No takers for coal-bed methane blocks under open acreage licensing policy
While the ministry of petroleum and natural gas has recommended to the empowered committee of secretaries (ECS) names of top bidders for 32 hydrocarbon blocks under Open Acreage Licensing Policy (OALP) rounds II and III, there seems to be no takers for coal-bed methane blocks. There were eight onland, five shallow water and one ultra-deepwater blocks under auction for OALP-II, a total of 14. Under OALP-III, out of the 23 blocks, 19 are onland (including five coal-bed methane), three in shallow water and one in deepwater. No bids were received for five blocks under round III. Bids came in for 32 blocks out of the 37, but none for the CBM blocks which were carved out by the Directorate General of Hydrocarbons and put up for auction. “Investors seem to be worried about the evacuation of the gas as there are few avenues to sell. Maybe once city gas distribution networks come up, explorers will show interest,” said a government official. The CBM blocks are in the eastern part of India where ONGC, Great Eastern Energy Corporation, and Essar Oil & Gas already have blocks. While Reliance Industries, along with its foreign partner BP, is set to get a hydrocarbon field after a gap of 11 years as it last won in 2008 under New Exploration Licensing Policy, the ministry has also recommended two fields for which single bids were received. State-run Oil India has won 12 blocks under the two rounds, followed by Vedanta (10), ONGC (8) and Indian Oil Corporation (1) under OALP II and III. Once the ECS clears the recommendations, it will have to be cleared by the petroleum minister and the finance minister. In April, 2018, the Cabinet Committee on Economic Affairs (CCEA) had given them the power to award oil and gas exploration blocks to successful bidders under HELP after getting recommendations from the ECS, a move to fast-track the process. Earlier, awarding of blocks required the CCEA’s approval. ECS comprises secretaries of economic affairs, revenue, expenditure, law and petroleum. Vedanta, operator of the prolific Barmer field in Rajasthan, bagged 41 out of the 55 hydrocarbon blocks offered under the OALP-I, a critical part of the March 2016-launched Hydrocarbon Exploration Licensing Policy (HELP). HELP’s hallmarks are single licence for exploration of all forms of hydrocarbons (including shale gas and CBM), a simple revenue-sharing model and marketing and pricing freedom for the developers. Under HELP, blocks are awarded to companies that offer the highest share of revenue to the government.
MOL wins Indian LNG contract
Japan’s Mitsui OSK Lines (MOL) has secured a short-term charter agreement from India’s main natural gas company, GAIL, for one of its LNG carriers. No further specifics have been revealed about the deal. MOL tends to focus on long-term charters when it comes to its LNG division. Like compatriot Nippon Yusen Kaisha (NYK) it has sought to grow its Indian energy business a great deal in recent years. “It is expected that demand for gas will be increasing continuously in India, registering significant economic growth,” MOL stated in a release today.
Indian oil companies plan LNG terminal in Mozambique
ONGC Videsh Ltd., along with its Indian and foreign partners, has announced that it will invest around $20 billion to construct a gas liquefaction and export terminal in the African nation of Mozambique. This is an effort to monetise the offshore natural gas reserves that they have discovered in the country. Oil and Natural Gas Corp (ONGC), Bharat Petroleum Corp Ltd (BPCL) and Oil India Ltd (OIL) on Wednesday filed exchange disclosures that said their subsidiaries, along with US-based Anadarko Petroleum, have taken a final investment decision (FID) for Area-1 of the Mozambique LNG project. This will consist of two LNG trains with a total nameplate capacity of 12.88 million tonnes per annum, with feedgas coming from the Golfinho/Atum field in Offshore Area 1. The project, which will be built on the Afungi peninsula in Cabo Delgado province, will also involve the construction of associated infrastructure, storage tanks, and export jetty facilities. The project is planned to be commissioned by 2024. “OVL, a wholly owned subsidiary of ONGC, the national oil company of India, announces that Rovuma Offshore Area-1 consortium has taken an FID for the two trains Golfinho/Atum Mozambique LNG Project,” the company said. OVL holds a 16 per cent interest in Mozambique Rovuma Area-1 offshore project, while OIL holds 4 per cent stake. Bharat PetroResources Ltd, owned by BPCL, holds a 10 per cent interest and Anadarko holds a 26.5 per cent interest. Japanese company Mitsui has 20 per cent and Mozambique’s state energy company ENH has 15 per cent interest, with the remaining 8.5 per cent owned by Thailand’s PTT. Anadarko and its partners have locked in long-term sales and purchase agreements (SPAs) for a total of 11.1 million tonnes per year. SPAs include ones signed with Tokyo Gas, Centrica, Shell, China’s CNOOC, France’s EDF and Indonesia’s Pertamina, among others. “Additionally, the project will have a significant domestic gas component for in-country consumption in Mozambique to help fuel the economic development,” the OVL statement said, “The FID signifies that the Golfinho/Atum Mozambique LNG project will now advance to the construction phase.” Once Anadarko is taken over by US-based Occidental Petroleum, Occidental has agreed to sell Anadarko’s sub-Saharan African upstream assets, including the Mozambique LNG project, to French oil giant Total SA in a $8.8 billion deal. The transaction, which is contingent upon Occidental completing its acquisition of Anadarko, is expected to close in 2020. Anadarko has awarded TechnipFMC the engineering, procurement, construction and installation (EPCI), worth more than USD 1 billion, of the subsea hardware system for the Golfinho/Atum development. Under the contract, TechnipFMC alongside its consortium partner Van Oord will carry out the offshore installation scope.
