Hazira gas plant fire due to faulty gasket: PNGRB
Use of an improper gasket procured from the local market has been identified as a probable cause of leak which led to the massive fire at ONGC’s Hazira gas plant in the early hours of September 24, 2020, according to a report by an enquiry committee set up by the Petroleum and Natural Gas Regulatory Board (PNGRB) to investigate the incident. The report said that gaskets from the original equipment manufacturers (OEM) were not purchased, while the ‘O’ rings were bought from local markets and were used without any quality control measures. The gasket was last replaced on September 18, 2020 — a few days before the fire broke out in the gas terminal of the Hazira plant — after a leakage was observed in an old meter installed in 1986. “There is no record of date or authority of the decision to switch over from OEM supplied gasket to locally purchased gasket,” the PNGRB report noted, adding that “no hydro test was done after replacement of the gasket”. The leaked gas ignited, causing the fire, as it got exposed to the electrical fitting in one of the nearby faulty flame proof lamps. The report pointed that three bolts were missing in the lamp, resulting in it being open with the glass case getting detached from the main body, leaving a gap of six centimetres. Though electrical audit inspection is supposed to be done every six months, the last inspection before the incident was carried out in July, 2019. The Hazira plant is the largest sour gas processing complex in the country. The plant also supplies special grade of high-flash high-speed diesel for specific use of Indian Navy. Gas supply from the plant to the prime vendor Gail had been restored by ONGC just a day after the fire. The pipelines were depressurised by flaring through the stack, causing blast-like noise, and the fire was put off within four hours.
India blames Saudi oil output cut for surge in oil prices
ndia, the world’s third biggest oil importer and consumer, on Tuesday complained that recent output cuts by some OPEC nations had created uncertainty for customers and led to a surge in prices. Top exporter Saudi Arabia has pledged additional voluntary output cuts of 1 million barrels per day (bpd) in February and March under a deal between the Organization of the Petroleum Exporting Countries and its allies including Russia, a group known as OPEC+. “A few months back we all were discussing about consumption-centric economic revival, demand revival, and we are supposed to restrict our production cuts and gradually ramp up the production by January – but in contradiction to that, now we all are controlling the oil production,” Oil Minister Dharmendra Pradhan said at an energy conference organised by the Atlantic Council. Pradhan said the efforts to cut output, coordinated by OPEC Secretary-General Mohammad Sanusi Barkindo, were creating confusion for consumer countries. “This kind of scenario will push us to more alternative methods of energy sourcing … if the producing country will not recognise our aspirations, then innovative new business models are bound to come up.” Barkindo said at the same conference that the steps taken were within the framework of last year’s deal to cut output by about 9.7 million bpd, and were aimed at keeping oil markets stable on a sustainable basis. Pradhan also said India was engaged on energy with the United States in many ways, and this would continue under the administration of Joe Biden, who becomes president on Wednesday. “Change of guard is not unusual in a democracy. India will continue to have a good relationship with the U.S., including on the energy front,” he said.
Shell India starts LNG truck-loading unit at Hazira
Royal Dutch Shell’s India unit on Tuesday announced the start of operation of its small-scale LNG supply with a truck-loading unit being inaugurated at its LNG import terminal at Hazira in Gujarat. Oil Minister Dharmendra Pradhan inaugurated the LNG truck-loading unit, the company and the oil ministry said in separate statements. Speaking on the occasion, Pradhan said the unit will boost the availability of natural gas in off-grid areas where there are no gas pipelines and also promote the use of LNG in long-haul trucking. The government is promoting the use of natural gas through various policy and regulatory reforms towards making India a gas-based economy by raising the share of gas in the nation’s primary energy mix to 15 per cent from the current 6.2 per cent. Small-scale LNG can play an important role in realizing this target as it enhances clean energy access across the country. Gas is traditionally transported through pipelines from gas fields or liquefied natural gas (LNG) import terminals. Trucking LNG to users has lately emerged as an option to take the fuel to small and stranded users. “While gas customers in industrial clusters are expected to be the primary beneficiaries, small-scale LNG will also support the market seeding and development of the recently licensed city gas distribution (CD) geographical areas, not yet connected by pipelines,” Shell Energy India said in the statement. Apart from industrial and CGD segments, the small-scale LNG supply infrastructure will also contribute to the development of a conducive ecosystem for faster adoption of LNG as the preferred transportation fuel, especially for long-haul transport. The