Nov 18, 2015 (LBO) – Sri Lanka’s Laugfs group plans to expand into Asian waters more aggressively with the launching of its planned LPG terminal to be built at Hambantota port, the group chairman said.
“We are now aggressively working to become a leading LPG player in other Asian markets, and with this significant investment we are planning to become the strongest LPG trader and logistic provider in the Indian Ocean,” W.K.H.Wegapitiya, group chairman of Laugfs said.
“We consider we have a strategic advantage in Hambantota and in Sri Lanka,” he said.
“Unfortunately even though we have been talking for many years that we should plan to capitalize those strategic locations, we have been limited,” he said.
Laugfs Terminals Limited, a company to be structured as a wholly owned subsidiary of Laugfs Gas PLC signed the agreement with China Huanqiu Contracting & Construction Corporation (HQC) for the turnkey EPC construction of the Laugfs LPG Terminal, the first and the largest investment in Sri Lanka’s strategic port at Hambantota.
In a stock exchange filing the company said the terminal will have storage capacity of 30,000 metric tonnes with provision to expand another 15,000 metric tonnes.
The Chinese firm is a subsidiary of China National Petroleum Corporation.
With an investment of over 80 million US dollars, the Laugfs Terminal will be one of the largest LPG import and export terminals in its class in South Asia in terms of storage capacity, and will be the most strategic in terms of its location, having access to serve a population of around half a billion within neighboring countries.
The terminal to be constructed within 24 months will have the capacity of 30,000 metric tons initially with an investment of 58.1 million US dollars investment and plans to increase it to 45,000 metric tons as the second phase.The terminal will also have the capability to handle local distribution of LPG through LPG road tanker trucks and will further have an onsite LPG bottling facility.
The terminal will service vessels from small pressurized vessels to VLGCs (Very Large Gas Carriers).
According to Wegapitiya 60 percent of LPG gas will be exported while the balance will be used for local needs.
“This LPG terminal will be a monumental step in our global expansion plans, which we are aggressively pursuing, and will help further strengthen our energy presence across the region,” Wegapitiya said.
“We will help further strengthen our energy presence across the region. With the exports of LPG to the regional markets Sri Lanka will be in a better position to earn more foreign exchange which will contribute to our export growth. In addition, the economy will see many new investments in the shipping trade.”
Hambantota is a strategic location that sits in the middle of the world’s largest nautical/shipping routes with over 50 percent of the world’s nautical traffic. It is also in close proximity to some of the largest emerging LPG markets, including India, Bangladesh, Myanmar, Eastern and Southern Africa to name but a few.
The company has acquired two ships already and Wegapitiya said the company plans to acquire more than 10 ships in the future.
“We are planning to acquire more than 10 ships in order to turn around this terminal more effectively and also to cater to regional demand,”he said.
“Also there will be many related businesses coming into play with the construction of the new terminal at the Hambantota harbor. Employment opportunities will be also created in the Hambantota in the time period of construction of the terminal and once done in operational activities of the terminal.”
The company acquired the third largest LPG gas manufacture in Bangladesh recently.
Laugfs Gas PLC has further diversified interests in vehicle emission testing, leisure and property & real estate sectors through Eco Sri, Laugfs Leisure and Laugfs Property.