Myanmar: Indian Oil Corp to enter fuel market
Myanmar Petroleum Products Enterprise (MPPE) opened a tender to cooperate as a joint venture (JV) for import, storage, distribution and sale of all petroleum products expect liquefied petroleum gas and liquefied natural gas, reported The Economic Times. The JV will be for a maximum of 30 years, extendable for two 10-year periods. MPPE will hold 51% of the equity while a foreign company will hold the rest. MPPE has been present in Myanmar´s fuel business for a long time. It currently owns four main fuel terminals and 24 sub-terminals. After being privatized in 2010, MPPE sold its 216 gas stations to private companies across the country expect for 12 pumps. The company now wants to re-enter the fuel retailing business of Myanmar, where 70 private companies run the country´s 1163 filling stations, with a foreign partner by the side.
U.S. Taps India as Asia’s Debut Buyer of American Shale Gas
Gail India Ltd. bought the second shipment of liquefied natural gas from Cheniere Energy Inc.’s Sabine Pass plant in Louisiana in a deal that makes it the first Asian importer of U.S. shale gas. The nation’s biggest supplier will receive the cargo, bought on spot basis, at the Dabhol import terminal on the country’s west coast by mid-April, Vandana Chanana, a company spokeswoman, said Friday by e-mail. Faith Parker, a spokeswoman at Cheniere in Houston, didn’t immediately respond to a voice mail left outside office hours and an e-mail sent Friday morning. The deal marks the beginning of U.S. LNG exports into the world’s biggest importing region of the super-chilled fuel, just as regional producers from Australia to Papua New Guinea ramp up supplies. India last year overtook South Korea as the world’s second-biggest importer of the fuel on a spot and short-term basis as buyers took advantage of a slump in prices brought on by the crash in crude oil and an oversupply. “This is the first and definitely will not be the last shipment to go to India from the U.S. Gulf Coast,” Chris Rumley, a senior LNG and natural gas consultant at Poten & Partners, said by telephone from Houston on Friday. “There is terminal capacity in India and if the price is competitive against alternative fuels, then there’s a market there for it.” Higher Price The delivered price of the cargo is about $5 per million British thermal units, according to two people with direct knowledge of the matter, who asked not to be identified because the information is private. Chanana declined to comment on commercial terms. That’s higher than the $4.30 per million British thermal units now paid by customers in northeast Asia for spot cargoes, according to assessments by the World Gas Intelligence publication. Prices crashed 78 percent from the peak in February 2014. The price slump supported demand for spot cargoes in India. Imports rose 45 percent to 9.7 million tons in 2015, the biggest increase in spot and short-term traded volumes last year, according to the International Group of LNG importers annual report published this week. India imported a total of 14.6 million tons of LNG last year, unchanged from a year earlier, according to the group. Tanker Route The Clean Ocean LNG tanker left Sabine Pass on March 15 after loading the second export cargo from the terminal. It’s sailing toward South Africa, according to ship-tracking data on Friday. Some analysts had expected the vessel to go elsewhere, perhaps to South America because of demand there for the power-plant fuel and because of the content of the gas Cheniere was producing. “We initially thought when it left it would be Rio or Kuwait, because of there being hotter gas, meaning higher ethane and C+ content, in the tanks when they started to liquefy,” Jason Lord, LNG analyst for energy data provider Genscape Inc., said by telephone from Boulder, Colorado. “Their regas facilities and grid tend to be able to handle that better in the Atlantic basin. Potentially, this one in India can handle that.” The first batch of LNG from the Cheniere terminal was shipped to Brazil in February, marking the start of U.S. shale gas exports. The third cargo on the GasLog Salem is also set to go to Brazil, while the destination of the fourth shipment on the Energy Atlantic is still unclear, according to the ship-tracking data
Essar Oil plays the ‘made in UK card’ to gain retail market share
