India eases rules for entry into fuel retail sector: Javadekar
India’s cabinet on Wednesday relaxed norms for setting up fuel stations in the country, the information and broadcasting minister said, a move that could help private and foreign firms to enter a sector dominated by state-owned companies. The new rules will allow companies to set up electric vehicle charging stations, and sell gas, petrol and diesel at their pumps, Prakash Javadekar told a news conference. “Companies would be able to sell all sorts of transportation fuels at their petrol pumps,” Javadekar said. Global oil companies including Saudi Aramco, Trafigura’s downstream arm Puma Energy and France’s Total are interested in setting up fuel stations in India, where fuel demand is expected to rise in the years to come.
Brookfield acquires 25-percent stake in $8B Dominion Energy LNG facility at Chesapeake Bay
Dominion Energy is selling a quarter stake in its East Coast liquefied natural gas (LNG) facility for more than $2 billion. Brookfield Super-Core Infrastructure Partners will pay to obtain a 25-percent non-controlling equity interest in Dominion’s Cove Point LNG LP. The Dominion entity owns a LNG import, export and storage facility on the western shore of Chesapeake Bay in Maryland. The Brookfield infrastructure fund’s investment will total a little more than $2 billion in cash consideration, excluding working capital. The transaction also gives Cove Point an implied capital value of more than $8 billion. The deal is part of Dominion’s previously announced intention to established a permanent capital structure for Cove Point. “The agreement highlights the compelling intrinsic value of Cove Point and allows us to efficiently redeploy capital toward our robust regulated growth capital programs,” Dominion CEO Thomas Farrell said in a statement. “We are very excited to have a highly respected infrastructure investor such as Brookfield as our partner in this world-class facility.” These assets provide liquefaction, gasification, transportation, storage and peaking gas supply services to customers in the United States, India and Japan. It also includes a 136-mile pipeline that interconnects the facility with the U.S. interstate pipeline system. In 2018, the company completed a $4.1 billion expansion to enable natural gas exports. The Cove Point transaction with Brookfield is expected to close by the end of this year. Dominion Energy will retain full operational control of the facility and its services, and current employees and customers will not be affected by the recapitalization agreement. Utilities such as Dominion, AES and Sempra are investing in LNG projects.
I see great partnership in energy sector between India, Russia: Oil minister Pradhan
Union Petroleum and Natural Gas Minister Dharmendra Pradhan on Wednesday said he sees a great partnership in the energy sector between India and Russia. “I see a great partnership in future, especially in the energy sector between the two countries (India and Russia). Russia is the most favoured overseas investment destination for India,” he told reporters here. Earlier in the day, Pradhan held a “productive meeting” with First Deputy Minister for Development of the Russian Far East and Arctic Sergey Tyrtsev. “Had a productive meeting with H.E. Sergey Tyrtsev, First Deputy Minister for Development of the Russian Far East and Arctic. We discussed about furthering energy cooperation between India and Far East Russia particularly on sourcing coking coal and other minerals,” the minister tweeted. Representatives of Indian steel and coal companies held separate meetings with their Russian counterparts. “Long-term cooperation with Russian Far East in the coal sector will help India bridge the demand gap of coking coal in the country,” Pradhan said in a follow-up tweet. Pradhan met with senior management of Vostochny intermodal container port in the Russian Far region where he discussed ways to secure more coking coal for the steel industry in India. “Met with senior management of Vostochny intermodal container port. One of the oldest and year-round operation port in the Russian Far East specialised in coal handling and suitable for handling large-tonnage ships. Discussed with Port authorities about their expansion plans and also on ways to secure more coking coal for the domestic steel industry,” he tweeted. Pradhan on Tuesday visited the Zvezda Shipbuilding Complex. The shipyard deals in manufacturing various kinds of vessels, including LNG carriers, offshore vessels and passenger ships. The minister is currently on a four-day visit to Russia and Japan from October 22 to 26. His visit comes as a follow up to the visit of Prime Minister Narendra Modi to Vladivostok for the Eastern Economic Forum in September. The minister, who is accompanied by an official and business delegation, is in Vladivostok from October 22 to 25.
