HPCL plans rapid vehicle-battery swap program
Bracing for a future with less-polluting fuels, Indian oil refiner Hindustan Petroleum Corp is planning a pilot program for swapping batteries of electric two- and three-wheelers at its outlets by December, according to people familiar with the matter. The initiative is aimed at helping the company maintain its grip on a segment of the mobility market that’s rapidly shifting to cleaner power sources, said the people, who asked not to be identified because the plans aren’t public. The ultimate capacity of the program hasn’t been decided. An HPCL spokesman wasn’t immediately able to comment. Two- and three-wheelers account for about two-thirds of HPCL’s gasoline sales, said the people. Those two types of vehicles now make up more than 80% of all autos on Indian roads, according to BloombergNEF. Their electric versions have achieved parity with gasoline vehicles in terms of total cost of ownership and are expected to lead electrification of transport in India, according to BNEF’s latest Electric Vehicle Outlook. The swap program, which will take place in the city of Thane in India’s western Maharashtra state, will allow consumers to replace depleted batteries with fully charged ones in just a few minutes. That’s a quicker option for motorists than recharging the battery themselves, which can take several hours. The pilot is among several HPCL initiatives to cater to electric vehicles, which include charging stations at seven of its retail outlets as of March and a plan to work with Tata Power to set up more. The speed of adaption of electric vehicles and consumers’ changing fuel preferences may be a risk to the motor fuel business, HPCL said in its annual report. Indian startups including Sun Mobility and Lithion Power Pvt. are currently providing battery swapping services for two- and three-wheelers and some buses. Last year, Finnish utility Fortum Oyj’s India unit and Sweden’s Clean Motion launched a battery swapping pilot near New Delhi. HPCL also isn’t the only Indian fossil fuel-focused company adapting to the influx of electric vehicles amid the transition to cleaner power. State-run NTPC Ltd. and Bharat Heavy Electricals Ltd. have also announced plans to set up electric vehicle chargers.
India increases oil and gas bidding window to three times a year
In a bid to increase participation in India’s ongoing oil and gas bidding rounds held under the Open Acreage Licensing Programme (OALP), the government has now increased the Expression of Interest (EoI) submission cycle to three times in a year from two times earlier, Directorate General of Hydrocarbons (DGH) said in a notification. “In view of recent policy reforms and changes aligned to promote ‘Ease of Doing Business’, the EoI submission cycle is increased from two to three times in a year,” DGH said. According to the revised EoI submission cycle; the first window for submission will now start from 1 April to 31 July, second from 1 August to 30 November, and the third from 1 December to 31 March every year. The fourth window of EoI submissions for oil and gas fields ended on 15 May 2019 and according to the information provided on DGH’s EoI submission portal, the government has received seven bids under the fourth round. Moreover, the government had earlier in February 2019 modified the Hydrocarbon Exploration and Licensing Policy for enhancing domestic exploration and production of oil and gas. However, the amendments in the policy would be effective from the fourth OALP round. According to the new reforms notified on 28 February 2019, the contractor will now have full marketing and pricing freedom for crude oil and natural gas to be sold at arm’s length basis through a transparent and competitive bidding process. Also, exploration blocks would be bid out exclusively on the basis of exploration work program without any revenue or production share to the government in category-I and category-II basins where presently no commercial production has commenced. However, royalty and other statutory levies will continue to be charged on the contractor. For unallocated/unexplored areas of producing basins (category-I basins), the bidding will continue to be based on revenue sharing basis but with more weightage to work programme (70 per cent weightage to work programme and 30 percent weightage to revenue share). An upper ceiling of 50 percent on biddable revenue share at higher revenue point has also been prescribed, besides other amendments. The government has, under the first three rounds of OALP, awarded 87 oil and gas fields to private and public entities. According to the DGH, the fifth EoI submission window which commenced on 16 May in the current year has now been extended up to 30 November 2019.
