ENNORE: Expect 9-month LNG terminal delay

Vol 18, PW 13 (26 Feb 15) Midstream & Downstream
     

IndianOil has decided it’s better to delay the 5m t/y Ennore LNG terminal project by nine months than risk 'vigilance' queries over an innocuous mistake in the last storage tank tender.

PETROWATCH learns last week IOC director refineries Sanjiv Singh ordered the much-delayed storage tank tender to be scrapped and re-issued. On October 27 last year Mitsubishi Heavy Industries bid lowest quoting $177m to construct two 160,000-cubic metre LNG storage tanks.

IHI came second quoting $187m. Both bid more than a year before on October 15, 2013.

Poor Mitsubishi has been waiting for months for an LoA but it looks like that will never happen. Why was the tender scrapped? IOC, it seems, made a mistake while preparing the bid document and asked for quotes for the supervision cost in US dollars instead of Indian rupees as required.

Mitsubishi quoted a supervision cost of around $5.6m (Rs35cr). Earlier IOC top management wanted to overlook the mistake as it was a minor financial matter compared to the overall Ennore project cost of Rs5150cr ($827m).

In principle everyone including IOC chairman B. Ashok was convinced there was no problem if they convert the dollar price to the current rupee rate and then freeze it.

“But no one wanted to take a risk,” we hear. “Someone could accuse us.

"

LNG Summit