GAIL LNG tender to ferry gas from US finds no bidder

After postponing tender deadline thrice and also one year later, state-owned gas utility GAIL India Ltd has not found any bidder for its USD 7 billion tender to hire newly-built LNG ships to ferry gas from the US.
GAIL's Rs 42,370 crore tender to hire nine newly-built liquefied natural gas (LNG) tankers drew a blank due to the government's condition of building a third of the ships in India, officials said.
GAIL had in August last year floated a global tender to charter nine newly-built ships for transportation of natural gas in its liquid form at sub-zero temperature (LNG) from the US.

The tender, however, required bidders to build one-third of the ships in India, a condition that found no takers.
It first postponed the last date of bidding from October 30 to December 4, then to January 6 and February 17.
GAIL was originally not in favour of the condition but succumbed to Oil Ministry's dictate once it was threatened with a Presidential directive.

Officials said the company may now have to re-float the tender without the 'Make in India' condition.
GAIL board had on April 4 last year approved hiring of up to 11 newly-built LNG ships.
The Ministry saw the chunky contract to be the perfect opportunity for India to exercise buyer's clout and wanted a part of the contract be set aside for Indian shippers to kick-start domestic manufacturing by compelling global majors to transfer LNG shipbuilding technology to India.

GAIL, however, resisted this but the Ministry in no uncertain terms told the firm that a Presidential directive -- an order from the owner of the company -- will be issued.
The company fell in line and re-floated the tender calling
for bids in lots of three with the condition that at least one ship in each of lots should be built in India.
But the tender evoked lukewarm response with major shipbuilders not wanting to move to India, they said.
Oil Minister Dharmendra Pradhan and External Affairs Minister Sushma Swaraj had tried to persuade South Korea, the world's largest LNG tanker manufacturer, to rescue the tender.

Four Korean shipyards qualify for GAIL's tender requirements -- Samsung Heavy Industries, Daewoo Ship Building and Marine Engineering, Hyundai Heavy Industries and STX Offshore and Shipbuilding (STX) -- but none of them showed any interest in the tender, they said.
Korea was lukewarm to Indian requests as it saw New Delhi not reciprocating by clearing hurdles for POSCO's USD 12 billion steel plant.
Instead, India has told the Korean firm to bid for an iron ore licence to feed its planned steel plant as against its expectation of getting a mine on nomination or without bid basis.
GAIL will start receiving LNG from the US from December 2017 and it needs the tankers before that. It has already lost one year in the tendering process.