Gujarat: Nayara Energy’s expansion plans face green challenge
Rosneft-backed Nayara Energy’s (formerly known as Essar Oil) plans for expansion of the existing refinery and setting up a new petrochemical complex at Vadinar near Jamnagar seems to have hit a hurdle after some villagers alleged that the company did not follow due process to get environmental clearance. Nayara Energy’s expansion plan includes setting up a 10.75 million metric tonnes per annum (MMTPA) capacity petrochemical complex and expansion of the refinery from 20 MMTPA to 46 MMTPA for a total investment of about Rs 1300 billion. A clutch of people from villages including Gagva, Khavdi, Meghpar, Padana, Jakhar, Vadinar, Timbdi, Devadiya and Lakhiya objected to grant of clearance by the Ministry of environment, forests and climate change (MoEFCC) on the grounds that a public hearing was not held, said Dilipsinh Jadeja who filed a petition in the Gujarat high court. He is a resident of a village near the Nayara’s project. The environment appraisal committee (EAC) under MoEFCC deferred the matter after it was approached by the company for environmental clearance, according to an interim order passed by the high court recently. The court order cites the statement of the senior counsel of the respondent which says that the expert appraisal committee is to convene a meeting between February 25 to February 27 but has deferred grant of environment clearance for Nayara’s expansion plans. Jadeja said that the company’s plans for expansion in Jamnagar was earlier on the agenda of the EAC for February 26 but now stands deferred. In August last year, a public consultation was held over grant of environmental clearance to Nayara’s proposed expansion plans. Local villagers and others to be affected by the project were required to send responses in writing to Gujarat Pollution Control Board (GPCB) member secretary till August 5. GPCB forwarded the responses to the MoEFCC for consideration of grant of EC, a government source said. This was perhaps the first time that GPCB chose the public consultation route instead of a public hearing, sources added. “There are legal guidelines that needs to be adhered to while granting environmental clearance. These rules have been grossly violated in this case. Such projects always require public hearing and it can’t be through public consultation,” said Jadeja. In August 2017, a Rosneft-led consortium acquired Essar Oil for $12.9 billion and it was later renamed Nayara Energy. “Environmental clearance for the Vadinar project was valid till 2018. However, the proposed expansion was not carried out in the stipulated time-frame by the earlier promoters. The new promoters have decided to scale down the project. Also, no additional land was required for the expansion, hence the public consultation route was chosen by GPCB,” said a government official in the know of the matter.
Kochi: Transport authority to issue permits to CNG, LNG, LPG and e-vehicles only
Regional Transport Authority (RTA) has decided to conditionally issue city permits to autorickshaws in Kochi. The new permits will be issued to autorickshaws, which ply on CNG, LNG and LPG, and electric vehicles. According to the decisions taken by the RTA, new permits will only be given to permanent residents living in Kochi corporation limit. Applicant should produce two documents to prove that he/she is a permanent resident. Only one permit will be issued to one person. Age of these autorickshaws has been limited to 10 years. Priority in issuing new city permits will be given to vehicles registered after November 2011 and transfer of city permits will be allowed only between permanent residents in the corporation limit. RTA has mandated that bonnet number should be displayed at the front, rear and right side of the vehicle. The front part of the vehicle should be painted in cream or yellow. Registration number of electric autorickshaws should be displayed. Applicants who have experience in driving autorickshaws will be given priority while issuing permit. Those who currently operate autorickshaws in the city without permit have been told to approach the motor vehicles department (MVD) for permit variation. RTA has said that electronic fare meter, calibrated by the legal metrology and fare chart approved by the MVD, should be displayed in the vehicle. Driver should display name plate and keep identity card. Application for city permit should be submitted to the Ernakulam regional transport office before March 12. Meanwhile, people living in sub-regional transport officer’s limit should submit application at Mattancherry office. The MVD had stopped issuing new city permits to diesel and petrol autorickshaws, around four years ago. As a result, autorickshaws from rural areas started to ply in the city, and they overcharge passengers. Currently, around 5,000 autorickshaws with old city permit operate in the city.
