Regional LNG: NTPC rejects BG, Petronet bid for LNG supplies

India state-run National Thermal Power Corporation (NTPC) has rejected bids of British oil and gas major BG Group and public sector oil companies consortium Petronet LNG Ltd for supply of 3 million tonne of Liquefied Natural Gas (LNG) to fire its two power plants, the Hindu Business Line reported Friday.

While Petronas of Malaysia, Royal/Dutch Shell and Yemen LNG qualified for supply of 3 million tonne LNG a year for 17 years, Reliance Industries (RIL) too cleared the technical hurdle for supply of 4.14 billion cubic meters natural gas for NTPC's Kawas and Gandhar power projects in Gujarat from its gigantic gas field in Bay of Bengal.

However, big names such as Oman LNG, RasGas of Qatar, Total of France, Unocal of US and BP of UK, who had expressed interest in supply of LNG/natural gas to NTPC, did not put in technical and price bid on the close of tender yesterday, industry sources said.

For regassificatiton of imported LNG, PLL's Dahej terminal and Shell's Hazira terminal (both in Gujarat) were shortlisted.

BG Group, which had bid for supply of LNG from its Iran gas field and regassification at its proposed Pipavav terminal, had not furnished the $4 million bid security, which was the main reason for its disqualification.

NTPC sought two separate bids for supply of 3 million tonne imported LNG or 4.14 billion cubic meters natural gas from domestic fields to fire Gandhar and Kawas power projects, which are being expanded from 650 MW to 2,000 MW each, and regassification of imported LNG.

Petronet LNG had proposed to supply 3 million tonne LNG sourced from Qatar, but the bid was rejected on technical grounds, sources said.

Reliance Industries has proposed to supply 3 million tonne (4.14 billion cubic meters) of gas from its Krishna Godavari basin gas field, off the Andhra Pradesh coast.

Unocal decided to sit out as it felt supplying LNG from its east coast import terminal would be impossible. Besides, the Bangladesh government too has not allowed it to export gas from its field to India.

Technical bids were opened on Tuesday and price bids are likely to be opened next month, they said.

Sources said most of the foreign LNG suppliers did not bid as they disapproved of the tender terms, which they called unreasonable.

Ras Laffan Liquefied Natural Gas Co Ltd (RasGas) - a joint venture firm promoted by ExxonMobil of US, had in July quit the race saying the tender conditions were heavily loaded against the supplier. Terms and conditions are unrealistic, not balanced and non-commercial and do not support the large investments necessary to assure timely and secure supplies.

Bidders had voiced reservations to as many as 48 clauses including termination conditions, bid security, fixed price quote for gas, most favoured customer status and lack of confidentiality clause.

Most of the foreign bidders did not bid as they found NTPC tender terms unrealistic, said a source in a multinational firm. (*)