Gujarat added most CNG stations in India
Continuing its thrust on the usage of clean fuel, Gujarat added the highest number of compressed natural gas (CNG) stations in India during the April-January period in 2020-21. In fact, the state accounted for 20 per cent of the new CNG stations developed in the country during the period. The number of CNG stations in Gujarat increased by 102 to 738 by the end of January 2021 as compared to 636 CNG stations on April 1, 2020. The information was released by the rating agency Care Ratings, which cited the data from Petroleum and Planning Analysis Cell, the Union ministry of petroleum and natural gas. Gujarat figures include CNG stations in Dadra and Nagar Haveli, Daman and Diu. The total number of CNG stations across the country increased by 506 to 2,713 as on January. The number was 2,207 at the beginning of the fiscal 2021. Gujarat was followed by Uttar Pradesh (89 new refuelling stations), Maharashtra (70), Odisha (47), Haryana (40), and Rajasthan (34). Gujarat is covered 100 per cent under the city gas distribution network with the Petroleum and Natural Gas Regulatory Board (PNGRB) awarding natural gas retailing licences to all the geographical areas in the state. As a result, more and more CNG stations are being set up in the state, said an industry source. The government’s push for cleaner fuel along with a deeper penetration of natural gas have led to the establishment of more CNG stations in the state, added industry players. City gas distribution players estimate that the number of new CNG stations in Gujarat could be about 150 by the end of the 2020-21 fiscal. “CNG is 60 per cent cheaper than petrol and 45 per cent cheaper than diesel,” Care Ratings said. “Given the volatility in petrol-diesel prices, more vehicle users are making a shift to CNG-powered vehicles and it is fast gaining prominence as a preferred fuel especially in the case of public transportation.”
HPCL acquires balance 50 per cent stake in Chhara LNG Terminal
Hindustan Petroleum Corporation Limited (HPCL) has acquired the balance 50 per cent equity stake in HPCL Shapoorji Energy Private Limited (HSEPL) from SP Ports Private limited company. Post acquisition, HPCL’s stake in HSEPL gets enhanced to 100 per cent, making HSEPL a wholly-owned subsidiary of HPCL. HSEPL is constructing a five million tonnes per annum (MTPA) LNG terminal (with provision for expansion to 10 MTPA) at Chhara in Gujarat’s Gir-Somnath district, at an estimated cost of about Rs 4,300 crores, which is likely to be completed by end of 2022. The terminal will have all facilities for receipt of LNG through ocean-going tankers, marine unloading, storage, LNG road tanker loading, regasification, and supply of regasified LNG to the gas grid. The acquisition is in line with the overall future strategy of HPCL to diversify its product portfolio and is an important step in the direction of having a strong presence in the total natural gas value chain. The percentage of natural gas in the overall energy basket of India is expected to grow from six per cent at present to 15 per cent by 2030 which makes it one of the important growth drivers in the future. HPCL, along with its joint venture companies, has a presence in CGD (City Gas Distribution) business in 20 Geographical Areas (GA) in 34 districts covering nine states in the country. HPCL, on its own, operates 674 CNG (Compressed Natural Gas) stations as of the date which it plans to expand further. It is also foraying into setting up LNG dispensing stations. These, together with the focus on enhanced use of natural gas in refineries of HPCL and its joint ventures/subsidiaries add to the strategic value of the acquisition.
BPCL acquires OQ’s stake in Bina refinery
Privatisation-bound Bharat Petroleum Corporation Ltd (BPCL) on Wednesday said it has acquired partner OQ’s entire stake in the Bina refinery project in Madhya Pradesh for Rs 2,400 crore. BPCL signed a sales purchase agreement with OQ, formerly known as Oman Oil Company Ltd, to acquire its 36.6 per cent stake in Bharat Oman Refineries Limited, the company said in a statement. With this, BPCL now has full control over BORL, which runs a 7.8 million tonnes per annum capacity oil refinery at Bina in Madhya Pradesh. “Bharat Oman Refineries Limited was incorporated in 1994 as a public limited company with equal equity participation of BPCL and OQ. Since March 2020, BPCL has been holding 63.4 per cent and OQ 36.6 per cent equity in the company. The Government of Madhya Pradesh has a minor stake in the company through compulsorily convertible warrants,” the statement said. For OQ’s stake, BPCL will pay about Rs 2,400 crore, it said. Commenting on the occasion, N. Vijayagopal, Director (Finance) of BPCL said, “With the acquisition of OQ’s entire stake in BORL, BPCL will establish control over BORL. This is expected to bring immense advantages to both the companies in terms of synergies and optimization of returns and will facilitate any future expansion or diversification in Bina.” BPCL is India’s second-largest oil marketing company, with refineries in Mumbai, Kochi and Bina having a combined capacity of around 37 million tonnes per annum. Its distribution network comprises around 18,000 petrol pumps, 6,600 LPG distributorships, 52 LPG bottling plants, 58 aviation service stations, and 4 cross-country pipelines. The government is selling its entire stake in BPCL.