Coronavirus has had no effect on Iran’s oil, gas production: Official
Coronavirus has not had any effect on oil or gas production in Iran, the deputy head of the National Iranian Oil Company (NIOC) said on Wednesday, according to the Tasnim news agency. “The production and distribution of Iran’s oil and gas is being carried out without any effect from the outbreak,” Farokh Alikhani was quoted as saying. Iran’s crude oil exports were slashed by more than 80% after U.S. President Donald Trump withdrew from a multilateral nuclear deal with the Islamic Republic in 2018 and reimposed sanctions. Iran’s Oil Minister Bijan Zanganeh departed Tehran to attend a meeting of the Organization of Petroleum Exporting Countries (OPEC) in Vienna on Wednesday, according to SHANA, the news site of the Iranian oil ministry.
India’s Rs 50,000 crore city gas investment plan gains viability on low LNG prices
The viability of India’s Rs 50,000 crore capital expenditure plan for city gas distribution (CGD) over the next four years has improved with the price of liquefied natural gas (LNG) expected to be subdued during the period. LNG accounts for nearly half of CGD consumption volume and a lower price augurs well for both volumes and operating margins of distributors, and project returns. Spot prices of LNG have more than halved on-year to a decadal low of less than $3 per million metric British thermal units (mmBtu) in February 2020 because of oversupply and the Coronavirus outbreak. This has sharply improved the competitiveness of piped natural gas (PNG) compared with furnace oil, liquefied petroleum gas (LPG) and gasoline, prices of which are typically linked to crude oil. “At a Brent crude price of $55 per barrel, the landed cost of furnace oil would be about $12 per mmBtu, while Industrial LPG will be about $16 per mmBtu. On the other hand, industrial piped natural gas, apart from being cleaner, is significantly cheaper at $10.5 per mmBtu,” said Manish Gupta, Senior Director, CRISIL Ratings. Global LNG prices are seen softer over the medium-term because supply is on course to exceed demand growth, with liquefaction capacity of about 180 million tonne – equal to 40 per cent of current world capacity – set to be commissioned over the next 4-5 years. Domestically, regasification capacity, too, is expected to witness robust growth, outpacing LNG demand. The domestic administered price mechanism-based gas, which accounts for the balance half of CGD volume, is also expected to benefit from low international benchmark natural gas prices. Typically, CGD companies pass on lower inputs costs to their compressed natural gas (CNG) and retail customers, and in return, they get a volume fillip owing to better price competitiveness. The subdued outlook for LNG prices improves the viability of Rs 50,000 crore of CGD capex relating to the ninth and tenth rounds of auctions by the Petroleum and Natural Gas Regulatory Board (PNGRB). It also improves the prospects for 44 new geographical areas set to be awarded in the upcoming 11th round of auctions.
Exxon outlines its steps to reduce harmful methane emissions
Exxon Mobil on Tuesday outlined how it is reducing the methane its operations release into the atmosphere, detailing its efforts as governments around the globe write new rules to regulate the harmful greenhouse gas. The oil and gas giant is seeking to influence the way those rules are written, hoping companies and regulators adopt the procedures Exxon says helped reduce methane emissions by 20 per cent in some of its US drilling operations over the past two years. “Our industry has developed high-tech advances to curb emissions, and we also hope this framework will be helpful for governments as they develop new regulations,” said Darren Woods, chairman and CEO of Exxon, in a statement accompanying a document outlining Exxon’s procedures for reducing methane emissions. Some environmental advocates see Exxon’s move as a rebuke of President Donald Trump’s Environmental Protection Agency, which in August proposed relaxing regulations on methane emissions. But they also said Exxon needs to be much more aggressive in its efforts to curtail global warming. “The steps Exxon Mobil has taken and the commitments the company announced are nowhere near sufficient to get us there,” said Kathy Mulvey, accountability campaign director at the Union of Concerned Scientists. “We need to see much more ambitious and urgent actions taken by companies like Exxon Mobil.” Methane has 86 times the global warming potential of carbon dioxide over a 20-year period, according to the Union of Concerned Scientists. It is the main component