Malaysia's Petronas to set up office, plant in India with LNG focus
10 August 2017
Malaysian government-run energy major Petronas is aiming to expand its liquefied natural gas (LNG) business in India, and is scouting for a stake in a terminal capable of handling its LNG product. It is also looking to enter into more long term contracts for supply LNG and scaling up its lubricants business.
Petroliam Nasional Berhad, better known as Petronas, currently operates in India's petrochemicals, lubricants and liquefied petroleum gas (LPG) segments and also supplies crude and LNG to various Indian companies.
Petronas, which has been in business with Indian companies for over two decades, is for the first time setting up headquarters for all its local businesses in Delhi, and has appointed a general manager to head it.
"We are looking at opportunities to invest in the LNG infrastructure in India and to bring LNG here to meet the increasing demand," said Datuk Wan Zulkiflee Wan Ariffin, president & group chief executive. However, he did not say if the company was in active talks with any Indian company for a stake purchase.
Ariffin also said that Petronas, with a turnover of about $46.1 billion, will expand its lubricants business in India, for which it is setting up a manufacturing plant in Patalganga, around 100 km south of Delhi, for about $50 million (about Rs320 crore).
Currently, the company's market share in this segment is in single digits and the aim is to grow by at least three times in the next five years. It is spending another $100 million to expand its lubricants segment. Globally, it is among the top 10 players in terms of market share in lubricants.
India contributes about $1.5 billion to Petronas's annual revenue and Ariffin expects this to rise. To understand the Indian market better, earlier this month all the top executives of the Malaysian energy major spent a week in India, visiting various companies here. The focus was to understand India's transformation into digital space, the Petronas CEO said.
"India is a very exciting market for us given its growth rate of 7 per cent and its energy deficit. It is our largest market for crude and that relationship will continue. We are very bullish on petrochemicals, LNG and lubricant business in the country," Zulkiflee told reporters in Delhi.
LNG market in India is fast growing and we have so far sold 15 cargos in spot market. We want to sell more on a long-term basis. The biggest bottleneck for LNG supply in the country is infrastructure and we are looking at opportunities to build it to connect unserviced markets," Zulkiflee said.
The company is scouting for opportunities to develop projects or acquire equity stakes in regassification units and pipelines.
Zulkiflee said his company's team visited India to meet non-energy companies in a first of its kind initiative. He said interactions with companies like Infosys, Bharti Airtel and startups such as Paytm were encouraging given Petronas' thrust in digitisation.