GAIL sets Dec 4 deadline for bids for hiring LNG ships

State-run natural gas distributor GAIL India has extended by over a month the deadline for placing bids for nine newly-built ships it seeks to hire to transport liquid natural gas (LNG) from the US.

GAIL has, through a notice, extended the last date for bidding until Dec 4 from the earlier deadline of Oct 30.

GAIL has contracted for the supply of 5.8 million tonnes per annum of LNG from the US for 20 years. The imports are due to start in 2017.

It had in late-July decided to hire from Indian shipbuilders a third of the ships needed for ferrying this LNG. It has conditioned that one ship out of every lot of three ships each would be built in India.

In the tender, the utility has given Indian shipbuilders six years to deliver the ships as opposed to two-and-half years deadline for foreign firms.

GAIL earlier had not favoured the inclusion of domestic shipbuilders in the tender on grounds that Indian shipyards would need at least six years and massive finances to build cryogenic LNG carriers.

As per the tender, each of the LNG ships will be registered as a Special Purpose Vehicle (SPV) for ownership and management purposes. Also both GAIL and the state-owned Shipping Corp. of India (SCI) will have the option to take equity ownership in each SPV up to 10 and 26 percent respectively.