NTPC plant’s prospects hinge on LNG pricing
The survival of National Thermal Power Corporation (NTPC) Ltd’s thermal power plant at Kayamkulam is linked to the pricing mechanism of natural gas, that is, the plant can solve the energy crisis of Kerala if the global pricing system takes a new turn. Alternatively, the Union government will have to take measures to end the disparity in the prices of domestic and imported gas. Global prices are set according to an international system. There are a few popular formulae to calculate the prices. Two of the most widely accepted pricing systems are Japan Crude Cocktail (JCC) and Henry Hub pricing. Both are linked to international crude prices, according to experts in the industry. Natural gas is supplied mostly on long-term contracts. The gas can be brought through spot markets as well. With increased availability of natural gas, spot prices have become more attractive. In the event of natural gas-based power production at the NTPC unit, gas could be sourced from the Petronet LNG terminal where gas is supplied on a long-term international contract. The price of imported gas reaching Kayamkulam could be a matter of concern to Kerala State Electricity Board, which is the sole purchaser of power from the plant. Unless the prices are low, the cost of production will go up, resulting in higher price for electricity generated at the plant. The NTPC has been providing electricity under its naphtha-based fuelling system at about Rs.7 a unit, whereas the KSEB has been getting power at cheaper rates from other sources. If LNG is made available at lower prices, the plant could function at its installed capacity of 350 MW. The plant has a plan to increase the capacity to 1,050 MW. Again, the expansion plan is hinged on the profitability of operation. At present, the prices of imported LNG offered to entities in Kerala are above $12 per million Btu (British thermal units), while the gas available from domestic sources are provided at less than half that price. Kerala being not connected to the national gas grid, it has to depend on imported gas. Rob Havenstein Womens Jersey
Power sector acquisitions to get cheaper next year: CESC
RP Sanjiv Goenka Group flagship CESC Ltd is expecting acquisition opportunities in the power sector to get cheaper over the next 12 months. “Opportunities will come cheaper in a year or so. This is our articulated calculation for it,” the group’s Chairman Sanjiv Goenka said recently on the sidelines of the company’s annual general meeting (AGM). He was responding to questions on acquisition of stressed assets in the power sector. “A dedicated team is working towards identifying stressed assets and we have well articulated principles laid down for it. We look only at assets which are completely viable in terms of inputs and output. “Unless the basic operation of an asset is profitable, we are not interested even if it comes cheap,” he said, adding that the power ministry has sorted out several issues facing the sector. In 2009, CESC acquired Dhariwal Infrastructure Ltd’s 600 MW Chandrapura thermal project in Maharashtra. However, the project now has accumulated losses of ?600 crore, but is expected to turn revenue positive once a Power Purchase Agreement (PPA) for 150 MW is signed over the next three months. “We have so far tied up for almost 300 MW and another 150 MW is expected over the next three months. With this, our total PPA for Chandrapura will be 450 MW, out of 540 MW effective capacity. Annual revenue will be about ?600 crore and with this, we will be profitable,” Goenka said. Haldia Energy, which operates a 600-MW thermal power plant at Haldia, has achieved 100 per cent ash utilisation and is exporting ash to Bangladesh for cement making. Ronnie Harrison Authentic Jersey
People restore power transmission in Siang
The residents of Pangin, under the guidance of Siang DC Rahul Singh, have created a record of sorts by repairing and restoring power transmission between Yembung and Pangin. The power supply had remained disrupted for a long time even after the restoration of Yembung Hydel Plant three months ago. The department concerned was not being able to transmit power to Pangin as the two poles were totally damaged because of construction of Trans Arunachal Highway and landslides. Official reports stated that the power department had failed to restore the system for the past three months owing to the alleged paucity of government funds. DC Singh had mobilized the locals, including officers and staff of various departments, local leaders and villagers to make a joint initiative in the area. With the help of power department, they successfully erected two new poles without any financial assistance from the government and revived the transmission after hours of toiling. The DC, while appreciating the locals for their endeavour, asked them to make such united efforts in future whenever the need arises. He promised all possible help to the power department officials to carry out their duties, a report said here on Saturday. A.J. Derby Jersey
