BS VI fuel: Indian Oil says supply has begun in 12 NCR districts, Agra
Supply of ultra-clean Euro-VI grade petrol and diesel has begun in cities adjoining the national capital from Monday, Indian Oil Corporation (IOC) said. While Delhi in April 2018 became the first city in the country to leapfrog from Euro-IV grade petrol and diesel to Euro-VI fuels, cities in the national capital region like Noida and Ghaziabad switched over to the cleaner fuel from Monday. Rest of the country will follow suit from April 2020. “Oil companies keep up BS-VI (Euro-VI) promise! 12 NCR districts and city of Agra converted to BS-VI green fuels from today,” IOC said in a series of tweets. In keeping with the implementation plan for BS-VI grade fuels in the national capital region (NCR), the oil industry Monday switched over to supply of BS-VI grade transportaiton fuels in 12 contiguous districts of Rajasthan and Uttar Pradesh as well as the city of Agra, it said. Petrol and diesel containing 10 parts per million or ppm is now being supplied in Alwar, Bharatpur, Karauli and Dholpur in Rajasthan and Meerut, Muzaffarnagar, Ghaziabad, Gautam Budh Nagar, Baghpat, Hapur, Bulandshahr, Shamli and Agra in Uttar Pradesh. Originally Gurugram and Faridabad too were to get Euro-VI grade fuel from April 1 but supplies there have been postponed. India had in 2015 decided to leapfrog to Euro-VI emission norm compliant petrol and diesel from April 2020, from the Euro-IV grade at present. While the deadline for the rest of the country stands, the same for Delhi, which is choking on thick toxic smog, was brought forward. Euro-VI grade fuel contains 10 ppm of sulphur as against 50 ppm in Euro-VI fuels. “BS-VI fuels would be supplied through 1,630 fuel stations of the three OMCs (IOC, BPCL and HPCL) in Delhi and NCR region,” IOC tweeted.
City Gas Distribution: New gas licences promise solid gains
Consumers have never had it so good as far as potential availability of cleaner and cheaper gas for their energy needs is concerned, with 136 geographical areas (GAs) being awarded in the ninth and tenth round of city gas distribution (CGD) licence auctions in the last two years. This is a huge jump over the 91 GAs awarded in eight CGD rounds over the preceding eight years. This acceleration has been accompanied by the entry of new players in the CGD space. Almost 50% of the 136 GAs were won by Adani Gas and the oil marketing companies, outbidding incumbents like Indraprastha Gas, Mahanagar Gas and Gujarat Gas—the new entrants were aggressive with their bids even as the existing players concentrated mostly on return on capital. After the tenth round, CGD licences have been auctioned for 228 GAs in all, comprising 402 districts across 27 states and union territories. Some experts have expressed doubts regarding the viability of bids by the new players. “We remain skeptical of work completion by successful bidders given the extremely aggressive PNG (piped natural gas) and CNG (compressed natural gas) station targets,” Edelweiss Securities has observed in a report. The latest rounds entail setting up of 8,181 CNG stations and 42.4 mn PNG connections compared to 1,349 CNG stations and 4.2 mn PNG connections in the earlier rounds put together. However, the new entrants are confident of meeting targets. “We were very conscious of the number of PNG connections we quoted. We will be able to achieve those targets,” says P.P.G. Sarma, MD for CGD and logistics at Atlantic Gulf & Pacific Co of Manila (AG&P). The company won three GAs in the ninth and nine GAs in the tenth round. AG&P claims to have done a detailed study of the GAs and met customers before it bid for 13 GAs in the tenth round. “The targets will be met through innovative solutions derived from our global expertise,” he says. “It is really about how we control the molecule in its journey from the terminal to kitchens or fuel stations through our designs and systems,” points out Joseph Sigelman, CEO, AG&P. One private player to have made a huge impact in the last two rounds is Adani Gas, having won 15 GAs on its own and another ten in a joint venture with Indian Oil (IOC). Again, the company is confident of achieving targets. “Our contractual offerings are extremely flexible and designed to suit customer requirements in all the segments,” says an Adani Group spokesperson. Among the other top winners in the ninth and tenth rounds are IOC (17), Bharat Gas Resources (13), Torrent Gas (13) and Hindustan Petroleum Corporation (10). Given the aggressive bidding, analysts at Edelweiss “expect consolidation to take place, to the benefit of incumbents, as new entrants fail to deliver on steep targets”. Be that as it may, completion of work mandated by the ninth and tenth rounds —on-ground results are expected from 2020 onwards and run up to 2029— would go a long way in taking the share of gas in India’s energy mix from 6.5% to the targetted 15%.
