Qatargas agrees on 22-year LNG supply deal with China
Qatargas said on Monday it had agreed on a 22-year deal with PetroChina International Co, a unit of PetroChina Co, to supply China with around 3.4 million tonnes of liquefied natural gas (LNG) annually, as the nation stepped up efforts to combat air pollution. The Qatari state-owned company will supply LNG from the Qatargas 2 project – a venture between Qatar Petroleum, Exxon Mobil Corp and Total – to receiving terminals across China, with the first cargo to be delivered this month. The deal allows flexibility in delivering LNG to Chinese terminals including those in Dalian, Jiangsu, Tangshan and Shenzhen, using the Qatargas fleet of 70 conventional, Q-Flex and Q-Max vessels, the company said. China requires LNG for its push to replace coal with cleaner burning natural gas, a way to reduce air pollution. After Beijing started the programme last year, China has overtaken South Korea as the world’s second-biggest buyer of LNG. China’s LNG imports may surge 70 percent to 65 million tonnes by 2020, according to consultancy SIA Energy. Last year, China imported a record 38.1 million tonnes, 46 percent more than the previous year. Meanwhile Qatar, the world’s biggest LNG producer, is seeking buyers for a planned expansion of its output. Mike Adams Authentic Jersey
Massive 15% natural gas price hike on anvil; households’ kitchen, auto fuel budget may take a hit
A natural gas price hike to the tune of a massive 15% may be on the cards, as the government has decided to raise the price of domestically produced natural gas to $3.50 per million metric British thermal units for the next six-month period, CNBC Awaaz reported citing sources. This could raise domestic cooking gas for households and CNG bills for automobile users. Earlier this year, the government raised domestic natural gas price by 6% to $3.06 per million metric British thermal units, applicable for the current six-month period Apr-Sep 2018. The revised prices are based on the government’s formula and calculated on gross calorific value basis. The 15% rise is indeed massive, and the the increase in prices of natural gas has a strong likelihood of it leading to rise in prices of PNG (piped domestic cooking gas) and CNG (auto fuel), as it will put pressure on margins of the retail fuel distributors, fertiliser makers and power producers, which use natural gas as feedstock. Fertiliser and power companies also import LNG (liquefied natural gas) in addition to buying the domestic gas, and pool the prices to calculate their overall costs. This may provide some cushion to their margins, as they would look to increase the mix of imported LNG, depending on its prices in the international open markets. The government had approved a new formula in October 2014 to set the price of the natural gas produced at the domestic fields and revise it every six months based on the movement in prices in the US (Henry Hub), the UK (National Balancing Point), Canada (Alberta) and Russia. The latest potential hike in natural gas prices is also seen to boost the profits of oil marketing companies ONGC and Oil India. According to a recent Jefferies report, though the contribution of gas business is less on the revenue and operational front, a $1 per mmBtu rise can lift the earnings per share of ONGC and Oil India by at least 10%. Ben Lovejoy Womens Jersey
Gasoil emerges as winner as India tweaks oil product yields
Refiners in India have strategically altered their oil products output to maximize gasoil yields, as new cokers and robust margins in international markets have provided them an opportunity to lift both output and exports of the middle distillate. Traders and analysts said the growth in gasoil production, which has risen by an unusually high rate of 8% year on year in the first seven months, would maintain a similar momentum for the rest of the year. But exports could slow during the rest of the year as domestic demand recovers after the monsoon season. “India’s gasoil exports have been rising this year as refiners have raised output of the product over gasoline due to attractive margins,” said Lim Jit Yang, director for Asia at S&P Global Platts Analytics. “Furthermore, India’s domestic gasoline demand was growing at a very strong pace of nearly 10% year on year over January-July, while gasoil demand growth was more modest at 6% over the same period. This also helped gasoil exports,” he said. The Asian gasoil swap crack — the spread between the front-month 10 ppm sulfur gasoil derivative and front-month Dubai crude derivative — is currently hovering at a three-month high, reflecting the strength in the gasoil market. At the Asian close Tuesday, the gasoil crack stood at $16.48/b, up from $15.97/b seen