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SCI - Shipping Of India News Story

₹56.95 2.2  4.0%

Last Trade - 07/08/20

Sector
Industrials
Size
Small Cap
Market Cap £269.4m
Enterprise Value £491.8m
Revenue £449.5m
Position in Universe 442nd / 3003

UPDATE 1-India's IOC close to deal for Panama-flagged vessel as Indian vessels fail to match

Tue 2nd July, 2019 11:48am
(Adds quotes from SCI official)
    By Nidhi Verma
    NEW DELHI, July 2 (Reuters) - India's top refiner Indian Oil
Corp is close to chartering a Panama-flagged ship rather than an
Indian vessel in its first five-year tender to hire an oil
tanker with scrubbers that remove sulphur emissions, sources
with knowledge of the matter said. 
    In December last year, state-owned IOC  IOC.NS  issued a
global tender and offered Indian shippers a first right of
refusal as the nation seeks to boost its shipping industry.
India, the world's third-biggest oil importer, wants to promote
the market share of its vessels in bringing in crude imports. 
    But the Panama-flagged very large crude carrier (VLCC)
Bright Pioneer, owned by Nissen Kaiun Co Ltd, has emerged as the
likely winner for a daily rate of $30,000-$32,000, the sources
said. 
    None of the Indian companies could match the bid, they said.
"Indian companies declined the first right of refusal," said one
of the sources. 
    That will be a blow to the federal shipping ministry, which
wants the state-refiners to sign five-year contracts with local
shipping firms to shift freight worth billions of dollars to
Indian flag carriers, including Shipping Corp of India (SCI)
 SCI.NS , Mercator Ltd  MRCT.NS , Great Eastern Shipping Co
 GESC.NS  and Essar Shipping  ESPL.NS . 
    SCI, Great Eastern, Seven Island Shipping  SEVI.NS  and
other Indian shipping companies participated in the IOC tender,
the sources said. 
    "We did not match the offer as the rates were not in line
with market trends. Very low rates have been offered," said an
official at SCI. 
    The introduction of the scrubbers is important because the
International Maritime Organization (IMO) is introducing the
rules on marine fuels from the beginning of 2020, limiting the
sulphur content to 0.5 percent, down substantially from the
current 3.5 percent, to curb shipping pollution.  urn:newsml:reuters.com:*:nL8N1SH60Y 
    IOC will be using Bright Pioneer from January 2020 for at
least five years, giving its Singapore-based operator Global
United Shipping Company six months to install the scrubbers. 
    IOC and Global United Shipping did not respond to Reuters
emails seeking comments. 
    By stripping out sulphur emissions, scrubbers allow shippers
to use dirtier fuel oil but still meet new global requirements
for lower emissions. 
    The IMO says that when the new rules come into force it will
ban ships that do not have scrubbers from carrying any fuel oil,
making it easier to catch cheaters. 
    The duration of the IOC contract can be extended by another
two years to a total of seven. 

 (Reporting by Nidhi Verma; Editing by Martin Howell and Tom
Hogue)
 ((nidhi.verma@thomsonreuters.com; +91 11 49548031; Reuters
Messaging: nidhi.verma.thomsonreuters.com@reuters.net))
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