INNOVATION: Researchers design new materials to enhance natural gas storage, reduce global warming
Scientists have designed plastic-based materials that can effectively store natural gas. The materials can not only make large-scale, cost-effective, and safe natural gas storage possible, but further hold a strong promise for combating global warming, suggests a study. The study was published in the journal ‘Natural Energy’. Natural gas (predominantly methane) is a clean energy alternative. It is stored by compression, liquefaction, or adsorption. Among these, adsorbed natural gas (ANG) storage is a more efficient, cheaper, and safer alternative to conventional compressed natural gas (CNG) and liquefied natural gas (LNG) storage approaches that have drawbacks such as low storage efficiency, high costs, and safety concerns. However, developing adsorptive materials that can more fully exploit the advantages of ANG storage has remained a challenging task. “We envision a whole host of new designs and mechanisms to be developed based on our concept. Since natural gas is a much cleaner fuel than coal and petroleum, new developments in this realm will help switch to the use of less polluting fuels,” said Cafer T. Yavuz, lead researcher of the study. The research team synthesised 29 unique porous polymeric structures with inherent flexibility and tested their methane gas uptake capacity at high pressures. These porous polymers had varying synthetic complexities, porosities, and morphologies, and the researchers subjected each porous polymer to pure methane gas under various conditions to study the ANG performances. Of these 29 distinct chemical structures, COP-150 was particularly noteworthy as it achieved a high deliverable gravimetric methane working capacity. COP-150 can be produced using freely available and easily accessible plastic materials, and moreover, its synthesis takes place at room temperature, open to the air, and no previous purification of the chemicals is required. The pressure-triggered flexible structure of COP-150 is also advantageous in terms of the total working capacity of deliverable methane for real applications. The research team believed that the increased pressure flexes the network structure of COP-150 showing “swelling” behaviour, and suggested that the flexibility provides rapid desorption and thermal management, while the hydrophobicity and the nature of the covalently bonded framework allow these promising materials to tolerate harsh conditions. This swelling mechanism of expansion-contraction solves two other major issues, the team noted. Firstly, when using adsorbents based on such a mechanism, unsafe pressure spikes that may occur due to temperature swings can be eliminated. In addition, contamination can also be minimized, since the adsorbent remains contracted when no gas is stored.
Three baby RILs in the making with RIL as holding entity
Reliance Industries is working towards a strategy to carve out at least three independent companies from its different businesses, making itself a holding firm for these entities. Chairman Mukesh Ambani said RIL was embarking on its most ambitious value creation strategy, at the heart of which would be partnerships with global players who would be inducted as strategic partners in various businesses. “We are the only diversified multi-sector Indian enterprise with three major growth engines in one single corporate entity — oils-to-chemicals division, Jio (in telecom) and retail. All three have done exceedingly well in the past year. We are also incubating newer growth engines,” Ambani said. “If these two consumer businesses (Jio and retail) had been separately listed companies, each would be ranked among the top 10 in India today, in terms of value,” he added. At the company’s 42nd Annual General Meeting, Ambani announced a deal to sell a 20 per cent stake in its oil-to-chemical business to Saudi Aramco, and said RIL would look at strategic partners for retail and telecom and eventually list those. The deal with Aramco will cover all of RIL’s refining and petrochemicals assets, including 51 per cent of the petroleum retail joint venture with BP. The move is seen as a precursor to carving out different companies from Reliance Industries. Analysts said this strategic plan would help the company deleverage its balance sheet. They also speculated that it could be a part of the company’s long-term succession plan. “Right now, we are carving out the oil-to-chemical business into a division. We have committed that this business would be a standalone entity in five years. If then RIL and Aramco decide it should be listed at some later time, they may do so; there is no decision yet,” executive director PMS Prasad said. RIL has plans to hit the capital market with initial public offers for Reliance Retail and Reliance Jio Infocomm to list those separately by 2024. Before that it may induct strategic investors in these businesses. Co Plans to Tap Global Investors for Retail, Jio Analysts expect the retail business to be listed first. “RIL’s plans to list Jio will help improve the parent company’s balance sheet, and at the same time make adequate cash available for funding Jio’s fibre-based home broadband expansion and other digital initiatives,” said Rajiv Sharma, co-research head at SBICaps Securities. “If these two consumer businesses had been separately listed companies, each would be ranked among the top 10 in India today, in terms of value,” Ambani said. Reliance Retail shares started trading in the last week of June in the unlisted market, at between Rs 475 and Rs 500 apiece, with a market capitalisation of Rs 2.5 lakh crore in the unofficial market. “Over the past month, the stock has appreciated further to Rs 550 apiece with a market cap of Rs 2.75 crore,” said two brokers. The valuation is bigger than all listed retailers put together. One analyst expects Jio’s valuation to be at least 13 times the EV/ Ebitda ratio compared with rival Vodafone Idea’s valuation, which he estimates at 8 times the ratio.
