ONGC Videsh JV enters into LNG sale and purchase pact
ONGC Videsh Limited (ONGC Videsh) – a wholly owned subsidiary of ONGC, announced that Mozambique LNGl Company Pte Ltd., the jointly owned marketing entity of ONGC Videsh and joint venture partners of Mozambique Rovuma Offshore Area 1 project has entered into long-term LNG Sale and Purchase Agreement (SPA) with Tokyo Gas Co. Ltd. (Tokyo Gas) and Centrica LNG Company Ltd., a subsidiary of Centrica pie (Centrica) through a co-purchasing agreement. The two companies have signed a deal for sale of 2.6 mn tonnes per annum (MMTPA) from the start-up of production until the early 2040s. These latest deals build upon previously executed deals for long term offtake of LNG from Rovuma Offshore Area 1 project and take long-term sales to more than 9.5 MMTPA. The state run oil major has also signed an MOU with CNOOC gas and power (CNOOC) for 1.5 MMTPA for a term of 13 years, Shell International Trading Middle East Ltd. (Shell) for 2 MMTPA for a term of 13 years, Bharat Gas Resources Ltd. a wholly owned subsidiary of Bharat Petroleum Corporation Ltd. for 1 MMTPA for a term of 15 years and Pertamina, an Indonesian PSU for 1 MMTPA for a term of 20 years. The exchange filing also mentioned that with the approval of the development plan in February 2018, ongoing resettlement implementation activities, site preparation and execution of these SPAs, the project is poised to take off in H1 2019. ONGC Videsh holds 16% interest in the Mozambique Rovuma Area-1 Offshore Project out of which 10% PI is held directly by ONGC Videsh and another 6% interest is held through its 60% shareholding in ‘Beas Rovuma Energy Mozambique Limited’ (“BREML”). The remaining 40% shares in BREML are held by Oil India Limited (“OIL”). Anadarko Mozambique is the operator of the project with 26.5% PI and the other partners are Mitsui E&P Mozambique Area 1 Ltd. (20%), ENH (15%), BPRL (10%) and PTTEP (8.5%). ONGC Videsh is a wholly owned subsidiary of Oil and Natural Gas Corporation Limited (ONGC), the National Oil Company of India, and is the largest international oil and gas E&P Company of India. At present, ONGC Videsh has 41 projects in 20 countries including Azerbaijan, Bangladesh, Brazil, Colombia, Iraq, Israel, Kazakhstan, Libya, Mozambique, Myanmar, Namibia, New Zealand, Russia, South Sudan, Sudan, UAE, Venezuela and Vietnam.
GAIL evaluating buying stake in Adani’s East Coast LNG terminal
The chairman of India’s GAIL said on Wednesday the company was evaluating buying a stake in the Adani Group’s proposed 5 million tonnes per annum Dhamra liquefied natural gas (LNG) terminal on India’s eastern coast. GAIL has sold about 70 percent of U.S. LNG in deals with terms extending up to 20 years to Indian buyers, and the rest to global firms in deal terms extending to up to five years, he said. GAIL has 20-year deals to buy 5.8 million tonnes a year of U.S. LNG, split between Dominion Energy’s Cove Point plant and Cheniere Energy’s Sabine Pass site.
