Vedanta offers 90,000 b/d crude from west India blocks
Indian private-sector resources firm Vedanta has offered to sell 90,000 b/d of crude to domestic refiners from two oil blocks it operates in west India. Vedanta is offering to sell 82,000 b/d produced at its RJ block in Barmer, Rajasthan state and another 8,000 b/d from its Cambay block in Gujarat state, request for proposal (RFP) documents reviewed by Argus show. The crude being offered by Vedanta accounts for around 16pc of India’s 570,000 b/d production in the April 2021-March 2022 fiscal year. Deliveries from both blocks will start from 1 April 2023 until 31 March 2024. The price for the crude sold will be benchmarked to dated Brent prices, Vedanta said. India in July 2022 allowed domestic crude producers from fields awarded before 1999 freedom to sell their production in the domestic market but continued to ban exports. The government earlier fixed the buyers for oil produced from older fields. Only state-controlled, private-sector and joint-venture refiners in India are eligible to participate in the competitive bidding process, according to the RFP documents. The due date for technical bids is 7 February with the final results scheduled before 10 February. The Cambay Block CB/OS-2 was awarded in 1998 under a production-sharing agreement (PSA) to a joint venture of Vedanta, state-controlled upstream firm ONGC and domestic private-sector firm Invenire Petrodyne. The PSA for the Barmer Block RJ-ON-90/1 in 1995 went to a joint venture of Vedanta, ONGC and Vedanta subsidiary Cairn Energy Hydrocarbon.
AG&P speeding Philippines, India LNG terminals development
Global LNG logistics company Atlantic Gulf & Pacific International Holdings hopes to start operations at its first Philippines LNG import terminal between March and May while aiming to expand its presence globally, President AG&P LNG Terminals and Logistics, Karthik Sathyamoorthy, said. “We are going through a very interesting time within the LNG space … we are a demand creator [developing and building LNG terminals] to unlock demand in emerging economies,” Sathyamoorthy told S&P Global Commodity Insights in an interview, adding that within Asia, the company was advancing projects in India, Indonesia, and Vietnam. Singapore-headquartered AG&P’s LNG import terminal in Philippines — PHLNG — is being commissioned in two phases and comes at a time when production at Malampaya, the country’s primary gas field, has been declining, making the development of the country’s LNG infrastructure more critical. PHLNG, located at Batangas Bay, comes with a capacity of up to 5 million mt/year and is based on a floating storage unit — Ish — to be leased on a long-term basis with onshore storage and regasification facilities, Sathyamoorthy said. In February 2022, AG&P said it had inked a long-term charter agreement with ADNOC Logistics and Services for the supply, operations, and maintenance of Ish — a 137,512 cu m FSU — to be chartered for 11 years with an option to extend by another four years. The second phase of the PHLNG project comprises two onshore tanks of 60,000 cu m which are already under construction. Their integration with the main terminal was planned by mid-2025, Sathyamoorthy said. The primary customer for PHLNG is the power sector and because the terminal sits adjacent to the Illijan power plant it will secure base load supplies for Illijan and likely beyond, Sathyamoorthy said. “Because we have a customer committed to our capacity, we feel we are in the best place to continue to expand, provide additional supply and integrate demand downstream,” Sathyamoorthy said. Penetrating India “For us, after the Philippines, India is a corner key market for us and we have over the last five years invested significantly,” he said, noting the company already had a strong downstream infrastructure business in India after it won licenses for city gas distribution business in 12 geographical areas. Traditionally, India’s demand primarily was led by gas-based power and gas to power always has a pricing issue because the alternative has always been coal and the affordability of LNG prices has always been questioned, Sathyamoorthy said. However, a new set of demand is being created by city gas whereby LPG cylinders to households are being replaced by piped natural gas, he said. The licensing regime for city gas over the past few years has meant that a license holder has committed to invest and develop infrastructure over the coming years, which is positive for the country’s gas demand prospects, he said, adding that AG&P itself has committed to close to $2 billion of capital investments over the next eight years. “We are bullish about India’s demand story…so we also wanted to develop a terminal at Karaikal which we haven’t fully canceled or scrapped yet,” Sathyamoorthy said. Karaikal LNG, to be owned and operated by AG&P was planned with an initial capacity of 1 million mt/year and was targeting to supply natural gas to power plants, industrial and commercial customers within a 300-km radius, the company said in February 2020. In December 2021, AG&P said it had signed an agreement with ADNOC L&S to utilize Ghasha, an ADNOC L&S LNG carrier with a capacity of around 138,000 cu m, as an FSU for AG&P’s proposed LNG import terminal in India. Pandemic-related curbs had led to a delay in the terminal’s development initially, Sathyamoorthy said. However, the company was also contemplating alternative locations based on the spread of its city gas licenses to “strategically supply all of our city gas locations,” Sathyamoorthy said. Selecting a geography with a potential longer-term growth for LNG demand in India was another consideration for exploring other locations, he said. “In 2023, we will go ahead and finalize the terminal for which we want to go forward with the construction…By 2025, we should have an operating LNG terminal in India,” Sathyamoorthy said. “We are looking at a 5 million mt/year terminal in India as well for AG&P and primarily we will use some part of that capacity for our own demand and use the terminal to on sell capacity to other demand holders as well.”