ITOCHU Corporation (headquartered in Minato-ku, Tokyo; Masahiro Okafuji, President　& CEO; hereinafter “ITOCHU”), through its wholly-owned subsidiary, ITOCHU Petroleum Co., (Singapore) Pte. Ltd. (headquartered in Singapore), has reached an understanding with AEGIS LOGISTICS LIMITED (headquartered in Mumbai, India; hereinafter “Aegis”) that under which ITOCHU will purchase 19.7% of the shares of Aegis’s wholly-owned subsidiary, HINDUSTAN AEGIS LPG LIMITED (in Gujarat, India; hereinafter “HALPG”) for a total consideration of INR 2.5 billion (approx. JPY 4.3 billion). HALPG is developing a major new LPG import terminal project at Haldia Port, West Bengal, India. The understanding is subject to final agreement and approval by the Board of Aegis, as well as customary conditions precedent and normal regulatory approvals.

Aegis owns and operates receiving terminals for LPG, petroleum products and chemicals at various locations in India, including Mumbai, one of the biggest LPG demand areas in India, and is engaged in terminalling and logistics businesses, and also through AEGIS GROUP INTERNATIONAL PTE. LTD. (headquartered in Singapore; hereinafter “AGI”), sourcing, shipping and supply of LPG to the Indian market. In addition to our acquisition of 40% of the shares of AGI in 2014, our first joint venture with Aegis, which supplies more than 1 million metric tons of LPG per annum to Indian LPG market, ITOCHU aims to expand its LPG business more in India by way of our investment in new LPG import Terminal at Haldia Port.

It is highly expected that the volume of seaborne LPG trade (86 million metric tons in 2016) will be increased with the abundant growth in LPG supply from shale gas fields in North America. Currently, total LPG demand in India is 20 million metric tons per annum (more than in Japan), which is second only to United States and China. The net import volume is expected to keep increasing and exceed 24 million metric tons in 2020, with population growth, income growth and clean energy policies implemented by Indian government.

ITOCHU currently trades 6.0 million metric tons of LPG to the markets in Japan, Korea, Philippines, Indonesia, Thailand and other Asian countries. Through the acquisition of shares of HALPG, ITOCHU will strengthen and expand its LPG activities more to the India market where definitive increases in both total demand and net imports are expected.