Haldia Petrochem to invest Rs 62,714 crore to set up 12 MTPA refinery complex in Andhra
Kolkata-based Haldia Petrochemicals is planning to invest Rs 62,714 crore in setting up a 12 Million Tonne Per Annum (MTPA) refinery-cum-petrochemical complex near Kakinada in Andhra Pradesh. The proposed crude-to-chemical complex will produce refinery derivatives and petrochemicals for domestic sale and exports. It will also help in meeting the company’s primary feedstock requirement of Naphtha as well as Paraxylene, the company said in an application seeking clearance from the environment ministry. The project is expected to be set-up in A V Nagaram village, East Godavari district, Andhra Pradesh. The complex is likely to be commissioned in 60 months from zero date. It will employ 5,000 personnel during the construction phase and its peak manpower requirement would be in the range of 20,000 to 30,000 personnel. The refinery will be integrated with a downstream petrochemical complex with a 12 MTPA petroleum refinery and 1.6 MTPA of Ethylene equivalent petrochemical complex. “The proposed project has been conceptualized considering the integration with demand of PX and Naphtha within the group company and demand supply scenario of the downstream products,” HPL said. The product focus of the refinery will be production of petrochemical feedstock, different from a conventional refinery where main products produced are fuel-based. The company is looking at producing High-Density Polyethylene (HDPE), Mono-ethylene Glycol (MGE) and Poly Vinyl Chloride (PVC) among other petrochemical products. “The main product of the proposed refinery will be LPG, Naphtha, Paraxylene etc catering to the feedstock requirement of the petrochemical units and fuel generation from the refinery will be limited to the extent it can be sold in domestic market. However, depending on the volume, some amount of diesel may have to be exported considering low demand growth rate in domestic market,” HPL said. HPL manufactures commodity polymers like HDPE, linear low-density polyethylene (LLDPE), and polypropylene (PP) and other chemicals like benzene, butadiene among other polymers and chemicals. The company serves packaging, consumer durables, houseware, automobiles, furniture, container, and luggage manufacturers. HPL claims to be the third-largest player in the domestic polyolefins market after Reliance Industries and Indian Oil. India is a net importer of all petrochemical products, except Polypropylene. The demand for various petrochemical products is growing at a rate of 8-10 per cent with the bulk of the demand being met through imports.
U.S. making a mistake politicising oil -Iran oil minister
The United States has made a bad mistake by politicizing oil and using it as a weapon, Iran’s Oil Minister Bijan Zanganeh said in a parliamentary session on Tuesday, the Islamic Republic News Agency (IRNA) reported. “America has made a bad mistake by politicizing oil and using it as a weapon in the fragile state of the market,” Zanganeh said, according to IRNA. Oil prices on Tuesday hit their highest level since November after Washington announced all waivers on imports of sanctions-hit Iranian oil would end next week, pressuring importers to stop buying from Tehran and further tightening global supply. Zanganeh added that the United States will not be able to reduce Iran’s oil exports to zero. “With all our power, we will work toward breaking America’s sanctions,” Zanganeh said in parliament, according to the Iranian Students’ News Agency (ISNA). The United States on Monday demanded that buyers of Iranian oil stop purchases by May 1 or face sanctions, ending six months of waivers which allowed Iran’s eight biggest buyers, most of them in Asia, to continue importing limited volumes. The White House said after its Iran move it was working with Saudi Arabia and the United Arab Emirates to ensure oil markets were “adequately supplied” but traders worried about tight supplies. Zanganeh said the oil market is unpredictable and the announcement by the United States and its regional supporters intended to keep oil prices stable is a sign of their concern, ISNA reported. “You can’t be assured that enough oil can be produced to meet demand,” Zanganeh said, according to IRNA. “Because some regional countries announce production capacities higher than their real levels.”
Global oil markets adequately supplied: IEA
Global oil markets are adequately supplied and spare production capacity remained at comfortable levels, the International Energy Agency (IEA) said on Tuesday, while highlighting the need to avoid higher oil prices amid fragile global economic growth. The agency’s comments come against the backdrop of the United States tightening its sanctions on leading oil producer Iran. “Further tightening of sanctions on Iran will have an impact on its export capacity,” the Paris-based IEA said, adding Iranian shipments of crude and condensates are running around 1.1 million barrels per day (bpd), 300,000 bpd lower than March, and 1.7 million bpd lower than May 2018. The agency, which coordinates the energy policies of industrialised nations, said global spare production capacity has risen to 3.3 million bpd due to high compliance rate with the agreed supply cuts among the Organization of the Petroleum Exporting Countries and its allies. OECD oil inventories at the end-February were at 2.871 billion barrels, above the five-year average, IEA said, adding total oil supplies from the United States are expected to increase by 1.6 million bpd this year.
