Laugfs Gas and Hambantota Port to make Sri Lanka an Energy Hub
Laugfs Gas, a pioneer in Sri Lanka’s power and energy sector, is currently working towards making Sri Lanka an energy hub, and Hambantota Port is their launch pad for this ambitious plan. They are of the view that the port being strategically placed in one of the world’s unique locations works to their advantage.
The company believes that they are well placed to become a big competitor to Singapore, and Sri Lanka bringing in a strong strategic partner like CMPort as a port operator, will be a tipping point that would propel the country to a new age of trade and commerce. The Laugfs Group’s potential customers are some of the fast growing economies positioned in close proximity to the Hambantota Port like, India, Bangladesh, Maldives, Myanmar and East Coast of Africa. With a mega LPG storage complex already established adjacent to this southern port, Laugfs believes they could provide their target markets, a much better service than their competitors. Once it is commissioned in November 2018, for commercial operations, this will be the largest and most modern LPG related infrastructure in the Indian Ocean rim area.
Speaking of the value addition CMPort brings to the equation, W. K. H. Wegapitiya, Group Chairman of Laugfs Holdings says “Hambantota Port was under-utilized and did not bring any value to the overall national equation. Therefore, a strategic partner was necessary to develop the port fast. This is not just for the logistics or shipping sector, but also for the economic spillover which will benefit the whole country. GDP will develop, there will be employment opportunities and wealth creation.” Wegapitiya believes that today the world is moving away from old fashioned ideas. For example, instead of nations wanting full control of their own enterprises they are leveraging what they have to attract the right partners, to create synergies that would help them to move forward.
Laugfs has plans to bring LPG in larger vessels from international markets like the Gulf, US, Singapore etc., to Hambantota. The Group Chairman says that the port’s two jetties dedicated for oil, gas and petroleum business, makes it convenient for the company, especially since the port will provide them with a connection facility to unload vessels through a pipeline connecting to their facility — which is about 3 km from the jetty. This would help them to transfer the LPG from ships direct to their facility, in large quantities i.e. 20,000 to 30,000 metric tonnes. Mixing and blending will then be done to create different LPG products, according to market demand, and these would then be exported from Hambantota to Indian ocean rim countries. “Once Laugfs terminal opens in November this year, we would be bringing close on 30 ships per month; 20 of them would be owned by us,” Wegapitiya says.
As their main service provider, the Hambantota International Port Group (HIPG) is a key stakeholder for Laugfs Gas, and plays a pivotal role in their operation. HIPG is in the process of developing Hambantota as a multi purpose port which will provide a variety of services such as handling containers, break bulk, RORO, passenger, oil, bulk terminal, gas and project cargo. The port is slated to become one of a kind, as it will be the only port in the country, designed to handle the full gamut of services in the maritime and logistics area.
CEO of HIPG Ray Ren says that their first partnership with a local entrepreneur of Laugfs Gas calibre would be a major confidence boost for the Hambantota Port enterprise. “The synergies HIPG and Laugfs will bring will give the Port the impetus to position itself not only as an energy hub but also as a major international player for shipping and logistics. It will also open up a wealth of local job opportunities in different disciplines, which would be a boon to locals seeking employment and in the long term, the Sri Lankan economy.”
Laugfs Gas says that the Port Operator’s connection to an international brand name like CMPort, is something the local industry can leverage on. CMPort was recently named the global port operator by Lloyds of London, which coupled with their experience and know how, would give more local companies the confidence to partner with HIPG.