Saudi’s Falih warns of policies undermining oil, gas development
Saudi Energy Minister Khalid al-Falih said on Wednesday that more energy investment was needed to meet future demand and warned that policies in many countries are undermining energy sector development. “Many consuming nations set unrealistic schedules for the deployment of alternative energy sources and enact measures that undermine oil and gas development,” Falih said at an industry event in Riyadh, according to a copy of his speech. “We find increasing pressure – including governmental, financial and media factors – to prematurely cut investment in conventional energy. In such an environment, the trillions of dollars needed to grow vital conventional energy supplies… are unlikely to be forthcoming.”
Indian Oil, Adani, Bharat Gas, Torrent emerge biggest winners under 9th and 10th round of CGD auctions
Indian Oil Corporation (IOC), the country’s largest fuel retailer, and Gautam Adani-led Adani Gas have emerged as the largest winners for City Gas Distribution (CGD) licenses, winning 17 and 15 Geographical Areas, respectively, under the ninth and tenth rounds of CGD auctions. Overall, the winners of the two rounds of auction combined are expected to provide 4.13 crore Piped Natural Gas (PNG) connections and set-up 7,924 Compressed Natural Gas (CNG) stations across the country by 2029. Also, laying of 170,873 Km of steel pipeline network is expected up to 2029. Other companies which won significant number of GAs under both the rounds were Bharat Gas with 13 GAs, Torrent Gas with 12, a consortium of AG&P LNG Marketing & Atlantic Gulf & Pacific Company of Manila with 11 GAs, IOC-Adani consortium with 10 GAs, Gail Gas with 8 and Gujarat Gas with 7 GAs. Petroleum and Natural Gas and Regulatory Board (PNGRB) announced the winners of the tenth round of CGD biddings on Tuesday. Tenth CGD Round Under the just concluded tenth round, IOC, Hindustan Petroleum (HPCL) and the Consortium of LNG Marketing and Atlantic Gulf & Pacific Company of Manila won 9 GAs each. “225 bids from 25 entities were received up to 5 February 2019, the bid closing date. Based upon the bids evaluations, PNGRB in its board meeting held on 26 February 2019 approved issuance of Letters of Intent (LoI) to the 12 successful entities for 50 Geographical Areas,” PNGRB said. The regulator added that post the completion of the tenth round, city gas would be available in 228 GAs comprising 402 districts spread over 27 states and union territories covering around 70 per cent of India’s population and 53 per cent of its geographical area. Research agency Jefferies India said in a note the cumulative target for all areas suggests bidding in the tenth round might have been even more aggressive than the ninth round. “While the tenth round was 70-80 per cent of the ninth round by area and population and 60 per cent by number of areas, the number of domestic PNG connections targeted during 8 years is 96 per cent of the ninth round and the CNG station target remains stiff too at 82 per cent of the ninth round. Targets set on the pipeline front were more conservative at 50 per cent of the ninth round,” it said. As per the work commitments made by winning entities under the tenth round, the companies are expected to provide 2.02 crore domestic PNG connections and set-up around 3,578 CNG stations for transport sector, along with laying of 58,177 inch-km of steel pipelines over an 8 year period ending March 2029. According to Jefferies, a major challenge will be execution of the projects and penalties could subsequently take center stage. “With execution challenges in sight, penalties could indeed take center stage. Penalties here are on the lower side esp for domestic PNG connections that have the highest weightage (Rs 750 per shortfall, or 15 per cent of security deposit),” it said. The agency also said the penalties could, however, prove material for new entrants in case of large slippages. Guidelines provide for cancellation of licenses if entities fail to meet 30 per cent of the target quoted at the end of the third year. During the tenth round, Gujarat Gas won city gas licenses for 6 GAs, followed by Gail Gas which won rights for 4 GAs and Indraprashta Gas Limited and Torrent Gas, who won distribution rights for 3 GAs each.
