Govt plans crude sourcing playbook to boost energy security
In a big push for India’s energy security efforts, the Central government is working to help state-owned oil refiners and private sector companies draw up a coordinated approach for sourcing crude oil, said two government officials aware of the development, seeking anonymity. The first such calibrated strategy, involving public and private firms, may not only help save on oil import bills, but may also be able to counter China’s dominant global position as the world’s second largest oil importer that helps it land better terms for oil imports. India is third largest oil importer globally. The ministry of petroleum and natural gas held preliminary meeting to discuss the way forward. Energy security is key to India’ national security as the country imports over 80% of its oil requirements. Large refiners include Indian Oil Corp. (IOC), Bharat Petroleum Corp. Ltd (BPCL), Hindustan Petroleum Corp. Ltd (HPCL), Nayara Energy Ltd (formerly Essar Oil) and Reliance Industries Ltd (RIL). “There was a discussion on the coordinated approach with a meeting called by the petroleum and natural gas ministry. This is about a calibrated and coordinated approach that will help the country as well as the firms involved,” said one of the officials cited above. India is particularly vulnerable as any increase in global prices can affect its import bill, stoke inflation and increase its trade deficit. India spent $101.4 billion on crude oil imports in 2019-20 and $111.9 billion in 2018-19. It is a key refining hub in Asia, with an installed capacity of over 249.36 million tonnes per annum (mtpa). It has 23 refineries and plans to grow its refining capacity to 400 mtpa by 2025. “We want our companies to talk and work together. We are working on that. We are working out the coordination for public and private sector companies buying crude oil,” the official added. India has been recalibrating its crude sourcing strategy amid growing uncertainties to buffer consumers from any spike in global prices. The new playbook may have a major bearing on the global energy architecture and help bargain for crude oil purchases. “Joint sourcing of crude oil is neither possible nor desirable. However, given the expanse of India’ oil sourcing network, mutual information sharing can help refiners evolve a calibrated approach that can result in significant savings,” said a second official cited above. Queries emailed to the spokespersons of the petroleum and natural gas ministry, IOC, BPCL, HPCL, Nayara Energy and RIL late on Thursday remained unanswered. While covid-19 had hit global energy demand, the announcement of several successful vaccine candidates, international crude oil prices witnessed a spike. Experts however remained wary of the move. “India used to import oil at over $100 per barrel five years ago—now the price is less than $50 per barrel. This reduction has happened not because of joint sourcing of oil, but because of new oil production from the US and Canada resulting in a better supplied market. If we want oil to remain cheap, we need to invest in upstream oil production in places such as the US,” said Amit Bhandari, fellow, energy and environment studies programme, Gateway House, Mumbai. India, which is a major energy consumer, has been calling for a global consensus on “responsible pricing”. Every dollar increase in the price of oil raises India’s import bill by ₹107 billion on an annualized basis.
OPEC+ resumes talks after February split on oil output
OPEC+ resumes debate on Tuesday after talks stumbled over February policy, as Russia led calls for higher output while others suggested holding or even cutting production due to new lockdowns. Debate resumes at 1430 GMT after the group, which combines OPEC and other producers including Russia, failed to find a compromise on Monday. OPEC+ sources told Reuters that Russia and Kazakhstan backed raising production by 0.5 million bpd while Iraq, Nigeria and the United Arab Emirates suggested holding output steady. An internal OPEC document, seen by Reuters on Tuesday and dated Jan. 4, suggested a 0.5 million bpd cut in February as part of several scenarios considered for 2021. The document also said that the OPEC+ joint ministerial committee highlighted bearish risks and “stressed that the reimplementation of COVID-19 containment measures across continents, including full lockdowns, are dampening the oil demand rebound in 2021”. On Monday, Saudi Energy Minister Prince Abdulaziz bin Salman said OPEC+ should be cautious, despite a generally optimistic market environment, as demand for fuels remained fragile and variants of the coronavirus were unpredictable. New variants of the coronavirus were first reported in Britain and South Africa and have since been found in countries across the world. With benchmark Brent oil futures holding above $50 per barrel, OPEC+ took the opportunity this month to raise output by 0.5 million bpd as it looks to eventually ease cuts that currently stand at 7.2 million bpd. OPEC+ producers have been curbing output to support prices and reduce oversupply since January 2017 and cut a record 9.7 million bpd in mid-2020 as COVID-19 hammered demand for gasoline and aviation fuel.