a week ago, and up 14% from the start of the month. MIDDLE DISTILLATE FOCUS On the production side, gasoil’s gain has been gasoline’s loss. India’s gasoil production rose by 171,000 b/d to 2.3 million b/d over January-July, a year-on-year growth of 8%. On the other hand, gasoline output in the same period rose by 31,000 b/d to 911,000 b/d, a year-on-year growth of only 3.5%. “There has been a significant shift in overall product yields, away from fuel oil to maximize middle distillates,” said Senthil Kumaran, senior oil analyst at Facts Global Energy. Cokers at Bharat Petroleum Corporation Limited’s Kochi refinery and Indian Oil Corporation’s Paradip refinery have ramped up to their full rates this year, while Chennai Petroleum Corporation had added a coker earlier this year as well. “This reduced fuel oil output, while boosting production of distillates. Temporary length in gasoil resulted in higher gasoil exports by India over H1 2018. Also, crude runs have been consistently rising since the beginning of this year, largely due to recent expansions at BPCL and stable operations at Paradip,” Kumaran added. India’s refinery runs averaged 5.2 million b/d over January-July, a growth of about 5.2% year on year. “Diesel yields have increased due to several coker additions. Stronger markets this year compared to gasoline has also incentivized refiners to maximize diesel production. This trend will continue through 2020,” said Nevyn Nah, oil products analyst at Energy Aspects. EXPORT OUTLOOK Analysts said the trend of higher gasoil production could continue in the near to medium term as domestic demand is expected to remain robust over the next year. India is scheduled to hold general elections in 2019, when demand for diesel normally shoots up. Gasoil consumption growth is expected to be particularly strong in Q4 2018, with provincial elections planned in some states. Analysts added that a force majeure at Reliance and ongoing maintenance at the Bina refinery of Bharat Oman Refineries would result in a pull back in gasoil supplies over the next few months. In addition, Nayara’s Vadinar refinery is expected to shut mid-November for maintenance. “With all these developments, we expect gasoil exports to trend lower moving forward,” FGE’s Kumaran said. Platts Analytics’ Lim said: “India’s demand for diesel is expected to pick up after the monsoon season, and exports of the product are likely to ease.” India’s domestic demand for diesel witnesses a seasonal downturn during the monsoon season, when traveling is reduced due to heavy rains and hydro power generation is used instead of diesel. Sean Weatherspoon Womens Jersey
IOC will commission Ennore-Manali LNG pipeline on schedule by end of 2018
Indian Oil Corporation (IOC) today said it has lined up Rs 220 billion capex plan for the current fiscal year and will commission the Ennore-Manali LNG pipeline on schedule by the end of the year. Sanjiv Singh, the chairman of the nation’s largest oil marketing company, said the board has approved a capex plan of Rs 220 billion for FY19, of which around Rs 60 billion will be towards upgrading refineries to meet BS-VI emission norms. Addressing reporters after the AGM here, Singh also said the company is confident of commissioning the over Rs 40 billion, the 1,170-km-long pipeline linking its Ennore LNP terminal near Chennai to Manali in Himachal in 2018. The over Rs 5,000-crore LNG terminal at Ennore will be commissioned as scheduled by October, he added. “More than 50 percent work on the pipeline is already completed and we have tied up with all our target customers in Manali and most of them in Chennai region as well, Singh said. On crude imports from Iran, Singh said there is no clarity how the sanctions will pan out from November 4 and accordingly they have tied up many national oil marketing companies to ensure that crude supplies are not disrupted. “We don’t procure crude from private suppliers. We have sounded out enough national oilcompanies for supplies to source oil depending on the impact of the US sanctions on Tehran,” he said. He also denied that IOC has reduced its intake from Iran as saying on a net-net basis there is no cut-down. “There could have been some fluctuations in some months but overall we are procuring as per our contracts,” said Singh. Giving a break-up of the capex plan, finance director AK Sharma told PTI that around Rs 60 billion will go into refinery upgrades to meet the BS-IV emission norms, Rs 40 billion into marketing of which half will be used to procure new LPG cylinders and around Rs 30 billion into new businesses like biofuels, and Rs 10 billion into Paradeep petrochemicals expansion among others. On fundraising plans, though Sharma said the company does not need any