State gas utility GAIL India Ltd will hire ships on short term to ferry gas from the US after it was forced to scrap a USD 7 billion tender for making vessels in India, Oil Minister Dharmendra Pradhan said today. After dragging for more than two years, GAIL had in October last year scrapped a tender for hiring newly built ships to ferry liquefied natural gas (LNG) from the US after bidders did not agree to ‘Make-in-India’ terms. The company wanted shipbuilders to manufacture one out of three ships in India.
“The tender was cancelled by GAIL as the bids received contained multiple deviations and were not in line with the tender condition,” he said in a written reply to a question in Lok Sabha here.
The bidders, he said, did not relent on “major deviations” they sought for the ships to be built at Indian shipyard.
Because of this, “the bids were considered non-responsive as per GAIL’s tendering procedure and the tender for charter hiring of LNG ships to import LNG from the US was cancelled on October 15, 2016,” he said.
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Two Japanese bidders — a consortium of Mitsui OSK Lines (MOL)-Nippon Yusen Kabushiki Kaisha (NYK Line) and Mitsui and Co. and a consortium comprising Mitsubishi Corporation- Kawasaki Kisen Kaisha Ltd (K Line) and GasLog, had sought several deviations from the tender conditions, which were not agreeable to GAIL.
In the tender, GAIL sought to time-charter nine newly built LNG ships of a cargo capacity of 150,000-180,000 cubic meters to LNG it has tied up from Sabine Pass and Cove Point LNG projects in the US, with supplies slated to start from January 2018. Bids were sought in lots of three, with the condition that one of the three ship will be built at an Indian shipyard.
Pradhan said GAIL has initiated action to charter hire ships on short term basis for a period of 3-4 years to ferry LNG from the US.
“GAIL has informed that supply of US LNG is expected to commence from January 2018,” he said, adding a committee headed by NITI Aayog vice chairman has been constituted to look into the issues of desirability of acquiring shipbuilding technology/capacity for LNG ships.
Report of the committee is awaited, he said.