Deadlock over GAIL’s Kochi-Bengaluru LNG pipeline project ends
Ending the deadlock over Kochi-Bengaluru LNG pipeline project, the Gas Authority of India Ltd (GAIL) has awarded the work to lay 94-km pipeline along the Koottanadu-Walayar stretch to Corrtech International Private Ltd. The completion of the stretch is vital for Kerala as the state would get domestic LNG at half the existing price if it is connected to the national gas grid in Bengaluru. Though the Kochi-Koottanadu-Bengaluru-Mangaluru LNG pipeline project was started in January 2013, the GAIL had to terminate the contractors in November 2013 as they couldn’t make any progress in the laying of pipes. The main reason for the delay was the objection from landowners. The GAIL would be awarding the pipelaying work along 42-km in Bengaluru-Krishnagiri stretch in a week. “Laying of the 438-km pipeline from Kochi to Mangaluru will be over by November-December. We will be able to complete the laying of the main pipeline to Walayar and connection lines for piped natural gas (PNG) in Coimbatore by June next year. Then, 8 million cubic metre of LNG from the plant at Puthuvype, with a capacity to 16 million cubic meter, can be sold,” said Tony Mathew, general manager and officer-in-charge GAIL in the state. As of now, the average sales from Petronet LNG is around 2 million cubic metre and the tax earned by the state government is Rs 200 crore per annum. This will go up in the range of Rs 400 crore to Rs 450 crore when the pipeline up to Walayar is completed, sources with GAIL said. Revenue earned by International Container Trans-shipment Terminal at Vallarpadom will also go up. “Once connected to the domestic grid, Kerala will get its share and will be able to provide LNG to different factories at half the international rate and it will be a boost for industries in areas like Kanjikode,” Mathew said. Of the 438km Kochi-Mangaluru line, we have completed lowering and welding of pipes along 330km. “The pipe has to be laid along 71 waterbodies in Koottanadu-Mangaluru sector. The work up to Mangaluru can be completed by November-December,” Tony Mathew said. The pipeline up to Koottanad will be commissioned in June 2018, he said. Jayon Brown Jersey
Premier Oil says debt reduction on track as output grows
Premier Oil said on Wednesday it is heading for a “material” reduction of its $2.7 billion debt pile, with its Catcher field ramp-up reaching a promised 60,000 barrels per day as oil prices trade at their highest in more than three years. In a trading update, Premier reiterated it was on track to meet its full-year production guidance of 80,000-85,000 barrels of oil equivalent per day. “We are on track to deliver our plan of material debt reduction in 2018 and 2019 with selective investment in our future growth projects from 2020, once balance sheet strength has been restored,” Chief Executive Tony Durrant said. He has said it would be reasonable to expect net debt to fall to about $2.3 billion by the end of the year. Premier shares were up 2.3 percent in early trade. Premier hedges parts of it output to guard against falls in oil prices. It has expanded its hedging for next year to benefit from current high oil prices. It said it had hedged 21-28 percent of its output through the third quarter of next year at an average price of $66-$67 a barrel. For this year, it insured 40 percent of its oil output at $58-$60 a barrel. After disposing of assets in the North Sea in recent months, a final investment decision for its Tolmount gas field in the southern North Sea is due in the second half of the year, it said. Premier is also working to start its first appraisal well in the Zama field off Mexico with potential reserves of up to 800 million barrels in the fourth quarter, while Mexican firm Pemex is in the process of securing a rig for a well in an adjacent block. Antoine Bethea Jersey
DGH proposal to allow private oil firms explore producing fields rejected
The oil ministry has rejected the Directorate General of Hydrocarbon’s (DGH) recommendation that companies be permitted to carry out exploration in their producing fields irrespective of its effect on the government’s share of the profit, multiple people familiar with the matter have said. The recommendation by DGH, the technical arm of the ministry and upstream regulator, was debated for months in the oil ministry, with officials also seeking guidance from the Prime Minister’s Office (PMO) on the matter. Officials felt the current guidelines, which are in line with a previous observation by the national auditor that such a petroleum operation could be supported only if it raised government take, didn’t