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July 26: After the June 9 cyclone that hit the coast of Gujarat and badly destroyed the Kandla port, one of the three ports that handle LPG unloading, LPG supplies were expected to be seriously affected. However, according to shipping companies involved in the transportation of LPG, there has been no such slow down in supplies. Imports for the month of June has touched 91,000 MT which is substantially higher than the 65,000 MT figure achieved in May. For July imports are expected to be in the range of 104,000 MT (52,000 MT has already been unloaded). Shippers are confident that volume of traffic is likely to increase further in future.
The other two major ports are Vishakapatnam and Mangalore. Vishakaptnam's LPG handling facility had been gutted down in mid 1997. Mumbai has a small LPG unloading facility which is handled by Aegis Chemicals. This facility, since its inception has been running at optimal capacity, hence there was no scope for diverting traffic to Mumbai. All LPG traffic was expected to be July 26: After the June 9 cyclone that hit the coast of Gujarat and badly destroyed the Kandla port, one of the three ports that handle LPG unloading, LPG supplies were expected to be seriously affected. However, according to shipping companies involved in the transportation of LPG, there has been no such slow down in supplies. Imports for the month of June has touched 91,000 MT which is substantially higher than the 65,000 MT figure achieved in May. For July imports are expected to be in the range of 104,000 MT (52,000 MT has already been unloaded). Shippers are confident that volume of traffic is likely to increase further in future.
The other two major ports are Vishakapatnam and Mangalore. Vishakaptnam's LPG handling facility had been gutted down in mid 1997. Mumbai has a small LPG unloading facility which is handled by Aegis Chemicals. This facility, since its inception has been running at optimal capacity, hence there was no scope for diverting traffic to Mumbai. All LPG traffic was expected to bediverted to New Mangalore Port Trust. Under these circumstances experts had allayed fears that there could be a supply side problem. However, import figures tell a different story.
There is a huge LPG demand-supply mismatch in the country and there exists a huge appetite for the product, say industry watchers. Being a clean fuel the demand for the product is high not only from the household sector but also from the industrial sector. There is also a likelihood that the fuel might be approved for consumption as fuel in the automobile sector, which could further imbalance the demand-supply equation.
Government opened the floodgate for LPG sector after it announced that parallel marketing domestic consumers, though at international prices and not at subsidised price. In order to meet the huge demand a number of international as well as domestic players entered the fray. SHV of Netherlands, one of the major players in LPG market has decided to bring in Rs 1,700 crore in three years time in order to developLPG infrastructure throughout the country. Caltex-Spic a joint venture company has acquired the LPG division of SPIC which includes the three terminals at Chennai, Madurai and Tuticorin. It is reported that a further Rs 100 crore will be infused in the joint venture to strengthen its operation. Shri Shakti LPG and Hindustan Aegis LPG are two of the bigger private sector domestic players in the rapidly growing market. Other domestic players who are entering the sector in a big way are Essar, Reliance Industries (who have recently started marketing the product for domestic consumption after making a stunning entry in bulk marketing by capturing market shares from public sector giants) and Gujarat Gas among others.
One of the major problems was lack of unloading facility. HPCL in the past couple of years set up two huge unloading facility at Kandla and Mangalore with a capacity of 600,000 tonnes. The New Mangalore Port Trust is expanding its facilities and has leased out land for installation of unloadingfacilities (14.5 acres to USTIL and 20 acres to Shri Shakti LPG). To meet the huge import demand three major shippers have joined hand to handle the increase in traffic and are extremely optimistic about the future.
Considering the fact that only one major port was able to handle more than the average imports of LPG, industry observers feel that supply of LPG will shoot up considerably when all of them are operational which is expected very soon. Kandla port's LPG terminal is expected to be commissioned soon as more than the jetty it was the terminals pipeline that took the brunt of the cyclones fury.
Copyright © 1998 Indian Express Newspapers (Bombay) Ltd.
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