Laugfs Gas says adequate LPG supplies secured

Laugfs Gas PLC, Sri Lanka’s only private sector LPG supplier, yesterday said it has secured adequate LPG supplies for the next four months, after experiencing a shortage due to the drone attack at the Saudi Aramco oil processing facilities in Abqaiq and Khurais, in eastern Saudi Arabia.

“Fuelled by the company’s vast experience and ample resources, including its own three large vessels and terminal facility in Colombo and Hambantota, Laugfs effectively secured the required amount of LPG from Gulf countries as well as other regions to meet the projected demand for the next four months and beyond,” Laugfs Gas said in a statement.

It also said the company has already obtained large haulers from its suppliers to transport cargo of 22,000MT very large gas carriers to its Hambantota terminal.

Laugfs Gas said following the attack on Aramco assets, multinational LPG players in the subcontinent sought to balance the demand for LPG globally, which triggered a slowing down of LPG supply to countries in South Asia.

In the second phase, the company expects to increase the capacity of its LPG transhipment terminal up to 45,000 MTS, which will allow very large gas carriers (VLGCS) to be accommodated.

The terminal currently supplies LPG to Sri Lanka and Bangladesh through the group’s distribution network.

However, De Silva noted that it would be even relatively cheaper for the state entity, Litro Gas, to procure LPG from the Hambantota terminal, due to the competitive pricing.

According to him, Laugfs Gas has a 28 percent market share in Sri Lanka’s duopoly LPG market.

In Bangladesh’s LPG market, Laugfs holds an 18 percent market share through its subsidiary Laugfs Gas Bangladesh Ltd, according to the firm. Although its LPG distribution in volumes has increased significantly in Bangladesh, its market share has declined from 22 percent, mainly due to the rapid expansion in the market and due to the entrance of multiple new players to the market.

Speaking of the expansion plans to Myanmar and Kenya, De Silva said the company has decided to put off the plans until the conclusion of the upcoming presidential elections in November. In Myanmar, he said that the company would be exploring the possibilities of acquiring or partnering with a firm, which already possesses the required licences to distribute and import LPG.

Laugfs is looking at bulk LPG supplies initially to Kenya and Eastern Africa.

The full investment for the LPG transhipment terminal is estimated at US $ 85 million. The company has obtained a US $46.2 million loan from People’s Bank and a US $ 20 million loan from China Export and Credit Insurance Corporation.