Aegis, Vopak to jointly operate 8 LPG terminals in India

Aegis Group and Dutch tank storage company Royal Vopak is forging a joint venture to operate a network of eight terminals in five strategic ports on India's east and west coasts with total capacity of around 960,000 cu m, making it one of the country's largest independent tank storage companies for LPG and chemicals.

The transaction is expected to close early 2022 and the partnership is positioned for further growth, targeting mainly LPG and chemicals as well as industrial terminal opportunities, both the firms said in a statement July 12.

The transaction involves two entities that Vopak will simultaneously buy into on a joint-control basis.

The first is Aegis Vopak Terminals Ltd., in which Vopak will acquire 49%. Vopak's existing CRL terminal entity in Kandla will become a wholly owned unit of Aegis Vopak Terminals Ltd.

CRL is currently a fully owned subsidiary of Vopak and upon the transaction's closure, it will be jointly controlled, as CRL will be part of Aegis Vopak Terminals Ltd.

Aegis' network of terminal assets at five locations in Kandla, Pipavav, Mangalore, Kochi and Haldia on the west and east coasts, will be added to the joint-venture asset base, they said.

Second is the Hindustan Aegis LPG Ltd. entity, in which Vopak will acquire 24%. Hindustan Aegis is currently a joint venture between Aegis and Japanese trading house Itochu.

In 2017, Itochu marked the first Japanese participation in an Indian LPG terminal by taking a stake in Aegis's wholly owned subsidiary, Hindustan Aegis LPG, which operates the 2.5 million mt/year Haldia terminal, providing LPG logistics and handling facilities as well as charging service fees for third-party importers of LPG such as national oil marketing companies.

After the Aegis-Vopak transaction, Aegis will own 51% and Itochu will continue to hold 25%, the statement said.

Potential to grow into LNG, Renewables

"This joint venture with Vopak will accelerate the growth of Aegis in the terminals business and has the potential to allow Aegis to diversify into new areas of gas storage such as LNG and other energy projects, including renewables in partnership with the world's leading independent tank storage company," said Raj Chandaria, Chairman of Aegis Logistics Ltd.

India is the world's second-largest importer of LPG behind China, importing just above 15 million mt/year.

"This is an investment in a growth market and by joining forces with Aegis, we aim to deliver growth over the next 10 years in line with the new joint ventures' and India's ambition for LPG," said Eelco Hoekstra, Chairman of the Executive Board and CEO of Royal Vopak.

Vopak and Aegis have arranged financing of Eur153 million ($181.50 million) in the joint ventures.

Shipping giant BW LPG, which had projected India's LPG imports to grow 34% up to 2025, has also formed a joint venture with India's Global United Shipping in 2017 to serve the Indian market.