Gail ensures up to 49% Indian stake in revised $7-bn tender for LNG carriers
19 Sep 2015
State-run gas utility GAIL India has re-invited bids to hire nine newly-built liquefied natural gas (LNG) ships under modified `Make in India' terms that also allow Indian shipyards to pick up to 13 per cent stake in three of these carriers.
The revised tender for LNG ships proposed to be built at home under the 'Make in India' plan offers up to 49 per cent Indian shareholding and a longer construction time compared with overseas carriers that GAIL plans to charter.
GAIL had in August last year floated a global tender to charter nine newly-built ships for transportation of up to 5.8 million tonnes per annum of LNG from the US.
Gail scrapped the $7 billion (approximately Rs46,508 crore) tender to hire nine LNG carriers to ferry gas from the US, as the caveat that three of them be made in India did not find any takers.
The tender, however, required bidders to build one-third of the ships in India, a condition that found no takers.
GAIL postponed the last date of bidding from 30 October to 4 December, then to 6 January and finally to 17 February before cancelling the tender.
No foreign shipyard was willing to share LNG shipbuilding technology with Indian shipyards at that time.
Now that Korean shipbuilders Samsung Heavy Industries, Hyundai Heavy Industries, Daewoo Shipbuilding & Marine Engineering have agreed to cooperate with Cochin Shipyard, L&T Shipbuilding and Pipapav Shipyard, respectively, GAIL this week re-floated the tender for charter hiring of nine ships.
The tender has been quoted in three lots of three ships each, wherein one ship in each lot will be built at an Indian shipyard.
The tender document also provides for a new condition that the Indian shipyard building the ship will have the right to take 5 to 13 per cent stake in the liquefied natural gas (LNG) carrier that it builds.
Also, GAIL will have the right to take up to 10 per cent equity stake in any or all of the nine ships. Shipping Corporation of India (SCI), which is to operate the carriers, will have a right to 26 per cent interest, according to the document.
GAIL and SCI had last year signed an agreement wherein the state-owned shipping company has the step-in right to take at least a 26% stake in each of the nine LNG carriers hired by GAIL.
GAIL plans to time charter, or hire, the carriers for 18 years from fleet owners. Overseas shipyards have been given time till 31 May 2019 to deliver their ships while those built at Indian shipyards are to be delivered between 1 July 2022 and 30 June 2023, according to the tender document.