L&T says no to GAIL’s LNG tender
Indian shipyard Larsen and Toubro decided it will not participate in the recently re-floated tender by GAIL to hire nine LNG newbuilds that would transport U.S. gas to India starting from 2017.
L&T, that had previously agreed to cooperate with Hyundai Heavy Industries for the purposes of bidding in GAIL’s tender, opted not to take part in the bidding due to clauses added to the new tender.
According to the new tender, shipyards are required to buy a 5% to 13% equity stake in the locally built LNG carriers.
A source confirmed to the Live Mint that the equity clause was the reason for the company not to participate in the tender.
The source revealed that L&T’s partner, HHI has been informed about the decision.
GAIL recently re-floated its tender 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.
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, according to the tender documentation.
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.
Bids for the tender are due to be submitted by December 17.
With Larsen & Toubro deciding not to bid in the tender, only two local shipyards are left in the running, Cochin Shipyard that has a cooperation deal with Samsung Heavy Industries and Pipavav Defence and Offshore Engineering that has agreed to work together with Daewoo Shipbuilding & Marine Engineering of South Korea.
LNG World News Staff; Image: L&T