BPCL to expand storage capacity of Cherlapalli LPG bottling plant
State-owned oil and gas giant Bharat Petroleum Corporation Ltd (BPCL) will be expanding the storage capacity of its Cherlapalli LPG bottling plant, said a senior official of the company on Monday. “We are expanding our storage capacity at the bottling unit and will be adding 1,200 tonnes to the current 1,900 tonnes. This 1,200 tonnes is under construction and is expected to be completed by January-February next year,” BPCL state head (LPG) S Dhanapal said here on Monday. The company, which caters to 22 lakh individual LPG customers in Telangana, added 2 lakh connections last fiscal. This year, thanks to Ujjwala Scheme, it has been able to provide over 1.5 lakh connections in the state. “This year, we will be able to provide around 2.5 lakh new connections in the state,” he added. Dhanapal also spoke about the digital initiatives of the company and said it had launched the Bharatgas mobile app last year. He said currently only 2% of its customers use the app and that the company would like more people to make use of it for a hassle free experience while making payments, applying for a new connection, among others. Darryl Sittler Womens Jersey
India’s first Biofuel flight takes off
India’s first Biofuel-powered flight was successfully tested for domestic operations on Monday between Dehradun and New Delhi. The Bio-fuel is expected to reduce India’s dependency on Aviation Turbine Fuel (ATF) and help bring down air fares. The SpiceJet aircraft was flagged off by Uttarakhand Chief Minister, Trivendra Singh Rawat, and was received in New Delhi by Union Ministers of Road Transport and Highways, Nitin Gadkari, Petroleum and Natural Gas Dharmendra Pradhan, Civil Aviation Suresh Prabhu, and Science and Technology, Harsh Vardhan. Minister of State for Civil Aviation, Jayant Sinha, Chairman and Managing Director, SpiceJet Ajay Singh, and senior government and aviation officials were also present at the occasion. “On August 10, Prime Minister Narendra Modi announced the new Biofuel policy and today we have successfully implemented it in the aviation sector. This is a great achievement for clean energy, Biofuel energy and aviation industry. The Petroleum Ministry will soon come up with a new BioATF policy,” Petroleum Minister Dharmendra Pradhan told ANI. He added that ATF price is the key component in the aviation industry, and in the coming days, India is hoping to reduce its import dependency in this area. “In the emerging aviation industry, this will be beneficial for everybody since it is not only economical but also environment-friendly. It would help generate employment and additional income for the farmers,” Pradhan said. “The GST (Goods and Service Tax) on Bio-diesel has been reduced to 12 per cent from 18 per cent. On Ethanol it has been reduced to 5 per cent. Last year, we bought 35 billion of Ethanol, and it would increase. There would also be an increase in the business of Bio-diesel and Bio-CNG (Compressed Natural Gas). We have achieved the most challenging aspect that is to find a substitute for the ATF. And, in the coming days, there would be a rise in bio-energy from all sides, be it ATF, transportation liquid fuel, or CNG,” Pradhan added. Speaking on the effects of Biofuel on aviation fuel prices, Road Transport and Highways minister Nitin Gadkari said the government is working to bring down the cost of this fuel. “It is Rs 70 per litre today. This would be reduced to Rs 55/litre soon and the manufacturing of aviation fuel will increase in India. There is already the market of Rs 300 billion. Tribals and farmers will get jobs from this process. We will increase the productivity using biotechnology. We had a discussion with the Petroleum Minister on making a special policy on Biofuel ATF and then bringing it in the cabinet,” Gadkari said. Minister of Civil Aviation Suresh Prabhu emphasised that the use of alternative fuel would benefit the consumers. “We import oil in large quantities and it is consumed by the whole transportation sector. Biofuel would reduce the quantity of our imports, emission of greenhouse gases, and would further benefit the consumers,” Prabhu told ANI. Expressing happiness over the success of the test flight, Chairman and Managing Director of SpiceJet, Ajay Singh said that this will eventually help in bringing down the air fares. “This fuel is low cost and helps in significantly reducing carbon emissions. It has the potential to reduce our dependence on traditional Aviation Fuel by 50 per cent on every flight and bring down air fares. India is the fastest growing aviation market in the world