Indian Oil Corporation (IOC) plans to acquire ownership stakes in Very Large Gas Carriers (VLGCs) as it prepares to increase imports of liquefied petroleum gas (LPG) from the United States.
The move marks the first time an Indian refiner has sought partial ownership of LPG carriers. The strategy aims to reduce freight costs, strengthen supply security, and support India’s plan to source up to 25% of its LPG imports from the United States by 2027.
IOC Invites Bids for VLGCs
Indian Oil has invited bids to acquire 50% ownership stakes in VLGCs with carrying capacities ranging from 80,000 to 93,500 cubic metres.
The company has specified that eligible vessels must be no more than 12 years old. Bidders may offer up to two vessels, while IndianOil LNG may acquire one or more ships through the tender process.
A pre-bid meeting is scheduled for August 5, while the deadline for submitting technical and commercial bids is September 7.
Freight Costs Drive Strategic Investment
Freight remains one of the biggest challenges in expanding Indian Oil LPG Imports from the United States.
LPG cargoes shipped from the U.S. Gulf Coast travel much longer distances than supplies from Saudi Arabia, the United Arab Emirates, and Qatar. Consequently, transportation costs increase even when U.S. propane and butane prices remain competitive.
By acquiring ownership stakes in VLGCs, Indian Oil expects to reduce its exposure to volatile charter rates and gain greater control over shipping expenses.
India Looks Beyond the Middle East
India imported about 21.85 million metric tonnes of LPG in 2025, with nearly 90% of supplies sourced from the Middle East.
Imported LPG accounted for around 66% of domestic consumption. This dependence leaves the country vulnerable to supply disruptions in key shipping routes, particularly the Strait of Hormuz.
Recent geopolitical tensions and disruptions around Hormuz highlighted the need to diversify both supply sources and transportation capacity.
U.S. LPG Imports to Increase
Indian Oil, Bharat Petroleum Corporation Limited (BPCL), and Hindustan Petroleum Corporation Limited (HPCL) are preparing procurement plans for larger volumes of U.S. LPG beginning in 2027.
India expects LPG imports to reach around 20 million metric tonnes next year, while domestic consumption is projected to recover to nearly 31 million tonnes.
The expansion of U.S. energy imports also supports India’s broader objective of increasing imports from the United States by US$10 billion and raising bilateral trade to US$500 billion by 2030.
Outlook
The Indian Oil LPG Imports strategy reflects a long-term effort to improve energy security and reduce logistics costs. Partial ownership of VLGCs will provide greater control over freight operations while supporting India’s plan to diversify LPG imports and strengthen supply resilience in the coming years.
