GAIL May Abandon LNG Carrier Tender

A newbuild LNG carrier at Samsung Heavy Industries (file image)

By MarEx 2016-09-21 20:46:50

India's state-owned natural gas firm GAIL may cancel its tender for the construction and time charter of nine LNG carriers, reports the Economic Times of India.

The tender has already been postponed three times. 

The bidding requirements included a provision for one in each set of three ships to be built in India, a key component of the government's "Make in India" campaign to grow the manufacturing industrial base. 

Sources told the Times that the gas firm failed to reach agreement with the leading bidders, who had filed proposals with conditions outside the scope of the government's original tender. 

The move will come as a blow to the government-owned Cochin Shipyard, which obtained certification to use GTT's LNG containment systems in tanker construction in anticipation of shipbuilding orders. 

GAIL is still under contract to purchase 3.5 mtpa of American LNG from Cheniere's Sabine Pass facility and another 2.3 mtpa from Cove Point LNG, which is still under construction.

On Wednesday GAIL moved forward on shoreside infrastructure to accommodate the influx of gas: the Petroleum Ministry announced that GAIL and Indian Oil have signed for a combined 50 percent share of Adani Group's proposed Dhamra LNG receiving terminal in Odisha, about 100 miles southwest of Kolkata. 

The two firms will also buy almost all of the regasification facility's output and will put it towards a variety of end uses, including gas demand from refineries, fertilizer plants and municipal gas distribution networks in eastern India. 

"Dhamra LNG terminal will emerge as a bridge to prosperity for the entire eastern India," the ministry said in a statement. 

The terminal deal replaces GAIL's own plan to place an FLNG at Paradip, a scheme it abandoned last year.