Repsol for major investment in Indiaآ’s LPG business
Repsol YPF of Spain is deepening its presence in Indias partially de-regulated LPG business.
Repsol began operations in India in April 2005 when it acquired the north-India based Energy Infrastructure (India) Ltd, which was selling LPG to retail customers in 12-kg and 17-kg cylinders under the Max Gas brand. Max Gas has more than 55,000 household customers that use LPG as cooking fuel.
Repsols focus will be on bulk sales to big industrial customers and sales of 17-kg cylinders to commercial establishments. Like other private sector LPG retailers, Repsol will avoid the loss-making business of selling LPG cooking fuel to households, which benefit from government subsidies that keep LPG prices well below global levels.
Repsol is carrying out a market study of commercial and industrial demand in the perennially deficit north and northwestern states of India. Only after this study is complete, says an industry source, can Repsol confirm detailed sales targets for the Indian market.
Expect this to happen by the middle of next year. Broad plans will see 30 new bottling plants in north and north west India with likely sales of 750 kilo tonnes within the next 10 years.
Repsol is also setting up its own dedicated LPG import facility at Okha port in Gujarat, which will have an all-weather deepwater mooring system, a Floating Storage and Offloading (FSO) unit and a sub sea pipeline. By mid-2006, the facility should be ready to berth and unload Very Large Gas Carriers.
When the FSO is ready Repsol will have a market map in hand to launch in a big way, adds a source. Repsol and Energy Infrastructure have signed a contract with GAIL to transport LPG from Okha to north India through the Jamnagar to Loni dedicated LPG pipeline.
The final tap-off point will be at Sona near Gurgaon, site of the LPG storage tanks, from where LPG will be transported to bulk industrial and commercial customers in a fleet of Repsol-owned tanker trucks.