IOC Looks To Buy 50% Stake In VLGCs As US LPG Imports Set To Rise

Indian Oil Corporation (IOC), the country's top refiner, is looking to acquire a 50% stake in very large gas carriers as it prepares to step up imports of liquefied petroleum gas from the United States, according to a tender document seen by Reuters. Very large gas carriers, or VLGCs, are ships used to transport LPG in bulk over long distances.

IOC would be the first Indian refiner to seek ownership of such vessels. The company currently relies mainly on time-chartered LPG and crude tankers.

According to the tender document, IOC is seeking vessels with a capacity of 80,000 to 93,500 cubic metres that are no more than 12 years old. The document was issued to a limited number of shipping companies and allows bidders to offer up to two vessels each, though IOC has not specified how many it plans to acquire in total.

IndianOil LNG, a joint venture of IOC, reserves the right to acquire one or more vessels under the same tender. A pre-bid meeting is scheduled for August 5, and commercial and technical bids are due by September 7. Notably, once the vessels are acquired, they will be reflagged to India.

Indian state fuel retailers are set to increase purchases of US LPG, used mainly as cooking gas, from 2027. US LPG tends to cost Indian buyers more due to longer voyages and higher freight charges, the report said, adding that freight rates, rather than availability, remain the biggest challenge in sourcing the fuel from the US.

State-run oil marketing companies are planning to raise LPG imports from the US beyond the current annual volume of about 2.2 million tonnes, as part of a broader push to diversify procurement and cut dependence on Gulf suppliers. The contracted import volume could be doubled, with oil companies also exploring additional sourcing options such as Algeria, TOI reported.

Data from global analytics firm Kpler shows India's LPG imports from the US have risen sharply since the US-Iran war began. After a slight decline in April, imports increased steadily, with June volumes nearly 145% higher than in February, the data showed.

Meanwhile, LPG shipments from major Middle Eastern suppliers such as the UAE, Saudi Arabia and Qatar have dropped significantly. The UAE, once India's largest LPG supplier, has seen its exports to India fall sharply following the closure of the Strait of Hormuz.