Shell, Exxon Mobil among groups to build 5 Pakistan LNG terminals
Pakistan has approved the construction of five liquefied natural gas (LNG) terminals by groups that include Exxon Mobil Corp and Royal Dutch Shell, aiming to triple imports and ease the country’s chronic gas shortage, Pakistan’s oil minister said on Friday. The five terminals could be in operation within two to three years, Omar Ayub Khan, Pakistan’s minister of power and petroleum, said in an interview.
IEX board approves setting up of gas exchange
Indian Energy Exchange (IEX) on Thursday said its board has approved a proposal to create a subsidiary for setting up an exchange for trading of gas. The proposal was approved at IEX board meeting on Wednesday. “The Board…has considered and approved the incorporation of a wholly-owned subsidiary in India to undertake the business of developing a gas exchange for transacting, clearing and settling trades in various types of gas-based contracts including all other forms/types of energy,” a BSE filing said. The exchange will be set up with an initial investment of up to Rs 10 crore in the form of subscribed and paid-up capital, the filing added. IEX will furnish the necessary details after the new company is formed. IEX is the first and largest energy exchange in India providing a nationwide, automated trading platform for physical delivery of electricity, renewable energy certificates and energy saving certificates. The exchange enables efficient price discovery and increases the accessibility and transparency of the power market in India while also enhancing the speed and efficiency of trade execution. In August 2016, IEX received ISO certifications for quality management, information security management and environment management. The exchange is now listed with NSE and BSE. IEX is approved and regulated by Central Electricity Regulatory Commission and has been operating since June 27, 2008.
Uttarakhand: ONGC, THDC yet to pay taxes amounting to Rs 1,111 crore
P K Gupta, the Principal Chief Commissioner Income Tax of Dehradun Zone on Thursday said that two Public Sector Undertaking (PSU) companies in the zone have not paid taxes worth Rs 1,111 crore this year. “Oil and Natural Gas Corporation (ONGC) and Tehri Hydro Development Corporation Limited (THDC) are two big PSU companies in the Dehradun zone. These companies have not paid taxes worth Rs 1,111 crore for the year till September 15. The growth rate of the department has fallen because of this,” Gupta told ANI. “In a discussion with the ONGC officers, they pointed out that this was because of the price of crude oil,” he added. Gupta informed that tax assessment surveys will be conducted from October 1. He further said that the Uttarakhand Chief Secretary has informed him that Goods and Services Tax (GST) collection in the state have been poor this year.
95% coal, oil-driven industries switched to CNG in 3 months: Delhi govt think tank
Ninety-five per cent of Delhi’s coal and oil-driven industries have switched to CNG-operated systems in the last three months, according to a report of government think tank Delhi Dialogue Commission. The panel submitted the report to Chief Minister Arvind Kejriwal recently. Of the 1,542 coal and oil-driven industries in Delhi, 1,457 have shifted to compressed natural gas (CNG). The government has been making efforts to convert another 85 industries into CNG-adaptive, a statement said. At a meeting held earlier this week, Chief Minister Arvind Kejriwal had discussed with several industrialists the benefits of switching to CNG. He had also assured the industrialists about provisions of grants and compensation for making the shift. “The Kejriwal government is committed to eliminating industrial pollution from Delhi. It is through strategic proposition and determined steps that 95 per cent of the oil-driven industry has shifted to CNG-operated systems,” the statement read. “With the efforts of the Delhi government, air pollution in the city has reduced by 25 per cent in three years. Delhi is the only state in the country to record a reduction in air pollution,” Kejriwal said. Delhi’s Environment Minister Kailash Gehlot said, “95 per cent of the industries are now operating on CNG. We are aiming to bring this figure to hundred per cent.” Earlier, the Delhi government had prohibited the use of petroleum, tyre oil, and other types of polluted chemicals in all types of industries except thermal power plants. The closure of coal-based power plants in Rajghat in May 2015 and in Badarpur in October 2018 has also aided in reducing pollution in Delhi, the statement said. The Delhi Pollution Control Committee had also announced compensation for conversion of chemical-powered industries into CNG in 2017-18. Under the scheme, a compensation of Rs 50,000 was given to small and medium industries and Rs 1 lakh to big industries. According to data from The Energy and Resources Institute and Automotive Research Association of India, industries contribute 22 per cent to air pollution (PM 2.5) in Delhi in the summer and 30 per cent in the winter.
