Odisha: HPCL to soon start work for constructing new LPG bottling plant
Hindustan Petroleum Corporation Limited (HPCL) will start work very soon for construction of a LPG bottling plant at Rayagada with an investment of Rs 91 crore. The plant will be ready by September 2020, official sources said. The state-owned company has a bottling plant at Jatni in Khurda district. After completion of Rayagada plant work, it will have two bottling plant in the state. Union petroleum minister Dharmendra Pradhan will lay foundation stone of the project on Tuesday. The LPG bottling plant will come up on 21 acres of land near Rayagada railway station. The plant will have the capacity of filling42 lakh cylinders per year. Once commissioned, the plant can supply LPG cylinders to the consumers in 11 districts of the state- Balangir, Kalahandi, Sonepur, Koraput, Malkangiri, Nabarangapur, Boudh, Gajapati, Kandhamal, Rayagada and Nuapada. “The Rayagada plant will play a major role in catering to the massive increase in demand of LPG from 1.06 lakh per month in 2014 to 2.06 lakh per month in 2019, in these 11 districts,” said Dharmendra Behura, HPCL’s deputy general manager (LPG Bhubaneswar region). He said HPCL has 26.64 lakh customers as on February 1 and consume about 1.3 crore cylinders in a year. This consumption is expected to increase to 1.6 crore cylinders by 2020. With the LPG demand growing in the state particularly in the western and south-western Odisha, the company took a decision to set up such plant in Rayagada town considering the logistics advantage of the location, he added. Presently, state has 76.65 lakh LPG consumers as on February 1. Official sources said the demand for packed LPG in Odisha was 3.2 crore cylinder last year, but it may touch 4.3 crore cylinders by 2020. Oil marketing companies including HPCL, Indian Oil Corporation Limited and Bharat Petroleum have LPG bottling plants at Balasore, Jharsuguda, Khurda and Jatni. Apart from Rayagada, the companies will also set up their plants at Bhubaneswar and Balangir. With the commissioning of three new plants, Odisha will have a total of 7 LPG plants and its capacity will be about 4.06 crore cylinders per annum from 2.8 crore cylinders. Apart from that, the Union minister will inaugurate three foot over bridges in Rayagada, Ladda and Jimidipeta stations. East Coast Railway has spent Rs 2.44 crore for construction of a FOB with ramp in Rayagada, Rs 1.12 crore each for Ladda and Jimidipeta stations respectively.
PM Modi to launch infrastructure projects worth Rs 33,000 crore
Prime Minister (PM) Narendra Modi will either inaugurate or lay foundation stones for several infrastructure projects worth around Rs 33,000 crore at Begusarai on Sunday. The projects for which foundation will be laid include expansion of production capacity of Barauni refinery from 6 million metric tonnes to nine million metric tonnes per annum, setting up an amonia-urea fertilizer complex at Barauni refinery, expansion of Paradip-Haldia-Durgapur LPG pipeline up to Patna and Muzaffarpur, sewerage projects worth Rs 452.33 crore, Patna metro rail project, establishment of medical college at Chhapra and upgradation of government medical colleges at Bhagalpur and Gaya. The PM will inaugurate 415km-long Jagdishpur-Haldia-Dhamra pipeline project, Patna City Gas Distribution project, phase 1 of Patna riverfront development project, Ranchi-Patna weekly air-conditioned train and electrification of Biharsharif-Daniyawan, Fatuha-Islampur and Sugauli-Raxaul rail sections. Governor Lalji Tandon, CM Nitish Kumar, Union ministers Ram Vilas Paswan, Ravi Shankar Prasad, Giriraj Singh, R K Singh, Ram Kripal Yadav and Ashwini Kumar Chaubey will also attend the event. The PM is scheduled to address the audience around 12pm. This will be the second time that PM Modi will share dais with CM Nitish after the latter’s return to the NDA in July 2017. The two had earlier shared the stage at Mokama on October 14, 2017 when PM Modi had laid foundation for infrastructure projects worth Rs 3,769 crore. “Though it is a sombre moment for the entire country, development work cannot stop. Hence, PM Modi will launch projects worth Rs 33,000 crore, which will benefit state and the entire eastern India. Some projects, including expansion of Barauni refinery, are part of PM’s special package for Bihar,” deputy CM Sushil Kumar Modi told TOI, adding Bihar has ushered in a new era of manifold development with ‘double engine’ of NDA government at the Centre and in state. The expansion of Barauni refinery is expected to increase the demand of petroleum products in eastern India. According to sources, the Barauni fertiliser plant of Hindustan Fertilizers Corporation Ltd (HFCL) has been closed since 1999, but on July 13, 2016, the Union cabinet had approved plans for revival of HFCL’s Barauni, Sindri and Gorakhpur plants through a special purpose vehicle (SPV) of the NTPC, Coal India Limited and the Indian Oil Corporation (IOC) for setting up a gas-based ammonia-urea plant of 1.27MTPA capacity at an estimated expenditure of Rs 6,000 crore each. Later, 480 acres of land of Barauni fertiliser unit was transferred to Hindustan Urvarak and Rasayan Ltd (HURL) on lease for reviving the plant. Another salient feature of the revival of Barauni refinery is setting up of an aviation turbine fuel hydro-treating unit, which is aimed at fulfilling the demand of aviation fuel in Bihar and Nepal.
