GAIL re-floats LNG carriers tender

GAIL of India has re-invited bids to hire nine LNG newbuilds aimed for transporting U.S. gas starting from 2017.

The tender is calling for 9 LNG ships of a cargo capacity of 150,000-180,000 cbm, enabling GAIL to comply with its off-take commitments at Sabine Pass and Cove Point LNG projects from December 2017, according to the tender documents.

The bidders will be required to quote for lots of 3 vessels, with a mandatory provision that under each lot, one of the vessels shall be built in an Indian shipyard. Indian shipyards will be allowed to buy  from 5 percent to 13 percent stake in three of these LNG vessels, the documents showed.

GAIL has set a window for the delivery of the vessels from the foreign shipyards from January 1, 2019 to May 31, 2019, while Indian shipyards have a delivery window starting July 1, 2022 and ending June 30, 2023.

Gail will not directly order the vessels at shipyards, instead it plans to time charter the carriers for a period of 18 years. Shipping Corporation of India (SCI) will operate the nine LNG vessels.

Also, GAIL and SCI will have the option to acquire up to 10 percent and 26 percent respectively in one or all of the LNG ships.

Bids are due to be submitted until December 17.

The initial tender failed since Japanese and Korean shipbuilders were unwilling to share expertise and technology, and after postponing the tender several times, GAIL had to cancel it completely.

However, following extensive talks and efforts by India’s Minister of State for Petroleum & Natural Gas, Dharmendra Pradhan, with Japanese and South Korean state officials, Indian shipyards signed deals to cooperate with their Japanese and South Korean counterparts in the construction of LNG vessels.

For the purposes of bidding in GAIL’s tender, Samsung Heavy Industries signed a deal with Cochin shipyard, while L&T Shipbuilding, a Larsen & Toubro unit, signed a similar agreement with Hyundai Heavy Industries. Daewoo Shipbuilding & Marine Engineering joined forces with Pipavav Defence and Offshore Engineering.

LNG World News Staff; Image: DSME