Aug 21, Colombo: LAUGFS Gas PLC and Standard Chartered launched one of the first private sector financing facilities in Sri Lanka, on Friday, supported by China Export and Credit Insurance Corporation (Sinosure) for the 30,000 MT LAUGFS Import and Export Terminal at Hambantota.
As a principal party to this transaction, Standard Chartered acted as the coordinating bank, sole arranger and lender for the financing facility.
The LPG storage terminals by LAUGFS Terminals Ltd., a subsidiary of LAUGFS Gas PLC, is being built with an investment of USD 80 million and will be one of the largest LPG import and export terminals in South Asia.
"This marks a significant milestone for our LPG Terminal project, which is well on track to be commissioned in the second half of 2018," LAUGFS Holdings Chairman W.K.H. Wegapitiya said. "Once completed, the storage terminals in Hambantota will garner tremendous economic benefits to our country by helping to position Sri Lanka as a central energy hub in the region."
Strategically located at the Hambantota Port, the LAUGFS LPG Terminal will operate as a central hub for LPG importing, re-exporting as well as the provisioning to retailers.
Chief Executive Officer, Standard Chartered Sri Lanka, Jim McCabe said, "This is a landmark occasion for Standard Chartered, as the first international bank to sign a strategic cooperation agreement with Sinosure."
"This transaction is a result of the excellent working relationship we have developed over the years with SINOSURE and LAUGFS, supported by our longstanding presence in China and Sri Lanka," he said.
SINOSURE Deputy General Manager, Guo Yilin said the LAUGFS LPG Terminal project will become a catalyst that contributes to the future economic prosperity of Sri Lanka. "The strategic location of the terminal in the midst of the world’s largest shipping routes will undoubtedly be an enormous advantage that the company can leverage on. We are pleased to be part of this visionary endeavor with the first-ever such private sector finance facility in Sri Lanka," he said.
Constructed by China Huanqiu Contracting & Engineering Corporation (HQC), the first phase of the LAUGFS LPG Terminal will be of 30,000MT storage capacity, with plans to extend to 45,000MT in phase two.
Once completed, the facility will consist of above-ground spherical LPG storage tanks, each with a volume of 6,000 m3. With the proposed cargo heating system at the existing jetty, the terminal will be well-equipped to accept VLGCs with refrigerated or pressurized cargo.
"As a company with strong Sri Lankan roots, we are very pleased to note the multiple benefits the LAUGFS LPG Import & Export Terminal will yield to our country. These will range from foreign revenue generation and employment creation to the development of ancillary industries to support the terminal’s activities. I am thankful to all the teams involved in this historic transaction from both LAUGFS and Standard Chartered for their exemplary contribution to initiate and complete a transaction of this nature," LAUGFS Holdings Group Managing Director Thilak De Silva remarked.
LAUGFS has been strengthening its energy presence within the region over the past few years with the expansion of its LPG downstream businesses to Bangladesh, rapid expansion of its LPG vessel fleet under LAUGFS Maritime and the establishment of its energy trading arm in Dubai. The LAUGFS LPG Import and Export Terminal under construction in Hambantota is set to further solidify its position as a global energy conglomerate.