All You Need to Know About New Regional Air Connectivity Scheme
The Draft Regional Air Connectivity Scheme will be placed in public domain for three weeks to enable Stakeholders to give their suggestions. After this the details of the scheme would be finalised. To operationalise the Scheme Aircrafts and helicopter operators would be required to assess the demand on various routes and submit their proposal for providing connectivity on such routes. They would be required to earmark certain number of seats on every flight for the RCS. The fare for such seats would be capped based on flight distance and time. An index has also been prepared for airfare caps for the RCS seats for fixed wing aircrafts and helicopters depending upon the distance. Conditions set: Airport Authority of India will be the implementing Agency for the Scheme. The RCS route would have to include un-served airports i.e. airports where there is no scheduled commercial flight or under-served airports i.e. airports which have 7 or less scheduled commercial flights per week. The RCS routes would cover a length between 200 to 800 km. But these criteria would not apply to hilly areas, islands, North-east region and for helicopter operations. The procedure for selecting Airline Operators would be based on reverse bidding mechanism. Two half-yearly cycles would be the basis for inviting and evaluating the proposal. The selected Airlines will enjoy a period of exclusivity on the awarded routes. The exact period would be fixed on the basis of suggestions by Stakeholders. Benefits to airlines: The Central Government will support the RCS Scheme by levying an excise duty of only 2% on Aviation Turbine Fuel (ATF) purchased at RCS Airports for a period of three years. The service tax will be levied at only 10% of the taxable value of tickets for RCS seats for a period of one year. The operating Airline will be free to enter into code sharing arrangement with domestic and international airlines. The State Governments will charge Vat of 1% or less on ATF at RCS Airports for a period of 10 years. It will also provide security and fire services free of cost, besides providing electricity, water and other utility services at concessional rates. Airline Operators will exempt RCS flights from landing charges, parking charges, and terminal navigation landing charges. The selected airlines on their part would be expected to commit 50% of the seats on RCS flights to be sold at the specified airfare cap. They would also be required to maintain a frequency of minimum, three flights per week and maximum seven flights per week. A Regional Connectivity Fund would be created to subsidise the operation of the RCS. The Viability Gap Fund (VGF) would be calculated on normative basis. Lamar Miller Authentic Jersey
Modi push to air-link policy despite NITI demurral on sops
The government’s policy think tank, NITI Aayog, had serious objections to the civil aviation ministry’s Regional Connectivity Scheme (RCS), the draft policy of which was announced last week. The Aayog’s main objection was on the cross-subsidy idea, of levies on trunk routes to fund connectivity to places where an airline would not otherwise wish to go. But Prime Minister Narendra Modi’s support saved the day for the draft scheme. The ministry had suggested such connectivity through revival of near or fully defunct airports. It appealed to the Prime Minister’s Office (PMO) and was, after presentations and questions, able to get the support of the PM. Improving of regional connectivity was a key feature of the National Civil Aviation Policy, unveiled last month. The concept also found place in the ruling Bharatiya Janata Party’s manifesto during the 2014 general elections. RCS proposes to reduce the cost of operation for airlines to places off the main routes through concessions, including through a Viability Gap Fund (VGF). For the latter, the Centre plans a levy on airlines in the trunk routes, pushing up air fares in those. Logan Cooke Authentic Jersey
15 airports in Karnataka can opt for regional link plan
Fifteen unserved airports or airstrips in Karnataka have found a place in a list of 394 facilities across the country that could opt for the regional connectivity scheme. According to an official draft, in south India, Karnataka has the highest number of unserved airstrips of airports that could opt for the ambitious scheme drafted by the Ministry of Civil Aviation “to connect the unconnected” and “serve the unserved or underserved”. The unused airports or airstrips in Karnataka include Ammasandra, Baldota/Koppal, Ballari, Bidar, Ginigera (Hospet), Hassan, Jakur, Kolar, Mysuru (Mandakalli), Raichur, Shahbad, Vidyanagar, Yadgir and Yelahanka. While Tamil Nadu has 13 such facilities, Telangana has 10, AP 4 and Kerala one. West Bengal and Rajasthan have the highest number of facilities (35), followed by Bihar (32) and Uttar Pradesh (29).
