India’s oil companies are set to fully commission the world’s longest liquefied petroleum gas (LPG) pipeline by June. The $1.3 billion project will drastically cut transportation costs and reduce the risk of fatal road accidents.
“This will be a game changer in the LPG supply chain,” said N. Senthil Kumar, Director of Pipelines at Indian Oil Corp. Kumar added, “It’s like putting LPG on a conveyor belt”.
Replacing Trucks with Pipelines
Currently, trucks transport a significant portion of LPG across the country, creating safety hazards and high logistics costs.
The new 2,800-kilometer pipeline, built by a joint venture of Indian Oil, Bharat Petroleum Corp., and Hindustan Petroleum Corp. (IHB), will connect Kandla on the west coast to Gorakhpur in northern India.
The first phase will begin operations in March, and by mid-year, the entire pipeline will be fully functional. Once commissioned, the network will transport 8.3 million tons of LPG annually, meeting about 25% of India’s total demand.
Boosting Efficiency and Reducing Costs
The pipeline will significantly lower transportation costs in India, the world’s third-largest consumer of LPG. Currently, nearly 70% of the country’s bottling plants rely on trucks for supply. The Petroleum and Natural Gas Regulatory Board has been urging refiners to expand the pipeline network to accommodate rising demand and prevent road accidents.
LPG Demand Soars with Government Subsidies
LPG consumption in India has surged by 80% over the past decade, reaching 29.6 million tons in the fiscal year ending March 2024. This growth outpaced the 47% rise in overall demand for refined oil products. The increase is largely due to government subsidies aimed at helping low-income households switch from polluting biomass to cleaner cooking fuel.
Overcoming Challenges and Delays
The project was announced in 2019. However, several challenges delayed its completion. The COVID-19 pandemic, supply chain disruptions, and material shortages caused by Russia’s war in Ukraine slowed progress. Despite these setbacks, India now has an LPG pipeline network spanning nearly 5,000 kilometers.
As the ambitious project nears completion, Thestar.com reports that India will transform its LPG supply chain, enhancing efficiency, safety, and affordability for millions of consumers.
