Air quality panel issues fresh directions to industries in NCR to switch to PNG
The Commission for Air Quality Management (CAQM) has reiterated its push for industries in the National Capital Region (NCR) to switch to Piped Natural Gas (PNG) or biomass fuel. In an order issued recently, the CAQM said that industries in the NCR which have not shifted to PNG or biomass fuel, despite the availability of natural gas infrastructure and supply, are to switch over completely by September 30, “failing which such industries shall be closed down and not permitted to schedule operations thereafter.” Early in December, the commission had restricted operations of such industries not running on PNG or cleaner fuel to eight hours per day for five days a week, on account of deteriorating air quality in the NCR. These restrictions were in place till Friday, when the CAQM lifted them. In its order, the commission noted that apart from those in Delhi, a majority of industries in the industrial areas across the NCR, where gas infrastructure and supply are available, are still not fully operating on PNG or cleaner fuels and continue to run on coal or high-speed diesel. The commission also noted in its order that in those industrial areas where PNG infrastructure and supply is not available, industries shall plan and switch over to running on biomass fuel at the earliest. In August last year, the commission had directed Haryana, Uttar Pradesh and Rajasthan to prepare a time-bound action plan to supply gas in the industrial areas within the NCR districts to ensure that industries run on PNG in all industrial areas. It also noted then that out of 1,469 industrial units identified for switching to gas in Haryana, only 408 had made the shift, while in Uttar Pradesh, the figure was 1,161 industrial units that had shifted to gas out of 2,273 identified in the NCR districts.
Oil And Gas Will Keep Meeting India’s ‘Baseload’ Energy Demand- Oil Minister
Oil and gas will continue to meet the ‘baseload’ energy demand of India in the “foreseeable future” even as the world’s third-biggest crude importer takes steps to move to cleaner sources to cut emissions, oil minister Hardeep Sing Puri said on Friday. India has set a goal to achieve net-zero carbon emissions by 2070. “As our economy grows to $5 trillion by 2025, and towards $10 trillion by 2030, our burgeoning energy needs will take shape and in turn, the global energy markets will be shaped by India’s requirements,” Puri told the World Energy Policy Summit. Imports cover about 85 per cent of India’s overall crude needs, but it’s per capita energy consumption is just a third of the global average. Hit hard by a rally in global oil prices, India is taking steps to boost its oil and gas output while accelerating energy transmission to cut emissions. However, Puri said, “the oil and gas will continue to meet the baseload energy demand for the foreseeable future.” India’s top oil explorer Oil and Natural Gas Corp is scouting for partnerships with global companies to boost oil and gas output, its chairperson Alka Mittal said at the online event. ExxonMobil Gas (India) chief executive Monte Dobson said his company would help ONGC in boosting oil, gas output from ONGC’s difficult and challenging fields in India’s east and west coasts. India Oil Corp, the country’s top refiner, is expanding into low carbon businesses, by expanding its gas sales business and building infrastructure to help boost the role of electric vehicles in India’s transport fleet. “IOC is leveraging the surplus hydrogen capacities available at its refineries as a potential source for promoting fuel cell mobility,” its chairman S.M. Vaidya said.
Panel to choose new chairman of ONGC
Eight months after its headhunter failed to find any suitable candidate for top job at ONGC, the government will deploy a sparingly used committee approach to find a new chairman and managing director of India’s top oil and gas producer. Most board level appointments at public sector companies are done on the basis of recommendations of the Public Enterprise Selection Board (PESB) but the government headhunter had in June last year did not find anyone suitable from nine candidates, including two serving IAS officers, to head Oil and Natural Gas Corporation (ONGC). “Keeping in view the strategic importance and vision for the company and its future, the Board did not recommend any candidate and decided to constitute a Search Committee,” PESB had said in a notice after interviews on June 5, 2021.
Shell swings into huge profit as oil price recovers
Energy giant Shell surged back into profit last year as oil prices rocketed on recovering demand with economies reopening from pandemic lockdowns. Net profit stood at US$20.1 billion following a loss after tax of US$21.7 billion in 2020, Shell said in a statement on Thursday. “2021 was a momentous year for Shell,” said chief executive Ben van Beurden, noting that the group also simplified its name and structure and outlined plans to slash greenhouse gas emissions. Following the bumper earnings, Shell said it planned a share buyback programme totalling US$8.5 billion (7.5 billion euros). As lockdowns spread in 2020, oil prices dropped off a cliff, even briefly turning negative. Prices have since rebounded sharply, with the benchmark Brent North Sea oil contract trading at almost US$90 per barrel. Gas and electricity prices have also seen massive gains over the past year, boosting income for energy majors but weighing on business costs and individuals’ spending power. Also last year, Shell shareholders backed plans to switch the oil giant’s headquarters from the Netherlands to Britain after a century and to drop Royal Dutch from its name. That has meant also a switch of its tax residence to Britain as well as top executives including Beurden to London. Shell is however keeping 8,500 staff in the Netherlands.
