Only L&T bids in Petronet-LNG tank tender

Petronet-LNG received just one Request for Proposal (RFP) with a price bid from L&T on June 14 (2021) in its tender to construct two LNG tanks at its 17.5m t/y Dahej LNG terminal amid talk it prefers IHI.

A source explains why this project is critical for Petronet-LNG. "Tankers wait at the anchorage because they can't discharge their cargoes," he explains.

"There's no space in the (six Dahej LNG storage) tanks." But Petronet-LNG might not solve the problem anytime soon: some fear it will scrap the RFP process and invite offers again to give IHI a second shot.

L&T bid by the June 14 (2021) deadline, extended several times from the original May 18 (2021) deadline. Surprisingly, IHI stayed away.

"IHI wanted to bid through its Indian subsidiary," says a source. "But Petronet-LNG wanted IHI's parent company in Japan to bid."

Petronet-LNG faced criticism when issuing the RFP notice on April 1 (2021) that it tailor-made the tender for IHI and partner Afcons. "IHI is still in talks with Petronet-LNG," he says.

"They're working out how to move forward." He adds Petronet-LNG wants IHI to participate because of its experience building six tanks at Dahej and two at Kochi.

IHI built the first two 148,000 cubic metre tanks at Dahej in 2003-04, the third and fourth 160,000 cubic metre tanks in 2008-09, and the fifth and sixth 170,000 cubic metre tanks in 2016. In 2011-12, it built the Kochi tanks and later two 160,000 cubic metre tanks at Mundra, commissioned in 2019.

An IHI source confirms it did not bid for the Dahej project. "The tender is not finalised," he said.

"Some negotiations are on; Petronet-LNG wants IHI Tokyo to bid, but IHI wants to avoid the cost of bringing staff from Japan and bid through its Indian company." The Indian company in question is Chennai-based Sinmado Engineering, set up on January 28 (2011) as a subsidiary of Jurong Engineering, in which IHI has a significant stake.

IHI believes Petronet-LNG might re-tender. "I don't think they'll award the job to L&T," adds IHI.

"L&T doesn't have experience in LNG tanks." For a full breakdown of LNG cargo arrivals to India, with landing prices and volumes, subscribe to the LNG Dipla database from Petrowatch.com