90 new small airports in next 12 months
India will push to get 90 new airports up and running over the next 12 months, under a government plan to service smaller cities that have missed out on the country’s air travel boom, officials said. Prime Minister Narendra Modi wants to accelerate growth in the world’s fastest expanding aviation market while encouraging airlines like IndiGo, SpiceJet and Jet Airways to fly more people to and from smaller, often poorer cities. Scores of new airports have been built around the country but many are yet to open because airlines do not see sufficient demand as ticket prices are too high for a majority of Indians. That has raised worries the government is building infrastructure few can afford to use. Civil aviation ministry officials, however, said the government has identified 30 recently-built airports, and another 60 nearing completion, that it says it can get airlines to start flying to soon. Individual states will offer free land and emergency service support to all newly built airports, while landing charges and taxes on aviation fuel will be kept at low levels, they said. Matthew Spencer Womens Jersey
Collaborate to compete in global oil & gas industry faced with low prices
Indian oil companies should form a consortium to acquire & build acreages abroad including India, says Prabhat Singh, Petronet LNG’s MD & CEO. In order to successfully confront the challenges of low oil& gas prices and difficult global economic condition, industry experts believe Indian oil and gas companies should collaborate for scouting oil & gas assets in India and internationally. “Collaborative approach of national oil companies is the right solution to creating oil and gas assets in India to enable it thrive under the low oil and gas price regime. Indian oil sector needs a fiscal regime better than what prevails currently,” said Yash Malik, executive director – corporate planning, ONGC, during a conference on ‘How to survive in low oil & gas price scenario’, organised by PHD Chamber of Commerce and Industry (PHDCCI) on June 30, 2016. Malik also pointed out that in the low price scenario of oil and gas, ONGC is successfully going ahead with joint venture approach. During the conference, Prabhat Singh, managing director & CEO, Petronet LNG Limited, floated a proposal for creation of a consortium or special purpose vehicle (SPV), consisting of companies such as Petronet LNG Limited, Gail, ONGC, Engineers India Ltd and Oil India Ltd (OIL) to jointly bid for prospective properties for exploration of natural gas and as well setting up of LNG terminals in overseas fields, particularly those of Sri Lanka, Bangladesh and the like. Elaborating on the issue of proposed consortium or SPV, Prabhat Singh hinted that it has been conceived by the Petronet LNG at a time when the company expects that the prevailing scenario of low oil and gas price would stay on for another five years and that to thrive on such circumstances, the consortium and SPV approach of national oil companies would be ideal situation to acquire oil & gas including terminal acreages and assets overseas including India. According to him, the Ministry of Petroleum and Natural Gas is aware of it and that the Ministry’s intent is also there on it without disclosing a definite roadmap to convert it into reality. “The idea has been briefly floated and discussed and its conclusiveness should follow as India would be bidding to acquire gas properties and to build LNG terminals in countries like Sri Lanka and Bangladesh for which if India proceeds with collective approach, it would establish and edge over others,” pointed out Prabhat Singh adding that such an approach is also called for under prevailing circumstances to building energy storage facilities and other such assets domestically. Drew Kaser Jersey
Bloated LPG import bill fear
