India’s largest refiner, Indian Oil Corporation (IOC), is planning to acquire a 50% stake in very large gas carriers (VLGCs). The move comes amid preparation to step up imports of liquefied petroleum gas (LPG) from the United States, according to a tender document.If the plan goes ahead, IOC will become the first Indian refiner to own VLGCs. At present, the company primarily depends on time-chartered vessels to transport both LPG and crude oil.India has been actively diversifying its sources of LPG and the US has emerged as its largest supplier in the months following the outbreak of the West Asia conflict.
US LPG imports in focus
According to the tender document quoted in a Reuters report, IOC is looking for VLGCs with a cargo capacity ranging from 80,000 to 93,500 cubic metres and an age of no more than 12 years. The tender has been issued to a select group of companies.State-owned fuel retailers in India are expected to increase purchases of US LPG from 2027. LPG is mainly used as cooking fuel, although imports from the US typically work out costlier for Indian buyers because of longer shipping distances and higher freight charges.“The biggest challenge in buying US LPG is not availability but freight rates,” an Asian LPG trader said.Interested bidders can offer up to two VLGCs, although IOC has not disclosed how many vessels it ultimately intends to purchase. The document states that IndianOil LNG, IOC’s joint venture, reserves the right to acquire one or more vessels through the tender process.IOC has scheduled a pre-bid meeting for August 5, while commercial and technical bids must be submitted by September 7.Following the acquisition, the vessels will be reflagged under the Indian flag, the tender document said.State-run oil marketing companies are now planning to raise LPG imports from the US beyond the current annual volume of about 2.2 million tonnes as part of a broader effort to diversify procurement and reduce dependence on Gulf suppliers.TOI has reported that the contracted import volume could be doubled. Oil companies are also exploring additional sourcing options, including Algeria.According to data from global analytics firm Kpler, India’s LPG imports from the United States have risen sharply since the US-Iran war began. After a slight decline in April, imports have increased steadily, with June volumes almost 145% higher than those recorded in February.At the same time, 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 exports to India decline sharply following the closure of the Strait of Hormuz.
