LAUGFS Gas PLC has arranged three LPG shipments due in Sri Lanka in November and is seeking approval to resume domestic supplies from its Hambantota terminal, the company said on Tuesday.

According to the company, the first shipment from OQT is expected at Hambantota Port between 12 and 14 November. A Geogas shipment is scheduled for Colombo Port between 15 and 17 November, and a third OQT shipment is due at Hambantota between 24 and 28 November. The dates depend on shipping arrangements, port operations and regulatory approvals.

The company said distribution is expected to resume gradually once the cargoes arrive and clear, subject to authorisation for domestic releases from the Hambantota terminal. In a statement, LAUGFS Gas apologised to households and businesses for the difficulties caused by the supply disruption.

It attributed the shortage partly to the conflict in the Middle East and disruption to shipping through the Strait of Hormuz, which it said has affected international LPG supply chains and made buying and shipping gas difficult for Sri Lanka and other importing countries.

LAUGFS Terminals Ltd., a wholly owned subsidiary, has asked for three months of temporary permission to use the Hambantota terminal for domestic supplies. The company said the BOI Chairman told it on Monday that, on instructions from President Anura Kumara Dissanayake, he had asked the Secretary to the Treasury to facilitate the approvals within one week. The approvals are still pending, the company said.

Background

The Hambantota terminal is a US$65 million facility that began operations in 2019. It has a storage capacity of 30,000 metric tonnes and is described by the company as Sri Lanka’s largest LPG receiving, storage and entrepôt terminal.

The terminal operates under the Board of Investment (BOI) Commercial Hub framework. Under the relevant regulations, domestic releases are linked to 40 percent of the annual value of re-export turnover. The company said the COVID-19 pandemic, Sri Lanka’s economic and political crisis, foreign exchange shortages and sovereign credit rating downgrades had affected its ability to maintain the required re-export levels, which restricted domestic supplies from the terminal.

LAUGFS said it is working with the BOI, the Ministry of Finance, Sri Lanka Customs and the Department of Imports and Exports Control to complete its transition out of Hub status and put the necessary operating arrangements in place, with applicable duties and taxes payable. It has also called a fresh tender for direct LPG deliveries to Colombo, to begin in January 2027.

The company also said that neither LAUGFS Gas PLC nor LAUGFS Terminals Ltd. is designated by the Office of Foreign Assets Control (OFAC) of the United States Department of the Treasury.

What it means

For households and businesses waiting for LPG cylinders, the company’s timetable points to a gradual return of supply from mid-November at the earliest, and only if the shipments arrive on schedule and the Hambantota approvals are granted.

LAUGFS said it will give further updates as shipment arrivals and regulatory approvals are confirmed.