funds now, towards the end of the fiscal year, they will hit international bond markets along with a domestic debt market, as the firm has not tapped it for long. According to the annual report presented to the shareholders today, the company sought shareholders’ approval for raising around Rs 200 billion through an NCD issue this year. The company has around Rs 530 billion of debt as of June, of which 70 percent are forex loans. The chairman also said, IOC, which was the first oil company to set up an electric vehicle charging station a few years ago in Nagpur, will increase its footprint more. But he did not offer more details. On new businesses, especially after entering the city gas distribution arena on its own after the last month’s auctions, he said IOC is very bullish about this segment and will invest over Rs 150 billion into this vertical over the next three years. It can be noted that IOC has a joint venture with Adani group for city gas distribution and at the auctions last month it has on its own won rights to seven cities, including Coimbatore and Salem in Tamil Nadu and Guna in MP. Together with its JV partner Adani, it has marketing rights in nine more cities, including Allahabad. He also said in the medium term, the company expects around 15 percent profit to come from the gas business, and 15-20 percent from petrochemicals vertical. On the ethanol plant, Singh said the first 100 tons per day plant in Panipat, with an investment of Rs 5 billion, will be commissioned over the next two years. The company has also taken land for two more biofuel plants in UP and Gujarat, he added. Jake Rudock Womens Jersey
IOC eyes 52,000 fuel retail outlets in 3 years
State run-Indian Oil Corporation aims to almost double its fuel retail network to 52,000 outlets over the next 3 years from 27,000 now. IOC, India’s largest fuel retailer, accounts for 44% of the market despite the entry of private sector in the segment. “IOC is also investing in the retail segment. With over 50,000 new fuel stations and LPG distributorship coming up in the next few years, benchmarking to global standards and generating additional revenue streams from non-fuel business is an idea worth exploring by oil marketing companies,” chairman Sanjiv Singh said. The company’s executives said that the three state-run oil marketing companies are likely to add 50,000 fuel retail outlets over the next three years, of which 25,000 would be by IOC while the rest will be split equally between Bharat Petroleum Corporation and Hindustan Petroleum Corporation. This will help the company maintain its market share. “The company aims to double its refining capacity to 140 million tonne per annum by 2030, and has accordingly undertaken brownfield expansions at Chennai Petroleum Corporation, and is also preparing to set up a 9 million tonne per annum refinery at Nagapattinam in Tamil Nadu,” Singh said. IOC, which sources a substantial share of crude for running its refineries from Iran, is awaiting the Indian government’s decision on imports from the country. The US has told all countries, including India and China, to stop their oil imports from Iran by November 4 or face sanctions. “Iran imports are suitable for us as they offer us good terms and conditions. We will be perfectly fine with whatever the government will decide. We have other options available and the flexibility with other countries to source crude,” Singh said. IOC is upbeat on gas marketing business and has plans of investing on infrastructure to support it. “Investments close to Rs 20,000 crore are being envisaged in city gas distribution alone over the next five to eight numbers,” Singh said. Martavis Bryant Jersey
India’s Biggest Gas Utility Is Opening Up Its Pipeline Network
India’s largest natural gas pipeline operator has invited users to book surplus network capacity online as the country prepares to create a distribution hub that sets benchmark prices. State-run GAIL India Ltd., which controls 70 percent of the nation’s network, on Monday launched a website for online bookings of pipeline capacity to ship gas across the country. GAIL, with 11,400 kilometers (7,084 miles) pipelines, is investing 250 billion rupees ($3.6 billion) to add another 5,000 kilometers, Chairman Bhuwan Chandra Tripathi said. Lion’s Share Greater sharing of infrastructure will allow quicker trading and movement of natural gas supplies and boost utilization of GAIL’s pipelines. India, home to some of the world’s most polluted cities, is seeking to cut emissions and its oil import bill by doubling the share of gas in the energy mix to 15 percent. “This is going to pave the foundation for the gas hub,” Tripathi said. “The online booking allows transparent and hassle-free access and increases the ease of operations, and pushes the country toward a gas-based economy.” Why Gas-Gorging Asia Wants an End to Faraway Pricing: QuickTake GAIL already has more than a hundred customers using its pipeline network on an open-access basis. Once the gas hub is operational, it will increase utilization of the company’s pipelines, which are operating at half capacity, Tripathi said. The Petroleum and Natural Gas Regulatory Board, which has been tasked with setting up the gas-trading exchange, expects the hub to be operational by December. India’s cabinet of ministers is expected to approve the gas exchange plan “soon,” Oil Minister Dharmendra Pradhan said Monday, without elaborating. Todd Frazier Jersey
