Indian Builders Asked to Take Stake in Gail’s LNG Ships

India’s gas utility company Gail has asked local shipbuilders bidding for the country’s LNG carriers to take equity stakes in the three new carriers to be built indigenously under a tender for nine units, which are to be used to import LNG from the US.

The request has been issued to Cochin Shipyard Ltd, L&T Shipbuilding Ltd, a unit of Larsen and Toubro Ltd (L&T), and Pipavav Defence and Offshore Engineering Ltd, which have been asked to take at least a 13% stake in each of the tankers, Indian newspapers Live Mint reports.

All three Indian shipbuilders have found international partners with the necessary know how on construction of these technologically-advanced ships.

India’s Cochin Shipyard Ltd has entered into a deal with South Korean shipbuilder Samsung Heavy Industries on exchanging technology for construction of planned LNG carriers, L&T Shipbuilding Ltd has partnered up with Hyundai Heavy Industries whereas Pipavav teamed up with Daewoo Shipbuilding and Marine Engineering.

The move would see the equity stakes held by India in the ships increase from previous 36% to 49% thus serving as an incentive to global fleet owners to opt for the remaining 51% stake.

The request comes ahead of Gail’s new tender for construction of nine LNG carriers which is expected to facilitate the bidding process and remove hurdles that have prolonged the project.

The previous tender has been scrapped after it failed to attract bidders. The initial plan envisaged for the third of the newbuilds to be built locally so as to boost Indian shipbuilding capabilities.

Gail plans to be able to start its import activities from USA to India in 2017.

World Maritime News Staff