Despite Modi promise GAIL tanker tender struggles

Vol 18, PW 10 (15 Jan 15) Midstream & Downstream

Prime Minister Narendra Modi told the Vibrant Gujarat investor summit this week (January 11-13) how he wants to promote “the ease of doing business in India.

” But a GAIL tender to buy nine LNG tankers is in chaos because foreign companies find the tender terms unattractive. Some at GAIL believe it will scrap the tender and instead hire tankers to ship LNG from the US from 2017.

“I think we will cancel the tender,” admits a senior GAIL officer. Not only is the bidding criteria too complicated but foreign companies are reluctant because they are being told to quote for packages of three tankers of which one must be built in India.

Foreign companies do not want to take responsibility for the quality of an LNG tanker made in India, he says. So it’s unsurprising GAIL for the third time extended the bid deadline to February 17.

An earlier deadline of October 30 was extended to December 4 then January 6. GAIL needs to award the nine tanker tender by May this year (2015) to ship 2.3m t/y LNG from Dominion Cove’s Maryland liquefaction facility in the US by 2017.

Indian shipyards which have never built LNG ships before are also finding it difficult to forge technology alliances with South Korean or Japanese companies, specialists in the field.

LNG Summit