By Bloomberg

By Bloomberg

GAIL-led consortium loses Ghana gas master plan bid

GAIL-led consortium loses Ghana gas master plan bid

Hyderabad: An Indian consortium led by GAIL (India) Ltd has lost a bid to develop Ghana’s gas master plan that included building a gas pipeline to supply offshore gas to two power plants and a natural gas processing facility in the west African country.

Besides the state-owned gas retailer, other members of the consortium are Engineers India Ltd for design engineering and project management, and Punj Lloyd Ltd for construction.

By Bloomberg

Analysts say GAIL’s bid was part of a larger strategy to gain access to Ghana’s hydrocarbon sector. India is building Ghana’s parliament as it seeks to gain an extra edge in its quest for energy resources.

Growing demand for energy assets has pitted India against China in a race to acquire as much of the world’s resources as they can. The rivalry for control of natural resources and energy assets has inflated overseas acquisition costs.

“There is an urgent need for India to establish its soft power by helping other emerging nations with the knowledge and experience in building institutional frameworks," said Gokul Chaudhri, partner at audit and consulting firm BMR Advisors Pvt. Ltd. “Losing the bid is a strategic loss for India as it impacts long-term bilateral build-up of mutual interests."

An Indian government official aware of the development confirmed the consortium’s failure to secure the project.

“It looks like it is already decided and the bid is not in our favour," a top executive of a consortium partner company said on condition that neither he nor his firm be named. “Ghana wanted to have natural gas network in major parts of the country."

Mint could not ascertain the identity of the successful bidder.

“We are unaware about the development," GAIL chairman and managing director B.C. Tripathi said in response to a question about the consortium losing the bid.

A Punj Lloyd spokesperson on Monday confirmed that the consortium has lost out on the bid. Other Indian state-owned firms have investments lined up for Ghana but the country has largely played second fiddle to China in building commercial relationships with African countries. State-controlled Rashtriya Chemicals and Fertilizers Ltd is to build a $1 billion (around 4,900 crore) urea factory in the African country. Yet, India has in recent years scrambled to come up with a cohesive economic diplomacy policy in Africa. Of 163.594 million tonnes (mt) of crude oil imported by India in 2010-11, 35.27 mmt came from Africa.

For decades, India enjoyed strong relations with Africa, stemming from a shared colonial past and India’s support for independence movements in the continent. But in recent years, Chinese economic diplomacy and aid have put India-Africa ties in the shade.

To catch up with the progress China, South Korea and Malaysia have made with their African plans, India has held two India-Africa summits—one in New Delhi in April 2008, and the second in Ethiopian capital Addis Ababa in May. India has set a target of $70 billion in trade with the continent by 2015.

India imported 17.31 mt of petroleum products and 9.79 mt of liquefied natural gas (LNG) in 2010-11. By 2030, the country is expected to import 90% of its energy needs.

GAIL has a presence in overseas oil and gas sector. It holds a 26% stake in an Oman block and along with ONGC Videsh Ltd, the overseas arm of Oil and Natural Gas Corp. Ltd, holds a 30% stake in two Myanmar blocks. GAIL registered a net profit of 3,561 crore last fiscal on revenue of 32,459 crore.