Indian state-controlled refiners are planning to spend 200bn rupees ($3.1bn) on LPG infrastructure by 2020, as government policies to expand use of the fuel lead to a sharp rise in demand.
The Rs200bn figure covers new and existing investment plans in LPG pipelines, import terminals, bottling plants and storage depots. Refiners IOC, BPCL and HPCL are boosting infrastructure as existing facilities prove inadequate to meet new demand for the cooking fuel.
The investments include Rs10bn on a 2,650km pipeline with at least 6mn t/yr of capacity running from Kandla in the western state of Gujarat to Gorakhpur in northern India's Uttar Pradesh. The project will include spur lines from Pipavav to Ahmedabad and Dahej to Koyali in Gujarat.
IOC and BPCL are also planning to commission a 498km LPG pipeline in south India by April 2018 to boost supplies in Kerala and Tamil Nadu states. IOC will also commission by February a Rs30bn LPG import terminal and pipeline linking to BPCL's Kochi refinery, a bottling plant and BPCL's planned bulk LPG terminal in Palakkad.
The remaining investment will go towards import facilities and bottling plants. State-run Engineers India is inviting bids for a refrigerated pipeline system for BPCL's Haldia LPG import facility, while BPCL is seeking 100,000 LPG cylinders each with 14.2kg of capacity.
Indian oil companies are boosting infrastructure to keep pace with record demand and support LPG imports, which currently supply 45pc of consumption. India's ageing, choked road infrastructure is ill- equipped to deal with heavy LPG trucks.
State-controlled oil companies added a record 32.5mn new LPG connections to households in the financial year that ended 31 March. This included 20mn connection under a subsidised LPG cylinder issue programme that was launched in May last year.
National LPG coverage was 72.8pc as of 1 April with 198.8mn active consumers, according to oil ministry data. This compares with 56pc coverage in April 2015 with 140mn connections.
India's LPG imports reached a record high in March as domestic production was unable to meet the rising demand. India imported 1.23mn t of LPG in March, up by 64pc compared with a year earlier and 23pc higher on the month. The country's LPG consumption climbed to 1.9mn t in March, up by 4.4pc on a month-on-month basis, and just below January's 2mn t record.
