Shell plays silly games with Hazira LNG bidders

Vol 19, PW 9 (14 Jan 16) Midstream & Downstream

Shell and Total executives are clearly reading too many spy novels.

How else to explain the cloak and dagger secrecy while accepting bids by the extended December 21, 2015 deadline in their tender to raise Hazira capacity from 5m to 7m t/y at an estimated cost of Rs1800-2200cr ($282m-$345m)? Shell took extreme measures to ensure bidders did not know each other's identities. "We expected to be called to the Hazira project office on December 21, 2015 to submit bids," says a bidder.

"But Shell representatives came to our hotel rooms that day and collected the documents personally." Another source adds Shell did not want bidders to gather and meet. Despite the secrecy PETROWATCH learns Shell received bids to set up one onshore LNG tank and regasification facilities from Larsen & Toubro in partnership with Saipem; IHI with Toyo Engineering; and Sener with AFCONS.

A consortium of Black & Veatch and KazStroyService is also believed to have bid but only to set up the regas facility. However this could not be independently confirmed.

Many are surprised a consortium of Punj Lloyd and Mitsubishi Heavy Industries stayed away, as it was widely expected to win given that it built the original LNG storage tanks when Hazira was set up with an initial 2.5m t/y capacity in April 2005 for $641m.