India imports more oil in 5 years of Modi govt; 10% import cut by 2022 remains a dream
India has further strengthened its position of being a net importer of oil during the five years of the Modi government, floundering on an ambitious plan that entailed reducing countrys import dependency of oil by 10 per cent by 2022. As per government’s estimates, the country’s import dependency on oil has increased from 78.3 per cent of total consumption in 2014-15 to settling at a new high of 83.7 per cent in the 10-month period of FY19. The increase has also been consistent with dependence on imported oil increasing in all the five years of the government with the number being 80.6 per cent in FY16, 81.7 in FY17 and 82.9 in FY18. Ironically, the country imported more oil to meet its domestic demand in the past five years even though Prime Minister Narendra Modi had set out a road map for reducing India’s crude oil imports by 10 per cent by 2022 in March 2015. “We cannot be living in a dream world. India has not been able to raise domestic production of oil and gas for the past decade. Some of its ageing blocks are now showing signs of fatigue while new discoveries and production is not coming online. If we aspire to move of the path of self-sufficiency, efforts to boost domestic production should go on a war footing,” said a former head of country largest state-owned explorer ONGC, asking not to be named. Though the Ministry of Petroleum and Natural Gas (MoPNG) has taken several policy measures to ramp up domestic production with reforms such as the Hydrocarbon Exploration Licensing Policy, or HELP, and taking a series of de-bottlenecking measures in NELP, or New Exploration Licensing Policy, and pre-NELP regimes, the results are yet to show on the ground. What is frustrating is that country’s oil production has stagnated around 35 million tonnes (MT) since 2007-08 onwards while domestic gas output has actually fallen for the past four years. Over the past 19 years, from 1998-99 to 2017-18, India’s crude oil production increased only by 8.8 per cent from 32.8 MT to 35.77 MT. The decline has come at a time when consumption is rising, pushing the country to rely more on imports. Higher imports have also meant rising import bill, pushing up the current account deficit. As per estimates, crude import bill in FY19 is expected to shoot up by close to 50 per cent to $ 130 billion, twice the level what government agencies were earlier projecting. If the oil import bill reaches closer to $ 130 billion mark, it would be close to levels experienced in FY13 and FY14 when international oil prices had skyrocketed and hovered over $100 a barrel for most of the year. The Indian basket of crude at present is just about $ 65 a barrel. This will make oil import bill for FY 19 the highest in the five years of the Modi government and very close to high import bill during UPA-II when the crude oil prices had breached all records to touch close to $ 140 a barrel mark.
PM Narendra Modi launches Rs 5,150 crore Ennore LNG terminal in Tamil Nadu
Prime Minister Narendra Modi on Wednesday laid foundation stones for five national highway projects in Tamil Nadu worth Rs 5,010 crore and the Rs 5,150 crore state-of-the-art terminal for import of Liquefied Natural Gas at Ennore near Chennai. At a function in Kilambakkam near Chennai, Modi inaugurated via video-conferencing two road projects, including two-laning of 122 km section of NH-38 that goes via Vellore, Thiruvannamalai and Viluppuram districts, and four-laning of 32km Avinashi-Tirupur-Avinashipalayam section of NH-381, in Tirupur. district Foundation stones were laid for four-laning of 116.5km Vikravandi-Sethiathope-Cholapuram-Thanjavur section of NH-36 in Viluppuram, Cuddalore, Ariyalur and Thanjavur districts, six-laning of 36-km-long Karaipettai-Walajapet section of NH-48 in Kancheepuram and Vellore districts and strengthening of existing carriageway of Gudiyatham bypass and Vellore bypass on NH-75 in Vellore district. The Prime Minister dedicated to the nation the electrified Erode-Karur-Trichy and Salem-Karur-Dindigul sections of the railways. Electrification of the sections cost Rs 321 crore. According to ministry of petroleum and natural gas, LNG from Ennore terminal will be transported to customers en route by pipeline right up to Tuticorin in South Tamil Nadu via Puducherry and Trichy. A pipeline has been laid to Bengaluru via Hosur to reach LNG to more industrial customers. The imported LNG will benefit Manali refinery, fertiliser plants, petrochemical plants and power plants, besides gas-based industries and transport sector. Tamil Nadu Banwarilal Purohit, chief minister Edappadi K Palaniswami, deputy chief minister O Panneerselvam and others were present.
