CRISIL excludes BHP from NTPC gas tender

Vol 7, PW 2 (07 Apr 03) Midstream & Downstream

BHP BILLITON of Australia is unlikely to figure on NTPC's shortlist.

An industry source tells us BHP is struggling to pass pre-qualification.We understand NTPC's commercial and legal advisor CRISIL has written off BHP as a qualifier and NTPC is the only one trying "to go the extra mile" to keep BHP in the race.

"All other companies except BHP qualify as suppliers." It seems CRISIL doesn't think BHP meets the criteria set by NTPC for an invitation to submit bids. BHP identified Iran's South Pars as its gas source but unlike its competitors - who focused on LNG - BHP wanted to bring gas to India by pipeline through Pakistan, unworkable for many.

"BHP put all its eggs in one basket and did nothing to activate the LNG option in parallel with the pipeline," reveals a source. "They could not see that the pipeline is competing against LNG.

Even the Iranians think LNG is more feasible than the pipeline." NTPC feels BHP is yet unable to provide "sufficiently robust" documentation from Iran showing it has access to South Pars, nor is it yet able to provide firm proof of a Joint Venture agreement with the National Iranian Oil Company. Contacted by PETROWATCH, a BHP spokesman in London responds: "The proposal for qualification was submitted jointly with NIOC and not by BHP Billiton alone." BHP also dismisses suggestions that neither it nor NIOC has experience in operating comparable scale projects elsewhere in the world.

"The number of multibillion dollar projects which NIOC and BHP Billiton have been involved in globally are testimony to our experience in this field." BHP cites NIOC gas sales to Azerbaijan and Turkey and its own involvement in the Bolivia to Brazil pipeline as two examples.