- 10 New Fuel Tankers to Be Built Locally by 2028.
- IOC to Own Six Vessels, BPCL and HPCL Two Each
- Refiners Seek Government Support for Shipbuilding Costs.
India is making strides in its shipbuilding ambitions, with state-run oil refiners gearing up to order 10 vessels built right here at home for coastal fuel transport. This move aligns with the government’s larger vision to bolster the nation’s shipbuilding capabilities, viewing ships as crucial national assets for energy security, trade, and defence, reports Business Standard.
Joint Tender Expected by Year-End
According to insiders, Indian Oil Corp., Bharat Petroleum Corp., and Hindustan Petroleum Corp. are set to jointly release a tender by the end of this year for medium-range (MR) tankers. The contract could be worth around $600 million, with deliveries anticipated to kick off by 2028.
Limited Yard Capability in India
While India boasts about 40 shipyards, only four are equipped to construct ships larger than MR tankers. Despite the government’s encouragement, refiners have shown only a tepid interest in owning tankers, pointing to cost inefficiencies when compared to chartering vessels. They’ve also asked for government financial backing to make the project feasible.
Vessel Specifications and Ownership
The MR tankers in question are expected to range from 50,000 to 60,000 DWT in size, with each potentially costing between $55 million and $60 million. Sources indicate that Indian Oil Corp. is likely to take six vessels, while BPCL and HPCL will each acquire two.
Local vs. Foreign Build Costs
Opting for Indian-built ships might come with a higher price tag. A South Korean-built MR tanker is priced around $50 million, while its Chinese counterparts are about $43 million, according to shipping consultancy Braemar Plc.
Current Fuel Transport Mix
At present, 13% of India’s petroleum products are transported via coastal shipping, while over 50% are moved through pipelines, as reported by the country’s downstream oil regulator.
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Source: Business Standard
