Gas supply issues keep ceramic units from resuming production
After temporarily shutting down operations to switch over to natural gas, over 450 ceramic tile making units in Morbi had last month decided to resume production from April 15. However, 250-odd plants, mainly wall tile making units, could not commence production on Monday because of gas supply issues. Soon after the National Green Tribunal (NGT) ordered closure of units running on coal-gasifiers, half of the 900 ceramic manufacturing units in Morbi had shut operations to change over to cleaner fuel. Around 325 wall tile manufacturing units had unanimously resolved to restart operations after mid-April. Some floor and vitrified tile makers, too had voluntarily chose to resume production from April 15. “While many floor and vitrified tile units have started production after switching over to natural gas. Around 75 wall tile units could resume operations and remaining 250 have been stuck due to issues related to gas supply,” claimed Nilesh Jetpariya, president, Wall Tiles Division, Morbi Ceramics Association (MCA). According to Jetpariya, Morbi ceramic industry’s natural gas requirement is estimated to be 65 to 68 lakh cubic meter per day. Gujarat Gas Limited (GGL), that supplies gas to the industrial units, with its current gas distribution infrastructure is able to provide 42-43 lakh cubic meter of gas every day. “Even some of the regular gas users have been facing problems over the last 5-6 six days as they are not getting the required gas pressure needed for smooth operations,” he added. When contacted, a GGL official said, “Currently, GGL is catering to demand of around 650 plus ceramic units including the new additions. To further boost the supply, it (GGL) is working closely with its gas transporter GSPL (Gujarat State Petronet Ltd). Additionally, for debottlenecking of the network, GGL has already started laying of a pipeline on a war footing basis from nearest transmission terminal at Gala Village. This three-month project is likely to be completed in less than a month for which a special team has been deployed under the on-ground supervision of the company’s CEO.”
Vedanta’s Cairn Oil and Gas names Ajay Kumar Dixit as new CEO
Vedanta’s Cairn oil and gas has appointed Ajay Kumar Dixit as its new Chief Executive Officer, the company said in a statement today. Dixit will succeed Sudhir Mathur who had resigned earlier this month. “Ajay succeeds Sudhir Mathur, who after seven successful years with the company, moves on to pursue personal endeavours,” the company said in a statement. Prior to his appointment, Dixit served as the acting CEO of Vedanta’s Aluminium and Power business Srinivasan Venkatakrishnan, CEO, Vedanta in a statement said, “Ajay has a deep understanding of our business and the markets we operate in. He is a dynamic and values-driven leader with an impressive track record of delivering consistent high quality performance in a safe and sustainable way. We are confident that he will play a stellar role in further increasing the operational efficiency and growth of our oil and gas business.” Both Mathur and the company’s Chief Financial Officer (CFO) Pankaj Kalra resigned from their positions recently. The company had last week said in a statement the resignations were unrelated. The resignations holds significance as Mathur would be the fourth CEO moving out of Cairn Oil and Gas post its acquisition by Vedanta in 2011. According to people privy of the development, Kalra resigned as the CFO of Cairn in mid-February, while Mathur tendered his resignation last week.
