Power woes to multiply: Summer yet to peak, but Chandigarh already short of electricity
There could be a lot of sweating in store for residents with the UT administration not getting 30MW (around 10% of city’s peak demand of 400 MW) of power it used it used to buy from Jammu and Kashmir every year. UT electricity department superintending engineer MP Singh told HT, “We were drawing power up to 30 MW from Jammu and Kashmir during summers and we use to give them power during winters. The finances were settled mutually. Now, however, we will not buy power from them as they some financial issues to settle with the Central power authorities. ” “The maximum load is between 1 pm to 4pm and during the night. Now, rotational cuts likely to be deployed, the residents will be harassed. The department for year 2016-17, 17-18 and 18-19, has projected the peak demand to be 426 MW, 450 MW and 475 MW,” the officer added. UT buys power from central stations The electricity department does not have its own power generation source and buys power through its allocation from the NTPC, the NHPC, the NPCIL, the BBMB, Satluj Jal Vidyut Nigam (SJVN) and Tehri etc. ‘Heatwave to stay, rain by weekend’ The weather department has predicted no respite from the scorching heat (the temperature touched 39°C on Monday) for the next two days. Relief is likely only by the weekend as there is prediction of rain on April 21 and 22 (Friday and Saturday). Temperature is likely to touch 40°C over the next two days. The minimum temperature recorded was 25.2°C, 6°C above normal. The humidity oscillated from 20% to 57%. “The temperature will increase during the next two days, but it will decline on April 21-22, as there is a possibility of rain,” said Surender Paul, Director, India Meteorological department, Chandigarh. Zdeno Chara Jersey
Haryana govt promises unhindered power supply in Gurugram this summer
Rubbishing media reports of power outages in several areas of the Millennium city, the Haryana Power Utilities said they were fully capable of meeting the peak load this summer season and that there will no outages on account of deficiency in the system or shortage of power availability. The reaction came after a section of media reported frequent power cuts and tripping in the areas of South City, Sector 17, 30, 31, 43 46, 47, 21, 15, New Basti, Patel Nagar etc. “The power cuts reported in the above mentioned areas on Saturday were on account of planned maintenance activity and not due to any fault in the transmission or distribution system,” an official spokesperson said. He said power outage was permitted to facilitate the work of shifting of power lines coming in the way of construction of underpasses on the National Highway 8. Besides, HVPNL also had to shut down the Badshahpur Sector 15 power line due to erection and shifting of towers falling in the way of highway and the underpasses, he said. The spokesperson further clarified that there is a lot of construction activity going on along the highway for quite some time now, which has forced DHBVN and HVPN to allow shutdowns as per requirement of civic authorities. He said a special drive for maintenance and up-gradation of system has been launched since the last four months, and around 1,880 meter ACSR conductors have been erected and 154 transformers added to the system in Gurugram. “Dakshin Haryana Bijli Vitran Nigam (DHBVN) has set up a call centre in the city to deal with complaints of power cuts. The call centre can be reached 24X7 on toll free number 1912. Besides, another toll free number 1800-180-4334 has been set up for the consumers to contact the Helpdesk round the clock,” the spokesperson added. Doug Baldwin Authentic Jersey
Oil and gas activity firmly back in growth mode
For the first time since crude prices began falling in late 2014, Permian Basin oil and gas activity is exceeding year-ago levels. The Texas Permian Basin Petroleum Index achieved the milestone of year-over-year increases in February, according to Karr Ingham, the Amarillo economist who prepares the index. He said the index was up sharply from January levels and is 2.4 percent higher than the February 2016 levels. Ingham also cited sharp improvements in crude oil price averages, rig count, drilling permits and oil and gas employment compared to year-ago levels. February crude prices were just over $50 a barrel, up 84.7 percent from the $27.08 averaged the previous February. This is the first