Jharkhand PNG pipeline hits forest clearance, land acquisition hurdle
GAIL India Limited’s plan for supply of Compressed Natural Gas (CNG) and domestic Piped Natural Gas (PNG) in Jharkhand has hit the forest clearance and land acquisition hurdle. GAIL officials said the company plans to commission 22 stations for supply of CNG to 1.25 lakh vehicles in Ranchi and Jamshedpur. It also plans to lay down a 551-km pipeline for supply of piped natural gas (PNG) to 10.46 lakh households across 12 districts, including Ranchi, Chatra, Giridih, Hazaribagh, Bokaro, Ramgarh, Dhanbad, Saraikela, Khunti, Gumla, Simdega and East Singhbhum. “Initially the natural gas will reach in special containers which will be transported by road from Patna. Later, the natural gas will be supplied through Jamshedpur-Haldia and Bokaro-Dharama pipeline popularly known as Pradhan Mantri Urja Ganga. The pipeline under construction will be completed by December 2020,” said K.B.Singh, Executive Director of GAIL eastern region, at the inauguration of two CNG stations in Ranchi on Thursday. “The CNG supply plan is a major step towards the fulfillment of Prime Minister’s dream of developing a gas-based economy and linking Eastern India to the country’s natural gas grid through PMUGY, which will pass through six states, including Uttar Pradesh, Bihar, Jharkhand, West Bengal, Orissa and Assam,” said Singh. Work has started on the Rs 4,366-crore project. “But forest clearance and land acquisition remain major issues in its completion, though we are getting full support from the state government,” Singh admitted on Thursday. “The forest laws are very tight and getting clearances is tough for us. So there are clearance issues with around 114 kms of forest land,” a source in GAIL told IANS. “Land acquisition is another big problem. We find difficult to acquire land and compensate the owners as the land records are as old as 1916 and it is tough to demarcate raiyati land from government land. In many places, a single piece of land has so many claimants. We cannot compensate anyone for land without verifying facts,” said the source. Asked about the state’s single window clearance system to help investors and industries, the source said: “The single widow clearance system exists in Bihar, Jharkhand, Chhattisgarh and Odisha as well, but the ground realities are different.” The GAIL source also spoke about the Maoist menace prevailing in Chatra, Khunti, Gumla and East Singhbhum.
BPCL to invest Rs 1,500-1,700 cr in floating LNG terminal in AP
Bharat Petroleum Corp Ltd (BPCL) plans to invest Rs 1,500-1,700 crore in building a floating liquefied natural gas (LNG) import terminal at Krishnapatnam in Andhra Pradesh by 2022, its chairman D Rajkumar said on Monday. BPCL, the country’s second-biggest state-owned oil refining and fuel marketing company, is betting big on gas business in anticipation of energy consumption basket undergoing change as focus shifts to cleaner sources. The company will hold 74 per cent interest in the project while the remaining 26 per cent will be with Petronet LNG Ltd, he said here. “Initially it will be a 1 million tonne per annum FSRU based terminal which can be scaled up to 3 million tonne or 5 million tonne in future,” he said. The project is likely to be commissioned by 2022. “It (the project) may cost Rs 1,500 crore to Rs 1,700 crore,” he said. The global oil and gas market is going through a transformation as mounting climatic concerns drive changes in the energy mix in favour of natural gas and renewables. In India, natural gas demand is slated to grow at a rate much faster than oil as the share of environment-friendly fuel rises in the energy basket. To tap this opportunity, BPCL has made a foray into city gas distribution (CGD) and is now looking to set up an LNG import terminal of its own. Krishnapatnam will be the sixth LNG terminal to be announced, on the coast. Petronet had previously signed a firm and binding term sheet for developing a land-based Liquified Natural Gas (LNG) terminal at Gangavaram Port in Andhra Pradesh with an initial capacity of 5 million tonne with Gangavaram Port Ltd (GPL) but later dropped it. State-owned GAIL too had planned a facility at Paradip in Odisha but it also dropped the plans. This space was quickly taken up by Adani Group which is building a 5 million tonne facility at Dhamra in Odisha. GAIL as also Indian Oil Corp (IOC) has booked capacity on the Dhamra terminal. IOC recently commissioned a 5 million tonne per annum import facility at Ennore. GAIL had also previously announced plans for setting up an LNG terminal at Kakinada in Andhra Pradesh but the project has not taken off. Hiranandani Group-promoted H-Energy is executing a Rs 3,500-crore project in West Bengal. Rajkumar said BPCL is transferring its gas business to a new subsidiary, Bharat Gas Resources Ltd (BGRL). The company on its own or in a joint venture with other companies now has CGD licence for 37 geographical areas (GAs), he said. Also, BGRL has entered into a long-term sales and purchase agreement to buy 1 million tonne per annum of LNG from Mozambique for 15 years, he said. The company owns 10 per cent interest in Mozambique LNG1 Company Pvt Ltd – the joint venture which is developing a giant gas field offshore Mozambique and converting the gas into LNG for shipping to consuming nations. Anadarko Petroleum Corp of the US is the Operator of the field that holds about 75 trillion cubic feet of recoverable natural gas. In the initial phase, 12.88 million tonne per annum of LNG will be made from the field. The supply is likely to start from Financial Year 2024-25. BPCL is also a co-promoter of Petronet LNG Ltd, along with IOC, GAIL India and Oil and Natural Gas Corp (ONGC). It is also a co-promoter of four city gas distribution companies — Indraprastha Gas in Delhi with GAIL; Sabarmati Gas in Gujarat with Gujarat State Petroleum Corp Ltd (GSPL); Maharashtra Natural Gas and Central U.P. Gas with GAIL.
