Petronet looks to make foray into petrochemical business, plans LNG terminal in Odisha
Petronet LNG Ltd, India’s largest gas importer, plans to set up a petrochemical complex at Dahej in Gujarat as it looks to make a foray into high margin business to hedge gas trading risks, Oil Secretary Tarun Kapoor said. Petronet, which owns and operates to terminals at Dahej and Kochi in Kerala for import of super-cooled gas in ships, is also looking at setting up a floating terminal at Gopalpur port in Odisha, Kapoor, who is also chairman of the company, said. In the firm’s largest annual report, Kapoor said Petronet “is embarking upon a major diversification drive to broad base its business activity and is exploring to have an ethane/ propane import facility at Dahej terminal.” Petronet “has also planned for setting up of a petrochemical complex based on imported propane at Dahej LNG Terminal”, he said. “The foray into petrochemicals would be a forward integration of our strategy as the same planned to get synchronised with our upcoming third jetty project and available land bank at Dahej.” He, however, did not give details of the planned petrochemical complex including investment and size of the plant. Petrochemicals, made using crude and natural gas as feedstock, form raw material for plastics, packaging material, and personal care products. In terms of volume, the petrochemical market in India stood at 42.50 million tonnes and is estimated to reach 49.62 million tonnes by 2025, expanding at a compound annual growth rate (CAGR) of 6.14 per cent between FY 2021 and FY 2025. Using ethane, plastics and detergents can be made; while propane can give plastic. Petronet is 50 per cent owned by state-owned refiners Indian Oil Corp (IOC) and Bharat Petroleum Corp Ltd (BPCL), gas utility GAIL (India) Ltd and oil and gas producer ONGC. The four companies sit on board of the company, which is headed by the Secretary, Ministry of Petroleum and Natural Gas. Kapoor said Petronet is exploring the possible business opportunities from harnessing the cold energy from its regasification terminals at Dahej and Kochi. “Harnessing LNG’s cold energy not only maximises re-gasification terminals’ potential but also offers an opportunity to cut emissions in cold warehousing chain simultaneously adding value and improving energy efficiency,” he said. After establishing a presence in the southern and western parts of the country, Petronet is now planning to set up a floating LNG terminal at Gopalpur port in Odisha with a view to establishing its presence on the eastern coast of India, he said. “The LNG terminal will help meet the increasing gas demand of the eastern and central part of the country,” he said. He added that Petronet has already completed the pre-project studies and is in process of preparing the Detailed Feasibility Report (DFR) for 4 million tonnes per annum floating storage & regasification (FSRU) terminal followed by a pre-feasibility report for a 5 million tonnes land-based terminal in future. Petronet, he said, “has signed MoU (memorandum of understanding) with Gopalpur Ports Ltd and is in discussion with them to finalise the key technical and commercial terms of the agreements”. Without giving investment details or timelines for the project implementation, he said the firm is in process of obtaining the final investment decision for the project. Dahej terminal is the largest import facility in the country, with a nameplate capacity of 17.5 million tonnes per annum. Kochi terminal is a 5 million tonnes nameplate capacity but it operates at a fraction of capacity in absence of pipelines to take the fuel to customers.
MRPL-HPCL merger will take as much time as required by law: ONGC Chairman
The Chairman of Mangalore Refinery and Petrochemicals Ltd (MRPL) and Oil and Natural Gas Corporation (ONGC), Subhash Kumar, has said that the process of the merger of MRPL with HPCL (Hindustan Petroleum Corporation Ltd) will take as much time as required by law. Replying to a shareholder query on the delay in the merger of MRPL with HPCL at the 33rd annual general meeting of MRPL on Saturday, he said the merger plan is definitely there. MRPL is a subsidiary of ONGC. He said HPCL also happens to be one of the promoters of MRPL. All the three companies – HPCL, MRPL and ONGC — are listed entities, and all the processes will have to go through as per the legal requirement. Stating that merger of OMPL (ONGC Mangalore Petrochemicals Ltd) with MRPL itself is taking time, he said there are certain timelines defined as per the process. The team is working to make it happen at the earliest. On the benefits from the merger of OMPL with MRPL, he said the entire refinery complex can function on an integrated basis with this merger, and there will not be any inefficiencies within the group. Timelines On the timelines for the merger of MRPL with HPCL, he said the process will take as much time as required by the law. Stating that the full-scale merger will help improve value realisation, he said first it will happen through the merger of OMPL with MRPL. To a query by a shareholder on the need for expanding the retail outlet network of MRPL when it is going to merge with HPCL, M Venkatesh, Managing Director of MRPL, said retail outlet will be a value addition to both MRPL and HPCL rather than competition. “We are ensuring that retail outlets will only add value to HPCL, if and when the merger takes place at the right time,” he said. Subhash Kumar said that MRPL has opened 27 retail outlets in Karnataka and Kerala till now. The plan is to take the total number of retail outlets to 40 during this fiscal, he said. When a shareholder suggested that MRPL should have focussed on transporting water by road or rail to meet its requirements rather than setting up a sea water desalination plant in Mangaluru, Venkatesh said refining sector is water intensive and it is practically impossible to transport the kind of water required by road or rail. Stating that the dependence on rainwater is not a good strategy, he said: “We have embarked upon the desalination plant to de-risk one of the main components for MRPL. We will optimise the water consumption from desalination plant to reduce the operating cost.” Subhash Kumar said that MRPL is planning to commission the sea water desalination plant during September 2021.
Indian Govt: Ethanol mixed petrol to be available in most parts of India within 6 months
In a move to promote cleaner mobility, the Central Government is all set to promote ethanol as an alternative fuel in coming times. According to a statement made by Mr Nitin Gadkari, Union Minister of Road Transport and Highways in SIAM annual convention 2021, the ministry will be expanding the network of ethanol pumps across the country in the next six months. For this move, the Central Government has already ordered the petroleum companies of the public sector to start ethanol pumps in the regions where ethanol is already available. Adding to the development, Mr Tarun Kapoor, Secretary, Ministry of Petroleum and Natural Gas, said that 100 per cent ethanol (E100) is already available at three retail outlets. After this announcement, the number of outlets is only going to expand in upcoming times. To match the progress, automakers should also start developing new vehicles with flex-fuel engines. Roadmap for the strategy of ‘ethanol-ification’: Earlier, the ministry had set a deadline of 2030 to introduce E20 for vehicles, which is petrol mixed with 20 per cent of ethanol. However, with time, the deadline was preponed to 2025 and then eventually 2023. Currently, 80 per cent of the petrol available in the country today is E10 (petrol blended with 10 per cent ethanol). The E10 is available in most of the prominent and populous zones, except remote areas like those in the North East and parts of Jammu and Kashmir. However, the availability of E10 is expected to be 100 per cent throughout the country by 2022. Following this, the rollout of E20 will be done in a gradual manner, which will ultimately lead to that of E100 down the lane as well. Mr Gadkari has previously said that India is capable of producing ethanol from the surplus amount of rice, corn, maize and wheat produces, which will promote the faster rollout of vehicles that can run on E20 fuel. The move towards ethanol is also seen as a strategy of the Government of India to phase out small capacity diesel engines for passenger vehicles. Currently, there is not a single vehicle in India that is powered by a flex-fuel engine. Back in 2019, TVS had showcased an ethanol-powered version of the Apache RTR 200. However, that model is still not confirmed for series production and availability. One of the key reasons behind the absence of vehicles with flex-fuel engines is the lack of availability of ethanol. However, the new strategy of the Government of India will certainly give motivation much needed for the automakers.