Massive LPG crisis till 2030: Report

The Northeast is staring at a massive crisis in the LPG sector and will continue to be deficit in LPG production till 2030, says the Hydrocarbon Vision 2030 Northeast.

By Roopak Goswami in Guwahati
  • Published 18.02.16
A man arranges LPG cylinders. File picture

Guwahati, Feb. 17: The Northeast is staring at a massive crisis in the LPG sector and will continue to be deficit in LPG production till 2030, says the Hydrocarbon Vision 2030 Northeast.

The plan Hydrocarbon Vision 2030 Northeast India which aims to develop the region as a dominant hydrocarbon hub was announced by minister of state (in-charge), petroleum and natural gas, Dharmendra Pradhan, here on February 9.

"The demand-supply analysis at product level reveals that the Northeast will continue to be in deficit as far as LPG is concerned. LPG shortage in the region has been growing over the last 10 years and initiatives are required from the refineries to increase LPG production from the region and to take it to the all-India level of average production. This would require the refining companies to upgrade their refineries and change their refinery configuration so that more of LPG is produced from the region," the plan says.

In fact, the crisis is not limited only to production but is also in pipeline network and bottling plants.

Production of LPG in the region was 157,000 metric tonnes (TMT) in 2014-15 as compared to consumption of 402 TMT in the same year.

Consumption is expected to increase as LPG penetration rates increase. By 2030, LPG consumption in the Northeast is expected to be around 957 TMT for achieving 80 per cent penetration, as compared with production of around 806 TMT, which will result in a shortfall of around 150 TMT. Assuming 100 per cent LPG penetration, there will be a shortage of around 800 TMT.

Except for LPG, production exceeds demand for all other key POL (petroleum products, oil and lubricants) products produced by refineries in the region.

The LPG-processing capacity of the refineries in the region have not been sufficient enough to meet the ever-increasing demand from the region. Going forward, the trend is likely to continue as more consumers are going to receive LPG connections which will outpace the increase in proposed LPG processing capacity of the refineries in the region.

At present, Northeast does not have LPG pipeline network, therefore, the entire supply of LPG is made through road transportation using LPG bullet tankers/packed trucks. Supply by road is often subject to various interruptions, which regularly occur during the course of travel of the tankersrucks to distant destinations.

Considering the fact that there is no LPG pipeline and transportation in hilly areas has become difficult, a LPG pipeline from Numaligarh-Imphal has been identified and pre-feasibility study has already been completed.

However, as the pipeline would be laid through difficult terrain and remote areas, implementation would require different set of security concern during construction as well as operation of the pipeline.

"Considering the LPG shortage scenario in the region, the pipeline network should be given priority and financial support needs to be extended by the Centre in terms of viability gap funding to ensure immediate implementation of this network," the plan says.

Indian Oil Corporation Ltd (IOCL) has started upgrading its Guwahati refinery by implementing its in-house patented technology called INDMAX for enhancement of LPG and gasoline production. Similar initiatives from the other refineries are also warranted for increasing LPG production.

Even the storage capacity is dismal. The figure is more dismal for states such as Meghalaya, Tripura and Mizoram which have 0-2 day's coverage.

Therefore, considering the geographical locations of the region, effort should be made to increase LPG coverage to 15 days from current level of 5-6 days.

On the bottling plants, currently, there are 12 LPG bottling plants across the northeastern region with a total bottling capacity of 426 TMTPA and existing tankage of around 15 TMTPA.

"Planning of additional tankages need to be put in place so that adequate storage cover is available in the Northeast considering the rise in demand," the plan says.