LAUGFS Gas outlines Nov., shipment plans and measures to restore LPG supplies

LAUGFS Gas PLC yesterday said it has arranged three LPG shipments expected to arrive in Sri Lanka this month and is working with the relevant authorities to secure approvals for domestic supplies through its Hambantota terminal.

The company said it sincerely regrets the hardship caused to households and businesses by the current supply disruptions. “As a Sri Lankan company serving the domestic LPG market for more than 25 years, LAUGFS remains committed to restoring availability and strengthening long-term supply reliability,” it said.

Expected November shipments:

• OQT shipment expected at Hambantota on 12-14 November
• Geogas shipment expected at Colombo on 15-17 November
• Second OQT shipment expected at Hambantota on 24-28 November

These dates remain subject to shipping arrangements, port operations and applicable regulatory approvals. Domestic releases from the Hambantota shipments require the necessary authorisations. Distribution is expected to resume progressively following receipt and clearance of the cargoes.

Supply challenges and the Hambantota terminal

Conflict in the Middle East and disruptions to maritime transport through the Strait of Hormuz have affected international LPG supply chains, creating procurement and shipping difficulties for Sri Lanka and other importing countries.

To strengthen Sri Lanka’s LPG supply security and support regional trade, LAUGFS Terminals Limited (LTL), a wholly owned subsidiary of LAUGFS Gas PLC, invested $ 65 million in its Hambantota import and export terminal, which commenced operations in 2019. With 30,000 metric tonnes of storage capacity, it is Sri Lanka’s largest LPG receiving, storage and entrepôt terminal.

The project received capital goods import-duty concessions under the Board of Investment’s Commercial Hub framework, subject to the applicable conditions. Under the relevant Hub Regulations, domestic releases are linked to 40% of annual re-export turnover by value. This is an export-linked operating condition, not a restriction on LAUGFS Gas’s domestic market share.

The COVID-19 pandemic, Sri Lanka’s economic and political crisis, foreign-exchange shortages and sovereign credit-rating downgrades disrupted LTL’s ability to maintain the required re-export levels. The resulting regulatory restrictions have limited the terminal’s availability for domestic supply despite its substantial storage capacity.

Temporary permission previously granted by the Finance Ministry under Emergency Regulations ceased when those regulations ended.

Steps to enable domestic supply

LTL has requested three months of temporary permission to use the Hambantota terminal for domestic LPG supply. In parallel, the company is working with the BOI, Finance Ministry, Sri Lanka Customs and the Department of Imports and Exports Control to complete its transition out of hub status and establish the necessary operating arrangements, with applicable duties and taxes payable.

The BOI Chairman confirmed to the company yesterday that, following instructions from the President, he had written to the Treasury Secretary requesting that the necessary approvals be facilitated within one week. These approvals remain pending. LAUGFS appreciates the Government’s intervention and the cooperation of the relevant authorities.

As an additional supply safeguard, LAUGFS Gas has also called a new tender for direct LPG deliveries to Colombo commencing in January 2027.

Clarification on OFAC designation

LAUGFS Gas PLC and LAUGFS Terminals Ltd., are not itself entities designated by the US Department of the Treasury’s Office of Foreign Asset Control (OFAC). The company remains committed to applicable regulatory and compliance requirements and to maintaining transparency with its stakeholders.

LAUGFS Gas PLC appreciates its customers and business partners for their patience and will provide further updates as shipment arrivals and regulatory approvals are confirmed, the company said.