Prepare to bid for NTPC's gas pre-qualification tender

Vol 6, PW 17 (23 Oct 02) People & Policy

TUESDAY 22ND OCTOBER was the last date to buy tender documents to supply 3m t/y LNG to NTPC.

Three weeks earlier on 30th September NTPC invited bids to pre-qualify suppliers of LNG or natural gas and providers of related services. These bids must be submitted by 16th November.

A single party can offer to supply both gas and services. Pre-qualified companies can enter the second stage of this exercise and will be issued the final Request for Proposal documents in the first week of February 2003.

NTPC is targeting the first week of May next year to receive final price and technical bids. Another three months to evaluate bids and by September 2003 NTPC hopes to award the gas supply and services contract.

Despite this impressive schedule, Petronet LNG is sceptical of NTPC's plan. "They have realised they cannot get the price they are looking for," a source tells us.

"They are looking for regassified LNG at a fixed price of less than $3 per mmbtu. Nobody in the industry can supply them at this price." Petronet-LNG has drawn lessons from its own experience when it issued a tender to supply 5m t/y LNG to Dahej.

"When we asked for price quotes we set out two scenarios: a price linked to crude oil and a price partly fixed and partly linked to coal." Quotes with a fixed price element were much higher than those with a price linked to crude. "That was why we opted for LNG price linkage with crude." Elsewhere, NTPC says it expects to be able to finalise a gas and port consultant for LNG by the end of October.

Tenders for these were floated a month ago.