India plans bio-gas plants to tackle toxic pollution, but experts sceptical
India is planning to set up more than 100 bio-gas plants and provide thousands of farmers with machines to dispose of crop stubble in a bid to halt the choking crop-burning pollution that blights the country every winter. A major source of the smog that engulfs vast swathes of northern India, including the capital New Delhi, is the burning the straw and stubble of the previous rice crop to prepare for new planting in October and November. New Delhi is regularly judged to be one of the world’s most polluted major cities. Government-backed Indian Oil Corp Ltd will invite private companies to apply to set up 140 bio-gas plants that will use rice stubble as feed stock, two government officials, who didn’t wish to be identified in line with official policy, said. The plants would cost 35 billion rupees ($487.67 million) and each would require two tonnes of crop residue every hour for at least 300 days to produce “an optimum amount” of compressed natural gas (CNG), one of the sources said. The government would earmark funds for the project that would make it attractive for farmers to sell their waste rather than burn it, they said. The stubble pollution has become more acute in recent years because mechanised harvesters leave more residue than crops plucked by hand. Other than helping farmers sell their residue to the new bio gas plants, the government would provide 100,000 new machines every year to farmers to dispose of the farm waste in their fields, the sources said. “We’ll give farmers the choice to either get rid of crop residue or sell it to the bio CNG plants,” one of the sources said. Environmental experts were sceptical. “Given the amount of resources that the government has, what will decide the efficacy of this plan is consistent engagement with farmers,” said Nandikesh Sivalingam, a programme manager for Greenpeace. “But if you expect results next winter, it can’t happen.”
Shell, RIL to hand over PMT fields back to ONGC tomorrow
Reliance Industries (RIL) and Royal Dutch Shell’s Indian subsidiary in a joint statement on Friday announced that they are handing over the Panna-Mukta and Tapti (PMT) oil and gas fields located at Mumbai offshore back to government of India’s nominee Oil and Natural Gas Corporation (ONGC) on 21 December after the 25 year production sharing contract (PSC) ends. The PSC for the Panna-Mukta and Tapti fields, were executed by the PMT joint venture (JV) partners with the government of India in 1994. The PMT JV constituents of ONGC, RIL, and BG Exploration and Production India (BGEPIL), with each holding 40 per cent, 30 per cent and 30 per cent participating interest, respectively. B Ganguly, president of exploration and production at RIL in a statement said, “At their peak, Panna-Mukta have contributed to nearly 6 per cent of India’s oil production and almost 7 per cent of India’s gas production in 2007-08.” According to the release, the PMT fields were the first fields in India to be operated under a joint operatorship model. The fields have produced 211 million barrels of oil and 1.25 trillion cubic feet of natural gas since December 1994. In 2019, the average monthly production from the fields was 10,000 barrels per day of crude oil and 140 million standard cubic feet per day of natural gas. “The Tapti fields had ceased production earlier in 2016 and its process platform facilities were handed over to ONGC in 2016. Decommissioning and site restoration of residual Tapti facilities, including five unmanned platforms and in-field pipelines, are currently being carried out by the PMT JV under India’s first offshore decommissioning and site restoration project,” the release said. According to Press Trust of India report, the fields were awarded to a consortium of US energy giant Enron and Reliance in 1994 and ONGC — which had originally discovered the fields — was given 40 per cent back-in right as a government nominee. Trivikram Arun, managing director at BGEPIL said, “The PMT JV is a great example of a successful partnership between India’s largest national oil company (ONGC), India’s largest private company (Reliance) and an international oil company (Shell).” Enron during its bankruptcy was taken over by BG Group of UK in 2003, while BG Group’s interest was subsequently taken over by Shell in 2016.
