IOC lines up Rs 400 billion to take refining capacity beyond 100 million tons
Indian Oil Corporation (IOC) will invest Rs 400 billion to expand its refining capacity to over 100 million tons by 2022 as the nation’s largest oil firm takes the lead to add capacity to meet India’s rising energy needs. “As we see, (fuel) demand is expected to grow at 3.5-4 per cent CAGR and we need to build capacities to meet that requirement,” IOC Director (Refineries) Sanjiv Singh told PTI. International Energy Agency’s World Energy Outlook projects 4 per cent CAGR growth in India’s fuel demand to 348 mt by 2030, from 184 mt in 2015-16. BP projects demand to be 335 mt while EIA has pegged it at 294 mt, which translates into a CAGR of 3 per cent. India has a refining capacity of 232.06 mt. “All the projections clearly show that the demand will grow and unless we start investing now, we will lag,” he said. IOC will expand its refining capacity to 104.55 mt by 2022 from the current 80.7 mt per annum with an investment of about Rs 400 billion, he said. It is looking to scale up its Koyali refinery in Gujarat to 18 mt from 13.7 mt while capacity of the Panipat refinery in Haryana will be raised by a quarter to 20.2 mt from the current 15 mt. A 3-mtpa capacity addition each is planned for Uttar Pradesh’s Mathura and Bihar’s Barauni refineries, which will take their capacity to 11 mt and 9 mt, respectively. The recently-commissioned 15-mtpa Paradip refinery in Odisha will see a capacity addition of 5 mt while about 3 mt will be added in IOC’s Digboi and Bongaigaon refineries in the North-East, he said. Other state refiners too have planned capacity addition to meet rising demand. Bharat Petroleum Corp (BPCL) is looking to ramp up capacity to 53 mt, from 30.5 mt currently, by adding 1.6 mt to its Mumbai refinery and another 6 mt to the Kochi unit. There is a plan to ramp up capacity of Bina refinery in Madhya Pradesh by 9 mt, to 15 mt, while Numaligarh’s will go up to 9 mt, from 3 mt. Hindustan Petroleum Corp Ltd (HPCL) also plans to expand its Mumbai refinery to 8.2 mt from 6.5 mt and that of Vizag unit to 15 mt from 8.3 mt. While its Bhatinda refinery’s capacity will go up to 11.2 mt from 9 mt, it has plans to set up a 15-mt unit in Vizag in Andhra Pradesh and another 9-mt refinery at Barmer in Rajasthan. As for the Mangalore refinery, it is chalking up plans to increase capacity to up to 21 mt, from the current 15 mt. Derrick Henry Jersey
RIL gets green nod for Rs 8 billion drilling project in Tamil Nadu
Reliance Industries has received green nod for drilling 8 additional exploratory wells to ascertain the reservoir capacity and commercial viability of hydrocarbons off the coast of Tamil Nadu at a project cost of Rs 8 billion. The company has been awarded exploratory rights for hydrocarbons prospecting in the offshore block DY-III-D5 under the New Exploration Licensing Policy-III. RIL has already been given the environment clearance to drill 11 exploratory wells in this block. As on date, Reliance Industries Ltd has drilled nine wells and discovered hydrocarbons in three wells. Since seismic data and the drilling campaign shows presence of hydrocarbons in the block, RIL is planning to carry out 8 additional exploratory well drilling to establish the reservoir capacity. “Based on the recommendation of the Expert Appraisal Committee (EAC), the Environment Ministry on June 30 gave environment clearance for the RIL’s exploratory drilling project in Tamil Nadu,” a senior government official said. The clearance to the Rs 8 billion project has been given subject to certain conditions, the official added. Among key conditions specified, RIL has been asked to ensure gas produced during the testing should be flared with appropriate flaring booms. It should also ensure that there is no impact on flora and fauna due to drilling of wells in the offshore sea. It should undertake conservation measures to protect the marine animals/biota in the region. The company should monitor the petroleum hydrocarbons and heavy metals concentration in the marine fish species regularly and submit report to the government. Among others, the Panel suggested that all the hazardous waste generated at the rig/offshore facility should be properly treated, transported to on shore and disposed of in accordance with the