CNPC to build new shale oil field by end of year
* China’s state-owned CNPC has started to develop a new offshore shale gas field near the Bohai Rim Basin, the company said via its official newspaper. * CNPC aims to produce 50,000 tonnes of shale gas from the Bohai Rim Basin in 2019 and to achieve production capacity of 1 million tonnes by 2028 * CNPC also said it will prioritize shale gas-related exploration at the Songliao Basin, Ordos Basin, and Jungar Basin
ONGC to drill 406 wells in Gujarat oil and gas asset at a cost of Rs 2,403 crore
Oil and Natural Gas Corporation (ONGC), India’s largest producer of oil and gas, has applied for Environmental Clearance (EC) for drilling 406 wells in its Mehsana asset in Gujarat at a cost of Rs 2,403 crore to tap into 13.65 Million Tonne of crude oil. “The proposed project will be covering an ML area of 1114 square km wherein 406 wells are proposed to be drilled for development. Likely cost of the project works out to be Rs 2,402.83 crore. It is planned that 195 wells will be in Non-EOR field area and 211 wells in EOR field area. Total oil production is about 13.6 MT to be produced over 6 years,” the company said in its EC application. The Expert Appraisal Committee is expected to take up the application soon. The company plans to drill 211 wells in its Enhanced Oil Recovery (EOR) field at a cost of Rs 6.73 crore per well and 195 wells in the Non-EOR field at a cost of Rs 5.04 crore per well. “The drilling process will involve a number of skilled and unskilled workers. There is possibility that local people will be engaged for the purpose and hence improve the existing employment scenario of the region. The drill site construction would be done largely by employing local labor. At each drill site local employment for 600 people will be generated,” ONGC said. The firm’s crude oil production from Gujarat during April-January 2018-2019 period increased 0.72 per cent to 3,751 thousand tonnes while natural gas production from the state dropped 16 per cent to 1,116 Million Cubic Meter. ONGC was recently given an environmental clearance to drill 200 wells across various fields in Sivasagar district of Assam at a cost of Rs 6,000 crore. It has notified 11 new oil and gas discoveries in the current fiscal so far.
5,000 compressed bio gas plants to come up by 2023: Pradhan
Around 5,000 compressed-bio gas (CBG) plants will be set up in the country by 2023, while a city gas distribution system covering 400 districts will provide a ready market for the CBG, Petroleum Minister Dharmendra Pradhan said on Wednesday. Speaking at the handing over event of Letters of Intent (LOI) to private producers for setting up CBG plants under the government’s Sustainable Alternative Towards Affordable Transportation (SATAT) scheme, Pradhan said the marketing of this environment-friendly fuel produced from waste would be facilitated through the City Gas Distribution (CGD) network which would become available in 400 districts. The SATAT initiative, launched in October 2018, aims to produce CBG from agricultural residue for use in the vehicular sector in order to reduce polluting emissions. “We have already issued LoIs for setting up 100 CBG plants, and we have kept a target of 5,000 such units of various capacity to be set up across the country by 2023,” Pradhan said. This “waste-to-wealth” scheme is lucrative for prospective entrepreneurs as it provides a guaranteed rate of return, assured 100 per cent offtake by state-run oil marketing companies and abundant raw material, he said. “Given this situation of viability, the banks have said they are quite agreeable to give loans, and the minimum standard of investment is Rs 3 crore. “The government is in also talks with the UN Environment Fund and the Japanese government for providing soft loans for such projects,” he added. A Petroleum Ministry statement said SATAT was launched with a four-pronged agenda of utilising over 62 million tonnes of waste generated every year in the country, cutting down oil imports, job creation and reducing vehicular emissions and pollution from burning of agricultural and organic waste. CBG production also provides an additional source of revenue for farmers.
Saudi’s Falih warns of policies undermining oil, gas development
Saudi Energy Minister Khalid al-Falih said on Wednesday that more energy investment was needed to meet future demand and warned that policies in many countries are undermining energy sector development. “Many consuming nations set unrealistic schedules for the deployment of alternative energy sources and enact measures that undermine oil and gas development,” Falih said at an industry event in Riyadh, according to a copy of his speech. “We find increasing pressure – including governmental, financial and media factors – to prematurely cut investment in conventional energy. In such an environment, the trillions of dollars needed to grow vital conventional energy supplies… are unlikely to be forthcoming.”
