Shell and Yemen LNG refuse parent guarantee in NTPC tender

Vol 7, PW 21 (14 Jan 04) News in Brief
     

Shell and Yemen LNG are refusing to offer parent company guarantees to NTPC for its tender to supply 3m t/y LNG or natural gas to the Kawas and Gandhar power plants in Gujarat.

An industry source tells PETROWATCH that Shell has a clear policy not to offer parent company guarantees for any single project. Yemen LNG, where TotalFinaElf has a controlling stake, has the same policy.

Both Shell and TotalFinaElf have offered to give guarantees from one of their subsidiary companies, we learn. These are as good as guarantees from the parent company.

NTPC should understand that no global company is willing to risk its creditworthiness for the sake of a single project in one country. NTPC wants parent company guarantees from each bidder.

Only Petronas, Reliance and Petronet-LNG are happy to give parent company guarantees. Shell is also bidding for the LNG regassification contract.