India aims to buy stakes in producing oil and gas fields abroad
India aims to invest in producing oil and gas fields abroad to compensate for falling domestic output and to help reduce the impact of oil price volatility, the oil minister said on Tuesday. India, the world’s third biggest oil consumer, imports about 80% of its oil needs, making it highly susceptible to crude price swings. “Today we are very much focused to invest in producing fields,” Oil Minister Dharmendra Pradhan said, adding that the eastern part of Russia was an area “we are concentrating on.” He said India was negotiating with Russia’s Rosneft to invest in eastern Russia. Price volatility was a major challenge for India, the minister said, adding that “the changing geopolitics is creating anxiety, creating uncertainty that affects commodity prices.” Indian firms have invested in foreign oil and gas assets, but many of these assets are still under exploration or not hitting production goals. “At some point of time India was investing in African countries where a lot of geopolitical challenges were,” he said. Pradhan said the acquisition by Indian investors of stakes in producing fields in the United Arab Emirates and Russia’s Vankor field had started adding to corporate revenues. In addition to talks on oil investment, the minister said India and Russia were planning a maritime link from Vladivostok to eastern India. High transport costs have made Russian crude expensive for Indian refiners. Pradhan said India was also investing in infrastructure to encourage the use of natural gas, which produces lower emissions than oil and coal, helping the country reduce pollution and providing a buffer against more volatile crude prices. “We are rebalancing the hydrocarbon portfolio by giving more thrust to natural gas and other green alternatives,” he said.
GAIL’S 444 KM NATURAL GAS PIPELINE IN THE FAST LANE, FINALLY
While work on the Indian Oil Corporation Ltd’s LPG Import Terminal began on Monday after two years, another key project, Gas Authority of India Ltd’s (Gail)’s `3,263-crore Kochi-Koottanad-Bengaluru-Mangaluru natural gas pipeline project (KKBMPL), which faced protests in northern parts of the state, is quietly progressing at a fast clip. The first stretch of 96km from Kochi to Koottanad was commissioned in June this year. Koottanad is the point from where the pipeline bifurcates to Mangaluru (via Malappuram, Kozhikode, Kannur and Kasaragod) and to Bengaluru (via Palakkad, Coimbatore, Erode, Salem Dharmapuri and Krishnagiri). Tony Mathew, general manager (construction), GAIL, said of the total length of 444km from Kochi to Mangaluru, pipe-laying on the 441.5km stretch has been completed and work on the remaining 2.5km is in progress across five rivers — Netravati (Mangaluru), Chandragiri (Kasaragod), Kuttiyadi, Chaliyar and Iruvanjippuzha in Kozhikode district. “We hope to commission the pipeline up to Kozhikode by February 2020 and the entire project will be commissioned by March 2020” he told TNIE. The KKBMPL is an ambitious project initiated in 2007 by GAIL to connect the southern states of Kerala, Tamil Nadu and Karnataka to the national gas network. The deadline for the project was December 2018, but the flood last year and frequent protests in northern districts in the state held up the work. Mathew said there are 28 stations (including 23 sectionalising valve (SV) stations and five intermittent pigging (IP) stations and receiving terminal at Mangaluru) on the 444km stretch.The SVs are installed at regular intervals (around 25km to 40km) to isolate pipeline section during emergencies like leakage as per statutory requirements. The SVs and IP stations are also the parts used for real-time monitoring of the gas supply. The work in a majority of these stations have been completed and it is in the advanced stage of completion in the remaining stations, he said. “The commissioning of the project can facilitate piped natural gas to housholds and industries and compressed natural gas to automobiles in seven districts (in Kerala) and the Union Territory of Mahe,” Mathew said. Petronet LNG Ltd’s liquefied natural gas (LNG) import terminal in Kochi, which has been operating at only 10 per cent of its five million-tonne-a-year capacity, will also see an improvement in its capacity once the GAIL pipeline is fully commissioned next year. “(The work on) the 89km Koottanad-Walayar stretch is in progress and 75km welding is completed out of which 42km is lowered in soil. There are six stations including five SV stations and nine IP stations at Walayar) on this stretch,” said the GAIL official. “The commissioning of this stretch is expected by June 2020 which can facilitate gas supply to industries in Kanjikode and Coimbatore in addition to City Gas distribution at these places,” he added. Meanwhile, 48km of the pipeline is being laid from Bengaluru to Hosur (reverse direction of Kochi-Bengaluru) to provide gas supply to industries in Hosur as Bengaluru is already connected with the National Gas Grid. Mathew said the work in Tamil Nadu has not been started yet and discussion is in progress for final clearance from the Government of Tamil Nadu.
