Agility Fuel Solutions Makes History in India With Long Distance CNG Buses
Dharmendra Pradhan, India’s Minister for Petroleum and Natural Gas, launched India’s first long distance compressed natural gas (CNG) bus on December 24, 2019 under a strategic program led by Indraprastha Gas Limited (IGL), the largest CNG distribution company in India. The launch ushers in CNG as the fuel of choice for long distance transportation in India. The Honorable Minister speaking on the occasion complimented Agility Fuel Solutions and urged the Indian automotive and fleet industry to implement long distance travel solutions with CNG. Present at the launch were Dr. M.M. Kutty, Secretary, Ministry of Petroleum & Natural Gas, Govt. of India, Mr. Gajendra Singh, Director, GAIL, Mr. Ranganathan, MD, IGL and Mr. Manoj Chugh, President, Mahindra & Mahindra Ltd. The composite cylinder-based complete bus fuel system designed, engineered, assembled and delivered by Agility Fuel Solutions, along with its Indian partner Advantek Fuel Systems, more than doubles the range of India’s CNG buses and is also equipped with a special fast filling module to reduce filling time. While CNG buses in India previously traveled 350 kms at best, the program’s five buses with Agility’s technology each have a range of over 1100 kms – a first in India’s automotive history. With BS VI Emissions Standards going into effect on 1 April 2020, IGL’s program begins a shift away from diesel, which previously accounted for 100% of intercity travel, towards a gas-based economy. Buses outfitted with Agility Fuel Solutions’ roof top CNG systems not only allow fleet owners to achieve BS VI easily, but allow them to do so in a cost-effective manner, since CNG costs less than diesel. “We are very happy to be working with Agility to showcase this technology in India and we hope that fleet operators will shift to CNG for long distance operations since they will save both on fuel costs but also save on the green tax levied for diesel vehicles.” said Mr. Ranganathan, the Managing Director of IGL. “The Indian market represents a significant opportunity for Agility Fuel Solutions to bring its world leading product line to this market. Agility already has a strong presence in the market and intends to expand manufacturing capabilities in India,” added Eric Bippus, SVP of Global Sales and Marketing of Agility Fuel Solutions. At 1360 liters total, Agility’s four tanks nearly double the 720-liter capacity of India’s current CNG bus systems. At the same time, India’s current systems have a weight of around 1100 kgs, which will reduce drastically to 490 kgs using Agility’s systems. Fleet operators thus get more than double the range at less than half the weight. CNG buses also get better mileage and have lower maintenance costs. “Agility is the only company that offered system solutions and offered to assume turnkey responsibility to handle this project. Due to our longstanding relationship and established trust, we were more than thrilled to work with IGL, the pioneers and leader in India’s gas industry on this initiative.” said Ravindra Vasisht, Director of Agility India Pvt Ltd & Hexagon Composites India. Additionally, CNG costs on average about 20-25% less than diesel. IGL’s pilot program leads the way for fleet owners to save money on long distance travel, even while complying with BS VI. Delhi is one of four cities implementing new CNG technology under the encouragement of Gas Authority of India Limited (GAIL). Together, city gas companies in Delhi, Mumbai, Pune and Bengaluru are also planning to demonstrate how long distance CNG buses can become common in India.
Total India head on Adani Gas board
French energy giant Total SA’s India head Alexis Thelemaque has been appointed as a director on the Board of billionaire Gautam Adani’s gas retailing firm Adani Gas Ltd. The appointment follows Total buying a 37.4 per cent stake in Adani Gas Ltd – the firm that retails gas to automobiles and households for an estimated Rs 57 billion. “The Board of Directors of the company have, by way of circular resolution passed on January 14, 2020, appointed Alexis Thelemaque as an Additional Director (Non-Executive, Non-Independent),” Adani Gas said in a regulatory filing. Thelemaque, who joined Total Group in France in 1993, is Chairman and Managing Director of Total Oil India Pvt Ltd. Total, which in August 2018 exited a JV with Royal Dutch Shell in a 5 million tonne liquefied natural gas (LNG) import terminal at Hazira in Gujarat, had in October last year announced the acquisition of the stake in Adani Gas. This followed by a 50:50 joint venture the two had agreed upon in October 2018 for two LNG import terminals of Adani on the east and west coast of India as well as for setting up of 1,500 petrol pumps in the country over 10 years. The French firm is the latest energy major seeking to expand its presence in India, which is the world’s third-largest and the fastest-growing energy consumer. In August 2019, Reliance Industries said Saudi Arabian Oil Co will buy 20 per cent of its oil-to-chemical business at an enterprise value of USD 75 billion. As part of the deal, Total will first make an open offer to buy a 25.2 per cent stake in Adani Gas. Depending upon the success in the open offer, it will buy a stake from Adani to take its holding to 37.4 per cent in the company. Adani family holds a 74.8 per cent stake in Adani Gas and will dilute shares to the public to bring down its holding to 37.4 per cent – at par with Total. Adani family will sell some stake in the open market to meet the listing norm of keeping public holding at 25 per cent. Adani Total joint venture (JV), where the two groups hold 50 per cent stake each, is building a 5 million tonne LNG import terminal at Dhamra in Odisha and will potentially hold a 25 to 50 per cent interest in Gujarat government’s Mundra import facility. This JV would also supply 3 million tonnes per annum of LNG to India and Bangladesh. Adani Gas, wherein Total and Adani would hold 37.4 per cent stake each, is targeting to set up 1,500 CNG stations to retail gas to automobiles and piped cooking gas to 6 million households. It will also set up 1,500 petrol pumps over 10 years. As part of this partnership, Total will bring its LNG and retail expertise and will supply LNG to Adani Gas. Total and Adani will also establish a joint venture to market LNG in India and Bangladesh.
