BP and Reliance JV excluded from FSRU race

Vol 19, PW 4 (22 Oct 15) Midstream & Downstream

India Gas Solutions, a JV between BP and Reliance, has surprisingly been excluded by the Mumbai Port Trust (MbPT) from the race to set up a proposed 5m t/y LNG FSRU off Mumbai, most likely to avoid allegations of favouritism.

The move is leading to doubts over the project's viability as the three companies shortlisted have no R-LNG marketing experience which is essential for the success of this venture. Mumbai-based Shapoorji Pallonji, Excelerate Energy and a consortium of IMC Infrastructure and Norway’s Hoegh LNG were the companies provisionally shortlisted, subject to security clearance, after MbPT instructed bidders on October 1 to purchase Request for Proposal (RfP) documents by October 6.

IGS sources confirm the company was forced to stay away as the tender had been amended, bringing back Clause 2.2.9 of the original Request for Qualification (RfQ) document which says an 'associate company' must control more than 50% of the shares in a joint venture. Reliance and BP each hold 50% in IGS but the RfQ was earlier amended to allow them to bid.

Why revert to the original tender terms? “Somebody complained (to the authorities) that there’s an attempt to favour one company (IGS),” says a source. Shortlisted companies should now begin market studies so they can submit completed RfP documents by January 15.

MbPT wants to award the contract by end-March 2016 so the FSRU can begin commercial operations by March 2020.

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