Petronet in talks with IGL, GSPC to set-up LNG pumps on Delhi-Mumbai highway
Petronet LNG, India’s largest natural gas importer is in talks with Indraprastha Gas Limited (IGL) and Gujarat State Petroleum Corporation (GSPC) to jointly set-up liquefied natural gas (LNG) pumps in six locations on the Delhi-Mumbai Expressway, Prabhat Singh, chief executive officer (CEO) at Petronet told media on the sidelines of Bloomberg New Energy Finance (BNEF) summit in New Delhi on Friday. “We are initially looking at starting this in six locations three each with IGL and GSPC. Once everything is frozen we will float tenders inviting dealerships for setting up LNG retail outlets in these locations. The first outlet should be ready within 10 months from the date of floating the tender. We should be able to float these tenders in 2-3 months,” Singh said. In order to increase the use of natural gas in the mobility sector, the company has been trying to push for introducing LNG in the heavy vehicle category. The company had originally planned to set-up LNG pumps across the Delhi to Trivandrum highway, however, after further evaluation it decided to first focus on the Delhi-Mumbai Expressway. While replying to a question on whether fleet owners and manufactures are on board for using LNG as a fuel and manufacturing special LNG vehicles, Singh added, “Stakeholders are warming up to the idea and business opportunity it presents, once the pilot starts this new model will get the push it needs. We have already placed orders for four LNG buses from the Tatas’ which we will use in our Dahej facility.” Singh had earlier told ETEnergyWorld that the company had also requested the petroleum ministry to ask finance ministry for exempting custom duty on LNG trucks. Talking about Petronet’s overseas ventures, Singh said that discussions for setting up a floating LNG terminal for Sri Lanka has shown progress. “Talks have picked up pace with Sri Lanka for the proposed floating LNG terminal, they have formed a committee post the Cabinet approval, we have given them the commercial contracts and we are expected to begin negotiating on the terms now. Sri Lanka Port Authority will be the fourth partner in the project,” Singh said. He added that sourcing LNG for the terminal will be based on economics and can be sourced from Ennore or Kochi or a cheaper alternative. Petronet along with Japan’s Mitsubishi, Sojitz Corp and Sri Lanka Port Authority plan to set-up a 2.6-2.7 million tonne floating LNG terminal near Colombo, Sri Lanka. The company had also signed a Memorandum of Understanding with Bangladesh’s national oil company Petrobangla to set up a 7.5 million tonne LNG terminal on the Kutubdia island back in December 2016. However, according to Singh, a new site has now been identified for the proposed terminal. “Bangladesh, due to defence reasons, cancelled the earlier identified site of Kutubdia island and now have zeroed in on Maheshkhali for the terminal. As it is a new site the tender process has started from the beginning and we have submitted our bid,” Singh said. According to Petrobangla’s 2017 annual report the project is expected to be commissioned by December 2021.
Numaligarh Refinery Limited received its first consignment of imported Miri Crude Oil from PETRONAS
Assam based Numaligarh Refinery Limited (NRL) on Sunday received its first consignment of imported Miri Crude Oil from PETRONAS, Malaysia. A railway rake comprising of 50 Tank Wagons and carrying around 2,760 Metric Tonnes of Crude Oil reached Numaligarh from Haldia port, West Bengal from where it was dispatched. Miri Crude Oil is low in sulphur and is close in specifications to Assam Crude Oil, also known as Sweet Crude for its low sulphur content, which the refinery is currently processing from the Oil fields of Upper Assam. NRL stated that this is for the first time that Crude Oil is being imported by NRL to be processed in the Refinery. This would help NRL attain better capacity utilization of its existing refining capacity of 3 MMTPA (million metric tonnes per annum); which has till now been constrained due to non-availability of adequate domestic Crude Oil. The Refinery has also embarked on a mega Refinery expansion project to treble its capacity from 3 to 9 MMTPA and developing capabilities for sourcing of Crude Oil augurs well for its future. ‘This landmark development would assist us in enhancing Refinery throughput and as our distillate yield is high, this will increase our margins’, Managing director of NRL, S.K. Barua said on the development. The refinery said, “Crude Oil availability in North East region has gradually declined over the years and is not able to cater to the requirement of 7 MMTPA for all the 4 North East refineries put together. As a result, the Guwahati – Barauni Pipeline which was earlier being used to transport Crude Oil from the region to other parts of the country is now being utilized for the reverse flow of Crude Oil into the region”.
Import dependence rises as crude oil & gas output declines
Crude oil and gas output has declined in the first quarter of the current fiscal year, further increasing India’s dependence on imports to meet its energy needs. Crude oil output fell 6.8% to 8.2 million metric tonnes (MMT) while gas slipped 0.5% to 8.03 billion cubic meters (BCM) in the first quarter from a year earlier. This raised India’s import dependence in oil to 85.2% from 83.8% in the yearago quarter. In gas, it increased to 50.4% from 48.7%. Crude oil output in April-June shrank 4.74% from a year earlier for ONGC and 6.8% for Oil India. For private operators, the fall was sharper at 6.8%. Natural gas production rose 3.7% and 1.5% at ONGC and Oil India respectively during the quarter but this was more than offset by declines at private operators such as Reliance Industries and Vedanta where output slipped 18%. India has struggled to raise its oil and gas output for years. Policy reforms and initiatives by explorers in recent years have had little impact on output, leaving the country dependent on foreign suppliers and vulnerable to the geopolitics of the international oil market. Dependence on oil imports hurts local currency and affects the trade balance. India will likely spend Rs 800,000 crore on oil imports in 2019-20, as per an oil ministry’s estimate that assumes an oil price of $66/barrel and average exchange rate for Rs 71 against the dollar. In early 2015, Prime Minister Narendra Modi had set a target of cutting oil import dependence by 10% from 77% then. But imports have increased as output in ageing fields is falling and there are no major discoveries. The less-than-projected output from fields, operational difficulties, delay in drilling new fields and less offtake by consumers in some regions together contributed to production decline in the April-June quarter, according to the monthly production report from the oil ministry.