In Brazil, Norway’s Equinor eyes natural gas infrastructure
Norway’s Equinor ASA is scouting locations on Brazil’s coast to install new natural gas infrastructure, the company’s Brazil chief said, as the firm’s gas-heavy offshore fields come on-line in the coming years. Natural gas is considered both a promising opportunity and a vexing problem in Brazil. The Latin American oil powerhouse is rapidly developing a prolific oil area off the nation’s southeastern coast known as the pre-salt. Many of the region’s assets have significant amounts of natural gas, but consumption is low among Brazilians and the nation has few pipelines and terminals to facilitate exports. As a result, firms have largely opted to “re-inject” the gas, in a process that increases crude output. That will only work for so long. Some fields coming on-line in the pre-salt have too much gas to re-inject. Two massive government auctions in early November in a gas-rich zone are likely to add to the conundrum. In an interview, Executive Vice President Margareth Ovrum estimated Equinor’s gas condensate Pao de Acucar field would come online in the mid-2020s, making it “probably the first field coming on-line (in Brazil) that needs a gas export solution onshore.” Other firms will be watching Equinor’s experience closely. “We are assessing different opportunities for landfall,” Ovrum told Reuters on Monday at the company’s office overlooking Rio de Janeiro’s Guanabara Bay. “Should we extend a terminal? Do we build a new one? What do we do on the (natural gas liquids) side?” The firm is having similar conversations at its Carcara field. It expects to begin “first phase” production there in 2023 or the first half of 2024, she said. Equinor has not decided on when it will begin phase two, she added, but that could involve constructing natural gas infrastructure as well. “FIGHTING FOR VALUE” Equinor is one of 14 firms signed up for the so-called transfer-of-rights oil bidding round on Nov. 6, in which Brazil’s government expects to rake in around $26 billion in signing bonuses. While the transfer-of-rights assets are considered one-of-a-kind as state-run Petroleo Brasileiro SA has already done exploratory work in the region, some major oil companies has raised concerns about the prices of the assets. Ovrum said Equinor was studying the potential profitability of the areas, adding that Brazil was competing against other basins. “Obviously, it’s a very high signature bonus,” she said. “You are fighting with other shelves, whether it’s Argentina, or the Gulf of Mexico, or Norway or wherever. And you’re not fighting for the volume, your fighting for the value.”
India’s September oil imports at three-year low, Saudi regains top spot
India’s oil imports fell to their lowest in more than three years in September to 3.82 million barrels per day (bpd), data obtained from industry and shipping sources showed, as some refiners cut purchases due to shutdowns for maintenance and fuel upgrades. Last month, Saudi Arabia replaced Iraq as top oil supplier to India after a gap of about 13 months, the data showed. September oil imports, which dropped below 4 million bpd for the first time since June 2016, were about 18.7% lower than in August and down 8.4% from a year ago, the data showed. The fall in oil imports limited India’s fiscal deficit for September, but it also potentially points to a general economic and industrial slowdown. “Lower imports were largely due to refinery turnarounds as refiners have to supply Euro VI fuels in the country from an April 1 deadline. Heavy rains and slower industrial and construction work drain down the demand for refined fuels,” said Ehsan Ul Haq, an analyst with Refinitiv. For a table on shutdowns at Asian refineries see: Falling industrial demand dragged India’s fuel demand to its lowest in more than two years in September. “Due to weakening fuel demand there was an inventory build up of refined products so we had to cut crude processing and restrict imports,” said an official at one of the refiners. Indian refiners’ crude processing declined about 7% in September from a year ago, government data showed on Tuesday. SAUDI OUTSHINES IRAQ Saudi Arabia supplied about 830,500 bpd oil to India in September, compared with 821,000 bpd supplied by Iraq, the data obtained from sources showed. The sources declined to be identified. India restricted imports from Iraq in September as it had imported record volumes of Basra oil in August. “By reducing their official selling price (OSP) Saudi attracted more buyers compared to others, they continue to meet the demand even after outages due to attacks on its two fields,” Haq said. Saudi Arabia has cut its September OSP for its Arab Light grade for Asia by $0.75/barrel compared to a $0.40/barrel reduction in Iraq’s Basra Light. The United Arab Emirates emerged as India’s third biggest supplier in September after a gap of seven months, knocking Nigeria into fourth place, a position held by Venezuela in August. The UAE was fifth biggest oil supplier in August. Venezuela was in sixth place behind Angola as private refiner Nayara Energy did not ship oil from the Latin American country in September and instead discharged old cargoes, the data showed. Lower imports by Nayara had also dented India’s overall purchases in September, the data showed. “Any sustained decline in India’s oil imports and fuel demand might prompt global agencies to revise down their oil demand growth forecast,” Haq said. OPEC and the International Energy Agency (IEA) have trimmed their global oil demand growth forecast for 2019. The IEA expects 2019 global oil demand growth to be the weakest since 2016, following evidence of a slowdown in economies including Europe, India, Japan, Korea and the United States. The IEA said India’s oil consumption rose by 235,000 bpd on average during 2014-18, nearly a fifth of the global total. The growth could moderate to 170,000 bpd in 2019, the slowest since 2014, due to an economic slowdown, the IEA said. Asia’s third-largest economy expanded by just 5% in the June quarter, its slowest pace since 2013. The country’s central bank has also cut its growth forecast for 2019-20 to 6.1% from prior projection of 6.9%.
