UAE to supply INDIA with extra LPG

10 October 2019

Lab Chat

The UAE’s state-owned oil company Abu Dhabi National Oil Company (ADNOC) has agreed to supply India with two additional cargoes of liquified petroleum gas (LPG) in the month of October. The request was made by India after their regular provider, Saudi Arabia, suffered a shortfall in its supplies and requested deferment of delivery of the October shipment.

That shortfall arose due to a serious attack on two of Saudi Arabia’s biggest oil processing facilities last month. The incident halved the output of crude oil for the world’s top exporter, and though Saudi Arabia is adamant that crude oil exports will not be affected, it could not say the same for LPG.

Disaster strikes for Saudis

With an oil production capacity of 11.3 million barrels per day, Saudi Arabia is the world’s leading provider behind the USA. However, that capacity was slashed in half last month, when two of its biggest plants Abqaiq and Khurais were targeted by an enormous drone strike by an unknown assailant.

The incident knocked out 5.7 million barrels per day of production capacity – around 5% of the world’s total capability. In order to maintain its export commitments with regard to crude oil, Saudi Arabia was forced to close down its refineries, meaning LPG is in short supply this particular month.

UAE picks up shortfall for regular supplier

Saudi Arabia normally supplies India with almost two million tonnes of LPG every month, much of which is used as cooking oil in the huge country. With festival season right around the corner (Navaratri and Diwali are both scheduled to occur in October), India is in desperate need of that fuel more so than at any other time of the other.

However, the unforeseen circumstances mentioned meant that Saudi Arabia was forced to withdraw its customary supply and UAE were happy to step into the breach. “This gesture of UAE ADNOC provides further momentum to our comprehensive strategic partnership,” remarked Dharmendra Pradhan, India’s oil minister. “We look forward to collaborate and work together to strengthen our hydrocarbon engagements with an important partner like the UAE.”

What is LPG?

First developed in the early 20th century, LPG became a popular fuel source for cooking stoves in the 1920s in the USA. A curious mix of both liquid and gas, LPG is a gas at ambient temperatures and pressures, but can be easily converted to liquid by subjecting it to moderate pressure at colder temperatures.

This makes it a highly versatile fuel source that is often used in barbecues and portable cooking stoves in the form of butane or propane. With India on the cusp of its vibrant festival scene, satisfying the gastronomic appetites of attendees is a key concern – and one that the UAE’s supplementary LPG is instrumental in accommodating.

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