LAUGFS Gas, Hambantota Port strike deal to light up energy hub

From left: Hambantota International Port Group COO Tissa Wickramasinghe, Hambantota International Port Group CEO Ray Ren, LAUGFS Holdings Group Chairman W.K.H. Wegapitiya and LAUGFS Holdings Executive Director H.A.Ariyarathna

LAUGFS Gas, a pioneer in Sri Lanka’s power and energy sector, is currently working towards making Sri Lanka an energy hub, and Hambantota Port is its launch pad for this ambitious plan.

LAUGFS Gas is of the view that the port being strategically placed in one of the world’s unique locations works to its advantage.

The company believes that it is well placed to become a big competitor to Singapore and Sri Lanka bringing in a strong strategic partner like CMPort as a port operator, will be a tipping point that would propel the country to a new age of trade and commerce. 

The LAUGFS Group’s potential customers are some of the fast-growing economies positioned in close proximity to the Hambantota Port like, India, Bangladesh, Maldives, Myanmar and East Coast of Africa.

With a mega LPG storage complex already established adjacent to this southern port, LAUGFS believes it could provide its target markets, a much better service than its competitors.Once it is commissioned in November, for commercial operations, this will be the largest and most modern LPG related infrastructure in the Indian Ocean rim area. 

Speaking of the value addition CMPort brings to the equation, LAUGFS Holdings says Group Chairman W.K.H. Wegapitiya: “Hambantota Port was underutilised and did not bring any value to the overall national equation. Therefore, a strategic partner was necessary to develop the port fast.  This is not just for the logistics or shipping sector, but also for the economic spill-over which will benefit the whole country. GDP will develop, there will be employment opportunities and wealth creation.” 

Wegapitiya believes that today the world is moving away from old fashioned ideas. For example, instead of nations wanting full control of their own enterprises they are leveraging what they have to attract the right partners, to create synergies that would help them to move forward. 

LAUGFS has plans to bring LPG in larger vessels from international markets like the Gulf, US, Singapore, etc., to Hambantota. The Group Chairman says that the port’s two jetties dedicated for oil, gas and petroleum business, makes it convenient for the company, especially since the port will provide them with a connection facility to unload vessels through a pipeline connecting to its facility — which is about three km from the jetty. This would help them to transfer the LPG from ships direct to its facility, in large quantities i.e. 20,000 to 30,000 metric tons. 

Mixing and blending will then be done to create different LPG products, according to market demand, and these would then be exported from Hambantota to Indian Ocean rim countries. “Once LAUGFS terminal opens in November this year, we would be bringing close on 30 ships per month; 20 of them would be owned by us,” Wegapitiya says.

As its main service provider, the Hambantota International Port Group (HIPG) is a key stakeholder for LAUGFS Gas, and plays a pivotal role in its operation.  HIPG is in the process of developing Hambantota as a multi-purpose port which will provide a variety of services such as handling containers, break bulk, RORO, passenger, oil, bulk terminal, gas and project cargo. The port is slated to become one of a kind, as it will be the only port in the country, designed to handle the full gamut of services in the maritime and logistics area. 

HIPG CEO Ray Ren says that its first partnership with a local entrepreneur of LAUGFS Gas calibre will be a major confidence boost for the Hambantota Port enterprise. 

“The synergies HIPG and LAUGFS will bring will give the port the impetus to position itself not only as an energy hub but also as a major international player for shipping and logistics.  It will also open up a wealth of local job opportunities in different disciplines, which would be a boon to locals seeking employment and in the long term, the Sri Lankan economy.” 

LAUGFS Gas says that the Port Operator’s connection to an international brand name like CMPort, is something the local industry can leverage on. CMPort was recently named the global port operator by Lloyds of London, which coupled with its experience and knowhow would give more local companies the confidence to partner with HIPG.