GAIL to invest Rs 1.05 lakh cr to create infra for gas-based economy
GAIL India Ltd, the country’s largest gas utility, will invest Rs 1.05 lakh crore over the next five years to expand pipelines, lay city gas distribution network and raise petrochemical production capacity, its new chairman and managing director Manoj Jain said on Monday. Gas pipelines are planned to take the fuel to the east and northeast regions as well as to consumers in the south as part of the government push to raise the share of natural gas in India’s energy basket to 15 per cent by 2030 from the current 6.2 per cent, he said. “We have planned a capex of Rs 45,000 to Rs 50,000 crore in laying pipelines, Rs 10,000 crore petrochemical capacity expansion and another Rs 40,000 crore for city gas distribution (CGD) business,” he told reporters here. GAIL’s push for infrastructure creation is in line with Prime Minister Narendra Modi’s vision of creating a gas-based economy that is less reliant on polluting fuels for meeting its energy needs. India currently consumes some 160 million standard cubic meters of gas per day and the consumption has to rise to 600 mmscmd to reach 15 per cent share in the energy mix, and GAIL is laying the infrastructure to help achieve that. At present, GAIL operates 12,160-km of pipeline network and markets two-thirds of all-natural gas sold in the country. It will add about 7,000 km of pipeline length in the next five years, Jain said. The company is scaling up on liquefied natural gas (LNG) import capacity. Besides owning a part of Petronet LNG Ltd, India’s biggest liquid gas importer, it also owns and operates a 5 million tonnes LNG import facility at Dabhol in Maharashtra. “We have awarded the contract for construction of a breakwater at Dabhol to L&T and this should get completed in two-and-half-years. The completion will help operate the Dabhol terminal at its full capacity of 5 million tonnes per annum,” he said. Currently, operations are restricted during monsoon months as high tide could damage ships carrying gas in its liquid form. Also, the company has booked capacity at Adani Group’s upcoming terminal at Dhamra in Odisha, Jain noted. Domestic gas production meets just half of the country’s demand and the rest has to be imported. Pipeline projects at hand include the ambitious Urja Ganga Project to take gas to Bihar, West Bengal, Odisha, and Jharkhand as well as Kochi-Kootanad-Bangalore-Mangalore line; and Indradhanush North East Gas Grid. Besides pipelines, GAIL is also expanding city gas distribution (CGD) networks for retailing of CNG to automobiles and piped natural gas to household kitchens, he said, adding investments are also planned for the expansion of Pata petrochemical plant in Uttar Pradesh as well as converting a LPG recovery unit at Usar in Maharashtra into 5,00,000 tonnes Polypropylene plant. GAIL is looking to put up 400 CNG stations and give out a record 10 lakh piped natural gas (PNG) connections to household kitchens in the next 3-5 years. The company is building a 2,655-km gas pipeline from Jagdishpur in Uttar Pradesh to Haldia in West Bengal, Bokaro in Jharkhand and Dhamra in Odisha. Jagdishpur-Haldia & Bokaro-Dhamra Natural Gas Pipeline (JHBDPL) project, also known as the ‘Pradhan Mantri Urja Ganga’ project, was inaugurated by the Prime Minister in July 2015. GAIL has commenced city gas operations in all the six geographical areas (GAs), including in Patna and Bhubaneshwar, that was awarded to it along the Urja Ganga route, Jain said. The pipeline will be extended to Guwahati by laying an additional 750-km line. At Guwahati, it would interconnect with the upcoming 1,500-km ‘Indradhanush’ pipeline network conceived to operate in the northeast region by the public sector oil and gas majors. GAIL will also lay a 600 km Srikakulam-Angul natural gas pipeline.
Karaikal LNG terminal to start operations by Q4 2021
LNG logistics company AG&P on Thursday said it will commission an LNG import facility at Karaikal in Puducherry by the fourth quarter of 2021. The company had a ground-breaking ceremony for the project on Thursday. “The Karaikal LNG import facility is expected to commence commercial operations by Q4 2021,” it said in a statement. Owned and operated by AG&P, the LNG terminal is being built on a 12-hectare site within the Karaikal Port, which enjoys the only deep-water access on the East Coast. Karaikal LNG, which will have an initial capacity of 1 million tonne per annum, will include a floating storage unit (FSU) leased through a long-term charter agreement with ADNOC Logistics and Services (ADNOC L&S) from 2021, providing an efficient solution that will enable the supply of this clean fuel to be affordable. “Strategically located 280-km south of Chennai and in close proximity to Tamil Nadu’s thriving manufacturing clusters, the new terminal will provide natural gas to power plants, industrial and commercial customers within a 300-km radius. “In addition, Karaikal LNG will serve the important city gas networks of AG&P and other city gas companies that bring CNG and LNG to vehicles and piped natural gas to households and other establishments. Truck loading bays will enable the delivery of LNG to remote customers by AG&P’s own fleet of trucks,” it said. AG&P develops and builds LNG import terminals in nascent and growing markets around the world. These facilities encourage the development of a downstream gas value chain and unlock latent demand. At Karaikal LNG, AG&P has developed a flexible configuration combining floating storage and onshore facilities, such as truck-loading. “This design increases operational efficiencies that result in a flexible and commercially-compelling solution for our customers,” it said. Beyond Karaikal, AG&P has won city gas distribution licence for 12 geographic areas across Tamil Nadu, Andhra Pradesh, Kerala, Karnataka and Rajasthan. “At the end of 8 years, the AG&P networks will offer more than 1,500 CNG stations and natural gas connections to millions of households,” the statement added.