Abu Dhabi’s ADNOC announces a new offshore gas find
Abu Dhabi’s state-owned oil and gas company announced Thursday the discovery of between 1.5 to 2 trillion standard cubic feet of raw gas in an offshore area located in the emirate’s northwest. The discovery comes as Gulf Arab states continue to rely heavily on profits from oil and gas exports, despite rising global temperatures and climate change from burning fossil fuels. The United Arab Emirates, where Abu Dhabi is capital, was the first Gulf Arab state last year to join other countries around the world in pledging “net-zero” emissions targets within its borders — while maintaining fossil fuel exports abroad. The Abu Dhabi National Oil Company, also known as ADNOC, said the discovery came about in partnership with a consortium led by Italy’s Eni and Thailand’s PTT Exploration and Production Company Limited, which were awarded concession rights in the area. The 2019 agreement saw Eni and PTTEP vowing to invest $230 million to explore for oil and gas and appraise existing discoveries in two blocks spanning a total of 8,000 square kilometers (3,000 miles). For their natural gas discovery, the companies relied in part on insights from a massive 3D seismic survey underway in Abu Dhabi, according to ADNOC. ADNOC Managing Director and CEO Sultan Ahmed al-Jaber hailed the discovery. He said it speaks to the company’s commitment to partnerships that help Abu Dhabi explore and develop its untapped hydrocarbon resources. In December, ADNOC announced the discovery of up to 1 billion barrels of oil in another block of Abu Dhabi. The U.S. Energy Information Agency cites figures estimating the UAE holds the seventh-largest proven reserves of natural gas in the world at over 215 trillion cubic feet. The country, which lies on the eastern coast of the Arabian Peninsula along the Persian Gulf, has some 98 billion barrels of proven oil reserves, with about 96% of that located in Abu Dhabi. The United Arab Emirates is among the world’s 10 largest oil producers, with most of the country’s oil and gas wealth concentrated in Abu Dhabi. Despite its large natural gas fields, the UAE also imports natural gas due to its extensive domestic use in operating power plants and desalination plants.
Petroleum Minister blames decisions during Congress Govt for high fuel prices
Amid protests by the Opposition, Hardeep Singh Puri, Petroleum and Natural Gas Minister, replied, “Between 1979-86, prices rose by 126%, 2000-2007 prices went up 60%, last seven years prices have gone up by only 30%.” He further added, “Prices are determined by international price. During the lockdown, prices went down, but when economic activity picked up, the prices also rose.” Talking about the international production cost, he said, “The amount of crude available in the market is less than the demand thus the price is high. Crude oil price is decided by exchange rate, freight rate and dealer price. Government reduced the prices by Rs. 5 and 10 recently.” Dayanidhi Maran, DMK leader asked, whether the government has decreased the fuel prices with the U.P. election in mind. Mr. Puri replied that the State governments should reduce vats to reduce the fuel prices. “We are increasing ethanol blending. Petrol and diesel prices were deregulated by the Congress government. They floated oil bonds, which have resulted in huge repayments we made last year.”
Clarity sought for budget levy on unblended fuel
The announcement came close to the end of the finance minister’s budget speech on February 1, and it now has stakeholders in the petroleum & gas industry seeking more clarity from the government on its decision to levy an additional excise duty of Rs 2 per litre on unblended fuel. The minister said the levy would become effective from 1 October 2022. While the finance minister says the levy aims to make oil & gas companies to further push the levels of ethanol blending, it will enhance the retail price of most of petrol and diesel currently sold in India. Reacting to the budget proposal, Dr Pramod Chaudhari, Founder-Chairman of Praj Industries, a biofuel technology company said, “Tax on unblended fuel is a great start to promote the transition to greener fuels which is in line with the global practice of differential pricing for ethanol-blended fuel. The budget outlines concerted efforts to conserve the environment by sustainable climate action with a focus on carbon intensity reduction to achieve net zero targets.” A senior executive at a PSU, requesting anonymity, said that while blended petrol is relatively easily available in ethanol-producing states such as Maharashtra, Gujarat, Uttar Pradesh amongst others, it becomes difficult to source in certain other states including in Rajasthan, Bihar where sugarcane production is low or negligible. This also includes the south. Also, logistics-related issues play an important part in its availability at the retail stations. “It will certainly push OMCs to work harder towards achieving its blending goals” the executive added, emphasizing that the increase in excise duty will most likely get passed on to the consumers. The central government, through the National Policy on Biofuels, 2018, aims to increase usage of bio-fuels in the transportation sector towards energy security and climate change mitigation. During the period of 2020-2021 (December-November), 302 crore litres of ethanol was supplied to oil marketing companies by distillers thereby reaching a pan-India average blending level of nearly 8 percent. The government’s mandate is to increase the blending levels to 10 percent this year before doubling it by 2025. The development comes months after a cabinet committee of economic affairs increased the ex-mill price of ethanol to incentivise the millers to divert higher cane towards ethanol and increase its production. Also, the government in December slashed the GST on ethanol meant for blending under the Ethanol Blended Petrol (EBP) programme to 5 per cent from 18 per cent. Even as the ethanol blending program for petrol is on way up, a similar blending in diesel seems to be far behind in comparison. As per industry estimates, the biofuel blending of diesel currently stands at just about 0.1 percent.