Sinopec may ink 20-year LNG deal with Cheniere when trade spat ends
China Petroleum and Chemical Corp plans to sign a 20-year liquefied natural gas (LNG) supply agreement with Cheniere Energy once China and the United States end their trade dispute, two sources with knowledge of the matter said on Wednesday. Cheniere and China Petroleum and Chemical, known as Sinopec, reached a consensus in late-2018 on commercial terms after months of negotiations, but the signing of the deal was held back by the ongoing trade friction between the world’s top two economies, one of the sources, who has direct knowledge of the matter, told Reuters. “Without the trade spat, the deal should have been signed some time ago,” the source said, declining to be named because the matter is not public. In recent weeks, Beijing and Washington appear to have moved closer to a deal to end a bruising eight-month dispute that has seen the countries slap tariffs on billions of dollars worth of the other’s good. A resolution is widely expected to include stepped-up Chinese purchase of U.S. goods. Sinopec intends to buy close to 2 million tonnes a year of LNG from Houston-based Cheniere starting 2023, the two sources added, without giving a deal value. Cheniere may start delivering some supplies before 2023, said the second of the two sources. Based on the delivered cost of U.S.-sourced supplies into east China in January at $8.30 per million British thermal units given by Chinese customs, the 20-year deal would amount to roughly $16 billion. Sinopec and Cheniere both declined to comment on the status of a deal. The Wall Street Journal reported on Sunday that as part of a trade deal with the United States, China would buy $18 billion worth of natural gas from Cheniere. Officials from Cheniere visited Beijing in late February, said a third source, who was also familiar with the matter. Sinopec, a late comer to China’s LNG scene compared to domestic rivals China National Offshore Oil Corp (CNOOC) and PetroChina, has said it wants to more-than double its receiving capacity over the next six years to around 41 million tonnes annually, by building three new terminals along China’s east coast and expanding existing facilities. China, the world’s second-largest LNG buyer after Japan, imported just over 2 million tonnes of the super-chilled fuel in the first nine months of 2018 from the United States, according to Chinese customs. Imports have since almost dried up after Beijing announced a 10 percent tariff on U.S. LNG in September, with sporadic shipments in November and January, amid an escalation of the tit-for-tat trade war. In February 2018, before the trade war started, PetroChina’s parent company CNPC signed a 20-year deal with Cheniere to buy 1.2 million tonnes of LNG a year through 2043, with a portion of the supply beginning in 2018. Thanks to its shale boom, the United States is on track to become the world’s third-biggest LNG exporter by capacity in 2019, after Australia and Qatar. Cheniere said last week it planned to make a final investment decision to build a sixth liquefaction train at its Sabine Pass LNG export terminal in Louisiana in the coming months.
Essar Oil & Gas gets environment clearance to begin shale gas exploration
Essar Oil & Gas Exploration and Production (EOGEPL) has received environment clearance for exploring shale gas reserves in its Raniganj block in West Bengal, an official said. This follows the government’s decision to allow operators freedom to explore both conventional oil and natural gas as well as non-conventional sources such as coal-bed methane (CBM) and shale reserves within an exploration acreage. Previously, companies could explore only oil and natural gas or CBM, depending on their licence for the block. The official said the expert appraisal committee (EAC) in its January 29 meeting allowed Essar to drill 20 wells to explore shale gas in its Raniganj CBM block. It has been awarded an exploration lease for shale gas, CBM and hydrocarbons in the Raniganj block. EOGPL has got approval to drill 20 shale wells at a cost of Rs 10 crore. To start with, it will drill five wells in the block to test the shale potential. When contacted, company Managing Director and CEO, Vilas Tawde said: “We will start off with collecting the data. For this, we will need to drill the coal, identify the sweet spot and then drill horizontally for almost a km. Thereafter, we will analyse the coal, the shale, the strength of the shale, and the required volume.” “If this exploration is successful, we plan to drill around 220-250 wells that will require an investment of Rs 7,000 crore,” he said. EOGEPL has invested around Rs 4,000 crore in the Raniganj block, which will produce 1.7 million standard cubic metres per of gas from coal seams (CBM) in the next two years and ramp up to 2.5 mmscmd in the next three to four years. With the policy for simultaneous exploration of unconventional resources in place, EOGEPL is looking into the shale prospect in the same blocks, which is in the range of 7.7 trillion cubic metres. The official said the company could spend up to $1 billion in development of shale reserves if the exploration programme was successful. Essar has already signed an agreement to sell its entire production from the Raniganj East CBM block to state gas utililty GAIL India Ltd. Besides the Raniganj CBM block, the company also has a Mehsana CBM block in Gujarat, where it plans to drill six wells. The project will be completed in 18 months.
