Itochu will help run a liquefied petroleum gas receiving terminal in eastern India, seeing a chance to bolster gas sales in the country as Prime Minister Narendra Modi promotes higher use of the fuel. The Japanese trading house will spend 2.5 billion rupees ($38.6 million) in July to buy a 19.7% stake in Hindustan Aegis LPG, the operator of the facility in the state of West Bengal. In the same month, the Mumbai-based company will begin operating the terminal, which has an annual LPG storage capacity of 2.5 million tons. Hindustan Aegis will receive tank leasing fees from gas importers.
In addition to India, Itochu operates LPG import hubs in Japan and the Philippines. It sells 6 million tons of LPG annually to countries such as Japan, South Korea and the Philippines. With help from its Indian business, the trading house targets 10 million tons in annual sales by 2020. India's LPG demand ranks third worldwide by volume, trailing the U.S. and China. Demand is estimated to grow from about 21 million tons in 2016 to around 25 million tons by 2022, says India's Petroleum Planning & Analysis Cell. Imports currently meet about half of India's LPG needs, with demand on the rise from factories and power plants.