(TH)
State-owned GAIL (India) Ltd is set to sign a ship chartering deal this month with TOTAL SA to hire one LNG tanker for three years from the French oil major for hauling gas from the US beginning January 2018.
TOTAL emerged the successful bidder for the short-term charter on an enquiry floated by Shipping Corporation of India (SCI) on behalf of GAIL, by quoting the lowest day rate of $44,900 for the three-year deal, which can be extended by one year, multiple sources told BusinessLine. The LNG carrier offered by TOTAL has a storage capacity of 165,500 cubic metres.
Some 30 LNG ships were offered by owners as against a requirement of at least four ships by GAIL. “Other ship owners who participated in the enquiry were unwilling to match the lowest day rate put by TOTAL, posing a challenge to GAIL for hiring the balance LNG tankers it require,” an official briefed on the plan said, asking not to be named because GAIL is yet to make the charter deal public.
“The fair market price today for a 2-3 years charter of an LNG ship of that size is about $65,000 per day,” said a shipping industry official. The LNG tanker offered by TOTAL is owned by Teekay LNG Partners LP, one of the world’s top independent owner and operator of LNG carriers. The ship was chartered to TOTAL till 2029 for the Yemen LNG (YLNG) project.
“However, due to the political situation in Yemen, YLNG decided to temporarily close down the LNG plant in 2015. As a result, the LNG ship came off-hire. TOTAL was losing money on that ship because it had to continue paying the charter rentals to Teekay, but didn’t have a job for her. Even if they offer this ship to GAIL for $44,900, that much money they are reducing from their loss every day,” the official mentioned earlier said, adding that the Yemen LNG plant continue to remain closed.
