India’s appetite for Russian oil reduces, share slips to lowest in 9 months as OPEC gains
OPEC’s share in India’s oil imports in October hit a 10-month high as refiners bought more crude from Saudi Arabia and the United Arab Emirates after discounts narrowed for Russian oil that month, trade data showed. Russia’s share of the Indian market in October slipped to the lowest in nine months, according to Reuters calculations based on ship tracking data from trade sources. India, the world’s third-biggest oil importer and consumer, typically relies on producers in the Middle East for most of its oil needs and has encouraged refiners to diversify to cheaper alternatives to cut costs. The South Asian nation has emerged as the top buyer of the Russian seaborne oil sold at a discount after Western nations stopped buying from Moscow following its invasion of Ukraine. India imported about 4.7 million barrels per day (bpd) of crude in October, up 8.4% from the previous month as refiners increased purchases to meet higher local fuel demand during the festive season, the data showed. Imports from Saudi Arabia and the United Arab Emirates jumped to a 7-month high, up about 53% and 63% respectively in October from the previous month, the data showed. That helped lift the share of the producers in the Organization of the Petroleum Exporting Countries to 54% in October, up from 50% in September, according to the data. India imported on average 1.56 million barrels per day (bpd) of Russian oil in October, up 1.2% from the previous month, the data showed. Despite the increase, Russian oil’s share in India’s October imports slipped to 33% from 35% in September. Russia was the top oil supplier to India in April to October, the first seven months of this fiscal year to March 2024, followed by Iraq and Saudi Arabia. Higher intake of Russian oil boosted the share of the Commonwealth of Independent States (CIS) in India’s oil imports to the highest during April-October, the data showed.
Indian Oil to double Ennore LNG terminal’s capacity to 10 mln tpy
Indian Oil Corp, the country’s top refiner, aims to double the capacity of its liquefied natural gas (LNG) import terminal at Ennore in southern India, Sandeep Jain, the company’s executive director for gas business, said on Friday. The company plans to expand capacity to 10 million metric ton per year (tpy) amid the growing demand for gas in the country, Jain told reporters at an industry event. He did not elaborate the details. India wants to raise the share of gas in its energy mix to 15% by 2030, up from the current 6.2%, as part of an effort to cut emissions. Jain said IOC hopes to boost local sales of gas to 20 million tpy by 2030, a substantial increase from the current 6.3 million tpy. Aside from the Ennore terminal, IOC has leased capacity in at least two local projects operated by other companies to import gas. Jain said India needs to sign more long-term LNG import contracts to ensure price stability. IOC recently signed two agreements for 14-year LNG import contracts worth $11 billion, he said.
India seeks to build strategic reserves by storing gas in depleted wells
India is looking at building its first strategic natural gas reserves by using old, depleted hydrocarbon wells to store the fuel and hedge against global supply disruption, a senior executive of natural gas company GAIL (India) Ltd said on Friday. The strategic facilities would be built in phases in India’s western and northeastern regions with an initial capacity to store three to four billion cubic meters (bcm) of gas, Sumit Kishore, an executive director at GAIL, told reporters at an industry event. India has five million tonnes of strategic petroleum reserves but no storage facilities for natural gas. Indian companies together currently hold two bcm of gas in pipelines and liquefied natural gas tanks for commercial use. Kishore said the first strategic gas storage facility would take three to four years to build after government approval. India aims to raise the share of natural gas in its energy mix to 15% by 2030 from about 6.2% now. The nation consumes around 60 bcm gas annually.