Promote ethanol production from sugarcane, maize & agri waste: Nitish to officials
Bihar Chief Minister Nitish Kumar on Monday underscored that there is a huge potential of ethanol production in the state and asked officials to work on promoting ethanol production from sugarcane, maize and agri waste. Making ethanol from sugarcane will promote sugarcane industries in the state, Kumar said. “There is a huge potential for ethanol production in the state…we had sent proposal to the Centre in our first tenure (2005 to 2010) in this regard but the proposal was not accepted at that time. “I am happy to know that work is being done on it (ethanol production) now,” Kumar said in an official release. He was speaking at a high level meeting held at CMs secretariat to review the various schemes and programmes of the industries department. Deputy Chief Minister Renu Devi, Chief Secretary Deepak Kumar, Industries departments Additional Chief Secretary Brajesh Mehrotra, CMs Principal Secretary Chanchal Kumar and a host of other senior officials of the department attended the meeting. Stating that a slew of measures are being taken to promote entrepreneurship in the state, the CM said there is a huge scope for the growth of micro, small and medium enterprises in the state. The arrangements for imparting training to youths be made so that they can either set up their own industries or carry out their own businesses in the state, Kumar said while adding that the state government is committed to give all possible help for setting up new industries. Earlier, Mehrotra gave a detailed presentation on the progress of industries departments various works, schemes, programmes, policies that included plastic park scheme, electronic manufacturing cluster scheme and action plan for ethanol production. He also gave vivid presentation on Bihar Industrial Investment Promotion Policy 2016, besides giving information about steps and measures taken to promote industrialisation in the state.
Gas-based economy crucial for Atmanirbhar Bharat, says PM Modi
Prime Minister Narendra Modi on Tuesday said that a gas-based economy is crucial for Atmanirbhar Bharat and work is being done in the direction of “One Nation, One Gas Grid”. Prime Minister Narendra Modi also inaugurated the Kochi-Mangaluru natural gas pipeline, via video conferencing today. “It is an honour to dedicate the 450-km pipeline to the nation. This is an important day for India, especially for people of Karnataka and Kerala. India is focusing on gas-based economy and lot of work is being done on ‘One Nation, One Gas Grid’. The gas-based economy is also crucial for Atmanirbhar Bharat,” said PM Modi at the inauguration. “It is an important day for India, especially for the people of Karnataka and Kerala. These two states are being connected via a natural gas pipeline. I congratulate everyone as the pipeline is a futuristic step towards a clean energy ecosystem,” he added. Governors and Chief Ministers of Karnataka and Kerala, along with Union Minister for Petroleum and Natural Gas were also present during the event. Kochi-Mangaluru Natural Gas Pipeline will have a positive impact on economic growth, the Prime Minister stated. “It is an example that if we work together, nothing is impossible,” he added. “The Kochi-Mangaluru pipeline is an example that if everyone works together by prioritising development, no goal is unachievable. This pipeline is going to prove very important in accelerating the development of both the states,” said PM Modi. “It is not just a pipeline but it will be a major driver of development in both states,” he added. The Kochi-Mangaluru pipeline will increase the ease of living for millions of people in both states. This pipeline will reduce the expenses of the poor, middle class and entrepreneurs of both the states, the Prime Minister stated. “The Kochi-Mangaluru pipeline will be the medium of gas distribution system in cities. It will become a medium for developing CNG-based transport systems in many cities,” he added. According to the PMO, the 450 km long pipeline has been built by GAIL (India) Ltd. It has a transportation capacity of 12 Million Metric Standard Cubic Metres per day and will carry natural gas from the Liquefied Natural Gas (LNG) Regasification Terminal at Kochi (Kerala) to Mangaluru (Dakshina Kannada district, Karnataka), while passing through Ernakulam, Thrissur, Palakkad, Malappuram, Kozhikode, Kannur and Kasaragod districts. The total cost of the project was about Rs 3,000 crore and its construction created over 12 lakh man-days of employment. Laying of the pipeline was an engineering challenge as the route of the pipeline necessitated it to cross water bodies at more than 100 locations. This was done through a special technique called the Horizontal Directional Drilling method. The pipeline will supply environment-friendly and affordable fuel in the form of Piped Natural Gas (PNG) to households and Compressed Natural Gas (CNG) to the transportation sector. It will also supply Natural Gas to commercial and industrial units across the districts along the pipeline. Consumption of cleaner fuel will help in improving air quality by curbing air pollution.
Hubballi: 19,000 houses to be connected to PNG network by May-end
In what is likely to give a much-needed push for sustainable energy solutions, as many as 19,500 households in the twin cities will be connected to the piped natural gas (PNG) network by the end of May. Transitioning from the traditional liquified petroleum gas (LPG) to the more eco-friendly PNG is in keeping with both the state and central government’s push for the adoption of greener solutions to meet energy requirements. The Indian Oil Adani Gas Private Ltd (IOAG) has thus far connected 7,000 households in Hubballi-Dharwad to the PNG network and has set for itself the target of supplying 37,000 households with natural gas by the end of 2021. Listing the advantages of PNG, IOAG deputy general manager (projects) Vinod Papal told TOI, “In addition to its being a cleaner and greener alternative to LPG, by becoming a part of the PNG network, residents will be spared the hassle of booking a cylinder since natural gas will be supplied to them round the clock. It is also much safer since the threat of fires in the kitchen will be greatly reduced. Natural gas is lighter than air and hence, will not accumulate in a confined space. It is eco-friendly and combustion-free.” However, supply of natural gas through the piped network is feasible only to well-planned localities. “It is very difficult to lay pipelines in congested areas. We will soon be supplying natural gas to Vasant Nagar, Badami Nagar, Bengeri, Shirur Park, Dollars Colony, Renuka Nagar in Hubballi, while in Dharwad, the infrastructure is in place in Gandhi Nagar and Shettar Colony,” Vinod added. Pointing to the prevalence of natural gas in European countries, Vinod said that most of metros in India too were switching to the cleaner, safer fuel. Expressing his gratitude to the HDMC, Hubballi-Dharwad Smart City Ltd and the elected representatives for cooperating with IOAG, Vinod added, “I am sure people will love the idea of gas being supplied directly to their kitchens.” The length of the PNG network in Hubballi-Dharwad is now extended to 323km. Natural gas is being sourced from the Dhabol-Bengaluru pipeline, he added.