Pradhan says Rs 1.2 lakh cr investment planned for city gas network expansion
India will see an investment of about Rs 1.2 lakh crore in the roll out of city gas network in almost 300 districts by 2030 as a massive expansion is planned for CNG dispensing stations and pipelines supplying cooking gas to household kitchens, Oil Minister Dharmendra Pradhan said on Monday. With a licence to retail CNG and piped gas to household kitchens given out for 136 geographical areas or GAs in last one year, the coverage of city gas network would be 70 per cent of country’s population, he said here. Pradhan was speaking at an event organised to mark the commencement of work on 50 GAs awarded in the 10th bid round to firms such as Indian Oil Corp (IOC), Adani Gas and Bharat Gas earlier this year. “Five years ago, city gas distribution (CGD) network spanned 34 GAs and now it has expanded to 228 GAs covering 406 districts,” he said. CNG stations retailing the environment-friendly fuel to automobiles has expanded from 938 (five years ago) to 1,769 and will further be expanded to 10,000 by 2030, he said adding that CNG-run vehicles are expected to cross 2 crore, up from about 34 lakhs now. Household kitchens getting piped cooking gas has doubled to nearly 52 lakh and licences awarded would take the number to 5 crore by 2030, he said. Oil regulator Petroleum and Natural Gas Regulatory Board (PNGRB) has, in one year, awarded licences for setting up city gas distribution networks in 136 GAs. While Rs 70,000 crore investment was committed in 86 GAs awarded in the 9th city gas bid round in August last year, another Rs 50,000 crore was committed in the 50 GAs awarded in the 10th round in March this year. “The investment proposed is about Rs 1.2 lakh crore,” he said. “Less than 20 percent of the population was covered by city gas distribution network in 2014 and now after award of 10th bid round, this will reach 70 per cent.” While 86 GAs, made up of 174 districts, were offered for bidding in the 9th round that concluded in August last year, 50 GAs, comprising of 124 districts, were offered in the 10th round. The massive expansion of city gas distribution network is a part of government efforts to raise the share of natural gas in the energy basket to 15 per cent by 2030 from current 6.2 per cent. Natural gas is cleaner and environment-friendly fuel and is intended to replace some of the polluting coal and liquid fuels consumed currently. With the completion of 10th bidding round, CGD would be available in 228 GAs comprising 406 districts spread over 27 states and Union Territories covering approximately 70 per cent of India’s population and 53 per cent of its geographical area. As many as “225 bids from 25 entities were received up to February 5, 2019 – the bid closing date (for the 10th round). And the PNGRB finalised the bids in a record time of 21 days,” PNGRB Chairman D K Sarraf said. Prior to this, CGD licences had been given for 178 GAs covering 280 districts (263 complete and 17 part) spread over 26 states and UTs. These covered about 50 per cent of India’s population (as per 2011 census) and 35 per cent of its geographical area. State-owned IOC won licences to retail gas in 10 cities, while HPCL won rights for nine towns in the 10th city gas bid round. IOC won city gas distribution licences for nine cities, most of them in Bihar and Jharkhand, on its own and one in a joint venture with Adani Gas. HPCL, a subsidiary of state-owned Oil and Natural Gas Corp (ONGC), won licences to retail CNG to automobiles and piped natural gas to households in nine cities in Uttar Pradesh and West Bengal. A consortium of LNG Marketing Pte Ltd and Atlantic Gulf & Pacific Company of Manila Inc won rights for nine cities in Andhra Pradesh, Karnataka, and Kerala. Gujarat Gas Ltd won rights for six cities, while state gas utility GAIL India’s unit GAIL Gas Ltd won rights for four. Indraprastha Gas Ltd and Torrent Gas won rights for three cities each, while Adani Gas and Bharat Gas Resources Ltd, a subsidiary of state-owned Bharat Petroleum Corp Ltd (BPCL), bagged two cities each. In the 10th bid round, 2 crore piped natural gas connections have been committed to be given and 3,500 CNG stations will be set up. Besides, a 58,000-inch kilometer of steel pipeline will be laid for the supply of gas.
