Larsen & Toubro Backs Down from Race for Gail’s LNG Carriers
- Business & Finance
Indian shipbuilder Larsen & Toubro Ltd has decided to withdraw from the race for construction of Gail India Ltd’s long-awaited LNG carriers.
According to local media, the reason behind backing down is a clause in the recently published tender that requires shipyards to hold equity stake of as much as 13% in the LNG carriers that are to be built locally.
“We are not participating in the tender because of the stipulation put by GAIL for winning shipyards to take equity stake in the LNG tankers,” an anonymous L&T executive familiar with the matter is quoted by Live Mint as saying.
L&T Shipbuilding Ltd had partnered up with Korean shipbuilder Hyundai Heavy Industries (HHI) to share the know-how on construction of the three Gail’s ships intended to be built domestically.
Last week, India’s gas utility Gail issued a new tender to hire nine newly-built LNG carriers under modified terms aimed at facilitating the bidding process and removing hurdles that have prolonged the project.
The tender is quoted in three lots of three ships each, out of which three ships would have to be built in India. Under the new terms, Indian shipyards have been given the opportunity to take up to 13 % in each of the three carriers to be built locally.
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.
Gail plans to time-charter the ships from global owners, who will order the construction of the nine ships.
The LNG carriers ordered overseas are to be completed by May 2019, whereas the batch to be built by domestic shipyards should be delivered between July 1, 2022 and June 30, 2023.
World Maritime News Staff