Indian Oil’s Gujarat refinery starts dispatch of low sulphur marine fuel
Indian Oil Corp (IOC)-owned Gujarat Refinery on Tuesday announced it has made the first dispatch of low-sulphur marine fuel (MARPOL) meeting ISO 8217 -2017 standards. “In a pioneering feat, we have started the supply of MARPOL before the International Maritime Organisation (IMO) starts implementinga new regulation for more than 0.50 per cent global sulphur cap for marine fuels,” Gujarat Refineryexecutive director Sudhir Kumar told here. From January 1, 2020, the International Maritime Organization (IMO) will implement a new regulation for a 0.50 per cent global sulphur cap for marine fuels. Under the new global cap, ships will have to use marine fuels with a sulphur content of no more than 0.50 per cent sulphur against the current limit of 3.50 percent sulphur in an effort to reduce the amount of sulphur oxide. Production of MARPOL from Gujarat Refinery marks a significant change in the marine fuels landscape as it will enable to reduce pollution from marine and shipping operations through reduced amount of sulphur oxides emanating from ships, Kumar said. This will, Kumar said, “lead to major health and environmental benefits for the world, particularly for populations living close to ports and coasts.” He also informed that Gujarat Refinery gearing up for the supply of 100 per cent BS-VI ultra clean fuels, it has already started supply of BS-VI grade MS and HSD and Winter Grade MARPOL FO (Furnace Oil). Earlier, IndianOil chairman, Sanjiv Singh unveiled the plaque marking the mechanical completion of the New Amine Regeneration Unit and ISBL (Power Grid Import) facility under BS-VI project during his visit to Gujarat Refinery. Singh said that the Gujarat Refinery has played a significant role in the companys growth and it will be seeing a number of significant projects and activities in the days ahead. Gujarat Refinery has planned to invest huge amounts on new projects and expansions in the next couple of years These include capacity expansion to 18 MMTPA, oxo-alcohol petrochemical project and Linear Alkyl Benzamine (LAB) revamp project.
Work on LPG terminal, storage facilities begins amid protests
Indian Oil Corporation (IOC), which is establishing a cooking gas receiving jetty and storage facilities on Puthuvype Island, resumed work on the project after a gap of about three years amid tight police protection even as local residents, under the aegis of an organisation protesting against the facility, mounted a campaign to stop the work. The work was stopped in June 2017 after a blockade by the people, who expressed the fear that the project posed a grave threat to their lives in case of an accident. They have demanded that the storage facility be shifted to Ambalamugal, where there is land available. These allegations have been denied by IOC. The oil company maintained that the upcoming facility had the latest safety arrangements to take care of any emergency situation. But, K.S. Murali, convenor of Puthuvype LNG Terminal Virudha Janakeeya Samara Samithy, said on Monday that the people would defy the declaration of Section 144 CrPC around the project area to march to site on Saturday. Ahead of that, on Wednesday, people would blockade the panchayat office in protest against the government decision to let the work restart. “While the government should offer us protection, it is helping build the project,” said Mr. Murali, who spoke after a meeting of local residents who reiterated their concerns. Safety issues About 400 police personnel, drawn from Kochi city and neighbouring police stations, kept a watch over the situation even as IOC officials said work had resumed and reiterated their commitment to the safety of the lives and property of the people who live in the project neighbourhood. IOC said in a statement on Monday that as the construction of the LPG import terminal had restarted, “we would like to reaffirm its safety”. The company said that around 75,000 bulk LPG bullet truck movements took place across congested Kerala roads to and from Mangaluru to supply cooking gas. This is highly risky and, during the last five years, road accidents in Kerala due to LPG bullet trucks have crossed 60. “Accidents are still happening and any of them can become gruesome,” the IOC statement said, as it cited recent accidents at Karunagapally, Kollam district and Chala in Kannur district. IOC is therefore committed to lay cross country pipelines in the State to reduce road transportation of bulk LPG and the “Puthuvypeen terminal is essential for this so that LPG could be brought by sea to Cochin and further transported to various bottling plants by pipeline”. The joint venture of IOC and Kochi Salem Pipeline Private Limited (KSPPL) is already in the process of laying pipelines in the State and it is expected to completely shift the LPG bulk movement in the State through pipelines once the LPG Import Terminal is completed. The Puthuvype terminal has adopted global standards of safety norms. One third of the cost of the terminal was spent on its safety, said the IOC statement. The risk analysis study conducted by PDIL (Projects and Development India Limited, a PSU) also established that the terminal was safe, IOC added.