Cairn Oil and Gas selects Lloyd’s Register for Integrated Project Management of 41 blocks
Cairn Oil and Gas, the upstream arm of Vedanta Ltd, today announced it has short-listed Lloyd’s Register for integrated project management of 41 blocks won by the company under India’s first oil and gas auction round held under Open Acreage Licensing Policy (OALP). Lloyd’s Register Group provides professional services for engineering and technology that can improve performance and safety of infrastructure projects. “The shortlisting has followed a rigorous bidding process that saw participation from top global players,” the company said in a statement. Cairn was awarded 41 of the 55 blocks under the first round of OALP contracts for which were signed in October 2018. The company said Lloyd’s selection will enable speedy exploration management across the 41 blocks simultaneously with an end-to-end plan under stipulated timelines. Cairn Oil and Gas has applied for Petroleum Exploration Licenses (PEL) in these blocks and the process of obtaining environmental clearances for all the 41 blocks is ongoing. Cairn has already received PELs for 11 blocks so far. The company’s CEO A K Dixit said the interest was garnered from top global players for participating in the India exploration opportunity and the firm is planning for a success case scenario, looking ahead for how production management can be adopted prior to initiating the exploration activities. “This approach, while capital-intensive, is the best way forward to fast-track production and deliver on our vision to contribute to India’s energy security,” Dixit said. He had said in an interview to ETEnergyWorld last week the company plans to award 75 per cent of the work contracts for 41 blocks it had won under the first round of OALP within six weeks. Cairn plans to increase its production to 270 thousand barrel of oil equivalent per day (Kboepd) from 190 Kboedp currently.
HPCL installs reactor at AP refinery under expansion project
Hindustan Petroleum Corp Ltd (HPCL) on Thursday said it has installed country’s largest reactor at its Visakh refinery in Andhra Pradesh as part of the refinery modernization project. As a part of the Visakh Refinery Modernization Project (VRMP), India’s largest full conversion hydrocracker unit (FCHCU) with a capacity of 3.053 million tonnes per annum is being set up. The licensor for this unit is Universal Oil Products (UOP) and the Project Management Consultant is Engineers India Limited (EIL), the company said in a statement. HPCL is expanding the Visakh refinery capacity from present 8.33 million tonnes per annum to 15 million tonnes a year at a cost of Rs 20,928 crore by July 2020. “The first and second stage reactors are the heart of this unit. The First Stage Reactor which is heaviest in India, with an erection weight of 1,646 tones (1,858 tones including internals), has a wall thickness of 254.5 mm and stands 55.6 meters tall. The Second Stage Reactor weighs in at 454 tonnes, has a wall thickness of 184.5 mm and stands 28.5 meters tall,” it said. Both the reactors, supplied by Larsen and Toubro Ltd were shipped via barge from vendor’s workshop at Hazira in Gujarat on March 22 and received at Vizag on April 24. “The second stage reactor was successfully erected on June 11, 2019. The first stage reactor with an erection was successfully erected on June 18. This is one of the heaviest reactors erected in a single piece in the Indian oil industry,” the statement added.
Bangladesh receives interest from 12 companies to build LNG terminal
Bangladesh has received interest from twelve companies to build the country’s first onshore liquefied natural gas (LNG) import terminal, according to three sources familiar with the matter. The South Asian country, which has a population of more than 160 million, is turning to land-based LNG terminals as its first imports of the super-chilled fuel via a floating platform were delayed due to weather and technical issues. Rupantarita Prakritik Gas Co, part of state-owned oil and gas company Petrobangla, earlier this year had requested expressions of interest (EOI) from potential terminal developers for a land-based LNG regasification terminal at Matarbari in the Cox’s Bazar district of southern Bangladesh. Twelve companies have submitted their interest to build the terminal, said two officials from Rupantarita Prakritik Gas Co. The companies include Japan’s Mitsui, South Korean utility KOGAS, and a consortium led by Summit Corp, a unit of Bangladesh’s Summit Group, the officials said. Japan’s Mitsubishi and JERA Co, the world’s largest LNG buyer, are minority stakeholders in the Summit consortium. Summit declined to comment, while the South Korean and Japanese companies couldn’t be reached after office hours. A committee will evaluate the proposals and create a shortlist based on the capabilities and technical assessments of the 12 companies, one of the officials said. It could take more than a year to complete and award the contract for the terminal, the official said. The expressions of interest were initially due on March 20, but the closing date was delayed to this week after the companies requested more time. The expression of interest is for the design, engineering, procurement, construction and commissioning of an onshore terminal that can handle 7.5 million tonnes a year of LNG, including receiving, unloading, storage and regasification. The project is on a build-own-operate basis for 20 years, with ownership to then be transferred at no cost to the Bangladeshi government or a company nominated by the government.