"We are hiring the ship for three years with an option to extend the time-charter by another year," a senior company official said.
GAIL, India's biggest natural gas marketing company, had through the Shipping Corporation of India (SCI) invited bids for hiring four LNG carrying tankers. Some 30 LNG ships were offered, with Total offering the lowest day rate of USD 44,900 for a ship with 165,000 cubic meters of storage capacity.
The official said the company is for the time being hiring only one ship as the other offers were higher than Total's bid.
Total has offered a ship it had chartered from Teekay LNG Partners LP, one of the world's top independent owners and operators of LNG carriers, for ferrying LNG from a project in Yemen.
The French company had chartered the ship till 2029 but due to turmoil in the country, Yemen LNG (YLNG) project was temporarily shut in 2015.
GAIL had resorted to short-term chartering after its USD 7 billion tender for hiring newly build ships fell due to bidders not agreeing to 'Make in India' terms.
In the tender, GAIL had sought to time-charter nine newly built LNG ships of cargo capacity of 150,000-180,000 cubic metres to ferry LNG it has tied up from Sabine Pass and Cove Point LNG projects in US.
Bids were sought in lots of three, with the condition that one of the three ships will be built at an Indian shipyard.
Two Japanese bidders -- a consortium of Mitsui OSK Lines (MOL)-Nippon Yusen Kabushiki Kaisha (NYK Line) and Mitsui & Co and a consortium comprising Mitsubishi Corporation-Kawasaki Kisen Kaisha Ltd (K Line) and GasLog -- had sought several deviations from the tender conditions, which were not agreeable to GAIL.
The official said since Indian shipyards neither had technology or experience of building the highly specialised LNG ships, the bidder sought sovereign performance guarantee for the ones built in India.
The terms could not be agreed upon, leading to the cancellation of the tender in November last year, he said.
In the meanwhile, GAIL has either swapped or sold about 60 percent of the 5.8 million tonnes per annum of LNG it has tied up from the US. The reduced volumes, which are likely to flow from April next year, would need 2-3 ships.
SCI is being asked to float a fresh tender for 2-3 more ships, the official added.
(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)