Gail extends bidding deadline for $7bn LNG ship contract

22 December 2015 (Last Updated December 22nd, 2015 18:30)

State-owned Gas Authority of India (Gail) has extended the deadline for bidding for a $7bn LNG carriers contract, until February 2016.

State-owned Gas Authority of India (Gail) has extended the deadline for bidding for a $7bn LNG carriers contract, until February 2016.

Gail is seeking to hire nine newly constructed ships to transport 5.8 million tonnes per annum of LNG from the US.

The bidding was to close last week but has been extended to 29 February 2016, reportedly to help local shipbuilding companies to tie-up with foreign technology suppliers.

"The deadline of the tender was extended thrice as foreign shipyards refused to share their LNG shipbuilding technology."

The extension comes close on the heels of Cochin Shipyard obtaining a licence to use French company Gaztransport & Technigaz’s (GTT) LNG technology to build vessels.

GAIL floated a tender seeking a charter hiring of nine LNG vessels in three lots, with one ship in each lot to be built in India.

The deadline of the tender was extended thrice as foreign shipyards refused to share their LNG shipbuilding technology.

Korean shipbuilders Samsung Heavy Industries, Hyundai Heavy Industries, and Daewoo Shipbuilding & Marine Engineering agreed to partner with Cochin Shipyard, L&T Shipbuilding and Pipapav Shipyard respectively. L&T Shipbuilding opted out from the competition.

GAIL re-floated the tender in September, modifying the terms wherein Indian shipyards will get to own 5-13% stake in the LNG carriers.

Shipping Corporation of India (SCI) has been involved as an operator of the LNG carriers and will exercise a right of 26%, while Gail will own 10%.

The tender document requires the foreign shipyards to deliver the ships by 31 May 2019 and the Indian counterparts to complete delivery between 1 July 2022 and 30 June 2023.