need to be amended. An informal calculation by the ministry showed that the government could lose thousands of crores in its share of profit if the proposal were to go through, according to people familiar with the matter. A senior executive at a private firm, however, rejected this assessment, calling it improbable. The PMO too wasn’t persuaded by the proposal that could have helped Vedanta, RIL and other explorers in the country. Under the older licensing rules, companies first receive Petroleum Exploration License (PEL) for a ‘contract area’. After the exploration licensing period expires, the operator must relinquish entire contract area to the government except for places where discoveries have been made. Once discoveries have been appraised, a ‘Development Area’ is carved out for which operator gets Petroleum Mining Lease (PML) that allows it to produce oil and gas from that area. Private players have been demanding permission to undertake exploration in ‘Development Area’, or PML area after the exploration license has expired. In February 2013, the government unveiled a policy, allowing exploration in PML area in a ring-fenced manner, and permitting cost recovery only when the contractor proved exploration activity wouldn’t reduce the government takes. “Subsequently there have been views that the terms and conditions are regressive, not in the interest of promoting petroleum operations in the country. The terms are also found to be difficult to administer particularly the ‘ring-fencing’ concept,” the DGH had said in a draft policy paper. “Permitting exploration throughout field life will promote investment and chances of increasing new discoveries and more production. A higher Royalty is invariably paid to the government when production increases consequently to further exploration,” the DGH had further said. Rob Gronkowski Authentic Jersey
Confidence Group Launches ‘GoGas Elite’, Makes Composite LPG Cylinders Available in India
Confidence Petroleum Limited, India’s largest LPG cylinder manufacturer and one of the largest LPG retailers, has launched the Composite Cylinders in India under the brand ‘GoGas Elite’. The company will market and distribute these composite cylinders through its subsidiary, Confidence Futuristic Energetech Limited. The ‘GoGas Elite’ composite cylinders, ideal for the domestic and commercial use, weigh about 50% lesser than conventional steel cylinders. These are blast-proof and hence, much safer. Moreover, the advanced cylinders enable consumers monitor the gas level at any given point of time, thereby helping them track consumption and replace the cylinders on time, resulting in zero wastage. Commenting on the occasion, Mr. Vimal Parwal, President, Confidence Group said, “Majority of LPG consumers in India are not aware of the weight of LPG gas they get in a cylinder nor do they know how much LPG is left in the cylinder when they think the gas is over. Introduction of composite gas cylinders in Indian market by Confidence Group is a revolutionary step which is bound to transform Indian kitchens in the years to come. Firstly, these composite gas cylinders are extremely light in weight. They can be easily picked up even by women and children. Secondly these cylinders have transparent body due to which the amount of gas inside the cylinders can always be seen. This ensures that right quantity of gas is supplied and the amount of gas available in the cylinder can be easily checked. Hence, from now on there is no more worry of less gas being supplied or even of gas theft. Third speciality is that these cylinders are ‘Blast proof’ so there is no danger of loss of life and property thus making them extremely safe to use.” “GoGas Elite has brought the latest world-class technology in India for the first time. These cylinders have been certified safe by PESO the explosives department of the government of India. 700 million people use LPG and given the advantages of composite cylinders, we expect most of the people eventually switching to using them. Composite cylinders are extremely popular in America, Japan, Australia and many European countries and have been in use for many years now. We plan to have presence in all major cities in India within the next three months,” added Mr. Rajesh Nair, CGM, Confidence Group. The ‘GoGas Elite’ composite cylinders are available in varying sizes of 2 kgs., 5 kgs., 10 kgs. and 20 kgs. These are available through the company’s dealer and distributor network across the city. These cylinders are ideal for households as well as the commercial establishments in HORECA (Hotels, Restaurants and Cafes) industry. Michael Schofield Authentic Jersey