truck-loading unit will augment Shell’s natural gas supply offerings in India to include the supply of LNG via trucks. Shell Energy India owns and operates a 5 million tonnes a year LNG import terminal at Hazira (Surat), Gujarat. The terminal has been in operation since 2005 and received more than 600 LNG cargoes to date. “In early 2019, we acquired additional 26 per cent equity in the Hazira Terminal and created a fully-owned and integrated Shell value chain – supply from our global LNG portfolio, regasification at the Hazira facility, and downstream customer sales. “This development extends our downstream customer offering and now, in addition to the supply of R-LNG via pipeline, we can also supply LNG by trucks to customers across India,” Nakul Raheja, who has recently taken over as Country Head, Shell Energy India, said. Speaking on the occasion, Pradhan complimented Shell for their efforts in expanding the LNG infrastructure in the country. “Clean, affordable and reliable energy is the need of the growing population and a key priority for the Government of India,” he said. “The Government is committed to bringing in a clean energy future whilst reducing the adverse impact on the environment.” Innovative supply solutions like LNG by trucks will play a pivotal role in the development of gas markets across the country including hinterlands. “This infrastructure will also help support in the development of LNG as a clean transportation fuel,” he said. Pradhan said increasing competition in the LNG sector will help in the emergence of new markets, create new employment opportunities, ensure cleaner fuels for industries and facilitate environment conservation. “We are committed to increasing the clean energy share in our energy mix to transform into a gas-based economy, address issues of climate change and build an Aatmanirbhar Bharat,” he said.
Rising fuel prices boost Karnataka coffers by Rs 2,000 crore
Increasing fuel prices have helped the state government earn additional revenue of nearly Rs 2,000 crore in the past four months, even though consumption has remained moderate. The government mopped up Rs 6,314 crore between September 2020 and mid-January 2021, Rs 1,896 crore more than the figure of the corresponding period in 2019-20. While daily consumption of petrol has reached pre-Covid levels of 20,000 kilolitres, that of diesel is only about 70 per cent of the average recorded before the pandemic. “This shows that additional revenue came from increasing fuel prices,” said KM Basave Gowda, president, Akhila Karnataka Federation of Petroleum Traders. Rising fuel prices boost Karnataka coffers by Rs 2,000 crore After the latest price hike of 25 paise per litre on Monday, fuel rates have hit their highest level in Karnataka since October 2018. Petrol is sold at Rs 87.7 per litre and diesel at Rs 79.6 per litre. The state’s revenue comes from sales tax, which is ad valorem in nature. Basically, the tax is levied on the sum of the base fuel price and central excise duty (CED). The quantum of the state’s revenue from fuel sales automatically increases when there’s a hike in the base price or CED. Going by Monday rates, the government earned sales tax of Rs 21.8 per litre of petrol, which is 35 per cent of the sum of the base price (Rs 29.3) and CED (Rs 32.9). For diesel, it is Rs 14.9, which is 24 per cent of the sum of the base price (Rs 30.3) and CED (Rs 14.9). In April 2020, crude oil prices, which drive the base rate, hit a low of $19 per barrel. The Centre still hiked CED by Rs 10 for both types of fuel, which helped the state get a steady flow of revenue despite low consumption. Karnataka also increased sales tax by Rs 1.6 per litre. The base rate, which remained stagnant until September, started to increase as crude oil prices climbed. Crude oil prices have touched $49 per barrel. BT Manohar, chairman (taxation committee), FKCCI, said: “While the state is benefiting from the ad valorem taxes, the price consumers are paying is inflationary. In the interest of industries and the general public, the government must reduce taxes.”
Low production due to COVID-19 raising fuel prices: Dharmendra Pradhan
Union Minister for Petroleum and Natural Gas Dharmendra Pradhan on Monday said fuel prices had gone up because of lower production in oil-producing nations due to the coronavirus pandemic. This lower production had caused an imbalance in demand and supply, the minister said. “Oil producing countries stopped production or reduced it during the coronavirus epidemic. A pressure on fuel prices was seen due to this imbalance in demand and supply. A few months ago, crude oil prices were USD 35-38, which has gone up to USD 54-55,” he told reporters here. “Our basic challenge is we have to import 80 per cent of crude oil of our requirement. Consumption has been increasing. India is third as far as energy consumption is concerned,” he said. He said the focus of the government was on electric vehicles (EVs), solar energy, production of ethanol etc to become self-reliant in the energy sector. Ethanol production, which was less than 1 per cent of demand when the NDA government came to power in 2014, was set to reach 9 per cent this year, he said. In reply to a query on some people doubting the efficacy of COVID-19 vaccines, Pradhan said countries across the world were looking at India with hope in the fight against the pandemic.
