Visakhapatnam LPG Storage Cavern Inaugurated

Visakhapatnam LPG Storage Cavern Inaugurated

On Monday, January 14, South Asia LPG Ltd (SALPG), equally owned by Total Gas & Power India and Hindustan Petroleum Company Ltd (HPCL), inaugurated the mined LPG* storage cavern in Visakhapatnam, on India’s east coast. The ceremony marked the startup of operations. The first storage facility of its type in India, the cavern will provide a platform for imports of the country’s most competitively priced LPG.

Four Questions for Christophe Miaux, Managing Director, Total Gas & Power India

Why did you go with an underground storage facility?Can you describe it for us?
Caverns are the safest LPG storage technique available today. The liquid LPG is stored in the cavern using natural hydrostatic pressure. This type of infrastructure also has the advantage of being more visually unobtrusive.

The Visakhapatnam cavern consists of two 160-meter-long cylindrical galleries located 160 meters below ground. Two 180-meter shafts rise to the surface.

With a capacity of 60,000 tons, the cavern can be supplied by the 40,000-ton LPG carriers, the largest currently in service.

How did construction go?

Begun in 2003, construction was completed in 2007. The latter part of 2007 was spent running a wide array of technical tests.

Responsible for building and operating the cavern, SALPG awarded the construction work to India’s Larsen & Toubro. In addition, it turned to Géostock, a 50%-owned Total subsidiary specialized in underground storage facilities, to provide technical consulting services for cavern construction and to perform tests, validate containment tests and commission the facility.

All possible measures were taken to ensure that the project teams complied with Total’s safety standards.

Furthermore, the project was delivered on budget, even though construction ran nearly a year behind schedule.

To sum up, the construction of this cavern was completed successfully, thanks in particular to the strong commitment of the site project team, the active support of headquarters units and sterling cooperation among the various participants.

Why did Total undertake this project?

We launched the project in 2003 in the belief—which has proved correct—that India’s energy demand, buoyed by economic growth, would increase significantly. Through the project, fast-growing LPG demand in southeastern India will be met; the region has a large shortfall and is a heavy importer. In addition, costs are significantly lower because Very Large Gas Carriers (VLGC) can be used for transportation.

We chose Visakhapatnam because of its excellent port infrastructure and existing market access via a pipeline to Hyderabad. More specifically, the site’s geology was ideally suited to the construction of a storage cavern.

What’s the outlook for the future?

Through its size, SALPG will transform LPG supply in India by offering the facilities needed for large capacity carriers and thereby generating significant freight cost savings, in line with market and production developments, in particular in the Middle East. Now it’s up to us to leverage the potential synergies between the project and our international LPG trading and local LPG marketing activities.

*Liquefied petroleum gas is a mixture of propane and butane, which are extracted from natural gas and oil fields or produced when crude oil is refined. LPG is stored as a liquid under pressure in dedicated tanks. It becomes gaseous at ambient temperature and atmospheric pressure. An alternative to conventional automotive fuels, LPG is also used for heating and cooking, as well as specific industrial applications. In India, 90% of LPG is for domestic use, mainly cooking.