RIL plans to invest Rs 70,000 crore for setting up crude-to-chemical projects at Jamnagar
Mukesh Ambani-led Reliance Industries (RIL) plans to invest Rs 70,000 crore for setting up crude-to-chemical projects adjacent to the existing Jamnagar site, an integrated petroleum refinery and petrochemical complex, as part of its oil-to-chemical strategy, the company said in an application to the environment ministry. “Aligned to the national Make-in-India objective, RIL plans to optimally leverage the Jamnagar refinery + gasification assets, as a future growth platform, to maximize petrochemicals, termed as crude-to-chemicals. For setting up the crude-to-chemical growth projects in Jamnagar, RIL proposes to develop a total area of 2,000 acres adjacent to the existing Jamnagar supersite,” the company said as part of the application. RIL plans to undertake setting-up a host of oil-to-chemical units including multi-feed steam cracker to maximize chemical monomers, setting-up of Multizone Catalytic Cracking units for the conversion of feedstock to high-value propylene and ethylene, converting existing fluid catalytic cracking units to Petro FCC for maximizing production of olefins and aromatics instead of gasoline. The company also said it plans to set-up aromatic complex along with chemical complexes to produce streams of C1, C2, C3, C4 and C6 chemicals. Saudi Aramco, the world’s largest oil producer, earlier this year announced its decision to invest $75 billion to pick up a 20 percent stake in RIL’s oil-to-chemical business. The partnership will cover all of RIL’s refining and petrochemical assets, including 51 percent of the petroleum retail Joint Venture. Aramco will supply up to 500,000 barrels per day of crude oil on a long-term basis to the Jamnagar refinery. As part of RIL’s strategy to stay ahead of the curve amid a shift towards renewable energy and electric mobility, the company plans to transform the Jamnagar refinery from a primary producer of fuels to chemicals. The Jamnagar refinery, at the culmination of the oil-to-chemical transition, will only produce jet fuel and petrochemicals, according to the company. “All refined products priced below crude shall be eliminated for chemicals at the initial stage. Final fuel de-risking shall target the elimination of gasoline, alkylate and diesel, synchronized to the global evolution of E-mobility and transport fuel demand decline,” RIL had said in its 2018-2019 annual report. The company aims to achieve over 70 percent conversion of crude oil in Jamnagar to olefins and aromatics. RIL’s petrochemical production during the second quarter ended September increased to 9.9 Million Tonne (MT) from 9.4 MT in the corresponding quarter last year. The company’s market value briefly surpassed BP for the first time at the end of last month and it has now regained the lead over the British company after its shares hit a fresh high in Mumbai on Wednesday. RIL’s market capitalisation today edged closer to Rs 10 lakh crore mark, a first for any Indian company.
Putin attacks ‘strange’ European plans to reduce gas usage
Russian President Vladimir Putin on Wednesday rubbished European calls to reduce reliance on fossil fuels, saying that such ideas could lead to humans living in caves again. Speaking at an investment forum in Moscow, Putin also slammed shale gas production through fracking as dirty and environmentally damaging, saying Russia — one of the world’s top gas producers — would never use this technology. Asked what he thought of Europe’s moves to reduce use of gas, for which it is heavily dependent on Russia, Putin said that “in my view, disdaining such a clean hydrocarbon as gas is absolutely strange”. The European Union’s investment arm last week said it would stop funding fossil fuel projects — including gas — from 2022. “When people suggest such ideas, I think that mankind could end up back in caves again,” Putin saod. The Russian president said that “the way technology is today, without raw hydrocarbons, without nuclear power, without hydroelectric power, mankind can simply not survive, cannot preserve its civilisation”. He boasted that Russia’s relatively intense use of gas and hydroelectric power had an energy balance that is “one of the greenest in the world”. The extraction of shale gas through fracking — banned in many countries but booming in the United States — is “without any exaggeration barbaric”, Putin said. The extraction techniques “destroy the environment”, he said. “In some places where shale oil is being extracted, people don’t have water coming out of their taps, but black slush. “Despite all the possible economic advantages, we don’t need such extraction, we won’t do this ever.”
