Hardly any interest in GAIL's LNG tanker offer

Vol 19, PW 12 (25 Feb 16) Midstream & Downstream

Most reckon Cochin Shipyard will be the only company that responds to GAIL's tender for nine or possibly 11 tankers to import LNG for 20 years from the US.

Industry sources believe GAIL will award a contract even if it receives a single bid by the extended February 29 deadline. "GAIL is reconciled (to the fact that) only Cochin Shipyard will bid," says a source.

Cochin, in alliance with Samsung Heavy Industries, is telling service contractors it will quote around $300m to build one 174,000 cubic metre capacity LNG tanker. About a dozen companies have shown interest in the tender where at least three tankers must be made in India.

Still unclear is if any other companies will respond. Take Pipavav Defence, the only other Indian yard to tie up with a foreign partner, Daewoo Shipbuilding.

"So far we've heard (informally) that only Cochin intends to bid," says a source. "There's no news from Pipavav, which as a private yard probably sees no point investing in infrastructure to manufacture at most three tankers.

" A senior Pipavav source is concerned by the lack of clarity on who will bear the additional cost of the tankers built in India and whether inexperienced Indian yards must bear all risks or share them with GAIL. "Unless these matters are clarified, participation (in the tender) is doubtful," he says.