Ethanol blending in petrol will cross 8% in 2020-21: Petroleum Secretary Tarun Kapoor
Ethanol blending in petrol will cross 8 per cent in 2020-21 after reaching 5 per cent in the previous year despite the pandemic, Petroleum Secretary Tarun Kapoor told ET. State oil marketing companies received 173 crore litres of ethanol for blending with petrol during ethanol supply year that ran between December 2019 and November 2020. The volume was lower than 189 crore litres of 2018-19 but the share in petrol blending was the same at 5 per cent due to the overall decline in fuel sales due to the pandemic, which also curbed the availability of ethanol. “This year we are quite certain of crossing 8 per cent ethanol blending in petrol,” said Kapoor. Behind this confidence is the supply offer of 320 crore litres for this year from various suppliers in recently floated tenders. The rise in ethanol supply offers has come on the back of the government widening the basket of raw materials that could be used to produce the green fuel. This year the offers of ethanol derived from food grains have risen to 40 crore litres from 10-12 crore litres in previous years, Kapoor said. “A rise in food grains-based supply will help farmers and stabilize the food market,” he said. Earlier, only molasses-based ethanol was allowed. Then the government broadened the choices to include damaged food grains, and normal gains in a surplus year as well as maize. Distilleries can also convert excess sugar to ethanol. The government has set a target of 10 per cent ethanol blending in petrol by 2022 for state-run oil companies. Blending is being promoted to help cut expensive oil import and reduce air pollution. The government is also promoting compressed biogas as it is aggressively encouraging the distribution of natural gas across the country. The government has set a target for setting up 5,000 compresses biogas plants by 2023-24 with a production target of 15 million tonnes. “This will become a gamechanger for rural India. This has several advantages of Atmanirbhar Bharat (self-reliance), swachhta (cleanliness), and energy security,” Kapoor said. State-run oil companies have already issued 700 letters of intent (LOIs) for such plants to entrepreneurs. They have also signed initial agreements to set up another 900 biogas plants. It takes about two years to set up a plant. “We are hopeful that a large number of plants will come up in the next two years,” Kapoor said.
PM Modi to inaugurate Kochi-Mangaluru natural gas pipeline today
Prime Minister Narendra Modi will dedicate the Kochi – Mangaluru Natural Gas Pipeline to the nation via video conferencing on Tuesday. According to a release of the Prime Minister’s Office (PMO), PM Modi will inaugurate Kochi-Mangaluru natural gas pipeline at 11 am today. The event will mark an important milestone towards the creation of ‘One Nation One Gas Grid’. Prime Minister Modi has said that the ” futuristic project will positively impact many people.” “Tomorrow, 5th January is a landmark day in India’s quest for #UrjaAatmanirbharta! At 11 AM, the Kochi – Mangaluru Natural Gas Pipeline would be dedicated to the nation. This is a futuristic project that will positively impact many people,” PM Modi said in a tweet on Monday. Governors and Chief Ministers of Karnataka and Kerala, along with Union Minister for Petroleum and Natural Gas Dharmendra Pradhan will also be present on the occasion. According to the PMO, the 450 km long pipeline has been built by GAIL (India) Ltd. It has a transportation capacity of 12 Million Metric Standard Cubic Metres per day and will carry natural gas from the Liquefied Natural Gas (LNG) Regasification Terminal at Kochi (Kerala) to Mangaluru (Dakshina Kannada district, Karnataka), while passing through Ernakulam, Thrissur, Palakkad, Malappuram, Kozhikode, Kannur and Kasaragod districts. The total cost of the project was about Rs 3000 crore and its construction created over 12 lakh man-days of employment. Laying of the pipeline was an engineering challenge as the route of the pipeline necessitated it to cross water bodies at more than 100 locations. This was done through a special technique called the Horizontal Directional Drilling method. The pipeline will supply environment-friendly and affordable fuel in the form of Piped Natural Gas (PNG) to households and Compressed Natural Gas (CNG) to the transportation sector. It will also supply Natural Gas to commercial and industrial units across the districts along the pipeline. Consumption of cleaner fuel will help in improving air quality by curbing air pollution.