The country’s LPG import bill is likely to increase substantially as non-domestic consumption grew 25.8 per cent during the first two months of the fiscal. It can rise further following the government’s efforts to push cooking gas to BPL (below poverty line) families and transfer the subsidy to the bank accounts of consumers. According to the Petroleum Planning & Analysis Cell (PPAC), LPG consumption grew 7.4 per cent in May and 7.8 per cent during April-May. However, domestic consumption rose only 5.7 per cent in May and 6.1 per cent April- May. Non-domestic consumption increased 21.5 per cent in May, with a cumulative growth of 25.8 per cent during April-May. A non-domestic 19.2-kg LPG refill costs Rs 1,035 in Calcutta, while a subsidised 14.2- kg domestic LPG cylinder costs Rs 423.16. India plans to almost double its LPG imports in the next three years to over 16.5 million tons (mt). The country is looking to import from Bangladesh and Iran besides its traditional sources in West Asia. LPG imports rose 1.6 mt during April-May this fiscal against 1.4 mt last fiscal. The country had imported 8.8mt of LPG at $3.8 billion during 2015-16. However, the spurt in global crude prices can jack up the import cost, analysts said. Brent prices will average around $40 per barrel in 2016 and is expected to average $65-$70 per barrel by 2020. The country imports 40 per cent of its 21mt LPG requirement. This will go up as demand rises by double-digits following the new connections. The high growth in the consumption of non-domestic LPG and the increase in its market share can be attributed to its easy availability, low price and curbs on the diversion of subsidised domestic cylinders. The diversion of cheaper and subsidised cooking gas meant for households towards commercial use has stopped after the government launched the PAHAL scheme for direct transfer of subsidy to the consumers from January 2015. Under this scheme, LPG is being sold to consumers at the market rate while the subsidy is directly credited to their bank accounts. Petroleum minister Dharmendra Pradhan has said more than Rs 210 billion of subsidy has been saved by implementing PAHAL. Besides putting an end to the black marketing of cheap LPG, 33.4 million duplicate, inactive and ghost accounts were detected and blocked. Bulk LPG registered a positive growth of 22 per cent in May and a cumulative growth of 24.2 per cent during April- May. The percentage share of bulk LPG in total consumption went up to 2 per cent in May from 1.7 per cent in the same period a year ago. Rodney Gunter Jersey
Petrobras’ Indian partners fight delay in troubled Brazil oil project
Petrobras has warned its Indian partners in a huge offshore project to not expect oil from the site until 2022, according to sources, a fresh sign of how low oil prices and the state-owned company’s corruption scandal and mountain of debt are dragging on Brazil’s energy industry. The previously unreported, four-year delay in the “super-giant” discovery off the northeastern coast of the Brazilian state of Sergipe is forcing India’s Oil and Natural Gas Corp and IBV Brasil Petroleo Ltd to seek ways to speed up the Petrobras-led project which has cost them $2.1 billion with no return in sight. The delay and pressure from the Indian partners is just one of many challenges for new Petrobras Chief Executive Pedro Parente, named by Brazil’s interim-President Michel Temer in late May amid an ongoing financial crisis. In the face of a massive bribery and kickback scandal and Petrobras’ $126 billion of debt, Parente has pledged to run the company in a more market-friendly way but has declined to comment on individual projects. He has also promised a revamped investment plan by the end of October – though it is unclear whether it will address the Sergipe offshore standoff. In April, Petrobras told IBV, a 50-50 joint venture between state-owned Bharat Petroleum Corp and privately held Videocon Industries Inc, that there will be no oil output from Sergipe “until at least 2022,” an IBV executive told Reuters. A year ago, Petrobras’ promised first oil by 2018. Hoping to speed up development, IBV told Reuters it has offered to arrange up to $10 billion in loans from Indian and other international development banks to finance the Sergipe development – Brazil’s biggest oil prospect outside the prolific subsalt region near Rio de Janeiro where Brazil is pinning hopes of energy independence. “It’s a common and simple loan structure, if Petrobras is willing to provide future output as collateral, it won’t have to pay a penny until oil starts flowing, something we could can probably do by 2020,” the IBV executive said. “But we get the feeling that Petrobras has yet to accept its new, more restricted circumstances,” the executive added. Petrobras told Reuters it has yet to receive a formal proposal from its Indian partners to finance the project. Alshon Jeffery Womens Jersey
