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The chairman of Cochin Port Trust (CPT), N Ramachandran, has said that six national and international companies have stated an interest in establishing a bunker terminal on Puthuvype Island adjacent to Kochi port in southern India, Business Standard reports.

Plans are said to be in place to complete the facility, which would be located in one of the two special economic zones (SECs) promoted by the CPT, within a period of two years.

CPT recently completed a feasibility study to build the terminal, which would have an initial capacity of a million tonnes and could be increased to three million tonnes.

The project would be awarded on a design, build, finance, operate and transfer (DBFOT) basis for a concession period of 30 years.

Approximately 1,000 ships are said to pass through Indian waters every day to and from Southeast Asia and Far East Asia from the Suez Canal.

India’s three largest oil refiners – Indian Oil Corporation Ltd, Hindustan Petroleum Corporation Ltd and Bharat Petroleum Corporation Ltd – are all located at Kochi port as bunker suppliers.

According to Ramachandran, the bunker delivery strategy will be to supply the fuel by barge wherever ships drop anchor. "These ships don't have to come to Indian waters or to the port. We will supply the fuel in barges wherever the ship is anchored," the CPT Chairman is quoted as saying in a Business Standard article.

Ramchandran said that in addition to the strategic location of the new bunker hub, bunker prices in India would also be more competitive following the recent reduction in value added tax (VAT) on bunker products in August from 12.5 percent to 0.5 percent.