MUMBAI�India�s national gas pipeline company, Petronet LNG Ltd., has relaxed the �force majeure� clause in the contract agreement for its proposed liquefied natural gas (LNG) shipping deal. The clause was brought on to par with global levels after the company�s agreed to pay the normal charter hire rates to shipowners and operators during the period that �force majeure� is in effect.
A decision to this effect was communicated to bidders through an addendum in the bid documents; and completed before the Nov. 30 deadline for submission of techno-commercial and price bids.
The original bid documents had stated that Petronet LNG would not pay charter hire rates to shipowners and operators during the �force majeure� period. Prospective bidders had strongly condemned this clause as restrictive and unacceptable.
If the �force majeure� period persists for 3 months or more, both the shipowner/operator and Petronet will sit together and work out ways and means to mitigate the losses caused to them. If the event lasts for more than a year, Petronet will have the right to terminate the contract by giving a three-month notice period.
"This is a step in the right direction, and will definitely improve the bankability of the bid document and the LNG shipping deal," said a senior official of the Shipping Corporation of India, which has formed a consortium with Mitsui OSK Lines, NYK Line, and K Line.
"It will now enable bidders to secure better financing terms and conditions from bankers," he said.
Petronet, in response to bidder demand, has also reduced the validity period for shipyard quotations and bankers� guarantee on bid bonds by 15 days.
