State-owned Oil and Natural Gas Corporation (ONGC) has cancelled bids received for its Daman upside gas development project off the western coast due to high price quotes, sources have said. 

The project is crucial to ONGC’s strategy of ramping up gas production from its shallow-water fields off India’s west coast. Once completed, the project will lead to nearly doubling of current gas production of 4-5 million standard cubic metres per day (mscmd). 

Sources aware of the matter have added that the bids ONGC received for the project were way higher than the company’s internal estimates and so the tender has been cancelled. The tender will now be divided into separate packages and rebid.

Engineering and fabrication contractor Larsen & Toubro (L&T) had emerged as the lowest bidder when the bids were opened in December last year. It had quoted a cost of $663.77 million to build the infrastructure needed to ramp up production from the field that lies about 60 km off the west coast. 

A consortium of Afcons and Indonesia’s Gunanusa Utama Fabricators had emerged a distant second in the bidding, quoting close to $801.90 million. Vietnam’s PTSC and Abu Dhabi’s National Petroleum Construction Company (NPCC) were also among those initially chasing the contract, but did not participate in the bid process.