High-level panel for reverting to older system of auctioning oil blocks
Two years after the government shifted to revenue sharing contracts for oil and gas block auctions, a high-level panel has suggested reverting back to older system of awarding areas in most basins based on exploration commitment. The six-member panel, headed by NITI Aayog Vice Chairman Rajiv Kumar, which was formed on directions of Prime Minister Narendra Modi, in its report submitted on January 29 stated that “unexplored areas in Category II & III basins be bid out exclusively based on exploration work programme”. “No revenue or production sharing other than payment of statutory levies (including royalty)” should be the criteria, it said. “However, in case of windfall gain defined as revenue of more than USD 2.5 billion in a financial year from the block, then 50 per cent sharing of incremental revenue above USD 2.5 billion.” The BJP-led NDA government had two years back moved from production sharing contracts, where acreage for exploration of oil and gas was allocated to firms offering the largest work programmes (such as carrying out seismic survey and drilling of wells), to revenue sharing contracts, where the firm offering highest revenue to the government was given the blocks. The move to revenue sharing was contrary to most of the industry players being against the new regime. India has 26 sedimentary basins measuring 3.14 million square kilometers. These are classified into four categories: Category-I basins where commercial production has been established like Cambay, Mumbai Offshore, Rajasthan, Krishna Godavari, Cauvery, Assam Shelf and Assam-Arakan fold belt; Category-II basins with known accumulation of hydrocarbons but no commercial production so far such as Kutch, Mahanadi-NEC (North East Coast), Andaman-Nicobar and Kerala-Konkan-Lakshadweep. The category-III basins have hydrocarbon reserves that are considered geologically prospective such as in Himalayan Foreland basin, Ganga Basin, Vindhyan basin, Saurashtra basin, Kerala Konkan basin, Bengal basin; and Category-IV which are the ones having uncertain potential which may be prospective by analogy with similar basins in the world. These include Karewa basin, Spiti-Zanskar basin, SatpuraSouth RewaDamodar basin, Chhattisgarh basin, Narmada basin, Deccan Syneclise, Bhima-Kaladgi, Bastar basin, Pranhita Godavari basin and Cuddapah basin. The committee included Cabinet Secretary P K Sinha, Economic Affairs Secretary Subhash Chandra Garg, Oil Secretary M M Kutty, NITI Aayog CEO Amitabh Kant and ONGC Chairman and Managing Director Shashi Shanker. The operators in Category II & III areas be given more concessions such as full marketing freedom to expedite production. “India’s import dependence on crude oil and natural gas has been a source of big concern to our government. While we have taken a large number of measures to moderate the increasing demand through the usage of bio-fuel and alternate technologies, urgent action is needed to increase hydrocarbon production to reduce imports,” Minister Piyush Goyal had said in his budget speech in Lok Sabha on February 1. He had stated that a high-level inter-ministerial committee has made several specific recommendations, including transforming the system of bidding for exploration, changing from revenue sharing to exploration programme for Category II and III basins. “The government is in the process of implementing these recommendations,” he had stated. The government has formed a group of ministers to process the recommendations of the panel, sources said.
Indian Oil signs first annual deal to buy up to 3 mln T U.S. oil
Indian Oil Corp, the country’s top refiner, has signed its first annual deal to buy up to 3 million tonnes or 60,000 barrels per day of U.S. oil, its chairman Sanjiv Singh said on Monday. State-run IOC had previously purchased U.S. oil from spot markets and signed a mini-term deal in August to buy 6 million barrels of U.S. oil between November to January. Singh said the annual contract will begin from April. He declined to give the name of the seller and pricing details citing confidentiality.
