Gujarat rolls out green carpet for India’s natural gas-based economy
In 2008-09, billboards were displayed across Ahmedabad claiming Gujarat will show the way to the rest of India how to be pollution-free by use of compressed natural gas (CNG). The campaign was aimed at discouraging autorickshaw drivers and owners who mixed kerosene with petrol to fuel their vehicles, causing heavy air pollution, said a senior government official. In June this year, Gujarat chief minister Vijay Rupani announced the ‘CNG Sahbhagi Yojana’. It aims to resolve the issue of long queues at CNG stations by adding another 300 stations in two years. Further, the state government recently gave its nod for what it claims to be the world’s first compressed matural gas (CNG) port terminal. The facility, to come up in Bhavnagar, will be set up jointly by the UK-based Foresight Group and the Mumbai-based Padmanabh Mafatlal Group. Gujarat rolls out green carpet for India’s natural gas-based economy The central government, while planning to cut down on oil imports, is shifting to creating a gas-based economy. And Gujarat, which is considered a gas hub for over two decades now, may offer some answers. With new infrastructure facilities coming up and the state pushing for cleaner fuel options, Gujarat is likely to consolidate its position further. It became the first and only Indian state so far to be completely covered under the piped gas distribution network after the ninth round of bidding by petroleum and natural gas regulator in 2018. Producing 47% of the nation’s natural gas, it is home to 19.6 lakh piped natural gas users who account for 42% PNG customers in India. Companies like Gujarat Gas, Adani group, Torrent group, Petronet LNG, Shell group, Gujarat State Petronet Ltd, Shapoorji group, IRM Energy and Sabarmati Gas have invested in various infrastructure facilities from LNG terminals to CGD networks to pipeline infrastructure to power plants, creating an ecosystem for a gas-based economy. Gujarat-based companies bagged rights to retail CNG and PNG in a number of cities during the 9th and 10th round of auctions by PNGRB. Torrent Gas bagged licences for 18 cities, while Adani Gas won 15 areas on its own and 10 in joint venture with Indian Oil Corporation. State-run Gujarat Gas bagged rights for seven cities. The cumulative investments by these players to develop CGD networks in these cities will be more than Rs 25,000 crore over the next few years. Apart from developing natural gas pipeline supply infrastructure, Gujarat is the only state with two operational LNG terminals — Dahej, run by Petronet LNG, and Hazira terminal by Shell group. It currently holds about 25% share of natural gas consumption in total gas supplies on pan-India basis. While these two terminals handle about 70-80% of total gas and LNG supply in the country, a third one, set up jointly by Gujarat government, is all set to be commissioned soon. Two more LNG terminals, one by Shapoorji Pallonji group and another one by Swan Energy are under construction. Another terminal with a re-gasification capacity of 5 million metric tonnes per annum (mmtpa), built jointly by Gujarat government and Adani group at Mundra, is expected to be commissioned shortly. “The presence of LNG terminals has acted as a catalyst and enabled Gujarat to position itself as the prominent gas corridor of the country with majority of LNG imports being sourced through these terminals,” said Gujarat energy minister Saurabh Patel. The state houses 10 gas-based power projects with a capacity of 4,050 mega watts that have been developed by government and private companies. “Torrent group has a long-standing commitment to promoting natural gas, going back more than 25 years, when we set up India’s first private sector gas-based power plant. Torrent has the largest gas-based power capacity of 2,730MW in the country, all of which is in Gujarat,” said Jinal Mehta, managing director, Torrent Power Ltd. While Gujarat Gas is the largest CGD of the country in terms of volumes and customer base, the Adani Group, which forayed in 2004, is biggest in terms of licenced areas. The group aims to add 9 lakh households and set up 100 additional CNG stations in next few years. After setting up a huge pipeline network in the