Cryogas and INOX bid lowest for IOC tanks

Vol 24, PW 15 (17 Jun 21) Midstream, Downstream, Renewables

Vadodara based companies Cryogas and INOX look set to walk away with contracts to supply IndianOil with 20 small 56-kilolitre LNG storage tanks as the state-owned refiner steps up its government-backed drive to become the country's dominant LNG fuel retailer.

This report learns IOC is presently evaluating financial bids from Cryogas and INOX, as well as from ?Pune-based Shell-N-Tube, and Vijayawada-based Italian company VRV Asia Pacific. When IOC opened bids on May 8 (2021), it was pleasantly surprised to note that bids from all four companies were less than its internal estimate of Rs24.31cr ($3.3m).

Cryogas bid lowest, quoting Rs15.77cr ($2.1m); INOX came second, quoting Rs16.45cr ($2.2m) and VRV was third, quoting Rs20.76cr ($2.8m). Shell-N-Tube was last, quoting Rs21.63 ($2.9m).

Missing from the list was Pune-based Spark Engineers. ?"IOC rejected spark's bid after technical evaluation," says a source.

First issued on March 9 (2021), IOC later scrapped the tender and re-issued it on March 24 with an April 8 (2021) technical bid deadline. IOC has awarded an initial contract for four LNG tanks to the L1 bidder Cryogas for delivery within three months despite ongoing financial evaluation.

Still unclear is where IOC will deploy the four tanks. "They (IOC) will decide this when the tanks are about to be despatched," confirms ?a source.

In its tender, IOC states it wants to source the 20 tanks from two different suppliers - 12 or 60% from the lowest bidder and eight or 40% from the second-lowest bidder. If IOC sticks to this promise, Cryogas will win the contract for a minimum of 12 tanks and INOX for the remaining eight.

On November 19 (2020), oil minister Dharmendra Pradhan told an online foundation-laying ceremony for 50 proposed LNG stations across India that IOC would be responsible for setting up 20, ?HPCL and BPCL eleven each, GAIL six and Petronet LNG two. ?