Petroleum Minister Hardeep Puri inaugurates floating re-fueling (CNG station for boats at Ravidas Ghat
In a significant step towards a pollution free Varanasi, the city’s second floating Compressed Natural Gas (CNG) Mobile Refueling Unit (MRU) station at Ravidas Ghat was inaugurated today by Minister of Petroleum and Natural Gas & Housing and Urban Affairs Shri Hardeep Singh Puri. This is the country’s second such station built to fill CNG in boats, after the Namo Ghat CNG station here. Both the stations have been developed by GAIL (India) Limited, a Maharatna PSU under the Ministry of Petroleum & Natural Gas. GAIL Chairman & Managing Director Shri Sandeep Kumar Gupta, Director (Human Resources) Shri Ayush Gupta, Director (Marketing) Shri Sanjay Kumar and a host of dignitaries were present on the occasion. With this, floating CNG stations for boats are now operational on both sides of the main Ghats of Varanasi. The floating stations have been developed by GAIL at a cost of approx. Rs 175 million. In a world grappling with environmental challenges and the urgent need to transition to cleaner, more sustainable energy sources, the inauguration of the second floating infrastructure in Varanasi is a significant step towards viable sustainable energy solutions, Shri Puri said. “The decision to set-up this floating CNG station is a testament to our belief in the transformative power of clean energy,” the Minister said. Speaking about the significance of CNG station at Ravidas Ghat, Shri Puri noted that this will provide great convenience to boatmen as they will not have to go all the way to NaMo Ghat for refueling, thus saving time and money. “On an average, it is estimated that each boatman can potentially save over Rs.36,000 per year by using CNG as fuel”, said the Minister.
IOC, GAIL fined for second straight quarter for failing to meet listing norms
State-owned oil and gas giants including IndianOil and GAIL (India) Ltd have been slapped with fines for the second quarter in a row for failing to meet listing requirements of having the requisite number of independent directors on board. Stock exchanges have fined oil refining and fuel marketing giant Indian Oil Corporation (IOC), explorers Oil and Natural Gas Corporation (ONGC) and Oil India Ltd, gas utility GAIL, refiners Bharat Petroleum Corporation Ltd (BPCL) and Hindustan Petroleum Corporation Ltd (HPCL), and Engineers India Ltd Rs 5,42,000, stock exchange filings showed. In separate filings, the companies detailed the fines imposed by the BSE and NSE but were quick to point out that appointment of directors was done by the government and they had no role in it. The fines were for not having the requisite independent directors in the second quarter. They had faced fines for the same reason in the first quarter as well. While the companies have now been slapped with a uniform Rs 5,42,800 fine, ONGC was previously slapped with Rs 3,36,000 fine, IOC Rs 5,36,000 and GAIL Rs 2,71,000 fine. HPCL and BPCL were each asked to pay Rs 3,60,000 fine, while Oil India had faced a penalty of Rs 5,37,000. Listing norms require companies to have independent directors in the same proportion as executive or functional directors. They are also required to have at least one woman director on the board. In its filing, IOC said it has informed the BSE and NSE that “being a government company, the power to appoint directors (including independent directors) vests with the Ministry of Petroleum and Natural Gas (MoPNG), Government of India and hence the non-appointment of women independent director on the Board during the quarter ended September 30, 2023 was not due to any negligence/fault by the company.” IOC said it “should not be held liable to pay the fines and the same should be waived-off.” Stating that it has been regularly taking up with MoP&NG for appointment of requisite number of independent directors (including woman independent director) to ensure compliance with corporate governance norms, the company said it had received similar notices from the stock exchanges in the past imposing fines and its waiver request was considered favorably by the exchanges. GAIL said “the non-compliance with regard to the composition of the Board was neither due to any negligence/default by the company nor within the control of GAIL’s management and continuous efforts were also made to meet the compliance requirements.” “GAIL (India) Limited is a ‘Government Company’ under the administrative control of the MoP&NG, Government of India. All the Directors on the Board of GAIL (including Independent Directors) are nominated/ appointed by the Government of India.