Former oil secretary Tarun Kapoor to be new oil regulator
Former oil secretary Tarun Kapoor was on Thursday selected to head India’s oil and gas regulator PNGRB, sources said. Kapoor, who superannuated as secretary of the Ministry of Petroleum and Natural Gas on November 30, 2021, was selected to be chairman of the Petroleum and Natural Gas Regulatory Board (PNGRB) after interviews of over a dozen candidates. His candidature will now go to the Appointments Committee of the Cabinet for ratification and once approved, he would take over. Sources said as many as 13 candidates, including former chairmen of ONGC and a former director of IOC, had applied for the top job at PNGRB. Out of these, the ministry shortlisted seven candidates. Interviews were held by a search-cum-selection committee headed by V K Saraswat, Member (S&T), Niti Aayog on Thursday and Kapoor was picked for the top job. Former Oil and Natural Gas Corporation (ONGC) chairmen Subhash Kumar and Shashi Shanker as well as G K Satish, who superannuated as director for planning and business development from Indian Oil Corporation (IOC) a couple of months back, had applied for the top job. Numaligarh Refinery Ltd (NRL) Managing Director Saumendra Kumar Barua and Indraprastha Gas Ltd (IGL) Managing Director Asit Kumar Jana were among those who had applied. The shortlisted candidates for interview included Kumar, Satish, Barua, Jana, Virendra Nath Datt, OSD to chairman of GAIL (India) Ltd and former CPCL MD Surendra Nath Pandey. Shanker was not shortlisted. Kapoor was selected in response to the government re-advertising the post of chairman, PNGRB, in November. The committee — which also comprises secretaries to the ministries of oil and commerce, secretary legal affairs and economic affairs secretary — had in June 2021 picked up former power secretary Sanjeev Nandan Sahai. But, that appointment was not confirmed and so the post was re-advertised. Other candidates interviewed on June 2 included retired bureaucrat Avinash Kumar Srivastava, former ONGC chairman Shashi Shanker and former ONGC director Sanjay Kumar Moitra. The post of chairman, PNGRB, has been lying vacant since December 4, 2020, when Dinesh K Sarraf completed his three-year term. The Board, which comprises four members besides the chairman, is almost defunct with just one serving member. Former GAIL directors Gajendra Singh and A K Tiwari are currently the two members of the PNGRB.
GAIL starts India’s maiden project of blending hydrogen into CGD network
State gas utility GAIL (India) Ltd on Monday said it has commenced India’s first-of-its-kind project of mixing hydrogen into the natural gas system at Indore, Madhya Pradesh. The hydrogen blended natural gas will be supplied to Avantika Gas Ltd, one of GAIL’s joint venture with HPCL, for retailing of CNG to automobiles and piped natural gas to households in Indore, the company said in a statement. ”In line with the National Hydrogen Mission, GAIL has started hydrogen blending as a pilot project to establish the techno-commercial feasibility of blending hydrogen in City Gas Distribution (CGD) network. This project marks the stepping stone of India’s journey towards hydrogen-based and carbon-neutral future,” it said. GAIL started injection of grey hydrogen at the city gate station (CGS), Indore. ”This grey hydrogen would subsequently be replaced by green hydrogen,” it said. GAIL has already obtained the necessary regulatory permissions to commence the project. Zero-emission hydrogen is the latest buzzword around the world. Depending on the source, the hydrogen is classified as blue, green or grey. Blue hydrogen is when natural gas is split into hydrogen and CO2. The CO2 is captured and then stored. Grey hydrogen is a similar process to blue hydrogen but the CO2 is not captured and is released into the atmosphere. Green hydrogen is hydrogen produced by splitting water by electrolysis using electricity from renewable energy sources such as wind or solar. This produces only hydrogen and oxygen. The hydrogen is used and oxygen is vented into the atmosphere with no negative impact. GAIL said it has also engaged domain experts to carry out the impact assessment of blending hydrogen in natural gas. India has committed to achieving net-zero carbon emissions by 2070 and hydrogen together with renewable energy is seen as key to achieving that goal. For the transition, natural gas is the fuel and the government is looking to raise its share in the primary energy basket to 15 per cent by 2030 from the current 6.2 per cent. ”GAIL has always been committed to the growth of a gas-based economy in India and to India’s vision of a greener and cleaner environment. As our country is moving forward with the ambitious goal of achieving a carbon-neutral and self-reliant future, this project is a significant step in that direction,” the statement said. It is expected that this pilot project would help in the creation of a robust standard and regulatory framework in India to cover the aspects of injecting hydrogen into natural gas. This will pave the path for carrying out more similar projects in India.