Indian Oil sells more naphtha for August
Indian Oil Corp sold a naphtha cargo last Thursday, bringing its total August exports to 97,000 tonnes, the highest monthly volume from the port of Chennai since 2015, three industry sources said on Tuesday. IOC sold the 35,000-tonne naphtha cargo for Aug. 28-30 loading from Chennai to commodity trader Trafigura at a premium of about $17 a tonne to its own price formula on a free-on-board (FOB) basis after extending the validity of the sales tender by a day, the sources said. It was unclear why IOC’s August exports were higher than its average monthly volume for the first seven months of this year at 55,000 tonnes. But of the three cargoes it sold for August, one cargo at 27,000 tonnes sold to Litasco at a premium of $2 for Aug. 3-5 lifting was not within the usual specifications, the sources said. The other cargo sold for Aug. 16-18 went to BP at a premium of about $13 a tonne, one of the sources said.
Explosion and fire on offshore vessel at Vizag, one killed
A person was killed and another went missing after a massive fire broke out in an offshore support vessel (OSV) named Coastal Jaguar, hired by Hindustan Petroleum Corporation Limited, on Monday, following a loud explosion on board the vessel. The deceased has been identified as Ashish Kumar (30) from Rajasthan and the missing crew member has been identified as Vicky (40). According to city police, both of them jumped out of the vessel after the fire broke out. The rest of the 26-member crew of the Coastal Jaguar was rescued by teams sent by Visakhapatnam Port Trust and the Indian Coast Guard. According to police, six crew members are seriously injured — Tasarapu Bharadwaj (23), a resident of Old Post Office area in Visakhapatnam suffered 90% burn injuries, Ansar Ulhak (39), who hails from Kolkata suffered 65% burns, Vanamadi Annavaram (40) from East Godavari suffered 30% burns, Jaswir Singh (46) from Agra suffered 45% burns, Juvin Joshi (24) from Ernakulam suffered 45% burns and Chintapalli Tandelu (48) from Srikakulam. The police said eight others were also injured in the mishap. All of them have been admitted to a private hospital in the city. The cause of the fire is yet to be ascertained, but sources said a cylinder pipe caught fire, while police sources said it might be an explosion of fuel tank. The vessel had gone to Single Point Mooring (SPM) for maintenance work. The accident took place while the work was being carried out. Meanwhile, a press release issued by Vizag Port Trust (VPT) said the fire erupted in the vessel at HPCL’s Single Point Mooring, a terminal where crude oil is handled. The VPT marine department was alerted about the accident around 11.25am and deployed four craft — Sea Lion Agile, Sea Lion Sentinel, Sardar Patel and Fire Float — for rescue operation. According to VPT, 13 of the crew were injured and shifted to hospital and six were rescued unhurt, but did not reveal how many were part of the crew. Indian Coast Guard vessel Rani Rashmoni, which was in the vicinity, was sent to coordinate rescue operations. The Coast Guard also deployed Samudra Pheredar and chopper C-432 for support. Coastal Jaguar was towed by a VPT tug to a safe location away from the SPM.
Russia’s Novatek wants to sell LNG from Arctic LNG-2 to India
Russia’s Novatek is interested in supplying liquefied natural gas (LNG) from its Arctic LNG-2 project to Indian companies, Russian Deputy Energy Minister Anton Inyutsyn was quoted as saying by the ministry’s website on Monday. Novatek plans to start producing LNG at Arctic LNG-2 in 2022-2023. The plant, which is expected to cost around $25.5 billion, will have an annual production capacity of 19.8 million tonnes. Novatek plans to retain a 60 percent stake in the project.
Reliance, BP joint venture to invest Rs 35,000 crore in KG basin
Reliance Industries and BP Plc will together invest Rs 35,000 crore for bringing to production three sets of natural gas fields in the Krishna Godavari basin block in the Bay of Bengal, Chairman and Managing Director Mukesh Ambani said on Monday. The three projects will help reverse the falling gas output from what was once the biggest gas-producing block in the country. In July, the two partners had announced investment sanction for development of their deepest natural gas discovery in the KG-D6 block. “With an expected peak production of one billion cubic feet per day, equivalent to nearly 30 percent of India’s current indigenous gas production, the joint venture will emerge as a major contributor to India’s energy security,” said Ambani while speaking at the group’s 42nd annual general meeting. With the world-class deep-water infrastructure in the east coast of India, the joint venture is uniquely positioned to monetize over three trillion cubic feet of discovered resources in the KG D6 block, he said adding the projects to develop these gas-fields are among the most complex being executed anywhere in the world. Ambani said the natural gas business will soon regain its pride of place in Reliance’s value-creation strategy. With Reliance de-emphasizing its shale gas business in the United States, the company is currently focused only on India. “In our coal bed methane blocks, we are focusing on augmenting production. The joint venture with BP will play a major role as a producer of natural gas,” he said.
