New plant in India to produce 4 million litres of biodiesel
LRE Petroleum received letter of intent (LOI) from Indian Oil to set up biodiesel manufacturing plant in India. The Ministry of Petroleum & Natural Gas (MPNG) announced the National Biofuels Policy back in 2018, which has a target of 5% blending of biodiesel with conventional diesel by 2030. LRE Petroleum is expected to produce at least 4 million litres of biodiesel (B-100) every year from used cooking oil (UCO). Biodiesel produces 78% less carbon emissions from conventional diesel. In India the transport sector adds about 20% every year to the annual carbon emissions which is at about 2.3 Gt CO2e emissions for the year 2019. The company is set to reduce 10,000 tonnes of CO2e from the atmosphere annually. The biodiesel plant is strategically located in Karnal, Haryana, India, with LRE’s new 1,700 tonnes per annum compressed biogas plant which is expected to be commissioned by end of March next year.
Air Quality panel orders immediate closure of NCR industries not running gas or cleaner fuels despite having infrastructure
The Commission for Air Quality Management in NCR and Adjoining Areas (CAQM) on Wednesday issued directions for immediate closure of all industries where PNG infrastructure and supply are available but they have still not switched over to the PNG. As per the directions of the Commission, these violating industries/ industrial units will not be permitted to schedule their operations till December 12. The position will be reviewed for further decisions, according to an official statement. “Despite measures taken in different sectors towards the improvement of air quality of Delhi-NCR, the air quality still remains in ‘Very Poor’ to ‘Severe’ category. Keeping in view the need to enforce strict actions against the deteriorating air quality of the region, the commission believes that there is an urgent need to take further preventive measures, as a matter of extreme emergency and abundant caution,” it said. The CAQM has also deputed flying squads for field visits and rigorous inspections of different sites contributing to the deteriorating air quality of Delhi-NCR and reporting their compliance of the directions. The Commission is reviewing the progress on daily basis by holding the review meetings with the flying squads to take stock of the situation and take necessary punitive actions against the violators, it said.
Abu Dhabi chemical company, Reliance Industries form $2-bn production JV
Billionaire Mukesh Ambani’s Reliance Industries on Tuesday said it will in partnership with Abu Dhabi Chemicals Derivatives Company RSC Ltd (TA’ZIZ) invest $2 billion in setting up a petrochemical production facility in the UAE. The oil-to-telecom conglomerate will join the recently-formed TA’ZIZ joint venture of Abu Dhabi state energy giant ADNOC and state holding company ADQ for developing the facility at Ruwais in western Abu Dhabi. “TA’ZIZ and RIL, have agreed to launch ‘TA’ZIZ EDC & PVC’, a world-scale chemical production partnership at the TA’ZIZ Industrial Chemicals Zone in Ruwais,” the company said in a statement. The new joint venture will construct and operate a chlor-alkali, ethylene dichloride (EDC) and polyvinyl chloride (PVC) production facility, with an investment of more than $2 billion. The TA’ZIZ Industrial Chemical Zone projects are currently in the design phase with project start up targeted in 2025. “Representing the first production of these chemicals in the UAE, the project will enable the substitution of imports and the creation of new local value chains, while also meeting growing demand for these chemicals globally,” it said. The TA’ZIZ Industrial Chemicals Zone is a joint venture between Abu Dhabi National Oil Company (ADNOC) and ADQ. ADNOC, which pumps most of the UAE’s 3 million barrels per day of crude oil, plans to spend USD 45 billion with partners to develop its downstream operations in Ruwais. These projects include adding refining and petrochemical capacity. The oil refinery planned at Ruwais is being designed to be integrated with the petrochemical project. “The project builds on ADNOC and Reliance’s long-standing strategic partnership and is Reliance’s first investment in the MENA region,” the statement said. The signing of the joint venture terms, which are subject to regulatory approvals, was witnessed by UAE Minister of Industry and ADNOC chief executive Sultan Ahmed Al Jaber and Reliance Chairman and Managing Director Mukesh D Ambani. The joint venture terms were signed by Khaleefa Al Mheiri, Acting CEO of TA’ZIZ and Kamal Nanavaty, President Strategy and Business Development of Reliance. The agreement capitalises on the growing demand for these critical industrial raw materials and leverages the strengths of the two firms as global industrial and energy leaders. Reliance operates the world’s largest refining complex at Jamnagar in Gujarat. It also has petrochemical plants. Besides producing oil, ADNOC too has similar operations. Under the terms of the agreement, TA’ZIZ and Reliance will construct an integrated plant with a capacity to produce 940,000 tonnes of chlor-alkali, 1.1 million tonnes of ethylene dichloride and 360,000 tonnes of PVC annually. While chlor-alkali is used in water treatment and in the manufacturing of textiles and metals, ethylene dichloride (EDC) is used for producing polyvinyl chloride (PVC). PVC is commonly used in pipes, fittings, profiles, tubes, windows, doors, sidings, wire, cable, film, sheet, and flooring. Al Jaber, said: “This strategic partnership with Reliance builds on the strong and deep-rooted bilateral ties between the UAE and India and highlights the attractive and compelling value proposition offered by TA’ZIZ as we grow a globally competitive industrial ecosystem.” “This joint venture marks a major milestone in ADNOC’s downstream expansion and the development of the TA’ZIZ Industrial