Samsung to build LNG carrier at Kochi on GAIL tender’s failure

On the heels of GAIL’s Rs 42,370 crore global LNG ship tender with ‘Make in India’ caveat failing, Korea’s Samsung has signed a pact to build liquefied natural gas carriers with the Cochin Shipyard.

After postponing the deadline thrice, GAIL had in February scrapped the tender to hire nine LNG carriers, with a caveat that three of them be made in India. No foreign shipyard was willing to share LNG shipbuilding technology. 

“After consistent efforts of the Indian government with the Korean government for persuading the Korean shipyards to collaborate with Indian shipyards, recently, Samsung shipyard has signed a collaboration agreement with Cochin Shipyard,” Oil Minister Dharmendra Pradhan said on Wednesday.

In a written reply to a question in the Rajya Sabha, he said the tender floated by “GAIL provided for charter hiring of nine ships quoted in three lots of three ships each and one ship in each lot was to be built in an Indian shipyard”. It specified that Indian shipyards will have to forge a binding technical collaboration with foreign shipyard which will transfer LNG shipbuilding technology. 

“However, no qualified foreign shipyard signed a binding collaboration with an Indian shipyard till the due date for bid submission,” Pradhan said. GAIL had in August floated a global tender to charter nine newly-built ships for transportation of natural gas in its liquid form at sub-zero temperature (LNG) from the US. It needs the carriers for a period of 20 years starting 2017.

GAIL was originally not in favour of bidders having to build a third of the ships in India but succumbed to Oil Ministry’s diktat, threatened with a Presidential directive. The ministry saw the contract as an opportunity for India to exercise buyer’s clout and wanted a part of the contract be set aside for Indian shippers to kick-start domestic manufacturing by compelling global majors to transfer LNG shipbuilding technology to India. Four Korean shipyards qualified for GAIL’s tender requirements.