Dharmendra Pradhan unveiled new refining technology at Honeywell India Technology Center in Gurgaon
Indian Minister of Petroleum and Natural Gas Dharmendra Pradhan unveiled a new refining technology at Honeywell’s India Technology Center, which is dedicated to helping Indian refiners get more clean transportation fuels from every barrel of oil. The technology is one of several being developed at the center by Honeywell UOP, a world leader in developing and licensing process technologies used in oil refining and the production of petrochemicals and renewable fuels in India and globally. The company has invested about $40M at the facility, which is one of the main technology development hubs for Honeywell UOP outside the U.S. It also develops technologies for other Honeywell businesses in the region. “The Indian government is committed to innovation and being an early adopter of technologies to drive growth for the country. I am pleased to launch this new Honeywell technology today, dedicated to making Indian refiners more competitive and efficient,” Shri Pradhan said. The technology inaugurated at the event is a pilot plant specifically designed to develop advanced hydrocracking catalysts that can more efficiently produce higher yields of clean-burning diesel fuel from crude oil. The technology can allow Indian refiners to get more from each barrel of oil, helping reduce imports of crude oil while producing environmentally preferable diesel fuels. “The Hon’ble Prime Minister’s visionary call to realize a 10 percent reduction in the country’s crude imports by 2022 has already set a challenge before the Indian hydrocarbon sector, making this advanced hydrocracking technology the solution of choice to help meet this goal and meet the growing demand for energy in India,” said Steven C. Gimre, Managing Director, UOP India Private Limited. In the past, Honeywell UOP has helped India meet its goal for production of petrol and diesel in the 1980s and to implement Euro III and Euro IV fuel specifications in the 1990s. Today, Honeywell UOP’s technologies are deployed in every refinery in India. More than half the country’s oil and more than 70 percent of the country’s gasoline are made with Honeywell UOP processes, and more than 85 percent of the nation’s biodegradable detergents are produced using Honeywell UOP technologies. More recently, Honeywell UOP entered into a collaboration agreement with Indian Oil Corporations Limited (IOCL) to develop a range of biofuels technologies. “Honeywell India employs close to 15,000 people to deliver innovative technologies that help customers improve energy efficiency, safety, security, and productivity – all of which are key imperatives for India. Honeywell and its employees are creating solutions and technologies in India, for India, and for the rest of the world,” said Anant Maheshwari, President of Honeywell India. Honeywell is aligned with and has a significant Make in India footprint with seven manufacturing facilities in Chennai, Dehradun, Gurgaon, Pune and Vadodara, and five technology and engineering centers in Bangalore, Gurgaon, Hyderabad and Madurai. Artie Burns Authentic Jersey
India’s LNG imports rise 45% in April
Imports of LNG have steadily risen over the years, albeit at varying rates of growth from about 7 bcm in FY06 to about 21 bcm now. With liquified natural gas (LNG) prices hovering around a benign $5/mBtu for several months coupled with drop in domestic production of natural gas, India’s gas imports have risen a steep 45.4% annually in April. The LNG imports for the month of April stood at 2,142 million metric standard cubic metres (mmscm) compared with 1,473 mmscm in the corresponding month last year, according to petroleum ministry data. On the other hand, the gross gas production from domestic fields dropped 6.9% to 2,488 mmscm in April 2016 against the same month last year. In the full year of 2015-16, the LNG imports witnessed a surge of 14.96% at 21,309.28 mmscm against 18,535.73 mmscm in FY15. The domestic natural gas output fell 5.5% in FY16 at 25,306.73 mmscm. “Industrial and commercial segments are the largest consumers. With the expected pick-up of power generation and industrial manufacturing, imports are likely to grow further in FY17. Some new urea plants under implementation as well as some on the drawing board are likely to be drivers of incremental demand. Over the next five years, demand from city gas is also likely to grow faster than that of industrial segment and thus, its share in overall demand is expected to increase to double-digit figures,” said Kalpana Jain, senior director at Deloitte in India. Imports of LNG have steadily risen over the years, albeit at varying rates of growth from about 7 bcm in FY06 to about 21 bcm now. Overall gas consumption, has increased, especially FY14 onwards, to compensate for the decline in domestic production. In March, gas volumes to the tune of 7.62 mmscmd have been auctioned to different stranded power stations to run operations. “India’s total domestic production has been a sort of bell curve over the last 10 years,” explained Jain. The production was 32 billion cubic metres (bcm) in FY06, which increased to a high of 52 bcm in FY11 and thereafter reduced to about 32 bcm in FY16. While the overall production dropped, production of PSU explorers ONGC and OIL has largely remained flat in the range of 25-26 bcm. Production from private players, particularly RIL, ramped up from FY08 to FY11 and then declined substantially from FY12 onwards. The flat production by PSUs is primarily because of two key factors—most of their producing fields are old and have crossed peak production stage and second, new discoveries are either yet to commence production or have not reached their full potential. “New fields being brought on production are not large enough to significantly offset the decline in production from older fields. Besides, some fields which are likely to be large reserves, such as ultra-deep water blocks in eastern coast, are in difficult to produce areas which probably require higher gas price to justify investment,” added Jain. Indian domestic fields do not operate in a pattern where output could be ramped up immediately. Such production increase is possible on a short notice where output is varied based on global price and economics of fields as those in West Asia or Russia. Given that India is an import-dependent country, all developed and producing fields are in any case operated at optimal levels as regulated by the directorate general of hydrocarbons (DGH). The government’s efforts to spur investments in exploration and production is recent and given the long gestation of oil and gas investments, it could take time to bear fruit.
