The companies are looking to spend Rs
650 crore on the project, which is expected to be operational by 2026. The
terminal will have a capacity of 62,000 metric tonnes, the companies said
during a press conference on February 19. They
also expect the infrastructure to enhance the storage capacity and
distribution capabilities for LPG in India.
The companies announced their joint
venture (JV) on February 19 and earmarked investments worth Rs 2,000 crore for
upstream and downstream expansions, to be spent in the next three years.
Confidence Petroleum plans to fund the capex through internal accruals,
said Nithin
Khara, Chairman of Confidence Group.
Khara flagged accruals worth Rs 250
crore from the current financial year and targets earnings
before interest, taxes, depreciation (EBITDA) of Rs 400 crore next
year. BW Energy, which holds about 8 percent stake in Confidence
group, had earlier invested $30 million to support the infrastructure plans.
The move comes amid the government’s plans
to increase the share of natural gas in the country’s energy basket to 15
percent from 6 percent now. India is already
witnessing growing demand accelerated by the adoption of LPG for cooking gas.
The clean gas is also gaining popularity among power, industrial, and
transportation industries amid greener goals.
The companies also plans port
development in Porbandar, Managlore, Halida and Visakhapatnam in future. Besides
infrastructure, the JV will also examine the potential impact on trade
relationships between India and other countries involved in the import and
export of LPG, the companies said in a press statement.
Confidence group, which already operates 68+ bottling
plants in the country, plans to scale it upto 100 plants in the next three
years. These plants are where the LPG is
put into bottles for storage and the bottling plants caters to public sector
undertakings such as Indian Oil, Hindustan petroleum, Bharat
petroleum, which the group counts as its customers. The JV also aims to add 500 auto LPG dispensing stations nationwide. As
of now, the group operates 252 such stations.