IOC lines up Rs 400 billion to take refining capacity beyond 100 million tons
Indian Oil Corporation (IOC) will invest Rs 400 billion to expand its refining capacity to over 100 million tons by 2022 as the nation’s largest oil firm takes the lead to add capacity to meet India’s rising energy needs. “As we see, (fuel) demand is expected to grow at 3.5-4 per cent CAGR and we need to build capacities to meet that requirement,” IOC Director (Refineries) Sanjiv Singh told PTI. International Energy Agency’s World Energy Outlook projects 4 per cent CAGR growth in India’s fuel demand to 348 mt by 2030, from 184 mt in 2015-16. BP projects demand to be 335 mt while EIA has pegged it at 294 mt, which translates into a CAGR of 3 per cent. India has a refining capacity of 232.06 mt. “All the projections clearly show that the demand will grow and unless we start investing now, we will lag,” he said. IOC will expand its refining capacity to 104.55 mt by 2022 from the current 80.7 mt per annum with an investment of about Rs 400 billion, he said. It is looking to scale up its Koyali refinery in Gujarat to 18 mt from 13.7 mt while capacity of the Panipat refinery in Haryana will be raised by a quarter to 20.2 mt from the current 15 mt. A 3-mtpa capacity addition each is planned for Uttar Pradesh’s Mathura and Bihar’s Barauni refineries, which will take their capacity to 11 mt and 9 mt, respectively. The recently-commissioned 15-mtpa Paradip refinery in Odisha will see a capacity addition of 5 mt while about 3 mt will be added in IOC’s Digboi and Bongaigaon refineries in the North-East, he said. Other state refiners too have planned capacity addition to meet rising demand. Bharat Petroleum Corp (BPCL) is looking to ramp up capacity to 53 mt, from 30.5 mt currently, by adding 1.6 mt to its Mumbai refinery and another 6 mt to the Kochi unit. There is a plan to ramp up capacity of Bina refinery in Madhya Pradesh by 9 mt, to 15 mt, while Numaligarh’s will go up to 9 mt, from 3 mt. Hindustan Petroleum Corp Ltd (HPCL) also plans to expand its Mumbai refinery to 8.2 mt from 6.5 mt and that of Vizag unit to 15 mt from 8.3 mt. While its Bhatinda refinery’s capacity will go up to 11.2 mt from 9 mt, it has plans to set up a 15-mt unit in Vizag in Andhra Pradesh and another 9-mt refinery at Barmer in Rajasthan. As for the Mangalore refinery, it is chalking up plans to increase capacity to up to 21 mt, from the current 15 mt. Derrick Henry Jersey
RIL gets green nod for Rs 8 billion drilling project in Tamil Nadu
Reliance Industries has received green nod for drilling 8 additional exploratory wells to ascertain the reservoir capacity and commercial viability of hydrocarbons off the coast of Tamil Nadu at a project cost of Rs 8 billion. The company has been awarded exploratory rights for hydrocarbons prospecting in the offshore block DY-III-D5 under the New Exploration Licensing Policy-III. RIL has already been given the environment clearance to drill 11 exploratory wells in this block. As on date, Reliance Industries Ltd has drilled nine wells and discovered hydrocarbons in three wells. Since seismic data and the drilling campaign shows presence of hydrocarbons in the block, RIL is planning to carry out 8 additional exploratory well drilling to establish the reservoir capacity. “Based on the recommendation of the Expert Appraisal Committee (EAC), the Environment Ministry on June 30 gave environment clearance for the RIL’s exploratory drilling project in Tamil Nadu,” a senior government official said. The clearance to the Rs 8 billion project has been given subject to certain conditions, the official added. Among key conditions specified, RIL has been asked to ensure gas produced during the testing should be flared with appropriate flaring booms. It should also ensure that there is no impact on flora and fauna due to drilling of wells in the offshore sea. It should undertake conservation measures to protect the marine animals/biota in the region. The company should monitor the petroleum hydrocarbons and heavy metals concentration in the marine fish species regularly and submit report to the government. Among others, the Panel suggested that all the hazardous waste generated at the rig/offshore facility should be properly treated, transported to on shore and disposed