CPCB gets February 15 deadline to take ‘meaningful’ action
The National Green Tribunal (NGT) is fuming at the non-implementation of its order asking the state pollution control boards to recover compensation for environmental damage caused by the polluting units in 100 industrial clusters over the past five years. The pollution watchdog has warned of ‘coercive’ action against chairmen and member secretaries of state pollution control boards if they don’t submit ‘meaningful’ action against the clusters, 10 of which are in Gujarat, by February 15, 2020. In July, NGT had directed the Central Pollution Control Board (CPCB) to assess and recover compensation from polluting units in 100 industrial clusters across the country, including 10 clusters in Gujarat, for a period of last five years. NGT fixed interim compensation to be collected from large polluting units at Rs 1 crore, for medium-scale units it was Rs 50 lakh and in case of small industry the amount was Rs 25 lakh. The directions were issued by NGT in its November 14 order. The NGT reiterated its order of July this year, when it had directed CPCB and state pollution control boards to take recover compensation and furnish report regarding closure of polluting activities. The tribunal, which was hearing the issue of conversion of coal-based gasifiers in Morbi ceramic cluster into gas-based ones, had noted in July “while remedial action may certainly be planned, current violation of law could not be ignored and was actionable by way of stopping polluting activities initiating prosecution and recovering compensation on ‘polluter pays’ principal.” The NGT had then directed CPCB to assess compensation to be recovered form the polluting units for a period of last five years taking into the account the cost of restoration, damage to the public health and environment, and deterrence element. The green tribunal in its November 14 order warned “On default, the tribunal will have no option except to proceed against the chairman and member secretaries of pollution control board by way of coercive action.” The action may include replacement of persons heading pollution control boards or direction for stopping their salaries till the meaningful action for compliance of order of this this tribunal, the NGT asserted. The CPCB has categorized industrial clusters in three categories — Critically Polluted Area (CPA), Severally Polluted Area (SPA) and Other Polluted Area (OPA). The tribunal has asked CPCB to follow it’s earlier order in case of Vapi Green Enviro Limited to calculate interim compensation till the time it completes assessing environmental damage caused by individual units.
Opposition protests in Lok Sabha over disinvestment of PSUs, electoral bond
The opposition Congress on Thursday protested in Lok Sabha against privatisation of a few PSUs, including Bharat Petroleum Corporation Limited (BPCL), and issuance of electoral bonds, terming the move as “big scams”. However, Congress members returned to their seats after the protests and sloganeering in the Well of the House for about 15 minutes when Speaker Om Birla assured them that they will be allowed to raise issues during Zero Hour. “This is a big scam. The country is being looted. Please allow us to speak,” Congress leader in Lok Sabha Adhir Ranjan Chowdhury said. However, Speaker Birla told members that the MPs should not lower the dignity of the House by coming into the Well. “This is wrong. The House is discussing a very important issue on sports persons. No, no. Don’t talk to the chair from the Well. It is the responsibility of every member to maintain decorum and dignity of the House,” he said. The Speaker said the Question Hour is very important and the MPs should not disrupt proceedings. “I am a new member. You are senior. Don’t come to the Well. Maintain the convention,” Birla said, adding he has not admitted the adjournment motion moved by the Congress but is ready to allow the party to speak during Zero Hour. With this the Congress MPs went to their seats. At this, Chowdhury said the opposition keep cooperating in smooth functioning of the House and the Speaker too reciprocate with them. “You are not new. You are the chair of the House. We are forced to give the adjournment motions to raise very important issues, not to disrespect the chair. We have given the notice because this is a big scam. The country is being looted,” he said. At this, Parliamentary Affairs Minister Pralhad Joshi said Prime Minister Narendra Modi is running the cleanest government and there is no scope of corruption in its functioning. “You come everyday with an adjournment motion bringing some issues. This is not done,” Joshi said. Chowdhury countered Joshi by saying the BJP, while in opposition, disrupted proceedings of the House days together by raising issues like alleged coal scam or 2G scam. Joshi said at that time the issues were raised in the House as the two cases were either before the Supreme Court or the Comptroller and Auditor General of India. However, opposition members calmed down after the Speaker’s assurance. “You (Joshi) may be tough but the Speaker is soft,” Chowdhury said. The government on Wednesday kicked off a disinvestment plan, lining up the sale of five public sector units (PSUs), including majority stakes in bluechip oil company BPCL and Shipping Corporation of India. Also on sale will be a 31 per cent stake in Container Corporation of India (Concor) along with management control. Under the electoral bonds scheme, the government had offered complete anonymity to those making donations. A donor can now anonymously buy a bond, and deposit it with the political party of his choice.
