Delhi HC dismisses govt appeal accusing Reliance of ‘fraud, unjust enrichment of over $1.729 billion’ for siphoning gas
In a set back to the government, the Delhi High Court on Tuesday dismissed its petition accusing Mukesh Ambani-led Reliance Industries (RIL) and its partners of committing an “insidious fraud” and “unjust enrichment of over $1.729 billion” by siphoning gas from deposits they had no right to exploit. Justice Anup Jairam Bhambhani while upholding the international arbitration award of July 24, 2018, that ruled in favour of RIL-led consortium that includes UK-based BP Plc and Niko Resources of Canada said “no interference” is called for. The government had sought setting aside of the arbitration award on the grounds that “the award strikes at the heart of the public policy and has given a premium to a contractor (RIL) that has amassed vast wealth by committing an insidious fraud as well as criminal offence …” “The unjust enrichment amassed by the contractor had already reached more than $1.729 billion today (at the time of filing petition), and is since increasing as the production of migrated gas is still continuing,” it had stated in its petition. Favouring RIL-led consortium in the so-called gas migration dispute case, the three-member tribunal headed by Singapore-based arbitrator Lawrence Boo in its 2:1 award in July 2018 had rejected the government’s contention. It said that the production sharing contract (PSC) doesn’t prohibit the contractor from producing gas—irrespective of its source—as long as the producing wells were located inside the contract area. It also had held that the consortium was not be liable to pay any amount to the government and had also directed the latter to pay $8.3 million as the cost of arbitration to the consortium. The government had raised a demand of $1.47 billion in 2014 upon RIL, the contractor of KG-DWN-98/3 block in the KG basin in the Bay of Bengal, for disgorgement of unjust enrichment made by draining and selling the gas that migrated from adjacent ONGC blocks – Godavari PML and KG-DWN-98/2, which share borders with the RIL’s block. It said that RIL was neither entitled to produce as per the PSC nor had any express permission from the government. In 2014, state-run ONGC approached the Delhi High Court, complaining that gas from its blocks was being produced by RIL. The two companies had appointed US-based consulting agency DeGolyer and MacNaughton (D&M), to examine the issue. D&M said development of the RIL block would be “capable of depleting (original gas in-place) on the Godavari PML block.”
India eyes green hydrogen bunkering at major ports by 2035
India has set a deadline of 2035 to establish green hydrogen bunkering and refuelling facilities at major ports in the drive to cut its carbon footprint, the shipping ministry said in guidelines issued on Wednesday. One of the world’s biggest emitters of greenhouse gases, India aims to cut emissions to net zero by 2070, and the shipping minister said three of its ports would initially have bunker facilities for green hydrogen and ammonia. “Our target is to cover all 12 major parts with a green hydrogen bunkering facility by 2035,” Shipping Minister Sarbananda Sonowal told Reuters. The initial ports in the effort are to be Paradip in the east, Kandla in the west, and Tuticorin in the south. “Financing required to turn these ports into green ports is under consideration,” Sonowal added. More than 200 ports dot India’s coastline, which stretches 7,500 km (4,660 miles), in addition to the 12 major ones, all together accounting for 95% of its trade by volume and 65% by value. Authorities want electricity to power at least half the vehicle and equipment needs of major ports by 2030, rather than diesel, and raise that figure further to 90% by 2047. “Whatever initiative we are taking aims to meet the 2070 goal of being a net-zero carbon nation,” Sonowal said. To meet the net-zero goal, at least 40% of India’s electricity will have to come from renewables. To that end, the new shipping guidelines require ports to satisfy at least 60% of electricity needs through renewables by 2030 and 90% by 2047. Also, by 2030, all ports must achieve cuts of more than a fifth in energy consumption on each tonne of cargo versus 2023, the guidelines show. To boost use of gas, the shipping ministry wants ports to set up at least one liquefied natural gas (LNG) bunkering station by 2030 and electric vehicle charging stations in and around port areas by 2025.
GAIL plans $4.9 billion ethane cracker in West India
AIL (India) Ltd, the country’s top gas supplier, plans to build a 400-billion rupee ($4.89 billion) ethane cracker near its liquefied natural gas (LNG) import plant in Western India, two sources with direct knowledge of the matter said, as it seeks to meet an expected surge in demand. Indian companies are boosting their petrochemical production capacity as the expanding economy boosts the need for goods ranging from plastics to paints and adhesives. A cracker produces ethylene, required for products such as plastics. Demand for petrochemicals could nearly triple by 2040, according to estimates by top refiner Indian Oil, forcing companies to make big investments to set up new facilities across the country. GAIL is looking for land in the coastal region of Dabhol in Maharashtra state for the 1.5 million tonnes a year (mtpa) cracker project, one of the sources told Reuters. GAIL operates a 5 mtpa LNG plant at Dabhol. The company plans to import ethane from the United States for the project, the source said. GAIL’s communications office did not immediately respond to a request for comment.
S&P says India will import lesser crude oil this year than expected
Standard & Poor’s expects India to import less crude oil than expected because of flat demand in April. Latest government data shows that oil products demand fell 360,000 barrels per day (b/d) on the month in April 2023. According to data released by the oil ministry’s petroleum planning and analysis cell, year-on-year crude oil demand was up by only 11,000 b/d, or 0.2%, marking it the weakest growth since the contraction in January 2022. The April slump was due mainly to the weakness of LPG, gasoline, and other minor products such as pet coke and asphalt. Demand for gasoil was robust with growth at 156,000 b/d, while growth for naphtha, gasoline, kerosene/jet fuel and fuel oil were more modest, but these increases were largely offset by a decline of 227,000 b/d for minor products. According to JY Lim, Oil Analyst at S&P Global Commodity Insights, India’s gasoline demand rebounded above pre-COVID-19 levels in 2021 and was expected to be some 17.6% higher in 2023. Gasoil demand was expected to be close to 8% above pre-COVID-19 levels this year, but kerosene/jet fuel demand will remain about 19% lower than 2019 levels.