IOCL plans to invest Rs 18.23 bn to expand east India’s first LPG pipeline
Oil marketing major Indian Oil Corporation Ltd (IOCL) is planning to augment eastern India’s first pipeline, the Paradip-Haldia-Durgapur LPG Pipeline and its extension up to Muzaffarpur and Patna, with an investment of Rs 18.23 billion. “Under the augmentation of Paradip-Haldia-Durgapur LPG Pipeline, new facilities will be added at Paradip and Balasore. We expect to commission the project by December 2020. This line will be extended to Muzaffarpur and Patna”, said P C Choubey, Executive Director (pipelines division), IOCL. The LPG requirement at Patna and Muzaffarpur are now met by train wagons and bullets. The investment is in addition to Rs 13.30 billion LPG pipeline planned by IOCL, the first in eastern India and proposed from Paradip to Durgapur for transportation of LPG from Paradip refinery, Choubey added. The Paradip-Haldia–Durgapur LPG pipeline will cater to the LPG demand of Odisha, Jharkhand and West Bengal and originates from Paradip. The pipeline will have pump stations at Paradip and Haldia and delivery stations at Balasore (Odisha), Budge Budge, Kalyani and Durgapur (West Bengal). IOCL has already commissioned the Paradip-Balasore section of the pipeline. “With the commissioning of 157-km Paradip-Balasore section pipeline, construction of pump station at Paradip and delivery station at Balasore, the road transportation of LPG from Paradip is eliminated, thereby reducing carbon emissions and traffic congestion,” sources said. Similarly, IOCL has already started work on laying of its Rs 23.21 billion Paradip-Hyderabad pipelines. It has already commissioned its Rs 18 billion Paradip-Raipur-Ranchi pipeline (PRRPL) for transport of products from Paradip refinery. IOC’s 15-mtpa capacity refinery at Paradip is spread over an area of 3,345 acres with an estimated cost of Rs 345.55 billion. The refinery can process 100 per cent high-sulphur and heavy crude oil to produce various petroleum products, including petrol and diesel of BS-IV quality, kerosene, aviation turbine fuel, propylene, sulphur, and petroleum coke. It is also designed to produce Euro-V premium quality motor spirit and other green auto fuel variants for export. Nathan Shepherd Authentic Jersey
Nepal, India discuss oil and gas co-operation
Nepal and India on Tuesday held a meeting on a range of bilateral trade related issues including oil and gas co-operation between the two countries. Visiting Minister Commerce, Industries and Supplies Matrika Prasad Yadav led the Nepali team and Minister of Petroleum and Natural Gas of India, Dharmendra Pradhan, headed the Indian delegation during the meeting held at Shastri Bhawan. The meeting reportedly held discussions on feasibility study for setting up a gas pipeline, along with the under construction Mahottari-Amlekhgunj Petroleum Pipeline, for supplying cooking fuel to Nepal. Nepal buys all of its cooking gas needs from India, and the fuel is supplied to through gas bullets from refineries at Haldia, Panipat and Paradip. Nepali side has been saying that the laying of pipeline will cut the supply expenditure by gas bullets and will also end the problem of obstruction in supply. Nepal imports 25,000 tons of cooking gas in a month. Two years ago Nepal Oil Corporation (NOC) had formally requested the Indian Oil Corporation for setting up gas supply pipeline. During Prime Minister Oli’s India visit in April, PM K P Sharma Oli and Indian Prime Minister Narendra Modi had jointly launched the India-Nepal petroleum products pipeline from Motihari to Amlekhgunj. The 69-km long pipeline will supply 20,00,000 tons of oil annually. The pipeline project is expected to complete in two years. Likewise, the meeting also discussed the supply of natural gas for opening chemical fertilizer factory in Nepal in a bid to resolve problem of chemical fertilizer in Nepal. Mike Schmidt Authentic Jersey
Modi govt putting ‘pressure’ to stop GSPC from being declared bankrupt: Congress
