Single bid for ISPRL crude storage project
Despite expectations of a good response, only one bidder has bid to construct the proposed second 2.5m tonne capacity underground crude oil storage facility at Padur in Karnataka.
By the extended August 14 (2024) bid deadline, only Hyderabad-based Megha Engineering sent in an offer to 'design, build, finance, operate and transfer' this facility promoted by the state-owned Indian Strategic Petroleum Reserve (ISPRL) under a public-private partnership model. Adnoc was seen as a strong contender for this Rs5514cr ($662m) cavern proposed adjacent to the unused 2.5m t/y underground ISPRL storage cavern at Padur set up in December 2018.
Adnoc has been storing 750,000 tonnes of oil since 2018 at ISPRL's Mangalore cavern, which has a 1.5m tonne storage capacity and is 46-km south of Padur. An ISPRL source confirms it has received a bid but declined to name the bidder.
He adds that ISPRL is evaluating the bid. However, a well-placed source confirms Megha is the sole bidder.
"Now it is up to ISPRL to decide how to move forward," he adds. "Megha has bid alone; it doesn't need any technical partner given its experience (constructing) an underground LPG cavern for HPCL in Mangalore."
He adds Megha "will take the help of financial institutions" to fund the project, as ISPRL wants the successful bidder to arrange financing. Other companies are believed to have stayed away from bidding because of the financial risks.
"ISPRL is unwilling to take on any (financing) risks," we hear. "Also, the geotechnical information from ISPRL had a lot of gaps; many EPC contractors can design and build a cavern, but usually, such contractors don't get into financing these projects."
ISPRL expected a good response based on the April 15 (2024) pre-bid attendance in Delhi. Previously, the oil ministry spent five years sitting on this proposal before ISPRL finally published a tender on February 21 (2024).
Among those at the pre-bid were Hyundai Heavy Industries, ONGC, Bharat Petroleum, Megha, L&T, Tata Projects, Hindustan Construction (HCC), Reliance Industries and Adani Ports. Some of them also visited the site.