IOC, other PSUs not to bid for BPCL, hints Oil Minister Dharmendra Pradhan
Oil Minister Dharmendra Pradhan on Thursday hinted that public sector firms such as Indian Oil Corporation (IOC) may not be allowed to bid for buying government stake in Bharat Petroleum Corporation Ltd (BPCL), for which a buyer may have to shell out as much as Rs 90,000 crore. The Cabinet Committee on Economic Affairs had on Wednesday decided to sell the government’s entire stake in the country’s second-largest state refiner BPCL and India’s largest shipping company Shipping Corporation of India (SCI). It also approved privatisation of Container Corporation of India while also giving nod to paring stake below 51 per cent in select public sector undertakings but without losing control. “Since 2014, we have a clear vision that the government has no business to be in business,” Pradhan told reporters here. “We have examples of 2-3 sectors such as telecom and aviation where ushering in private participation has led to customers benefiting from price cuts, efficiency, and better service. And yesterday (on Wednesday), several reformist decisions were taken.” BPCL will give buyers ready access to 14 per cent of India’s oil refining capacity and about one-fourth of the fuel marketing infrastructure in the world’s fastest-growing energy market. It, however, will be sold after carving out Numaligarh Refinery from its portfolio and given to a pubic sector unit. “Numaligarh refinery was set up as per Assam Accord and it will remain a public sector unit. Assam Chief Minister had requested Prime Minister (Narendra Modi) to retain public sector character of Numaligarh Refinery and that has been accepted,” he said. Pradhan, however, did not say if IOC or Oil India Ltd, which already has a stake in the refinery and also supplies crude oil to it, will take over the unit. “The details have to be worked out,” he said. “Finance Minister (Nirmala Sitharaman) has stated that the privatisation of BPCL will happen this fiscal and we hope to adhere to the timeline.” Asked if public sector units will be allowed to bid for the government’s 53.29 per cent stake, he said: “Nitty gritty and details of the disinvestment process will have to be worked out but when I say the government has no business to be in business, it is indicative of possible future course of action.” At the current trading price of BPCL, the government’s 53.29 per cent stake is valued at a shade less than Rs 62,000 crore. On top of this, the acquirer will have to make an open offer to buy an additional 26 per cent stake from minority shareholders for about Rs 30,000 crore. Last year, the government had sold its entire stake in Hindustan Petroleum Corp Ltd (HPCL) to state-owned Oil and Natural Gas Corp (ONGC) for Rs 36,915 crore. Pradhan said the privatisation of BPCL was following the policy of ushering in greater competition in sectors that can sustain on their own. Greater private participation, like in the telecom and aviation sector, will bring about efficiencies and better service to consumers, he said. The CCEA had on Wednesday also approved the sale of an entire 63.75 per cent government holding in SCI and 30.8 per cent out of the government’s 54.80 per cent stake in Container Corp of India (Concor). Besides, the government will sell its entire holding in THDC India Ltd (THDCIL) and North Eastern Electric Power Corp Ltd (NEEPCO) to state-owned power generator NTPC Ltd, the finance minister has said. The government holds 74.23 per cent in THDCIL and 100 per cent NEEPCO. Parallelly, the Cabinet had also approved reducing government stake in select PSUs such as IOC to below 51 per cent while continuing to retain management control. The management control will continue to be retained with the government after considering equity held by other