Torrent Power seeks LNG cargo for March delivery
India’s Torrent Power is seeking a liquefied natural gas (LNG) cargo for delivery in March, two industry sources said on Tuesday. The utility is seeking the cargo for delivery into Dahej terminal on March 26 on a delivered ex-ship (DES) basis, one of the sources said. Offers are due by March 5, the source added.
Rs 1.2 lakh crore investment committed in city gas rollout over 8-10 years
As much as Rs 1.2 lakh crore of investment has been committed by firms like IOC, Adani Gas and Torrent in a massive rollout of CNG stations and cooking gas connections to households over the next 8-10 years, oil regulator PNGRB said Friday. The move is likely to expand coverage of city gas to 70 per cent of the country’s population. PNGRB has in last six months awarded licenses for setting up city gas distribution networks in 136 geographical areas or GAs in two bid rounds that will expand the network of CNG stations in the country to 10,000 from current 1,500 and piped natural gas connections to household kitchens to 5 crore from current 5 lakh, PNGRB Chairman D K Sarraf said. While Rs 70,000 crore investment was committed in 86 GAs awarded in the 9th city gas bid round in August last year, another Rs 50,000 crore was committed in the 50 GAs awarded in the 10th round Friday, he said. Oil Minister Dharmendra Pradhan handed over letter of intent to the winners of the 10th round which included firms like Indian Oil Corp (IOC), Hindustan Petroleum Corp Ltd (HPCL), Torrent Gas and Adani Gas. “Just 20 per cent of the population was covered by city gas distribution network in 2014 and now after award of 10th bid round, this will reach 70 per cent,” he said. “After 10th round, the coverage of city gas network will extend to 402 districts in the country”. 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). And the PNGRB finalised the bids in a record time of 21 days,” Sarraf 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 covered about 50 per cent of India’s population (as per 2011 census) and 35 per cent of its geographical area. State-owned IOC won licences to retail gas in 10 cities, while HPCL won rights for nine towns in 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. 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 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. “In the 10th bid round 2 crore piped natural gas connections have been committed to be given and 3,500 CNG stations will be set up. Besides, 58,000-inch kilometre of steel pipeline will be laid for the supply of gas,” Sarraf said, adding this along with commitments made in the 9th bid would help increase piped cooking gas connections 10-folds to 5 crore and CNG stations to 10,000 from current 1,500. Oil Secretary M M Kutty said the massive expansion of city gas distribution network is as part of government efforts to raise the share of natural gas in the energy basket to 15 per cent by 2030 from current 6.2 per cent. Natural gas is cleaner and environment-friendly fuel and is intended to replace some of the polluting coal and liquid fuels consumed currently. With the completion of 10th 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.
Gail chosen for Vedanta’s Barmer gas output buy
The Centre has nominated state-run GAIL to buy the gas output from Vedanta’s prolific Barmer block, which has recently begun pumping the energy resource after accounting for a fourth of India’s domestic crude oil production. The block, which would produce up to 4 million metric standard cubic meters a day (mmscmd), must sell the output to an entity chosen by the government. The production sharing contract for the Barmer block gives the producer pricing freedom but not marketing freedom. A long-drawn negotiation between GAIL and Vedanta hasn’t yet yielded an agreement, underscoring how hard it can be to settle on a rate in the absence of a widely acceptable domestic-market benchmark. “We are in the middle of a productive commercial discussion, which will enable all stakeholders to optimise revenue, investment, and production. We cannot, however, comment on speculation about commercial discussions since these are confidential,” Vedanta said in an emailed response to ET’s query. People familiar with the negotiations said there was a yawning expectation gap between the two parties as the seller has been demanding a rate equal to that of imported liquefied natural gas (LNG), while the buyer favours the domestic formula price or a reasonable margin on top of the cost of production. For producers and buyers, there are at least five gas price reference points in the country. A domestic formula price of $3.36 per million metric British thermal unit (mmBtu) applies to most gas produced in the country. Then there are the following: The maximum rate of $7.67 for gas from difficult fields, prices discovered in limited auctions for gas that is difficult to extract, imported LNG rates, and economically viable rates submitted in field development plans (FDP) by producers. In their FDPs submitted to the upstream regulator, producers mention the price at which developing a field would be viable. These prices are rarely publicised and so are less likely to become the basis of negotiations between a producer and buyer. Producers demand higher rates equal to that of imported LNG, pointing out that the rising local appetite for LNG shows consumer willingness to pay a higher price. But buyers say high prices can dent local demand for gas and hurt industries.
China to form national oil and gas pipeline company: state planner
China will create a national oil and gas pipeline company, the country’s state planner said on Tuesday in the first official acknowledgement of a reform that has been anticipated by the energy industry. The National Development and Reform Commission (NDRC) did not give a timetable or any details of the plan in its annual work report published at the opening of the annual meeting of parliament. Creating a central oil and gas operator will help China’s state-owned energy companies separate the cost of pipeline transportation from the sale of oil and gas. Reuters reported last month that a formal plan for the pipeline group combining the long distance pipeline assets of the country’s state-owned energy companies will be announced this year. The NDRC on Tuesday also repeated its goal of speeding up domestic oil and gas exploration.