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Improving Road Infrastructure and Proposed Huge Investments in Pipelines Bode Well For the Liquid and Gaseous Cargo Transportation Market in India

Posted on: Thursday, 6 August 2009, 02:56 CDT

MUMBAI, India, August 6 /PRNewswire/ -- Rapidly rising consumption of petroleum oil and gases, together with liquid chemicals, is driving the market for transportation of liquid and gaseous cargo in India. The growing economy, increasing disposable income, and growth in automobile and industrial production continues to push the demand for natural gas as well as petroleum, oil, and lubricants (POL). More than half of the liquid and gaseous cargo in India was transported domestically by road in 2008; but with growing consumption, pipelines are expected to gain share from road and railways in the POL segment. The main reasons behind this are higher safety, lower rates of pilferage, and faster transportation time.

New analysis from Frost & Sullivan (http://www.automotive.frost.com), Strategic Analysis of Liquid and Gaseous Cargo Transportation Market in India, finds that the market earned revenues of $3.06 billion in 2008 and estimates this to reach $3.73 billion in 2013. The study thoroughly examines the market for transportation of liquid and gaseous cargo by road, rail coastal, and pipeline in the following end-user markets: petroleum oil transportation, liquid chemicals transportation, edible oil transportation, and gases transportation.

If you are interested in a virtual brochure, which provides a brief synopsis of the research and a table of contents, then send an e-mail to Ravinder Kaur/ Amrita Nandi, Corporate Communications, at ravinder.kaur@frost.com/ amritan@frost.com with your full name, company name, title, telephone number, company e-mail address, company website, city, state and country. Upon receipt of the above information, a brochure will be sent to you by e-mail.

By 2010, public sector oil companies will spend close to $11.33 billion on expanding supplies and building new transportation networks for oil and gas. The Ministry of Petroleum also expects the demand to increase from the 176.4 million of oil equivalent (mmtoe) in 2007-08 to 233.6 mmtoe in 2011-12. Further, Reliance Industries Limited, the leading private participant in the Indian oil and gas sector, plans to invest between $5.45 billion to $ 6.54 billion over the next three years to lay a 10,000 km-pipeline.

"The impact of upcoming pipelines and increase in utilization of existing pipelines would have a major impact on the rail services and a marginal impact on road transport services," says Frost & Sullivan analyst. "While current utilization of pipelines in India is at 79.3 percent, it can be scaled up to above 100 percent, directly impacting road and rail modes."

While pipelines take over the share of road transport in the POL segment, road transport services will survive in the long run by serving the numerous retail outlets. In other product categories such as chemical and edible oil, the traditional mode of road transport will continue to be popular.

However, the global economic decline and slump in crude oil production is likely to affect the consumption of POL and industrial gases in India. Lower demand from the automobile and industrial sectors will restrain the transportation market for liquids and gaseous cargo in the country, at least for the next two years.

In response, the Indian Government is encouraging and supporting Indian companies in exploration and ventures in other regions around the world. As a result, companies such as ONGC Videsh Limited, Reliance Industries Limited, and others are looking for exploration opportunities in Africa, Russia, and other regions.

"This trend is expected to create major opportunities for POL and gaseous cargo transportation companies, since the discovered oil & gas from foreign locations has to be transported back to India, and then distributed within domestic market," notes the analyst.

The regulatory environment supporting this market is also evolving. Besides increased safety regulations, tracking the freight is coming into focus. While it is mandatory for all hazardous products transporters to have a vehicle tracking system (VTS) in their vehicles, adherence levels in India are low. Recently, the public sector units -Bharat Petroleum Corporation Limited, Indian Oil Corporation Ltd., and HPCL - have made it mandatory that their service providers adhere to the rules.

Strategic Analysis of Liquid and Gaseous Cargo Transportation Market in India is part of the Automotive & Transportation Growth Partnership Services program, which also includes research in the following markets: Strategic Analysis of Cement Transportation Market in India, Strategic Analysis of Metal Transportation Market in India, and Strategic Assessment of Containerization Trends in India. All research services included in subscriptions provide detailed market opportunities and industry trends that have been evaluated following extensive interviews with market participants.

Frost & Sullivan, the Growth Partnership Company, enables clients to accelerate growth and achieve best in class positions in growth, innovation and leadership. The company's Growth Partnership Service provides the CEO and the CEO's Growth Team with disciplined research and best practice models to drive the generation, evaluation, and implementation of powerful growth strategies. Frost & Sullivan leverages over 45 years of experience in partnering with Global 1000 companies, emerging businesses and the investment community from more than 35 offices on six continents. To join our Growth Partnership, please visit http://www.frost.com.

Strategic Analysis of Liquid and Gaseous Cargo Transportation Market in India

SOURCE Frost & Sullivan (India) Pvt. Ltd.

Source: PR Newswire

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