Chemicals Zone. It will help strengthen domestic supply chains, drive In-Country Value and accelerate the UAE’s economic diversification, in line with the leadership’s wise directives.” Ambani said the joint venture will further cement the long standing and valued relationship between India and the UAE. “India’s need for PVC to propel its growth, and the value from the abundantly available feedstock in UAE, provides a win-win partnership for both companies. Close cooperation in the region based on shared objectives is key as we optimise resources and work together to enrich the lives of our citizens,” he said. The production of chlor-alkali, EDC and PVC will create opportunities for export to target markets in Southeast Asia and Africa, as well as providing local industry with a source of critical raw materials manufactured in the UAE for the first time, the statement said. TA’ZIZ comprises three zones, the first of which is an industrial chemicals zone that will host chemicals production, with seven world-scale projects already in the design phase. The second is a light industrial zone, which will be home to downstream conversion industries that will convert the outputs of the chemical zone into consumable products and, finally, an industrial services zone that will house a variety of companies providing the necessary services required by the TA’ZIZ industrial zones and the wider Ruwais Industrial Complex.
IOC renews deal to buy up to 2 MT of oil from Russia’s Rosneft
Indian Oil Corporation (IOC), the nation’s largest oil firm, has renewed a deal to buy up to 2 million tonnes of crude oil in 2022 from Russia’s Rosneft, the Russian oil producer said. IOC had in February 2020 signed a deal with Rosneft Oil Company to import up to 2 million tonnes of oil via the port of Novorossiysk. In 2021, the deal envisaged supply of up to 1.7 million tonnes of crude oil but IOC bought just on parcel or shipload as the cost of transporting the oil made it uneconomical, when compared to alternatives. For 2022, the deal is for the supply of up to 2 million tonnes of oil from the Black Sea port of Novorossiysk. India has tied up supplies from Russia to the US in a bid to diversify its oil import basket, cutting reliance on the Middle East to meet its oil needs. “Rosneft and IOC signed a contract for the supply of up to 2 million tonnes of oil to India through the port of Novorossiysk by the end of 2022,” the Russian firm said on its website. The signing took place during the visit of Russian President Vladimir Putin to India, during which he met with Prime Minister Narendra Modi and held bilateral talks in an expanded format. The leaders of the two countries, the statement said, attach great importance to the development of all-around trade, economic and investment cooperation. Energy is one of the key areas of interaction between the companies of the two countries. “The signing of a new contract for the supply of oil confirms the strategic nature of the long-term partnership between Rosneft and Indian Oil,” said Igor Sechin, Chief Executive Officer of Rosneft. “It is important that cooperation between the companies develops in an integral format and covers the entire technological chain – from extraction to the sale of raw materials. I hope that our interaction with Indian Oil will develop within the framework of other projects.” India’s Ministry of External Affairs, listing out the 28 agreements signed during Putin’s visit, said the crude oil supply agreement “seeks to renew the previous contract between Rosneft and IOC”. IOC also signed a Statement of Intent of Collaboration with Russian petrochemicals company SIBUR to explore the feasibility of setting up a dual-feed cracker along with downstream units at its 15 million tonnes a year Paradip refinery in Odisha, the MEA said. In another pact with Gazpromneft, IOC is looking for VGO Hydrocracking Technology, Catalytic Iso-dewaxing for lobs and catalyst regeneration for fixed bed catalyst. IOC is already an investor in some of Rosneft’s production projects in Russia, including Vankorneft and Taas-Yuryah. Since 2016, IOC along with ONGC Videsh Ltd, Oil India Limited and Bharat Petroresources own 49.9 per cent of the Vankorneft subsidiary. This company is located in Krasnoyarsk province and developing Vankor oil and gas condensate field – the largest among the fields that were discovered in Russia in the past 25 years. Also, a consortium of IOC, Oil India and Bharat Petroresources owns 29.9 per cent of the company Taas Yuryakh Neftegazodobycha, which holds licenses for the areas of the Central Block of Srednebotuobinskoe Field and Kurungskiy license area (the other shareholders are Rosneft and BP). ONGC Videsh, the overseas investment arm of state-owned Oil and Natural Gas Corporation (ONGC), in 2001 bought a 20 per cent stake in Sakhalin-1 Project in Russia’s Far East (the other shareholders are Rosneft, ExxonMobil and the Japanese company Sodeco). In 2020, the project produced 12.4 million tonnes of oil and condensate and delivered more than 2.4 billion cubic meters to consumers. Rosneft owns a 49.13 per cent stake in the Indian company Nayara Energy, which operates a 20 million tonnes a year capacity oil refinery at Vadinar in Gujarat. This refinery is the second-largest in India and one of the most technologically advanced in the world, the Rosneft statement said. “The consortium is reviewing an option of a two-fold increase of the refining throughput at the Vadinar Refinery. In the first stage, the consortium plans to invest USD 850 million towards the building of a petrochemical unit in Vadinar within 2 years,” it said. The plant will produce up to 4,50,000 tonnes a year of polypropylene. Nayara Energy’s business also includes a deep-water port that can harbour super large VLCC class tankers and one of the largest retail networks in India now comprising more than 5,600 petrol pumps.