Power utility mulls hotline washing of high-tension wires across Nashik
The Maharashtra State Electricity Transmission Company Limited (MSETCL) has decided to conduct ‘hotline washing’ of high tension lines to avoid long power outages acoross the district. For this purpose, it may need to procure additional instruments. The procedure requires a truck-mounted instrument that allows one to spray de-mineralised water below the insulators made of china-clay to remove dust. Since this exercise is carried out without shutting down the power supply, it’s called ‘hotline washing’. The June 20 debacle that left the entire district in darkness for over 14 hours has pushed the state power utility to take concrete steps towards rectifying the problem and ensuring that Nashik does not have to face power outages of such large proportions in future. The issue of pre-monsoon maintenance of high power transmission lines has come under the scanner especially after the June 20-incident of power failure in district that resulted in three talukas and industrial area going without power besides tripping of two power generation sets in Eklahara colony. The Maharashtra State Electricity Transmission Company Limited (MSETCL) has therefore decided to conduct live washing of the high tension lines for which it may require to purchase instruments. “Once acquired, it will be the first-of-its-kind kit with the MSETCL in the state, which is used mostly to clean insulators more than 100ft above where fine dust accumulates and creates a path for water, leading to power failures. Since the pre-monsoon maintenance is a major issue, the company is contemplating buying the truck-mounted instrument for cleaning purpose,” a senior officer from MSETCL said. “The MSETCL currently has units to conduct hotline washing of the system where maintenance is carried out without shutting down the line – while 1,32,000 to 2,22,000 volt of energy passes through the wires. It is a specialist job. It is more difficult to clean the system with water. Around two years ago, the company cleaned the system using the cold water washing process. the drawback of this process is the limited amount of time available to complete the process, as the power supply has to be restored soon,” the officer added. Abroad, maintenance of the system is carried out through specially designed choppers. For cold washing the system, power outage for longer durations is needed, which is not feasible, especially during summers. “We cannot closing lines for too long, which leaves no scope for cleaning the system,” the officer said. Discussing the hotline washing method, he said that since there were no experts available to carry out the job, MSETCL was planning on readying a team that would specialise in carrying out the work. “The teams will be trained, developed and retained for the job,” he added. There is, however, another side to the issue. “The MSETCL officials may find it feasible to buy the equipment for hotline washing but a major concern remains about how often the kit would be brought to use. In such a scenario, it is best to outsource the work so that the utility can focus on other issues at hand instead for worrying up training and retaining teams for the job. Why should the company invest in a machine that will require huge funds? Let the job be outsourced, which is limited to a particular time of the year,” a union leader of the employees of the company said. Water should be de-mineralised 100% by the agency hired for the job and any shortcomings should be punished severely, he added. Kareem Abdul-Jabbar Authentic Jersey
Cairn India, Vedanta merger sealed with revised terms
For each equity share a minority investor holds in Cairn India, he’ll get one equity share and four redeemable pref shares in Vedanta. The Boards of Vedanta Limited and Cairn India announced approval of the revised and final terms for the merger. “The Boards of Vedanta Limited and Cairn India have approved revised and final terms for the Transaction, taking into account prevailing market conditions and having regard to underlying commercial factors,” a company release stated. Pursuant to the revised and final terms, each Cairn India minority shareholder will receive for each equity share held, one equity share in Vedanta and four redeemable preference shares with a face value of Rs. 10 in Vedanta. This translates to implied premium of 20 percent to one month volume-weighted average price (VWAP) of Cairn India share price. The merger plans were stalled after the income-tax department froze Cairn Energy’s 9.5 percent stake in Cairn India. In 2011, Cairn Energy sold 58.5 percent of Cairn India to Vedanta, for USD 8.67 billion. However, Vedanta holds 59.88 percent in Cairn India and LIC owns 9.06 percent in Cairn India with 3.9 percent stake in Vedanta. Wade Baldwin Authentic Jersey
RIL, BP spend Rs 45 billion to maintain gas output at KG-D6