Government planning for a wave of reforms in the natural gas sector
The government is planning to introduce a wave of reforms in the natural gas sector, aimed at the local discovery of prices and development of a national gas market. The oil ministry has prepared a Cabinet note that proposes snapping the power sector’s priority access to cheap local gas, setting up a gas trading platform to encourage market-discovery of prices, and hive off GAIL’s transportation unit to enhance third party access to its pipelines. At present, India produces just half of the gas it consumes, a government set formula determines rates for most local gas, and the absence of market price deters producers from investing in the country. By allowing marketing freedom to gas from new discoveries, the government has tried to address much of the investors’ concerns in recent years but officials think developing a free market was essential to sustained investment in the sector. Which is why the government wants to build a gas trading platform that can facilitate the market discovery of prices. A gas exchange will enhance trade transparency, boost consumer confidence, and increase market opportunities for suppliers, officials said. Government planning for a wave of reforms in the natural gas sector “But an exchange can work only if we have enough domestic gas to trade. Most of the gas is already allocated to priority consumers. We need to free up some gas,” an official said. Official guidelines bind producers to supply their output to certain consumers, mostly at rates based on a government-set formula. The oil ministry has, therefore, proposed to knock off the power sector, the biggest consumer of local gas, from the so-called priority list. It has proposed limiting the allocation to city gas (CNG vehicles and households) and the fertiliser sector, an official said. The power sector consumes about 31% of the local gas while the fertiliser and city gas sectors consume 24% and 22%, respectively. The proposal is likely to meet fierce opposition by the power ministry and generators. India has 25,000 MW of gas-based plants in total generation capacity of 356,000 MW.
GSPL pipeline plan gets boost from Jammu and Kashmir move
Gujarat State Petronet Ltd’s (GSPL) ambitious project of developing a natural gas pipeline project from Mehsana all the way up to Jammu and Kashmir is expected to get a major boost with revocation of special status to J&K under Article 370. The project is divided in two phases. Work on first phase connecting Gujarat and Punjab has been on. The second phase, covering Jammu and Kashmir, has been stuck for a long time. “Land acquisition — not permitted under Article 370 — was a major problem in Jammu and Kashmir,” according to a state government official. Now, land acquisition and infrastructure development will be smoother, he added. Also, the Central government’s plans for industrial development in Jammu and Kashmir will create a market for the clean fuel option. The J&K Gas Pipeline Act, 2014 with provisions of Right of User (RoU) needed amendments that got stuck with the state government for a long time, said another government official. “While some amendments were made last year, there was no provision for acquiring land to build gas terminals for storage purposes,” he added. The Centre’s decision to do away with the special status for Jammu and Kashmir paves way for the project as it will now fall under the Union government’s Petroleum and Minerals Pipeline (P&MP) Act, 1962. Officials say challenges of building pipelines in difficult terrains and its economic viability have to be taken into account before starting construction for second phase. The construction work for first phase to build a 1,670km gas pipeline from Mehsana to Bhatinda will begin in a month’s time, said an industry official. Contracts of about Rs 3,000-3,500 crore for laying pipeline infrastructure have already been awarded to companies like Kalpataru Power Transmission Ltd and Hyderabad-based Megha Engineering and Infrastructure Ltd. The first phase will be commissioned in 2020 following which construction for the second phase will begin. The pipeline project is a part of Prime Minister Narendra Modi’s plan for National Gas Grid. A consortium led by GSPL has formed a special purpose vehicle called GSPL India Gasnet Ltd to implement the project. GSPL has a 52% stake in the SPV, with Indian Oil Corp Ltd holding 26%, and Bharat Petroleum Corp Ltd and Hindustan Petroleum Corp. Ltd having 11% each. In 2011, Petroleum and Natural Gas Regulatory Board (PNGRB) had authorized Gujarat State Petronet Limited (GSPL), a subsidiary of the Gujarat government, to lay Bhatinda-Jammu-Srinagar gas pipeline.