IGL to supply piped cooking gas, CNG in three UP districts
City gas distributor, Indraprastha Gas Ltd (IGL), today announced it has received the Letter of Intent from the downstream petroleum regulator to lay city gas distribution (CGD) network in the districts of Fatehpur, Hamirpur and the unauthorised areas of Kanpur in Uttar Pradesh. The three geographical areas were bid out under the recently held 10th round of CGD bidding conducted by the Petroleum and Natural Gas Regulatory Board. The company said in a statement the project is aimed at providing supply of compressed natural gas (CNG) and piped natural gas (PNG) in these districts and it is expected that the first CNG station and piped gas connection would be made available within a year. Commenting on the development, IGL’s Managing Director E S Ranganathan said that the company plans to set up seven CNG stations and provide PNG connections to 14,400 households in the next two years across the geographical area. “Along with domestic kitchens, IGL would also be providing gas connections to industries and commercial establishments like hotels, restaurants, and hospitals in the region,” he said. IGL is a joint venture between GAIL (India) and Bharat Petroleum Corp (BPCL). The firm currently supplies CNG and PNG in Delhi, Gautam Buddh Nagar, Ghaziabad, Rewari, and Gurugram. The company operates a CGD infrastructure consisting of over 12,500 kilometers of pipeline network and 482 CNG stations. It meets the fuel requirements of 10.5 lakh CNG vehicles and supplies PNG to 10 lakh households in Delhi and adjoining National Capital Region towns.
MSRTC to run buses on LNG, will save Rs 10 billion, says transport minister Diwavkar Raote
The Maharashtra State Road Transport Corporation (MSRTC), reeling under severe losses has decided to convert 18,000 buses in its fleet to run on Liquefied Natural Gas (LNG). The conversion will save Rs 10 billion annually, said transport minister Diwakar Raote. He was speaking during the foundation laying ceremony of a new bus stand and lodging facility for passengers at Pandharpur. The dignitaries from the Varkari community performed the rituals. Speaking at the programme Raote said, “The conversion will require technical modifications in the buses. In the first phase, 18,000 buses from different depots across the state will be modified. The cost of modification for each bus is around Rs 0.15 million. The modification will be completed in the next few months to operate the buses on LNG.” Raote hailed the decision as eco-friendly, though it involves minor repairs and modifications in the buses. “MSRTC will set up LNG pumps on the outskirts of the depots so that the private vehicle owners would also be able to buy the fuel from the pumps. The conversion will save annual expenditure of Rs 10 billion on diesel. Maharashtra is the first state in the country to run its buses on LNG,” Raote said. Referring to the passenger load during annual Pandharpur pilgrimage, Raote said that the revenue earned during the pilgrimage is sufficient to pay the entire staff. “Since it is the most important pilgrimage, MSRTC has to manage it separately. The Corporation has decided to pay Rs 750 pocket money to the wards of employees and also to pay for their higher studies abroad. The Corporation has launched Rs 0.1 million Fixed Deposit scheme for the daughters of the employees and 1,000 employees have been benefited from the scheme till now,” Ravate said. Losses to the tune of Rs 30 billion The MSTRC has an accumulated loss of Rs 30 billion. It suffered a massive setback as several buses were damaged during different agitations over the last year. The Corporation caters to more than 5 million passengers every day, had to suspend the services during the rallies and violent agitations. It caused revenue loss to the Corporation, Raote said. He said that the Corporation suffered losses to the tune of Rs 3.5 million during the Maratha Reservation agitation. Fondly called ST, it is the lifeline of the common man. The Corporation is serving the people despite heavy losses. He said that 175 buses were damaged during Maratha Kranti rallies across the state, while services from many depots were suspended for many days. This caused the revenue loss to the tune of Rs 21.5 million.
Petroleum Minisater dedicates three ONGC projects in Assam
The ONGC board accorded approval for the multi-specialty 300 bed-hospital project to be undertaken in three phases. Minister of petroleum and natural gas and skill development and entrepreneurship Dharmendra Pradhan inaugurated three mega projects of ONGC in Assam. Along with two engineering projects of ONGC related to oil processing and transportation, he also dedicated a multi-specialty hospital to the nation at Rajabari in Sivasagar in Assam. The ONGC hospital, the PSU’s single largest corporate social responsibility (CSR) project, is aimed at providing quality and affordable medicare to the people of Sivasagar and upper Assam. The ONGC board accorded approval for the multi-specialty 300 bed-hospital project to be undertaken in three phases. The first phase of this hospital building, with 50 beds, at a cost of Rs 990 million is getting ready for functioning. Competent and qualified doctors have already been recruited from the state of Assam by Dr Babasaheb Ambedkar Vaidyakiya Pratisthan (BAVP), the COM (Construction, Operation and Management) partner engaged towards implementing this project. Further, the recruitment process for paramedics, nurses and other support staff from Sivasagar and adjoining areas has been initiated. He also dedicated to the nation the effluent treatment cum water injection plant at Lakhmani oilfield of ONGC. This ONGC plant, built at an investment of Rs 880 million, will handle the effluent produced at Lakhmani and Demulgaon fields and after treatment inject the water into the reservoir for pressure maintenance.