Multiple time-consuming clearances creating hurdles for CGD players: D K Sarraf, chairman, PNGRB
City Gas Distribution (CGD) players in the country are facing serious difficulties in getting permissions and clearances from state governments and municipal corporations for setting up CGD business, D K Sarraf, Chairman of downstream oil sector regulator Petroleum Natural Gas Regulatory Board (PNGRB) has said. “Let me confess that what has been done by team PNGRB is far easier than what remains to be achieved by CGD companies. Our CGD entrepreneurs are facing difficulties in getting Right of Use and permissions for laying pipelines from Indian Railways, NHAI, forest department and state governments,” Sarraf said at an event on the commencement of work of projects under the tenth City Gas Distribution (CGD) round. “(There is) uncertainty created by push towards EVs, though it has been clarified to some extent,” he added. He also said the industry is fully charged and committed to make an additional investment and create jobs and any encouragement given by the government will go a long way in the development of the gas industry in India. The winning companies under the tenth CGD round have committed work program of more than 3,500 Compressed Natural Gas (CNG) stations, 2 crore Piped Natural Gas connections and 58,000 inch KM of steel pipeline over 8 years, with a likely investment of Rs 50,000 crore. “The entities are required to pay very high charges to the state governments and municipal corporations for permissions to lay pipelines. The policies for CGD sector and single-window clearance mechanism is in-place in a few states. Multiple and time-consuming permissions and clearances are required for starting CNG stations, availability of land for stations is another challenge. Most importantly, GST remains to be applicable on natural gas,” Sarraf said, adding the regulator and the industry are confident the petroleum ministry will resolve the bottlenecks. Post the completion of the tenth CGD round, natural gas will be available in 228 Geographical Areas, covering 27 states and union territories, which will result in access to gas for 70 per cent of the country’s population and 50 per cent of its geographical area. The former Chairman of state-run petroleum explorer Oil and Natural Gas Corporation (ONGC) highlighted multiple initiatives being taken by the regulator including bringing in competition in CGD after end of market exclusivity, revising the bidding model for natural gas pipelines, determining the tariff of natural gas pipelines and starting of a gas trading platform. He said the regulator has cleared pipeline projects of over 9,000 KM across the country and is now commissioning a study to identify the gaps in the availability of natural gas infrastructure.
Govt to offer six oil & gas blocks in unexplored Vindhyan, Bengal basins
The government is set to offer six blocks in the unexplored Vindhyan and Bengal sedimentary basins for oil and gas exploration. Under a new policy, the Centre will not charge royalties on production from companies operating in these areas. The Directorate General of Hydrocarbons (DGH) will be inviting bids for seven oil and gas blocks during the fourth round of bidding under the Open Acreage Licensing Policy (OALP), likely to open on August 28, sources in the know said. The only block on offer in an already explored area in OALP-IV will be in the Rajasthan basin. Investors will get a window of 60 days to submit their bids. The government sees this as a milestone in the country’s hydrocarbon sector, as investments so far were limited to only seven of the 26 sedimentary basins in the country. According to the latest DGH estimates, the 26 basins have in-place resources of 41.872 billion tonnes of oil-equivalent (BTOE), of which 29.796 billion tonnes is undiscovered hydrocarbons. Bids will be floated after companies submit expressions of interest for these areas, incentivised by a February 19 decision by the Cabinet that waived royalties for unexplored blocks. It also stated that in basins where there was no commercial production, exploration blocks would be bid out exclusively on the basis of exploration work programme, without any revenue or production share to the government. The move is likely to draw more interest from global oil and gas majors, which had not shown much interest in the first three rounds of the OALP. The Vindhyan basin covers areas under the Son valley, Bundelkhand and Rajasthan, while the Bengal basin is in West Bengal and extends into the offshore region of the Bay of Bengal. The seven category-I explored basins in India are Cambay, Mumbai Offshore, Rajasthan, Krishna Godavari, Cauvery, Assam Shelf, and Assam-Arakan Fold Belt. Contracts for 32 blocks under the second and third rounds were awarded on July 16. Those rounds saw participation from private players like Vedanta, BP and Reliance Industries, and state-run majors like ONGC, Oil India and Indian Oil Corporation. The first OALP bid round was launched by the government in January 2018, and received 110 bids for 55 blocks covering 59,282 sq km area. The blocks were awarded in October 2018 and production from the first round blocks is expected by 2023. To achieve the target of reducing crude oil imports by 2022, state-run companies have increased their share of investment in the recent years. Between 2016-17 and 2018-19, ONGC made an investment of about Rs 750 billion, while Oil India Rs 96.89 billion in exploration and production activities. Investments made by private and joint venture companies during the period were $562 million under the production sharing contract regime, which was in place before the OALP.