IGL signs long-term agreement with DTC for supply of CNG
Indraprastha Gas Ltd, India’s largest CNG retailer, on Wednesday signed a long-term agreement to supply compressed natural gas to Delhi Transport Corporation (DTC) buses. The 10-year compressed natural gas (CNG) supply deal was signed by IGL Managing Director A K Jana and DTC Managing Director Vijay Kumar Bidhuri, a company statement said. The gas supply agreement is valid till December 2030, it said. DTC is the largest CNG-powered bus service operator in the world with a fleet size of 3,762 buses and is also in the process of procuring 1,000 new CNG buses which would shortly be plying on the roads of the national capital. “It consumes around 2.80 lakh kgs of CNG per day for its buses which constitute around 11 per cent of daily CNG sale of IGL. The consumption of CNG is expected to increase further after the addition of new buses,” the statement said. In 2010, IGL had signed a long-term gas supply agreement with DTC. As part of the agreement, dedicated CNG filling facilities have been set up at 44 depots of DTC across Delhi and Noida to cater to the fleet of DTC buses being used for public transport with a total compression capacity of 10 lakh kgs per day. “These state-of-the-art CNG filling facilities have helped in timely CNG fuelling of the fleet. The initiative has resulted in optimization of time, finances, and resources for DTC apart from ensuring timely commute of the buses on their respective routes,” it said. In addition, DTC has provided 19 plots adjacent to its depots to IGL for the creation of hybrid facilities, which are used as retail outlets for serving the public. “The relationship between IGL and DTC dates back to the inception of IGL and has been mutually beneficial for both organisations and DTC has been one of the largest customers of IGL,” the statement added. IGL retails CNG to automobiles and piped natural gas to households for cooking purposes and industries as fuel in 10 cities including Delhi, Noida, Greater Noida and Ghaziabad (in Uttar Pradesh). It sells fuel to over 12 lakh vehicles in the national capital region (NCR) through a network of 560 CNG stations. Besides, it supplies piped natural gas to nearly 16 lakh households in these cities.
Gas price for ONGC remains at decade low of $1.79, falls 11% for Reliance-BP
The government on Wednesday left the price of natural gas produced by companies such as ONGC unchanged at a decade-low rate of USD 1.79 while the same for difficult fields like the one operated by Reliance-BP was cut by 11 per cent. The Oil Ministry’s Petroleum Planning and Analysis Cell (PPAC) announced the bi-annual revision in the price of gas, which is used to generate electricity, make fertiliser and convert into CNG for automobiles and cooking gas for households. The rates paid for gas produced from fields given to Oil and Natural Gas Corporation (ONGC) and Oil India Ltd (OIL) were left unchanged at USD 1.79 per million British thermal unit for the six-month period beginning April 1, PPAC said in a notification. Simultaneously, the price for gas produced from difficult fields such as deepsea, which is based on a different formula, was cut to USD 3.62 per mmBtu from the current price of USD 4.06. This is the maximum price that Reliance Industries Ltd and its partner BP plc are entitled to for gas they produce from deepsea blocks they won under New Exploration Licensing Policy (NELP). While the government sets the price of gas produced by ONGC from fields given to it on a nomination basis, it bi-annually announces a cap or maximum price that operators who won exploration acreage under NELP can get. The operators are supposed to do a market price discovery by seeking bids from users but that rate is subject to the price ceiling announced by the government, sources said. Reliance-BP had in recent price discovery for new gas from their Krishna Godavari basin block, got rates of over USD 6 per mmBtu but they would get USD 3.62 as per the pricing formula. “The price of domestic natural gas for the period April 1, 2021, to September 30, 2021, is USD 1.79 per mmBtu on Gross Calorific Value (GCV) basis,” PPAC said. Similarly, “the price ceiling” for gas produced from “discoveries in deepwater, ultra-deepwater and high pressure-high temperature areas” is USD 3.62 per mmBtu, it said. Natural gas price is set every six months — on April 1 and October 1 — each year based on rates prevalent in surplus nations such as the US, Canada and Russia in one year with a lag of one quarter. So the price for April 1 to September 30 is based on the average price from January 2020 to December 2020. The sources said gas prices had fallen when the pandemic broke out but recovered later and so the price for ONGC remains unchanged. At the last revision, the price was cut by 25 per cent to USD 1.79 per mmBtu for six months beginning October 1 from USD 2.39. This was the third straight reduction in rate in one year. The price was cut by a steep 26 per cent to USD 2.39 in April last year. The USD 1.79 rate is equivalent to the price paid to ONGC and Oil India Ltd (OIL) prior to May 2020 when formula-based pricing was first introduced. ONGC, the sources said, had posted Rs 4,272 crore loss on gas business in 2017-18, which is likely to widen to over Rs 6,000 crore in the current fiscal (April 2020 to March 2021). ONGC has been incurring losses on the 65 million standard cubic meters per day of gas it produces from domestic fields shortly