Govt takes step to build LP gas storage plants

6 Feb 2015, Kathmandu - The government has initiated homework to set up LPG storage plants in the country to avert possible cooking gas shortage in the future in the event of disruption in LPG imports. The Ministry of Commerce and Supplies has directed the Nepal Oil Corporation (NOC) to carry out a feasibility study for such storage plants in all five development regions. Ministry spokesperson Deepak Subedi said the meeting chaired by Commerce Minister Sunil Bahadur Thapa had instructed NOC Managing Director Gopal Bahadur Khadka on
Wednesday to prepare a detailed plan on the storage plants. “The ministry decision follows the recommendation by the high-level parliamentary committee for reforms in the NOC,” said Subedi. The five plants are estimated to cost between Rs200-250 million to build, Subedi said. However, it is not clear what would the storage capacity of the plants at this time. “We’ve not decided about the capacity of the plants. The feasibility study will give us a clearer picture,” he added. As Nepal does not have any storage facility, any disturbances in the LPG imports from India often have a knock-on effect on the LPG supply in the domestic market. The imports from India were reduced by almost 50 percent in the last three months due to maintenance works at Indian Oil Corporation’s Barauni refinery plant in Bihar. “The situation would not have been as severe had there been storage facilities,” said an NOC official. Currently, LPG is imported by the private bottlers. However, of the 55 LPG bottling plants only apart from Nepal Gas the remaining 55 LPG bottling plants have storage plants. The parliamentary committee has also recommended 300-tonne storage capacity for the private bottling plants. Meanwhile, the ministry has assured LPG supply would return to normal in the next 2-3 days. “With increased import, supply will ease in the next few days,” said Subedi, admitting that the shortage was due to uneven distribution of the quota provided to the small LPG bottlers. “Amid growing complaints, the ministry is revising the distribution system for February,” he said. Out of the increased quota of 7,000 tonnes, the bottling companies will be provided quota based on the capacity of their production plants and number of cylinders they hold. LPG bottlers also claimed the supply of cooking gas has become normal. Shiva Ghimire, president of the Nepal LP Gas Industry Association, said there is a short supply of only 30 percent at present.