state, Gujarat State Petronet is currently implementing two cross-country natural gas trunk pipelines for an estimated investmenwwwt of Rs. 6,500 crore. Our overarching aim of entering this domain was to make cleaner and affordable fuel available to the remotest corners of India and the state of Gujarat has played a pivotal role in this journey. Going forward, our strategic partnership with world’s energy major Total would bolster this ambition. By contributing to India’s vision of becoming a gas-based economy, we wish to shoulder the nation’s climate goals Pranav Adani | MD, agro, oil and gas, Adani Group Thanks to the visionary leadership, Gujarat is a role model for the gas-based economy. Today, Gujarat is the only state with 100% coverage of CGD development authorisation. The enabling state policies and its conducive eco-system made Gujarat Gas the largest city gas distribution company in India Nitin Patil | CEO, Gujarat Gas Limited About 70-80% of the country’s LNG comes from terminals in Gujarat. Very soon, more terminals will get operational. To back this up, we have developed a gas grid covering all districts. With gas-based power plants and fertilizer units, the state has an entire ecosystem ideal for a gas-based economy Saurabh Patel | Gujarat energy minister Gujarat has been a pioneer in creating a gas-based economy and natural gas usage across various applications has grown exponentially over the last two decades. Continuing with our firm belief in the future of natural gas and in line with our prime minister’s vision of turning India into a gas-based economy, the Torrent group has recently forayed into the CGD sector with the mission to supply clean fuel to its authorised areas spread across 32 districts in seven states Jinal Mehta | MD, Torrent Power Ltd The State Produces 47% Of India’s Natural Gas And Its LNG Terminals Handle
Essar, GSPC bag most of RIL-auctioned natural gas
Essar Steel and Gujarat State Petroleum Corporation (GSPC) won two-thirds of the natural gas Reliance Industries offered in an auction, where winning bids were $5.3-5.4 a unit, people familiar with the matter said. Reliance-BP offered 5 million metric standard cubic metres a day (mmscmd) it plans to produce from April next year at its R-cluster field in KG-D6 block. About half a dozen companies participated in the e-auction on Friday. Reliance did not respond to ET’s emailed query. Essar Steel is learnt to have won 2.25 mmscmd, while GSPC got 1.2 mmscmd. State-run Hindustan Petroleum is believed to have won 0.35 mmscmd, while Adani, Mahanagar Gas and GAIL won 0.3 mmscmd each, according to the people. Gujarat State Fertilizer Corp is also said to have won 0.10 mmscmd. Essar Steel, which has been in news lately for its bankruptcy, will likely use the gas in its plant, while Adani and Mahanagar may feed it into their city gas network. RIL-BP sold all the gas offered. The duration of supply could not be ascertained. Buyers had the option to bid for a supply period of two to six years. Bidders were expected to quote a price as a percentage of dated Brent crude. The minimum they could quote was 8.4%. Bidders ended up quoting between 8.4% and 8.6%, the people said. This translates into a price range of $5.29 to $5.41 per million metric British thermal unit (mmBtu) at the current rate of $63 per barrel for dated Brent. Prices will vary during the period of supply as the dated Brent is defined as the average of published Brent prices for three calendar months immediately preceding the relevant contract months in which the gas supply is made. After including the pipeline tariff, the delivered cost of gas would be about $6.5 for buyers, most of which are in Gujarat. Reliance-BP have the marketing and pricing freedom for all the gas they produce from the Rcluster field. The prices, however, cannot exceed the government-set ceiling for the gas from difficult fields, which is currently $8.43 per unit. Prices during the RIL-BP’s gas auction were influenced by a collapse in the global liquefied natural gas (LNG) market and an expected rise in supply from domestic sources over the next few years. This meant the auction ended up with rates that were close to the floor price set by the producer. ONGC is also auctioning 0.75 mmscmd on November 19.
