Indian Oil forms joint venture for LPG business in Bangladesh

Dubai's IOC Middle East, a wholly-owned subsidiary of Indian Oil Corporation, and UAE's RR Holdings, the holding company of Beximco LPG of Bangladesh, signed an agreement for the formation of a 50:50 joint venture for LPG business in Bangladesh.

The LPG market in Bangladesh has seen a five-fold growth in the past five years and is expected to grow at a CAGR of 12-13 per cent.

The JVC will draw strength from the core competencies of IndianOil and the local expertise of Beximco. As per the business plan, the JVC would begin functioning by acquiring Beximco’s existing LPG assets.

Sanjiv Singh, Chairman, IndianOil, said: "We intend to set up a large LPG terminal at a deep-water port in Bangladesh, which would facilitate receipt of LPG in Very Large Gas Carriers, leading to reduction in cost of imports. Reduction in cost of import would help make LPG available at an affordable price to the people of Bangladesh.”

Dharmedra Pradhan, Hon’ble Minister for Petroleum & Natural Gas and Steel, Govt. of India, who presided over the function, said that the agreement is a major milestone for India-Bangladesh cooperation when a group company of IndianOil based in Dubai is joining hands with one of the most promising LPG companies in Bangladesh through its holding company in UAE for LPG business in Bangladesh.

Salman Fazlur Rahman MP, Hon’ble Private Industry and Investment Adviser to the Prime Minister of Bangladesh, said: “The JVC should serve as a testament to the remarkable investment potential of Bangladesh. At a time when the entire world is grappling with the severe economic consequences of the COVID 19 pandemic, this investment also reflects the resilient and enduring friendship between Bangladesh and India.”

Nasrul Hamid, MP, Hon’ble Minister of State for Power, Energy and Mineral Resources of Bangladesh added: "As Bangladesh’s middle class is rising with higher purchasing power, the LPG sector has seen an exponential boom over the years and is set to grow further in the coming years. As such, a partnership and investment at this scale between two experienced and major players has every potential to be a true game changer in the industry.”