today and it is our responsibility to grow using clean and sustainable technologies,” said Singh. Made from Jatropha crop, Biofuel has been developed by the Council for Scientific and Industrial Research-Indian Institute of Petroleum (CSIR-IIP), in Dehradun. It has been recognised by American Standard Testing Method (ASTM) and meets the specification standards of Pratt and Whitney and Bombardier for commercial application in aircraft. SpiceJet had last year placed orders for 205 Boeing 737 Max fuel-efficient planes that are expected to reduce fuel consumption by about 15% and will leave 40% lesser noise footprint. SpiceJet said that the company intends to use the mixture of 75% ATF and 25% Biofuel in its operations. ArDarius Stewart Authentic Jersey
GAIL’s online gas portal to boost transparency
The launch of an online portal by GAIL (India), allowing third-party access to its natural gas pipeline network, would ensure transparency and permit companies to understand the infrastructure further, analysts said on Tuesday. GAIL, India’s biggest gas marketing and trading firm, launched an online portal on Monday for companies to book natural gas pipeline capacity. The state-run utility, which operates more than 11,400 kilometres of natural gas pipelines across various parts of India, has been providing third-party access to natural gas pipelines since 2004. GAIL has served about 100 to 150 customers over the past few years, and, this would be the first time the company has taken the process online. “It’s a positive step towards introducing further transparency into the market,” said Nicholas Browne, senior gas analyst at energy consultancy Wood Mackenzie. “I haven’t heard of this mechanism elsewhere in Asia although other markets such as Japan have introduced third-party operators, so a visible step towards separate ownership of transmission.” While GAIL has said the portal was to bring transparency in the way pipeline capacity is sold, the move could help the utility convince the Indian government that it is not blocking access to the market as it faces the threat of being broken up, said Browne. The government had said in January it wanted to split GAIL into two companies – one for laying pipelines and the other for marketing and petrochemicals – to encourage more transparency between the two operations, but has since appeared to have changed its position. India, the world’s third-biggest energy consumer, is building infrastructure, including pipelines and import facilities, to raise the share of gas in its energy mix to 15 percent by 2030 from the current level of about 6.5 percent. LNG IMPORTS India’s imports of liquefied natural gas (LNG) surged by 20 per cent in the first half of this year, compared with the same period a year earlier, said consultancy IHS Markit’s senior analyst Vidur Singhal. “With this initiative, there could be more visibility on available pipeline capacity and greater push for short-term LNG trades directly between buyers and sellers,” he added. However, constraints to increase the country’s LNG imports still remain. “The bigger constraint is actually the quantity of pipelines rather than open access,” Woodmac’s Browne said, adding that India remains critically under-served by pipelines. “Pipeline construction in India is notoriously difficult … as such, companies have proposed building their own pipelines to avoid being reliant on GAIL’s construction schedules.” GAIL is working on increasing the gas grid by another 5,000 kilometres, connecting eastern and north-eastern India. Pierre Turgeon Womens 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. Odisha is set to become the first state in eastern India to have all the pipelines in the hydrocarbon chain ranging from crude oil to petroleum products, LPG and natural gas. Riley Dixon Authentic Jersey
Shell to buy out Total in Hazira LNG terminal
Royal Dutch Shell today said it will acquire French oil major Total’s 26 per cent stake in the company that operates 5-MTPA Hazira LNG terminal in Gujarat. The size of the deal was however not disclosed. “Shell Gas BV, a subsidiary of Royal Dutch Shell plc, has signed a binding Letter of Intent (LoI) with Total Gaz Electricité Holdings France to acquire its 26 per cent equity in the Hazira LNG and Port venture in India, subject to regulatory approvals,” it said in a statement. Hazira LNG & Port venture comprises two companies — Hazira LNG that operates an LNG regasification terminal in Gujarat and Hazira Port, which manages a direct berthing multi-cargo port at Hazira. “The move would allow Shell commercial and operational flexibility over Hazira to maximise integrated value and offer creative customer value propositions,” it said. This portfolio action is consistent with Shell’s strategy to deepen its presence in the gas value chain in India, the fourth largest LNG consumer in the world, Royal Dutch Shell said. Rick Barry Womens Jersey
