Good response to IOC’s east coast LNG tender

Vol 24, PW 12 (06 May 21) Midstream, Downstream, Renewables

Despite doubts about whether it makes sense, IndianOil has received an excellent response to its tender for a consultant to help it find an east coast port for its second LNG import terminal after Ennore.

IOC opened technical bids on April 19 (2021) after receiving seven responses from industry and one from an educational institution: Chennai-based Indian Institute of Technology (IIT). Other proposals were from the Indian subsidiaries of UK-based engineering consultancy BMT Group (BMT Consultants India Pvt Ltd), Dutch consultant Royal Haskoning DHV (Haskoning DHV Consulting Pvt Ltd), and UK-based Lloyd's Register (Lloyd's Register Marine and Inspection Services India) as well as from Chennai-based L&T Infrastructure, Mumbai-based Pace Marine Solutions, Italy-based RINA Consulting and Gurgaon-based Voyants Solutions.

Many questioned IOC's logic in setting up a second east coast LNG terminal when it issued the tender on February 26 (2021): Ennore remains grossly underutilised, using just 11.9% of its 5m t/y capacity, according to January (2021) oil ministry data. But such concerns were far from the companies who responded, and it looks like the consultancy project is going ahead.

An IOC source confirms technical bids are under evaluation. "After that, we will open the financial bids of companies that pass the technical evaluation," he says.

An industry source adds it is too early to predict a frontrunner. IOC is considering four ports in Andhra Pradesh and Orissa; its focus area is north of Ennore, where it commissioned a 5m t/y nameplate capacity terminal in February 2019, and south of Dhamra, where Adani is setting up a 5m t/y LNG terminal.

After due consideration, IOC dropped West Bengal as a possible location for the new LNG facility because of shallow water depths and heavy silting from a confluence of rivers on the coast that would make it difficult for LNG tankers to berth.