All eyes from LNG industry on Tellurian during Trump visit to India
India Prime Minister Narendra Modi and United States President Donald Trump enter the NRG Stadium stage as part of the Texas India Forum on Sunday, Sept. 22, 2019, in Houston. All eyes in the energy industry will be on Houston liquefied natural gas company Tellurian during President Donald Trump’s visit to India. All eyes in the energy industry will be on Houston liquefied natural gas company Tellurian during President Donald Trump’s visit to India. Company officials told the Houston Chronicle that they will have a team in India during the president’s visit to the South Asian nation. Details were not available but Trump’s visit to the subcontinent comes at a time when Tellurian is working to finalize the details of a $2.5 billion supply deal with India’s Petronet LNG by a March 31 deadline. Indian Prime Minister Narendra Modi is expected to receive Trump on Monday. The presidential visit to India comes roughly five months after Modi visited Houston, which was the backdrop for the signing of a memorandum of understanding between Tellurian and Petronet LNG. Headquartered in Houston, Tellurian received a federal permit in April 2019 to build its Driftwood LNG export terminal in Lake Charles, Louisiana. If the facility lands contracts and financing, it will be able to build a facility capable of producing and exporting up to 27.6 million tons of LNG per year. Under the proposed deal with Tellurian, Petronet has pledged to invest $2.5 billion in the Driftwood LNG project, in exchange for the rights to 5 million metric tons of LNG per year over the lifespan of the project. With slumping demand in China attributed to a warm winter and the ongoing coronavirus outbreak, India is emerging a growing buyer of LNG — as the South Asian nation, the world’s second most populous, seeks to increase the amount of electricity generated from natural gas.
Deal for piped gas, Indo-Pacific capacity building on agenda for Modi-Trump summit
A deal for additional supplies of gas to India and joint formulation to maintain balance in the Indo-Pacific region including steps for capacity building will be among key outcomes from US President Donald Trumps February 24-25 visit. An Agreement will signed for strengthening collaboration among India Oil Cooperation Ltd. Exxon and Chart Industries to improve access to gas, government sources told ET. This agreement will promote access in India to gas in areas where the current gas pipeline infrastructure is not as developed. Till the time that gas pipeline network is developed in the country transportation of gas through container is an efficient alternative. In the US companies like Exxon and Chart Energy have expertise in transporting gas through containers. This agreement will allow us to tap into that expertise and facilities clean and efficient access to gas to areas which are yet not connected to the pipeline infrastructure network. The U.S. has emerged as a key partner for India in the field of energy. India is an important market for U.S. exports, But the sensitive issue that will be keenly watched during President Trump’s two-day visit to India is the joint formulation of the Indo-Pacific vision, especially since it has the potential to prompt a sharp reaction from China, said people aware of the matter. India will continue to emphasise on an inclusive Indo-Pacific region that includes China, even as the United States has embarked on a strategy to contain China globally, they said. As part of their collaboration, India and the US could launch an Indian Ocean Cooperation and Training exercise, on the lines of the Southeast Asia Cooperation and Training exercise (SEACAT), said one of the persons, who did not wish to be identified. The focus would be on strengthening the capabilities of Indian Ocean states to combat regional issues such as piracy, trafficking and terrorism, said the person. The SEACAT, involving the US, began in 2002 under the name ‘Southeast Asia Cooperation Against Terrorism’ and was renamed in 2012 to expand the scope of training among regional navies and coast guards. Designed to promote multilateral cooperation and information-sharing among navies and coast guards in South and Southeast Asia, the exercise brings together liaison officers to execute maritime responses to scenarios to better tackle maritime security challenges such as smuggling and piracy. It usually comprises a series of workshops, information exercises as well as operations on the sea. “While differences exist on the US and Indian definitions of the Indo-Pacific, the foreign ministerial meeting of the Quad members in New York suggested that on political issues, there was some coordination,” Professor Srikanth Kondapalli of the JNU, a China expert, told ET. “China is now on the alert. As Asia-Pacific benefited from China’s rise, Beijing is cautious or even opposing the Indo-Pacific for the possible loss of its position in the new scheme of things.” He said that in an attempt to create a division among the SEACAT members, China is approaching Japan by offering Belt and Road Initiative (BRI) projects and is likely to make overtures to India as well. “While Wuhan and Chennai meetings brought equilibrium between the two, there have been no tangible benefits to India so far. China tries to pre-empt any coalitions against it by intimidation or offering tactical measures,” said Kondapalli. The second edition of the so-called 2+2 dialogue, between the foreign and defence ministers of India and the US, in Washington in December last year, had created a framework for widening partnership in the Indo-Pacific region. Modi and Trump are expected to focus on building a free, open, inclusive, peaceful and prosperous Indo-Pacific region. They will support ASEAN centrality, rule of law, freedom of navigation and overflight, peaceful resolution of disputes, and sustainable and transparent infrastructure investment, said a person quoted earlier. The two leaders are expected to reaffirm their shared vision for greater connectivity in South Asia and the Indo-Pacific and review the progress of ongoing initiatives being undertaken by India and by the United States for the development of infrastructure and connectivity in the region. Besides, Modi and Trump are likely to emphasise on strengthening diplomatic consultation and coordination between India and the US, bilaterally, with other partners and in regional and international fora to sustain and enrich the international rules-based order. India and the US will explore measures to build on the India-US Oceans Dialogue to advance shared oceanic priorities, including combating pollution, fisheries enforcement, scientific exploration and species documentation in the Indian Ocean, said the people cited earlier.
