Hindustan Petroleum Corp Ltd and Indian Oil Corp have issued tenders looking to secure LPG vessels on time charter, extending a rush among Indian state oil companies to do deals to accommodate rising imports while freight rates are near multi-year lows, shipping source said.

A third state-run firm, Bharat Petroleum Corp. Ltd., last month closed its bid for a VLGC time charter for a two-year period, with extensions for six-plus-six months, sources have said.

IOC on Wednesday tendered for a VLGC for one year, with an extension for a second year. The laycan starts July 1-31 and the tender closes May 23, with validity until June 20, according to tender documents.

The vessel should be less than 25 years old and capable of loading a 45,000 mt cargo, evenly split between butane and propane. Delivery ports include Mesaieed, Mina Al Ahmadi, Ras Laffan, Ras Tanura and Ruwais.

The vessel must get approval from Middle Eastern LPG term suppliers — Abu Dhabi National Oil Co., Kuwait Petroleum Corp., QatariTasweq and Saudi Aramco.

HPCL on Tuesday tendered for a vessel capable of loading 21,000 mt of butane and/or propane, tender documents showed. The charter is for a two-plus-one year period, with the laycan starting July 1-20. The tender closes May 16, with validity until May 20. The delivery ports are Ras Tanura, Saudi Arabia, or Ruwais, United Arab Emirates.

Shipping sources said the earlier BPCL tender, which closed April 14, has yet to be awarded. Among vessels said to be have been put on offer were Global United’s Benny Princess as well as vessels from India’s Great Eastern Shipping, BW LPG, Phoenix, Dorian, South Korea’s KSS Line and the VLGC EverRich 10, shipping sources had said.

Some sources said it was likely Great Eastern Shipping’s Jag Vidhi, a 1996-built VLGC acquired last month from South Korea’s KSS Line Ltd. for around $27 million, might win the tender.

“As an Indian company, they [Great Eastern] will have the first right of refusal and will be given the chance to match the lowest rate too,” a source said.

If the three tenders are awarded, a total of 16 LPG vessels will have been taken on time charter by the three state run companies. These comprise 10 VLGCs and six medium or large gas carriers, shipping sources said.

A source said the high number of LPG vessels being put on time charter was to capitalize on low freight rates.

After touching $25/mt on April 14, the lowest since February 19, 2013, spot VLGC rates on the key Persian Gulf-Japan route have recovered to around $29/mt Wednesday, still almost 80% below last year’s peaks.

India’s LPG demand jumped to a record 1.835 million mt in March, up 14.2% year on year. That meant first-quarter demand was 5.254 million mt, up 11.3% year on year, data from India’s Petroleum Planning and Analysis Cell showed.

LPG imports were forecast to jump to 11.4-11.8 million mt in the 2016-17 financial year that began April 1, up around 1 million mt from projections for fiscal 2015-16, as a 7.6% year-on-year rise in demand to 19.36 million mt in 2015-16 outstripped domestic output, industry sources have said.

Source: Platts