Slump in LNG prices delays production at Mozambique gas field
Production at the Mozambiquegas field, in which Indian state firms have 30% interest, will get delayed by about three years with the first output likely only in 2021, as plunging gas prices cast a shadow on investment decisions and make buyers scarce. “It’s aclassic chicken and egg situation,” said a source with direct knowledge of the matter. “Gas purchase agreements can’t be finalised quickly as the final investment decision (FID) hasn’t been made, and an FID can’t be made because there is no visibility on who will buy the gas.” At the heart of this complex situation is the massive three-fourths drop in liquefied natural gas (LNG) prices in two years. A supply glut has brought down spot LNG prices to about $4.25 per unit, upending the market rules and leaving buyers and sellers with little pricing certainty with which to strike long-term deals. Many of those caught in long-term expensive deals prefer spot cargoes these days. The Mozambique project, however, is not unique in this as many other projects globally face the same stress brought on by the price crash. To be sure, the Mozambique project has entered into preliminary agreements with several buyers for its natural gas. But those agreements haven’t entered the final, binding stage since, according to a source, buyers first want to see investment commitment from the promoters of the Mozambique field. Another source said the investors in the project are hesitant in committing to long-term deals at current prices and are therefore delaying the project. The FID for the project is now expected only by the end of 2016, according to the source. The output would start only in 2021, he said. The first LNG from the project was expected by 2018, Oil and Natural Gas Corporation (ONGC) had said while announcing its first stake buy in the project in June 2013. ONGC and Oil India had jointly agreed to purchase 10% participating interest from Videocon Mauritius Energy Ltd for $2,475 million in Rovuma Area-1block in Mozambique with an estimated recoverable reserves of 35 to 65 trillion cubic feet. Just two months later, ONGC agreed to buy additional 10% stake from Anadarko for $2,640 million. Bharat Petroleum Corporation had entered the project in 2008 with a 10% stake. Anadarko Petroleum Corporation, with its 26.5% interest, is the operator of the block. According to the source quoted above, $5-6 billion has already been invested in the Mozambique project and another $25 billion is further needed. Michael Grabner Womens Jersey
RIL, BP on way to end dispute with government
Reliance Industries (RIL) and joint venture partner BP Plc are moving towards ending their dispute with the government on gas pricing, but are yet to officially approve the proposal for it, industry sources said. RIL and BP declined to comment on the matter. RIL, BP and their partner Canada’s Niko Resources are contemplating pulling out of the arbitration against the government as the government’s policy changes announced in March requires them to drop the case if they want to accept the higher gas prices being offered. On April 13, EThad reported that RIL, BP and Niko have formally started the process of developing their deep sea fields, which industry executives say signals their intention to withdraw arbitration against the government a necessary condition if they want to charge market price for natural gas. At that time, BP had said: “The recent reforms announced by the Government of India will provide the much needed impetus to the Indian oil and gas industry. Together with our partners, we are working with the Government to progress activities in our blocks.” In March, the government announced a new policy that links the pricing of gas from undeveloped difficult fields such as deep sea and high-pressure, high-temperature areas to alternative fuels, effectively doubling the prices. While the maximum price available to domestic natural gas is $3.06 per unit, difficult fields can avail of $6.61per unit. But the policy states that any operator engaged in litigation against the government cannot avail of these prices. Top executives of Reliance and BP met government officials recently to discuss plans to develop discoveries affected by the new policy. In a report on Wednesday, Bloomberg said RIL and BP intend to complete the withdrawal from multiple arbitration proceedings, at least one dating back to 2011, before they finalise plans to restart developing discoveries in the KG-D6 block off the east coast of India, among other exploration areas they hold. Byron Buxton Authentic Jersey