HPCL mulls LPG storage facility for Rs 700 cr

Media reports suggest that Hindustan Petroleum Corp (HPCL) is discussing the feasibility of a Rs 600-700 crore project to set up underground storage facility for liquefied petroleum gas (LPG).

The company proposes to set up the facility, which would be its second one, in Mangalore and it is expected to arrive at a decision on the project in the next six
months.

The Mangalore facility will also have 60,000 tonne capacity. It is learnt that the firm may rope in its partner, Total SA of France, to build the cavern.

Both Total and HPCL, through their equal joint venture, South Asia LPG (SALPG), already have a 60,000-tonne capacity LPG underground storage facility in Visakhapatnam, Andhra Pradesh. The facility was commenced in 2007 at an investment of Rs 333 crore.

HPCL feels that importing LPG in large quantity would make more sense than importing in smaller capacity given the demand for LPG.

Of the three oil marketing companies, IndianOil Corp holds 48 per cent of LPG market share. Bharat Petroleum Corp and HPCLÂ’s market share stands at 26 per cent each.

Data from the petroleum planning and analysis cell shows that India consumed 5.08 mn t of LPG in 2011-12 against 4.50 mn t, an increase of 13 per cent. Till December 2012, however, the total consumption of LPG in the country stood at 4.39 mn t.