Underground gas storage bid deadline on 2nd March

Vol 8, PW 23 (23 Feb 05) Midstream & Downstream

Expect tough competition between underground gas storage experts for GAILs contract for a consultant.

Geostock of France, technical consultants Sofregas in consortium with Projects and Development India, Russias Gazprom and Engineers India are all expected to submit technical bids by the 2nd March deadline. We wont extend the date beyond this, a GAIL director tells this report.

Bids were supposed to be submitted by 19th January but after requests from interested companies the date was later extended to 9th February and eventually till 2nd March. We want to move fast on this project, the director says.

The ministry is waiting for our report on storage and we cant delay any further. GAIL wants to set up a strategic storage facility that can hold natural gas reserves of up to 1bn cm/d.

The study will look at two options: an underground storage in salt leached caverns or in porous media. GAIL has also asked for help from the Geological Survey of India to identify sites especially for salt leached caverns in states like Rajasthan.

Another French major, Gaz de France, is also offering its expertise. Yet Geostock is the clear favourite to win this contract, given its 35 years international experience in design, construction and operation of underground gas storage facilities.

Geostock is jointly owned by Total (50%), BP (25%) and Tractebel (25%) and is building an underground LPG storage cavern in Vishakhapatnam for South Asia LPG, a joint venture between Total and Hindustan Petroleum. Underground storage is much more cost effective than above ground storage, says an industry source.

Another French company Sofregas is the author of Petronet-LNGs feasibility report for the Dahej LNG regassification terminal. Eligible bidders should have completed at least one feasibility study for the development of underground gas storage for 500m cm/d in porous media or 100m cm/d in salt caverns during the last seven years.