Air Products Unveils World-Scale Kochi Industrial Gas Complex
Air Products today announced it has inaugurated its new world-scale industrial gas complex within the Integrated Refinery Expansion Project (IREP) of the BPCL Kochi Refinery located in Kochi, India. Air Products’ new facility was inaugurated by Dr. K.T. Jaleel, Minister for Local Self-Governments, Kerala, in the presence of Mr. P. Thilothaman, Minister for Food & Civil Supplies, Kerala, Dr. Samir J. Serhan, executive vice president for Air Products, Mr. Richard Boocock, president, Industrial Gases – Middle East, India, Egypt and Turkey for Air Products, and other dignitaries and guests. Air Products has invested several hundred million dollars for the build-own-operate (BOO) project, the largest of its kind in India in terms of investment. Air Products’ Kochi Industrial Gas Complex, which generates hydrogen, nitrogen, oxygen, and steam, is an invaluable constituent of BPCL’s IREP to manufacture auto-fuels complying with Euro-IV/Euro-V specifications. The industrial gases manufactured at the complex also enable BPCL to increase refining capacity by nearly two-thirds, from 190,000 to 310,000 barrels per day, while producing cleaner fuels through upgraded fuel specification. The industrial gas complex provides jobs to around 50 employees. “Air Products is privileged to serve BPCL’s expansion needs at Kochi to provide significantly more high quality, cleaner-burning fuels,” said Serhan. “I am very proud of the team for their excellent work on this project, which achieved a flawless start-up and is now reliably supplying industrial gases to the BPCL refinery. This world-class facility represents true project execution excellence and took more than 10 million man-hours to build without any safety incidents.” An Air Products team located across four countries, including India, the U.K., the Netherlands, and the U.S., worked on the Kochi project, built on more than 15 acres of land leased from BPCL. “As one of the fastest growing economies in the world, we are very proud to invest in India and want to continue growing our presence and strong relationships in the region as the safest and most innovative industrial gas company,” said Boocock. “The Kochi Industrial Gas Complex houses one of the most efficient and flexible HyCO (hydrogen/carbon monoxide) plants in Air Products’ global plant fleet. This is a technologically-advanced plant, built using Air Products’ proprietary technology, incorporating state-of-the-art safety features which also deliver reliability and environmental performance.” A unique highlight of the plant is that the gas turbine is integrated into the design of the twin steam methane reformers. These are the first-ever twin steam methane reformers designed and built by Air Products with a combined capacity of 16.4 tonnes per hour of hydrogen production. “We are committed to continuing investing in Kochi as BPCL and the downstream petrochemical industry grows,” said Hui Hong Thng, general manager – Air Products Kochi. “We understand that safe, reliable and cost-effective industrial gases are a critical enabler of local manufacturing investment, and we see our Kochi site as a national model for other states.” “The commissioning of the IREP in 2017 has made BPCL Kochi Refinery the largest Public Sector refinery in the country and enabled it to manufacture auto-fuels complying with the required Bharat Stage IV (Euro IV) specifications and a greater depth of conversion. We are happy to partner with leading global players such as Air Products to achieve this target,” said Mr. R. Ramachandran, director, Refineries at BPCL. “IREP is one of the largest investments Kerala has ever witnessed, targeted at enhancing the refining capacity of Kochi refinery at a cost of Rs.165 billion. With the increased capacity of 15.5 million tons, the Kochi Refinery will transform itself into a most modern industrial complex having global standards. Commissioning of the state-of-the-art hydrogen generation unit by Air Products is a significant milestone towards this,” said Mr. Prasad K. Panicker, executive director, BPCL Kochi Refinery. BPCL and Air Products are looking forward to the commissioning of a second project at Kochi, as the two companies signed a long-term agreement in January 2018 to build, own and operate a new syngas production facility. The syngas facility will be located alongside the current BOO project and will supply BPCL’s new Propylene Derivates Petrochemical Project (PDPP). The unit will employ Air Products’ proprietary cryogenic gas separation technologies to produce syngas. The PDPP enables BPCL to enter the Indian petrochemical