Berlin woos US in Europe gas battle
Germany will put on a show of unity with the United States Tuesday in talks on importing natural gas, as Berlin battles accusations an under-construction pipeline deepens European energy dependence on Russia. Economy Minister Peter Altmaier will meet the US deputy energy secretary, Dan Brouillette, Tuesday morning at a conference his ministry is hosting on liquid natural gas (LNG). “Germany and the US share an interest in secure and dependable energy supplies,” Altmaier said in a statement Monday. “With LNG we can get gas from even more suppliers and increase our security of supply.” Economy ministry sources told AFP Altmaier will unveil a policy paper proposing regulatory changes to allow easier imports of the gas. LNG as a potential alternative to Russian gas became a hot topic as construction on the Nord Stream 2 pipeline got under way last year. The pipeline will double the capacity of an existing link between Russia and Germany, and combined with the planned Turkstream connection could remove the need to pump gas to Europe via Ukraine. Kiev fears eliminating its role as a transit country will expose it to further aggression from Moscow, after Russia annexed the Crimean peninsula in 2014 and backed separatist rebels in Ukraine’s east. Meanwhile eastern EU member states including Poland and the Baltic nations, backed by the US, have complained the pipeline also undermines their security. “We aren’t fundamentally against Russian gas in Europe. But we’re against too much Russian gas driving our partners into dependency,” American ambassador to Germany Richard Grenell told the Welt am Sonntag newspaper. Some 16 of the EU’s 28 member nations share Washington’s fears, he added. – Visible splits – Chancellor Angela Merkel has always dismissed such fears, describing Nord Stream 2 as a “purely business” project. On Friday she reiterated that “Germany has the right to secure its energy supply in a diverse way”. “That includes Russian natural gas, but not exclusively… we’ve made it clear that in future we will land LNG in Germany.” Earlier last week the intra-EU battle came to a head, when France said it would vote for common oversight of the pipeline — potentially allowing opposing member states to strew obstacles in its path. But Paris agreed at the last minute to leave the responsibility with Germany. A near-unanimous final vote in favour of the compromise revealed “growing displeasure among the EU states over the attempted US influence”, a European diplomat told AFP Friday on condition of anonymity. The Kremlin capitalised on the failure of American lobbying, as spokesman Dmitry Peskov accused Washington of “underhanded competition” by trying to encourage Europeans “to buy more expensive American gas”. Altmaier said Monday his meeting with Brouillette was simply an opportunity to “discuss the development of the LNG import market with companies and energy industry federations” from both sides of the Atlantic. “Competitive prices” for gas were a precondition of any import business, he underlined.
Punjab inks deal to turn paddy straw into biofuel
To put a check on stubble burning and boost renewable energy generation, the Punjab government joined hands with Delhi-based Virgo Corporation for a Rs 630 crore biofuel project. The comapny will use the technology provided by the US-based firm Honeywell to extract bio jet fuel from rice husk. It would set up a rapid thermal processing plant, which will provide over 150 direct and 500 indirect jobs. Punjab chief minister Amarinder Singh said the project would help in addressing the problem of the environmental pollution due to stubble burning besides providing additional income to farmers by helping turn the unmanageable agro-waste into raw material for producing bio fuel.
Govt allows export of biofuels from special economic zones, EoUs
The government has allowed export of biofuels from special economic zones (SEZs) and export-oriented units (EoUs) with certain conditions, according to a notice of the directorate general of foreign trade. In August 2018, the government imposed restrictions on export of biofuels for non-fuel purposes. After this restriction, exporters operating from SEZs and EoUs made representations to remove this prohibition stating they only use imported material for export of final product. They also informed government authorities that SEZ units have been granted letter of approval for export of biofuels and EoU units have obligations to fulfil under an export promotion scheme. “Considering the hardship faced by the trade community and the fact that production of biofuels in EoU/SEZ would be from imported feedstock, therefore, it would not impact the domestic production/consumption. Hence, the restriction as applicable to DTA (domestic tariff area) may not be extended to EoU/SEZ,” the DGFT notice said. SEZs and EoUs are export-oriented units outside the ambit of domestic customs laws. “Members of trade and industry are informed that export of biofuels for non-fuel purposes from EoU/SEZ will be regulated” under certain rules of SEZs and foreign trade policy, it added. It said that the feedstock for production of biofuel for export from these areas should be from imported sources only. biofuels include ethyl alcohol, petroleum oil and oils obtained from bituminous minerals, bio-diesel and mixtures. Before August 2018, exports of these items were allowed without any restrictions. India exported ethyl alcohol worth $276.35 million in 2017-18 as against $224 million in the previous fiscal. Similarly, export of petroleum oil and oils obtained from bituminous minerals increased to $8 million in 2017-18 from $0.54 million in the previous fiscal. Biodiesel and mixtures shipments rose to $5.36 million in the last financial year from $2.73 million in 2016-17. Last year, the directorate had also imposed restriction on import of biofuels including ethyl alcohol and other denatured spirits, bio-diesel, petroleum oils and oils obtained from bituminous minerals other than crude.