Indonesia plans to sell 10 cargoes of LNG to spot market in H1 2019
Indonesia plans to sell 10 cargoes of LNG to spot market in the first half of 2019, said energy ministry official Djoko Siswanto, who is director general of oil and gas. There will be 1 cargo in April and 2 cargoes in May from Bontang LNG plant, 4 cargoes in June from Tangguh LNG plant, and 3 cargoes in March, May, and June from Donggi Senoro LNG Plant, he told a forum on Tuesday. Indonesia has 40 excess cargoes of LNG until 2025, Siswanto said.
India is consuming LPG like never before! What’s driving this phenomenon?
India is now the second largest consumer of liquefied petroleum gas (LPG) in the world, with LPG consumption in the country posting an average growth of 8.4%. And a lot of the credit goes to the government’s push to provide clean cooking fuel to every household through the Pradhan Mantri Ujjwala Yojana (PMUY). As on February 1, Oil Marketing Companies (OMCs) had released more than 63.1 million LPG connections under the scheme. In fact, a record 40.7 million new LPG connections were added in the current fiscal year alone, a jump of 45% over 2017-18, The Business Standard reported. Moreover, the three state-owned oil marketing companies – Indian Oil Corporation (IOC), Bharat Petroleum Corporation, and Hindustan Petroleum Corporation (HPCL) – have collectively set a target of adding 42.5 million customers by the end of this month. On the flip side, the mushrooming number of beneficiaries – up 77% since March 2015 – under the scheme is increasing the Centre’s subsidy burden. Under the PMUY scheme, the government provides a subsidy of Rs 1,600 to state-owned fuel retailers for every free LPG gas connection that they give to poor households. The LPG subsidy during the first nine months of the current fiscal is reportedly already 23% higher than last year’s figure – the Modi government shelled out Rs 25,700-crore subsidy over April-December 2018. The Budget for 2019-20 had, however, provided only Rs 202.83 billion in the Revised Estimates for FY19. Furthermore, the government expects the LPG subsidy to rise over 62% to Rs 329.89 billion for 2019-2020. A part of this is expected to be rolled over from the current year. Last week, IOC hiked LPG price by Rs 2.08 per cylinder and non-subsidised gas by Rs 42.50 per bottle, after three straight monthly reduction in rates totally around Rs 13. A 14.2-kg subsidised LPG cylinder now costs Rs 495.61 in Delhi while a non-subsidised one costs Rs 701.50. Those with family income of below Rs 1 million get subsidy for 12 cylinders. For March, subsidy on LPG cylinders is Rs 206 in Delhi. “With the number of consumers rising exponentially, it is time the government should consider further rationalising LPG subsidy,” an industry expert told the daily. The latest Petroleum Planning and Analysis Cell (PPAC) data reveals that total LPG consumption recorded a growth of 11.1% during January 2019 and a cumulative growth of 5.7% for the April-January period. “PSU OMCs together have 252.1 million active LPG customers in the domestic category which are being served by 22,654 LPG distributors. The LPG coverage of the country, estimated on the basis of active domestic connections and estimated households as on January 1, 2019, is around 89.9%,” read its LPG Profile report. To cater to the increased customer base, 3,030 LPG dealerships were reportedly added this year, compared to 724 in 2017-18. In January 2019, the northern region bagged the highest share in total LPG consumption (32.8%), followed by the southern region and western region at 27.2% and 22.9%, respectively. The eastern region and the northeast continue to lag behind at 19% and a miniscule 2%, respectively. Of the total number of consumers, around 242.7 million are reportedly covered under the direct benefit transfer of LPG Scheme (DBTL), or PAHAL. While speaking at the Asia LPG Summit last month Oil Secretary MM Kutty had claimed that as per the ministry’s projections and forecasts, LPG consumption in India is expected to grow 34% to 30.3 million tonnes by 2025 and 40.6 million tonnes by 2040.
Torrent Power seeks LNG cargo for March delivery
India’s Torrent Power is seeking a liquefied natural gas (LNG) cargo for delivery in March, two industry sources said on Tuesday. The utility is seeking the cargo for delivery into Dahej terminal on March 26 on a delivered ex-ship (DES) basis, one of the sources said. Offers are due by March 5, the source added.