time prices have topped $50 a barrel since June 2015, according to Ingham. He said activity may slow in the near future barring an unforeseen event that sends prices significantly higher. The rig count, which had more than doubled since last summer, has seen its growth curve flatten over the last couple of weeks, both in the Permian Basin and statewide, Ingham said. “How far will $50 take us? I don’t know the answer but it will take us ahead for the foreseeable future,” he said. While the industry has momentum at the moment, he said the outlook bears watching. “We’ll see where oil prices land,” he said. “At some point there will be a plateau. The rig count may already be stalled right now, and drilling permits indicate strong activity for now. Assuming we don’t get a significantly higher oil price in 2017, at what point do we reach an activity level incentivized by $50 oil?” he said. As oil prices began their 85 percent surge, so did the rig count, Ingham said. The February rig count averaged 252 rigs, the first time it has topped 250 since March 2015 and was a 66.9 percent rise from the 151 rigs averaged last February. Reflecting that growth in activity, estimated direct oil and gas employment in Midland-Odessa recorded a year-over-year increase of almost 700 jobs, or 2.4 percent, the first such increase since February 2015. The Railroad Commission issued 564 drilling permits in February, up 79.6 percent from the 314 issued last February. In the first two months of the year, the commission has issued 1,051 permits, up 84.7 percent from 569 in the same period of 2016. Operators reported 245 oil completions in February, down 40.8 percent from the 414 reported last February and have completed 489 oil wells so far this year, down 42.9 percent from the 856 completed at this time last year. Crude production volumes rose 3.2 percent compared to February 2016 and are up 3.5 percent so far this year. Natural gas continued to mirror crude oil, reporting higher prices and production volumes. Natural gas averaged $2.61 per Mcf in February, up 45 percent from $1.80 last February. Producers reported only nine natural gas completions in February, down 69 percent from 29 last February and have completed 14 wells so far this year, down 72 percent from 50 a year ago. Natural gas volumes from Permian Basin wells was up 3.3 percent over last February and is up 4.6 percent so far this year. Curtis Lazar Womens Jersey
Open up petroleum marketing as well
It is welcome that public sector oil retailers plan daily revision of automotive fuel prices in five cities from May 1, with nationwide rollout of the “daily dynamic pricing” policy planned later this year. It would be in line with global practice, and better align the going rates for crude oil imports with retail prices of petroleum products. It is essential to do so, to determine domestic scarcity value, as much of our growing requirement of crude is met by way of imports. However, in tandem, it is also vital to reform and overhaul market design for retailing However, in tandem, it is also vital to reform and overhaul market design for retailing petro-products. The continuing policy of ring-fencing retail sales of petro-products exclusively for oil companies is both anachronistic and incongruous. It is also not as per the best international practice. Worse, it implies a huge national cost. Given the large and fast-growing domestic oil sector — India is now the third-largest importer of crude — the tight effective monopoly in retail sales of petro-products creates scope for padding costs. Abroad, in the mature markets, independent oil retailers account for about half the offtake of oil. We need to speedily integrate oil into the larger retail industry. It would lead to more competitive oil prices, boost convenience and likely improve service quality as well. In parallel, we also need speedy rationalisation of taxes on oil. We need to drop the perverse tax-on-tax and cascading rates across the value chain in oil. Petroleum products are to stay out of the goods and services tax framework, for now. But the Goods and Services Tax Council needs to firm-up consensus to bring petro-products into the goods and services tax regime at the earliest. However, it would be sensible to duly cap input tax credits for oil products, to factor in externalities like pollution and impact on climate change. Odell Beckham Jr Authentic Jersey
Is India ready for the U.S. LNG trade?
