$ 65 m LAUGFS Terminals Complex at Hambantota Port celebrates 100th ship call

LAUGFS Terminals Ltd. yesterday celebrated its 100th ship call for loading of LP Gas at its port based in the LP Gas Storage and Transshipment Terminal Complex located at Hambantota International Port (HIP). This facility was built and now operated by LAUGFS Terminals Ltd. which is a fully owned subsidiary of LAUGFS Gas PLC.  

The installed cargo capacity of this Terminal Complex is 30,000 m/t, which can turnaround three times monthly to achieve 1,000,000 m/t of LP Gas per annum as transhipments, by way of import, storage, mixing of elements of propane and butane, and exports to identified markets. 

The call of the 100th ship at the terminal complex through Hambantota International Port is a landmark event for the nation, since it denotes the beginning of creating an “Energy-Hub” around the port in addition to it being a “Maritime-Hub”. 

LAUGFS Terminals Ltd. has taken only a period of 14 months to achieve this important feat, which is significant when compared against the general gestation periods for infrastructure projects of this nature and also from the point of view of the energy trading projects globally; that will usually take at least 24 months to reach optimum levels of operations. 

LAUGFS said that its achievement of having called 100 ships is all the more important of an achievement, in light of the adverse effects from oil-price volatility, USA China trade disputes, drone attacks on Saudi Aramco installations, COVID-19 hindrances along with economic recession; creating a substantial decline in energy demand and trading. 

LAUGFS Terminals Ltd., with its 100th ship call at the terminal complex had handled in total 413,000 m/t of LPG of inward and outward cargo. The value of the transactions of inward and outward cargo of these 100 ships is around $175,000,000. 

Its exports to foreign markets include Bangladesh, Maldives and India, and it is now reaching 60% of exports of the total volumes handled monthly, which is once again considered as a noteworthy feat to highlight. 

“Our major export mix consist of apparels, tourism, plantation produce and few more sectors, but it is quite interesting to observe a gradual emergence of a completely new sector, the “energy exports”; adding value through LAUGFS Transshipment Terminals. This will hopefully be a major export sector in the country in the time to come,” LAUGFS said. 

At the moment, the terminal records an average of 15-20 ship calls per month and it will soon be increased up to 30 ship calls per month, and it will be a situation of at least one ship will either be loading or unloading of LPG cargo at the terminals per day. 

LAUGFS Terminals Ltd. spent $65 million to build this state of the art terminal complex and was able to complete the construction work within two and half years, and employed for this purpose, the state-owned venture HQC of China as its EPC contractor. 

This transshipment terminal complex has granted the Board of Investment approval with special hub-status as per the relevant Gazette notifications and enjoy a range of statutory concessions. 

The commercial operations of this facility commenced in July 2019, and it is considered as an impressive performance to record the 100th ship call within a space of only 14 months; which is exceptional for an infrastructure project of this nature, which usually is prone to having long gestation periods. 

LAUGFS notes that Sri Lanka has always boasted about its strategic location in the historical “Maritime Silk Route”, that connects the Indonesian Archipelago, China, the Indian sub-continent, Arabian Gulf, all the way to Europe and East Africa. 

Sri Lanka has also for years been vocal about a “Maritime-Hub” around our country, but hardly any tangible move had been made towards achieving this status, either by the authorities concerned or by the private sector establishments.

However, LAUGFS, having been an active player in the energy sector of the country for over 25 years and also having its wings in certain overseas LPG markets, stepped up to build the LPG Transshipment Terminal complex at Hambantota Port, not only with a view to contribute to make this port a “Maritime-Hub” but to making it an “Energy-Hub” too. 

The company had many issues to overcome during the process of building the complex and also afterwards, from regulatory authorities, environmental bodies, funding institutions and also had to face stiff retaliatory moves from international competitors engaged especially in the mid-stream LPG markets; having perceived a threat for their dominant positions. 

However, the management of the Company and the Group was strong-willed to weather the storm and to realise its vision to install a LPG Storage and Transshipment Terminal at Hambantota International Port, and also to integrate effectively the mid and downstream value chain of LAUGFS. 

The operation of LAUGFS Terminals Ltd. will contribute to enhance the country’s foreign exchange reserves directly, by way of terminal service fee revenue and savings derived in foreign exchange through bulk supplies made for local consumption. There will also be foreign exchange servings on freight cost paid by local importers with larger LPG carriers being used for import of LP Gas, which are to be stored at the terminals. 

In terms of shipping and maritime activities, the fleet of LPG vessels owned by LAUGFS Maritime Services Ltd. is fully utilised for LPG cargo transportation from the terminals and it earns its revenues in foreign exchange. Moreover, this company has created opportunities for qualified maritime personnel since it employs only Sri Lankan crew to man their vessels. 

Besides, the substantial increase in LPG vessel movement within the Hambantota International Port will have number of indirect economic benefits since it will lead to promote large number of business opportunities such as bunkering operations, ship agency services, ship chandelling opportunities, large scale ship repairing opportunities similar to dry dock, small scale mechanical workshops to undertake minor repairs of ships and the increase of clearing and forwarding operations; all of which will create considerable, direct and indirect employment opportunities. 

Hambantota International Port Group Ltd., CEO Ray Ren commenting on the 100th ship call of LAUGFS Terminals said, “We congratulate LAUGFS Terminals on their robust business plans and operation which will contribute greatly to the energy-hub status of Hambantota International Port.”

“HIP, which now positions itself on quality services and standards in all aspects of port operations, will continue to support LAUGFS Terminals in achieving their targets with high quality operations adhering to health and safety standards for the discharge and loading of LPG.”