Indian Oil, Adani, Bharat Gas, Torrent emerge biggest winners under 9th and 10th round of CGD auctions
Indian Oil Corporation (IOC), the country’s largest fuel retailer, and Gautam Adani-led Adani Gas have emerged as the largest winners for City Gas Distribution (CGD) licenses, winning 17 and 15 Geographical Areas, respectively, under the ninth and tenth rounds of CGD auctions. Overall, the winners of the two rounds of auction combined are expected to provide 4.13 crore Piped Natural Gas (PNG) connections and set-up 7,924 Compressed Natural Gas (CNG) stations across the country by 2029. Also, laying of 170,873 Km of steel pipeline network is expected up to 2029. Other companies which won significant number of GAs under both the rounds were Bharat Gas with 13 GAs, Torrent Gas with 12, a consortium of AG&P LNG Marketing & Atlantic Gulf & Pacific Company of Manila with 11 GAs, IOC-Adani consortium with 10 GAs, Gail Gas with 8 and Gujarat Gas with 7 GAs. Petroleum and Natural Gas and Regulatory Board (PNGRB) announced the winners of the tenth round of CGD biddings on Tuesday. Tenth CGD Round Under the just concluded tenth round, IOC, Hindustan Petroleum (HPCL) and the Consortium of LNG Marketing and Atlantic Gulf & Pacific Company of Manila won 9 GAs each. “225 bids from 25 entities were received up to 5 February 2019, the bid closing date. Based upon the bids evaluations, PNGRB in its board meeting held on 26 February 2019 approved issuance of Letters of Intent (LoI) to the 12 successful entities for 50 Geographical Areas,” PNGRB said. The regulator added that post the completion of the tenth round, city gas would be available in 228 GAs comprising 402 districts spread over 27 states and union territories covering around 70 per cent of India’s population and 53 per cent of its geographical area. Research agency Jefferies India said in a note the cumulative target for all areas suggests bidding in the tenth round might have been even more aggressive than the ninth round. “While the tenth round was 70-80 per cent of the ninth round by area and population and 60 per cent by number of areas, the number of domestic PNG connections targeted during 8 years is 96 per cent of the ninth round and the CNG station target remains stiff too at 82 per cent of the ninth round. Targets set on the pipeline front were more conservative at 50 per cent of the ninth round,” it said. As per the work commitments made by winning entities under the tenth round, the companies are expected to provide 2.02 crore domestic PNG connections and set-up around 3,578 CNG stations for transport sector, along with laying of 58,177 inch-km of steel pipelines over an 8 year period ending March 2029. According to Jefferies, a major challenge will be execution of the projects and penalties could subsequently take center stage. “With execution challenges in sight, penalties could indeed take center stage. Penalties here are on the lower side esp for domestic PNG connections that have the highest weightage (Rs 750 per shortfall, or 15 per cent of security deposit),” it said. The agency also said the penalties could, however, prove material for new entrants in case of large slippages. Guidelines provide for cancellation of licenses if entities fail to meet 30 per cent of the target quoted at the end of the third year. During the tenth round, Gujarat Gas won city gas licenses for 6 GAs, followed by Gail Gas which won rights for 4 GAs and Indraprashta Gas Limited and Torrent Gas, who won distribution rights for 3 GAs each.
IOC wins city gas licences for 10 areas; HPCL wins for 9
State-owned Indian Oil Corp (IOC) has won licences to retail gas in 10 cities while Hindustan Petroleum Corp Ltd (HPCL) won rights for nine towns as oil regulator PNGRB announced winners for the 10th city gas bid round. IOC won city gas distribution licences for nine cities, most of them in Bihar and Jharkhand, on its own and one in a joint venture with Adani Gas, according to a press statement issued by Petroleum and Natural Gas Regulatory Board (PNGRB). HPCL, a subsidiary of state-owned Oil and Natural Gas Corp (ONGC), won licences to retail CNG to automobiles and piped natural gas to households in nine cities in Uttar Pradesh and West Bengal. A little known consortium of LNG Marketing Pte Ltd and Atlantic Gulf & Pacific Company of Manila Inc won rights for nine cities in Andhra Pradesh, Karnataka, and Kerala. Gujarat Gas Ltd won rights for six cities while state gas utility GAIL India’s unit GAIL Gas Ltd won rights for four. Indraprastha Gas Ltd and Torrent Gas won rights for three cities each while Adani Gas and Bharat Gas Resources Ltd, a subsidiary of state-owned Bharat Petroleum Corp Ltd (BPCL), bagged two cities each. This is the second auction in a row that IOC has dominated. In