Petrol, diesel prices see sharp decline for second day in a row
Petrol and diesel prices declined today across all major cities in India for the fifth day in a row. Petrol prices were cut by 22-23 paise per litre and diesel prices were down by 20-21 paise a litre. The fuel prices had declined sharply yesterday as well. In Delhi, a litre of petrol is being sold at Rs 71.49 per litre, Rs 77.18 in Mumbai, Rs 74.16 in Kolkata and Rs 74.28 in Chennai. Diesel costs Rs 64.10 a litre in Delhi, Rs 67.13 a litre in Mumbai, Rs Rs 66.43 a litre in Kolkata and 67.65 per litre in Chennai, according to Indian Oil Corporation website. Domestic fuel prices have been seeing a sharp decline in prices since last one week due to falling global crude oil prices amid fears of a Coronavirus pandemic. Prices registered a big drop yesterday as well with petrol price dropping by 17 paise and diesel by 21 paise on Sunday. In international markets, global benchmark Brent crude was hovering around $51 a barrel, after earlier dropping to $48.40, the lowest since July 2017. The fuel prices are reviewed by oil marketing companies on a daily basis.
IOC-Phinergy to begin metal-air battery field trials; in talks with auto companies
Indian Oil, which has picked up a minority stake in high-tech battery maker Phinergy earlier this month, is in talks with leading domestic electric vehicle makers to start field trials for the metal-air batteries that the Israeli company specialises in. Indian Oil chairman Sanjiv Singh has also said they will soon form a joint venture with Phinergy to set up an unit to manufacture metal-air batteries called al-air battery system, which does not use electricity to recharge. Singh said, IOC has a board position at the Israeli company but refused to quantify the equity it has picked up in the Israeli firm. Phinenergy specialises in aluminium-air (al-air) and zinc-air battery systems. Metal-air batteries use metals like aluminum as the anode and air as the cathode, along with a liquid electrolyte. Aluminium-based metal-air battery uses oxygen from the air and combines it with the metal to create an aluminum hydroxide, which activates the electrolysis process and creates an electric current. These batteries are lighter and compact with high energy density. Metal-air batteries have great potential in electric mobility and stationary applications, aluminium is naturally available in the country with good extraction and recycling technologies. “If the field trials are successful and if our talks with EV makers fructify, the metal-air batteries can complement the lithium-ion batteries to provide a hybrid solution for large-scale adoption of electric vehicles. In terms of range, it can easily offer over 600 km,” the chairman said. It can be noted that one of the biggest impediments facing EV adoption in the country is the lower battery range, coupled with public charging stations. The best available range is under 150 km per charge now, even though Tata Motors had last month said it would offer up to 300 km for the electric version of its compact SUV Nexon but commercial supply is yet to begin. The al-air batteries offer many an advantage like higher range, energy density, safety, longer life-cycle among others. Singh also said the company has already set up 43 EV charging stations and will pursue its plans to manufacture lithium-ion battery cells and also hydrogen cells.