state-owned companies in the divested firm. The government, currently, holds 51.5 per cent in IOC and another 25.9 per cent through state-owned Life Insurance Corp of India (LIC), and explorers ONGC and Oil India Ltd (OIL), and the government can potentially sell 26.4 per cent for about Rs 33,000 crore. A similar formula can also apply to ONGC and gas utility GAIL India Ltd. The stake sales are critical for the government to meet its disinvestment target of Rs 1.05 lakh crore set for the current financial year. At current prices, the government’s 30.8 per cent stake in Concor is worth about Rs 10,800 crore, while stake sale in SCI will fetch just over Rs 2,000 crore. BPCL operates four refineries in Mumbai, Kochi (Kerala), Bina (Madhya Pradesh) and Numaligarh (Assam) with a combined capacity of 38.3 million tonnes per annum, which is 15 per cent of India’s total refining capacity of 249.4 million tonnes. After removing three million tonnes capacity of the Numaligarh refinery, the new buyer will get 35.3 million tonnes of refining capacity. It also owns 15,177 petrol pumps and 6,011 LPG distributor agencies in the country. Besides, it has 51 LPG (liquefied petroleum gas) bottling plants. The company distributes 21 per cent of petroleum products consumed in the country by volume as of March this year and has more than a fifth of the 250 aviation fuel stations in the country. The government is keen to get international energy majors such as Saudi Aramco, Total SA of France and ExxonMobil to operate in the downstream fuel marketing business so as to bring in greater competition. Currently, 95 per cent of retail petrol and diesel sales and near 100 per cent of cooking gas (LPG) and kerosene sales are controlled by the public sector units. As on March 31, BPCL reported cash and cash equivalents of around Rs 5,300 crore, against Rs 10,900 crore of debt maturing over the next 15 months.
This BPCL unit will remain a PSU despite privatisation: Here’s why Numaligarh Refinery won’t be sold
Even as the government announced strategic divestment of the entire stake in Bharat Petroleum Corporation Limited (BPCL), Numaligarh Refinery, in which BPCL holds a majority stake, has been kept out of the plan. In fact, the finance minister Nirmala Sitharaman announced that the refinery in Assam will be carved out of BPCL and taken over by another PSU. It was done due to the historic Assam Accord of 1985 signed between All India Assam Students Union (AISU) and the central government of the time after the 6-year long agitation against the immigrants. On Thursday, Dharmendra Pradhan, Union Minister of Petroleum and Natural Gas, also said that Numaligarh Refinery is out of the BPCL divestment plan due to the existing accord. Assam Chief Minister Sarbananda Sonowal, on Wednesday, had petitioned Prime Minister Narendra Modi asking him to maintain the status of Numaligarh Refinery as PSU even if the BPCL is disinvested. Stake sale in the refinery will lead to dilution of its character after it goes into the private hands, Sarbananda Sonowal said in the letter. Numaligarh Refinery was set up in accordance with the provisions made in the Assam Accord signed on August 15, 1985. It was conceived as a vehicle for the speedy industrial and economic development of the region. Located at Morangi, Golaghat district, Assam, the refinery is the country’s largest producer of paraffin wax. It is owned by Numaligarh Refinery Limited (NIL), a joint venture between Bharat Petroleum (61.65 per cent), Oil India (26 per cent) and Assam government (12.35 per cent). On Wednesday, the Cabinet Committee on Economic Affairs (CCEA) approved the sale of government’s entire 53.29 per cent stake along with transfer of management control in the country’s second-biggest state-owned refiner BPCL after taking out Numaligarh Refinery.