India’s Mundra LNG terminal to receive commissioning cargo in H2 January
ndia’s Mundra LNG terminal in Gujarat co-owned by Gujarat State Petroleum Corp (GSPC) and Adani Group is set to receive its commissioning cargo in the second half of January, a source familiar with the matter told S&P Global Platts Tuesday. GSPC issued a tender Monday seeking a cargo to be delivered over H2 January to the Mundra LNG terminal. The tender closes Wednesday, with a one day validity. The terminal has been operationally ready since late last year but commissioning was delayed due to a commercial dispute between the developers, market sources said. The Mundra LNG terminal had been due to receive a cargo from the US in November last year, but the vessel had to be diverted to Hazira, trade sources said. The terminal has an import capacity of 5 million mt/year and two 160,000 cu m LNG storage tanks.
Planned $2 bn LNG project in Philippines put on hold
Plans for the $2 billion Tanglawan LNG hub venture in the Philippines have been put on hold by backers CNOOC Gas and Power of China and Phoenix Petroleum Philippines Inc. The facility was supposed to have a capacity of 2.2 million tonnes per year, with a targeted start-up by 2023. To support it, Phoenix also planned to build a 2,000-megawatt (MW) power plant. The two firms jointly requested the Department of Energy (DOE) put the project on hold after Phoenix parent Udenna Corp acquired a 45% stake in the Malampaya natural gas consortium, Phoenix said in a regulatory filing on Wednesday. Phoenix now wanted to “reassess” its gas venture and would submit a “new concept” to the Department of Energy, Energy Secretary Alfonso Cusi told the BusinessWorld newspaper. Oil and shipping group Udenna said last month it had signed a deal to acquire Chevron’s 45% stake in the Malampaya gas-to-power project. Developed and operated by Shell Philippines Exploration BV, Malampaya provides fuel for power plants with a combined capacity of more than 3,000 MW. Shell holds a 45% stake and state-owned Philippines National Oil Company holds the remaining 10%. The Malampaya gas field in the South China Sea is expected to be depleted within the next decade, but its operations may go beyond the 2024 expiry of Shell’s contract with the government, as further development is likely to be pursued. Shell has requested a contract extension, optimistic that Malampaya can produce gas beyond 2024. A Phoenix spokesman declined to comment.
