Petronas Wants a Bigger Energy Pie in India
Malaysian govt-owned co to sign more long-term LNG supply contracts & scale up lubricants business, to set up country HQ in Delhi
Mumbai: Malaysian governmentowned Petroliam Nasional Berhad, better known as Petronas, is looking to expand its operations in India by entering into more longterm contracts for supply of liquefied natural gas (LNG) and scaling up its lubricants business. The company, which has been in business with Indian companies for over two decades, is for the first time setting up its India headquarters for local businesses in Delhi, and has appointed a general manager to head it. Thus far, it only had different senior executives dealing in specific businesses in the country.
“India is a very exciting market for us, given its growth rate of 7% and that it is energy deficit. It is our largest market for crude and that relationship will continue. We are very bullish on petrochemicals, LNG and lubricant business in the country,” Petronas president Wan Zulkiflee told reporters during a visit to meet Indian clients.
India currently accounts for around 3% of the company’s global sales of $50 billion, but the share is expected to increase soon. Almost 80% of its India revenue is from the sale of crude oil. The balance comes from LNG, petrochemicals and lubricants businesses.
“Our lubricant business in India is very small, growth and market share are both in single digits, but we want to treble the business in the next five years,” Zulkiflee said. The company has committed $150-million investment on expanding its lubricant business, of which $50 million is being invested in a manufacturing plant to be commissioned by the first quarter of 2018. The rest would be invested on building a distribution network and marketing.
“The LNG market in India is fast growing and we have so far sold 15 cargos in spot market. We want to sell more on a long-term basis. The biggest bottleneck for LNG supply in the country is infrastructure and we are looking at opportunities to build it to connect unserviced markets,” Zulkiflee said. The company said it is scouting for opportunities to develop projects or acquire equity stakes in re-gassification units and pipelines.
Zulkiflee said the energy major’s global executive team visited India to meet non-energy companies in a first of its kind initiative. He said interactions with companies like Infosys, Bharti Airtel and startups such as Paytm were encouraging, given their thrust in digitisation.