|GAIL will need 12 LNG carriers|
a dozen LNG vessels at its disposal for the task. So GAIL will have to float tenders worth $2.4 billion which is likely to be issued by the end of this month.
Following China’s example, Government of India recently instructed GAIL to import LNG from foreign countries like US only in vessels where Indian firms have substantial ownership. This follows recent standoff between the two countries after the Devyani case that brought diplomatic ties to new low. Indian government wants to ensure that in future no diplomatic spat can hamper the import of such gas, which may have a worse impact in the power-starving economy of the country.
GAIL may ask shipping lines to ensure that foreign shipyards partner with their Indian firms as they place bids. These tie-ups would enable Indian shipbuilders to get the know-how for making these specialised vessels.
This will help revialise Indian shipyards many of them are facing flat revenues due to the economic slowdown.
During the last seven years, foreign shipyards delivered five membrane-type LNG ships each of a capacity not less than 135,000 cubic metres to GAIL.
Recently, the petroleum secretary met the heads of all the major Indian shipyards to discuss about the plan. Representatives from Pipavav Shipyard, L&T Shipyard, Goa Shipyard, Mazgaon Docks, Cochin Shipyard and ABG Shipyard took part in the meeting. The CMDs of GAIL, Shipping Corporation of India and ONGC were also present during the discussion.
GAIL has already signed a memorandum of understanding with SCI and agreed to provide SCI with step-in right to take up to 26 percent equity in each of the LNG carriers that would be chartered by GAIL and the company would also retain a similar right of up to 10 percent equity participation.
The ministry is planning to have time charter party agreements with major shipyards by the third quarter of 2014, in order to give adequate time for global majors for tie us and also ship building. GAIL is the largess LNG offtake holder from US, with contracts in place of 3.5 mt per annum from Sabine Pass project and another 2.3 mt from Cove Point signed last year. GAIL also has contracts with Gazrom in Russia and Gorgon project in Australia.
According to analysts for 5.8 mtpa of LNG to be transported from the US, at least 12 ships are required for uninterrupted supply of such LNG. The number of ships can go up to 15 for the entire transportation. An LNG carrier of 160,000 cubic metres costs about $200 million and depending on capacity this can go up to $250 million. So for 12 ships, the total cost for constructing the ships would be about at least $2.4 billion.
Post a Comment