Oil minister urges South Korean envoy to clear hurdle for GAIL's LNG ships

A tech-transfer issue has been holding up progress on GAIL's plan to charter hire nine LNG vessels

Oil minister Dharmendra Pradhan today held a meeting with South Korean ambassador Joon-gyu Lee seeking his assistance to sort out a technology-transfer issue that had been holding up progress on GAIL (India)'s plan to charter hire nine Liquefied Natural Gas (LNG) vessels.

The Indian state-owned gas utility had floated a global tender for hiring the LNG ships in three lots of three ships each. The tender makes it mandatory to build one ship in each lot in partnership with Indian shipyards, as part of the "Make in India" scheme. The tender, already extended twice, has to be awarded by May 2015 to start supplies from December 2017.

Three Indian shipyards are interested in the project but need to collaborate with four Korean shipyards -- Samsung Heavy Industries, Daewoo Ship Building and Marine Engineering, Hyundai Heavy Industries and STX Offshore & Shipbuilding (STX).

The Korean firms have citied Korean government's restrictions in technology transfer. Technology of LNG ship design and construction has been registered as Korea's National Core Technology and is handled at the National level and controlled by Korean Government Authority, they say.

"It was impressed upon the Ambassador that GAIL's tender is globally one of the largest tenders and this was a very good opportunity for Korean shipbuilders to expand business in India. Korean Government intervention in sorting out the technology transfer hindrance would greatly help," the oil ministry said in a statement.

The issue was also raised during Prime Minister Modi's meeting with South Korean President Park Geun-hye in Myanmar on the margins of East Asia Summit (EAS) and Association of South-East Asian Nations (ASEAN) Summit on 12 November. The ambassador promised to report the matter to his Government to find a solution for the problem.