Frontline buys 10 oil tankers from Trafigura for $675 mln
Frontline will buy 10 Suezmax oil tankers from Trafigura in a cash and share deal worth up to $675 million, and may buy a further four vessels later, the two companies announced on Friday. The deal will allow Frontline, which is controlled by Norwegian-born billionaire John Fredriksen, to boost its dividend in the time to come, the Oslo-listed tanker operator said. “The structure of the transaction creates an immediate impact to our earnings at a time when we expect freight rates to increase significantly,” Frontline Chief Executive Robert Hvide Macleod said in a statement. Trafigura will take an 8.5% stake in Frontline, valued at $128 million, and will receive a cash payment of between $538 million and $547 million. The vessels were all built in 2019 and have been fitted with exhaust gas cleaning systems.
Saplings planted at Goa fuel pump to absorb harmful petroleum fumes
Bamboo palm saplings which absorb benzene and other formaldehyde emitted from petroleum vapour have been planted at an Indian Oil petroleum pump in the heart of Panaji city. Three areca palm and two spider plant saplings were planted by North Goa district collector R Menaka. “These special breeds of plants contribute to an eco-friendly environment as they absorb benzene and other formaldehyde generated from petroleum vapours at pumps,” Siddhartha Swarup, chief divisional retail sales manager, Indian Oil, Goa, told TOI. The bamboo palm is popular in purifying air due to its tropical look and insect-repelling quality, Swarup said. “It packs a big punch when it comes to purifying the air. The bamboo palm can remove not only substances like benzene and formaldehyde but also chloroform, carbon monoxide and xylene,” he added. Under the Swachh Bharat Mission, Menanka also inaugurated a renovated toilet facility at the petrol pump in the vicinity of the Panaji Kadamba bus stand for both male and female customers visiting the pump. The toilet facility, as well as drinking water with a purifier and water cooler, is available at no cost to customers at the petrol pump. Menaka discouraged single-use plastic by distributing jute bags to customers at the petrol pump at the end of the programme.
India could review long-term LNG contract prices: Oil minister Pradhan
India will look at reviewing the pricing of its long-term liquefied natural gas (LNG) deals at an “appropriate time” due to a fall in spot prices, oil minister Dharmendra Pradhan said on Monday. “We will look at reviewing long-term LNG contracts,” Pradhan said at a natural gas event in New Delhi. The spot price of imported LNG into Japan, one of world’s biggest importers of the super-cooled fuel, has more than halved in the last year. This has led buyers in Japan and China to request delays in term cargoes, while many other countries are considering lifting lower term volumes, experts have said. “Long-term contracts are supposed to be honoured. We will look at an appropriate time (to review). In the past also we had renegotiated the deals,” Pradhan said. India’s biggest gas importer Petronet LNG Ltd said earlier this month that it would consider renegotiating its long-term LNG supply deals if spot prices remained weak for a prolonged period. “We have to be sensitive to the international market. If spot prices continue to be low for 2-3 years then you don’t have much of a choice, and there would be a case to look at renegotiation,” Prabhat Singh, Petronet’s managing director, told Reuters. Pradhan said India is investing up to 5 trillion rupees ($70 billion) to boost its natural gas sector, including city gas distribution projects, setting up LNG liquefaction facilities and natural gas exploration. Prime Minister Narendra Modi has set a target to raise the share of natural gas in the country’s overall energy mix to 15% by 2030 from the current 6.2%.