As LPG demand balloons, India to become more reliant on imports
A raft of government initiatives has propelled India’s insatiable appetite for LPG to record highs, leading analysts to believe that growth is expected to hover close to double digit levels in the near to medium term as New Delhi intensifies its push towards cleaner fuels. But with LPG domestic demand growing at a much faster rate than output, the country, where refiners find it more profitable to focus on middle distillates rather than boosting LPG output, will be increasingly dependent on imports to meet its incremental consumption growth, analysts added. LPG demand in March hit a record high of 1.835 million mt, up 14.16% year on year, taking the cumulative demand in January-March 2016 to 5.254 million mt, up 11.28% year on year, data from India’s Petroleum Planning and Analysis Cell showed. Top officials of Indian oil companies and independent analysts recently told Platts that even though demand growth is unlikely to hold at those lofty levels, LPG demand will continue to grow around 7%-9% over the coming years. “Lower prices and various affirmative government initiatives will support India’s robust LPG demand growth in the medium term,” said Sri Paravaikkarasu, Senior Consultant and Asia Downstream Specialist at Facts Global Energy. Paravaikkarasu said around 2.1 million new LPG connections were added across the country in March, which contributed to the surge in demand. In addition non-subsidized LPG consumption grew by 35% year on year in March. “We expect demand growth to remain strong in the coming quarters, albeit at slightly reduced levels than that seen in recent months,” Paravaikkarasu said. PPAC said that LPG demand from India’s auto sector grew 3.3% year on year n March, while cumulative growth was 4.3% over fiscal year 2015-2016 (April-March). “Even commercial LPG is now substantially cheaper than gasoline/diesel due to the multiple hikes in excise duties on these liquid fuels. This makes LPG attractive for auto LPG usage too,” Macquarie said in a research study on India’s oil sector. India’s LPG demand rose 8.6% year on year to 19.55 million mt in fiscal year 2015-2016, while the country imported 8.88 million mt of LPG over the period to meet its domestic needs. Industry sources have said that India’s LPG imports could surge in fiscal year 2016-2017, prompting the country to compete with Japan and China for the title of Asia’s biggest importer. “India’s LPG imports will keep rising,” said Paravaikkarasu. “Other than the recent Paradip refinery, we are not going to see any other grassroot additions in the near future. This will restrict growth in domestic supplies.” Paravaikkarasu said she expects India’s LPG imports to rise 30,000 b/d year on year during fiscal year 2016-2017. Expanding The Reach The BJP-led government, since coming to power in 2014, has undertaken a series of initiatives to help boost LPG penetration across the country. In its push towards making 2016 the “year of LPG consumers,” the Indian government has set an ambitious target of opening 10,000 new LPG dealerships across the country this year, in addition to the 16,000 that already exist. It has urged the more affluent class of society to give up their subsidized LPG connections. Around 10 million consumers have given up their LPG subsidies already. The growth in March meant that LPG consumption has recorded positive growth over 31 months in a row. Jordan Oesterle Womens Jersey
MRPL Says Owes About $2.6 Billion In Oil Dues To Iran
Mangalore Refinery and Petrochemicals Ltd currently owes about $2.6 billion to Iran and wants to settle the dues as soon as a payment mechanism is worked out, Managing Director H. Kumar said. The state-run refiner, which operates a 300,000 barrels per day (bpd) refinery in southern Karnataka state, is a key oil client of Iran. The central banks of India and Iran have reached an arrangement to use European banks to process pending oil payments to Tehran, oil minister Dharmendra Pradhan told Reuters last week. MRPL has shut a 60,000 bpd crude unit, a coker and a diesel hydrotreater, along with some other units since May 3 due to an acute water shortage in the state. The local authorities have stopped water supply to the refinery. “Our endeavour is to run the units till the last day… If it doesn’t rain till May 17-18 then we will review the situation. We may have to shut some more units,” said Mr Kumar. Because of the shutdown, MRPL’s diesel and liquefied petroleum gas production has been halved while gasoline consumption has been cut by 30 percent. Jonathan Ogden Authentic Jersey
Cairn gives 2 more yrs to Vedanta for $1.25 billion loan repayment, at higher interest
Cairn India has extended the repayment period for a $1.25 billion loan to a group company by two years but at a higher interest rate. The loan was given for two years in May 2014, to THL Zinc (TZL), a foreign subsidiary of Vedanta, the parent entity. Cairn India Holdings (CIHL), a subsidiary abroad of Cairn India Ltd, has decided on a two-year extension, the BSE was informed. A CLSA report had earlier suggested Cairn India seek a clarification from the Securities and Exchange Board of India, since the loan comes under Section 49 of the latter’s listing agreement rules which applied from October 2014, after the loan was granted), and as the loan crossed the threshold set by the clauses for a shareholder vote. A person close to the development said shareholder approval was not required since the transaction did not come under the norms in this regard, with both the companies being foreign entities and not listed in India. The loan extension is on an ‘arm’s length’ basis, at a revised rate of interest of Libor plus 450 basis points in the first year and at Libor plus 475 bps in the second year (compared to the existing rate of Libor plus 300 bps). It is on terms that are market standards, including change of control provisions, and will continue to be secured by a guarantee from Vedanta Resources Plc, said the company. The return from the said loan will provide