LNG terminal FEED award from IOC this month

Vol 15, PW 3 (11 Aug 11) Midstream & Downstream

State-owned companies are jokingly said to cut red tape lengthwise.

But companies competing for a contract to prepare the Front End Engineering and Design (FEED) for IndianOil’s proposed Ennore LNG terminal in Tamil Nadu have few complaints. “IOC is moving really fast on this project,” said a contractor on August 4.

By July 29, he said, IOC representatives had personally met four of the contract bidders. “They plan to meet the remaining four for technical clarification sometime this week,” he adds.

On July 6, a raft of companies including Sofregaz, Foster Wheeler, Engineers India, Black and Veatch, Tractebel, Whessoe, Technip and WorleyParsons submitted technical and price bids in IOC’s tender for the Ennore LNG terminal FEED contract. “This week we are expecting IOC to issue an ‘addendum’ to the tender after incorporating the changes to technical parameters discussed with bidders,” we hear.

“They want to receive ‘revised’ price bids by August 20; these will either be opened on the same day or within one week of submission.” A senior company source adds IOC plans to award the FEED contract for the 5m t/y LNG terminal project before the end of August.

Yet one bidder isn’t convinced. “It will be nice if it actually happens,” he says, sarcastically.

“IOC is being a bit ambitious in saying it can award the FEED this month.” Even if IOC does award the FEED this month, our source points out it has yet to appoint a Project Management Consultant (PMC) for Ennore.

Worse, IOC’s board hasn’t even approved plans to set up this LNG terminal. Yet that hasn’t stopped IOC’s gas division from setting aside around Rs130cr ($28m) for pre-project activities like preparing a FEED, scouting to source gas, and appointing a PMC.

“We will take a Final Investment Decision on building the Ennore terminal only after the FEED is prepared,” confirms IOC.

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