of natural gas, and when companies drill for oil, they generally also get natural gas, whether they want it or not. Methane is released in the atmosphere during extraction and distribution of natural gas, and while many scientists agree this is a major problem, there is little data to show exactly how much is leaking into the atmosphere. Last year, Exxon and other oil giants pushed back the EPA’s proposal to relax regulations on methane emissions. At the time, many had already invested in equipment and upgrades to satisfy emissions regulations enacted under former President Barack Obama. Major oil companies are also under pressure from investors to prove they will be able to adapt to future regulations that aim to curtail global warming. “With the climate crisis upon us, companies can’t afford to ignore their contributions to climate change,” said Ben Ratner, senior director at the Environmental Defense Fund. “In at least one or two parts of (Exxon’s methane) framework, what they are recommending appeared to fall considerably short of what would be considered the best available operational practice and regulatory requirements.” Exxon’s model framework included establishing a leak detection and repair program to identify and fix gas leaks as soon as possible, with inspections for leaks happening at least once per year. Some major oil companies are conducting inspections monthly, using sensors mounted on drones, Ratner said. “The truth is it needs to be much more, and we need to be driving to a world of continuous, real-time monitoring and rapid mitigation of this highly potent greenhouse gas,” Ratner said. “Once-a-year inspection is not a serious proposal for regulatory requirements that are up to the magnitude of the challenge.” Exxon, which is based in Irving, Texas, said its framework is a starting point for discussions for policy makers, and that governments or private companies could choose to go above and beyond what’s presented in the model. The company also suggested that if an oil and gas operator had to vent natural gas, it would be better to burn it off, or “flare” it, instead of releasing methane directly into the atmosphere. It suggested improving the combustion efficiency of flares so that methane isn’t accidentally released as a result of incomplete combustion. But flaring releases carbon dioxide, and while that is less potent than methane, it lasts longer in the atmosphere. Widespread flaring in the Permian Basin and other oil fields has been an ongoing problem. Gas flaring activity in the US increased 48 per cent from 2017 to 2018, reaching 1.4 billion cubic feet per day, which is roughly the same amount as the total gas consumption of a medium-sized European country such as Belgium or Romania, according to the World Bank. The surge in flaring happened as natural gas prices fell so low, and pipeline capacity was so constrained, that some producers were paying to have it carted away instead of selling it. Exxon released its methane document as regulators in the European Union, Nigeria, Argentina, New Mexico and elsewhere are writing methane policies. The European Union is a major natural gas importer, giving it leverage to demand much cleaner natural gas, Ratner said. For example, the EU could say that it will only import natural gas with a methane intensity – which measures the amount of methane emissions compared to the total amount of natural gas produced – of 0.2 per cent or lower, Ratner said. Exxon was also responsible for a major methane leak in February 2018 from a blowout at a gas well in Ohio. The methane released during the incident was reported to all regulatory agencies, a spokesman said.
India’s fuel demand expected to rebound to 3.8% in FY21
Petroleum product demand in 2020-21 is expected to total 222.79 million tonnes, up from 216 million tonnes estimate for the current fiscal, the ministry’s Petroleum Planning and Analysis Cell (PPAC) said. Fuel consumption in the current fiscal ending March 31 will grow by just 1.3 per cent, its slowest pace in six years. Diesel, the most consumed fuel in the country, is estimated to see a 2.8 per cent growth in FY21 to 86.6 million tonnes as compared with just 0.9 per cent expansion in the current financial year. The growth in diesel demand in 2019-20 is the slowest in five years. Petrol demand is expected to slow to 8.4 per cent to 33.43 million tonnes, from 9 per cent. Cooking gas LPG demand is estimated to grow by 5 per cent to almost 28 million tonnes in FY21. The slowdown in fuel consumption in the current fiscal is reflective of economic growth dipping to an 11-year low of 5 per cent in 2019-20.
