Project at Risk
Samsung Heavy Industries was expected to win a US$ 1.6 billion project to build a liquefied natural gas (LNG) tanker for Gail in India. But the project is at risk now.
According to foreign media reports and the shipbuilding industry on November 14, Gail, a state-owned gas company of India, planned to order six to nine LNG tankers for the purpose of importing LNG from the US. To this end, Gail held a bid for the selection of a shipbuilder that will carry out the project in March, and originally planned to conclude the contract in September. However, as the main contract schedule was delayed, the Indian company passed the deadline for receiving estimates, which was October 15.
Industry watchers analyze that passing the deadline, Gail virtually scratched off the project. "It is expected that Gail will abandon building the LNG tanker that Gail has planned on for more than two years to import LNG from the US and will proceed to held a bid to obtain a charter ship," said Tradewinds, a shipbuilding and shipping magazine on November 10 (local time).
The Gail LNG tanker project is a project that Samsung Heavy Industries exclusively bid for on the condition that the company will cooperate with Cochin, an Indian shipyard. One third of the ordered ships were scheduled to be built at Cochin Shipyard in India and the rest at Samsung Heavy Industries’s Geoje Shipyard in Korea. Gail was expected to order up to nine units, which meant that Samsung Heavy Industries would receive an order to build six units.
In addition, Samsung Heavy Industries can receive an additional US$ 400 million in technical support fees for the construction of the three ships at Cochin Shipyard. Considering the price of an LNG tanker is around US$ 200 million per unit, Samsung Heavy Industries can land an order of up to US$ 1.6 billion. In fact, the Gail LNG tanker project is the biggest project of this year for Samsung Heavy Industries.
"We have not received any official notification from Gail," said a representative of Samsung Heavy Industries. “We are monitoring the situation.”