Discoms looking for new revenue streams in Delhi
As Delhi Electricity Regulatory Commission (DERC) goes through a complicated phase with delayed orders of tariff revision and the appointment of chairman in jeopardy, discoms are looking at other avenues to increase their revenue. The capital’s power regulatory body has proposed changes in its regulations to allow the discoms and Delhi Transco Ltd (DTL), which claim to be under financial stress, to retain a larger share of their non-tariff income. As per the draft regulations floated by DERC, the power utilities may be allowed to retain up to 60% of the revenue earned from other businesses such as consultancy. Discom BSES has repeatedly asked the DERC to liquidate their regulatory assets which they claim have touched Rs 16,000 crore, pending dues that can be recovered by way of increased tariffs. This move by DERC is seen as an attempt to encourage non-tariff income. The proposed amendment in the DERC (Treatment of Income from Other Business of Transmission Licensee and Distribution Licensee) Regulations, 2005, also states that the utilities will be able to retain 40% of the revenue in case capital assets. Philip Rivers Authentic Jersey
Higher power purchase cost eats into profits at CESC
CESC registered a marginal 1.6 per cent growth in total comprehensive income under the new accounting standards – IndAs, for the first quarter of the current financial year against the previous corresponding period. Comprehensive income is the sum of net income (net profit) and other items that must bypass the income statement because they have not been realized. According to the new accounting standard – IndAs, total comprehensive income is a better indication of the company’s profits rather than net profit. Nevertheless, CESC’s net profit for the quarter under review was Rs 174 crore, against Rs 173 crore in the previous corresponding period. Profit growth was marginal despite a 11% growth in total income from operations at Rs 1,912 crore due to increased outgo on account of a 25 per cent rise in power purchase cost as well as rise in employee costs. The company sold 2,700 million units of power during the quarter against 2,550 million units in the previous corresponding period – a near 6 per cent growth in energy sales. Jack Crawford Womens Jersey
IOC announces Rs 1.80-trn investment plan in next 6 years
Announcing its plan of investing Rs up to 1.80 trillion across verticals in next six years, state-run Indian Oil Corporation today said it also is talks with foreign entities to co-invest in the investment that includes setting up a mega refinery in coastal Maharashtra. “In next six years, we need to spend Rs 1.70-1.80 trillion on refinery expansions, new petrochemical projects which are coming up and expenditure being incurred on natural gas, besides some exploration blocks that we are actively looking at,” IOC Chairman B Ashok told reporters here. He further said about Rs 50,000 crore will be invested in setting up refining capacity where it plans to add at least 24 million tonnes per annum over the next five years, followed closely by marketing infrastructure including new plants, new terminals, LPG import infrastructure and pipelines. Besides this, it has also earmarked sums for investments in petrochemicals and natural gas, he said. The state-run company will be investing Rs 15,000 crore in the current fiscal and will accelerate to over Rs 25,000 crore each over the next two fiscals, Ashok said, adding it has budgeted for a Rs 72,000 crore investment over the next three years. Meanwhile, Ashok said the ambitious project to set up the largest refinery project in the country in coastal Maharashtra is on and the state government has shown six potential sites where it can come up. IOC, which is taking leadership in the project that is estimated to cost Rs 1.76 trillion, will be holding a 50 per cent stake in the refinery while the remaining will be split evenly between its sister companies HPCL and BPCL. The company is also in talks with international investors for participating in the ambitious project, Ashok said, adding that the three domestic partners will dilute their stake equally as and when such an investor comes in. Ashok declined to name the foreign investors with whom talks are on and also refrained from giving a time-line for the project, saying it should come to life as soon as possible given the demand projections on the back of economic growth. It is looking for a 15,000-acre land parcel to set up the refinery, he said, adding that a third of it will be reserved for green zone. The technical specifics of the project, including the fuel to be refined and which products to be done has already been prepared in consultation with EIL (Engineers India). Asked about getting required clearances, given the heightened ecological sensitivities, Ashok exuded confidence of getting all the nods. Peter Holland Jersey