IOC keen to pick up BPCL stake
Indian Oil Corporation is keeping its option open on making an offer for competing public sector oil retailer and refiner Bharat Petroleum Corporation even though the government may baulk at such a move. IOC chairman Sanjiv Singh said the PSU would look at bidding for BPCL as and when the Centre puts it on the block. “Let’s see. Let it (divestment) come. We will take a call as and when it (BPCL) puts up for sale,” Singh said at the sidelines of an event in Calcutta over the weekend. The Centre’s 53.29 per cent stake in BPCL will translate into a market valuation of Rs 543.89 billion according to the closing price of the share (Rs 470.50) on Monday. Oil and steel minister Dharmendra Pradhan had earlier hinted at keeping the BPCL sale limited to the private sector. In November, the minister said the strategic vision of the Modi government was that it has “no business to be in business”. If IOC acquires BPCL, it will continue to remain a public sector unit, which is owned by the government. However, there has been several instances since 2014 when the government did not exactly follow this dictum. Life Insurance Corporation of India, the PSU behemoth, has come forward time and again to bail out several public sector share sales. For instance, it bailed out another PSU, IDBI Bank, by infusing over Rs 210 billion. Singh said there would be merits for and against acquiring. He admitted that there would be a “lot of value” if it comes in terms of synergy. IOC will immensely benefit from wide ranging and nearly identical BPCL assets — refineries, fuel retailing, LPG, gas pipeline and stakes in several prominent ventures such as Petronet LNG and Indraprastha Gas Ltd. However, a possible acquisition will certainly choke IOC’s own expansion as BPCL would fill the requirement, Singh pointed out, adding that India may not benefit in that scenario in terms of fresh investment in the oil sector. In the past, IOC had emerged as the most aggressive bidder for IBP when the retailer was sold in 2002. It beat Reliance Industries, Reliance Petroleum, Royal Dutch Shell, Kuwait Petroleum by a wide margin, paying Rs 11.5368 billion. The then oil minister Ram Naik is believed to have backed IOC to go for the jugular, aiming to keep the company within the central government’s fold. The scenario may be different this time around as the present dispensation would like to see private players, especially from overseas, participating and boosting India’s image to global investors. There has been speculation that Saudi Aramco, the world’s largest company by market cap, may show interest. The Cabinet Committee on Economic Affairs (CCEA) approved the sale of government stake in five major PSUs — BPCL, the Shipping Corporation of India, Container Corporation of India, Tehri Hydro Development THDC India Ltd and Neepco — in November. However, it appears that the government is now going slow on the sale.
India exploring ways to source crude oil from Russia: Pradhan
India is exploring ways to source crude oil from Russia, Oil Minister Dharmendra Pradhan has said. “We are working on the strategy to diversify our crude oil supply sources and we are now exploring ways to import crude from Russia as well,” Pradhan told a Russian media delegation. Indian refiners have been seeking crude oil from different parts of the globe to reduce their dependence on the conflict-prone Middle-East region that currently makes up about 60 percent of its imports. “We are keen to explore the new sea route to source crude oil and LNG through Russia’s Arctic. The route has the potential to cut the cost and time for transporting LNG from Russia to India, ” Pradhan said. Pradhan told the media delegation that relations between Russia and India would reach new heights in times to come. “2019 was a landmark year which boosted the bilateral relations between India and Russia to hitherto unscaled heights, ” he said.
