Mumbai, Nov. 6: Hindustan Petroleum Corporation Limited (HPCL) and French oil major Total SA have joined hands to set up a Rs 333-crore underground liquefied petroleum gas (LPG) storage facility at Vishakhapatnam in Andhra Pradesh.
The underground storage facility of South Asia LPG Company Pvt Ltd, the joint venture company, is the first of its kind in south Asia.
Both partners will have an equal stake in South Asia LPG Company. The project involves construction of an underground cavern of 60,000 metric tonnes storage capacity.
It will facilitate import of LPG in larger vessels of over 40,000 metric tonnes against vessels of 8,000 metric tonnes to 13,000 metric tonnes being currently used. The resultant benefits will mainly be in terms of freight cost.
Cavern storage is considered the safest form of LPG storage, HPCL said. Cavern storage for hydrocarbons is widely prevalent and quite common in developed countries like the US, Sweden, Norway and France.
Total SA brings to this project its experience in caverns.
According to HPCL, the cavern itself would be a modern engineering marvel. M/s Geostock are the technical and engineering consultants for the project.
The facility is planned at Vishakhapatnam at the foothills of Dolphin Nose, 200 m below the sea level.
South Asia LPG Companyís project outlay is Rs 333 crore for which the financial closure has been achieved.
Signing of the land lease agreements and documentation relating to bank loan sanctions have been completed. Construction will begin in December with a completion period of 32.5 months.
For HPCL, the location is important as Andhra Pradesh accounts for a significant share of the company's investment.
HPCL operates a refinery at Vishakhapatnam with a capacity of 7.5 million metric tonnes. It has a 571 km petroleum product pipeline from Vishakhapatnam to Secunderabad.
HPCL also has an LPG bottling plant and LPG import facilities at Vishakhapatnam.
For Total SA, the joint venture project is in line with the groupís strategy of expanding in high-potential Asian markets. In India, Total SA has already made its presence felt in LPG marketing, lubricants and speciality chemicals.