RIL biggest defaulter of MMRDA: RTI
Mukesh Ambani-owned Reliance Industries Limited is the biggest defaulter of Mumbai Metropolitan Region Development Authority (MMRDA), with dues of over Rs 15.76 billion against it, shows an right to information (RTI) response. A total of about Rs 16.41 billion of premium is pending against five lease holders of MMRDA, who were given extensions to complete construction of projects on the plots allotted to them, the MMRDA said in a reply to an RTI application filed by Mumbai-based activist Anil Galgali. The RIL reacted saying that court stay and regulatory clearances had delayed the construction. “The matter is before an MMRDA committee from which a final decision is awaited,” an RIL spokesperson said. The dues towards first plot, G/C-64, which is yet to be completed with six-year extension already given, amounts to about Rs 11.87 billion while a sum of about Rs 3.89 billion is pending for G/C-66 plot for a four-year extension on which the construction has been completed recently. The RIL has paid about Rs 0.4 million as premium against another plot G/RG -1A. The response says about Rs 24.37 billion got accrued as premium against 29 lease holders for extensions of which Rs 7.96 billion has been realised so far. While the dues against government organisations are over Rs 125 million, private sector owes over Rs 16.286 billion and public sector organisations have a negative balance of Rs 8.5 million (MMRDA has to return). Avonte Maddox Authentic Jersey
Indian Oil Petronas Gets Greenlight for Haldia LPG Terminal Expansion
Indian Oil Petronas has obtained environmental approval to expand the capacity of its LPG import/export terminal at Haldia, West Bengal state, to 36,500 mt from 31,500 mt, in a bid to increase LPG supply in the state, a company source said Tuesday. The expansion will cost Rupee 750 million ($11.2 million), according to a report by The Economic Times late last week. The report quoted a senior government official saying that the environment ministry has given clearance to the terminal expansion project at Haldia, subject to certain conditions. Among the conditions, IPPL is required to give adequate buffer zone around the storage tanks and construct a garland drain around the project site to prevent a spillage of oil into the nearby water. IPPL, a 50:50 joint venture between Indian Oil Corporation and Malaysia’s Petronas, has another LPG terminal at Ennore, Tamil Nadu state, with a capacity of 31,000 mt, according to the source. There are currently no plans to expand the Ennore terminal at this point. IPPL is however, looking at building a third LPG import/export terminal in the west coast of India, the source said, but added it is too premature to give details. India’s LPG imports have been growing steadily amid rising demand for the cooking gas. Imports grew from 6.567 million mt in fiscal year 2013-2014 (April-March) to 8.313 million mt in FY 2014-2015 and 8.885 million mt in FY 2015-2016, data from the Petroleum Planning and Analysis Cell showed. John Carlson Womens Jersey
ONGC starts selling gas at ‘premium’
State-run ONGC has started selling natural gas from its East Coast field at a premium price of $6.61/mBtu, to be the first to benefit from the government’s policy to reward production from difficult fields, reports Siddhartha P Saikia in New Delhi. In March, the government had allowed higher price for new gas production from deep, ultra deepwater and high pressure, high temperature areas. The current gas price for regular fields is $3.06/mBtu on a gross calorific value basis. “Happy that ONGC started sale of gas from its deepwater field for first time at market price taking benefit of March 10 Cabinet decision,” petroleum minister Dharmendra Pradhan tweeted. ONGC has started selling natural gas from the first development well at the S1-Vashishta gas fields located in the Krishna-Godavari (KG) offshore basin. This is a deep water field and current production is hovering 0.6 mmscmd. The output from the field is likely to go up to 3-4 mmscmd after complete development work. The gas is being sold to GAIL (India). Considering an output of 4 mmscmd for a full year at a price of $6.61/mBtu, ONGC would earn revenues to the tune of Rs 23 billion against Rs 11 