India’s IOC close to deal for Panama-flagged vessel as Indian vessels fail to match
India’s top refiner Indian Oil Corp is close to chartering a Panama-flagged ship rather than an Indian vessel in its first tender to hire an oil tanker with scrubbers that remove sulphur emissions, sources with knowledge of the matter said. In December last year, state-owned IOC issued a global tender and offered Indian shippers the first right of refusal as the nation seeks to boost its shipping industry. India, the world’s third-biggest oil importer, wants to promote the market share of its vessels in bringing in crude imports. But it is the Panama-flagged very large crude carrier (VLCC) Bright Pioneer, owned by Nissen Kaiun Co Ltd, that has emerged as the likely winner for a daily rate of $30,000-$32,000, the sources said. None of the Indian companies could match the bid, they said. “Indian companies declined the first right of refusal,” said one of the sources. That will be a blow to the federal shipping ministry, which wants the state-refiners to sign five-year contracts with local shipping firms in a move designed to shift freight worth billions of dollars to Indian flag carriers. They include Shipping Corp of India (SCI), Mercator Ltd, Great Eastern Shipping Co and Essar Shipping. Indian companies, including SCI, Great Eastern and Seven Island Shipping participated in the IOC tender, the sources said. The introduction of the scrubbers is important because the International Maritime Organization (IMO) is introducing the rules on marine fuels from the beginning of 2020, limiting the sulphur content to 0.5 percent, down substantially from the current 3.5 percent, to curb shipping pollution. IOC will be using Bright Pioneer from January for at least five years, giving its Singapore-based operator Global United Shipping Company a period of six months to install the scrubbers. IOC and Global United Shipping did not respond to Reuters emails seeking comments. By stripping out sulphur emissions, scrubbers allow shippers to use dirtier fuel oil but still meet new global requirements for lower emissions. The IMO says that when the new rules come into force it will ban ships that do not have scrubbers from carrying any fuel oil, making it easier to catch cheaters. The duration of the IOC contract can be extended by another two years to a total of seven.
Govt lowers tariff for KG Basin pipeline network by 64%
The downstream regulator has fixed about 64 per cent lower tariff for the Krishna-Godavari basin gas pipeline network at Rs 16.14 per million British thermal units (mmbtu), according to an order by the Petroleum and Natural Gas Regulatory Board (PNGRB). The previous tariff was Rs 45.32 and India’s biggest pipeline operator, GAIL, had proposed a revision to Rs 47.20/mmbtu for the pipeline network that begins from Krishna-Godavari basin, the order issued late on Friday said. However, the Board has fixed tariffs for Jagdishpur-Haldia-Bokaro-Dhamra pipeline and Hazira-Vijaipur-Jagdishpur pipeline in line with GAIL’s proposal. The new tariffs are applicable from today (Monday).
Gujarat gas price cut comes as a major relief for industrial units
In a major relief to scores of industrial units in Gujarat that use natural gas as fuel, the state government on Monday announced a relief of Rs 2.50 per SCMD (standard cubic meter per day) in the price of natural gas used by them. The decision has been taken to encourage increased usage of natural gas by small, medium and bigger industrial units in the state. “The announcement follows a suggestion by the Gujarat chief minister that industrial units be provided a relief in prices of natural gas to encourage pollution-free production in the state,” the government said in an official statement. As many as 8,910 industrial units in India consume natural gas as fuel. Of this, more than 50% or 4,903 are located in Gujarat. “By offering relief in the natural gas price, the state aims to make various goods available at cheaper rates to the people of the state. The relief will also make natural gas attractive to other industrial units which currently do not use natural gas,” the statement added. Stating that steps are being taken to reduce carbon emission in Gujarat, the state government further said that natural gas is not only sustainable but also cheaper, cleaner and safer than other fuels such as coal or diesel. Last week, the state government announced that more than 300 CNG stations would be set up across Gujarat over the next two years. These stations would be set up under the state’s ‘CNG Sahbhagi Yojana’.
ONGC, Indian Oil join hands to reduce carbon emission, enhance oil recovery
Energy major ONGC has teamed up with Indian Oil Corporation for enhanced oil recovery by injecting carbon dioxide captured from IOC’s Koyali refinery in Gujarat. The memorandum of understanding is aimed to establish a framework for mutually beneficial cooperation in carbon dioxide-based enhanced oil recovery as a mode of carbon capture utilization and storage (CCUS). “The common objective is to address some of the biggest challenges of our country in particular and the world at large, namely energy security and climate change,” ONGC said in a statement. “It is a landmark event in the history of the Indian hydrocarbon industry, with two its largest conglomerates agreeing to jointly work on CCUS,” it added. CCUS is known to be an effective method of enhanced oil recovery globally and is playing an increasingly important role in achieving the mission of carbon neutrality. The idea of the MoU is to replicate the global success story in India. The collaboration under this MoU focuses on the development of carbon dioxide capture plant at Indian Oil’s Koyali refinery with appropriate carbon capture technology, development of a business model, increasing domestic oil production through carbon dioxide-based enhanced oil recovery in Gandhar field. Besides, the inclusion of this project as part of a national emission curtailment measure is aimed at supporting the country’s low-carbon development goals. The project will add up a new dimension towards the national vision of CCUS and will infuse a new life to the depleted matured oil fields of ONGC. The learning curve from this endeavor will create a knowledge base to further expand the deployment of CCUS in India. “The success of CCUS in India will not only increase domestic oil production but also cater to address India’s nationally determined contributions of reducing the emission intensity of GDP by 33 to 35 percent by 2030 as per the Paris agreement,” according to a statement.
Gail India issues tender to sell and buy LNG
GAIL India has offered two cargoes of liquefied natural gas (LNG) for loading from the Cove Point plant in the United States in August and November, two industry sources said on Tuesday. The cargoes will be offered on a free-on-board (FOB) basis, they said. GAIL is also seeking an LNG cargo for India’s Dahej terminal for late December delivery on a delivered ex-ship (DES), the sources said. The tender for the swap deal closes on July 3, they added.