The Congress on Monday claimed that public-sector Gujarat State Petroleum Corporation (GSPC) owes Rs 12,000 crore in loans to various banks, and accused the Narendra Modi government of trying to prevent the company from being declared bankrupt. Senior Congress leader Jairam Ramesh claimed at a press conference that a Rs 20,000-crore scam has come to light in GSPC, 13 years after then Gujarat Chief Minister Narendra Modi announced in 2005 the discovery of a natural gas block in the Krishna-Godavari basin. He cited two reports of the Comptroller and Auditor General (CAG) that noted that GSPC took loans of Rs 20,000 core from 15 banks and gave contracts for drilling to “four-five companies”. Money was spent but gas was not found and today GSPC is in a financial state that it needs to be referred to the Insolvency and Bankruptcy Code, 2016, the Congress leader alleged. “Last year in August, under Prime Minister Narendra Modi’s pressure, ONGC was forced to buy GSPC gas block and GSPC got a relief of about Rs 8,000 crore. It still has to pay Rs 12,000 crore to banks,” Ramesh alleged. He also cited the February 2, 2018, Reserve Bank of India (RBI) circular, under which if a company on March 1, 2018 owes banks more than Rs 2,000 crore and if it defaults, it should be declared bankrupt after 180 days. Ramesh claimed that for the first time in 70 years, the cental government has filed an affidavit in the Allahabad High Court against the RBI circular. Noting that the 180-day window for GSPC ends today, Ramesh said all eyes were on State Bank of India to which the corporation owes over Rs 1,200 crore as to whether it would declare GSPC bankrupt or succumb to “government pressure”. “Does State Bank of India have the courage to declare GSPC bankrupt,” he asked. Efforts to get a response from GSPC authorities did not yield results. Miles Wood Authentic Jersey
Vedanta wins big under India’s first mega oil & gas auction, bags 41 blocks
Billionaire Anil Agarwal-owned Vedanta Resources has bagged 41 of the 55 blocks put on offer under India’s maiden oil and gas auction held under the new Open Acreage Licensing Policy (OALP), information shared by upstream regulator Directorate General of Hydrocarbons (DGH) showed. Vedanta had put in bids for all the 55 blocks on offer. Oil India Ltd (OIL), the state-owned petroleum explorer, which had put in bids for 22 blocks, won nine blocks. “We are happy with the allotment of the new blocks after the first round of Open Acreage Licensing Policy (OALP) and thank government for placing their faith in us. We will work hard to make the best of this opportunity. We are an energy deficient country and policies like OALP will held reduce country’s import dependence for oil from around 80% now to 67% by 2022, in line with PM’s vision,” Anil Agarwal, Chairman of Vedanta Resources said in a statement. Oil and Natural Gas Corporation (ONGC), the country’s largest oil and gas producer, had put in bids for 37 blocks and won two blocks. Hindustan Oil Exploration Company (HOEC), the largest private sector producer of oil and gas in the North-East, had put in bids for two blocks and won one block under the auctions. Bharat Petroleum subsidiary Bharat PetroResources Limited (BPRL) won one block and GAIL (India), state-run gas transmission utility, won one block. Of the nine domestic companies which participated in the technical bidding process, five were public sector units including ONGC, Oil India, GAIL (India), IOC, BPRL and four private companies including Vedanta, Selan, HOEC and Sun Petro. Selan Exploration Technology Limited and Sun Petro did not win any blocks under the auction. The oil ministry had made OALP auction live on 1 July last year, offering over 85 percent of the country’s 3.14 million square Kilometres of hydrocarbon sedimentary area under a new bidding mechanism – Open Acreage Licensing Policy (OALP) — and a revamped Hydrocarbon Exploration Licensing Policy (HELP). DGH had received 57 Expression Of Interests (EOI) and subsequently 55 blocks were cleared for bidding after eliminating areas that are under no-go zone or overlapping with existing mining lease. Of the 110 e-bids received for 55 acreages, 92 were received for onshore blocks and 18 for offshore blocks. Most of the blocks put on offer by DGH received an average of two bids with two blocks from Cambay basin in Gujarat — CB-ONHP-2017/11 and CB-ONHP-2017/12 — receiving three bids each. Cambay block CB-ONHP-2017/1 and Rajasthan block RJ-ONHP-2017/6 received only one bid each from Vedanta Ltd. The 55 blocks on offer were spread across the sedimentary areas including 19 in Assam-Arakan, 2 in Mumbai Offshore, 11 in Cambay, 9 in Rajasthan, 5 in KG, 3 in Cauvery, 2 in Kutch, 2 in Saurashtra, and one each in Himalayan Foreland and Ganga basin. Ray Nitschke Womens Jersey