ONGC charges premium over Brent in oil deals with BPCL, HPCL
India’s top oil and gas producer ONGC has signed term contracts with refiners to sell crude oil it produces from Mumbai offshore fields at a premium to international benchmark Brent, sources said. Oil and Natural Gas Corporation (ONGC) has signed deals to sell about 4.5 million tonne of crude oil each to Bharat Petroleum Corporation Ltd (BPCL) and Hindustan Petroleum Corporation Ltd (HPCL). The oil has been priced at the prevailing Brent crude oil price plus 1 per cent, company sources said. Brent, the world’s best known benchmark for the raw material that is converted into fuels like petrol and diesel in refineries, is trading at USD 80 per barrel. As per the pricing in the term contracts, ONGC would get USD 80 plus USD 0.8 for the oil it will sell to HPCL and BPCL. ONGC produces 13-14 million tonne per annum of crude oil from its fields in the Arabian Sea, off the Mumbai coast. In June last year, the government abolished a rule that said oil from blocks awarded prior to 1999 must be sold to government-nominated customers, mostly state refiners. The old rule had led to producers such as ONGC and Oil India not getting the best market price. Subsequent to that rule change, ONGC started quarterly auctions of crude oil produced from Mumbai High and Panna/Mukta fields in the western offshore. While the company got a slight premium over Brent – the crude oil its Mumbai offshore is closest in quality to – in the initial auction, refiners like Indian Oil Corporation (IOC) started seeking discounts equivalent to one they got on Russian oil, sources said. Following Moscow’s invasion of Ukraine in February last year, Russian oil was sanctioned and shunned by European buyers and some in Asia, such as Japan. This led to Russian Urals crude being traded at a discount to Brent crude (the global benchmark). The discount on Russian Urals grade was as high as USD 30 a barrel in the middle of last year and now around USD 6-7. Sources said refiners like IOC argued that they needed discounts as they suffered losses on selling petrol and diesel at below cost to keep inflation in check. ONGC resisted the discounts arguing that the government has taken away all upsides of the recent surge in oil prices through a levy of windfall profit tax. And as a way out, it floated the idea of a term contract – selling a fixed quantity of oil in a year at the pre-agreed benchmark. It first signed a pact to sell 4 million tonne per annum plus an optional 0.5 million tonne of crude oil to BPCL, which has a refinery to convert the crude oil into fuels like petrol and diesel at Mumbai.
Govt announces mandatory biogas blending in CNG, PNG
In a bid to promote bio-fuel in the country, the government on Saturday announced the phase-wise mandatory blending of compressed bio-gas (CBG) in compressed natural gas (CNG) and piped natural gas or PNG. In a meeting held by the National Biofuels Coordination Committee, it was decided that there will be a Central Repository Body (CRB) to monitor and implement the blending mandate. The mandatory blending obligation would start from FY2025-26. Initially, it will be kept 1% for use in automobiles and households, then it will be increased to about 5% by 2028. “In a major step towards enhancing use and adoption of CBG, the National Biofuels Coordination Committee (NBCC), chaired by the Petroleum Minister, announced on Saturday the introduction of phase-wise mandatory blending of CBG in CNG (transport) & PNG (domestic) segments of city gas distribution (CGD) sector,” said the petroleum ministry in a statement. According to the government, the objectives of the CBO (CBG blending obligation) are to stimulate demand for CBG in CGD sector, import substitution for liquefied natural gas (LNG), saving in forex, promoting circular economy and to assist in achieving the target of net zero emission etc. Petroleum minister Hardeep Singh Puri while talking about the initiative said the CBG blending obligation will promote production and consumption of CBG in the country. “It will encourage investment of around Rs 375 billion and facilitate establishment of 750 CBG pojects by 2028-29,” said Puri. Discussions also took place for promoting production of ethanol from maize with all stakeholders especially with the Department of Agriculture and Department Food and Public distribution (DFPD) to make it a prominent feedstock in coming years, the minister said. The government approved 1% sustainable aviation fuel (SAF) indicative blending target in ATF by 2027 for domestic flights and 2% SAF blending target in 2028 for international flights. The government has already achieved 10% ethanol blending five months before its November 2022 target. Now it has advanced its 20% ethanol blending in petrol target to 2025 from 2030. India, world’s largest importers of oil and gas, wants to cut down in its fuel import bill.