End in sight for acute northeast LPG shortage

Vol 20, PW 25 (07 Sep 17) Midstream & Downstream

If by chance you are awake at 5.45am in Nagaland's commercial hub Dimapur you can see long queues stretching along the roads as people wait to exchange old LPG cylinders (used as cooking fuel) for new ones.

All too common shortages of LPG cooking fuel in India's remote northeast are nothing new and were further exacerbated by severe floods last month. IndianOil however believes such scarcity could be a thing of the past once work is completed on a six-fold increase of LPG bottling capacity of its Bongaigaon refinery in Assam.

Dipankar Ray, IndianOil executive director, tells this report that over the past few weeks L&T Hydrocarbon Engineering has begun construction of an IOC-patented INDMAX bottling facility which will increase capacity from 4000 to 25,000 tonnes/month. Short for Indane Maximization - a reference to IOC's own brand of LPG - L&T announced it had won this project on February 25, 2017.

Ray adds IOC is now tendering to import equipment needed for the Rs2582cr ($403m) assignment slated for completion by November 2019. Today, India's seven northeastern states consume on average 35,000 tonnes/month LPG of which only 15,000 tonnes is bottled in the region; the rest is brought in from Haldia port by lorries.

Ray believes Narendra Modi's nationwide Ujjwala Yojana scheme to roll-out free LPG connections to the poor will push northeast demand up to 70,000 tonnes/month.

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