Indian Oil Pursues 50% Stake in Very Large Gas Carriers Amid Rising US LPG Imports
India’s largest refiner, Indian Oil Corporation (IOC), is set to acquire a 50% stake in very large gas carriers (VLGCs) as part of its strategy to boost imports of liquefied petroleum gas (LPG) from the United States. This initiative, outlined in a tender document, positions IOC to become the first Indian refiner to own VLGCs, moving away from its current reliance on time-chartered vessels for LPG and crude oil transportation.
US LPG imports in focus
The tender specifies that IOC is seeking VLGCs with a cargo capacity between 80,000 and 93,500 cubic meters, and an age limit of 12 years. The tender has been issued to a select group of companies. State-owned fuel retailers in India are expected to increase their purchases of US LPG starting in 2027. While LPG serves primarily as cooking fuel, imports from the US tend to be more expensive for Indian buyers due to longer shipping distances and elevated freight charges. An Asian LPG trader noted that the main challenge in acquiring US LPG lies in freight rates rather than availability.
Bidders can propose up to two VLGCs, although IOC has not specified the total number of vessels it intends to acquire. The tender document indicates that IndianOil LNG, IOC’s joint venture, retains the right to purchase one or more vessels through this process. A pre-bid meeting is scheduled for August 5, with commercial and technical bids due by September 7. Following the acquisition, the vessels will be reflagged under the Indian flag.
State-run oil marketing companies are planning to increase LPG imports from the US beyond the current annual volume of approximately 2.2 million tonnes. This effort is part of a strategy to diversify procurement and lessen dependence on Gulf suppliers. Reports suggest that the contracted import volume could potentially double, with oil companies also exploring additional sourcing options, including Algeria. Data from global analytics firm Kpler indicates that India’s LPG imports from the US have surged since the onset of the US-Iran conflict, with June volumes nearly 145% higher than those in February. Meanwhile, LPG shipments from major Middle Eastern suppliers, including the UAE, Saudi Arabia, and Qatar, have significantly declined.
Observer Voice is the one stop site for National, International news, Sports, Editor’s Choice, Art/culture contents, Quotes and much more. We also cover historical contents. Historical contents includes World History, Indian History, and what happened today. The website also covers Entertainment across the India and World.