after the government in November 2014 introduced a new gas pricing formula that had “inherent limitations” as it was based on pricing hubs of gas surplus countries such as the US, Canada, and Russia. The sources said ONGC in a recent communique to the government has stated that the break-even price to produce gas from new discoveries was in the range of USD 5-9 per mmBtu. In May 2010, the government had raised the rate of gas sold to power and fertiliser firms from USD 1.79 per mmBtu to USD 4.20. ONGC and OIL got USD 3.818 per mmBtu price for the gas they produced from fields given to them on a nomination basis and after adding a 10 per cent royalty, the fuel cost USD 4.20 per mmBtu for consumers. The Congress-led UPA had approved a new pricing formula for implementation in 2014 that would have raised the rates but the BJP-led government scrapped it and brought a new formula. The new formula takes into account the volume-weighted annual average of the prices prevailing in Henry Hub (US), National Balancing Point (the UK), Alberta (Canada), and Russia with a lag of one-quarter. Prices are set every six months — on April 1 and October 1 each year. The rate at the first revision, using the new formula, came to USD 5.05 but in the subsequent six-monthly reviews kept falling till it touched USD 2.48 for April 2017 to September 2017 period. Subsequently, it rose to USD 3.69 in April 2019-September 2019 before being cut by 12.5 per cent in October 2019 to USD 3.23
Torrent Gas acquires Mathura CGD network from Sanwariya Gas
Torrent Gas annonced it has signed a Share Purchase Agreement (SPA) with the promoters of Sanwaria Gas for the takeover of the company to provide Compressed Natural Gas (CNG) and Piped Natural Gas (PNG) service in the geographical area of Mathura. With this acquisition, it has now authorization to set up City Gas Distribution (CGD) network across 17 geographical areas spread over 33 Districts in seven states and one union territory. The transaction is subject to approval from the Petroleum and Natural Gas Regulatory Board (PNGRB) and fulfillment of other conditions. The company said it plans to invest over Rs 8,000 crore for development of CGD network in these districts over five years, of which Rs 1,500 crore has already been invested. “The Sanwariya Gas acquisition is our fourth acquisition in the CGD sector in three years and we are happy about that,” Jinal Mehta, Director, Torrent Gas said. Torrent Gas has been authorized to set up CGD infrastructure and sell CNG to vehicle users and PNG to industries and households in 33 districts across Uttar Pradesh, Gujarat, Maharashtra, Rajasthan, Punjab, Tamil Nadu and Telangana and Puducherry.
BPCL dealers seek exit window before privatisation
Bharat Petroleum Corporation Ltd (BPCL) petrol pump owners have sought the provision of an exit window before India’s second-largest state-run oil refiner and fuel retailer is privatised. In a presentation to the parliamentary standing committee on petroleum earlier this month, the dealers have suggested a minimum lock-in period after privatisation to protect willing dealerships against cancellation by BPCL’s new owner. The All India Petroleum Dealers Association, an umbrella body of petrol pump owners, told the committee headed by BJP’s Lok Sabha MP Ramesh Bidhuri the petrol pump land should be de-leased immediately in case a dealer wants to exit the business or end association with BPCL. BPCL has 15,402 retail outlets, accounting for 29 per cent of petrol and diesel sold in the country. “Land lease of many sites have expired but the company refuses to let go,” one dealer said on condition of anonymity. There are 64,625 petrol pumps in the country. Only 669, or 1 per cent of these, are owned and operated by the retailing companies. The remaining pumps are categorised into ‘CODO’ (company-owned, dealer-operated), which forms the bulk of the pumps, and ‘DODO’ (dealer-owned, dealer-operated). In CODO, the dealer leases the land to the company, which makes the investment. In DODO, the dealer provides the land and also invests in infrastructure. CODOs make up the bulk of the pumps in the country. Refusal to let go of the land appeared to be a common grouse of petrol pump owners against all three state-run fuel retailers. “But for the fear of companies refusing to de-lease, many of us would today prefer to put the land to more profitable commercial use,” another dealer said. In case of LPG (household cooking gas) service, the government has decided to shift all seven crore consumers of BPCL to a proposed SBU (special business unit to be created by the company to ensure they continue to get the applicable subsidy. The government has three suitors for its 52.98 per cent stake in BPCL. The metals-to-mining Vedanta group, investments funds Appollo Global and I Squared Capital’s Indian arm Think Gas have submitted EoIs (expressions of interest). Due diligence is currently going on. Till now BPCL operated four refineries — in Mumbai (Maharashtra), Kochi (Kerala), Bina (Madhya Pradesh) and Numaligarh (Assam) with a combined capacity of 38 million tonnes per annum, or 15 per cent of India’s total refining capacity of 249 million tonnes. It recently the Numaligarh refinery stake to a consortium of EIL and Oil India as the unit was not part of the disinvestment process. The company also has 6,011 LPG distributorships and 51 LPG (liquefied petroleum gas) bottling plants and a fifth of the 250 aviation fuel stations in the country.
