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IWAI Signs MoU with MOL (Asia Oceania) Pte. Ltd to Transport LPG Through Inland Waterways

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IWAI inks pact with MOLOn February 25, 2021 The Inland Waterways Authority of India(IWAI) signed a Memorandum of Understanding(MoU) with MOL (Asia Oceania) Pte. Ltd to transport Liquified Natural Gas(LPG) through barges on National Waterways-1 and National Waterways-2.

The MoU was signed in presence of Mansukh Mandaviya, Union Minister of State (MoS) (Independent Charge) of Ports, Shipping and Waterways.

Points to be Noted

i.MOL Group, World’s largest gas carrier company will invest to construct and operate LPG barges under Make-in-India initiative of the Government of India.

ii.Aegis Group has proposed to invest to set up storage terminals, pipelines between jetty to the terminal and necessary infrastructure at jetty for evacuation of products from barges.

Provisions of MoU:

Under the MoU, IWAI will provide support for the following:

  • Facilitate adequate fairway
  • As per notified provisions and rates on request of MOL, IWAI will handle LPG cargo on IWAI terminals/ Multimodal Terminals at Haldia, Sahibganj and Varanasi
  • Provide Lease Available Depth (LAD) information on fortnightly/ monthly basis.

Benefits when LPG is Transported by Inland Waterways:

When LPG is transported by inland waterways:

  • The carbon footprints can be reduced.
  • The overall logistics cost can be lowered which in India accounts about  13 to 14% of GDP compared to global average of 8%
  • Contributes to Government social schemes like UJJAWLA for LPG supply.

What is the Significance of LPG?

i.LPG is a clean cargo with no leaks and spillage because the products are handled by pipelines in a fully closed loop

ii.The safety precautions are regulated by Petroleum and Natural Gas Regulatory Board (PNGRB) and Petroleum and Explosives Safety Organization (PESO).

Comparison Between Road Transport & Waterway:

Cost Reduction

i.Currently, 60% of the LPG is transported through roads to various locations.

ii.It cost Rs 5 to 6 per metric tonne per kilometre. Oil companies are interested in reducing the cost.

iii.Waterways is a cheaper alternative to the existing mode of transportation. It also is cleaner and greener mode

Transport Issues

i.At times, there will be issues like strikes by transporters, road blockages that delays in transportation

ii.In some areas, particularly in the North-East Region there is a difficulty to approach through rail/ road. In these places, the Inland Waterway Transport (IWT) sector may provide usable solutions.

Can carry more LPG

The road trucks can carry  17 MT of LPG, but barges can carry bigger size depending on  the barge leading to economies of scale.

Recent Related News:

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About MOL (Asia Oceania) Pte. Ltd:

Managing Director– Koichi Yashima(Senior Managing Executive Officer responsible for Asia, the Middle East and Oceania Area)
Headquarters– Singapore

About  Inland Waterways Authority of India(IWAI):

It is under Ministry of Ports, Shipping, Waterways
Chairperson– DR. Amita Prasad, IAS
Head Office– Noida, Uttar Pradesh