Asian Oilfield to acquire majority stake in joint venture Optimum Oil and Gas
Asian Oilfield Services has entered into a share purchase agreement for the acquisition of 51 per cent of equity share capital in Optimum Oil and Gas from its existing shareholder. The company currently holds 23 per cent of equity share capital in Optimum. “On completion of all closing formalities, Optimum will become a subsidiary of the company with 74 per cent holding,” said a statement issued by Asian Oilfield Services. The company specialises in a geophysical range of onshore seismic and drilling services, including acquisition, imaging and field evaluation. In the second fiscal quarter (Q2 FY20), its revenue from operations grew by 45.9 per cent to Rs 56 crore as compared to Rs 38 crore in Q2 FY19. Its profit after tax totalled Rs 6.3 crore as compared to a loss of Rs 1 crore in Q2FY19. Earnings before interest, tax, depreciation and amortisation (EBITDA) for Q2 FY20 was Rs 12.5 crore as compared to Rs 6 crore in Q2 FY19, posting a growth of 110 per cent. The EBITDA margin of 22.6 per cent was due to better operating performance and focus on cost optimisation, the company said.
Chhattisgarh CM seeks Centre’s permission to make biofuel with surplus paddy
Chief Minister Bhupesh Baghel has requested the Centre to allow Chhattisgarh to make biofuel out of surplus paddy in the state. Speaking to reporters after his arrival from New Delhi, Baghel said that he met and requested Union Minister of Petroleum Dharmendra Pradhan to allow the state to make the biofuel. “I met Union Minister Dharmendra Pradhan and requested him that those states which have extra rice crop should be allowed to make biofuel. This way, farmers will get benefitted and employment will be generated,” he said. The Chief Minister said that Pradhan assured him to consult with Food and Agriculture ministries to move forward on the proposal.
Indian Oil to spend Rs 1,000 crore to double base-oil production from Haldia refinery
Indian Oil Corporation (IOC), the country’s largest fuel retailer, plans to double its base-oil production from Haldia refinery in West Bengal by adding a new 270 Thousand Tonne Per Annum (TMTPA) Catalytic Dewaxing Unit (CDU) at a cost of Rs 1,085 crore, the company said in an application to the environment ministry. “The proposed new plant, which is expected to run on neat-hydrocracked residuum in conjunction with the existing cat-dewaxing plant, should be able to increase the base oil production ex refinery by around 100 percent,” IOC said. Base-oil is a name given to the lubricant grade oil initially produced from refining crude oil or through chemical synthesis. The availability of a hydrocracker unit and the upcoming coker block has led to substantial potential in the refinery for augmenting the base oil production volume by setting up a new base oil production facility, the company said. It added that the base oil market is more stable than auto fuel market and the proposed project will provide additional flexibility to the refinery during major price swings. The company also said the proposed hydroprocessing route for grade II or grade III base-oil production will lead to the capability of producing 100 percent API grade III lube base oil. The project is also expected to provide flexibility in crude selection.
ONGC second quarter net profit falls 37 per cent to Rs 5,487 crore
Oil and Natural Gas Corporation (ONGC), India’s state-owned petroleum explorer, today posted a 37 per cent decline in consolidated net profit at Rs 5,487 crore for the second quarter ended September 2019, on the back of lower production and price realisation. The company had posted a consolidated net profit of Rs 8,731 crore in the corresponding quarter ended September 2018. ONGC’s revenue from operations during the second quarter declined 10.50 per cent to Rs 101,554 crore as compared to the corresponding quarter a year ago. Its overall crude oil production during the quarter dropped 3.9 per cent to 5.84 Million Tonne (MT). Crude oil price realization from nominated fields during the second quarter declined 17. 4 per cent to $60.33 per barrel, while realization from oil fields operated under Joint Ventures declined 13 per cent to $60.99 per barrel. The company’s total natural gas production during the second quarter declined 1.6 per cent to 6.26 Billion Cubic Meter (BCM) while gas price realization during the quarter increased 20.6 per cent to $3.69 million british thermal units as compared to the same period last year.
