The Hindu Business Line : Indianoil Petronas to set up LPG unit at Chennai port

Indianoil Petronas Pvt Ltd (IPPL) is finally on its way to set up an LPG terminal at Chennai port. The Rs 300-crore project is aimed at handling six lakh tonne LPG cargo every year. Apart from imports from Petronas, the project will also offer terminalling services to oil marketing companies (OMCs).

IPPL is a 50:50 joint venture between Indian Oil and Petronas of Malaysia. The company currently owns a terminal at Haldia Port.

Apart from importing LPG from Petronas and marketing the same to the oil marketing companies, IPPL offers terminalling services to all oil PSUs for both in-country and imported LPG cargo. Terminalling services currently contribute 80 per cent of the company's turnover.

IPPL also directly markets LPG for commercial purposes and has decided to set up a bottling plant at an approximate cost of Rs 25 crore at Haldia.

The JV conceived the Chennai terminal to cater the demand in Southern States more than a year ago. However, plans for capacity augmentation by domestic refiners forced both IPPL and IOC boards to rethink on the long-term viability of the project.

"Recent assurances on demand for LPG as well as terminalling services from Indian Oil and other OMCs have allayed fears on the viability of the project," an IPPL official told Business Line, adding that the company would soon enter into formal agreements with Petronas and IOC in this regard.

Meanwhile, rapid reduction in draft at IPPL's Haldia operations at HOZ-1 berth forced the company to draw up a Rs 12-15-crore plan to shift the entire operations to HOZ-2.