India’s crude oil production may show marginal increase by 2024: IEA
India’s domestic crude oil production is expected to increase marginally by 2024 with the country’s increased reliance on oil imports exposing it further to supply side disruptions, geopolitical uncertainties, and volatile oil prices, according to a report by the International Energy Agency (IEA). “Its oil consumption of 4.4 million barrels per day in 2017 already represents 5 per cent of global consumption, and it is set to grow at a rapid pace of 3.9 per cent a year (well ahead of the global average of 1.2 per cent) in the medium-term, despite the market penetration of alternative fuels like biofuels and gas,” Paris-based IEA said in its report titled ‘India 2019 – Energy Policy Review’. According to the report, the growth is expected to primarily come from government-owned Oil and Natural Gas Corporation’s (ONGC) KG-DWN98/2 deep-water oil and gas project with output starting in 2020 and reaching 78,000 barrels per day of oil at peak production. IEA further added that India’s proven oil reserves are limited compared to the domestic needs and said that production is on a decline. Also, possible new discoveries in Rajasthan are unlikely to fully compensate for the depletion of existing fields. The report citing data sourced from the oil ministry said that India’s proven reserves of crude oil and condensate as of April 2018 were about 595 mt (around 4.4 billion barrels), which could potentially sustain production for about 14 years at current levels. Oil production in India comes primarily from three onshore states, Assam, Gujarat and Rajasthan, which together account for more than 96 per cent of oil from onshore fields, and from the aged offshore Mumbai High Field. The report highlighted that the country’s increasing reliance on imports has left it exposed to various external risks. “India’s strong dependence on oil imports, already at 83 per cent, is expected to increase. With an oil import bill of about 4 per cent of the gross domestic product (GDP) today, and 65 per cent of imports coming from the Middle East through the Strait of Hormuz, the Indian economy is and will become even more exposed to risks of supply disruptions, geopolitical uncertainties and the volatility of oil prices,” IEA said. The report added that the country will have to expand its strategic petroleum reserves if it wants to keep up with its growing demand. “Today’s Indian Strategic Petroleum Reserves storage capacity of 40 million barrels can cover around 10 days of present day net imports. But the same volume will cover only four days of net imports in 2040. It is therefore important to indeed pursue the announced second phase of the strategic stock holding policy and prepare future phases,” IEA said. The report added that India does not have any policy to manage the demand for oil during an oil supply emergency, apart from general provisions under the Essential Commodities Act 1995, to maintain equitable distribution of petroleum products. The agency advised that the existing contingency plan should be reviewed to ensure that in the case of a serious supply disruption, the emergency stocks are available and physically accessible for the large consumption centres across the whole territory. The strategic petroleum reserves are proposed for construction with a capacity of 4 MT at Chandikhol in Odisha and 2.5 MT at Padur in Karnataka. The construction and filling of the reserves are being explored under a public–private partnership model with a tender for building the second-phase stocks to be opened by the end of 2020. If fully-filled, this second phase would add another 11.2 days of net imports, based on the consumption pattern in FY19.
India offers 11 oil and gas blocks in 5th bid round
India on Wednesday announced the opening of the fifth oil and gas block bid round, offering 11 areas for bidding on revamped fiscal terms. So far, the government has awarded 94 blocks under the Hydrocarbon Exploration & Licensing Policy (HELP) regime in a short time span of two and a half years. These 94 blocks cover an exploratory area of about 1,36,800 square kilometers over 16 Indian Sedimentary Basins, the Directorate General of Hydrocarbons (DGH) said in a statement. “In continuation of its aggressive acceleration of exploration and production activities and adhering to the prescribed timelines, the Government has now launched the Bid Round-V for International Competitive Bidding,” it said. “In this bid round 11 blocks, with an area of approximately 19,800 sq km are on offer for bidding to the investor community.” The last bid round saw just eight bids coming in for seven blocks on offer. According to the DGH, seven onland blocks were offered in the fourth round of Open Acreage Licensing Policy (OALP) under HELP regime, with an area of about 18,510 sq km. State-owned Oil and Natural Gas Corporation (ONGC) walked away with all the seven oil and gas blocks on offer. OALP-IV was the first round on revamped terms approved in February 2019. Unlike previous rounds where blocks were awarded to companies offering a maximum share of oil and gas to the government, blocks in little or unexplored category-II and III basins are now awarded to companies offering to do maximum exploration programme. Bidding for OALP-V will close on March 18, the DGH said. The 11 blocks under OALP Round-V are spread across 8 Sedimentary Basins and include eight on land blocks (six in Category-I Basin and one each in Category II and III Basins), two Shallow Water blocks (one each in Category-I and II Basins) and one Ultra Deep Water block (Category I Basin). “It is expected that OALP Round V would generate immediate exploration work commitment of around USD 400-450 million,” the DGH statement said. “An area of 1,36,800 sq km has already been awarded under OALP Bid Round I, II, III and IV. These OALP Bid Round-V Blocks would add further 19,800 sq km. Overall Exploration Acreage of India would then increase to 236,600 sq km.” The DGH said HELP, which adopts the revenue sharing contract model, is a giant step towards improving the ‘Ease of Doing Business’ in the Indian Exploration and Production (E&P) sector. “It comes with attractive and liberal terms like reduced royalty rates, no oil cess, marketing, and pricing freedom, round the year bidding, freedom to investors for carving out blocks of their interest, a single licence to cover both conventional and unconventional hydrocarbon resources, exploration permission during the entire contract period, and an easy, transparent and swift bidding and awarding process.” Under OALP, companies are allowed to carve out areas they want to explore oil and gas in. Companies can put in an expression of interest for any area throughout the year but such interests are accumulated thrice in a year. The areas sought are then put on auction. The fifth cycle of submitting EoIs closed on November 30, 2019, and was followed by the sixth cycle that began on December 1, 2019, and will last till March 31, 2020. It would be followed by the 7th cycle from April 1, 2020, till July 31, 2020. Of the 94 blocks awarded in the first four rounds of OALP, Vedanta has won the maximum at 51. Oil India Ltd has got 21 blocks and ONGC another 17. “All 11 blocks in OALP-V are based on Expressions of Interest received during EoI Window-V from 16th May 2019 to 30th November 2019,” the DGH said.