Laugfs invest $80m for South Asia’s largest import/export LPG terminal

• Signs construction deal with Chinese specialist firm
• Aims to re-export 60% of LPG to regional markets
• SL to witness significant economic impacts energy, shipping and exports
• Plans to buy 10 more vessels to cater to the growing regional LPG demand

By Charumini 

de Silva

Laugfs Terminals Ltd., a subsidiary of Sri Lankan energy conglomerate Laugfs Gas PLC yesterday signed agreements with China Huanqiu Contracting and Construction Corporation (HQC) to construct South Asia’s largest import and export liquefied petroleum gas (LPG) terminal with an investment of over $80 million.

The firm intends to invest $58.1 million in the first phase of the construction with a capacity of 30,000 MT within the next two years. In the second phase, Laugfs Terminals expects to increase its capacity up to 45,000 MTs, which can accommodate very large gas carriers. 

Speaking at this historical moment in shipping and energy sectors in Sri Lanka, Laugfs Group Chairman, W.K.H. Wegapitiya said that it is a new stepping stone for the Asian energy business by a truly Sri Lankan enterprise like Laugfs.

He said that 60% of LPG will be re-exported to regional markets, while 30% will be released for the local market (Sri Lanka). It 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.

Wegapitiya went on to say that this LPG terminal will be a milestone in their global expansion plans which they are aggressively pursuing. 

“With this significant investment and setting up of the LPG terminal in Hambantota we will be one of the strongest LPG traders and logistics providers in the Indian Ocean,” he said.

Laugfs LPG Terminal is the first and largest investment made by any foreign or local company at the Hambantota port. 

He further asserted that the completion of Laugfs terminal Sri Lanka will witness significant economic impacts in the areas of energy, shipping and exports earnings. 

“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,” he added. 

Elaborating on the company’s expansion plans he pointed that they already acquired two ships and they intend acquiring 10 more ships in order to turnaround Laugfs LPG terminal more effectively and cater to regional demand.

“Laugfs Gas PLC recently acquired the third largest LPG company in Bangladesh, and we are now aggressively working in the Asian markets to become the leading LPG player,” he noted. 

Wegapitiya also said that there will be many employment opportunities that will be created in the area. “The job opportunities will be available from construction stage to operational stage while in the long-term handling LPG and ships. This will provide an additional income to Sri Lanka Ports Authority from the Hambantota harbor.”

Commenting on the strategic location of Hambantota port he said that it sits in the middle of the world’s largest nautical/shipping routes with over 50% 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.

Laugfs Group Managing Director Thilak De Silva stated, “Laugfs Terminal will service vessels from small pressurised vessels to very large gas carriers (VLGCs). The terminal will be absolutely world class, employing the latest state-of-the-art technologies, equipment and systems, with the capability to export, blend and store LPG with an initial capacity of 30,000 MT.”

“We have plans to enhance the capacity with an additional 15,000 MT of LPG, which will boost the handling capacity yield easily to over 100,000 MT and beyond,” he added.

Elaborating further on the terminal HQC Chairman Li Yuping said that this state-of-the-art facility will have its own dedicated LPG pipelines from the terminal to the exclusively allocated jetty at the port. 

“One other very important feature is the compliance to global safety, operations and industry standards. It will have its own fire and total safety systems, which will monitor the site automatically around the clock with some of the most advanced fire safety systems installed including its own reserve fire water system. Operations are driven through a very advanced pneumatic system to prompt more safety,” he explained.

Laugfs Terminal at Hambantota will be certified by a leading global inspecting body in every respect and will serve as a common regional break-bulk LPG facility.