norms. The company has also been asked to take permission from the Shipping Ministry for commencement of the drilling operations. Reliance forayed into the exploration and production business by partnering British Gas in an unincorporated joint venture in Panna Mukta and Mid and South Tapti blocks, where it holds 30 per cent stake. Besides Panna Mukta and Tapti blocks, their domestic portfolio comprises of five conventional oil and gas blocks in Krishna Godavari, Mahanadi, Cauvery Palar, Gujarat Saurashtra and Cambay Basin and two Coal Bed Methane blocks in Sohagpur East and West in Madhya Pradesh. The company also has blocks overseas. Nikita Kucherov Womens Jersey
India demand surge sucks up LNG otherwise meant for Europe
India’s burgeoning demand for liquefied natural gas is dictating how many tankers make it to Europe, the world’s dumping ground for the fuel. LNG imports to India jumped 43 percent in May from a year earlier, a contrast to western Europe where shipments have stagnated over the past three months. The world’s second-most populous nation is expected to double its LNG intake over the next four years, according to energy consultants Wood Mackenzie Ltd. India overtook South Korea as the second-biggest buyer of spot and short-term LNG cargoes after prices crashed about 65 percent in almost two years, spurring demand for the cleaner fuel from fertilizer producers to power plants. For a supplier, having a closer market helps. It takes three days to ship LNG to western India from Qatar, the biggest producer of the fuel, compared with two weeks to get it to the U.K. where prices are lower. “India needs to be full before you start getting LNG imports in Europe going up,” Noel Tomnay, vice president of global gas and LNG research at Wood Mackenzie, said in an interview in London. “We haven’t seen a significant uptick in European LNG imports yet. What we have seen is a significant uptick in India.” The nation gets the fuel from Qatar at about $5 per million British thermal units, according to Petronet LNG Ltd., India’s biggest importer. That compares with $4.37 on average at Britain’s National Balancing Point trading hub in the second quarter, data from the ICE Futures Europe exchange in London show. “The NBP is below the western Indian market price, and that should gravitate the spot cargoes toward India,” Prabhat Singh, the chief executive officer of Petronet, said in an interview in New Delhi on June 30. “India is the place for world LNG to come if we handle the market well.” India’s imports of cargoes under contracts with duration of four years or less rose 45 percent to 9.7 million tons in 2015, according to the International Group of LNG Importers. The country imported 14.6 million tons of LNG last year, little changed from a year earlier, according to the group. In May, the nation purchased a total of 2.08 billion cubic meters of LNG, or 1.57 million tons, according to provisional data from the Oil Ministry’s Petroleum Planning & Analysis Cell. That compares with 3 billion cubic meters imported into western Europe, a figure that’s slated to fall to 1.25 billion cubic meters in June, according to consultants Energy Aspects Ltd. Western Europe is poised to take a bigger share of LNG imports “over the coming quarters” thanks to the region’s liquid trading hubs capable of absorbing excess LNG from the global markets, according to Fitch Ratings Ltd.’s BMI Research unit. Global supply is set to soar from the second half of this year as plants from the U.S. to Australia and Angola increase production, pressuring prices, BMI said in a June 30 research note. Increased deliveries have stretched India’s existing infrastructure. The Dahej terminal this year is running at an estimated 111 percent of its designed nameplate capacity and will be operating at 120 percent over the next six months, according to Petronet, which operates the facility. The company plans to complete an expansion of the terminal by September. India’s LNG price is forecast to fall to $4.8 per million Btu on average this year and $4.6 in 2017, down from $7.5 last year, according to Energy Aspects. “We have seen demand elasticity in India and it’s starting to stretch regas capacity,” said WoodMac’s Tomnay. “It is interesting to see how tested India will be as Asia’s natural sink.” Kris Versteeg Jersey