the previous 9th bid round, IOC had won licences for eight cities on its own and another nine in a joint venture with Adani Gas. Adani Gas had in the 9th round won licences for 13 cities on its own while Bharat Gas Resources Ltd bagged 11 areas. Gujarat-based Torrest Gas Pvt Ltd got nine cities. While 86 Geographical Areas or GAs, made up of 174 districts, were offered for bidding in the 9th round that concluded in August last year, 50 GAs, comprising of 124 districts, were offered in the 10th round. “225 bids from 25 entities were received up to February 5, 2019, i.e., the bid closing date (for the 10th round). Based upon the bids evaluations, PNGRB in its 88th Board meeting held on February 26, 2019, approved the issuance of Letters of Intent (LoI) to the 12 successful entities for 50 GAs,” the PNGRB statement said. Prior to this, city gas distribution (CGD) licences had been given for 178 GAs covering 280 districts (263 complete and 17 part) spread over 26 states and UTs. These cover about 50 per cent of India’s population (as per 2011 census) and 35 per cent of its geographical area. In addition, CGD operations are being carried out in five districts, authorisation for which is either under consideration of PNGRB or sub-judice. “With the completion of 10th CGD Bidding Round, CGD would be available in 228 GAs comprising 402 districts spread over 27 States and Union Territories covering approximately 70 per cent of India’s population and 53 per cent of its geographical area,” the statement said. As per the commitment made by the various entities in the 50 GAs approved for issuance of LoIs in 10th CGD Bidding Round, 2.02 crore domestic PNG (piped natural gas) connections and 3,578 CNG (compressed natural gas) stations for transport sector would be installed largely during a period of 8 years up to March 31, 2029, in addition to 58,177 inch-km of steel pipeline. “Further, the entities would be authorized to supply natural gas to industrial and commercial units in their respective GAs as per the limits provided in the CGD Authorisation Regulations,” it added.
Petrochemical complexes to boost turnover of BPCL Kochi Refinery
The BPCL Kochi Refineries is expecting around 16% increase in its turnover in another three years with the completion of its second petrochemical project. “We expect the turnover to increase by Rs 100 billion to Rs 700 billion by 2022 at the current level of prices,” said Prasad K Panicker, executive director of the company. Its Rs 111.30 billion second petrochemical complex to manufacture polyols is expected to go on stream by 2022. An import substitute, the products find wide use in the production of automotive seats, mattresses, shoe soles, refrigeration etc. BPCL Kochi Refinery is in discussion with various global companies to finalise the technology for six different products. “There is a huge demand for polyols and it is growing by over 10% per annum providing good scope for MSMEs to set up units for polyols-based products in the complex,’’ Panicker said. The company’s first petrochemical project being constructed at a cost of Rs 55 billion is all set to begin operation by the middle of the year. It will produce acrylic acid, acrylates and oxo alcohol that are used in the manufacture of paints, super absorbent polymers, detergents, adhesives, sealants, solvents etc. The technology has been sourced from global companies like Mitsubishi, Air Liquide Global and Johnson Mathey Davy. Both complexes have been made possible after the integrated refinery expansion project (IREP), recently dedicated to the nation by the Prime Minister Narendra Modi, that will raise the capacity of the refinery to 15.5 million tonnes from 9.5 million tonnes. The propylene produced after the expansion is the main feedstock of the petrochemicals. The refinery now has the capacity to produce 500,000 tonnes of propylene and 100,000 tonnes of ethylene. The entire quantity of propylene will be used for the two petrochemical compelexes. “ The two projects will result in Rs 130 billion forex savings per annum for the country ,’’ Panicker said. BPCL Kochi Refinery is slated to complete its fuel upgradation project to comply with BS-VI norms by February next year. The project cost is around Rs 33 billion. The country is expected to move to BS-VI automotive fuel by April 2020.
UAE’s ADNOC signs agreements with South Korean energy companies
The United Arab Emirates’ ADNOC has signed framework agreements with three South Korean energy companies to explore domestic and international growth opportunities, it said in a statement on Tuesday. The agreements with Korea Gas Corporation, Korea National Oil Corporation and GS Energy cover upstream, downstream and bunkering opportunities for crude oil and liquefied natural gas.