Released on = June 25, 2006, 9:42 pm

Press Release Author = RNCOS

Industry = Industrial

Press Release Summary = The Indian Government's announcement of the review of the
shipping policy has raged anger in the shipping industry. The companies demand
greater flexibility in the policy to help them compete with foreign shipping giants.


Press Release Body = In a recent statement by Indian Prime Minister, Manmohan Singh
announced a review of the LNG Shipping policy. Many in the shipping industry are
upset because Dr Singh did not discuss the issue with industry players.

The current LNG shipping policy restricts LNG import only on Indian flag vessels -
those Indian companies having a minimum of 27% ownership of the carrier. The
companies importing LNG will be allowed to import on spot basis on vessels other
than Indian flag vessels. This is subject to condition that the cargo on these spot
vessels be limited to 11% of the total amount of LNG import during the year.

There is debate in the shipping circles about the LNG shipping policy expecting to
allow wider choice of carrier. The restriction in the current LNG shipping policy is
on the foreign companies and any reform is likely to incur the anger of domestic
shipping companies.

The prevailing LNG guidelines were framed on the basis of the global practices then
prevalent and with an aim to meet India's energy requirements. The guidelines made
way for participation by foreign companies, equity contribution by domestic
companies followed by transfer of technology over a period of time.

Indian shipping companies demand certain reservation so that banks are willing to
finance them for acquiring ships. Without this the companies will not be in a
position to compete with the much financially stable foreign companies.

In their latest market research report, "Indian Oil & Gas Industry: An Industry
Analysis" RNCOS' experts explain that a change in policy will be only sufficient for
foreign shipping giants like Royal Dutch/ Shell to overpower the Indian market, for
they may import LNG using their own carriers.

The report views the growth prospects and future conditions in the industry where
the costly LNG ships will require investments of about Rs.960 crore.

It provides an objective analysis of the Oil & Gas sector in India. It gives
detailed information on exploration, production, and other processes accompanied
with annual consumption figures.

The report gives a detail overview of the opportunities and challenges and important
success factors for the growth of the shipping industry.

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