higher yield to CIHL, compared to the return it is earning from its existing investment out of its cash and cash equivalents, which are denominated in dollars, it added. TZL is the holding company of the Vedanta group’s international zinc business, with assets in South Africa and Namibia. Cairn India reported a historic quarterly loss of Rs 109.48 billion last month for January-March 2016. It also undertook an impairment of Rs 116.74 billion for the full year ending March 2016. The continued fall in crude oil prices has pulled down its performance. The company closed 2015-16 with a loss of Rs 94.32 billion and a normalised profit after tax of Rs 21.45 billion, compared to Rs 44.80 billion profit the previous year. The company had also taken an impairment of Rs 5.05 billion last year in the fourth quarter on account of its Sri Lankan assets. The company’s realisation was down 42 per cent to $28.2 a barrel of oil equivalent, compared to the quarter ending March 2015. It was almost $41 for 2015-16, a 46 per cent fall over the previous year. Rishard Matthews Authentic Jersey
Billionaire Ruias Seek to Pump India’s First Shale Natural Gas
Essar Oil Ltd. has approached the government for permission to further explore shale formations in its eastern India coal-bed methane block as part of its effort to maximize the production of unconventional resources. The company’s current production of coal-bed methane, which generates a large volume of water, can complement shale gas exploration, which involves blasting water, sand and chemicals underground to release fuel, according to Manish Maheshwari, chief executive officer of Essar Oil’s exploration and production business. “The unconventional can become the new conventional in India,” Maheshwari said in an interview. “The unconventional will include CBM, shale and tight gas.” Essar Oil’s optimism about shale production from its Raniganj block in West Bengal has been further boosted by a streamlined government hydrocarbon policy announced in March that allows companies to explore and produce for all forms of hydrocarbons in a designated area under a single license. The company is currently producing around 900,000 cubic meters a day of coal-bed methane from the Raniganj block and plans to double the volume by March. It aims to hit peak output of 3 million cubic meters a day by March 2019, a delay of four years, which the company attributed to reservoir and technical difficulties. Essar Oil is part of a group of companies that includes shipping, steel and energy units controlled by the billionaire Ruia brothers. Extracting both shale and CBM from the same block won’t be easy for Essar, said Sachin Mehta, an analyst at Centrum Broking Ltd. “It could be technically very challenging to extract shale gas out of coal-bed blocks and then the cost required to achieve that could make it more difficult,” he said. “Commercial viability is an issue as shale is viable only at a certain price.” The Raniganj block holds proved, probable and possible reserves of 1.1 trillion cubic feet of coal-bed methane, according to Maheshwari. It’s also contains 1 trillion cubic feet of gas trapped in shale formations, using the Society of Petroleum Engineers classification as “best estimate” resources, he said. Jordan Howard Womens Jersey
Smart cities need to be customised to Indian context: Piyush Goyal
Development of smart cities in the country will have to be customised to the Indian context while leveraging on economies of scale to make the requisite technology affordable, Power and Coal Minister Piyush Goyal today said. Addressing Smart Cities India Expo here, he said the development of smart cities or towns would have to be done “smartly”. The smart city concept should be practical, doable and affordable, which can be deliberated, discussed and then implemented, he added. “We got to think smart when we think of smart cities or smart technologies playing a role in India. How can we do it customised to the Indian context. How can we do it with the bare bone essentials, which would help have an impact. How can we do it to scale so that we can leverage the large economies of scale,” Goyal said. The Centre had in January announced the first batch of 20 smart cities in 11 states and New Delhi. These 20 cities proposed an investment of Rs 50,802 crore over the next five years. The minister said the power of economies of scale, the power of leveraging billion plus aspiring individuals, ensuring affordability to make a programme self sustainable, practical application in the Indian context are the keys to the implementation of smart cities. Goyal said India has certain challenges but the country that has demographic advantage also offers huge market opportunities. He talked about importance of disposal of wastage for the smart city movement and stressed on the need for adequate dustbins at an affordable cost. Citing the example of electric distribution network, Goyal said there is a need to replace the existing meters with smart meters, which in Indian context should have tamper-proof mechanism and two-way communication. “That’s the smart meter I am looking for. I don’t think it should cost more than $12-15. If we can do it at $15, I have a proposition of 250 million smart meters. That is the scale at which India offers opportunities,” he said. On energy efficiencies, Goyal highlighted that the Centre is running a 770-million LED bulb programme, which will cost less than $1 billion with no government investment. The cost of the LED bulb has come down by 83 per cent from Rs 310 to Rs 54.90 per piece, Goyal said adding people could save $6.5 billion every year in their electricity bills by switching to LED bulbs. Anthony Sherman Authentic Jersey
Gas Connections in Villages