Greek J&P AVAX files lowest bid to build Bulgaria-Greece gas link
Greece’s J&P AVAX filed the lowest offer in a tender to design and build a gas pipeline between Bulgaria and Greece, project manager ICGB said on Tuesday. The company offered 144.85 million euros ($162.94 million) to build 182 km (113 mile) pipeline which Sofia hopes will become operational in 2020 to transport Azeri gas to Bulgaria and end its almost complete dependence on Russian gas supplies. A consortium of two Bulgarian companies and Italy’s Bonatti, which also submitted an offer in the tender, offered 229.3 million euros.
ExxonMobil signs 20 year LNG agreement with Zhejiang Energy
ExxonMobil, the largest publicly traded global oil and as firm, today said it has signed a sales and purchase agreement with Zhejiang Provincial Energy Group for Liquefied Natural Gas (LNG) supply. Under the agreement, Zhejiang Energy is expected to receive 1 million metric tons per annum of LNG over 20 years. “This sales and purchase agreement represents an important milestone and provides a solid foundation for our strategic partnership with Zhejiang Provincial Energy Group,” said Peter Clarke, senior vice president of LNG at ExxonMobil. He added that ExxonMobil shares Zhejiang Energy’s vision in developing a major LNG gateway in the Ningbo-Zhoushan region and it looks forward to continuing support for Zhejiang Energy during the construction, commissioning and operation of its Wenzhou LNG receiving terminal. ExxonMobil has been engaged in China’s energy industry since the late 1970s. The company said it expects to help meet China’s energy needs through its products, technologies, partnerships and investments.
Centre grants ONGC Terms of Reference to dig 40 hydrocarbon wells
The ONGC has been granted permission by the Centre to conduct environmental impact studies to dig 40 hydrocarbon wells in the Cauvery Delta. Express earlier reported that the public sector oil major had applied to the Union Environment Ministry, seeking Standard Terms of Reference (ToR) to conduct detailed Environment Impact Assessment. According to the official communication dated April 18, 35 wells will be dug in Cuddalore and five in Nagapattinam. Earlier last year, ONGC was awarded a new block in the Delta covering 731 sq.km in Cuddalore and Nagapattinam — 579 onshore and 152 offshore — for hydrocarbon exploration. ONGC officials confirmed that they were waiting for approval from the Tamil Nadu government. The block falls in the eastern part of Ariyalur-Puducherry sub-basin of Cauvery. Total exploration period for the block is six years, of which three (extendable by one more year) is for initial exploration and three (extendable for one more year) for subsequent exploration. Justifying the location of the proposed wells, officials recalled that hydrocarbon had been discovered in the Bhuvanagiri Formation at Madanam and Pandanallur fields, where they currently have commercial operations. Now, they have also been granted ToR for the extension of the Bhuvanagiri field. The Andimadam Formation, which falls in the area for which permission has been granted, “is a potential prospective play,” say officials. Only recently, environment ministry granted ToR for 27 wells of ONGC in Bhuvanagiri and Periyakudi fields and expansion in Cauvery Basin falling in Cuddalore and Tiruvarur districts. All the wells are onshore, requiring land acquisition. As per official records, approximately 1.82 hectares of land per well is proposed to be acquired on short term lease. Earlier this month, Express reported that Vedanta Limited and ONGC have proposed to drill 341 wells to hunt for hydrocarbon reserves in and around Tamil Nadu. Large tracts of lands in the Cauvery delta region is likely to come under the pump if the proposals are approved. Awaiting TN government approval ONGC officials confirmed that they were waiting for approval from the Tamil Nadu government to conduct the necessary assessments. The block falls in the eastern part of Ariyalur-Puducherry sub-basin of Cauvery. 35 wells will be dug in Cuddalore and five in Nagapattinam. Only recently, ToR was granted for 27 wells in Bhuvanagiri and Periyakudi fields
Lifting of Iran oil sanctions waivers set to push global crude prices higher
Global crude oil prices are set to rise amid curtailment of supplies led by the reduction in Iran’s crude exports by around 1 million barrel per day (mbpd) due to US’ latest decision to end sanction waivers and also an ongoing disruption of 1.1 mbpd of Libyan oil output amid local unrest. However, potential increase in OPEC+ crude supplies may mitigate the impact gradually, although with significantly curtailed global spare capacity. “We expect global oil markets to tighten further in the near term due to full curtailment of Iran’s oil exports post the US decision to end sanction waivers granted to eight importing countries, once the exemptions period expires on May 2 and the possibility of disruptions in crude supplies from Libya given its escalating unrest,” Tarun Lakhotia, Associate Director at research firm Kotak Institutional Equities said. He added that Iran’s crude exports of 1 mbpd may get fully curtailed in the coming months, as countries that currently import oil from Iran may not want to risk an imposition of sanctions by the US. Iran’s crude production is likely to fall to 1.8 mbpd, closer to the level of domestic consumption, from peak volumes of 3.8 mbpd in June 2018 and recent production of 2.7 mbpd in first quarter of 2019. Global oil markets have already tightened in the recent months due to voluntary reduction in supplies by OPEC+ and Canada, and restraints on Venezuelan crude exports by the US. OPEC+ may ease production cuts in the near term, as indicated by the US, to mitigate the loss of Iranian crude. However, it will still reduce the available spare capacity in a tight market. According to K Ravichandran, Senior Vice President at research and ratings agency ICRA, global oil prices could breach the $80 per barrel mark in the immediate aftermath of the US decision to end waivers. “1 mbpd (Iranian exports) is a sizeable reduction in supplies. While it can be offset by additional supply from OPEC+ it is coming at a time when there are ongoing disruptions in Libya and Nigeria,” he said. He also said that India may not have to worry about supplies immediately as additional oil imports can be sourced from other nations including Saudi Arabia and Kuwait. “Some Indian companies are already importing oil from the US. It is possible to ramp up those volumes too,” Ravichandran said. Meanwhile, global oil prices hovered near 2019 peaks in early trading on Tuesday after the US move to abruptly to end waivers by May. Brent crude futures were at $74.33 per barrel at 0051 GMT, up 0.4 percent from their last close and not far off 2019 highs of $74.52 reached on Monday.