India in talks with Rosneft to invest in Far East Russian cluster: Pradhan
Union Oil Minister Dharmendra Pradhan said India is in talks with Russia’s oil giant Rosneft to invest in Far East Russian cluster for ensuring energy security. India has already made its biggest energy investments in Russia in the past with state-owned firms having spent close to USD 10 billion in acquiring stakes in oilfields such as Sakhalin-1, Taas-Yuryakh and Vankor and Siberia-focused company Imperial Energy. “In Russia, we are also negotiating with state-owned company Rosneft to invest in their eastern cluster. With the change in geopolitical situation, the eastern part of Russia is coming as a promising proposition and we are concentrating on that,” Pradhan said at the India Economic conclave 2019. He said the government is interested in investing in producing oil fields in the interest of India’s energy security. On the challenges faced by the country in terms of energy security, he said, “Due to the current geopolitical scenario, there is uncertainty which is affecting the commodity price of energy. For a price sensitive country like India, the emerging economy, with a lot of poor and lower middle class population, where energy is an inevitable part of life, volatility of price is a challenge.” Accepting that nearly 70-80 per cent of our energy requirements are still met through imports, he said the government is also taking various initiatives to switch to cleaner gas and increase the production of gas. “Through all these initiatives, we are confident we will be reducing our import dependency. Not only that hydrogen is new form of energy we are focused on. India is bound to grow and we will have our own path of energy route which will be self sufficient,” Pradhan added.
The Two Countries Dictating Oil Prices In 2020
It’s the end of the year and authorities of various caliber and standing are making oil price forecasts for next year. This wealth of information can be confusing because of its sheer quantity, but here’s a twist: it’s enough to focus on trends in just two countries to catch a glimpse of the immediate future of oil. The two countries, of course, are China and India. They are among the world’s top oil consumers, together accounting for almost a fifth of global oil consumption, as Reuters’ John Kemp noted in a recent column that tackled the issue of oil price forecast complexity. According to Kemp, it’s worth keeping tabs on the world’s ten largest consumers of the most traded commodity, since they account for over 50 percent of global consumption and demand growth, respectively. However, China and India have been consistently trumping the United States in importance when it comes to oil price trends in recent years. The reason for this is that demand for oil has been growing a lot faster in both China and India. In China, oil demand has been growing at an average annual rate of 5.5 percent, according to BP data cited by Kemp. In India, it has been growing by some 5.1 percent since 2008. Meanwhile, U.S. oil demand has only been climbing by 0.5 percent over the last decade. There is also another reason China and India are the countries to watch for those who want to know where oil prices are going at any particular point in time. Both countries are overwhelmingly reliant on imported oil. In China, the percentage of imported oil in its total consumption is almost 70 percent. In India, this percentage is even higher, at more than 80 percent. China’s daily consumption of oil averaged 13.5 million bpd in 2018. India’s stood at 5.1 million bpd. No wonder then, that any economic news from China and, to a lesser extent, India, moves prices as soon as it is released. It would be going too far to say that China and India are the only oil consumers that matter as far as price forecasts are concerned. The United States, despite its modest demand growth, is still the world’s largest oil consumer, guzzling around 20 million barrels of crude daily. It is this size of consumption that makes the Energy Information Administration’s weekly petroleum status report so popular among oil traders, despite the fact it is based on estimates rather than on hard data—and the figures are often revised later, when the hard data from the oil companies comes in. What’s more interesting, however, is that nobody seems to be paying attention to U.S. oil imports. As per the latest EIA report, the U.S. imported 6.9 million bpd in the first week of December. This is more than a quarter of domestic consumption and also more than India’s total consumption. Yet, U.S. oil import numbers are not a popular gauge for oil prices. The reason is most likely the demand growth trend, unlike developments in China and India. Still, despite its somewhat declining importance for prices as a consumer, the U.S. has become a factor to reckon with on the oil supply side. In just a few years the world’s top consumer also became one of the world’s top producers. The shale revolution has made the U.S. a lot more self-sufficient in its energy needs and turned it into a direct challenger to the oil market dominance—especially in Asia—of partner Saudi Arabia. So, in supply, one has to watch the U.S., OPEC, and Russia. In demand, however, it is enough to keep tabs on China and India. Anything that happens in those two economies immediately affects oil prices regardless of anything else that happens in the meantime. Just look at all the news coverage citing the U.S.-China trade war as the main factor for oil price depression. The depression persists despite OPEC+ agreeing to cut deeper. That should say enough about what moves oil markets.