Shipping Corporation of India awaits fruition of GAIL's LNG project tender

State-owned Shipping Corporation of India (SCI) is awaiting the outcome of GAIL's tender for nine LNG vessels which sought poor response from bidders. "The tender floated by GAIL for nine LNG vessels did not evoke any response from the bidders which are shipbuilders. The last date was December 4 and got extended till January 6. SCI is supposed to operate the vessels," Arun Kumar Gupta, chairman & managing director, SCI, told PTI. Gupta said the reason for the poor response was because GAIL had put in a rider in the tender that out of the three batches of three vessels each, one in each batch would have to be built in an Indian shipyard. He said that most of the shipbuilders are either Japanese or Koreans.

Gupta said that neither the Japanese nor the Koreans were convinced with the quality of Indian shipyards.

"So the response was poor," he said. "If the entire project fails to see the light of the day, then it will be a problem for SCI as it means losing a revenue stream," Gupta said. Gupta said that if everything went off well, the SCI would have the step-in rights to pick up a maximum equity of 26 per cent in the project by virtue of being a national liner. "We want to have a share of the pie", he said. Building cost of a single LNG vessel was approximately $225 million, he said. The GAIL project cost had been pegged at $3 billion. Gupta said that SCI was also contemplating to open a subsidiary in Singapore in association with a foreign company. "One foreign company has asked us to operate their LNG vessels for which we want to have a subsidiary in Singapore," Gupta said.

Gupta said that SCI was also managing three LNG vessels on behalf of Petronet. "Seeing our costing and expertise, the foreign firm had approached us," he said. GAIL was also planning to invest Rs 300 crore in LPG and offshore segment, he said.