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Japanese firm cashing in on growing gas demand in Nepal

Kyodo

A Japanese gas product vendor is tapping into the Nepali market as part of efforts to expand business in Asia, cashing in on growing energy demand in the Himalayan state, which is still recovering from a devastating earthquake three years ago.

Saisan Co., a distributor of liquefied petroleum gas, or LPG, has formed Gas One Nepal Pvt., a joint venture with a local partner, becoming the first foreign participant in Nepal’s LPG market besides firms from neighboring India.

At present, a total of 58 firms are providing LPG in Nepal, where firewood remains the main fuel resource. Demand for LPG is growing sharply as it can ensure a more stable supply compared to wood and will not cause air pollution.

But a city gas network is largely nonexistent in the country. Even in the capital Kathmandu, hotels and restaurants rely on LPG but the city diffusion rate for the gas is estimated to be only 20 percent, leaving room for expansion.

Satoki Koike, 53, who headed Saisan’s overseas business division, assumed the post of president at the joint venture in January, gearing up to explore business opportunities in the country.

The country’s gas demand has grown at an annualized rate of 10 percent on the back of economic growth as the country works to recover from its deadliest quake on record, which killed around 9,000 people in 2015.

LPG demand in Nepal rose from 260,000 tons in 2016 to 300,000 tons in 2017, according to Saisan.

The gas distributor in Saitama Prefecture is beefing up operations in Asia, advancing into Cambodia and Bangladesh in 2016 as the Japanese market shrinks from population decline.

Nepal “has growth potential just as other Asian countries,” said Koike, adding the country’s LPG demand would reach 500,000 tons annually in several years.

For the time being, the local joint venture is operating in southern regions near the Indian border, while eyeing the Kathmandu market in the future.