Canada urges Biden not to cancel oil pipeline Keystone XL on first day
Top officials in Canada want a chance to make the case for a long disputed oil pipeline to be built amid reports President-elect Joe Biden will cancel Keystone XL. Alberta Premier Jason Kenney said Monday he will seek legal damages if reports are true that Biden plans to scrap the pipeline on his first day upon taking office. Biden’s plan is outlined in transition documents seen by Canadian media outlets. “We hope President-elect Biden will show respect for Canada and will sit down and at the very least talk to us,” Kenney said. Biden spokesman Andrew Bates said Monday the transition team had no comment on the pipeline. A person familiar with the pipeline matter said Monday that the document cited by Canadian news media was a draft slide that was a few weeks old. Despite the timing suggested in the draft slide, everything on it “may not happen on day one,” the person said, speaking on condition of anonymity because they were not authorized to speak on the record on the matter. The 1,700-mile (2,735-kilometer) pipeline would carry roughly 800,000 barrels of oil a day from Alberta to the Texas Gulf Coast, passing through Montana, South Dakota, Nebraska, Kansas and Oklahoma. First proposed in 2008, the pipeline has become emblematic of the tensions between economic development and curbing the fossil fuel emissions that are causing climate change. The Obama administration rejected it, but President Donald Trump revived it and has been a strong supporter. Construction already started. Canadian Prime Minister Justin Trudeau raised Keystone XL as a top priority when he spoke with President-elect Biden in a phone call in November. The project is meant to expand critical oil exports for Canada, which has the third-largest oil reserves in the world. Trudeau and Biden are close and largely politically aligned, but the pipeline is expected to be an early irritant as Biden has said he would cancel it. “Surely the relationship between Canada and the United States is worth at least having that discussion,” said Kenney, whose province has a financial stake in the pipeline. After reports surfaced that it would be canceled on the first day of Biden’s term, Calgary, Alberta-based TC Energy Corp. announced late Sunday it would spent US$1.7 billion on a solar, wind and battery-powered operating system for the pipeline to ensure it is zero-emission by 2030, and to rely exclusively on union labor. Federal Natural Resource Minister Seamus O’Regan said in a statement his government continues to make the case for the pipeline to American colleagues. “Canadian oil is produced under strong environmental and climate policy frameworks, and this project will not only strengthen the vital Canada-U.S energy relationship, but create thousands of good jobs for workers on both sides of the border,” he said. Roland Paris, a former foreign policy adviser to Trudeau, noted it has been Biden’s position to cancel it for a long time. “Still, he should recognize that peremptorily revoking the permit without first giving Canada a chance to make its case wouldn’t exactly send a signal of renewed friendship that he has promised towards America’s closest allies,” Paris tweeted. Robin Rorick, a vice president of the American Petroleum Institute, an oil and gas industry trade group, said Keystone XL has been through 10 years of extensive environmental reviews. “Thousands of union workers are already a part of this responsible and sustainable project,” the trade group official said in a statement. “We urge President Biden to stand up for the thousands of good-paying union jobs tied to Keystone XL and ensure local communities across the country have access to the affordable, reliable energy that’s needed to power the nation’s economic recovery.”
India’s fuel demand falters in the first fortnight of January 2021
India’s fuel sales faltered in the first fortnight of January as festive and holiday season demands evaporated, indicating the economy may be pausing to catch its breath. Latest market data shows diesel demand falling 3.5% short of the same period of 2020. This shows a slowing demand as compared to December when sales had risen to 97% of the pre-pandemic level. Growth in petrol sales also appeared to have flattened as car sales dropped to their lowest in a decade. Petrol sales clocked 8.5% growth over January 2020, nearly the same as in December. The year-on-year numbers may not appear alarming, partly because of the base effect. But the trend of demand slowing becomes all too clear when compared against the first fortnight of December. Data shows diesel demand in the first fortnight of January down 6.6% from the same period of December. Petrol too sold 6% less than the same fortnight a month ago. Jet fuel sales were 48% down from the same period of 2020 as the number of flights still remained curtailed. Here too signs of faltering demand become evident, considering sales were only 43% short of the pre-pandemic level in December. Compared to the first fortnight of December, sales were down nearly 5% in the period under review. LPG continued to remain in positive territory with over 5% growth over a year ago but was 0.6% down from the first fortnight of December. Diesel consumption, one of the key barometers of economic activity, had covered slack to reach 97% of the year-ago period in December. It had dropped 7% from the year-ago period in November after shooting past the pre-pandemic level for the first time in eight months in October by clocking a 6% year-on-year growth.