Last date for bidding for oil, gas blocks pushed back a month to April 16
The government has pushed back the last date of bidding for the 11 oil and gas blocks offered in the 5th bid round by a month to April 16, the DGH said on Monday.The 5th bid round under Open Acreage Licensing Policy (OALP) opened in January and was to close on March 18. “Bid closing date for the India OALP Bid Round – V is now 16 April 2020,” the Directorate General of Hydrocarbons (DGH) said in a tweet. It did not give reasons for the postponement. So far, the government has awarded 94 blocks in the last two and a half years. These 94 blocks cover an exploratory area of about 1,36,800 square kilometers over 16 Indian Sedimentary Basins. In the latest bid round, about 19,800 sq km of area is on offer for bidding, according to the DGH. The last bid round saw just eight bids coming in for seven blocks on offer. State-owned Oil and Natural Gas Corporation (ONGC) walked away with all the seven oil and gas blocks on offer. OALP-IV was the first round on revamped terms approved in February 2019. Unlike previous rounds where blocks were awarded to companies offering a maximum share of oil and gas to the government, blocks in little or unexplored Category-II and III basins are now awarded to companies, offering to do maximum exploration programme. The 11 blocks under OALP Round-V are spread across 8 Sedimentary Basins and include eight on land blocks (six in Category-I Basin and one each in Category II and III Basins), two Shallow Water blocks (one each in Category-I and II Basins) and one Ultra Deep Water block (Category I Basin). At the time of the launch of OALP-V, the DGH had stated that the round is expected to “generate immediate exploration work commitment of around USD 400-450 million”. “An area of 1,36,800 sq km has already been awarded under OALP Bid Round I, II, III and IV. These OALP Bid Round-V Blocks would add further 19,800 sq km. Overall Exploration Acreage of India would then increase to 2,36,600 sq km,” it had said at that time. Under OALP, companies are allowed to carve out areas they want to explore oil and gas in. Companies can put in an expression of interest for any area throughout the year but such interests are accumulated thrice in a year. The areas sought are then put on auction. The fifth cycle of submitting EoIs closed on November 30, 2019, and was followed by the sixth cycle that began on December 1, 2019, and will last till March 31, 2020. It would be followed by the 7th cycle from April 1, 2020, till July 31, 2020. Of the 94 blocks awarded in the first four rounds of OALP, Vedanta has won the maximum at 51. Oil India Ltd has got 21 blocks and ONGC another 17. All 11 blocks in OALP-V are based on Expressions of Interest received during EoI Window-V from May 16, 2019, to November 30, 2019, according to the DGH.
IEX launches trading platform Indian Gas Exchange; norms yet to be framed
India’s leading power trading platform Indian Energy Exchange (IEX) launched its natural gas trading platform last week. Called the Indian Gas Exchange (IGX), it is now looking for trader members and gas buyers. This even as the Petroleum and Natural Gas Regulatory Board (PNGRB) is yet to come out with guidelines for gas trading. IGX would offer spot and forward contracts at Dahej, Hazira and Kakinada. While Petronet LNG Ltd (PLL) operates an LNG terminal at Dahej, Shell operates another one at Hazira. Kakinada is the landfall point for natural gas being produced from the Krishna Godavari basin. IGX will be offering a spot contract for the day ahead market, which means gas will be physically delivered the next day. The forward contract is for daily, weekly, monthly and fortnightly markets. Currently, LNG is not regulated both in terms of supply contracts and pricing while domestic gas prices are notified by the government. Supply contracts for gas produced by government-owned companies are dictated by government norms. IEX, which has 90 per cent share in day-ahead power trading, is planning an initial investment of Rs 10 crore for IGX over the next five years. Senior executives said this was planned keeping in mind the growth potential of the gas market. “Gas market in India is poised for a break outgrowth of 2.5 times, from 166 to 380 MMSCMD by 2030. With conducive policies, the share of natural gas in India’s energy basket could double to 15 per cent,” said a company executive. While the current government has been vocal about having a gas trading hub for the past three years, regulations are yet to be framed. PNGRB is yet to take a call on IEX’s plans. A PNGRB official indicated that they were in the process of coming up with regulations on the gas hub and gas trading guidelines will take shape only later. GAIL and Oil and Natural Gas Corporation (ONGC) were expected to take equity in the planned gas exchange, which would have helped create a natural gas trading hub. In April 2018, KPMG came out with an initial report submitted to the PNGRB for the creation of a gas hub in India. A GAIL official said the company was not against the IEX move so far. “It is a free world. But one has to see the legal validity of such an institution as the regulations by PNGRB are yet not out,” said a GAIL official. The government needs to take a call on whether gas produced out of domestic fields allotted on nomination basis and currently given on priority to notified sectors will be traded. In a presentation to investors, IGX said an exchange would help in increasing volumes and infrastructure utilization of terminals and pipelines. “Even small industries can use the exchange to procure gas at competitive prices. This will also help in revival of gas-based power plants. Exchange can provide gas at competitive rates for grid balancing purpose in upcoming high renewable energy scenario,” said the presentation. Peak power from gas and hydro is needed to balance the power grid with a rising share of intermittent renewable. IGX is also looking at the fertiliser industry and city gas distributors as buyers on their platform.
