Itochu Corporation (Itochu), headquartered in Minato-ku, Tokyo, through its wholly-owned subsidiary, Itochu Petroleum Co., (Singapore) Pte. Ltd., has reached an understanding with Aegis Logisitics Ltd (Aegis) that under which Itochu will purchase 19.7% of the shares of Aegis’s wholly-owned subsidiary, Hindustan Aegis LPG Ltd (HALPG) for a total consideration of INR2.5 billion (approx. JPY4.3 billion). HALPG is developing a major new LPG import terminal project at Haldia Port, West Bengal, India. The understanding is subject to final agreement and approval by the Board of Aegis, as well as customary conditions precedent and normal regulatory approvals.
Aegis owns and operates receiving terminals for LPG, petroleum products and chemicals at various locations in India, including Mumbai, one of the biggest LPG demand areas in India, and is engaged in terminalling and logistics businesses, and also through Aegis Group International (AGI), sourcing, shipping and supply of LPG to the Indian market. In addition to Itochu's acquisition of 40% of the shares of AGI in 2014, its first joint venture with Aegis, which supplies more than 1 million tpy of LPG to the Indian LPG market, ITOCHU aims to expand its LPG business more in India by way of investment in new LPG import Terminal at Haldia Port.
It is expected that the volume of seaborne LPG trade (86 million t in 2016) will be increased with the abundant growth in LPG supply from shale gas fields in North America. Currently, total LPG demand in India is 20 million tpy (more than in Japan), which is second only to US and China. The net import volume is expected to keep increasing and exceed 24 million t in 2020, with population growth, income growth and clean energy policies implemented by Indian government.
Itochu currently trades 6 million t of LPG to the markets in Japan, Korea, Philippines, Indonesia, Thailand and other Asian countries. Through the acquisition of shares of HALPG, Itochu will strengthen and expand its LPG activities more to the India market where definitive increases in both total demand and net imports are expected.
Read the article online at: https://www.tanksterminals.com/storage-tanks/02062017/itochu-acquires-shares-in-lpg-import-terminal/