Demand-supply gap in biofuels shows we have only scratched the surface: Shishir Joshipura, Praj Industries
Praj industries, a domestic biofuel technology provider, is bullish on the recent push by the government for the biofuels sector. The country will expand production capacity going forward, Shishir Joshipura, Chief Executive Officer and Managing Director told ETEnergyWorld in an interview. He talked about the company’s plan to offer technology allowing industry players to make renewable natural gas, second generation ethanol and bio jet fuel. Edited Excerpts: What is the status of the 2G ethanol projects you are helping set-up for the Oil Marketing Companies? There are four plants which we won through competitive bidding. Among the four, the first one was in Panipat for Indian Oil Corporation, the second one was for Bharat Petroleum in Odisha and the other two projects have now gone into construction phase. We have finished engineering for all the four. Civil works have begun, equipment ordering has started and major contracts have been awarded. Those sites are progressing towards mechanical completion. In 12-14 months we should see these two plants get commissioned. The other two plants are at different stages and we will make announcements during the year. Are the capacities for all the four facilities same? What would be feedstock requirement for such plants? Three of the projects, being set up for IOC, BPCL and HPCL, have same capacity of 1 lakh litres per day, while the one for MRPL would have a capacity of 60,000 litres per day. The feedstock requirement will not be the same for all the plants as there are some variations locally. We are looking at a feedstock requirement of 400 tonnes of material per day. The three facilities by IOC, BPCL and HPCL will be based on rice straw and the MRPL one will use rice straw as well as corn stover. Is the demo Compressed Bio-gas plant which Praj was working on ready? The plant will be commissioned in two weeks from now. The technology is state-of-the art and these plants are unique. These CBG plants will mostly come up in rural areas near fields. Therefore, we have ensured that the technology we have brought is virtually maintenance free. Once the plants start operations you do not have to worry about it. The yields from our technology are expected to be at least 1.5 times more than any other existing technology. Both these factors should ensure a healthy growth in business. How many domestic technology licensors are currently present in India? Essentially there are only two schools of technology worldwide — Continuous Stirred Reactors (CSTR) and Plug Flow Reactors (PFR). PFR technology is a bit complex to master but it is very easy in the hands of the customers. We also have CSTR but we are still offering PFR because we believe that really addresses the needs of the customers and there are many companies in this space. What would be the minimum size a CBG plant that a farmer or an entrepreneur can set-up? The way this works is, it is not only about consuming the bio-mass. It is also about managing the gas output that happens. Typically, 100 ton of biomass would be required as feedstock. It is not as if every field will have a CBG plant. It will be more of an aggregated model, where multiple fields will be involved. The yield for such a plant would be around 10 tonne of gas per day. The chairman, in the 2018-2019 annual report, mentioned the company’s focus on renewable chemicals. Can you explain the plan? It is a very natural evolution from single bio-fuel to a whole basket of bio-fuels — liquid biofuels to gaseous bio-fuels and derivatives thereof. The next progression is renewable chemicals. As the chairman mentioned this is the new horizon which the company is exploring but as things are at a Research and Development phase it will be too early for us to comment. We are confident that this space has a lot of potential. Could you update us on the partnership with US-based GEVO on producing iso-butanol through second generation route? We have finished the process of generating iso-butanol using different sugary feedstock and cellulosic sugar as well, which is second generation. The process has been developed, certified and we have shared it with GEVO and now we are in the process of starting out a plan of action as we have already figured out how to produce iso-butanol and how to produce bio-jet fuel from iso-butanol. Both the steps are clearly understood by both the companies and now we are in the process of offering it to the marketplace and making a commercial proposition. The government is promoting production of bio-diesel from used cooking oil. Has there been an increase in the use of this technology since the scheme was unveiled? We are already working on two-contracts for these plants. We have a very specialised enzymatic process which we have developed. That allows customers to use different kinds of feed stocks as compared to relying on just one kind. So our process