2 Japanese consortiums bid for GAIL’s $7-billion tender

Two Japanese consortiums have bid for state-owned gas utility GAIL India Ltd’s $ 7 billion tender for hiring nine newly built ships for ferrying LNG from the US.

Mitsui OSK Lines Ltd (MOL)-Nippon Yusen Kabushiki Kaisha Ltd (NYK Line) and Mitsui & Co Ltd is one consortium to have applied for the tender at close of the deadline on March 31, official sources said, adding that the other one is Mitsubishi Corporation-Kawasaki Kisen Kaisha Ltd (K Line) and GasLog Ltd. GAIL is seeking 9 LNG ships of a cargo capacity of 150,000-180,000 cubic meters to help transport liquefied natural gas (LNG) it has tied up from Sabine Pass and Cove Point LNG projects in US, with supplies slated to start from December 2017.

The tender, which was re-floated in September last year, was originally to close on December 17 but postponed first to February 29 and then to March 31. 

Sources said only two consortiums put in bid at the close of the extended deadline. GAIL sought quotes in three lots of three ships each. One ship in each lot is to be built at an Indian shipyard. After postponing the deadline thrice, GAIL had in February last year scrapped the tender to hire nine LNG carriers to ferry gas from the US, with a caveat that three of them be Made in India. At that time no foreign shipyard was willing to share LNG shipbuilding technology.

The tender was re-floated on September 15, 2015. Sources said while two ships will be built at the shipyards of their foreign collaborators, one carrier has to be built in India. Other Indian shipyards are looking at similar tie-up for the same.

The tender document provides for Indian shipyard taking 5 per cent to 13 per cent in the liquefied natural gas (LNG) carrier that it will build. This condition was not there in the original tender floated last year.