GAIL re-thinks LNG tanker fleet tender

Vol 17, PW 18 (24 Apr 14) News in Brief
     

GAIL is having second thoughts about its ambitious plans to invest an estimated $5bn to buy a fleet of tankers to ferry LNG from the US to India from 2017 and beyond.

GAIL's board has asked junior managers to look into the possibility of hiring vessels instead. GAIL directors will consider the findings at their next meeting end-May before approving the much-awaited tender to source up to nine vessels.

"If we buy LNG tankers it will cost us $5bn and take more than 15 years to get a return on investment," says a GAIL source. Having your own LNG vessels has operational advantages and is cheaper long term but worries persist about potential delays in vessel constructing.

“If we invest such a large amount and do not get delivery in time,” adds GAIL, it will be a huge problem.” Government policy under consultation will most likely require the participation of Indian shipbuilders in constructing new-builds.

GAIL fears this will mean delays.

LNG Summit