Arun Kumar Singh takes over as Chairman of IGL
Indraprastha Gas Ltd (IGL), the state-owned gas distributor, announced Arun Kumar Singh, Director (Marketing), Bharat Petroleum Corporation (BPCL) has taken over the additional responsibility as Chairman of the company. He has replaced P K Gupta, Director (Human Resources), GAIL (India), who has relinquished the charge upon completion of the two-year Chairmanship tenure of IGL by GAIL (India) Ltd. Singh is a Mechanical Engineer from NIT Patna and is Director (Marketing), BPCL apart from holding additional charge of Director (Refineries) in the company. He is also a Director on the Board of Bharat Gas Resources Ltd, a wholly-owned Subsidiary of BPCL engaged in natural gas business. Singh is also on the Board of Bharat Oman Refineries Limited, a subsidiary of BPCL engaged in refining business and is serving on the board of Petronet LNG. He had earlier held the position of Chairman, IGL between October 2018 and January 2019. IGL is a joint venture between GAIL (India), BPCL and the Delhi government. It is the largest Compressed Natural Gas (CNG) distribution company of the country, supplying CNG and Piped Natural Gas (PNG) in Delhi and Noida, Greater Noida, Ghaziabad, Muzaffarnagar and Fatehpur in Uttar Pradesh apart from Gurugram, Rewari, Karnal and Kaithal in Haryana.
IEA says oil, gas methane emissions down 10 per cent in 2020 as output fell
Global emissions of the potent greenhouse gas methane from oil and gas production dropped 10 per cent in 2020 mainly because of lower output as opposed to concerted climate action, a report by the International Energy Agency (IEA) found. Methane has more than 80 times the warming potential of carbon dioxide in its first 20 years in the atmosphere and is liable to leak from oil and gas infrastructure, such as pipelines. Other industries, including agriculture, are also big methane emitters. Last year, oil and gas operations emitted over 70 million tonnes of methane, or around 10 per cent less than in 2019, the IEA, which helps governments set energy policy, said. “A large part of the drop in methane emissions in 2020 occurred not because companies were taking more care to avoid methane leaks from their operations, but simply because they were producing less oil and gas,” the IEA said. “There is clearly a risk that this downward trend will be reversed by an increase in production to fuel a rebound in global economic activity.” An unprecedented deal in April between the Organization of Petroleum Exporting Countries, Russia and other nations cut oil production by around 10 million barrels per day, or 10 per cent of pre-coronavirus global demand. U.S. sanctions have crippled Venezuelan production and Libya’s oil industry has suffered from prolonged domestic strife. U.S. producers were hit by oil prices slumping in 2020 as the COVID-19 pandemic sapped demand and a volume war broke out between Russia and Saudi Arabia. In the IEA’s Sustainable Development Scenario, which would see global warming curbed to manageable levels, energy sector methane emissions would have to fall to below 50 million tonnes by 2025 and below 25 million tonnes by 2030. Publicly listed energy majors and some national oil companies are members of the Oil and Gas Climate Initiative that has set methane reduction targets. “We estimate that around 10 per cent of leaks in 2020 could be avoided at no net cost,” the IEA said. In absolute terms, Russia and the United States were the biggest emitters of methane, the IEA figures showed.
Italy’s ENI, trader Vitol place lowest offers for Pakistan LNG March tender
Italy’s ENI and commodity trader Vitol Bahrain have offered the lowest prices to supply three liquefied natural gas (LNG) cargoes to Pakistan LNG Limited (PLL) for delivery in March, according to a document posted on the company website. ENI offered a cargo for delivery over March 9 to 10 at a percentage of the Brent crude oil futures price, known as a slope rate, of 22.2421%, according to the document. Vitol offered a slope rate of 17.8131% for a cargo for March 16 to 17 delivery and a slope rate of 17.1917% for a cargo for March 22 to 23 delivery. PLL is a government subsidiary that procures LNG from the international market. Other companies which had placed offers into the tender include PetroChina International, Qatar Petroleum Trading, POSCO International and BB Energy, the document stated.