HPCL might go solo on its Rs 700-cr LPG cavern in Mangalore

France's Total SA was to partner the company earlier for the Mangalore project

State-run Hindustan Petroleum Corporation Limited (HPCL) might go solo on its plans to build its second underground liquefied petroleum gas (LPG) storage facility in Mangalore.

The company, which was planning to rope in Total SA of France to build the cavern jointly, said Total is not interested at present and might join at a later stage.

“We see merit in the project and have decided to go ahead. We will commission the detailed feasibility report shortly and then call for tenders in the next four-six months,” said a senior HPCL official.

The cavern will cost HPCL Rs 700 crore and will store 60,000 tonnes of LPG.  HPCL and Total, through their equal joint venture, South Asia LPG or SALPG, already have a 60,000-tonne capacity LPG underground storage facility in Visakhapatnam, Andhra Pradesh. The facility was commenced in 2007, at an investment of Rs 333 crore. On its website, HPCL says its cavern at Visakhapatnam has been dug in rock to store LPG. The storage facility is made up of two caverns of 19 metres height, 20 metres base width and 160 metres in length with inter-connections. The cavern is designed on “water containment principle” and is jacketed with water curtains. Besides being safe from natural calamities and hazards like sabotage, and aerial bombings, the caverns are leak and fire-proof.

The HPCL official said that looking at the growing demand for LPG in the country, a new cavern made commercial sense. The facility at Mangalore would be exclusively used by HPCL. HPCL plans to complete the project in the next four years. “We plan to begin construction by next year as it will take three years to construct the facility. We have kept the option open for Total if it wishes to join us later in the process,” the official added.

According to HPCL, given the demand for LPG, importing in large quantity would make more sense than importing in smaller capacity. Of the three oil marketing companies, Indian Oil Corp Ltd holds 48% of LPG market share. Bharat Petroleum Corp Ltd and HPCL’s market share stands at 26% each.

According to data from the petroleum planning and analysis cell, India consumed 16.3 million tonnes of LPG in 2013-14 against 15.6 million tonnes, an increase of 4.7%.

HPCL clarifies
In response to this report, HPCL has said: "The project is in feasibility stage and as of now we are not going solo."