Reliance Industries and its partner BP of UK have invested over Rs 45 billion in the flagging eastern offshore KG-D6 block to maintain gas output at current level despite the steep natural decline that has set in the seven-year old fields. RIL-BP are currently producing from Dhirubhai-1 and 3 gas field and MA oil and gas field, three of the over one-and-half dozen discoveries made in the Bay of Bengal Block KG-DWN-98/3 or KG-D6. The fields, which began gas production in April 2009, hit a peak output of 69.43 million standard cubic meters per day in March 2010 before water and sand ingress shut down well after well. The fields are on steep natural decline and RIL-BP have spent over Rs 45 billion arrest the decline and continue to increase the ultimate recovery of gas, sources said. The block is currently producing 8.7 mmscmd. Currently, RIL-BP are in the process of sidetracking (drilling) two of their existing wells and drilling away from the water to increase recovery of gas. Side-track campaign has also been initiated in MA field. Sources said the existing and enhanced production from these fields only get the price as per the formula that was approved in November 2014. Price according to this formula currently is $3.06 per million British thermal unit and is expected to be revised lower in October 2016. At these prices, leave alone new investment, even the base business will struggle to yield any profits, they said. Sources said RIL-BP have started working developing R- Series and satellite discoveries. A field development plan (FDP) approved in 2013 envisages $3.18 billion investment in R-Series or D-34 gas field to produce 13-15 mmscmd of gas for 13 years. RIL-BP recently submitted FDP for two other discoveries D-29 and 30, which formed part of R-Culster. Besides, another FDP of $1.529 billion for four satellite gas discoveries – D-2, 6, 19 and 22, was approved in 2012. The four fields can produce 10.36 mmscmd. The two partners are also working on a FDP of MJ find. Sources said it will take 36-42 months to build and install new facilities on these fields and to drill new wells and hook them up. Mike Palmateer Jersey
Centre sticks to GAIL pipeline plan
Dashing the hopes of some 2,430 farmers in the western belt of Tamil Nadu, the Union government has categorically ruled out an alternative route for the proposed Kuttanad-Kochi-Mangalore GAIL gas pipeline project. After the Supreme Court ordered in April that the pipeline be laid along its original route cutting across agricultural fields, the only ray of hope for the farmers was the possibility of a rethink on the part of the Union government and GAIL on the alignment. But a week ago, Union minister of state for petroleum and natural gas Dharmendra Pradhan told Parliament that the Centre examined the issue with GAIL and that the company’s response was that it was not feasible to lay high pressure cross-country gas pipelines along the highways as suggested by the affected farmers and the Tamil Nadu government. “Reputed consultants in the field of oil and gas pipelines have also expressed their opinion regarding technical non-feasibility of laying of high pressure cross-country gas pipelines for long distances along national highways,” Pradhan said. The state’s apprehension is that the alignment would cause irrecoverable damage to the agricultural property of several thousand farmers in the districts of Coimbatore, Tirupur, Salem, Erode, Namakkal, Dharmapuri and Krishnagiri. The pipeline will cover a distance of 310 km and farmers will have to give up land for a width of 20 metres along that stretch. It is estimated that over 1,20,000 fruit bearing trees will have to be uprooted to lay the giant pipes. Pradhan cited GAIL’s contention that there was non-availability of adequate space on national highways for movement of heavy duty crawler mounted equipment used for laying of pipeline, non-availability of land for installation of sectionalizing valve stations intermediate pigging stations required to be installed at regular intervals along the pipeline, safety and security concerns, and disruption of highways. But the state hopes to arrive at a solution fast. “The state government has recently received a letter from GAIL to join its 13-member expert committee, which includes Anna University professors, to resolve alignment issues, following CM’s request to PM Modi,” said a senior TN government official. Ricardo Allen Authentic Jersey
Centre will not force Tamil Nadu to implement CBM project: Dharmendra Pradhan
