India’s state-run refiner Indian Oil Corporation aims to sell two hydrogen units this year
State-run Indian Oil Corporation, the country’s top refiner, plans to sell hydrogen-producing units at its plants to private sector entities, its chairman S. M. Vaidya said on Tuesday. In her annual budget for the 2021/22 fiscal year presented last month, Nirmala Sitharaman, India’s finance minister proposed the sale of some assets of state-run companies to mobilise funds. To begin with IOC plans to sell two hydrogen units of 72,500 tonnes per annum capacity each at its 276,000 barrels per day (bpd) Koyali refinery in western Gujarat state by the end of 2021, Vaidya told reporters on the sidelines of an industry event. “We are starting with the Gujarat refinery. Let’s see how it goes before we start the process for other refineries,” Vaidya said. IOC operates about a third of India’s 5 million bpd refining capacity. Vaidya said the IOC will pay annual operation and maintenance charges to the new owner. “We are trying to leverage hydrogen units. The asset value and O&M (operation and maintenance) cost will be taken into consideration for selecting a licensor or new buyer,” he said. However, he said the firm had no plans to sell other units of the refineries for now. The sale of hydrogen units made sense, however, as IOC would be the sole customer of the hydrogen produced by the new owner from the units located at its Koyali refinery, he said.
India Oil Corp submits rate revision request for its Dadri-Panipat natural gas pipeline
India Oil Corp has sought a rate of Rs 14.59 per mmBtu for its Dadri-Panipat natural gas pipeline in its tariff revision plea filed with the Petroleum and Natural Gas Regulatory Board, which will take a final call after wider consultation. The 132-km-long pipeline has an economic life of 30 years extending to 2040 and a capacity of 9.5 million metric standard cubic meters a day (mmscmd). The tariff proposed by the company is lower than the pipeline’s current tariff of Rs 16.46 per mmBtu, which the PNGRB had determined for three years ending March 2021. The current tariff is much lower than Rs 38.45 the company had proposed to the regulator. For the period between July 2010 and March 2018, Indian Oil had proposed a tariff of Rs 18.25 while the regulator approved just Rs 10.20 per mmBtu. PNGRB has sought comments from all stakeholders by March 27 on Indian Oil’s new tariff proposal. The transportation tariff factors in the actual and projected capex and opex over the entire economic life of the pipeline. In its tariff filing, Indian Oil has claimed a total capex of Rs 458 crore between 2007-08 and 2040-41. A total opex of Rs 540 crore has been claimed during the economic life of the pipeline.
Domestic natural gas prices likely to remain unchanged at $2 on April 1: ICICI Securities
Domestic natural gas will be priced at $2 per mmBtu, almost unaltered from the current price when the government revises rates on April 1, ICICI securities said in a report. The new expected price, based on net calorific value (NCV), is derived from international prices in the calendar year 2020. The current price, published by the government on a gross calorific value (GCV) basis, is $1.79 per mmBtu, a record low. On NCV basis, this amounts to $2. Most of the country’s natural gas output is sold for a price obtained under a government-set formula introduced in 2014. Prices are revised every April and October and are valid for six months. The expected price for April-September this year would be about 64 per cent lower than the highest price ever obtained under the formula. The international gas market has been oversupplied for some years, resulting in lower prices. India, which imports more than half of its natural gas needs, has benefitted from low prices. Domestic producers, however, find the formula prices too low and say lower rates will hinder new investments in gas exploration and production.
BPCL bullish on clean fuel, aims at increasing CNG sale share to 15pc in 4-5yrs
PSU oil marketing company Bharat Petroleum Corporation Ltd (BPCL) is aiming big to expand its footprint in clean fuel space and looking to set up an infrastructure to tap the growing market for electric and gas-based mobility, an official said on Tuesday. The oil retailer is planning to increase the share of clean fuel in its annual sales and also working on the installation of battery-swapping and charging stations for electric vehicles. “There is a shift towards clean gas usage. Sales of gas-based fuel account for 1.5 per cent but we aspire to take this to 15 per cent in the next four to five years,” BPCL executive director (Retail) PS Ravi said. The company has already 5 CNG stations operational in West Bengal -one in Kolkata and four in Durgapur, he said. Ravi said the petroleum major is also carrying out trial runs for battery-swapping centres in Cochin and Lucknow, and once this business model is established, it would be launched in Bengal. He was speaking at a virtual media interaction at the inauguration of BPCL’s revamped Budge Budge storage installation and multi-product pipeline from Haldia jetty to its coastal facility. Revamped at a cost of Rs 167 crore, the Budge Budge facility helps double the storage capacity to 47,000 KL for diesel and petrol. A multiproduct pipeline from Haldia Jetty to its facility there was built at an investment of Rs 97 crore and it also commenced operation.
Vopak joins queue to build LNG import terminal in Australia
Dutch oil storage company Vopak wants to build an LNG import terminal in Australia’s Victoria state, vying with five other proposed projects to fill a looming gas supply gap in the country’s southeast. Vopak said it wants to dock a floating storage and regasification unit (FSRU) in Port Phillip Bay near Melbourne. It hopes to submit a proposal to the Victoria state government in the third quarter of 2021. It aims to have first imports after 2024, when the market is expected to face a gas shortfall as the ageing fields that have long supplied the state’s needs are rapidly drying up. “We would like to have the facility operational before Victoria is expected to be facing substantive gas shortages,” Vopak Australia Managing Director Fulco van Geuns said in a statement. Vopak expects the terminal to be able to import up to 50 LNG cargoes annually, with an open access model providing services to LNG suppliers and gas market customers. “Expectations are that any LNG terminal would need to act as a peak shaver for winter demand in the near term, depending on the profile of decline of domestic gas production in southeast Australia,” van Geuns said in emailed comments. The company has been in talks with potential customers, but did not elaborate due to confidentiality agreements. Vopak chose Victoria despite two other projects seeking approval in the state – one by top energy retailer AGL Energy and the other by Viva Energy which has a dock at Geelong, not far from Vopak’s planned site. “With reducing domestic gas and the current pipeline capacity from Queensland domestic gas supply sources, Vopak believe that an import terminal makes most sense to be positioned in Victoria,” van Geuns said. AGL is awaiting a final decision from the state government on its A$250 million ($193 million) project within the next few weeks, following an extended environmental review.