India says fully prepared to take on oil imports challenge post lifting of sanctions waiver
India today made it clear it is fully prepared to take on the challenge on oil imports front posed by the latest US decision to end the waiver allowed to importing countries like India from importing Iranian crude oil amid sanctions. “The Government of India has put in place a robust plan to ensure that there is adequate supply of crude oil to Indian oil refineries from May 2019 onwards. There will be additional supplies from other major oil producing countries from different parts of the world,” the oil ministry said in a statement. It added that the Indian refineries are fully prepared without any problem to meet the national demand for petrol, diesel and other petroleum products in the country. US Secretary of State Mike Pompeo had on Monday announced that US will not renew waivers or extend waivers granted to eight nations for importing Iranian crude oil. “Maximum pressure on the Iranian regime means maximum pressure. That’s why the US will not issue any exception to Iranian oil importers,” Pompeo said. The waiver was up for renewal on May 2. The US refusal to extend sanction waiver on Iran oil sales has fuelled concerns in India over the possibility of a fuel price spiral for consumers and a worsening of the government’s fiscal arithmetic. India depends on imports for 82 per cent of its oil needs and Iran is among its top-five suppliers. The nation supplied over 23 million tonne of crude to India in 2018-19. Global benchmark Brent crude jumped by around 3 per cent to $74 per barrel on Monday, the highest since November 2018. The US’ move is likely to drain nearly 1 million barrels a day from the global market and help crude firm up further.
Middle East oil benchmark Dubai rises to multi-year high on Iran sanctions
Middle East crude benchmark Dubai jumped on Monday to the highest premium in more than five years ahead of an expected announcement by Washington to end U.S. sanctions waivers for Iranian oil buyers, according to trade sources and Reuters data. Stronger Middle East crude benchmark prices pushed up costs of Middle East and Russian crude that account for more than two-thirds of Asia’s imports and squeezed refiners’ margins. Cash Dubai’s premium to Dubai swaps, was at $1.79 a barrel, the highest since at least 2014, the data showed. DME Oman’s premium to Dubai swaps also touched $1.90 a barrel on Monday, the highest since October. The United States is expected to announce on Monday that buyers of Iranian oil need to end imports soon or face sanctions, a source familiar with the situation told Reuters, triggering a 3 percent jump in crude prices to their highest for 2019 so far. Middle East crude prices have started the month strong, boosted by purchases by several companies during a price assessment process by S&P Global Platts, and as Asia’s demand is set to rebound in third quarter when refineries ramp up runs after maintenance. A total of seven Upper Zakum crude cargoes were purchased by BP, Lukoil, Koch, Gunvor and Total so far this month during Platts window, trade data showed. Earlier, several grades of Middle East and Russian crude such as al-Shaheen and ESPO Blend have traded at their highest premiums in five to seven months while light sour grades from Abu Dhabi traded at their first premiums in six months. Buyers will have no choice but to pay more for alternative supplies if the United States decides to stop waivers for Iranian oil buyers, traders said.
Thailand’s EGAT considers 12 firms for LNG imports
State-owned Electricity Generating Authority of Thailand has narrowed its list of potential liquefied natural gas sources to 12 companies, for importing up to 1.5 million metric tonnes per annum for the first time as the government liberalizes the energy sector to boost competition. Thailand’s largest power producer, EGAT, expects to finalize purchasing agreements by June and begin liquefied natural gas (LNG) shipments by September this year, EGAT Director Viboon Rerksirathai said. EGAT buys gas from a state-owned unit of PTT Pcl, which is the nation’s sole gas supplier and LNG importer. The move comes as Thailand joins other Asian countries such as China where LNG imports have risen exponentially over the past few years, driven by strong economic growth and a push for cleaner air. Of the dozen companies, which include, Qatargas, Shell and Total SA, EGAT would select the firm that offers the lowest price. The LNG imports would be via Thailand’s existing Map Ta Phut LNG Receiving Terminal in the east of the country. Other firms being considered are Chevron Corp, Malaysia’s Petronas, and Japan’s Marubeni Corp.