Tata Motors completes delivery of India’s first LNG bus order
Tata Motors on Monday has announced that it has completed the delivery of India’s first LNG bus order. The homegrown auto manufacturer has delivered four Starbus LNG models to LNG Petronet Limited, with two of them delivered in Dahej, Gujarat and rest in Kochi, Kerala. The automaker first showcased a LNG bus at the Auto Expo 2020 last month. Tata Motors claims that these 36-seater LNG buses reduce greenhouse gas emissions by 30 per cent in comparison with conventional fuels. These LNG buses have been indigenously developed by the automaker, as Tata Motors has claimed. Commenting on the occasion, Rohit Srivastava, Vice President, Product Line, Buses, Tata Motors, said, “Tata Motors has taken a significant leap forward with a slew of alternate fuel technologies for sustainable mobility solutions and with the delivery of first Starbus LNG bus, we have ushered into a new era of transportation. We are proud to work with LNG Petronet Limited in an effort towards creating a lower-carbon future.” He also said, “Our in-depth understanding of sustainable public transport, while developing reliable and environment-friendly public transit options, has led us to excel in this competitive industry. With the LNG technology, Tata Motors is not only optimistic and future-ready but is also extending that capability towards the energy security of the nation.” As Tata further claims, these LNG buses come with a fuel arrying capacity of up to 2.5 times more than CNG ones. Also, these buses can run up to 600-700 kilometres with full tank.
IGL to set up gas meter manufacturing unit to cut reliance on imports
As city gas distribution network in India expands rapidly, Indraprastha Gas Ltd plans to set up a factory to manufacture gas meters used to bill households and industries for the consumption of the environment-friendly fuel, as it looks to cut reliance on imports from China for the same. IGL will invest about Rs 100 crore for setting up a unit in the national capital region to manufacture 1 million meters annually, its Managing Director E S Ranganathan said here. The plan is part of the Modi government’s push towards raising the share of environment-friendly fuel in India’s energy basket to 15 per cent by 2030 from the current 6.2 per cent. As part of this, the city gas distribution (CGD) network for retailing CNG to automobiles and piped natural gas (PNG) for household kitchens and industries is targeted to expand to more than 400 districts spread over 27 states and Union Territories covering approximately 70 per cent of India’s population and 53 per cent of its geographical area. “Currently, gas meters are mostly imported from China and we felt there is a need for a domestic manufacturing unit to cut reliance on imports and boost ‘Make in India’,” Ranganathan said. IGL, which retails CNG and PNG in the national capital region, is in talks to finalise a partner for the metering unit. “We are in the advanced stage of talks,” he said without elaborating. The company will invest Rs 50 crore in plant and machinery and the remaining in land and building. Currently, CGD network spans close to 100 cities and districts covering about 90 lakh households and industries and about 35 lakh CNG vehicles. The network is targeted to be expanded to over 400 districts, covering 2 crore households with PNG connections. As the CGD network expands, the demand for meters will also rise. Ranganathan said city gas demand is likely to grow 10 per cent in the near future and IGL is planning an investment of Rs 1,100 crore next fiscal, mostly in setting up of CNG dispensing stations and laying piped gas lines to households and industries. The company will have 559 CNG stations by the end of the month and it plans to add another 60 in the next fiscal (April to March), he said adding IGL gave 2.8-3 lakh PNG connections in the current financial year and the same pace will be maintained in the next. Natural gas in the form of CNG is 60 per cent cheaper as compared to petrol and 45 per cent cheaper as compared to diesel. Also, PNG is 40 per cent cheaper as compared to the market priced LPG and the price of PNG almost matches that of subsidised LPG based on prices in Delhi. Natural gas is the cleanest and most efficient of fossil fuels and has the potential to play an important role in the world’s transition to a more affordable and secure cleaner energy future. Because of its high energy content, it provides substantial environmental benefits, such as improved air quality and reduced carbon emissions. IGL supplies compressed natural gas (CNG) to over 11 lakh vehicles in the national capital region through a network of CNG stations. It also sells PNG to over 12 lakh household kitchens in the national capital and adjoining towns.