India’s Oct diesel demand falls the most in nearly 3 years
India’s diesel demand in October fell at its steepest annual rate in nearly three years, provisional government data showed, reflecting subdued industrial and economic activity during the month. Local sales of diesel, which accounts for about two-fifths of overall fuel consumption, slipped 7.4 per cent year-on-year to 6.51 million tonnes. The annual decline was the most since January 2017, according to data posted on the website of Petroleum Planning and Analysis Cell. Demand for diesel in the world’s third biggest oil importer is seen as a measure of industrial vibrancy as it is used, for example, to fuel trucks transporting goods across the country. Declining diesel consumption is forcing refiners to export the fuel, adding to abundant supplies in Asia and weighing on refining margins for 10ppm gasoil. A fall in auto sales over the last year in tandem with a shift by motorists to gasoline powered vehicles, has also contributed to the fall in diesel consumption. Sales of gasoline, or petrol, rose 8.9 per cent in October from a year earlier, to 2.54 million tonnes. However, demand for diesel is expected to recover in the next six months as the longer-than-usual monsoon season that affected transportation and industry has ended, the chairman of top domestic refiner Indian Oil Corp said on Monday. Slowing economic and industrial activity has already led some global agencies to cut their Indian fuel demand forecasts. The International Energy Agency expects oil consumption growth to drop to 170,000 barrels per day (bpd) in 2019, the slowest since 2014. Asia’s third-largest economy expanded by just 5 per cent in the June quarter, its slowest pace since 2013, and the International Monetary Fund has cut its growth forecast for this fiscal year. “We don’t see a significant revival in (GDP growth) for some time. No doubt, the slowdown in consumption has weighed on diesel too,” said Jigar Trivedi, a commodities analyst at Mumbai-based Anand Rathi Shares & Stock Brokers. Overall refined fuels consumption, a proxy for oil demand, fell 1.4 per cent to 17.41 million tonnes on an annual basis in October, the steepest decline since June. In April-October 2019, the first seven months of this fiscal year, India’s fuel demand grew by 1 per cent from a year ago, the data showed. Growth in fuel demand in India is on course to fall to its lowest in at least six years as the economy slows and after heavy rains impacted gasoil consumption. Fuel demand fell to its lowest in a year in September, revised data shows.
Tamil Nadu: Indian Oil bottling plant to enhance storage soon
The Madurai LPG bottling plant of the Indian Oil Corporation (IOC) in Mattaparai village in Dindigul district, will soon enhance its storage capacity from the current 900 (3 x 300) metric tonne (MT) by another 1,800 (3 x 600 MT). The plant is awaiting regulatory clearance. Speaking to reporters in Madurai on Thursday, DGM K S Shankar, DGM (LPG), Tamil Nadu, and general manager R Chidambaram, southern region said the 37-acre campus has state-of-the-art security measures including fire safety equipment and caters to Madurai, Dindigul, Virudhunagar, Tuticorin, Tirunelveli and Kanyakumari districts through a network of 115 distributors. The plant has a capacity to fill and distribute 19,000 cylinders per day. While the annual capacity is the delivery of 60,000 cylinders, in 2018-19, it produced 93,000 cylinders, as the demand went up. The electronic carousel fills 24 cylinders per minute and 1,400 cylinders per hour. The filled cylinders are checked for valve leaks and o-ring leaks, through remote monitoring. The defective valves are replaced immediately. The plant fills domestic cylinders of 14.2 kg, commercial use cylinders of 19kg, nano cut cylinders for commercial applications, besides the smaller 5kg cylinder. It has also started supplying jumbo LPG cylinders weighing 425kg for commercial use. The officials said that the plant is equipped with a 100KW solar plant, while an organic waste converter helps deal with the waste generated by the canteen. Safety measures are given utmost importance and is covered by a fire water hydrant network and gas monitoring system, to tackle emergencies.