Saudi Aramco, BlackRock sign $15.5bn gas pipeline deal
Saudi Aramco said it has signed a $15.5 billion lease and leaseback deal for its gas pipeline network with a consortium led by BlackRock Real Assets and Hassana Investment Company in its second major infrastructure deal this year. The deal signed on Monday underscores how Aramco — the kingdom’s cash cow — is seeking to monetise its once-untouchable assets to generate revenue for the Saudi government as it accelerates efforts to diversify the oil-reliant economy. In June, Aramco sold a 49 percent stake in its oil pipeline business to a consortium led by US-based EIG Global Energy Partners for $12.4 billion. Under the new deal, a newly formed subsidiary, Aramco Gas Pipelines Company, will lease usage rights in Aramco’s gas pipeline network and lease them back to Aramco for a 20-year period, the Saudi oil firm said in a statement. In return, Aramco Gas Pipelines Company will receive a tariff payable by Aramco for the gas products that flow through the network, backed by minimum commitments on throughput. Aramco will hold a 51 percent stake in Aramco Gas Pipeline Company and sell a 49 percent stake to investors led by BlackRock and Hassana, a Saudi state-backed investment management firm. “With gas expected to play a key role in the global transition to a more sustainable energy future, our partners will benefit from a deal tied to a world-class gas infrastructure asset,” Aramco president and CEO Amin Nasser said in a statement. “BlackRock is pleased to work with Saudi Aramco and Hassana on this landmark transaction for Saudi Arabia’s infrastructure,” BlackRock chairman and CEO Larry Fink said. “Aramco and Saudi Arabia are taking meaningful, forward-looking steps to transition the Saudi economy toward renewables, clean hydrogen, and a net zero future.” Aramco, the world’s biggest oil producer, has pledged to achieve net zero carbon emissions in its operations by 2050. Saudi Arabia, one of the world’s biggest polluters as well as the top oil exporter, has also pledged to achieve net zero carbon emissions by 2060. Long seen as the kingdom’s “crown jewel”, Aramco and its assets were once tightly under government control and considered off-limits to outside investment. But with the rise of de facto ruler Crown Prince Mohammed bin Salman, who is pushing to implement his “Vision 2030” reform programme, the kingdom has shown readiness to cede some control. Aramco sold a sliver of its shares on the Saudi bourse in December 2019, generating $29.4 billion in the world’s biggest initial public offering.
Gail opens a new round for submission of proposals from Start-Ups
To support the Start-Ups operating in identified focus areas, GAIL (India) Limited plans to invest in such companies through its Start-Up initiative ‘Pankh’. The state-owned company has now opened a fresh Round for Solicitation of Investment Proposals from the Start-Ups operating in areas such as natural gas, petrochemicals, energy, project management, bio manure marketing, nanomaterials, IoT and data mining, environment, health and social, etc. The current Solicitation Round will remain open from 1st December 2021 to 15th January 2022.