IOC wins city gas licences for 10 areas; HPCL wins for 9
State-owned Indian Oil Corp (IOC) has won licences to retail gas in 10 cities while Hindustan Petroleum Corp Ltd (HPCL) won rights for nine towns as oil regulator PNGRB announced winners for the 10th city gas bid round. IOC won city gas distribution licences for nine cities, most of them in Bihar and Jharkhand, on its own and one in a joint venture with Adani Gas, according to a press statement issued by Petroleum and Natural Gas Regulatory Board (PNGRB). HPCL, a subsidiary of state-owned Oil and Natural Gas Corp (ONGC), won licences to retail CNG to automobiles and piped natural gas to households in nine cities in Uttar Pradesh and West Bengal. A little known consortium of LNG Marketing Pte Ltd and Atlantic Gulf & Pacific Company of Manila Inc won rights for nine cities in Andhra Pradesh, Karnataka, and Kerala. Gujarat Gas Ltd won rights for six cities while state gas utility GAIL India’s unit GAIL Gas Ltd won rights for four. Indraprastha Gas Ltd and Torrent Gas won rights for three cities each while Adani Gas and Bharat Gas Resources Ltd, a subsidiary of state-owned Bharat Petroleum Corp Ltd (BPCL), bagged two cities each. This is the second auction in a row that IOC has dominated. In the previous 9th bid round, IOC had won licences for eight cities on its own and another nine in a joint venture with Adani Gas. Adani Gas had in the 9th round won licences for 13 cities on its own while Bharat Gas Resources Ltd bagged 11 areas. Gujarat-based Torrest Gas Pvt Ltd got nine cities. While 86 Geographical Areas or GAs, made up of 174 districts, were offered for bidding in the 9th round that concluded in August last year, 50 GAs, comprising of 124 districts, were offered in the 10th round. “225 bids from 25 entities were received up to February 5, 2019, i.e., the bid closing date (for the 10th round). Based upon the bids evaluations, PNGRB in its 88th Board meeting held on February 26, 2019, approved the issuance of Letters of Intent (LoI) to the 12 successful entities for 50 GAs,” the PNGRB statement said. Prior to this, city gas distribution (CGD) licences had been given for 178 GAs covering 280 districts (263 complete and 17 part) spread over 26 states and UTs. These cover about 50 per cent of India’s population (as per 2011 census) and 35 per cent of its geographical area. In addition, CGD operations are being carried out in five districts, authorisation for which is either under consideration of PNGRB or sub-judice. “With the completion of 10th CGD Bidding Round, CGD would be available in 228 GAs comprising 402 districts spread over 27 States and Union Territories covering approximately 70 per cent of India’s population and 53 per cent of its geographical area,” the statement said. As per the commitment made by the various entities in the 50 GAs approved for issuance of LoIs in 10th CGD Bidding Round, 2.02 crore domestic PNG (piped natural gas) connections and 3,578 CNG (compressed natural gas) stations for transport sector would be installed largely during a period of 8 years up to March 31, 2029, in addition to 58,177 inch-km of steel pipeline. “Further, the entities would be authorized to supply natural gas to industrial and commercial units in their respective GAs as per the limits provided in the CGD Authorisation Regulations,” it added.
Petrochemical complexes to boost turnover of BPCL Kochi Refinery
The BPCL Kochi Refineries is expecting around 16% increase in its turnover in another three years with the completion of its second petrochemical project. “We expect the turnover to increase by Rs 100 billion to Rs 700 billion by 2022 at the current level of prices,” said Prasad K Panicker, executive director of the company. Its Rs 111.30 billion second petrochemical complex to manufacture polyols is expected to go on stream by 2022. An import substitute, the products find wide use in the production of automotive seats, mattresses, shoe soles, refrigeration etc. BPCL Kochi Refinery is in discussion with various global companies to finalise the technology for six different products. “There is a huge demand for polyols and it is growing by over 10% per annum providing good scope for MSMEs to set up units for polyols-based products in the complex,’’ Panicker said. The company’s first petrochemical project being constructed at a cost of Rs 55 billion is all set to begin operation by the middle of the year. It will produce acrylic acid, acrylates and oxo alcohol that are used in the manufacture of paints, super absorbent polymers, detergents, adhesives, sealants, solvents etc. The technology has been sourced from global companies like Mitsubishi, Air Liquide Global and Johnson Mathey Davy. Both complexes have been made possible after the integrated refinery expansion project (IREP), recently dedicated to the nation by the Prime Minister Narendra Modi, that will raise the capacity of the refinery to 15.5 million tonnes from 9.5 million tonnes. The propylene produced after the expansion is the main feedstock of the petrochemicals. The refinery now has the capacity to produce 500,000 tonnes of propylene and 100,000 tonnes of ethylene. The entire quantity of propylene will be used for the two petrochemical compelexes. “ The two projects will result in Rs 130 billion forex savings per annum for the country ,’’ Panicker said. BPCL Kochi Refinery is slated to complete its fuel upgradation project to comply with BS-VI norms by February next year. The project cost is around Rs 33 billion. The country is expected to move to BS-VI automotive fuel by April 2020.
UAE’s ADNOC signs agreements with South Korean energy companies
The United Arab Emirates’ ADNOC has signed framework agreements with three South Korean energy companies to explore domestic and international growth opportunities, it said in a statement on Tuesday. The agreements with Korea Gas Corporation, Korea National Oil Corporation and GS Energy cover upstream, downstream and bunkering opportunities for crude oil and liquefied natural gas.