LAUGFS Terminals Complex at Hambantota International Port Celebrates 100th Ship Call

Posted On 18 Sep 2020
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LAUGFS Terminals Complex at Hambantota International Port Celebrates 100th Ship Call

LAUGFS Terminals Complex at Hambantota International Port Celebrates 100th Ship Call

LAUGFS Terminals Ltd is celebrating today, the 100th ship call, for loading of LP Gas at its port based, all weather LP Gas Storage and Transhipment Terminal Complex located at Hambantota International Port. This facility was built and now operated by LAUGFS Terminals Ltd which is a fully owned subsidiary of LAUGFS Gas PLC. The installed cargo capacity of this Terminal Complex is 30,000 m/t, which can be turnaround 3 times monthly to achieve 1,000,000 m/t of LP Gas per annum as transhipments, by way of import, storage, mixing of elements of Propane & Butane and exports to identified markets. This Transhipment Terminal Complex has been granted the Board of Investment approval with special Hub-status as per the relevant Gazette notifications and enjoy a range of statutory concessions. The commercial operations of this facility commenced in July 2019, and it is considered as an impressive performance to record the 100th ship call within a space of only 14 months, which is exceptional for infrastructure projects of this nature having long gestation periods.

Our country from time immemorial had spoken loudly about its strategic location in the historical “Maritime Silk Route” that connects the path, Indonesian Archipelago, China, Indian sub-continent, Arabian Gulf, linking the stream to Europe and also to East Africa, at the end. We were also, for years had been making much noise about a “Maritime-Hub” around our country and the ports but hardly any tangible move had been made towards achieving this status either by the authorities concerned or by the private sector establishments. However, LAUGFS, having been an active player in the energy sector of the country for over 25 years and also having its wings in certain overseas LPG markets, stepped into build this LPG Transhipment Terminal complex at Hambantota Port not only with a view to contribute to make this port a “Maritime-Hub” but also and more importantly making it an “Energy-Hub”. LAUGFS Terminals Ltd has spent USD 65 million to build this state of the art terminal complex and was able to complete the construction work within two and half years and employed for this purpose, the state-owned venture HQC of China as its EPC contractor.

It is pertinent to mention here the company had many issues to overcome during the process of building the complex and also afterwards emanating from various fronts including that of regulatory authorities, environmental bodies, funding institutions and also had to face stiff retaliatory moves from international competitors engaged especially in the mid-stream LPG markets having perceived a threat for their dominant positions. However, the management of the company and the Group was strong-willed to weather the storm and to realize its vision to install a LPG Storage and Transhipment Terminal at Hambantota International Port and also to integrate effectively the mid and downstream value chain of LAUGFS and finally to make the port active with energy trading.

The call of the 100th ship at the terminal complex through Hambantota International Port is a landmark event in the country since it denotes the beginning of creating an “Energy–Hub” around the port in addition to it being a “Maritime-Hub” in the short to medium term with increased ship calls for trading and transhipment purposes. LAUGFS Terminals Ltd has taken only a period of 14 months to achieve this important feat which is significant when compared against the general gestation periods for infrastructure projects of this nature and also from the point of view of the energy trading projects globally that will usually take at least 24 months to reach optimum levels of operations. The achievement of the call of 100 ships all the more important in the light of the adverse effect from oil-price volatility, USA China trade disputes, drone attacks on Saudi Aramco installations and Covid-19 impacts with almost complete lockdowns globally leading to economic recessions creating a substantial decline in energy demand and trading.

LAUGFS Terminals Ltd with its 100 ships calling at the terminal complex had handled in total 413,000 m/t of LPG of inward and outward cargo. The value of the transactions of inward and outward cargo of these 100 ships is around USD 175,000,000. Its exports to foreign markets include Bangladesh, Maldives and India and it is now reaching 60% of exports of the total volumes handled monthly which is once again considered as a noteworthy feature to highlight. Our major export mix consist of apparels, tourism, plantation produce and few more sectors but it is quite interesting to observe a gradual emergence of a completely new sector the “Energy Exports” adding value through LAUGFS Transhipment Terminals. This will hopefully be a major export sector in the country in the time to come. At the moment, the terminal records an average of 15 – 20 ship calls per month and it will soon be increased up to 30 ship calls per month and it will be a situation of at least one ship will either be loading or unloading of LPG cargo at the terminals per day.

The operation of LAUGFS Terminals Ltd will contribute to enhance the country’s foreign exchange reserves directly by way of terminal service fee revenue and savings derived in foreign exchange through bulk supplies made for local consumption. There will also be foreign exchange servings on freight cost paid by local importers with larger LPG carriers being used for import of LP Gas to be stored at the terminals. In terms of shipping and maritime activities the fleet of LPG vessels owned by LAUGFS Maritime Services (Pvt) Ltd is fully utilized for LPG cargo transportation from the terminals and it earns its revenues in foreign exchange. Moreover, this company has created opportunities for qualified maritime personnel since it employs totally Sri Lankan crew at their vessels.

Besides, the substantial increase in LPG vessel movement within the Hambantota International Port will have number of indirect economic benefits since it will lead to promote large number of business opportunities such as bunkering operations, ship agency services, ship chandelling opportunities, large scale ship repairing opportunities similar to dry dock, small scale mechanical workshops to undertake minor repairs of ships and the increase of clearing and forwarding operations all of which will create considerable, direct and indirect employment opportunities.

Mr. Ray Ren, CEO of Hambantota International Port Group (Pvt) Ltd. Commented on the 100th Ship Call of LAUGFS Terminals. “We congratulate LAUGFS Terminals on their robust business plans and operation which will contribute greatly to the energy hub status of Hambantota International Port. HIP which now positions itself on quality services and standards in all aspects of port operations will continue to support LAUGFS Terminals in achieving their targets with high quality operational and health & safety standards for the discharge and loading of LPG,”

LAUGFS Holdings Limited is one of the largest diversified business conglomerates and a trusted and well-loved home grown business in Sri Lanka. Founded in 1995, LAUGFS today has expanded across 20 industries in Sri Lanka and overseas, establishing a strong presence as a leader and pioneer in the power and energy, retail, industrial, services, leisure and logistics sectors. With 3,500 employees and an annual turnover exceeding Rs. 60 billion, LAUGFS continues to expand and empower millions as a trusted Sri Lankan brand.

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