Oil’s not well with domestic production
The threat of the Omicron variant has spooked global markets, taking oil prices lower. But this could be only transient as global oil demand still exceeds supply this year. Brent crude prices ruled at levels of $71 a barrel last week, well below the average of $84 in October, but are substantially up on the start of 2021. The impact of high global oil prices is bound to be serious for countries like India, which imports 85% of its requirements. For India, costlier oil implies a higher import bill and inflation. Indications are that the crude import bill this fiscal is likely to exceed last year’s level of 196.5 million metric tonnes, worth $62.2 billion. Till October this fiscal, India imported 118.5 MMT worth $61.1 billion, as against 104.6 MMT amounting to $26.9 billion in April-October 2020-21. Costlier oil stems from global oil supply not growing fast enough at 95.97 million barrels a day to meet the recovering demand at 97.53 million barrels a day in 2021, according to the short-term outlook of the US Energy Information Administration. Oil prices have risen over the past year due to steady drawdowns of global oil inventories. The Organisation of the Petroleum Exporting Countries and its allies reaffirmed on December 2 that they will keep production targets unchanged to raise output by 400,000 barrels a day in January 2022. However, the grouping will closely monitor the market situation and may meet again if prices slide further. But there are cautious grounds for optimism that with higher supplies outpacing slowing global demand, Brent crude prices may fall to an average of $72 a barrel in 2022. To reduce vulnerability to high and volatile global prices, determined efforts must be made to increase the levels of relative self-sufficiency by stepping up domestic oil and gas production. Unfortunately, this is not happening. Domestic crude production has been steadily declining from 38.1 MMT in 2011-12 to 30.5 MMT in 2020-21. Till October this fiscal, production at 17.4 MMT is virtually unchanged from the levels during the corresponding period in 2020-21, according to the Petroleum Planning & Analysis Cell. Domestic production is falling due to declining output from old and marginal fields. India lacks the technological capability for deepwater exploration. There have also been no major hydrocarbon discoveries of late either. The preferred strategy in recent years is to pick up stakes in foreign oilfields to enhance India’s energy security. But with elevated international oil prices, stepping up domestic production must be prioritised at all costs. Indian state-owned oil majors like the Oil and Natural Gas Corporation must be able to generate internal resources to undertake exploration. Unfortunately, this cannot happen if ONGC is asked to give away a 60% stake plus operating control in India’s largest oil and gas producing fields of Mumbai High to foreign companies and divest its drilling and services arm to become asset light, among others. This prompted a former Union secretary, EAS Sarma, to write to the Prime Minister that instead of “weakening” ONGC, the government should adopt a conscious strategy to strengthen its ability. While addressing global oil and gas CEOs, PM Narendra Modi told them that the focus has shifted from revenue to production maximisation. This should be welcomed. Domestic oil majors like Cairn Oil and Gas have stated that as much as 70% of their revenue generation goes as levies to different governments while costs of running operations take up 20-25%, making it difficult for them to invest in capital-intensive technologies. Domestic oil producers must be incentivised to produce more to reduce import-dependence over the medium-term.
OMCs keep diesel, petrol prices unchanged on Monday
Oil marketing companies (OMC) have kept diesel and petrol prices unchanged across major Indian cities on Monday. Accordingly, diesel and petrol prices in Delhi stood at Rs 86.67 per litre and Rs 95.41 per litre, respectively. In the financial capital Mumbai, the rates were also unchanged at Rs 94.14 and Rs 109.98, respectively. Prices also remained static in Kolkata at Rs 89.79 and Rs 104.67, respectively. In Chennai too, it remained untouched at Rs 91.43 and Rs 101.40, respectively. Across the country as well, the price of the fuel largely remained unchanged on Monday but the retail rates varied depending on the level of local taxes.
