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Indian Oil Giant May Scrap LNG Vessel Tender

Maritime Activity Reports, Inc.

September 21, 2016

GAIL India, largest state-owned natural gas processing and distribution company in India, will likely scrap the tender for hiring LNG ships after failing to negotiate acceptable terms with bidders in what would hurt India's ambition to build high-tech LNG carriers at home under the Make in India programme, reports the Economic Times.

 
The oil marketing giant had issued a tender last September seeking to charter at least 9 LNG vessels to bring home from the US up to 5.8 million tonne of gas annually from early 2018. 
 
Successful bidders were supposed to locally build a third of all ships they make under the Make in India plan.
 
GAIL received bids from 2 Japanese consortiums after the deadlines for submissions were extended more than once. 
 
The bids, however, were not fully aligned with the tender and contained several conditions, which the GAIL executives hoped to resolve in negotiations that lasted more than 5 months with the bidders.
 
GAIL is now running out of time to hire ships as the supplies of its contracted gas from the US will start flowing in a little more than a year. A GAIL executive said hiring LNG ships in time wouldn't be difficult if we were to lift the Make in India condition. 
 
Early last year, GAIL had scrapped a previous tender seeking LNG carriers after receiving no response from foreign bidders reluctant to transfer technology and build ships in India. Indian shipyards don't have LNG carrier building technology.
 

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