ONGC tender for Mehsana attracts 42 companies

Vol 16, PW 3 (23 Aug 12) Exploration & Production

Cut-throat competition is expected in an estimated Rs700cr ($140m) tender to replace ageing pipelines and facilities at ONGC’s producing Mehsana asset in Gujarat.

Fifty-four companies have bought documents since ONGC issued the tender in July. Over 150 representatives from 42 of these companies attended a pre-bid at the Hotel Samrat in Delhi on August 3, presided over by ONGC director onshore AK Hazarika, group general manager (onshore engineering group) Deepak Bakshi, and executive director SK Gupta.

“We are happy so many companies are participating,” reports a senior ONGC source. “Initially we considered holding the pre-bid at our office but booked the hotel because of the huge response.

” KazStroy, Tata Projects, Punj Lloyd, AFCONS, Kalpataru, Leighton Welspun, Toyo Engineering, Technimont, Shiv Vani and IL&FS are among those expected to bid by the October 1 deadline. It won’t be an easy job to implement as ONGC has banned the selected contractor from shutting production to replace pipelines.

“How can I connect pipelines laid in the 1960s and 70s to new pipelines without halting production” asks a source. “These are small pipelines with two, four, six or eight-inch diameters.

” Even before they bid, companies expect to spend nearly Rs50 lakh each ($100,000) on pre-tender engineering, site visits, and bid preparation. Larger contractors, like Punj and AFCONS, worry smaller contractors with lower overheads might bid unreasonably low rates.

Some criticise ONGC for relaxing bidding criteria to allow any company to bid so long as it has successfully executed a contract worth Rs21cr ($4m). ONGC also wants the winner to install new equipment to expand capacity at its old gas gathering, gas processing and crude oil storage facilities.