Shell, Total may bid jointly for NTPC tender

Royal Dutch/Shell is likely to bid along with French oil giant Total for the state-run National Thermal Power Corporation's mega LNG supply tender.

Shell, which is in the fray for both supply of 3 million tonnes of liquefied natural gas and for providing import and regassification terminal services, has sought extension of the April 27 bid submission deadline to firm up a joint bid with Total's subsidiary Yemen LNG.

"NTPC in all probability is likely to extend the bid deadline to May 18," industry sources said.

Total, which last month acquired 26 per cent stake in Shell's under-construction 2.5 million tonnes LNG import and re-gassification terminal at Hazira in Gujarat, holds 36 per cent in Yemen LNG -- one of three bidders that was shortlisted by NTPC for sourcing fuel to fire its 1300 MW power plants at Kawas and Gandhar in Gujarat.

The other shortlisted firms for supply of LNG were Shell and Petronas of Malaysia. Reliance Industries, on the other hand, was shortlisted for supply of domestic natural gas.

For the services, Shell had bids on its Hazira terminal while Petronet LNG Ltd, a company promoted by public sector Indian Oil Corporation, GAIL, Oil and Natural Gas Corporation and Bharat Petroleum Corporation Ltd, had offered the services of its Dahej plant in Gujarat.

"Total came in Hazira only with the purpose of supplying LNG to India from its subsidiary Yemen LNG. In the NTPC tender, Shell and Total will synchronise their bids to make LNG sourced from Yemen and regassified at Hazira the cheapest," sources said.

Sources said Shell-Total will together bid for supply of LNG from Yemen and regassification at Hazira.

"Shell did not have a firm source for supply of LNG and it roped in Total in Hazira project with a view to securing a permanent source," they said pointing out that though Shell was to complete the Hazira terminal by the year end, it had not yet indicated the price of regassified LNG to its potential customers.

In the NTPC tender, Total sees a market for the 5.3 mn tonnes LNG it has in Yemen and its partnership with Shell will give it a regassification facility in India.

Reliance Industries has proposed to pipe 4 billion cubic meters of gas a year from Bay of Bengal to NTPC's projects in Gujarat while Petronas will supply LNG from its projects in South East Asia to be regassified at either Petronet's Dahej or Shell's Hazira terminal, they said.

NTPC had last year invited tenders for unbundled elements of gas supply. LNG suppliers had to compete with other LNG suppliers and supplier of natural gas from domestic fields.

Regassification of LNG was treated as a separate activity -- getting to supply LNG did not mean getting to set up the import and regassification plan.

Domestic natural gas suppliers had to make integrated bids for gas delivered to the power plant.

NTPC, which is expecting a delivered price of upto $3.5 per million BTU, is seeking LNG/natural gas supplies for 17 years.