No one can stop L&T-Pipavav in Sagar Pragati bid

Vol 16, PW 15 (21 Feb 13) Exploration & Production

They were strong enough separately, but together they seem unstoppable.

A consortium of Larsen & Toubro and Gujarat-based Pipavav Defence & Offshore is tipped as the frontrunner to win ONGC’s nearly $200m contract to convert ageing jack-up Sagar Pragati into a Mobile Offshore Production Unit (MOPU). “Everybody was surprised to see a combined bid from L&T and Pipavav,” says an industry source.

“They were expected to compete against each other.” ONGC sold 22 tender documents but received bids by January 31 from just five consortia: L&T with Pipavav; Mumbai-based AFCONS with China’s Daeyang Shipyard; Mumbai-based Mercator Offshore with Dubai-based Global Process Systems; Mumbai-based Essar Offshore with Singapore’s Keppel FELS Shipyard; and Hyderabad-based SEW with Indonesia’s PT Gunanusa.

ONGC is evaluating technical bids and will seek clarifications this week. Yet to be announced is a date to open price bids.

"L&T-Pipavav will be hard to beat,” adds our source. “Only Mercator-Global can compete with them.

” He explains that transporting the rig to Daeyang's yard in China or Keppel's yard in Singapore is more expensive than transporting it to L&T's yard in Oman or Global's yard in Dubai. L&T and Pipavav also have an edge as they can distribute the work between four yards: L&T's Sohar yard in Oman, its Kattupalli yard in Tamil Nadu, and its Hazira yard in Gujarat; while Pipavav has its own yard at Pipavav in Gujarat.

"Costs will be even lower if L&T carries out the conversion at one of its Indian yards instead of Oman," we are told. If they win, L&T is likely to construct process systems while Pipavav will handle construction and installation work.

ONGC wants to award the contract by March 15.

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