The U.S. is expected to become a net exporter of natural gas in a period between 2017 and 2018. The growth of domestic natural gas production in the U.S. is pushing it for speedy development of its liquefied natural gas (LNG) export terminal, as evident from the increase in long term application received and approved by Department of Energy (DoE)/Office of Fossil Energy (FE). For instance, the total number of non-FTA applications approved by DoE/FE have already increased from nine from September 2014 to 24 as of March 1, 2017. Presently, 95% of the U.S.’s total gas exports are moved through pipelines to Mexico and Canada. While natural gas exports through pipeline to Canada is already declining, pipeline gas exports to Mexico are expected to flatten before it starts decreasing due to development of Mexico’s own production capacity. Energy Information Agency (EIA) has predicted U.S.’s net exports of LNG to reach 6.7 trillion cubic feet (tcf), constituting 16% of its total gas production. Given its robust production of shale gas, U.S. has started to diversify its natural gas exports through LNG to consistently seek for the new markets. This is relevant at a time when global LNG industry itself is invigorating, where on one hand, traditional demand from countries, such as Japan, Korea and China is slowing down, with rolling off a long-term oil indexed contracts, on the other hand, the new LNG supply projects from countries like India, Pakistan and Egypt are picking up. This signifies a shift from a seller’s market to a buyer’s, wherein the latter having a greater say in LNG market dynamics. Buyers are now using their power not only to re-negotiate their long-term contracts with destination flexibility but also consistently looking for smaller and short-term deals. Moreover, reduced regassification cost, increase investments in small scale LNG terminals, increased investments in floating LNG, an urge to move towards clean energy systems through greater use of natural gas is working as a catalyst for increased demand for LNG, worldwide. In addition, opening of the expanded Panama Canal in June last year is termed as a potential supply-chain game changer, particularly for LNG sailing through Gulf Coast. This route offers shorter and less costly route to Northeast Asia, a primary destination for the U.S. LNG exports. Though, for India, Suez Canal or around the southern tip of Africa remains the more cost effective option compared to Panama Canal. Currently, shale and tight oil plays make up about 50% of natural gas production of the U.S., which has contributed significantly towards its natural gas production growth during the last decade, wherein, it has successfully increased its production of dry gas from 18 trillion cubic feet (tcf) to 27 tcf. In case of India, according to International Gas Union’s 2017 World LNG Report, it is the fourth largest LNG importer with 19.2 million tonnes per annum, having a global market share of 7.4%. According to Petroleum Planning & Analysis Cell, India’s LNG imports increased by 15% in 2015-16 on y-0-y basis to 16.08 million metric tons (mmt), while over the last five years. LNG imports increased by 38% since 2011-12. In September 2014, under a non-FTA category, nine American LNG terminals have been approved to export LNG of which two have inked deals to sell to Gas Authority of India Limited (GAIL). GAIL has signed two agreements with U.S. firms to import LNG. One agreement will bring 3.5 mtpa or 168 billion cubic feet (bcf) from Cheniere’s Sabine Pass in Louisiana, while the other is for 2.3 mtpa or 110.4 bcf from Cove Point in Maryland. Thus, while GAIL was one of the first companies to buy U.S. LNG from Sabine Pass and Cove Point, it bought the second shipment of LNG from Cheniere Energy to become the first Asian importer of U.S. shale gas. For the U.S., India could thus become one of the biggest LNG markets with flurry of U.S. shipments Cheniere-operated terminals at the US Gulf Coast over the coming months, provided the landed cost of LNG successfully competes with coal, for use in power generation. However, if U.S. LNG fails to compete with coal it would be difficult for India to easily expand the usage of LNG in price sensitive sectors such as power and fertilizer. This was already visible from the recent decision taken by the government when on March 31, 2016, when it scrapped subsidized imported LNG scheme in a backdrop of low gas prices and state governments withdrawing from the scheme. This scheme which helped LNG imports surged by 15% to 16.08 mt (Figure) in 2015-16 and to 17 mt in first 11 months in 2016-17 is now set to dip in the absence of this scheme. Decisions like this can have a significant impact on government’s plan to shift towards gas based economy, where import of LNG is a significant component. Further, India’s LNG expansion plan, is also burdened by taxes, irrespective of reduction of import duties from 5% to 2.5%. Gujarat, a destination for three of India’s four import terminals, namely, Dahej, Dabhol and Hazira, has withdrawn the tax benefit for imported LNG consumed outside the state. Moreover, GAIL, which is set to receive U.S. LNG cargoes from the Cove Point terminal in Maryland has called for imports to be made more economic to the domestic consumers so that sectors outside power, such as fertilizers, chemical plants and city gas distribution are encouraged to use natural gas. These efforts will contribute largely in stabilizing the environment and curb emissions. Thus, while the U.S. is gearing up to expand the base of its natural gas exports by increasing LNG exports, India would do well to gear itself to optimize the benefits of U.S. LNG trade by providing tax reliefs to sectors which needs to be pushed for greater natural gas usage. The U.S. on the other hand would be happy to narrow the trade deficit on its side while exporting LNG to India to mutually gain from LNG trade. Eric Fehr