Essar Oil is playing the ‘made in UK’ card and pricing products aggressively to grab a bigger piece of the fuel-retailing pie that has been thus far dominated by global energy conglomerates such as BP and Shell. The company has opened six retail outlets, making its debut in the consumer segment, and has plans to run 400 outlets in three years. “Retail venture is aimed at derisking. With our efforts, we have already turned around the Stanlow refinery but now there is limited opportunity in the refinery business,” Naresh Nayyar, executive chairman of Essar Oil UK, told ET. Billionaire brothers Shashi Ruia and Ravi Ruia-led Essar Group acquired the refinery from Royal Dutch Shell in July 2011 and has been able to turn around its performance and capture 15% of the UK’s road transport fuel demand. Essar Oil UK has turned around the loss making unit with a record net profit of $ 187 million in 2015-16 and its highest ever operating profit of $ 340 million in the period, primarily by rationalising operations, increasing efficiencies, diversifying the crude basket and implementing margin improvement programmes. The company has made a quiet foray into the retail business, focusing more on local branding and marketing exercise to leverage of its local presence with the tagline “direct from our UK refinery .” The Essar outlets offer prices at discount to competitors and have managed to clock 20% average revenue growth. “We have grown 45% since we moved to Essar and competitive pricing is a key factor but it also helps that the branding is bright to look at. The chanllege for these guys is to build a big network so that we can use fuel card. A lot of independent companies have talked about entering energy business but this is backed by a multi billion conglmerate and thats why the likes of BP and shell are worried this time,” Shane Thakrar, CEO of HKS Group told ET. His company runs 61 outlets across the country which includes one Essar outlet at Coalville, Leicestershire. SB Prasad, chief commercial officer retail of Essar UK said: “For us to make a dent in this market as an Indian company was tough. We are building a brand that conveys that our refinery is local unlike others.”
India’s Iran oil imports set to surge to 7-year high in 2016/17
India is set to import at least 400,000 barrels per day (bpd) of Iranian oil in the year from April 1, with refiners looking to ramp up purchases after the sanctions targeting Tehran ended in January, industry sources familiar with the matter said. Average annual imports at that level in the fiscal year just begun would be the highest in at least seven years, and would carry forward a bump in purchases that lifted March shipments to a five-year high for a month at 506,100 bpd. Iran was India’s second biggest oil supplier – a position now belonging to Iraq – before economic sanctions aimed at Iran’s nuclear programme hampered its trade relations, forcing the South Asian nation to tap alternative suppliers. The plans for higher annual imports by India are a sign that Tehran is beginning to regain market share after the lifting of sanctions. Iran has said it will continue increasing its oil output and exports until it reaches the market position it held in the pre-sanctions era. India’s state refiners – Indian Oil Corp, Mangalore Refinery and Petrochemicals Ltd, Bharat Petroleum and Hindustan Petroleum – told Iran in February that together they are willing to buy about 240,000 bpd in the year begun in April, the industry sources said. Among private refiners Essar Oil is willing to lift about 120,000 bpd, they said, and HMEL has indicated it will buy a small quantity with an option to raise volumes. The Indian oil companies and the National Iranian Oil Co (NIOC) – which handles Tehran’s oil sales – did not respond to requests for comment. IOC aims to buy 80,000 bpd from Iran with an option for another 40,000 bpd, MRPL will buy about 90,000-100,000 bpd, while HPCL and BPCL plan to buy about 20,000 bpd each, the sources said. In addition to these volumes and the barrels Essar is looking to buy, private refiner Reliance Industries is seeking to buy 100,000-120,000 bpd Iranian oil, mainly heavy grades, Reuters reported in February. It is not clear, however, how much of the heavy grades Reliance will be able to purchase as many of the barrels have already been committed. Last month, Reliance made spot imports of Iranian oil, its first such purchase since 2010. The Indian refiners are expected to finalise their annual contract deals with Iran soon, the sources said. The Indian buyers are being drawn in part by freight discounts that increase as more barrels are purchased, although the concession is much less than the free shipping that Iran was offering under pressure from sanctions, the sources said. Purchases from Tehran could still be impacted by the availability of insurance cover for installations processing Iranian oil and the resumption of banking channels to facilitate payments and opening of letter of credits (LCs). Last month ship insurers stepped in to help plug a shortfall in cover for transporting Iranian oil as U.S. reinsurers are still restrained by Washington’s sanctions. However, there is still no clarity on whether reinsurers will facilitate cover for refineries processing Iranian oil, the sources said. Iran last month gave a list of about a dozen banks, mainly European, that have accounts with Turkey’s Halkbank to clear a part of about $6 billion dues pending with Indian firms.