India’s gas utility Gail India Ltd has issued a new tender to hire nine newly-built LNG carriers under modified terms aimed at facilitating the bidding process and removing hurdles that have prolonged the project.
The tender is quoted in three lots of three ships each, out of which three ships would have to be built in India. Under the new terms, Indian shipyards have been given the opportunity to take up to 13 % in each of the three carriers to be built locally.
The move would see the equity stakes held by India in the ships increase from previous 36% to 49% thus serving as an incentive to global fleet owners to opt for the remaining 51% stake.
Gail plans to time-charter the ships from global owners, who will order the construction of the nine ships. Pursuant to a deal signed last year, Gail has the right to take up to 10% stake in the new ships. and the ships’ operator Shipping Corp. of India Ltd (SCI) can take up to 26% stake in each of the nine LNG carriers.
The LNG carriers ordered overseas are to be completed by May 2019, whereas the batch to be built by domestic shipyards should be delivered between July 1, 2022 and June 30, 2023.
According to the tender documents, the charter is 19.5 years for ships built overseas while their counterparts built locally would be time-chartered for 16 years.
Bidders have time until December 14 to submit their offers.
The previous tender has been scrapped after it failed to attract bidders.
The initial plan envisaged for the third of the newbuilds to be built locally so as to boost Indian shipbuilding capabilities.
However, it seems that this very precondition turned away international bidders as they were not that eager to share their technology with local builders. Nevertheless, three local builders Cochin Shipyard Ltd, L&T Shipbuilding Ltd, a unit of Larsen and Toubro Ltd (L&T), and Pipavav Defence and Offshore Engineering Ltd, managed to find international partners with the necessary know how on construction of these technologically-advanced ships.
India’s Cochin Shipyard Ltd entered into a deal with South Korean Samsung Heavy Industries, L&T Shipbuilding Ltd has partnered up with Hyundai Heavy Industries whereas Pipavav teamed up with Daewoo Shipbuilding and Marine Engineering.
World Maritime News Staff