Ioc Turns Down Sci Offloading Offer In Haldia

Indian Oil Corporation (IOC) has turned down an offer by the Shipping Corporation of India (SCI) to provide a 3,00,000 tonne floating storage offloading (FSO) facility offshore at Haldia. IOC has told the petroleum ministry that SCI's offer is on a higher side and it has found the alternate option of importing crude at Paradip and bringing it to Haldia through a pipeline more cost-effective.However, the ministry has told IOC that it should once again discuss the issue with SCI and if the commercial prudence is in favour of the Paradip facilities, then it should be examined and approved by IOC board. The Oil Coordination Committee (OCC) had suggested provision of FSO at Haldia for improvement of crude availability through Haldia Dock Complex (HDC). It was proposed to keep the FSO in and around Sandheads in the Bay of Bengal for receipt, storage and off-loading of crude oil throughout the year. The OCC had suggested that the FSO should be able to receive crude oil up to very large crude carrier (VLCC) type tankers and off-load to tankers ranging from MR to LR-1 type through ship-to-ship transfer operation for onward discharge at Haldia port. Initially, it was proposed to award the contract to SCI on nomination basis. A committee comprising IOC and OCC was constituted to examine the proposal and start a dialogue with SCI. Following several rounds of discussions, SCI quoted $28,900 per day as charter hire rate for a converted VLCC into FSO plus the direct operating expenses (DOE) at actual along with charges for two tugs at $3,500 per tug per day plus DOE for tugs at actual. In addition to this, IOC was also the bear the cost of single point mooring (SPM) and its installation and also provide an interest-free advance of $10.5 million to SCI. Though later SCI brought down the FSO rate to $25,500 per day, IOC felt that it was still very high. IOC decided to go in for an open tender for the FSO. The SCI has strongly objected to it saying that IOC had started dialogue with it around 15 months ago and when the issue was at the concluding stage, IOC decided to go in for open tender. It has also submitted to the government that it has already earmarked the vessel "Kanchanjunga" for this purpose.