UK’s Centrica, Tokyo Gas sign deal for LNG from Mozambique project
Centrica and Tokyo Gas have signed an agreement to jointly buy 2.6 million mt/year of LNG from Mozambique LNG, UK-based Centrica said on Tuesday. The move follows a non-binding deal signed in June 2018, and marks an important step towards the final investment decision by the Mozambique Area 1 joint venture partners, expected for the first half of 2019. The LNG will be delivered ex-ship (DES) to either Europe or Asia, from the start-up of production until early 2040. With the deal, the companies want to take advantage of Mozambique’s central location between Europe and Asia, whose gas markets have different supply and demand fundamentals. The agreement also represents the first long-term LNG procurement contract in Africa for both Tokyo Gas and Centrica, which is in line with their plan to diversify their respective supply portfolios. The deal will improve liquidity and further develop the global LNG market, Centrica said. Mozambique LNG is a planned two-train 12.9 million mt/year project. Partners in the project include Anadarko (26.5%), Mitsui (20%), and with lower stakes, ONGC Videsh, Empresa Nacional de Hidrocarbonetos (ENH), Bharat PetroResources , PTT Exploration & Production and Oil India. Last week, Anadarko Petroleum agreed to sell 1.5 million mt/year from Mozambique LNG to China’s CNOOC for a period of 13 years.
Essar Oil UK acquires BP strategic assets to drive growth
* ESSAR OIL UK GROUP ACQUIRES BP STRATEGIC ASSETS TO DRIVE FURTHER GROWTH * TO BUY STAKE IN UKOP PIPELINE, A SHARE OF CONTRACTUAL JV AND A 100 PERCENT INTEREST IN NORTHAMPTON TERMINAL * ESSAR’S TOTAL INVESTMENT IN THE UK NOW STANDS AT $1 BILLION * REMAINS COMMITTED TO FURTHER U.K. INVESTMENT * CONFIRMED PLANS TO GROW ITS NETWORK TO 400 RETAIL SITES OVER THE NEXT FIVE YEARS
Adani, IOC, GAIL among 225 bidders for city gas licences in 50 cities
As many as 225 bids by companies such as Adani Gas, Indian Oil Corp (IOC), Torrent and GAIL Gas were received on Tuesday at the close of bidding for city gas licences for 50 cities, official sources said. Without disclosing the names of bidders, the Petroleum and Natural Gas Regulatory Board (PNGRB) said “about Rs 50,000 crore” of investment would be plowed in the cities offered for bidding for a licence to retail CNG to automobiles and piped cooking gas to households kitchens. The cities on offer included Gwalior in Madhya Pradesh, Mysore in Karnataka, Ajmer in Rajasthan and Howrah in West Bengal. “About 225 bids were received in respect of all the 50 geographical areas (GAs) offered in the 10th City Gas Distribution (CGD) bidding round. The technical bids would be opened between February 7 and 9,” PNGRB said in a statement here. PNGRB had offered 50 geographical areas (GA), carved out by clubbing adjoining districts in 14 states, in the 10th round of bidding for city gas licences. Bidders were asked to quote the number of CNG stations to be set up and the number of domestic cooking gas connections to be given in the first eight years of operation. Also, they have to quote the length of pipeline to be laid in the GA and the tariff proposed for city gas and compressed natural gas (CNG), according to PNGRB. The GAs, PNGRB said, cover 124 districts – 112 complete and 12 part – in 14 states and extends CGD coverage of 18 per cent of India’s geographical area and 24 per cent of its population. The bid round comes within months of the close of the 9th round, which was the biggest ever city gas distribution licensing round where 86 permits for selling CNG and piped cooking in 174 districts in 22 states and union territories were offered. The government is targeting raising share of natural gas in the primary energy basket to 15 per cent from current 6.2 per cent, in the next few years and the bid rounds are aimed at fulfilling that objective. They are also aimed at meeting Prime Minister Narendra Modi’s target of giving piped cooking gas connection to 1 crore households, roughly triple the current size, by 2020. Cities offered in the 10th round include Nellore in Andhra Pradesh, Muzaffarpur in Bihar, Kaithal in Haryana, Mysore and Gulbarga in Karnataka, Allapuza and Kollam in Kerala, Ujjain, Gwalior and Morena in Madhya Pradesh, Jhansi and Basti in Uttar Pradesh, Firozpur and Hoshiarpur in Punjab, Ajmer and Jalor in Rajasthan, Nainital in Uttarakhand and Darjeeling and Howrah in West Bengal. Companies having a net worth of not less than Rs 150 crore could bid for GAs with a population of 50 lakh and more while the same for GAs with a population of 20-50 lakh has been proposed at Rs 100 crore. The net worth eligibility goes down with population, with a Rs 5 crore net worth firm being eligible to bid for GAs that have less than 10 lakh population.