The Minister of State (I/C) for Petroleum & Natural Gas Shri Dharmendra Pradhan informed that it is Public Sector Oil Marketing Companies (OMCs) aim to increase the National LPG coverage to 75 % with minimum 60 % coverage at State level and at least one distributor in each block by 2019. Further, the Government has launched “Pradhan Mantri Ujjwala Yojana” for providing LPG connections to 5 crore women belonging to the Below Poverty Line (BPL) families over a period of 3 years starting from FY 2016-17. Priority will be given to those States where LPG coverage is lower than the national coverage. Currently, the process for setting up of more than 1800 new LPG distributorships is at different stages of selection across the country. Nicolas Meloche Jersey
Inspection to be carried in Chennai airport after several complaints received
Civil Aviation Minister Ashok Gajapathi Raju today ordered Airports Authority of India (AAI) to carry out an inspection of the Chennai Airport, which has seen over 40 incidents of collapse of glass panels, granite slabs and false ceiling since 2013. The government-run airport operator has also been asked to fix the maintenance issues at the earliest, Raju said in a tweet today. “Recd (received). several msgs (messages) on maintenance issues at Chennai airport. Passed orders for inspection by senior officers and immediate rectification,” Raju tweeted. The Chennai airport was upgraded and modernised by the AAI in 2013 at an investment of over Rs 2,000 crore. The airport is, however, facing multitude of problems both relating to structural as well as maintenance issues. Last month alone, three incidents of a portion of false ceiling crashing down were reported at the airport. Alex Cappa Jersey
E-comm, tech startups to dominate hiring landscape: TeamLease
E-commerce and tech startups are likely to dominate hiring landscape in the coming months as the sector is likely to witness a 23.6 per cent growth in jobs during April-September, says a report. According to the TeamLease Employment Outlook Report, the increase in consumer spending and the renewed focus on market expansion will have a positive impact on hiring. However, manufacturing & engineering and infrastructure seem to be bearing the brunt of negative sentiment created by the slow progress of Make in India initiative. On the functional front, sales, IT and blue collar profiles will benefit substantially from the net positive sentiment. The rush to acquire driving and delivery skills seems to be boosting the demand for blue collar jobs. “Make in India initiative which was the critical driver of employment sentiment over the past couple of half years seems to be losing its sheen. In fact, the job market is maturing and giving way to business growth leading hiring. We are confident the buoyancy created will stabilise the market and lead to job creation,” TeamLease Services Senior Vice President Kunal Sen said. Hiring is largely clustered in metros and Tier I cities. In terms of cities, except for Kolkata and Ahmedabad, most of the cities reported positive job outlook. Tier II and III cities are also expected to contribute to the optimism as consumer spending in organised retail chains and e-commerce in these geographies are picking up steam. The study covered nine key industry verticals namely FMCG, manufacturing & engineering, BFSI, telecommunication, pharma & healthcare, IT, retail and e-commerce & technology startups across eight cities. Alex McGough Authentic Jersey
Work on phase I of coastal road in Mumbai to start by December
Work on the first phase of the much-delayed Rs 14,000-crore coastal road project in Mumbai is expected to start by the end of this year, Municipal Commissioner Ajoy Mehta said today. The municipal corporation of Greater Mumbai will implement the 34-km project in eight phases. “We have invited Expressions of Interest (EoI) from interested parties and waiting for the pre-bids to come out. We are hopeful that by November or December we will be able to start the civil work on the first phase,” Mehta said at a seminar here. He said the first phase includes a road from Priyadarshani Park to Bandra. It would provide an alternative to the existing traffic-clogged Western Express Highway. Mehta said the draft Development Plan 2034 for the city is ready and by the end of this month it will be made public for suggestions. The draft DP 2034 was first announced in February last year, only to be withdrawn two months later after being criticised for errors such as wrong reservations applied to certain zones and plots. Ryan Miller Authentic Jersey
Air India flying high on State Assembly elections
The Assembly elections in Assam, West Bengal, Tamil Nadu, Kerala and Puducherry are helping Air India in its bid to become profitable, giving it a financial bonanza, albeit one underwritten by the taxpayer. The airline is expected to rake in about ?23 crore for the 32 special charters that it is operating to transport security forces from one corner of the country to another to ensure that the election process passes off peacefully. Air India has already flown 32 special charters and is likely to operate three more till May 16 when votes are cast in Kerala, Tamil Nadu and Puducherry, ending the poll process in these States and Union Territory. The airline has deployed its Airbus A-320 aircraft for these charters flights. Sources told BusinessLine that the aircraft were chartered only for a particular flight between various cities from which the forces need to move. “No airline will agree to keep the aircraft out of commercial service for the entire duration of the elections,” a senior official said. The Election Commission has deployed over 32,000 personnel from Central police forces in Tamil Nadu, while 12,000 will be deployed in Kerala for the polling on May 16. The majority of the forces were airlifted from Kolkata to the two States after being deployed in West Bengal and Assam. Nearly 80,000 CPF were deployed in West Bengal. The process of electing State Assemblies started in March when the Election Commission announced that Tamil Nadu and Kerala as also Puducherry will go to polls on May 16. It also announced that West Bengal would have a six-phase poll starting on April 4 and ending on May 5, while Assam would have a two-phase poll on April 4 and 11. Counting of votes will take place on May 19. Brooks Orpik USA Womens Jersey