PPLC policy is to encourage suppliers and service providers to progressively adopt
The Union Cabinet chaired by the Prime Minister Narendra Modi has approved signing of Framework of Understanding (FoU) on Cooperation in the Hydrocarbon Sector with Bangladesh, setting up of Indian Institute of Petroleum and Energy (IIPE) at Visakhapatnam in Andhra Pradesh as “an Institute of National Importance” through an Act of Parliament and also approved the Policy to provide Purchase Preference (linked with Local Content PP-LC) in all Public Sector Undertakings under Ministry of Petroleum & Natural Gas on 12th April, 2017. The Secretary for Petroleum and Natural Gas, K D Tripathi said that the ‘Make in India’ initiative was launched by Prime Minister in September, 2014 as part of a wider set of nation-building initiatives devised to transform India into a global design and manufacturing hub. In tune with the campaign, the Government has decided to incentivize the growth in local content in goods and services while implementing oil and gas projects in India through a policy for providing Purchase Preference to the manufactures/services providers who meet the local targets in oil and gas business activities. Under the policy, progressively increasing targets of Local Content are being stipulated for procurement of goods, services and EPC contracts for oil and gas business activities. The manufacturers/service provider who meet the local content targets and whose quoted price is within 10% of lowest valid price bid, would be eligible for 10% purchase preference for a stipulated portion of the purchase order, on matching such price. For example, Drilling/Workover Rigs/WSS units construction in the onshore sector the local content would be pegged at 50% in the first year and progressively increased to 60% in the next two years and they to 70% in last two years. Similarly, for premium bids as wells as specialized drilling and completion services the local content stipulated is 10% in the first year and progressively increased to 15% in the next two years and then to 20% in the last 2 years. He added that the policy is expected to encourage suppliers and service providers to progressively adopt ‘Make in India’ practices and add value to their goods and services within the country. It will facilitate growth of activities related to manufacturing, services and EPC in the Indian economy. This will boost productivity and help in growth of employment at all levels in the oil and gas sector. Tripathi said that this policy is applicable to all the Public Sector Enterprises and their wholly owned subsidiaries under the Ministry of Petroleum and Natural Gas; Joint Venture that have 51% or more equity by one or more Public Sector Enterprises under the Ministry of Petroleum and Natural Gas; attached and subordinate offices of MoPNG. The Cabinet had approved a Framework of Understanding on Cooperation in the Field of Hydrocarbons. This was first discussed during the visit of Petroleum Minister Dharmendra Pradhan to Dhaka in April 2016 with the objective to work as an umbrella framework to initiate, monitor and pursue activities of mutual interest in the oil and gas sector. It will give an institutional mechanism for our engagement with Bangladesh in the Hydrocarbon sector. Salient Features of the proposed Framework document include: Promotes the energy trade and integration of oil and gas grids of the two countries Promotes investments in each other’s countries as well as in third countries, technology transfer, R&D, conducting joint studies and capacity building of human resources. Provides increased trans-border economic cooperation and connectivity. Promotes bilateral cooperation at the sub-regional and regional levels Exchange of information to energy policy formulation in the region. This Framework of Understanding shall remain in force for a period of five years, and shall be automatically renewed thereafter for a period of every five year. The visit of PM Sheikh Hasina which took place on April 8-10 has given a further impetus to the Indo Bangladesh relations, as 22 documents were signed, including many in the field of oil and gas. Minister of State (I/C) for Petroleum and Natural Gas, Dharmendra Pradhan had visited Bangladesh during 18-19 April, 2016 and in the last two years there have been at least 7 meetings between him and his counterpart in Bangladesh. There is an institutionalised Energy Dialogue at the level of Secretary which met last month in Dhaka. The comprehensiveness of the relationship between India and Bangladesh comes from the fact that we are already engaged in Supply of