The Centre would not force Tamil Nadu to implement coal-bed methane project, Union Minister of State for Petroleum and Natural Gas Dharmendra Pradhan said. “Government of India is not going to force or apply force. After consulting and take local community and the state government into confidence then only we can proceed (on the project),” he said. He was talking to reporters on the sidelines of the Golden Jubilee Celebrations of Chennai Petroleum Corporation a subsidiary of Indian Oil Corporation, at Manali near here. Pradhan’s comments have comes in the backdrop of Tamil Nadu government halting the project in 2013, by Great Eastern Energy Corporation Ltd in delta districts following the apprehensions of farmers who feared that the project would affect agricultural operations. “On the better interest of youth of Tamil Nadu, for their employment, for the industry and for the business, we must monetize the gas”, he said. Earlier at the Golden Jubilee celebrations, he sought the support of Chief Minister J Jayalalithaa for development of the gas pipeline network and for the coal-bed methane production in Tamil Nadu. “Our Government under the leadership of Prime Minister Narendra Modi is committed towards ‘Energy Justice’ & CPCL has a large role to play in it”. After formally the commissioning of Mounded Bullets at the CPCL refinery, he said the Mounded Bullets facility would enhance the safety and storage capacity of LPG at the refinery. He said CPCL was meeting the energy demands of Tamil Nadu and nearby states with “great reliability”. Commemorating the Golden Jubilee celebrations, he unveiled a memorabilia, symbolising the 50 years of CPCL refinery on the occasion. Pradhan along with Minister of State for Road Transport, Highways and Shipping, Pon Radhakrishnan reviewed the performance of CPCL. Austin Carr Womens Jersey
IOC in talks to buy GSPC’s stake in Mundra LNG terminal
Indian Oil Corporation (IOC) is in talks to buy debt-laden Gujarat State Petroleum Corp’s (GPSC) stake in the under-construction Rs 45 billion Mundra LNG import terminal in Gujarat. GSPC is looking to exit the 5 million tonnes a year LNG import terminal project, which is likely to be completed by mid-2017. It has offered its 50 per cent stake in the terminal to IOC, sources privy to the development said. With a view to expand its gas business, IOC is keen to buy a stake in Mundra terminal but does not want GSPC to exit the project completely. IOC, the country’s largest oil company, wants the state government entity to remain as a part of the project for smooth operations, sources said. The terminal is not connected with any pipeline for shipping gas to consumers. To lay a pipeline to the nearest grid, it would require state government support and with GSPC on board, it could be done easily, according to IOC. Sources also said IOC is keen to take half of GSPC stake and wants the Gujarat government entity to keep the remaining 25 per cent. GSPC LNG, a unit of GSPC holds 50 per cent interest in the project. Adani Group holds 25 per cent while the remaining 25 per cent is to be bid to a strategic partner, the shortlist of which also included IOC. It will be selling 5 million tonnes a year LNG terminal together with storage and re-gasification facilities over an area of 28 hectares on the coast. India Gas Solutions Pvt Ltd, the equal joint venture between the Mukesh Ambani-led Reliance Industries and Europe’s second largest oil firm BP and state-owned Oil and Natural Gas Corp (ONGC) are the other two firms shortlisted to pick up 25 per cent stake earmarked for the strategic partner in the project. Initially, eight firms including state gas utility GAIL India had expressed interest to buy the stake but only three were finalised. Essentially, GSPC was looking at a partner which can bring in LNG or can consume the imported liquid gas, sources said. While BP is a producer and trader of LNG, RIL’s twin refineries at Jamnagar in Gujarat as well as its large petrochemical plants are huge consumers of gas. ONGC also is a big consumer of the fuel. IOC too has large requirement of gas at its oil refineries. The company also markets gas to users. Besides the three, other firms which had expressed interest included Petronet LNG, Torrent Energy, Japan’s Mitsui & Co and Toyota Tsusho, sources said. Mundra terminal, which is to be financed in a debt to equity ratio of 70:30, is expandable up to 10 million tonnes per annum in near future. Teemu Pulkkinen Jersey
Navi Mumbai airport to start operations by December 2019, says minister
Mumbai’s air gridlock may start easing in the next four years. The Centre on Thursday said the Navi Mumbai International Airport, which is to act as the aerial bypass to the choked-to-capacity Chhatrapati Shivaji International Airport, may start operations by December 2019. Minister of state for civil aviation Jayant Sinha told Lok Sabha , “Selection of concessionaire on public-private partnership basis shall be finalized by December. All major clearances have been obtained, 160 hectares have been acquired… Phase-I of aircraft operations with capacity to handle 10 million passengers per annum is expected to commence by December 2019.” Cidco, the agency overseeing the project, expects construction work to begin on the site by the end of next monsoon or in a little over 13 months. Cidco VC and MD BhushanGagrani told TOI that the agency was working in three areas simultaneously so that the late-2019 target could be met. “The request for quotation work is over. We have issued financial bids to the three shortlisted companies (led by Tatas, GVK and GMR). By September-end, we should be ready with the concessionaire.” Bud Dupree Jersey