of in accordance with the norms. The company has also been asked to take permission from the Shipping Ministry for commencement of the drilling operations. Reliance forayed into the exploration and production business by partnering British Gas in an unincorporated joint venture in Panna Mukta and Mid and South Tapti blocks, where it holds 30 per cent stake. Besides Panna Mukta and Tapti blocks, their domestic portfolio comprises of five conventional oil and gas blocks in Krishna Godavari, Mahanadi, Cauvery Palar, Gujarat Saurashtra and Cambay Basin and two Coal Bed Methane blocks in Sohagpur East and West in Madhya Pradesh. The company also has blocks overseas. Nikita Kucherov Womens Jersey
India demand surge sucks up LNG otherwise meant for Europe
India’s burgeoning demand for liquefied natural gas is dictating how many tankers make it to Europe, the world’s dumping ground for the fuel. LNG imports to India jumped 43 percent in May from a year earlier, a contrast to western Europe where shipments have stagnated over the past three months. The world’s second-most populous nation is expected to double its LNG intake over the next four years, according to energy consultants Wood Mackenzie Ltd. India overtook South Korea as the second-biggest buyer of spot and short-term LNG cargoes after prices crashed about 65 percent in almost two years, spurring demand for the cleaner fuel from fertilizer producers to power plants. For a supplier, having a closer market helps. It takes three days to ship LNG to western India from Qatar, the biggest producer of the fuel, compared with two weeks to get it to the U.K. where prices are lower. “India needs to be full before you start getting LNG imports in Europe going up,” Noel Tomnay, vice president of global gas and LNG research at Wood Mackenzie, said in an interview in London. “We haven’t seen a significant uptick in European LNG imports yet. What we have seen is a significant uptick in India.” The nation gets the fuel from Qatar at about $5 per million British thermal units, according to Petronet LNG Ltd., India’s biggest importer. That compares with $4.37 on average at Britain’s National Balancing Point trading hub in the second quarter, data from the ICE Futures Europe exchange in London show. “The NBP is below the western Indian market price, and that should gravitate the spot cargoes toward India,” Prabhat Singh, the chief executive officer of Petronet, said in an interview in New Delhi on June 30. “India is the place for world LNG to come if we handle the market well.” India’s imports of cargoes under contracts with duration of four years or less rose 45 percent to 9.7 million tons in 2015, according to the International Group of LNG Importers. The country imported 14.6 million tons of LNG last year, little changed from a year earlier, according to the group. In May, the nation purchased a total of 2.08 billion cubic meters of LNG, or 1.57 million tons, according to provisional data from the Oil Ministry’s Petroleum Planning & Analysis Cell. That compares with 3 billion cubic meters imported into western Europe, a figure that’s slated to fall to 1.25 billion cubic meters in June, according to consultants Energy Aspects Ltd. Western Europe is poised to take a bigger share of LNG imports “over the coming quarters” thanks to the region’s liquid trading hubs capable of absorbing excess LNG from the global markets, according to Fitch Ratings Ltd.’s BMI Research unit. Global supply is set to soar from the second half of this year as plants from the U.S. to Australia and Angola increase production, pressuring prices, BMI said in a June 30 research note. Increased deliveries have stretched India’s existing infrastructure. The Dahej terminal this year is running at an estimated 111 percent of its designed nameplate capacity and will be operating at 120 percent over the next six months, according to Petronet, which operates the facility. The company plans to complete an expansion of the terminal by September. India’s LNG price is forecast to fall to $4.8 per million Btu on average this year and $4.6 in 2017, down from $7.5 last year, according to Energy Aspects. “We have seen demand elasticity in India and it’s starting to stretch regas capacity,” said WoodMac’s Tomnay. “It is interesting to see how tested India will be as Asia’s natural sink.” Kris Versteeg Jersey