BPCL privatisation may be pushed to next fiscal as no bidder visits in Q3
Privatisation of India’s second-largest oil refiner BPCL may have been pushed back to the next fiscal year as no bidder visited the firm’s premises in the last quarter, a senior company official said on Wednesday. The government is selling its entire 52.98 per cent stake in BPCL for which three expressions of interest (EoIs), including one from billionaire Anil Agarwal-led Vedanta Group, have been received. Financial bids are yet to be called. At a conference call with analysts, BPCL Director-Finance V R K Gupta said the firm continues to update data for bidders in the fray for the government stake and is also replying to their queries. During the third quarter (October-December 2021) ”no major events happened in terms of bidder visits to our company premises and the status quo is same”,he said. ”We don’t have any significant role in the disinvestment process,” he said. ”Whatever due diligence, data requirements are there, every quarter we update the data requirements in the portal, and bidders are continuously accessing the data.” BPCL, he said, is updating information on the data room and replying to queries raised by the bidders. ”We are continuously updating, and we are getting some queries and we are replying, that process is on,” he added. His statement on no bidder visiting the company premises implied that either the three bidders have completed the physical due diligence or that they have taken a pause for now. BPCL had in April 2021 opened a virtual data room, mostly containing financial information on the company, and qualified bidders signing confidentiality undertaking (CU) had been given access. Bidders, which besides Vedanta include private equity firms Apollo Global and I Squared Capital’s arm Think Gas, were thereafter allowed physical inspection of assets such as refineries and depots as part of the due diligence process. The government was to seek financial bids once bidders completed due diligence and the terms and conditions of the share purchase agreement (SPA) were negotiated. Sources said certain data which is commercially sensitive is uploaded in a separate section of the data room referred to as ‘Clean Data Room’ and access extended only to the designated team of lawyers of the qualified bidders in the interest of confidentiality and prevention of misuse of data. Gupta said the government has indicated that privatisation might not happen before March, and may even get pushed to the next financial year. ”Yesterday (in the Budget) also they have indicated that it might not happen before March 2022, it may be pushed to the next financial year,” he said. BPCL privatisation needs to achieve certain milestones before financial bids are called. A floor price for the bidding needs to be set and a sale-purchase agreement needs to be finalised. ”There are some milestones that have to achieve before calling for the financial bids. That entire process is being carried out by DIPAM only. From our side, whatever data we have to provide on a quarterly basis we have to provide the data and we have to reply to the query,” he added. A special purpose vehicle floated by the BSE-listed Vedanta Ltd and its London-based parent Vedanta Resources Plc submitted an EoI for buying the government stake in BPCL before the close of the deadline on November 16, 2020. While I Squared Capital is a private equity firm focusing on global infrastructure investments, New York-based Apollo Global Management, Inc is a global alternative investment manager firm. I Squared Capital invests in energy, utilities, transport and telecom projects in North America, Europe and select high growth economies such as India and China. BPCL will give the buyer ownership of around 15.33 per cent of India’s oil refining capacity and 22 per cent of the fuel marketing share. The buyer of the company will get 35.3 million tonnes of refining capacity — 12 million tonne Mumbai unit, 15.5 million tonne Kochi refinery and 7.8 million tonne Bina unit. BPCL also owns over 19,000 petrol pumps, 6,166 LPG distributor agencies and 61 out of the 260 aviation fuel stations in the country. The firm also has upstream presence with 26 assets in nine countries such as Russia, Brazil, Mozambique, the UAE, Indonesia, Australia, East Timor, Israel and India. It is also making a foray into city gas distribution and has licences for 37 geographical areas (GAs).