KPCL sets 19th Feb deadline for Bidadi gas tender

Vol 7, PW 23 (11 Feb 04) Midstream & Downstream

Prepare to submit techno-commercial bids for a gas or LNG supply tender promoted by the Karnataka Power Corporation.

By a deadline of next Thursday- 19th February - KPCL wants offers of 1.5m t/y gas or LNG for 17 years to fuel its proposed 1,400-MW power station at Bidadi. In the race are four bidders: Reliance Industries (natural gas), GAIL, an alliance of Petronet LNG, ONGC, Bharat Petroleum; and another alliance of Indian Oil and Petronas.

On 12th January, KPCL held a pre-bid conference at Bangalore where bidders raised many queries. A revised tender document incorporating over 400 clarifications was issued by the end of January.

KPCL wants bidders to submit their deviations, if any, along with the techno-commercial bids. One of the bidders tells PETROWATCH that KPCL has set an ambitious target of awarding the contract by end-March.

They say theyll respond to our deviations within 15 days, says a source. Price bids will be called for once the deviations are finalised.

KPCL has told bidders it wants gas supplies by June 2007. This is an impossible deadline, we are told.

Both sides have to achieve financial closure, meet conditions precedent and get government approvals. All these will take at least one year.

The most optimistic date to start construction of a LNG terminal (if KPCL chooses LNG over natural gas) is June 2005 and completion in June 2008. Even this, says our source, is a very tight and optimistic schedule.

Note that KPCL wants 10% of the gas to be delivered to Bangalore (some 30-km away) to fire an existing power station. How do bidders plan to deliver the gas to Bidadi Reliance plans to lay a pipeline from its KG basin gas discovery while LNG suppliers must set up a new terminal either at Kochi or Mangalore.