ONGC gas output jumps 6.5% to record high in FY19
Reversing years of decline, state-owned Oil and Natural Gas Corp (ONGC) has reported a record 6.5 per cent jump in natural gas production to 25.9 billion cubic meters in the fiscal year ended March 31, 2019, as it doubles up efforts to raise domestic output to curb imports. Natural gas production from ONGC-operated nomination fields, NELP blocks and joint venture assets reached 25.819 BCM in 2018-19 as compared to 24.61 BCM output in the previous fiscal, ONGC Chairman and Managing Director Shashi Shanker said here. The company is on course to produce 42 BCM by end of fiscal 2022, when its prized KG basin discoveries will come onstream. “Some of our gas fields are very old like the Bassien field in western offshore. These continue to make a substantial contribution to the overall domestic production of gas because of continuous monitoring of the fields, applications of state-of-the-art technology and best possible reservoir management,” Shanker said. A bulk of the output in the 2018-19 financial year came from fields that were given to ONGC on nomination basis. Gas output from these rose to 24.683 BCM against 23.43 BCM in the previous 2017-18 fiscal. There has been a marginal increase in the New Exploration Licensing Policy (NELP) fields also from 0.054 BCM to 0.073 BCM. The growth rate was higher than the global average of 3-4 per cent year-on-year. Natural gas is the fastest growing primary energy source in the world. It is the cleanest burning petroleum-based fuel and has wide applications — from being used to generate electricity to the running of automobiles (CNG) and firing kitchen stoves. Aiming to reduce dependence on imports for meeting energy needs and cutting greenhouse emissions, India is looking at increasing consumption of natural gas by more than doubling its share in energy basket to 15 per cent by 2030. Shanker said, gas sales also recorded an impressive increase during the year with sales (provisional) standing at 20.472 BCM against the sales of 19.494 BCM in 2017-18. During 2018-19, the company has, for the first time in its six-decade-old history, witnessed the highest ever gas production of 71 million standard cubic meters per day (mmscmd) in November 2018. ONGC, he said, is taking all measures to sustain the production level and then grow further as per the company’s operational blueprint. The company has stepped up efforts to bring newer fields into production after Prime Minister Narendra Modi set a stiff target of reducing oil import dependence by 10 per cent by 2022. India currently imports over 80 per cent of its oil needs. The growth in output was largely contributed by C-26 Cluster fields, Daman and Vasai East fields in the western offshore as well as sub-sea well S2AB in the eastern offshore, he said adding ONGC has charted out a plan to double the gas production at 42.7 BCM by 2021-22. It is investing ₹570 billion – one of the highest investments in the world in gas projects – in the high potential KG-DWN-98/2 project in the Bay of Bengal as well as in developing other discoveries on off the west coast. First gas from the KG-DWN-98/2 project is targeted for end-2019 and peak output is envisaged at 16.56 mmscmd by 2022. Giving details of projects that contributed to the increase, he said the incremental production came from Daman Offshore in the West as well as S1 –Vashishta in the eastern offshore. Some of the onshore fields too saw the trend of falling output reversed. The Daman project has been completed at an investment of₹60.86 billion for a production profile of 26.93 BCM over a period of time. The project contributed 4.5 mmscmd last fiscal. Similarly, ONGC has drawn an investment plan of ₹57.25 billion for Vashishta and S1 for total gas production of 14.61 BCM. Current production from the project stands at 3 mmscmd. One of the major breakthrough On-shore projects is Tripura Gas Project for which an investment plan of ₹50 billion is being drawn up to recover 49.37 BCM gas up to the profile period. Current gas production from the block is 4.5 mmscmd.
India’s H-Energy seeks 15 LNG cargoes for Q4 2019 delivery
India’s H-Energy is seeking to buy 15 cargoes of liquefied natural gas (LNG) for delivery over the fourth quarter of 2019 and throughout 2020, two industry sources said. The tender opened on March 31 and is expected to close in mid-April, they added. H-Energy is looking to import one cargo per month over the 15-month period.