L&T wins over Rs 7,000 crore contract from HPCL
Engineering and construction major Larsen & Toubro on Wednesday said its arm LTHE has won a mega project from Hindustan Petroleum Corporation. As per the company’s scheme classification, the mega project bagged by L&T Hydrocarbon Engineering Ltd (LTHE) is worth over Rs 7,000 crore. The project has to be completed on engineering, procurement, construction and commissioning (EPCC) basis. According to a statement by L&T, the project is for setting up a residue upgradation facility for Visakh Refinery Modernisation Project at Hindustan Petroleum Corporation Ltd’s (HPCL) Vizag Refinery. The residue upgradation facility is licensed by Chevron Lummus Global with a capacity of 3.55 MMTPA. This plant will enable HPCL to convert the heaviest oils into high-quality Euro 6 diesel while simultaneously eliminating fuel oil production, as well as increasing feedstock and product flexibility. This kind of facility is being set up for the first time in India, the company said. The contract is awarded through an international competitive bidding on lump sum turn key basis and is part of HPCL’s ongoing Visakh Refinery Modernisation Project wherein LTHE is already executing two packages. “L&T has a proven track record of over 25 years in refinery and petrochemical sector and bagging this contract from HPCL reinforces our integrated capabilities in executing critical plants for the sector,” Subramanian Sarma, MD and CEO, LTHE said. L&T is an Indian multinational engaged in technology, engineering, construction, manufacturing and financial services with over USD 21 billion in revenue. It operates in over 30 countries.
Petrobras, Brazil’s government near oil marketing deal: official
Brazil’s Petrobras could take over marketing of the government’s share of crude from offshore oilfields, a government official told Reuters, adding significantly to the state-run oil firm’s trading operations. In an interview on Monday, the head of Pre-Salt Petroleum, better known by its Portuguese acronym PPSA, said it is close to inking a deal in which Petrobras’ trading desk will manage the oil that Brazil’s government receives from private sector firms. The potential deal, being discussed ahead of a blockbuster season for oil bidding rounds in the South American nation, would significantly boost the volume of crude traded by Petroleo Brasileiro SA, as the firm is formally known. Petrobras declined to comment on the negotiations. On Nov. 6, a who’s who of international oil firms will compete to snap up prolific offshore oilfields in Brazil in a process expected to fetch some $25 billion for the government. The following day, firms will compete in a separate process expected to bring another $2 billion into state coffers. Following significant exploration work in the area, the fields are known to hold billions of barrels of untapped crude. All winners will hand a significant chunk of that oil over to the government, via the PPSA, as is standard practice within Brazil’s so-called “pre-salt” oil producing region. Due mainly to the upcoming rounds, the oil that the PPSA manages could soar from just a few thousands barrels per day (bpd) last year to around 500,000 bpd by 2028 according to preliminary estimates, PPSA head Jose Eduardo Gerk said in an interview. That compares with Petrobras’ current exports of 583,000 bpd in the September quarter. Last year, the PPSA sold its oil on the spot market and via auctions. But that is set to change as the agency closes in on the outsourcing contract with Petrobras, Gerk said. “Since I got here (in April), the negotiations … with Petrobras have gone forward and we hope to be able to come to an agreement by the end of the year,” he told Reuters. With the oil it receives set to skyrocket in the coming years, the PPSA is also set to grow. Currently a relatively sleepy agency of 44 employees located in downtown Rio de Janeiro, Gerk said the agency hopes to hire another 50 in-house employees by 2021.
IOC keen to open another oil terminal in Karnataka
In an attempt to cater to the demands of petroleum products including Petrol, Diesel, Kerosene and Liquified Petroleum Gas (LPG) from north Karnataka, Indian Oil Corporation (IOC) is planning to open another terminal in the state. Speaking to TOI, DL Pramodh, executive director of IOC (Karnataka), said they were looking for 120-150 acres of land in Davanagere-Chitradurga region to set up another terminal as the demand for their products are growing day by day. “We are planning to invest around Rs 400-500 crore and already in talks with Karnataka Industrial Areas Development Board (KIADB). This will not just cater better but also will lessen the burden on Bengaluru’s Devanagonthi terminal located near Hoskote which sells around five million tonnes annually,” he said. According to IOC, the 92 acre terminal situated on the outskirts of Bengaluru caters to 30% of the Karnataka’s demand for petroleum products. The company said, “Presently, we sell about five millions tonnes of fuel in Karnataka annually and have a market participation of 44%. The terminal in Bengaluru has a product coverage of 10 days for petrol and diesel, 14 days for Kerosene and five days for aviation fuel.” During 2019-20, Indian Oil has released new connections to the tune of 2.38 lakhs out of which 1.47 lakh were under Ujjwala scheme, which is highest for the industry, the company said. IOC terminal to go eco-friendly. With Supreme Court directing union government to implement Bharat Stage VI (BS VI) emission norms before April 2021, the IOC said that they are going to replace BS IV with BS VI from early 2020 to make the petroleum products more eco-friendly.