PipeChina to start operating gas lines, LNG terminal acquired from Kunlun Energy
PipeChina will start operating four major gas pipelines and a liquefied natural gas (LNG) terminal from Thursday after acquiring the assets from Kunlun Energy. Officially known as China Oil and Gas Pipeline Network, PipeChina is seeking to consolidate China’s trunk oil and gas pipelines and broaden access to energy infrastructure previously controlled by state giants, it said on its official Wechat platform on Wednesday. Assets acquired from Kunlun Energy include four parallel gas trunk lines connecting China’s top gas fields in the Ordos basin in the north to Beijing, and branch lines such as the one that links to PetroChina-controlled Tangshan LNG terminal. The pipelines have a combined length of 5,378 kilometers (3,342 miles) and an annual transport capacity of 35 billion cubic meters, PipeChina said. That’s equivalent to roughly one tenth of China’s gas consumption. Also part of the acquisition was an LNG receiving terminal in Dalian of northeast Liaoning province, making it the seventh operating facility under PipeChina. Hong Kong-listed Kunlun Energy, a subsidiary of state energy giant PetroChina, said in late 2020 it would sell its 60% stake in PetroChina Beijing Pipeline Co Ltd and 75% stake in PetroChina Dalian LNG Co Ltd to PipeChina for 40.9 billion yuan ($6.2 billion).
HPCL acquires balance 50 per cent stake in Chhara LNG Terminal
Hindustan Petroleum Corporation Limited (HPCL) has acquired the balance 50 per cent equity stake in HPCL Shapoorji Energy Private Limited (HSEPL) from SP Ports Private limited company. Post acquisition, HPCL’s stake in HSEPL gets enhanced to 100 per cent, making HSEPL a wholly-owned subsidiary of HPCL. HSEPL is constructing a five million tonnes per annum (MTPA) LNG terminal (with provision for expansion to 10 MTPA) at Chhara in Gujarat’s Gir-Somnath district, at an estimated cost of about Rs 4,300 crores, which is likely to be completed by end of 2022. The terminal will have all facilities for receipt of LNG through ocean-going tankers, marine unloading, storage, LNG road tanker loading, regasification, and supply of regasified LNG to the gas grid. The acquisition is in line with the overall future strategy of HPCL to diversify its product portfolio and is an important step in the direction of having a strong presence in the total natural gas value chain. The percentage of natural gas in the overall energy basket of India is expected to grow from six per cent at present to 15 per cent by 2030 which makes it one of the important growth drivers in the future. HPCL, along with its joint venture companies, has a presence in CGD (City Gas Distribution) business in 20 Geographical Areas (GA) in 34 districts covering nine states in the country. HPCL, on its own, operates 674 CNG (Compressed Natural Gas) stations as of the date which it plans to expand further. It is also foraying into setting up LNG dispensing stations. These, together with the focus on enhanced use of natural gas in refineries of HPCL and its joint ventures/subsidiaries add to the strategic value of the acquisition.
Qatar Petroleum to become sole owner of Qatargas 1 in 2022 -statement
Qatar Petroleum (QP), the world’s top liquefied natural gas (LNG) supplier, will in 2022 take full ownership of Qatargas 1, which produces LNG and related products, it said in a statement on Tuesday. Formally known as Qatargas Liquefied Natural Gas Company Limited (QG1), the project is a joint venture between Qatar Petroleum and affiliates of Total, ExxonMobil, Marubeni and Mitsui. Qatar Petroleum said it would not renew agreements with the companies when they expire on 31 December 2021. “As a result, Qatar Petroleum will become the sole owner of 100% of the QG1 assets and facilities on 1 January 2022.” Qatargas 1, established in 1984, has a production capacity of approximately 10 million tons per annum of LNG, according to information on its website.