India’s hunger for natural gas being fed by costly imports amid dismal local production
India’s hunger for natural gas to feed key industries in the power and fertilizer sectors is continuing to grow unabated but that demand is increasingly being met by costly imports on the back of dismal domestic production. The country consumed 174 million standard cubic metre per day (mmscmd) of natural gas in September 2019, a 6 per cent increase over the consumption of 164 mmscmd in the same month last year. The over demand growth stood at 3 per cent in the April-September 2019 period, according to latest data shared by research firm India Ratings. However, the 6 percent growth in consumption in September fuelled a massive 18 percent jump in costly imports of Regasified-Liquefied Natural Gas (R-LNG). “Domestic natural gas production decreased 4.3 percent year-on-year. During the month, gas volume production in Oil and Natural Gas Corp and private or joint venture fields recorded a fall of 4.6 percent and 6 percent, respectively, while Oil India Ltd recorded an increase of 1.5 percent year-on-year,” the agency said in a report. Domestic natural gas contributed a mere 52 percent to the overall domestic consumption during September 2019. Additionally, the rising demand for gas is coming increasingly from the fertilizer sector rather than power plants. Consumption data for August 2019 captures that trend. In August, the fertilizer sector consumed 26.2 mmscmd of imported natural gas but only 19 mmscmd of domestically produced gas. On the other hand, power plants consumed a mere 8.7 mmscmd of imported gas but 21 percent of the domestic output. Apart from gas, the trend of rising imports feeding domestic demand is replicated in crude oil, too, with the only difference that both production and imports are going down. In September 2019, crude oil production decreased by 5.4 percent year-on-year. Production volumes of ONGC and OIL declined 2.6 per cent and 5.4 per cent, respectively, and that of fields under production-sharing contracts decreased 11.4 per cent during the month. At the same time crude oil import volume decreased 6.6 per cent and the country’s oil import dependence ballooned to a staggering 83.1 per cent in September 2019.
Lucknow Municipal Corporation to generate bio gas, CNG from cow dung
In a bid to make the city’s Gaushalas self-dependant, Lucknow Municipal Corporation has proposed a project that will generate biogas and Compressed Natural Gas (CNG) from cow dung. Indram Tripathi, Lucknow Municipal Commissioner, told ANI: “We will get an income of Rs 25-30 lakh without investing any money. Three private companies from Maharashtra and Firozabad have shown interest in this project.” Adding that the Municipal Corporation will start the work by March next year, Tripathi said: “The Corporation has sent the proposal to the state government. Now, the cows in Gaushalas will not become a burden on anyone.” Earlier in October, Union Minister for Micro, Small and Medium Enterprises (MSME) Nitin Gadkari had launched cow dung soaps and bamboo bottles on the eve of Gandhi Jayanti under a special sales campaign of Khadi and Village Industries Commission in Delhi.
NITI draws up plan to curb stubble burning
The NITI Aayog has asked the Indian Agriculture Research Institute to expeditiously conduct field trials of a technology that allows paddy straw to decompose in fields as concerns mount over growing air pollution in the capital due to stubble burning in neighbouring states. The Aayog will work out a fiscal package for quick adoption of the technology from next year after the field trials, said a senior government official. NITI draws up plan to curb stubble burning “Technology of decomposing straw in situ is available at the lab level. We have to standardise it and test it on the fields,” said NITI Aayog member Ramesh Chand. The idea is to use decomposers either in the form of liquid that can be sprayed on the fields or use capsules that can decompose paddy or wheat straws on the farm itself in three-four weeks after which they can be ploughed back into the soil. A scheme could be rolled out next year before the onset of paddy harvest to avoid a repeat of the emergency-like situation in the National Capital Region (NCR) largely on account of stubble burning around this time of year. Air pollution levels in the NCR breached the 500-level mark on the air quality index (AQI) in the first week of November, prompting the Environment Pollution (Prevention and Control) Authority to declare it a public health emergency which resulted in closure of nearly 600 schools in the NCR. Subsequently, the AQI level shot up further to 900-mark in certain areas of Delhi, forcing the government to call a highlevel meeting to chalk out a strategy. The capital heaved a sigh of relief over the following weekend, with clear skies and AQI hovering between ‘moderate’ (100-200) and ‘poor’ (200-300) levels.
IndianOil seeks LNG cargo for December delivery
Indian Oil Corp is seeking a liquefied natural gas (LNG) cargo for delivery in December, three industry sources said on Tuesday. The company is seeking the cargo for delivery on Dec. 17 through a tender which will close later this week, two of them said. Lower spot prices for Asian LNG is attracting demand from Indian buyers, several trade sources said.