is enzymatic and not chemical, which the traditional processes were. We are able to handle larger variations in the input than any other technology. Overall in the country, do you see the industry ramping capacity when it comes to second generation ethanol plants, biofuels etc? We have seen an increasing role of biofuels in the country whether it is ethanol, second generation ethanol, biodiesel, bio jet fuel, renewable gas. We are seeing biofuels starting to increase share in India’s energy basket. There is a clear gap between the demand and supply of these biofuels and the gap is very significant. We are just scratching the surface when it comes to capacity. The gap in demand and supply should drive capacity upwards and we are very positive about that. How did operations fare this fiscal? What are the key industry trends you have witnessed in the first nine months of this fiscal? One of the good things is that our Pharma HiPurity business is turning
Asian LNG prices steady but traders wary of demand slowdown
Asian spot liquefied natural gas (LNG) prices stabilised this week though traders remained wary regarding overall demand as the spread of coronavirus threatens to dent the global economy. The average LNG price for April delivery into northeast Asia is estimated at around $3 per million British thermal units (mmBtu), steady from the previous week, but still near record low prices, several traders said. “We were worried about China initially but now with the virus spreading, I don’t think spot prices will be recovering any time soon,” a Singapore-based trader said. Global share prices are on track for their biggest weekly fall since the global financial crisis in 2008 as virus-related disruptions to travel and supply chains fuel fears of recession in the United States and the euro zone. For LNG, some bargain hunters appeared in the market either seeking or buying cargoes for April while availability for March cargoes are limited, a second Singapore-based trader said. South Korea’s GS Energy, Posco and Prism Energy International entered the spot market seeking cargoes, while India’s Gujarat State Petroleum Corp (GSPC) and Bharat Petroleum Corp Ltd (BPCL) sought cargoes for March and April, traders said. China’s appetite for LNG also appeared to be slowly resuming with shipments to the world’s second largest importer of the super-chilled fuel rising last week for the first time in five. This week, LNG imports into China are expected to rise further by 11% from last week, Refinitiv Eikon data shows. PetroChina on Wednesday bought a cargo for delivery in April from commodity trader Vitol through the S&P Global Platts’ pricing process also known as market-on-close (MOC).This follows two cargoes the firm bought in the spot market, traders said, though this could not be immediately confirmed. It was also not clear if the cargoes are for delivery into China. Still, supply was more than ample with several cargoes being offered in the market, traders said. Oman LNG, Russia’s Sakhalin 2 plant, Angola LNG and Malaysia’s Petronas were all offering cargoes. Osaka Gas, is also discussing a swap deal offering a cargo for loading from the United States and buying one for delivery into Japan, sources said. Shipments of three LNG cargoes from Indonesia’s Tangguh LNG Plant to Fujian province in China have been delayed because of the coronavirus outbreak, Indonesia’s upstream oil and gas regulator SKK Migas said on Thursday.
French major Total acquires shares worth over Rs 50 billion in Adani Gas
French energy major Total on Friday picked up shares worth over Rs 50 billion in Adani Gas through an open market transaction. On Friday, five promoter entities of Adani Gas on Friday sold shares worth more than Rs 50 billion through open market transactions, , as per bulk deal data available on the BSE. Adani Tradeline LLP, S B Adani Family Trust, Afro Asia Trade And Investments Ltd, Worldwide Emerging Market Holding Ltd and Universal Trade And Investments Ltd, offloaded shares. The five promoters have sold a total .of 40,76,43,145 shares for around Rs 125 per share and the total deal value is Rs 50.95 billion, according to the data. Separately, Total Holdings SAS picked up 40,57,51,145 shares in Adani Gas at an average price of Rs 125.12 apiece. This deal is worth Rs 50.76 billion. On BSE, shares of Adani Gas on Friday ended at Rs 133.9 apiece, down 9.04 per cent. In October, it was announced that Total Holdings SAS would acquire 37.4 per cent stake in Gautam Adani-led Adani Gas.
Egypt increases usage fee for national gas grid by 29 per cent
Egypt has increased the usage fees for its national gas grid by 29% to $0.375 per mmbtu, the national gas regulator said on its website on Friday. The price increase came as part of a “gradual liberalisation of the market”, it said in a statement. Egypt had first set the usage fees at $0.38 per mmbtu in August 2018 for a year. In December 2019, Egypt had lowered the usage fees by 24% to $0.29 per mmbtu.
