No interest in SPM for CPCL's new refinery

Vol 25, PW 26 (01 Dec 22) Midstream, Downstream, Renewables

IndianOil subsidiary Chennai Petroleum (CPCL) should contact the Guinness Book of World Records to document how many times it has extended a Single Point Mooring (SPM) system tender.

An industry source says the total number of extensions currently stands at 12 for the SPM needed at CPCL's proposed 9m t/y refinery at Nagapattinam in Tamil Nadu. Nobody responded to the last bid deadline for the $30m project on November 23 (2022), so CPCL's project consultant (McDermott subsidiary) CB&I announced December 8 (2022) as the new deadline.

CPCL wants a contractor to design, engineer, manufacture, test, and transport the SPM to Karaikal port and supervise the installation. CPCL initially wanted bids on June 27 (2022) but extended the deadline to July 11.

Since then, it has extended the deadline roughly twice a month, with almost all likely bidders informally telling CB&I they will not bid unless it scraps restrictive tender terms. UK-based Monobuoy is the only bidder comfortable with the terms, but this could not be independently verified.

"CB&I has been telling bidders to submit bids first, and it will address their concerns later," says a contractor. "But we want them to resolve issues first; they also want bidders to give in writing that they will not bid."

Our source alleges both approaches are to "trick bidders." He claims that all, except that of the favoured bidder, will be rejected when bids with deviations are submitted.

"If most bidders give in writing that they are not interested, this will be used to justify accepting (and opening) the bid of the favoured bidder," he alleges. CPCL wants the SPM system delivered within 13 months of the LoA.

Many consider this impossible and want at least a 20-month schedule. Another concern is CPCL wanting a counter-guarantee for each payment towards the purchase of items to construct the SPM at the contractor's yard.

"CPCL takes a bank guarantee when the project is awarded," we hear. "If the contractor has to give a counter-guarantee equal to the value of every invoice raised, it adds to our costs and is unworkable."