State-run gas utility GAIL India Ltd has
chartered an LNG tanker from French major Total SA for three years
to haul gas from the US beginning early 2018.
"We are hiring the ship
for three years with an option to extend the time-charter by another
year," a senior company official said.
biggest natural gas marketing company,
had through the Shipping Corporation of India (SCI) invited bids for hiring
four LNG carrying tankers. Some 30 LNG ships were offered, with Total offering
the lowest day rate of USD 44,900 for a ship with 165,000 cubic meters of
The official said the
company is for the time being hiring only one ship as the other offers were
higher than Total's bid.
Total has offered a ship
it had chartered from Teekay LNG Partners LP, one of the world's top
independent owners and operators of LNG carriers, for ferrying LNG from a
project in Yemen.
The French company had
chartered the ship till 2029 but due to turmoil in the country, Yemen LNG
(YLNG) project was temporarily shut in 2015.
GAIL had resorted to
short-term chartering after its USD 7 billion tender for hiring newly build
ships fell due to bidders not agreeing to 'Make in India' terms.
In the tender, GAIL had
sought to time-charter nine newly built LNG ships of cargo capacity of
150,000-180,000 cubic metres to ferry LNG it has tied up from Sabine Pass and
Cove Point LNG projects in US.
Bids were sought in lots
of three, with the condition that one of the three ships will be built at an
Two Japanese bidders -- a
consortium of Mitsui OSK Lines (MOL)-Nippon Yusen Kabushiki Kaisha (NYK Line)
and Mitsui & Co and a consortium comprising Mitsubishi Corporation-Kawasaki
Kisen Kaisha Ltd (K Line) and GasLog -- had sought several deviations from the
tender conditions, which were not agreeable to GAIL.
The official said since
Indian shipyards neither had technology or experience of building the highly
specialised LNG ships, the bidder sought sovereign performance guarantee for
the ones built in India.
The terms could not be
agreed upon, leading to the cancellation of the tender in November last year,
In the meanwhile, GAIL
has either swapped or sold about 60 percent of the 5.8 million tonnes per annum
of LNG it has tied up from the US. The reduced volumes, which are likely to
flow from April next year, would need 2-3 ships.
SCI is being asked to
float a fresh tender for 2-3 more ships, the official added.