Uttarakhand: ONGC, THDC record over Rs 1,112 crore dip in advance tax collection
In the first financial quarter, the advance tax collections from Oil and Natural Gas Cooperation (ONGC) and Tehri Hydro Development Cooperation (THDC) have recorded over Rs 1,112-crore dip compared to the past year’s figures, according to income tax department of Uttarakhand. According to the advance tax payment details accessed by TOI, in 2018, ONGC had paid Rs 4,900 crore in September installment and this year, the company has paid Rs 3,820 crore advance tax in this quarter. Similarly, THDC’s tax payment for September installment has dropped from Rs 112.3 crore in 2018 to Rs 80.82 crore this year. Incidentally, the state I-T department’s tax collection target for this year is Rs 18,755 crore and of the total amount, the department has so far collected only Rs 5,387 crore, which is around 28.72%. Talking to TOI, principal chief commissioner of I-T PK Gupta said, “The total advance tax collection from THDC and ONGC has witnessed a fall in comparison to the last year’s figure. However, advance tax payment from other corporates registered in Uttarakhand has shown an increase.” Gupta said that the overall advance tax shortfall is Rs 1,111.49 crore in Uttarakhand which he claimed would be realized. “In the coming months, we would conduct more surveys and scrutiny here.” A source in the ONGC office attributed the low advance tax collection to overall production and revenue earnings. Experts, meanwhile, said that trends of advance tax collection are a solid indicator of market health. Verendra Kalra, a city-based charted accountant, said, “The oil industry is not doing well and the overall market scenario does not seem upbeat and this reflects in the advance tax collection figures. But with the festive season ahead, things might improve a bit across the country.”
IOC’s Loni terminal to be ready with BS-VI grade fuel by Feb 2020
The Indian Oil Corporation (IOC) will be ready with the Bharat Stage (BS) VI emission-compliant grade fuel ahead of the government deadline of April 1, 2020. The company said the required quantity of fuel will be supplied to all outlets from the mandatory date. “Loni-Pune Terminal is well equipped to commence the BS-VI supplies and will have product in stock from February 2020,” Anjali Bhave, the company’s spokesperson for the western region, told TOI. Automakers have already started to bring out BS-VI compliant vehicles ahead of the deadline and said their vehicles can run on both BS-IV and BS-VI fuels. The oil major said it has reduced the manual intervention for supply of fuel at the Loni terminal down to zero. “Despite complexities involved in receipt, storage and delivery of product, manual touch points at smart terminals have been reduced to zero. Customers can place their supply request through SMS and can get their trucks loaded through an RFID card and get the receipt of product through SMS. This saves time and also enhances transparency,” the company said in a statement.
Why oil shocks don’t bother India as much now
The last time crude oil prices rose as sharply in a single day as they did on Monday (September 16) was during the 1990-91 Gulf crisis. Apart from triggering a balance of payments crisis that led to the reforms of 1991, the crisis also left India with oil reserves for just three days at one point. Today, India can survive for more than two months without importing oil. That’s a big cushion. What changed? While India’s financial situation (with forex reserves of $430 billion) puts it in a much better position to deal with price spikes, it is the improved oil storage infrastructure that’s behind the limited insurance we have in case of a supply crunch. India imports over 80% of its oil requirement. How many days? India’s refineries usually keep a stock to last for around 60 days. To keep the flow of crude to refineries going in case of a supply disruption, India also has massive underground storage capacity for oil. They are called strategic petroleum reserves (SPRs). The oil in the three facilities already built can help meet 10 days of crude requirement and the two planned ones can hold supply of about 12 more days. So, once completed, the country will have crude oil storage capacity to last for 82 days. Countries like US, Japan, China, UK and EU have strategic oil storage capacities too. In fact, on Monday, oil prices retreated after the US President approved the use of his country’s oil stockpile to ensure stable supply. Where’s the oil? India has three underground storage facilities that can store 5.33 million tonnes of crude oil. The one in Visakhapatnam is already filled with 1.33 MT of oil, deals to fill another 1.50 MT capacity in Mangalore have been signed and the third (with 2.5 MT capacity) in Padur, Karnataka, is built but awaiting oil for storage. News agency Reuters reports that about 55% of the 5.33 MT storage capacity is already filled with oil. India also plans to build an additional 6.5 MT facilities at Chandikhol in Odisha and Padur. Whose oil? Last year, India signed two pacts with foreign oil companies to fill up these facilities – one was to lease out a part of its storage at Padur to Abu Dhabi National Oil Co (ADNOC) for storing crude oil and the other to fill half of the storage at Mangalore. The agreement allows ADNOC to sell crude oil stored in these facilities to local refiners but it also gives Indian government the first right to the oil in case of an emergency. Allowing foreign companies to store oil will help Centre save Rs 10,000 crore. However, it’s not that surging crude oil prices won’t affect the world’s third largest oil importer. Petrol and diesel prices in the national capital registered their biggest single-day hike since the budget on July 5 — with petrol rising 14 paise per litre to Rs 72.17 per litre and diesel rising 15 paise per litre to Rs 65.58 per litre, on Tuesday. Investors also see rising prices as a major threat to government finances, especially as it threatens to make the economic slowdown even worse.
