GAIL Tries Again for LNG Ships
India's state-owned Gail India Ltd would reissue the multi-billion dollar tender to build three massive liquefied natural gas (LNG) carriers in India with “changed norms”, reports Financial Express.
There has been news that GAIL has scrapped a tender that would have led to the construction of LNG vessels at Indian shipyards. The tender, floated in 1 August 2014, was aimed at hiring nine LNG carriers, with a caveat that three of them be made in India.
However, there were no takers for the tender, since local yards inexperienced in building such ships failed to get expert LNG shipbuilders to share technology for the same. Despite hard sell by the Minsitry, the tender didn't attract any Japanese or Korean shipbuilders.
Gail needs the carriers for a period of 20 years starting 2017, for transporting LNG from US to India. However, no Indian shipyard has ever built a vessel to transport LNG and foreign giants based in Korea and Japan turned down India’s request to form a joint venture and transfer technology to India.
According to a senior government official, the tender now would be re-issued with changed norms. The official did not disclose the new deadline for launching the tender considering the sensitivity of the issue. The delay in finalizing the tender could land GAIL in a crisis for not having LNG vessels on time to import gas from the US, which is expected to start from 2017.
Observers feel the tender conditions are too stringent to be met. This is at a time when most Indian shipmakers do not have the financial muscle to spent capex for upgradation of shipyards. For the shipyards there are two challenges — to find the technology as well as investors. Moreover, such an opportunity has emerged for the first time in India and hence it would take time to fructify.