market and enhance the value obtained from its refining operations. The Kochi Industrial Gas Complex was executed with Air Products’ long-term alliance partner, TechnipFMC, a global leader in subsea, onshore/offshore, and surface projects for the energy industry. For more than 25 years, the alliance has provided the worldwide refining industry with competitive technology and world-class safety. The alliance is responsible for over 35 hydrogen production plants located in 11 countries around the world and produces well over two billion standard cubic meters of hydrogen per day for clean fuels production. TechnipFMC provides the design and construction expertise for steam reformers, while Air Products provides the gas separation technology. Hydrogen is widely used in petroleum refining processes to remove impurities found in crude oil such as sulfur, olefins, and aromatics to meet product fuels specifications. Removing these components allows gasoline and diesel to burn cleaner and thus makes hydrogen a critical component in the production of cleaner fuels needed by modern, efficient internal combustion engines. Brian O’Neill Jersey
Analysis: India’s ONGC picks right time to offer Brazilian crude to Asia
India’s ONGC Videsh Ltd could not have picked a better time to offer multi-month supply of Brazilian Ostra crude oil to the Asian market as Australia was set to halt production and exports of its heavy sweet crude grades during the second-half of this year. The Indian upstream company’s subsidiary ONGC Campos Ltda., issued a tender earlier this month, offering heavy sweet Ostra crude for loading directly from Espirito Santo FPSO in Brazil’s Campos Basin between June 1 and November 30, the official tender notice showed. The tender notice indicated that the quantity of crude offered would be OCL’s entire Ostra crude oil entitlement over the period of contract. The sell tender was issued at a right time as many regional refiners that often require a regular dose of heavy sweet crude oil, have been fretting about the potential shortage of Australian supplies during the latter half of this year, market participants said. A slew of upcoming maintenance at Australia’s Exmouth sub-basin oil fields would wipe out most of heavy sweet Enfield, Vincent and Pyrenees crude supplies for the next couple of quarters, but ONGC’s offer of fuel oil-rich Brazilian grade may help fill that supply gap, Asian trade sources said. “Australian heavy grades are niche items that often feed big refiners in China, India, South Korea and even the US west coast … Ostra should draw plenty of Asian interest [because heavy] Australian grades will be missing [during the second half of 2018],” a South Asian crude oil trader said. The tender closes Tuesday, 9:30 am India Standard Time (0400 GMT), with validity until Thursday, 8 pm IST (1430 GMT). The Espirito Santo FPSO had 39,311 b/d of oil production from 20 wells in March, which included the grades Argonauta and Ostra, Brazil’s Agencia Nacional do Petroleo, Gas Natural e Biocombustiveis (ANP) said. AUSTRALIAN SUPPLY GAP At least two floating production, storage and offloading vessels that contribute heavily to the production of heavy sweet crude oil from Australia are expected to undergo maintenance in the coming months. The production of Pyrenees crude oil offshore Western Australia is set to be suspended for a number of months after July, with the FPSO Pyrenees Venture at the grade to undergo maintenance at a dry-dock, industry sources with knowledge of the matter had said. The grade typically sees one 500,000-barrel cargo load each month. Previously, Australia’s Woodside Petroleum had also said that it planned to suspend shipment of heavy sweet Vincent crude for around 12 months because of modification works on the Ngujima-Yin FPSO. Following the loading of a cargo in July, the FPSO will sail to a dry-dock for maintenance, a market source said. Ostra is a heavy sweet crude produced in Brazil’s offshore Campos Basin. A January 2015 assay showed the crude having 17.97 API and 0.38% sulfur. Australia’s Vincent is also a heavy sweet crude with a gravity of around 17.4 API and sulfur content of 0.37%. Pyrenees has a gravity of 19.3 API with 0.19% sulfur, the latest assay reports showed. The price differentials for Vincent and Pyrenees have been falling sharply in recent weeks as buyers shied away from the heavy sweet Australian crude complex ahead of the H2 maintenance. Vincent was assessed at a discount of $1.85/b to Dated Brent last Friday, the lowest differential since October 19, 2015, when it stood at minus $1.90/b to Dated Brent, Platts data showed. OSTRA MAY BE COSTLY Not