India’s import of US oil jumps 10-fold to 2,50,000 bpd
US oil supplies to India have jumped ten-fold to 2,50,000 barrels per day (bpd) in the last few years, visiting US Energy Secretary Dan Brouillette said on Tuesday. Speaking at a business meeting alongside US President Donald Trump, he said Indian imports of US oil were 25,000 bpd a couple of year ago, and have now risen to 2,50,000 bpd. US is India’s sixth largest oil supplier. India began importing crude oil from the US in 2017 as it looked to diversify its import basket beyond the OPEC nations. It bought 1.9 million tonnes (38,000 bpd) of crude oil from the US in 2017-18 and another 6.2 million tonnes (1,24,000 bpd) in 2018-19. In the first six months of current fiscal (2019-20), US supplied 5.4 million tonnes of crude oil to India. Iraq is India’s top crude oil supplier, meeting close to one-fourth of the country’s oil needs. It sold 26 million tonnes of crude oil to India during April to September. India, which is 83 per cent dependent on imports to meet its oil needs, bought 111.4 million tonnes of crude oil from overseas during April-September. Saudi Arabia has traditionally been India’s top oil source, but has been relegated to the second spot, exporting 20.7 million tonnes of crude oil in the first six months.
Coronavirus impact: BPCL snaps up 500 mn barrels of distress crude
Sell-off-bound Bharat Petroleum has procured 500 million barrels of distress crude (five shiploads) at a discount of USD 3-5 per barrel to the already low prevailing price following order cancellations by coronavirus-hit China this month. Since the outbreak of the epidemic, crude prices have plunged over USD 15 a barrel to around USD 50 now as large parts of China, the largest importer and consumer of crude, are under Beijing-ordered lockdown and millions of factories are closed. The deadly virus outbreak in China since mid-January has left more than 2,660 dead and over 77,600 infected in China alone even as it has spread to countries like Korea, Japan, Iran and far-flung nations like Italy and France. “We have bought 500 million barrels of what we call opportunity crudes from distress sale in February. Price is so attractive it is coming at USD 3-5 per barrel cheaper than the already low prices which is trading at under USD 50 a barrel,” R Ramachandran, the director of refineries at BPCL told reporters. When asked whether the company will be snapping up more such crudes, he answered in the negative saying that will only make inventory management unwieldy. “Our inventory cycle is 30-40 days. Just because crude is cheaper now does not make sense for us to ramp up inventory too high as it will invariably lead to inventory losses, something we don’t want to invite upon ourselves,” he said. Meanwhile BPCL has been the biggest customer of US crude since the last two years, when that country lifted the ban on exporting crude for the first in decades. “We imported 1.6 million tonne crude from the US in FY19, and the same has already touched 1.57 million tonne this fiscal so far, making us the largest customer for the US crudes from the country,” he said. He also ruled out contracting Russian crude, unlike IndianOil did last week, saying the landed cost will not cost-effective for them. Meanwhile, a report from New Delhi quoting the visiting US energy secretary Dan Brouillette said in the past two years, Indian imports of crude from the US has jumped 10-folds to 2,50,000 barrels a day. In 2017, the country imported just 25,000 barrels per day from the US. “In the past two years, we’ve seen a remarkable off-take in US oil and gas by India, from 25,000 bpd in 2017 to 250,000 bpd now, a 10-fold spike and we expect it to be better from here,” Brouillette said in the National Capital, adding this makes the US the sixth-largest source market for India. India began importing crude oil from the US in 2017 as it looked to diversify its import basket beyond the Opec block. It bought 1.9 million tonne (38,000 bpd) crude from the US in FY18 and another 6.2 million tonne (1,24,000 bpd) in FY19. In the first six months of FY20, the US supplied 5.4 million tonne crude oil to India. Oil minister Dharmendra Pradhan later said India is the fourth largest export destination for US crude now, while LNG import from the US is also increasing progressively ever since import started in March 2018. India is now the fifth largest destination of US LNG exports. Pradhan said the bilateral hydrocarbon trade has increased exponentially during the past three years touching USD 7.7 billion mark in FY19, accounting for 11 per cent of total two-way trade. Iraq is India’s top crude oil supplier, meeting close to one-fourth of oil needs. It sold 26 million tonne crude to India in April-September, relegating Saudi Arabia to the second spot with 20.7 million tonne. The country meets as much as 83 per cent of oil demand through imports and has shipped in 111.4 million tonne during April-September.
India’s Petronet explores buying LNG under 10-year contract
India’s Petronet LNG , the country’s largest importer of liquefied natural gas (LNG), is looking to buy the super-chilled fuel through a long term contract starting from 2024, according to a document reviewed by Reuters. It has issued a Request for Information (RFI) indicating an interest to buy about 1 million tonnes per annum (mtpa) of LNG for 10 years starting from 2024, with the possibility to extend, according to the Feb. 19 document. A request for information is a common practice to ask for written information about the capabilities of various LNG sellers to help them make more informed buying decisions. Petronet’s Director of Finance Vinod Kumar Mishra declined to comment on the RFI. Petronet’s request comes amid a trend among LNG buyers to move away from long-term contracts with fixed pricing to shorter contracts with lower volumes and more flexible terms. However, Indian companies have sought longer contracts as they expect domestic gas demand to increase. The cargoes will be bought on a price formula linked to both Henry Hub natural gas futures in the United States and Dutch TTF gas futures and shipped on a delivered ex-ship (DES) basis, the document showed. Indian companies typically price their LNG contracts on an oil-linked basis while some are tied to the Henry Hub, two sources familiar with LNG imports into India said. Contracts priced on a TTF basis are rare, the sources added. Petronet is asking for suppliers to provide information related to the delivery and pricing of cargoes as well as flexibility that the suppliers can provide, including volumes and destination, the document stated. Suppliers must respond by Feb. 26 and Petronet will shortlist the five most competitive suppliers. The Indian company will analyse supply offers as well as potential LNG terminal investments if required by the suppliers. Petronet is already in talks with several companies including U.S. based Tellurian and NextDecade Corp to buy LNG. It currently has long-term contracts with Qatar Petroleum [QATPE.UL] and Exxon Mobil Corp to lift about 10 mtpa of supply. India wants to raise the share of gas in its energy mix to 15 per cent by 2030 from the current 6.2 per cent to reduce pollution, including the capital New Delhi. The South Asian country is expanding its pipeline network and building new LNG import terminals to encourage the use of cleaner fuel. Petronet has appointed consultancy Berkeley Research Group as an advisor, the document said.
India’s BPCL seeks LNG cargo for late March delivery
India’s Bharat Petroleum Corp Ltd is seeking a liquefied natural gas (LNG) cargo for delivery in late March, two industry sources said. The cargo is for delivery on March 28, one of them said, adding that offers are due by Feb. 27 and valid until Feb. 28.