HSD from Siliguri to Parbatipur, Setting up LNG Terminal at Kutubdi island, Setting up LPG Terminal in Chittagong / Kutubdi island, Providing gas for the Khulna Power plant in Bangladesh, Working of gas grid connectivity, Refurbishment of refineries, Building of pipelines and Upstream activity in Bangladesh by Indian companies etc. India and Bangladesh have signed three Documents: Sale Purchase Agreement between Numaligarh Refineries Ltd (NRL) and Bangladesh Petroleum Corporation for supply of High Speed Diesel to Bangladesh; Setting up of an LNG terminal in Kutubdia Island by Petronet LNG Ltd and Setting up of an LPG Terminal by IOCL in partnership with Petrobangla. In addition to these Hon’ble Prime Minister Narendra Modi along with Prime Minister of Bangladesh flagged off the Rail Rake carrying 2200 MT of HSD from Radhikapur in India to Parbatipur in Bangladesh. The rail rake travelled on the newly constructed rail route. The length of the new route is around 260 kms, almost half of the old route. Justin Bethel Womens Jersey
Iran launches offshore natural gas projects in Gulf to produce 150 mcm gas
Iran on Sunday launched several projects in the Gulf which it said would produce 150 million cubic metres of gas per day from the world’s largest natural gas field which the country shares with Qatar. In a ceremony carried live on state television President Hassan Rouhani inaugurated five new projects which officials said would put Iran on an equal footing with Qatar in exploiting the offshore gas field, which Tehran calls South Pars and Doha calls North Dome. Rouhani, and other officials at the event including oil minister Bijan Zanganeh, did not give a timeline. Iran also launched four petrochemical projects with an annual production of two million tonnes worth about $2 billion, state media said. Earlier this month, Qatar said it had lifted a self-imposed ban on development of the joint field, as the world’s top LNG exporter looks to see off an expected rise in competition. Qatar declared a moratorium in 2005 on the development of the North Field, to give Doha time to study the impact on the reservoir from a rapid rise in output. Luke Kuechly Jersey
HPCL resumes work on Rs 41,000 crore Rajasthan oil refinery
State-owned Hindustan Petroleum Corp Ltd (HPCL) today decided to resume work on the Rs 41,000 crore Rajasthan oil refinery after its board agreed on reduced fiscal incentives from the state government. “HPCL Board at its meeting held today has approved resumption of Rajasthan refinery project and signing of revised MoU with the Government of Rajasthan for implementation of the project,” the company said in a filing to the stock exchanges. It however gave no details. Oil Minister Dharmendra Pradhan had earlier this month stated that fiscal incentives for the project have been revised and a memorandum of understanding (MoU) is likely to be signed in Jaipur later this month. “The fiscal package negotiated by the previous (Congress) government had put a big burden on Rajasthan. Now, that has been balanced,” he had said. The fiscal sops offered previously were in favour of the company but now they have been reworked in favour of the state, he said. The project, which has been in the works for nearly five years, is projected to cost Rs 41,000-42,000 crore, up from the previous estimate of Rs 37,320 crore. HPCL, in March 2013, had signed an MoU with the Rajasthan government for setting up the refinery-cum-petrochemical complex in the Thar desert near the oil discoveries made by Cairn India. The refinery however never took off as a change of guard in the state led to the Rajasthan government putting on hold the fiscal incentives for the project. While the size of the refinery remains the same, the unit will cost more because it now has to be built to produce Euro-VI grade petrol and diesel, officials said. Engineers India Ltd (EIL) is doing a feasibility study. The HPCL board, in March 2013, had approved setting up of the complex at a cost of Rs 37,320 crore. Half of the crude oil requirement at the proposed refinery at Barmer was to come from the neighbouring oil fields of Cairn India. The rest was to be imported crude. At that point, HPCL had asked the state government to extend fiscal benefits like the ones extended by Gujarat and Odisha to new refinery projects to make the Barmer unit viable. The concessions included 50 per cent exemption in excise duty, waiver of VAT on products sold in Rajasthan and the state government picking a small stake in the project. Originally, the state-owned Oil and Natural Gas Corp (ONGC), which owns 30 per cent interest in the Barmer oil fields of Cairn India, in 2005 had committed to building the refinery, but later started soft-pedalling the project. In 2012, HPCL entered the fray and proposed to take 51 per cent stake in it. ONGC, which originally had the authorisation from the government for processing the Barmer crude at the proposed refinery, willingly made way for HPCL. Cairn India, which holds 70 per cent interest in the fields, produces about 1,60,000 barrels per day oil (8 million tonnes a year) from the Rajasthan fields. For HPCL, which has only two refineries in Mumbai and Visakhapatnam, the project will help meet fuel demand in the north. Joel Bitonio Womens Jersey