Report: Sibur to start LPG supplies to India in May

MOSCOW, May 6 (PRIME) -- Russia’s largest petrochemical company Sibur will sell two cargoes of liquefied petroleum gas (LPG) to India in May for the first time ever as it looks for new markets after demand in Europe fell sharply due to the coronavirus outbreak, Reuters reported April 30, citing traders and shipping data.

Most European countries have been in lockdown since March amid the coronavirus pandemic, causing a dramatic fall in fuel consumption. As LPG is widely used in Europe as motor fuel, it was hard hit by the lack of demand.

In India, though, LPG demand is rising this year despite the coronavirus as it is mostly used by private households as cooking gas meaning that its popularity rises during the lockdown.

In March, LPG sales in India rose about 1.9% from February to 2.31 million tonnes, according to the Petroleum Planning and Analysis Cell (PPAC) of the oil ministry.

Moreover, India promised at the end of March that the state would provide free cooking gas cylinders to poorer citizens for three months, under a scheme meant to nudge them to adopt the cleaner fuel in a move that is to trigger a surge in LPG sales later this year.

Sibur loaded a vessel, Navigator Luga, with 12,700 tonnes of butane on board on April 18 and another vessel, Navigator Libra, carrying 11,900 tonnes of propane on April 21 from Ust-Luga port for delivery to India’s Nhava Sheva port close to Mumbai, according to shipping data from Refinitiv Eikon.

The vessels are to arrive on May 11 and 14 respectively, the data shows. According to traders, more shipments of Russian LPG to India in the coming months are currently being negotiated.

Sibur produced 6.45 million tonnes of LPG in 2019, of which about a half was exported, according to the company’s data. Most of Sibur’s LPG sea exports were to northwest Europe in 2019, according to Refinitiv Eikon data.

Sibur didn’t immediately reply to a Reuters request for comment.

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