This in vesselfinder’s news section.
3 of the 11 ships should be made in India. Our govt could have stipulated the same. Want cheap, US tax payer subsidized LNG? Part of it has it be shipped on US flagged bottoms. But, that’s asking for too much.
Top Japanese fleet owners have applied for [B]India’s biggest shipping tender worth $7 billion[/B] issued by state-run natural gas firm [GAIL (India) Ltd](http://www.gailonline.com/final_site/index.html) [B]to hire 11 new liquefied natural gas (LNG) carriers[/B] to ferry gas from the
A consortium of Mitsui O.S.K. Lines Ltd (MOL)-Nippon Yusen Kabushiki Kaisha Ltd (NYK Line) and Mitsui & Co Ltd and another group comprising Mitsubishi Corporation-Kawasaki Kisen Kaisha Ltd (K Line) and GasLog Ltd applied for the tender when the deadline ended on Thursday, at least two people briefed on the tender said, asking not to be named because the details have not been made public
Image: Mitsui O.S.K.
Monaco-based and New York Stock Exchange-listed GasLog is the only non-Japanese firm to apply for the tender. In today’s market, it costs more than $200 million to build an LNG ship from scratch.
“The process of finalizing the successful bidder will take at least two months,” said an official who is advising GAIL on the tender. The tender will be awarded to the bidding group quoting the lowest daily hire
GAIL declined to comment.
GAIL needs the 11 LNG tankers to haul 5.8 million metric tonnes per annum (mmtpa) of gas from the United States beginning December 2017.
The keenly watched tender, a part of the prestigious ‘Make in India’ initiative of Prime Minister Narendra Modi, stipulates that three of the nine LNG carriers that will be on firm order have to be built at local yards.
GAIL will not order the ships directly at shipyards-both overseas and Indian. It plans to time charter the carriers from global fleet owners who will have to construct three of the nine LNG tankers in India as part of the ‘Make in India’ plan.
Prospective bidders are required to quote for lots of three vessels with a provision that under each lot, one of the vessels shall be built in an Indian yard.
State-run Shipping Corporation of India Ltd (SCI) and GAIL have a step-in right to take at least 26% and 10% stakes respectively in each of the nine LNG carriers hired by GAIL.
The local shipbuilder winning the contract to build the three LNG tankers have the option of acquiring another 5% to 13% stake in each of these tankers, according to the tender documents.
LNG Tanker Bishu Maru - Image:
India’s state-run Cochin Shipyard Ltd is the only yard that has fulfilled the eligibility criteria set by GAIL to build the LNG tankers. It has signed a technology collaboration pact with South Korea’s Samsung Heavy Industries Co Ltd to build the LNG ships. It has also secured license from GTT, France, to use its patented Mark-III LNG containment systems.
“We have successfully completed a Mark-III flex mock-up, which has been certified by GTT, France. With this, Cochin Shipyard has completed all the requirements to be licensed by GTT to build ships for any client world-wide using their patented Mark-III technology. Cochin has become the first shipyard in India to obtain this coveted license from GTT. Now, Cochin fulfils all the conditions of the GAIL tender,” Madhu Nair, chairman and managing director of Cochin Shipyard, said in an interview in February.
The LNG carriers ordered at overseas yards will have to be constructed and delivered between 1 January and 31 May 2019 while those ordered at Indian yards will have a window period of between 1 July 2022 and 30 June 2023 for delivering the vessels, according to the tender terms.
As a result, each of the six LNG carriers built at overseas yards will be hired by GAIL for 19.5 years while each of the three tankers constructed in India will be hired for 16 years.
The three LNG carriers to be built in India will be entitled to receive financial assistance from the union government, according to a shipbuilding policy approved by the National Democratic Alliance (NDA) government which will take effect from 1 April 2016 and run for 10 years.
India’s shipbuilding industry has also been granted infrastructure status helping yards raise long-term working capital loans from banks at competitive rates.