Adani Ports and Special Economic Zone Limited (APSEZ) has signed a Memorandum of Understanding (MoU) with Indian Oil Corporation Limited (IOCL) for a take-or-pay contract to develop Liquified Petroleum Gas (LPG) handling facilities at the Gangavaram Port.
As per the contract, IOCL will have to pay the full amount for using the terminal’s complete five lakhs annual capacity, whether or not it ships the committed quantity.
The biggest port operator in the country acquired the Gangavaram Port in 2021 for ₹6,200 crores. It had taken approval from the National Company Law Tribunals at Ahmedabad and Hyderabad last year to merge the facility with APSEZ.
IOCL currently uses Vishakhapatnam Port to import approximately eight lakh tons of LPG annually. In addition, it exclusively operates LPG handling terminals at Haldia and Ennore near Chennai. Moreover, a new facility is coming up soon at Cochin Port.
India is the second-largest LPG importer in the world. The demand for this fuel has increased over the past ten years by 84 per cent, from 15.3 metric tons in 2011-12 to 28.3 metric tons in 2021-22. Significant demand comes from households, industries, commercial users, and vehicles. As per the Ministry of Petroleum and Natural Gas, it is further expected to rise to 30.3 metric tons by 2025 and 40.6 metric tons by 2040.
