News
Old supplier edged out in $300m gas tender; Swiss firm wins contract amid rule-bending claims
View(s):By Duruthu Edirimuni Chandrasekera
The Cabinet has awarded to a Swiss company, Geogas Trading S.A., the tender to procure 380,000 metric tonnes of LPG (Liquefied Petroleum Gas) for 2026, ousting the traditional supplier, OQ Trading, the international energy and commodity trading arm of Oman’s government-owned energy company.
Litro Gas Lanka, responsible for providing for the country’s requirements of cooking gas, conducted the procurement under the 2024 Procurement Guidelines, inviting both technical and financial proposals through a double-cover procedure to supply gas to the country.
OQ Trading’s 2025 contract ends at the end of this month.
Litro Gas in April 2025 sent letters to 50 to 60 global gas suppliers, inviting them to bid for the upcoming tender. Industry officials questioned if this was in line with the National Procurement Policy and said that it should be on an international competitive bid.
Litro Gas, which is discussing an expansion of storage capacity, currently maintains a stock of about 8,000 metric tonnes—enough to meet nearly eight days of the country’s gas demand. As such, at any given time, there have to be at least four ships in rotation to supply gas to the country. This requirement underscores the logistical considerations necessary for maintaining energy security and the importance of a reliable maritime supply chain.
Noting that Sri Lanka is a challenging market for gas delivery, government officials said that traditionally, only about 5 to 6 companies participate in the tender. This time, due to the invitation, 20 companies had secured the bidding documents. In August, however, when the tender was floated, only five companies actually bid, proving the challenging market in gas supply to the country.
At the initial verification stage, the Sunday Times learns that two of these companies were disqualified, as they did not satisfy the bidding requirements. As a result, Geogas Trading S.A., the Greek-based Naftomar Shipping and Trading Co. Ltd. Inc. and the current supplier, Oman-based OQ Trading, were in the running for the tender.
In the evaluation stage, Litro Gas sought clarifications from all three bidders on technical aspects certified by shipping lines, confirming their vessel availability, and releasing the ships to the particular companies, as the supply of gas requires strength in logistics and fleet.
Naftomar Shipping and Trading Co. Ltd. Inc. had sent a letter to Litro Gas saying that the company cannot get such certification from the ship owners. OQ Trading had submitted these clarifications. It was understood that Geogas had also sent the clarifications and was awarded the tender.
However, the Sunday Times was shown documentation that Geogas had not submitted the required letters to Litro from the owners of the vessels bringing in the LPG.
Public officials are questioning why Geogas was then qualified when the company had deviated from the very criteria that Naftomar Shipping and Trading Co. Ltd. Inc. was disqualified on, alleging that this is illegal and unethical.
Litro Gas declined to comment when contacted to verify the veracity of these documents. However, subsequently, Chief Executive Officer Mahendra Gurusinghe, in a statement issued to the Sunday Times, said Geogas was recommended as the lowest responsive bidder by the Standing High Level Procurement Committee and in compliance with government tender procedure. OQ Trading was informed of the committee’s decision about the decision to award the contract to the lowest responsive bidder (lowest price offered per unit), viz., Geogas.
OQ Trading submitted an appeal to the Procurement Appeal Board challenging the decision, but the appeal was rejected. The Cabinet approved the tender on December 2, 2025, and it was awarded to Geogas, the statement said.
A senior Treasury official said that a decision was taken to call for worldwide tenders, as the previous supplier (OQ Trading) had been providing supplies to Litro Gas for over 10 years, and they (the government) believed that they could explore a better offer.
Since the value of the annual consignment was US$300 million, the government believed that even a slight price reduction would benefit the country given the current economic situation, the official said.
He pointed out that of over 20 companies, it was two companies that were finally considered.
The official said that, in keeping with the decision to award the contract to the lowest bidder, Geogas Company was awarded the contract, as the figure quoted was marginally lower than the other bid considered.
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