IndianOil sets up trading desk in Delhi to buy crude on real-time basis
India’s top refiner Indian Oil Corp (IOC) has set up a trading desk at its office here to buy crude oil from international market on a real-time basis, helping it cut import price by locking in best price and quality, its Director (Finance) A K Sharma said. IOC, which buys 30 per cent (15 million tonne) of its oil requirement from spot or current market, had set up a trading office in Singapore in 2017 but has now developed in-house software and trading team to buy crude oil on a real-time basis. It made the first purchase through the desk on March 25 when it bought one million barrel of Nigeria’s Agbami crude, he said. While private sector firms like Reliance Industries have had a local trading desk for buying of crude and exporting fuel it produces, IOC would be the first state-owned refiner to set up such a desk. Sharma said the Singapore desk was used to buy crude oil on a short-tender basis where the purchase was decided in two-hour time after receipt of offers from an international seller. This is compared to 10 hours taken to decide on purchase in traditional tenders. But with a trading desk at its office in the national capital, IOC is deciding on purchases on a real-time basis, he said. “This helps us get the best price and most suitable, value giving crude,” he said. In traditional tenders as well as short tenders floated through the Singapore office, IOC would seek quotations from international sellers for a particular grade and quantity of crude oil. It would decide on the price based on the lowest bid rate with no scope of any negotiations on the offer. However, with the trading desk now, it on a real-time basis negotiates with crude traders, often pitching price of one with another to get the best rate. “We have set up a compliance process,” he said. “We have established an in-house process where four traders, without interacting with one another, lock in best available price. A supervisor, who does not have the benefit of the identity of the seller, then instructs for further negotiations on an offer based on offers from other sellers. The traders then negotiate with the seller to bring down the price.” IOC plans to transfer the trading desk once it stabilises in Singapore to do the real-time purchase of quantities of crude oil it buys from the spot market. Also, it could trade on fuel its refineries would export, he said. The company buys about 70 per cent of its crude needs from oil companies such as Saudi Aramco of Saudi Arabia and SOMO of Iraq on annual term contracts. The rest is bought from the spot market through tenders. Sharma said ultimately most of the spot purchases would be done through the trading desk. He, however, did not give a timeframe for moving to that. Currently, one cargo of 1 million barrels are bought through trading desks at Singapore or at New Delhi. Sharma said IOCL Singapore Pvt Ltd – the company’s Singapore subsidiary – will ultimately handle the trading desk. IOCL Singapore has two officers as compared to four traders plus supervisor and compliance officer at the trading desk in the national capital, he said adding the company will gradually increase its workforce in line with transactions. Singapore is the trading hub for the world’s biggest consumer region and an office there will help it have better access to information and speedier decision making. Before 2017, public sector oil companies would often lose out on opportunities to buy cheaper crude from the international spot markets as their sourcing policies required them to float a tender and obtain approvals from the oil ministry before they could place an order. The process used to take up to two months. While these companies had board approvals to set up offices abroad, they could not go ahead due to policy constraints and concerns over transparency in the public procurement policy. The trading desk is part of progression IOC has seen in crude procurement policy since 2016 when the government gave flexibility to state refiners to devise their own crude import policies. Prior to that, IOC used to take 26 hours to decide on a tender for import of crude oil from spot or current market. In April 2016, after the Cabinet gave state-owned oil refiners freedom to devise their own crude import policies, the time has been shrunk to 12 hours. Time for deciding on tenders for export of petroleum products or fuel was cut to just 9 hours from the previous 35 hours. “Earlier, we had a three-member committee comprising two company executives and one senior official of the ministry of petroleum and natural gas to decide on awarding tenders for import of crude oil from the spot market. Now we have an internal committee which can take decisions quickly,” he said.
BPCL to build 3m tonne/yr PRFCC at Mumbai complex
India’s Bharat Petroleum Corp Ltd (BPCL) plans to build a 3m tonne/year petrochemical residual fluidized catalytic cracking plant (PRFCC) at its Mumbai complex in western Maharashtra state by 2022, a company source said on Monday. The Indian rupee (Rs) 68.8bn ($993m) project, which is part of BPCL’s refinery modernization plan, will replace the refinery’s catalytic cracking unit (CCU) commissioned in 1955 and the fluidized catalytic cracking unit (FCCU) commissioned in 1985. The PRFCC project will include a main fractionator and unsaturated gas plant (USGP); a regenerator flue gas scrubber; an unsaturated liquefied petroleum gas (LPG) treating unit (LTU); a propylene recovery unit (PRU); and a sulphur recovery unit. BPCL expects to receive required environmental clearances for the project soon, the source said. The PRFCC will help maximize the company’s polymer-grade propylene production, which will feed its upcoming polypropylene (PP) unit at Rasayani in Maharashtra, the source said. The Mumbai refinery will supply propylene feedstock to BPCL’s planned 450,000 tonne/year PP plant, which is expected to be commissioned by 2022-23.