Assam’s NRL refinery has started supply of Bharat Stage VI grade of Motor Spirit and High Speed Diesel from its refinery
Assam based Numaligarh Refinery Limited (NRL) has started supplying Bharat Stage (BS) VI grade of Motor Spirit (Petrol) and High Speed Diesel (Diesel) from its refinery. In a statement NRL has stated company had commissioned a Diesel Hydro Treater (DHDT) plant during 2018 with a project cost of around Rs 10 billion. This plant is capable of producing BS-VI grade of Diesel. Recently, NRL invested around Rs. 1.25 billion for revamping its Motor Spirit plant to meet BS-VI specification of petrol which has also been commissioned during January 2020. The statement added the Refinery which has embarked on a massive expansion plan from 3 MMTPA to 9 MMTPA has been configured to produce BS VI compliant fuels from its new facilities. “As compared to the present specification of BS IV grade of automotive fuel used in the country with a sulphur specification of 50 PPM, BS VI grade of automotive fuel has a much stringent sulphur limit of 10 PPM. While the country will leapfrog from the current BS-IV grade fuel to BS-VI, which have emission standards equivalent to Euro-VI fuel from April 1, 2020, NRL has begun supplying the ultra-clean fuel to the market ahead of schedule so that oil marketing companies taking supply from NRL can upgrade their inventory of automotive fuel – Petrol and Diesel, in their retail outlets and terminals well ahead of the timeline, “the statement added.
US gas developer rattled as biggest Indian buyer seeks competing deal
An emerging U.S. natural gas developer, along with its $28 billion export project, has been rattled by the attempts of a potential major customer in India to probe the market for competing supplies, highlighting mounting pressure on sellers amid a global glut of the fuel. India’s largest liquefied natural gas buyer, Petronet LNG Ltd., has started soliciting offers for supply under terms similar to a tentative agreement it signed with Tellurian Inc. last year, according to people with knowledge of the matter. The Petronet tender, combined with the lack of a deal announcement that was expected during President Donald Trump’s visit to India this week, adds to doubts that Tellurian will be able to secure a sizable anchor investment from Petronet for its Driftwood LNG project, according to Michael Webber, managing partner of Webber Research & Advisory LLC. “It’s supportive of our overall skepticism of the deal,” he said. The combined news spooked investors, sending Tellurian shares down 23%, the biggest one-day drop since January 2016. The development highlights how a flood of new supply and record low spot prices are strengthening buyers’ hands and ramping up competitive pressure among sellers. Tellurian didn’t respond to requests for comment Wednesday. A Petronet spokesman didn’t answer calls seeking comment. Petronet issued the tender to glean price and market information that it will use to back its position during talks with Tellurian, which are expected next month, as well as to justify to shareholders its final decision, one of the people said. The company’s main backers include state-controlled firms such as Oil & Natural Gas Corp. and GAIL India Ltd. Petronet Managing Director Prabhat Singh, who often speaks on behalf of the company, didn’t answer calls seeking comment. For most LNG projects, locking up long-term sales agreements for the bulk of the production is a key requirement to secure financing. Tellurian Chairman Charif Souki said in late January that the company would finalize a deal with Petronet soon, and that it plans to make a final investment decision on the first phase of Driftwood in the “next couple of months” and break ground in the second quarter. Under the preliminary non-binding deal in September, Petronet would buy as much as 5 million tons of LNG annually from the Driftwood project in Louisiana, which is slated to startup in 2024. The companies have been targeting a final deal by the end of March. Webber said it’s possible Tellurian and Petronet could reach a scaled-back deal, which also earlier included Petronet taking a 18% stake in Driftwood.
