The Union Petroleum Company (UPC) of Laos has decided to establish operations in four southern provinces of Laos, to expand its business and offer a competitive diesel and petrol supply service.
Initially the company plans to establish service stations to retail petrol in Champassak, Xekong, Saravan and Attapeu provinces. An agreement was signed on Tuesday in Vientiane between UPC General Managing Director Mr Noubanh Chanthachack and UPC Branch Director Mr Bounliang Khamphavong, and witnessed by representatives from the Ministry of Industry and Commerce, the Government Office and the respective provinces.
UPC will import 5,000 tonnes of fuel a month to sell in Champassak, Xekong, Saravan and Attapeu provinces and expects demand to gradually increase, Mr The Lao-Viet Bank and its insurance arm, the Lao-Viet Insurance Company, have signed an agreement to provide credit and insurance for the Nam Kong 2 hydropower project in Attapeu province. The bank and company signed the agreement with the Hoang Anh Gia Lai Group to lend assistance to the US$85 million project at a ceremony on Tuesday.
The signing was attended by Lao-Viet Bank Attapeu branch Head Mr Lam Quoc Buu, Lao-Viet Insurance Company Director General Mr Pham Duc Hau and Hoang Anh Hydropower Attapeu Director General Mr Pham Xuan Hung. Also present were Attapeu provincial Deputy Governor Ms Vathsady Khothyotha and Lao-Viet Bank Deputy Director General Mr Buavanh Simalivong.
According to the Ministry of Energy and Mines, the Nam Kong 2 hydropower project has an installed capacity of 70MW. The project is one of the largest ever undertaken in Attapeu and is expected to contribute significantly to provincial socio-economic Noubanh said. Afterwards, they plan to expand their operations to the northern provinces.
Union Petroleum Company is cooperating with countries including Malaysia, Russia and some Central Asian countries to source finance and secure petroleum at a reasonable price, he said. “We have a contract to lease a petroleum warehouse in Quang Tri province in Vietnam and plan to rent another in Phetchaburi province in Thailand when we expand our operations to the northern provinces,” Mr Noubanh said. With Laos being a landlocked country without domestic refineries, the petroleum will have to be imported through either Thailand or Vietnam, which both have major shipping ports.
Reposted from Lao Daily
The company’s head office is situated in Vientiane where a warehouse capable of storing one million litres of fuel is under construction. UPC is also building a model service station like those to be rolled out across the southern provinces.
UPC has spent more than US$1 million to build the warehouse in Vientiane and to buy petrol tankers to transport the fuel to the southern provinces. By establishing branches in the southern provinces, the company will be able to export petroleum products to Cambodia as well, via land borders in Attapeu and Champassak.
Mr Noubanh said the average monthly demand for petrol in Laos was around 60,000 tonnes, and with the current market outlook and continued economic growth, that figure is only expected to rise.
UPC has been planning their entry into the Lao petrol market for more than two years, establishing a business case and liaising with international investment companies to source the necessary finance to expand their operations.
Photo credit Lao daily