Qatar Shipping, one of the largest shipping companies in the Gulf region, has acquired a 15 per cent stake in two LNG transportation companies owned by the Shipping Corporation of India and three Japanese companies -- Mitsui OSK Line, NYK Line and K Line -- for around $15 million [approximately Rs 68 crore (Rs 680 million)].

The two companies, India LNG Transport Company 1 and India LNG Transport Company 2, have been set up to carry liquefied natural gas primarily to the Dahej terminal in Gujarat.

The terminal, which is expected to be commissioned next month, is being constructed by Petronet LNG, a company promoted by some state owned oil companies to import, store and distribute liquefied natural gas in India.

'This stake has been acquired by Qatar Shipping through the purchase of shares from the existing sponsors (including SCI) in proportion to their shareholding," SCI said in its latest annual report.

The acquisition of an interest in the two transportation companies has strategic importance as LNG will be imported from the gas fields in Qatar. Further, LNG transportation is regarded as the sunrise segment of the shipping industry.

Moreover, these contracts are typically for about 15-20 years and they guarantee an assured income stream. They thus provide a hedge to shipping companies from the vagaries of the freight markets.

After the acquisition by Qatar Shipping, SCI's stake in the two companies has come down to around 29.08 per cent from 34.21 per cent. The balance 70.92 per cent is held by the three Japanese lines.

The two LNG tankers are at present under construction. The first of these is likely to be delivered next month and the second in December 2004.

The cost of acquisition of the two tankers has been pegged at about $378 million [about Rs 1,797 crore (Rs 17.97 billion)]. It is being funded by a debt-equity mix of $283 million [about Rs 1,345 crore (Rs 13.45 billion)] and $95 million [Rs 451 crore (Rs 4.51 billion)].

The debt has been arranged by a consortium of banks led by ANZ Grindlays Bank and ABB Structured Finance.

The gas sale & purchase agreement has been recently inked between Petronet LNG and the Indian Oil Corporation, Gas Authority of India and Bharat Petroleum Corporation.