GdFSuez sole bidder for FSRU partner in Andhra

Vol 15, PW 18 (22 Mar 12) Midstream & Downstream
     

Nothing can be more heartening than hearing a state-owned company say it values ‘transparency’ above all else.

But for the Andhra Pradesh Gas Distribution Corporation (APGDC) this worthy ambition back-fired when only one company bid in a tender to select a ‘strategic partner’ for a proposed 3.5m t/y floating LNG regasification vessel (FSRU) off India’s east coast. APGDC officials were surprised when French company GdFSuez was the only company to bid by the March 5 deadline.

“Excelerate and Marubeni also turned up,” reports a source, “but they did not bid.” Marubeni and Excelerate, it seems, lobbied hard, each demanding the contract without an open tender, each offering their own FSRUs for the assignment.

“But this isn’t our business model,” adds a source. “As a government-promoted company we can only use a competitive and transparent system to choose our partner.

” GdFSuez made a presentation to APGDC on March 12 on how it could bring gas sector expertise to the project, help select a FSRU from a contractor, and market R-LNG. After the presentation, APGDC officials opened the French company’s bid.

Next they will take the proposal to their board for approval. “Our ‘strategic partner’ should be in place by March 31,” we hear.

APGDC - a JV between the Andhra government and GAIL - plans to set up a Special Purpose Vehicle (SPV) or joint venture to install and operate the FSRU for between seven and 10 years. If and when confirmed as strategic partner, GdFSuez can expect up to 26% in the SPV.

Samsung, Golar Energy and GMR Energy were also interested in a stake in the FSRU project, but only through a consortium bid. APGDC turned this down.

“We need a single FSRU project developer with gas business experience, not a consortium,” we learn.