India keen to up Australian LNG imports, but seeks to renegotiate contracts
India is keen to ship in higher volumes of liquefied natural gas (LNG) from Australia, but at the same time, the country has indicated that higher imports will be dependent on renegotiating existing long-term contracts to better reflect the fall in spot LNG prices. At a recent government-to-government dialogue, it was stated that with India moving to a gas-based economy, there existed significant scope to enlarge India-Australia energy cooperation. However, to achieve this, long-term contracts with Australian suppliers would need to be renegotiated as Indian consumers were “price sensitive” and long-term imports of LNG needed to be aligned with realities of softening spot international prices. It was pointed out, in the course of talks, that while most Indian long-term LNG import contracts were about $8 or $9 for a million metric British thermal unit, prevailing spot prices were almost half of that level. About 1.44-million tons a year of inward LNG shipments were locked up in long-term contracts with Australian suppliers. This compared with 8.5-million tons a year imported under long-term contracts with Qatar, 5.8-Million tons a year from the US and 2.5-million tons a year from Russia. Though not specifically related to imports from Australia, Indian Petroleum and Natural Gas Minister Dharmendra Pradhan said in a statement last month that “India will re-look at pricing of long-term LNG import contracts at the appropriate time”. He was quick to add that all long-term import contracts would be honoured, but that at the same time the price sensitivity of Indian consumers would also need to be protected if the country was to move towards a gas-based economy and achieve the target of LNG constituting at least 15% of the country’s total energy mix by 2030, up from 6% at present. A section of industry in India expressed reservations over the possible success of renegotiation of long-term contracts with Australian LNG suppliers considering the rapid rise in Chinese demand for LNG shipments from Australia. The industry sources pointed out that China was inching close to the levels consumed by Japan, currently the highest importer of Australian LNG. While Japan accounted for 39% of Australian LNG exports last financial year, China’s rising energy demand saw shipments increase to 36% of Australian exports. Given such a rising demand for Australian LNG from key Asian markets, questions remained as to whether Indian demands for renegotiating long-term supply contracts would find any takers among Australian LNG suppliers, industry sources in India added.
China’s top shale gas field Fuling to pump record 7 bcm in 2020
China’s top shale gas field Fuling in the country’s southwest is expected to pump at a record 7 billion cubic metres (bcm) in 2020, as operator Sinopec Corp is set to add nearly 100 new production wells this year, according to a media report and a Sinopec official * The Fuling field currently has a total of 402 wells in production, pumping 17.755 million cubic metres of gas a day, according to a report published on Thursday on the Wechat platform of state-run Chongqing Oil & Gas Exchange, citing local paper Chongqing Daily * Forecast 2020 production at 7 bcm will represent an increase of about 16% over the field’s output in 2018, said a Sinopec official based in Fuling, in southwestern Chongqing city. The official also confirmed the number of new production wells planned for this year * China’s shale gas output could reach 280 bcm, or 23% of the country’s total gas output, by 2035, according to a top researcher at PetroChina. China last year produced about 10.9 bcm shale gas, less than 7% of the nation’s total gas output
Karnataka: Residents of Hubli, Dharwad to receive PNG connections this year
The residents of the twin cities of Hubli and Dharwad are all set to receive Piped Natural Gas (PNG) connections in their households this year. A project of Indian Oil – AdGas Private Limited, the joint venture has set an ambitious target of providing 40,000 domestic connections this year itself. Speaking to media persons on Wednesday, project head, Arun Nayak stated, “The project will cover the Hubli Dharwad Municipal Corporation area. In South India, after Bengaluru, Ernakulam and Hyderabad have this facility.” “Our target is to cover 40,000 households this year itself,” Nayak added. A resident, Ashok expressed his excitement at the prospect of receiving a PNG gas connection in his home. “I have aged people in my house who cannot lift the heavy LPG cylinders and moreover, piped gas is safer and they also offer much better services,” Ashok said.