GAS Authority of India Limited (GAIL), a government owned entity, has again invited tenders to charter nine LNG newbuilds for transporting nearly 6M tonnes of LNG annually from the United States to India.
The tender that was floated last year for the purpose was scrapped when there were no takers mainly because it came with the rider that three of these ships would be built at Indian yards.
While that pre-requisite remains, this time around the three Indian yards viz. Cochin Shipyard, L&T Shipbuilding, and Pipavav Defence and Offshore Engineering have been able to forge a tie-up with major South Korean yards (HHI, Samsung, and Daewoo) for building three vessels. Such an understanding that will involve exchange of technology has cleared the decks for the USD7 billion newbuild programme to take off.
The three Indian yards will pick up stakes in the three ships that they will build.
Another factor in facilitating construction of the new LNG tonnage is the willingness of state-owned Shipping Corporation of India (SCI) to take up to 26% of the stakes in each of the three newbuilds to be built in India.
“I can confirm that we are ready to have a stake up to 26% in the new vessels that will be built at Indian yards,” SCI Chairman and MD Arun Kumar Gupta told IHS Maritime today.
“This will provide a comfort zone for builders of the LNG vessels,” Gupta, who heads India’s largest shipping company added.
Under the tender terms SCI can also invest up to 26% into the other six newbuilds, but Gupta said the shipowner is yet to take a decision.
Terming the arrangement as ideal, Manish Saigal, MD of consultant house Alvarez & Marsal India pointed out to IHS Maritime that the co-operation with South Korean yards will enable Indian shipbuilders to build LNG vessels that meet international standards.
Six ships that will be built at South Korean yards are scheduled to be delivered by the end of May 2019. Indian shipbuilders have been given more time (July 2022 and July 2023) to deliver the three vessels.