With no takers, GAIL again postpones LNG tender date

With no takers, GAIL again postpones LNG tender date

NEW DELHI: Finding no takers for its Rs 42,370 crore tender to hire newly-built LNG ships, state-owned gas utility GAILĀ  India Ltd has for the third time postponed the last date of bidding.

GAIL had in August last year floated a global tender to charter nine newly built ships for transportation of natural gas in its liquid form at sub-zero temperature (LNG) from the US. The tender, however, required bidders to build one-third of the ships in India, a condition that has found no takers.

The company first postponed the last date of bidding from October 30 to December 4 and then to January 6. Today it put it off till February 17, according to a notice issued by GAIL.

GAIL had originally not been in favour of the condition but fell to oil ministry’s dictate once it was threatened with a Presidential directive.

The company board had on April 4 last year approved hiring of up to 11 new build LNG ships.

The Ministry, however, saw the chunky contract to be the perfect opportunity for India to exercise buyer’s clout and wanted a part of the contract be set aside for Indian shippers to kickstart domestic manufacturing by compelling global majors to transfer LNG shipbuilding technology to India.

GAIL, however, resisted this but the Ministry in no uncertain terms told the firm that a Presidential directive – an order from the owner of the company – will be issued.

The company fell in line and refloated the tender calling for bids in lots of three with the condition that at least one ship in each of lots should be built in India.

But the tender evoked lukewarm response with major shipbuilders not wanting to move to India, industry sources said.

Oil Minister Dharmendra Pradhan as well as External Affairs Minister Sushma Swaraj have tried to persuade South Korea, the world’s largest LNG tanker manufacturer, to rescue the tender.

Four Korean shipyards qualify for GAIL’s tender requirements – Samsung Heavy Industries, Daewoo Ship Building and Marine Engineering, Hyundai Heavy Industries and STX Offshore and Shipbuilding (STX). But none of them has so far shown interest in the tender, they said.

GAIL to start receiving LNG from US from December, 2017 and it needs the tankers before that.


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