Opportunities in the Asian Region and

regional synergy

W K H Wegapitiya – Chairman

LAUGFS Gas PLC – Sri Lanka & Bangladesh

Harnessing the location specific advantages

of Hambantota for regional LPG opportunities

Shift in the Economic Center of Gravity

• World economy is shifting from the West to East

• Easternisation (Rachman: 2016) will act as the pivotal point in

the global economic axis.

Source; IMF world economic outlook, 2015

What’s Fueling the Economic Shift to the East?

• The Blue & Red economic opportunities in Asia

• Blue Economy - Oceanic based economic opportunities• fisheries, sea-minerals including oil & gas, developing ports &

shipping activities, marine tourism, marine biotechnology, deep-sea

mining, and transport & logistics (Mohanty, 2015)

• Red Economy - energy based economic opportunities • Upstream and downstream energy developments, oil & gas based

power generations, energy transportation & logistics – terminalling &

pipe borne logistics, entrypot activities (Parat et al, 2014)

Economic opportunities in the IOR

IOR – The epicenter of the Global Economic shift

No other place has the

combine advantages of

Blue & Red economic

opportunities other than

the Indian Ocean Rim

Countries

• More than 50 percent of the world's maritime oil trade is in the IOR

• 32.2 millions of barrels of crude oil and petroleum products are transported

• Nearly 40% of the world's offshore petroleum is produced in the Indian

Ocean countries

• India imports nearly 80% of its energy from the Middle East, and is due to

overtake Japan as the world's third largest energy consumer (behind China

and the United States)

• 84% of China’s imported energy resources passed through IOR

• 78% of world LPG is pass through IOR

• Over 100,000 ships transit through IOR and 25% carry energy

Purple Economy in the IOR

• Growth spillover – Indo-China economic spill

• China - “One Belt, One Road” - India “Make in India”

• India – China Geopolitical struggle

• India assisted – 12 ports, China assisted – 17 ports

• India – 9 Oil & Gas infrastructure, China – 11 Oil & Gas infrastructure

• Kra Isthmus and changing maritime dynamics in Asia

• IOR country's LPG demand will increase

by 3 fold in 10 years (WLPGA)

• Maritime logistics and support services

need to grow by 65%

Drivers of the Purple Economy in the IOR

• Ideal location for Blue and Red Economic activities

• Nutracentral location & underutilized capacities

• Maritime & logistic hub for energy, terminalling & break bulking,

Entrepot activities, shipbuilding and repairing, supplies and services –

bunkering, chandelling and crew services

• Oil refining, petrochemical, processing and value adding of energy,

safe stocks, trading, arbitrage and product swaps

• Immediate Spill over benefits and Sharkunning strategy

Sri Lankan competitiveness in the Purple Economy

The Sri Lankan advantage – Development Epicenter

• Location specific advantages

• Economic Spillover effects

• Strong Regional trade ties with Asian

economies

• Conducive trade and economic

policies

• Average of 45,000 ships passing southern tip of Sri Lanka annually and

25% of them are reported to carry energy including LPG

• All weather Port – no impact from the monsoon effect

• Deep Port - 19 meter draft which can accommodate VLGC’s

• Brand new berthing facilities with pier based unloading and loading arms

• Dedicated berth for energy (LPG) handling

• Free Port status with many concessions

• Especial investment concessions under BOI Hub status – 25 year tax

holiday which can be extended further period depending on the size

investment

• Most cost competitive location for a hub operation

Competitiveness of Hambantota Port

Logistic competitiveness of Hambantota for LPG

1. Singapore

2. Port Kelang

3. Penang

4. Thilawa

5. Yangon

6. Chittagong

7. Dhaka

8. Mongla

9. Haldia

10. Paradip

11. Vishakapatnam

12. Krishnapatnam

13. Madras

5 days

4 days

4 days

3 days

3 days

4 days

4 days

4 days

3 days

3 days

2 days

1 day

1 day

1 day

11 days

9 days

2 days

1.5 days

2 days

3 days

3.5 days

4 days

5 days

5 days

9 days

7 days

15 days

9 days

7 days

1. Tuticorin

2. Kochi

3. New Mangalore

4. Mumbai

5. Rathnagiri

6. Pipavav

7. Port Qasim

8. Karchi

9. Maldives

10. Mauritius

11. Madagascar

12. Reunion

13. Mombasa

14. Dar Es Salam

15. Rechard Bay

16. Durban

LAUGFS LPG Import & Export Terminal at Hambantota Port

Project Investments

• Largest LPG import, storage

and re-export terminal in the

IOR

• Total estimated investment

USD. 85 million

• Project promoter/ Investor –

LAUGFS Terminals Limited

Project

Timelines

• Started:

August 2016

• Completion:

April 2018

Project Capacity & Capabilities

• Capacity – 45,000 m/tons of pressurized LPG

storage

• Product handling capacity – 1,800,000 m/tons of LPG

annually

• Ability to store Propane and Butane separately,

facilitating the export of mix LPG

Total value of re-exports of LPG by this project in 2020 is expected to be US$ 1.3 Bn

This project

will contribute

6% of total

exports

earning

projected by

2020

Sri Lanka will become a leading energy re-exporter and an energy hub in Asia

Sri Lanka will become and energy trading and maritime hub in the Indian Ocean

Total Sri Lankan export earnings is US$ 11.3 Bn in year 2015

Projected to grow to US$ 20 Bn by 2020

Project Contributions - to the National

Economy

Capitalizing IOR Purple Economy - LAUGFS Strategy

• Largest LPG infrastructure in the IOR

• USD 85 million investment

• First Hub stated project in Hambantota

• 45,000 m/ton storage

• 1.8 million m/tons of LPG PA

• 6% of total export earning by 2020

• Creating the Energy hub- Purple Economy• Own shipping fleet

• 20 ships by 2020

• Maritime center in Asia

• Blue Economy in IOR

Laugfs Gas Bangladesh

• 160 m population

• Less than 5% market

Laugfs Gas Myanmar

• Regional presence

• Multinational company

• Integrated energy solution

• IOR Blue economy

• Regional energy trading

• Supply chain Management

• Maritime and logistic support

• Growing Domestic market

• Energy efficiency

• Local value creation

• Cylinder manufacturing

• Technical services

Laugfs Gas Sri Lanka

LAUGFS, is committed in harnessing rising Blue &

Red Economic opportunities in the IOR and support

the regional synergies by collaborating with all

stakeholders.

We invite you to join with us.. THANK YOU