all Asian refiners may consider Ostra as a suitable substitute to fill the Australian supply gap as quality differences still remain, market sources said. The longer delivery distance may also push the final cost significantly higher, they added. “Say if the outlet is China … freight costs would be at least two times higher from Brazil [compared to cargoes departing from northwest of Australia],” a shipping broker based in Singapore said. One regional crude trader said that with the cargo size of the crude expected to total about 750,000 barrels a month, ONGC’s Ostra crude cargoes could end up in the hands of a buyer in Europe or the Americas. “There is no economic [benefit] for Asian buyers [to buy this],” a north Asian crude trader said. “[Also in terms of quality] it is similar to [Indonesia’s] Duri [crude].” “Both have high acid [content] so people cannot pay high [cash differentials] for this,” the trader added. Peter Forsberg Womens Jersey
First crude oil cargo from Abu Dhabi departs for Mangalore’s strategic oil reserve
The first consignment of 2 million barrels of crude oil from the UAE for India’s strategic petroleum reserve at Mangalore is en-route to India and will help it deal with supply side disruptions, Minister for Petroleum and Natural Gas Dharmendra Pradhan has said. The cargo is the first under an agreement between Abu Dhabi National Oil Company(ADNOC) and the Indian Strategic Petroleum Reserves Ltd (ISPRL), an Indian government-owned company mandated to store crude oil for strategic needs. The loading of approximately 2 million barrels of ADNOC crude oil was witnessed by Pradhan and Sultan Ahmed Al Jaber, UAE Minister of State and ADNOC Group CEO, at a ceremony in Abu Dhabi yesterday. Speaking on the occasion, Pradhan said: “The UAE is the first country to invest in India’s Strategic Reserves Programme. This important partnership will further strengthen the close energy cooperation that exists between India and the UAE and builds on the historic acquisition of a stake in the Lower Zakum offshore concession by Indian companies.” In February, ONGC Videsh Ltd and its partners had acquired a 10 per cent in the Lower Zakum offshore oilfield in Abu Dhabi for USD 600 million. “The strategic reserve will provide a boost to India’s energy security and help us deal with supply side disruptions. While part of the stored oil will be used for commercial purposes by ADNOC, the major part will be purely for strategic purposes.” Al Jaber said that the strategic reserve project represents an important new energy partnership with India that leverages the UAE and ADNOC’s expertise and oil resources. “With this partnership, new market opportunities will open up for ADNOC, as we not only help to ensure the energy security of the UAE’s largest trading partner, but also gain greater access to one of the fastest-growing markets for high-quality crude oil. Our increased presence in India, will also catalyse demand for our own refined and petrochemical products,” he said. Indian energy demand is forecast by the International Energy Agency (IEA) to grow by more than any other country in the period to 2040, propelled by an economy that will grow to more than five-times its current size and by population growth that will make it the world’s most populous country. India’s energy consumption is expected to more than double by 2040, accounting for 25 per cent of the rise in global energy, and the largest absolute growth in oil consumption. India is 82 per cent dependent on imports to meet its crude oil needs, eight per cent of which is supplied by the UAE. Tony Perez Womens Jersey
IOC, BPCL seek LNG cargoes for June delivery – sources
Bharat Petroleum Corp Ltd and Indian Oil Corp are seeking a liquefied natural gas (LNG) cargo each for delivery in June, two industry sources said on Tuesday. BPCL is seeking a LNG cargo for delivery on June 22 in a tender that closes on May 16 and is valid until May 18. IOC is seeking a cargo for delivery on June 6 in a tender that closes on May 16 and will remain valid until May 17. IOC had earlier sought a cargo for a similar delivery period but re-issued the tender, one of the sources said. Otis Sistrunk Womens Jersey
Russia’s Sakhalin II LNG plant sells late June cargo, likely to Gazprom-trade.
Russia’s Sakhalin II liquefied natural gas (LNG) export plant sold a cargo loading on June 27 at a price estimated in the low-to-mid $8 per million British thermal units (mmBtu) range, traders said. The tender closed on May 11. Gazprom’s contract to supply India’s state-owned Gail with 0.5 million tons, or eight cargoes, of LNG in 2018/2019 starts from May. Kevin Shattenkirk Jersey