GAIL eyes charters as LNG newbuilding tender runs aground
GAIL is seeking to charter LNG carriers for terms of three to four years, having cancelled its multi-billion-dollar tender to build and time-charter up to 11 newbuildings, according to reports from India.
India’s state-owned energy company has cancelled the US$7 billion tender, which stipulated that a third of the ships would be built at home, for delivery in 2022-2023 and on charter terms of up to 18 years. Reports suggest that GAIL’s Make in India clause deterred both the Japanese-led consortia that bid for the tender.
State-owned Cochin Shipyard hoped to win the contract to build the three LNG carriers – an Indian first. The yard holds a GTT licence to build and install the French manufacturer’s containment systems and this year signed a co-operation agreement with South Korea’s Samsung Heavy Industries (SHI).
GAIL is contracted to import some 5.8 million tonnes a year (mta) of US LNG from next year, including 3.5 mta from Sabine Pass from March 2018. It issued a tender to build at least nine newbuildings for charter against those US exports.
Reports suggest that the Make in India clause would have raised costs threefold, prompting the bidders to press New Delhi to share the risk.
