BW LPG and Confidence Petroleum Join Forces to Establish LPG Storage Joint Venture

In a strategic move aimed at enhancing LPG infrastructure and downstream operations across India, Confidence Petroleum India has entered into a joint venture with Norway-listed BW LPG. The collaboration will see the establishment of a LPG storage capacity of 62,000 tonnes at JNPT in Mumbai under the newly-formed JV entity named BW Confidence Enterprise.

The partnership plans to replicate similar storage facilities across key locations including Porbandar (Gujarat), Mangaluru (Karnataka), Karaikal (Tamil Nadu), Visakhapatnam (Andhra Pradesh), and Haldia (West Bengal), ensuring seamless supply of LPG throughout the country.

BW LPG has demonstrated its commitment to the partnership by investing $30 million (approximately ₹240 crore) in Confidence Petroleum India, acquiring an 8.50% stake through preferential allotment.

Confidence Petroleum India is gearing up for substantial investments totaling ₹2,000 crore over the next three years across various projects. A significant portion of this investment will be allocated for capital expenditure, with ₹400 crore earmarked for the current fiscal year and an additional ₹600 crore planned for the next financial year.

In its recent ventures, Confidence Petroleum India has acquired 12 acres of land in Butibori, Nagpur, with plans to manufacture type-IV CNG cylinders for the automotive sector. These lightweight cylinders, constructed from High-Density Polyethylene (HDPE) co-polymer, promise to reduce the weight of CNG cylinders by 75%, consequently improving vehicle fuel efficiency. Production at the Butibori facility is slated to commence from August. Additionally, the company is ramping up its LPG bottling units and CNG fuelling stations.

Nithin Khara, Chairman of Confidence Group, expressed optimism regarding the investment made by BW LPG, highlighting its potential to bolster the company's expansion plans amidst a thriving LPG market. Khara also underscored the company's progress in catering to LPG demand in the hotels, restaurants, and cafes (HoReCa) segment through the GoGas brand.

Addressing concerns about the government's emphasis on electric vehicles (EVs), Khara asserted that the rise of EVs would not significantly impact the usage of CNG vehicles. He emphasized the coexistence of EVs and CNG vehicles in the market.

Iver Baatvik, Vice President and Head of Corporate Development at BW LPG, lauded Confidence Petroleum India's strong foothold in the domestic LPG industry, juxtaposed with BW LPG's formidable global shipping and trading network. Baatvik emphasized the synergies between Confidence's local expertise and BW LPG's international presence, foreseeing accelerated growth trajectories for both entities as a result of the partnership.

HBL