Sudan owes ONGC Videsh $560 mn in unpaid dues: Govt to Parliament
Sudan owes ONGC Videsh Ltd (OVL) a total of USD 560 million in unpaid oil dues and cost of pipeline built by the Indian firm built for the African nation, the government told Parliament on Monday. OVL, the overseas arm of state-owned Oil and Natural Gas Corporation (ONGC), had a 25 per cent stake in Block 2A&4 in Sudan. Sudan had since 2011 not paid OVL and partners for oil it bought from the block. “The amount due to OVL on account of over lifting of crude oil under the Exploration and Production Sharing Agreement (EPSA) is USD 339.75 million and under sale and purchase agreement (SPA) is USD 90.94 million, which amounts to USD 430.69 million in total,” Minister of State for Petroleum and Natural Gas Rameswar Teli said in a written reply to a question in Rajya Sabha. OVL had also not been paid for the 741-km-long pipeline it built from Khartoum to Port Sudan. The company initiated arbitration proceedings against the Government of Sudan to recover the dues and has terminated the Exploration and Production Sharing Agreement (EPSA). “Under Sovereign Guarantee- Pipeline Contract Agreement (SG-PCA) arbitration between OVL and Sudan Government, OVL has raised a demand of USD 98.94 million principal amount along with interest/damages for unpaid and delayed installments from the Sudan government,” he said. The African nation has admitted before the arbitration tribunal that it owes about USD 131 million to OVL in pipeline dues. “The Sudan government, in its statement of defence, has admitted about the unpaid instalments amounting USD 98.94 million and interest of USD 31.0 million payable on unpaid and delayed installments,” the minister said. The arbitration tribunal at the International Court of Justice in Hague is hearing the matter. “The outcome of the arbitrations are contingent on the Hon’ble Permanent Court of Arbitration, based outside India,” he said. OVL had in 2003 acquired 25 per cent interest in the Greater Nile Oil Project in Sudan. China’s CNPC holds a 40 per cent stake in the project, while Malaysia’s Petronas has 30 per cent and Sudapet of Sudan owns the remaining 5 per cent. GNOP consisted of the upstream assets of on-land Blocks 1, 2 and 4 spread over 49,500 sq km in the Muglad Basin, located about 780 km South-West of the capital city of Khartoum in Sudan. The crude oil produced from the oil field of GNOP is transported through a 1,504-km pipeline to Port Sudan at the Red Sea. Upon the secession of South Sudan from Sudan in July 2011, the contract areas of Blocks 1, 2 and 4 which straddle between Sudan and South Sudan was split with a major share of production and reserves are now situated in South Sudan. Post-secession, as the Government of Sudan’s share of total production from Sudan was not sufficient to meet the requirements of local refineries, foreign firms were asked to sell their share of crude oil to it. However, the payment of dues on account of crude oil purchased by the Government of Sudan has not been received. OVL had along with state-owned Oil India Ltd constructed and financed a 741-km multi-product pipeline from the Khartoum refinery to Port Sudan for USD 194 million. OVL’s share of the project cost was 90 per cent, while the rest was borne by OIL. The pipeline was handed over to the government of Sudan in October 2005. The lump-sum price, together with lease rent was required to be paid to OVL in 18 equal half-yearly installments effective from December 2005. The project cost and rental totalled USD 254 million, which equated to 18 half-yearly installments of USD 14.135 million each starting from December 30, 2005. The company got a total of 11 installments (USD 155.48 million) till December 2010 and the balance seven installments amounting to USD 98.94 million remained outstanding. The remaining seven installments due from June 30, 2011, to June 30, 2014, are yet to be released. OVL, whose share of investment in the project was USD 158.01 million, has been following up for the realisation of USD 98.94 million from the government of Sudan at various levels but hasn’t succeeded so far. This prompted the company to drag Sudan to arbitration. Sudan had denied ONGC and partners an extension of licence to operate block 2B after the initial contract expired in November 2016.
IGL Hikes Gas Prices in Delhi, Haryana, Rajasthan
The Indraprastha Gas Limited (IGL) has hiked the Compressed Natural Gas (CNG) prices in Delhi, Haryana, and Rajasthan with effect from Saturday, December 4, reported the livemint. With the latest revision in prices, the retail cost per Kg of CNG in the NCT of Delhi stands at Rs 53.04. In Haryana’s Gurugram, the price of CNG gas stands at Rs 60.40 per Kg, whereas in Rewari, the price stands at Rs 61.10 per Kg. In Karnal and Kaithal, the CNG gas rates have surged to Rs 50.30 per Kg, as per the Indraprastha Gas Limited web portal. In Rajasthan’s Ajmer, Pali and Rajasamand, the CNG price after revision stands at Rs 67.31 per Kg, according to the mint report. Revised CNG prices in other cities of UP, Haryana, Rajasthan: • Noida, Greater Noida & Ghaziabad – Rs 58.58 per Kg • Muzzaffarnagar, Meerut & Shamli – Rs 63.28 per Kg • Gurugram – Rs 60.40 per Kg • Rewari – Rs 61.10 per Kg • Karnal & Kaithal – Rs 59.30 per Kg • Kanpur, Hamirpur & Fatehpur – Rs 67.82 per Kg • Ajmer, Pali & Rajsamand – Rs 67.31 per kg Incorporated in 1998, IGL took over Delhi City Gas Distribution Project in 1999 from GAIL (India) Limited. The project was started to lay the network for the distribution of natural gas in the National Capital Territory of Delhi to consumers in the domestic, transport, and commercial sectors. With the backing of GAIL (India) Ltd and Bharat Petroleum Corporation Ltd (BPCL) – IGL plans to provide natural gas in the entire capital region.