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Opportunities in the Asian Region and
regional synergy
W K H Wegapitiya – Chairman
LAUGFS Gas PLC – Sri Lanka & Bangladesh
Harnessing the location specific advantages
of Hambantota for regional LPG opportunities
Shift in the Economic Center of Gravity
• World economy is shifting from the West to East
• Easternisation (Rachman: 2016) will act as the pivotal point in
the global economic axis.
Source; IMF world economic outlook, 2015
What’s Fueling the Economic Shift to the East?
• The Blue & Red economic opportunities in Asia
• Blue Economy - Oceanic based economic opportunities• fisheries, sea-minerals including oil & gas, developing ports &
shipping activities, marine tourism, marine biotechnology, deep-sea
mining, and transport & logistics (Mohanty, 2015)
• Red Economy - energy based economic opportunities • Upstream and downstream energy developments, oil & gas based
power generations, energy transportation & logistics – terminalling &
pipe borne logistics, entrypot activities (Parat et al, 2014)
Economic opportunities in the IOR
IOR – The epicenter of the Global Economic shift
No other place has the
combine advantages of
Blue & Red economic
opportunities other than
the Indian Ocean Rim
Countries
• More than 50 percent of the world's maritime oil trade is in the IOR
• 32.2 millions of barrels of crude oil and petroleum products are transported
• Nearly 40% of the world's offshore petroleum is produced in the Indian
Ocean countries
• India imports nearly 80% of its energy from the Middle East, and is due to
overtake Japan as the world's third largest energy consumer (behind China
and the United States)
• 84% of China’s imported energy resources passed through IOR
• 78% of world LPG is pass through IOR
• Over 100,000 ships transit through IOR and 25% carry energy
Purple Economy in the IOR
• Growth spillover – Indo-China economic spill
• China - “One Belt, One Road” - India “Make in India”
• India – China Geopolitical struggle
• India assisted – 12 ports, China assisted – 17 ports
• India – 9 Oil & Gas infrastructure, China – 11 Oil & Gas infrastructure
• Kra Isthmus and changing maritime dynamics in Asia
• IOR country's LPG demand will increase
by 3 fold in 10 years (WLPGA)
• Maritime logistics and support services
need to grow by 65%
Drivers of the Purple Economy in the IOR
• Ideal location for Blue and Red Economic activities
• Nutracentral location & underutilized capacities
• Maritime & logistic hub for energy, terminalling & break bulking,
Entrepot activities, shipbuilding and repairing, supplies and services –
bunkering, chandelling and crew services
• Oil refining, petrochemical, processing and value adding of energy,
safe stocks, trading, arbitrage and product swaps
• Immediate Spill over benefits and Sharkunning strategy
Sri Lankan competitiveness in the Purple Economy
The Sri Lankan advantage – Development Epicenter
• Location specific advantages
• Economic Spillover effects
• Strong Regional trade ties with Asian
economies
• Conducive trade and economic
policies
• Average of 45,000 ships passing southern tip of Sri Lanka annually and
25% of them are reported to carry energy including LPG
• All weather Port – no impact from the monsoon effect
• Deep Port - 19 meter draft which can accommodate VLGC’s
• Brand new berthing facilities with pier based unloading and loading arms
• Dedicated berth for energy (LPG) handling
• Free Port status with many concessions
• Especial investment concessions under BOI Hub status – 25 year tax
holiday which can be extended further period depending on the size
investment
• Most cost competitive location for a hub operation
Competitiveness of Hambantota Port
Logistic competitiveness of Hambantota for LPG
1. Singapore
2. Port Kelang
3. Penang
4. Thilawa
5. Yangon
6. Chittagong
7. Dhaka
8. Mongla
9. Haldia
10. Paradip
11. Vishakapatnam
12. Krishnapatnam
13. Madras
5 days
4 days
4 days
3 days
3 days
4 days
4 days
4 days
3 days
3 days
2 days
1 day
1 day
1 day
11 days
9 days
2 days
1.5 days
2 days
3 days
3.5 days
4 days
5 days
5 days
9 days
7 days
15 days
9 days
7 days
1. Tuticorin
2. Kochi
3. New Mangalore
4. Mumbai
5. Rathnagiri
6. Pipavav
7. Port Qasim
8. Karchi
9. Maldives
10. Mauritius
11. Madagascar
12. Reunion
13. Mombasa
14. Dar Es Salam
15. Rechard Bay
16. Durban
LAUGFS LPG Import & Export Terminal at Hambantota Port
Project Investments
• Largest LPG import, storage
and re-export terminal in the
IOR
• Total estimated investment
USD. 85 million
• Project promoter/ Investor –
LAUGFS Terminals Limited
Project
Timelines
• Started:
August 2016
• Completion:
April 2018
Project Capacity & Capabilities
• Capacity – 45,000 m/tons of pressurized LPG
storage
• Product handling capacity – 1,800,000 m/tons of LPG
annually
• Ability to store Propane and Butane separately,
facilitating the export of mix LPG
Total value of re-exports of LPG by this project in 2020 is expected to be US$ 1.3 Bn
This project
will contribute
6% of total
exports
earning
projected by
2020
Sri Lanka will become a leading energy re-exporter and an energy hub in Asia
Sri Lanka will become and energy trading and maritime hub in the Indian Ocean
Total Sri Lankan export earnings is US$ 11.3 Bn in year 2015
Projected to grow to US$ 20 Bn by 2020
Project Contributions - to the National
Economy
Capitalizing IOR Purple Economy - LAUGFS Strategy
• Largest LPG infrastructure in the IOR
• USD 85 million investment
• First Hub stated project in Hambantota
• 45,000 m/ton storage
• 1.8 million m/tons of LPG PA
• 6% of total export earning by 2020
• Creating the Energy hub- Purple Economy• Own shipping fleet
• 20 ships by 2020
• Maritime center in Asia
• Blue Economy in IOR
Laugfs Gas Bangladesh
• 160 m population
• Less than 5% market
Laugfs Gas Myanmar
• Regional presence
• Multinational company
• Integrated energy solution
• IOR Blue economy
• Regional energy trading
• Supply chain Management
• Maritime and logistic support
• Growing Domestic market
• Energy efficiency
• Local value creation
• Cylinder manufacturing
• Technical services
Laugfs Gas Sri Lanka
LAUGFS, is committed in harnessing rising Blue &
Red Economic opportunities in the IOR and support
the regional synergies by collaborating with all
stakeholders.
We invite you to join with us.. THANK YOU