billion at a normal gas price of $3.06/mBtu. In FY16, ONGC approved projects worth Rs 479.06 billion to develop 33.662 million tons of crude oil and 63.956 bcm of reserves. The chunk of it would go towards development of cluster 2 of its KG-basin deep water block — KG-DWN-98/2, which would cost Rs 340.12 billion. The price of domestic natural gas is currently decided based on a formula approved by the Modi government in October 2014, which is linked to select global indices. However, the government in March 2016 approved a mechanism that allows pricing freedom to gas production from high pressure, high temperature, deep and ultra deep water blocks. The only caveat is the ‘market price’ is subject to a ceiling to be derived from landed cost of alternate fuels such as fuel oil, naphtha, LNG and coal. The new pricing formula will apply to gas projects already discovered but are yet to commence production because of un-remunerative pricing of the commodity Laquon Treadwell Jersey
India Plans First LNG Facility in Haldia
The Haldia Dock Complex under Kolkata Port Trust has recently earmarked about 10 acres of land in the vicinity of Haldia Oil Jetty No. 1 for a period of 30 years for setting up of LNG storage facilities, with permission to lay pipelines and install unloading arms through tender cum auction. The project will be undertaken on land lease model by granting lease of land by middle of December, 2016. LNG facilities are expected to be developed within 24 months from date of allotment of land. This is an important development in context of the recent efforts of the Ministry of Shipping to reduce logistics cost and achieve the COP21 targets on cutting down pollution by introducing the use of LNG as fuel for barges. Use of LNG is expected to save around 20 percent on fuel. Carbon Dioxide emissions are likely to get reduced by 20-25 percent and nitrogen/sulphur oxide emissions by 90 per cent. The government is therefore taking measures to facilitate the movement of LNG and its storage at places situated along the inland waterways. Only a few advanced countries are using LNG powered barges at present. Therefore in that sense, the development at Haldia Dock Complex can be seen as a very positive one. The efforts to introduce LNG as barge fuel is part of the overall efforts to promote transport on inland waterways and coastal shipping. Inland Water Transport (IWT) is a cost effective and environment friendly system and a lot of importance is being accorded to it since the last two years. Work is already on for construction of terminals and other activities to facilitate navigation on river Ganga under the Jal Marg Vikas. The Ministry of Shipping has been regularly holding discussions with Petronet LNG Ltd. (PLL) and Inland Waterways Authority of India (IWAI). PLL is in the process of preparing a Detailed Feasibility Report for setting up LNG facilities at Haldia, Sahibganj, Patna and Ghazipur on NW-I (Ganga) as per an MoU signed by them with IWAI during the Maritime India Summit in Mumbai in April this year. In the last follow up meeting earlier this month, IWAI was requested to share the details of projections on the cargo and pattern of traffic on NW-1 as per a study conducted for the Jal Marg Vikas Project so as to enable PLL to estimate the demand for LNG. As a long term market for transportation of coal on LNG barges from the Eastern Coal Fields to various thermal power houses on Ganga, IWAI agreed to share with PLL the information they had gathered. The construction of LNG barges at Indian shipyards would be entitled to the 20 per cent subsidy through the ship building subsidy scheme whose guidelines have already been released by the Shipping Ministry. PLL was also requested to list out in detail the infrastructure support needed for moving to LNG as fuel for barges and specify the milestone for achieving the activities required to be accomplished. The LNG storage hubs may be built along the river Ganga which would facilitate potential gas consumers in the hinterland also as LNG has the potential to replace LPG, Naphtha, and HFO fuel. It would serve a variety of industries such as metal, ceramic and glass, food processing, refractory’s etc. as well as heavy mining machineries. LNG could even fuel the road transport sector. Goa and Maharashtra also have a tremendous potential for introduction of LNG barges on their waterways. PLL was requested to explore the introduction of LNG barges for that region also. Similarly the option of LNG based vessels on NH-5 was also discussed in the meeting this month. Bruce Bochy Womens Jersey