Delhi to soon start trial of hydrogen-run CNG buses
The Supreme Court has suggested looking into hydrogen-run vehicles as a solution for NCR’s poor air quality and while the technology will take some time to appear in the capital, buses running on hydrogen-enriched CNG (HCNG) are going to hit the city’s roads very soon. As part of a pilot project, 50 buses of the cluster scheme will be run using HCNG, which is much cleaner as compared to Compressed Natural Gas (CNG). “A four-tonne per day compact reformer-based HCNG production plant at Rajghat-1 bus depot of Delhi Transport Corporation (DTC) is going to be commissioned next month and trial run of HCNG-run buses would start soon,” an official said. In July, Indian Oil Corporation Limited (IOCL), which developed the technology to create HCNG, and Indraprastha Gas Limited (IGL) laid the foundation stone of the plant. Compared to physical blending of hydrogen with CNG, the use of compact reforming process is 30% more cost effective, according to IOCL. For using HCNG, separate buses are not required and the present CNG-run buses can be easily used with a little tuning. “We are aiming to commission the plant by December, subject to statutory clearances,” an IGL spokesperson said. After the commissioning, buses will be operated using HCNG on a trial-run for six months, the official added. It was, in fact, a directive of SC in July 2018 had led to IOCL and IGL collaborating to put up the first semi-commercial plant as a pilot project for conducting the study on the use of HCNG fuel in 50 BS IV compliant CNG-run buses in Delhi. Mixing hydrogen with CNG physically is a difficult proposition and that is why IOCL came up with the compact reforming process, which reforms CNG and the need for mixing is eliminated. For the pilot project, around 50 buses of Anthony Road Transport Limited (a cluster scheme concessionaire) will be fed with HCNG and their efficiency and emissions will be recorded during the six-month trial run and then submitted to the Supreme Court. Four tonne of hydrogen-enriched CNG will be produced at the plant daily and the excess fuel generated will be used to run generators, which will produce electricity. To begin with, it is likely that HCNG might cost a few paise more than CNG per unit but once production is scaled up, the costs are expected to come down.
India’s Oct diesel demand falls the most in nearly 3 years
India’s diesel demand in October fell at its steepest annual rate in nearly three years, provisional government data showed, reflecting subdued industrial and economic activity during the month. Local sales of diesel, which accounts for about two-fifths of overall fuel consumption, slipped 7.4 per cent year-on-year to 6.51 million tonnes. The annual decline was the most since January 2017, according to data posted on the website of Petroleum Planning and Analysis Cell. Demand for diesel in the world’s third biggest oil importer is seen as a measure of industrial vibrancy as it is used, for example, to fuel trucks transporting goods across the country. Declining diesel consumption is forcing refiners to export the fuel, adding to abundant supplies in Asia and weighing on refining margins for 10ppm gasoil. A fall in auto sales over the last year in tandem with a shift by motorists to gasoline powered vehicles, has also contributed to the fall in diesel consumption. Sales of gasoline, or petrol, rose 8.9 per cent in October from a year earlier, to 2.54 million tonnes. However, demand for diesel is expected to recover in the next six months as the longer-than-usual monsoon season that affected transportation and industry has ended, the chairman of top domestic refiner Indian Oil Corp said on Monday. Slowing economic and industrial activity has already led some global agencies to cut their Indian fuel demand forecasts. The International Energy Agency expects oil consumption growth to drop to 170,000 barrels per day (bpd) in 2019, the slowest since 2014. Asia’s third-largest economy expanded by just 5 per cent in the June quarter, its slowest pace since 2013, and the International Monetary Fund has cut its growth forecast for this fiscal year. “We don’t see a significant revival in (GDP growth) for some time. No doubt, the slowdown in consumption has weighed on diesel too,” said Jigar Trivedi, a commodities analyst at Mumbai-based Anand Rathi Shares & Stock Brokers. Overall refined fuels consumption, a proxy for oil demand, fell 1.4 per cent to 17.41 million tonnes on an annual basis in October, the steepest decline since June. In April-October 2019, the first seven months of this fiscal year, India’s fuel demand grew by 1 per cent from a year ago, the data showed. Growth in fuel demand in India is on course to fall to its lowest in at least six years as the economy slows and after heavy rains impacted gasoil consumption. Fuel demand fell to its lowest in a year in September, revised data shows.