India’s gas demand at inflection point, to rise by 66 per cent in 5 years
India’s domestic gas demand is at an inflection point and is expected to see a 66 per cent volume growth over the next five years, primarily driven by sustained weak LNG prices, as per a report. Gas demand is expected to rise from 148 million standard cubic meters per day (mmscmd) in 2018-19 to 250 mmscmd by FY25, Elara Securities said in a report. The bulk of the incremental demand will come from city gas distribution (CGD) operations being rolled out in 400 districts. As much as 52 mmscmd of additional demand will come from retailing of CNG to automobiles and piped natural gas to industries and households, it said. Another 35 mmscmd is to come from the power sector and 15 mmscmd from fertilizer plants. “Domestic gas demand is at an inflection point and we expect 66 per cent volume growth or 102 mmscmd over the next five years, given an environment of sustained weak LNG prices, owing to a global supply glut and muted demand from China, which has been aggravated by the coronavirus outbreak,” it said. LNG delivered cargo prices in western India have hit an all-time low of about $2.5 per million British thermal unit, a rate which should propel consumption. LNG at this rate, it said, is competitive or even cheaper at 53 out of the 78 polluted industrial clusters in the country that use imported coal. “This, we believe, will drive coal replacement demand among industries.” “We expect LNG prices to remain weak over the next 2-3 years, due to an estimated 47 million tonnes of new LNG supply addition over the calendar year 2020-21 and subdued China LNG demand growth on rising local gas production and commissioning of 104 mmscmd Russia-to-China gas pipeline,” it said. Giving a breakup of its estimation of additional demand, Elara Securities said 24 mmscmd gas is likely to be consumed by industrial CGD and another 28 mmscmd by non-industrial CGD (CNG, household and commercial piped gas). “In other words, this would serve an additional 3.8 million CNG vehicles, 33 million households, 0.3 million commercial units and 42,840 industrial units,” it said. The recent crash in liquefied natural gas (LNG) prices comes at the time when the government is looking to push for greater use of environment friendly fuel in the country. It wants the share of natural gas in the country’s primary energy basket to rise to 15 per cent by 2030 from current 6.2 per cent. Towards that objective, sector regulator Petroleum and Natural Gas Regulatory Board (PNGRB) gave out CGD licenses for 232 geographical areas (spread across 407 districts in 27 states) in two bid rounds in the last two years. This would service 70 per cent of India’s population. Also, the government wants states to cap VAT on CNG and LNG at 5 per cent, lower road taxes for CNG and LNG vehicles at par with that of electric vehicles and form a single clearance window for CGD projects. “In our view, these steps will unlock 52 mmscmd of new gas demand from overall CGD over FY20-25,” the report said. It went on to estimate that gas transmission volume will increase by 32 mmscmd or 83 per cent for Gujarat State Petronet and by 70 mmscmd or 66 per cent for GAIL over H1FY20-FY25E. Among listed CGD firms, Gujarat Gas, Indraprastha Gas and Mahanagar Gas would see gas volume growth in the range of 72-162 per cent.
IOC invests Rs 3,000cr to upgrade Haldia refinery for BS-VI
State-owned Indian Oil Corporation (IOC) has made an investment of around Rs 3,000 crore to upgrade its refinery at Haldia to meet BS-VI emission norms, an official said on Thursday. The oil marketing PSU will invest another Rs 388 crore for setting up a grassroot bottling plant at Kharagpur, diesel exhaust fluid (DEF) plant at Budge Budge and lube blending unit at Paharpur in West Bengal. “IOC has made an investment of Rs 3,000 crore for upgrading the refinery at Haldia for the manufacture of petrol and diesel to comply with BS-VI emission norms,” Pritish Bharat, ED (West Bengal, Sikkim and A&N), said. The new norms will come into force from April 1. He said the new BS-VI compliant fuel will have very low sulphur content as compared to BS-IV petrol or diesel. The company has incurred a total expenditure of around Rs 17,000 crore across its refineries in India to manufacture BS-VI compliant fuel, Bharat told reporters here. “All the retail outlets of IOC will be ready to supply BS-VI compliant fuel from April 1,” he said. The official said IOC will be investing Rs 163 crore to set up a new bottling plant at Kharagpur with a proposed capacity of 120 mtpa, which will be commissioned by 2021. The company is also coming up with a DEF plant at Budge Budge at an investment of Rs 75 crore, Bharat said, adding, the new type of fuel will be required to be used by heavy commercial vehicles for reducing emission of nitrogen oxide. IOC will be investing Rs 150 crore for a modern lube blending unit at Paharpur in the southern outskirts of the city, he said. To a query, Bharat said initially, customers will not have to pay a higher price for purchasing BS-VI compliant fuel. He said IOC has awarded contracts to two private players for setting up compressed bio-gas plants in the state. Besides plans to automate all its retail outlets, the company will also augment its LPG distributor network. For IOC’s various pipeline projects in West Bengal, it will invest an aggregate amount of Rs 3,352 crore, Bharat added.