GMB adopts Swiss Challenge route to make FSRU project competitive

AHMEDABAD: Gujarat Maritime Board (GMB) has opted for the more competitive Swiss Challenge (comparative bidding) route for the sole bid for its proposed maiden LNG port terminal project with a floating storage and regassification unit (FSRU) near Jafrabad in Amreli.

Swiss Challenge (comparative bidding) is a process, which acts like a bonus system, allowing third parties to make better offers (challenges) for a project with an objective to discourage frivolous project, or to avoid exaggerated project development costs.

GMB has received a proposal from a company referred to as 'original project proponent(OPP)' for the project, and will give an opportunity to it to make its proposal competitive, reads the GMB advertisement released in a national daily here.

SWAN Energy Ltd (SEL) had proposed to develop the first FSRU terminal for natural gas imports in India on the Western shore near Pipavav in Amreli district of the state, official sources said adding the concept was accepted keeping in view the limitations of onshore LNG receiving terminals.

The state port regulator has invited Request for Proposals (RFP's) for the project, under section 10 of Gujarat Infrastructure Development (GID) Act (invited comparative bids, popular as Swiss Challenge route) to develop the terminal.

It will be the fifth LNG terminal to come up in Gujarat, after Petronet's 10 MTPA capacity facility at Dahej, Shell's 3.6 million tonnes Hazira LNG terminal, and HPCL's proposed 5 MTPA terminal in Jafarabad and another 5 MTPA LNG terminal being developed by GSPC in joint venture with Adani at Mundra.

SEL and Gujarat Pipavav Port Ltd (GPPL) had signed an MoU in the Vibrant Gujarat Summit 2011 in the presence of GMB. Thereafter, they carried out various marine engineering studies and prepared the draft project report, official sources said.

The project is expected to be operational by 2014 end or early 2015, say sources.

Among big advantages of FSRU is that its conversion and operations can be commenced within 1 to 1.5 years if no new port related facilities are required to be developed, official sources said.

The concept of FSRU receiving terminal is now a commercially established technology and such terminals are already in operations in different parts of the world, experts say.

Onshore LNG terminals are relatively costlier as compared to FSRU model, they said.