GAIL to take call on LNG ship tender by September 30

By: | Published: September 27, 2016 6:28 AM

After dragging on for more than two years, GAIL (India) is expected to decide on its multi-billion dollar contract to hire newly built ships to ferry liquefied natural gas (LNG) by September 30, a top company official told FE.

Dismissing reports that the tender may be scrapped, a director on the board of GAIL said that the company is evaluating bids from two consortia. “Tender would not be scrapped, nor the terms would be changed. We are evaluating bids from two Japanese consortia and a final outcome would be known by September 30,” the official reiterated.

The two Japanese bidders eyeing the contract include – a consortium of Mitsui OSK Lines (MOL)-Nippon Yusen Kabushiki Kaisha (NYK Line) and Mitsui & Co. The second consortium comprises Mitsubishi Corporation-Kawasaki Kisen Kaisha Ltd (K Line) and GasLog.

GAIL has floated the latest tender for time-charter hiring of up to 11 ships for 15 to 18 years through international competitive bidding. Exact number of ships to be chartered will be decided in due course. The tender was floated on September 15, 2015 with a due date of submission of December 14, which was later extended till February 29, 2016.

The tender was first launched with a cut off date of October 30, 2014, which was later extended several times to December 4, January 6 and February 17 next year.

According to the initial plan, the vessels build overseas are to be delivered between January-May 2019 and one out of three made locally are to be ready between July 2022 and June 2023. However, it is not confirmed whether these timelines would still be met.

In December 2011, GAIL signed a deal with Cheniere Energy Partners to buy 3.5 mtpa of LNG from the Sabine Pass Terminal in Louisiana on FoB basis. Deliveries would start between March and August 2018.

In April 2013, GAIL booked another 2.3 mtpa capacity to export LNG from the Dominion Cover Point terminal in Maryland, delivery of which is expected from end-2017.

After a government directive, GAIL was forced to take out a tender with a clause that out of three LNG vessels one has to be built in India. Generally, it takes 30 months for Japanese and Korean companies to deliver an LNG ship.

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