Supreme Court dismisses Adani Gas’ plea against piped gas distribution award
The Supreme Court has upheld an award for piped gas distribution network in Chennai and Tiruvallur districts in Tamil Nadu to a Gujarat-based firm by the Petroleum and Natural Gas Regulatory Board (PNGRB). A bench of Justices D Y Chandrachud and Hemant Gupta dismissed the appeal filed by Adani Gas Limited and others and justified the action of PNGRB saying that calling the bidders with the highest composite scores cannot be faulted. The Board had granted the award for piped gas distribution network in Puducherry to AG & P LNG, in Chennai and Tiruvallur districts to Torrent Gas Private Limited and to SKN Haryana in Kanchipuram district in 2018. The top court said there is no merit in the submission that there was a breach of the principles of “natural justice” in calling only the bidders with the highest composite score to explain the reasonableness of their bids. “In the present situation, when the Board decided to call the bidders with the highest composite score in order to allow them an opportunity to explain reasonableness of their bid, the administrative decision taken by the Board cannot be faulted as being in violation of the principles of natural justice,” it said. The bench said if the Board Note of July 23, 2018 on the reasonability of bidding parameters was to be construed in the manner in which the applicants had urged, the automatic disqualification of bidders based on a criterion introduced by the Board Note would raise serious doubts about its fairness and legality. “This is because the Board Note was not notified to bidders as a basis for the evaluation of bids before the date for the submission of the bids had closed. To disqualify a bidder on the basis of a criterion which was not notified and of which bidders had no knowledge would be arbitrary and would constitute an infraction of Article 14. “The Board was thus correct in determining that the automatic disqualification of a bid on the basis of a criterion specified in the Board Note (which was never notified to the bidders) would not be legally correct. Hence, it would be reasonable to interpret the Board Note dated July 23, 2018 as being the formulation of a guideline for the Board,” the bench said. The Board Note adopted the Census 2011 data on the total number of households as the basis for computing the minimum and maximum limits for the purpose of determining unreasonably low or unreasonably high quotes. The apex court said that the course of action, which the Board followed, of calling the bidders with the highest composite scores in different geographical areas to justify their bids in terms of their reasonableness cannot be faulted. “On the contrary, if the Board had rejected these bids solely on the ground that they were above the limit of 100 per cent of households under the 2011 Census data, the decision would have been seriously flawed for having applied a criterion which was not a part of the Regulations, was not embodied in the Bid Document and in any event, was not notified to bidders before they had submitted their bids,” the bench said. Torrent Gas Private Limited was declared as the successful bidder for GAs 51, 61 and 62 respectively on August 30, 2018. On September 6, 2018, Adani Gas Limited wrote to the Board requesting a copy of the decision with respect to the issuance of Letter Of Intents (LOIs) for the above three GAs. Subsequently, the Board uploaded the details of the successful bidders under the ninth CGD round on its website on September 14, 2018. On September 19, 2018, an appeal was filed before the Appellate Tribunal For Electricity (APTEL) by Adani Gas Limited, aggrieved by the decision to award LOIs, in respect of Puducherry, Kanchipuram, Chennai and Tiruvallur districts on the ground that the successful bids were beyond the unreasonably high limit adopted by the Board. The appeal also contended that the Board issued the LOIs without uploading the decision on the website and without communicating it to Adani Gas Limited. Following the proceedings by Adani Gas Limited, IMC Limited also filed proceedings before the APTEL challenging the grant of authorisation by the Board in respect of Kanchipuram district. On February 28, 2019, the APTEL pronounced a split decision. While the chairperson allowed the appeals filed by Adani Gas Limited and IMC Limited, the Member Technical (Petroleum and Natural Gas) dismissed the appeals. Due to the divergence of opinion between the Chairperson and Member Technical (Petroleum and Natural Gas), the appeals were referred to the Judicial Member of the APTEL. The Judicial Member recused from hearing the appeal on March 7, 2019, as a result of which proceedings reached the apex court.