Dharmendra Pradhan rules out splitting GAIL, but wants petrochemical business divested at a good price
Oil minister Dharmendra Pradhan on Monday ruled out separating GAIL’s gas transportation and marketing businesses but said the state-owned gas utility should divest its non-core petrochemical business at a good price. To resolve the conflict arising out of the same entity owning the two jobs, GAIL will bifurcate the accounts and give outside parties access to its vast pipeline network. “GAIL board has considered the issue and has assured that it will operate the two businesses of gas transportation and marketing independently and autonomously,” Pradhan said. He was speaking at the launch of the company’s online portal for common carrier capacity booking by marketing entities and consumers for transportation of natural gas through its pipelines. Splitting GAIL “is not on the government’s agenda,” he said adding his ministry wants efficiency in operations of the company. Pradhan said GAIL was formed with the objective of building pipelines and over the past three decades has also become a major marketer of gas. Pipelines are crucial for taking natural gas to consumers across the country. Currently, the pipelines are concentrated in the western and northern part of the country only. “GAIL has to concentrate on pipeline laying. It is unacceptable that they neglect pipeline for marketing and petrochemicals,” he said. “It is unacceptable that they dress up their balance sheet with margins earned from gas marketing and petrochemicals.” Later talking to reporters, he said the company board has deliberated on the issue and agreed to separate balance sheets of the two businesses as also operating the pipelines on the transparent basis by giving third party access. Petrochemicals is “non-core business” of GAIL, he said. “GAIL should exit petrochemical business when they get a good price.” GAIL, he said, has to perform and fulfil the aspirations of taking gas to every nook and corner of the country. There is an estimated 30 million standard cubic meters per day of natural gas that cannot be produced now because of lack of pipeline infrastructure to take the fuel to the consumers, he said. India’s current domestic natural gas production is around 70 mmscmd. Pradhan said GAIL will separate balance sheets of marketing and transportation business. This would mean that if GAIL were to sell gas to a consumer, its marketing division will have to enter into an agreement with the unit owning and operating the pipelines on the same terms and tariffs as being offered to outside third parties. The oil ministry has been for last few months considering bifurcating GAIL’s businesses to resolve the conflict of the same entity doing both the jobs. One of the reasons for this was some industry players alleging that GAIL was not giving them access to its 11,000-kilometer pipeline network to transport their gas. GAIL Chairman and Managing Director B C Tripathi said GAIL gave first open access to its pipelines in 2004 when four companies booked capacities. Today, there are 115 consumers using GAIL pipelines, he said. The ministry had in January stated that it is considering to split GAIL into two – one for laying pipelines and the other for marketing and petrochemicals – to encourage more transparency between the two operations. This is because it believed that all entities authorised to lay natural gas pipelines including GAIL have to “provide mandatory open access of its gas pipeline infrastructure on common carrier principle at the non-discriminatory basis, at transportation rates determined by the Petroleum and Natural Gas Regulatory Board (PNGRB)”. Citing a 2006 policy, it stated that in the long run with the maturity of gas markets, the authorised entities should have transportation of natural gas as their sole business activity and not have interest in gas marketing or city gas distribution network. GAIL is the country’s biggest gas marketing and trading firm and owns most of the country’s pipeline network. Louis Domingue Womens Jersey
India to announce new Bio-ATF policy soon: Oil minister Dharmendra Pradhan
The oil ministry will soon announce a new Bio-Aviation Turbine Fuel (ATF) policy, oil minister Dharmendra Pradhan said today. The idea is to promote the use of clean biofuel in aviation. He was speaking to the media at the Indira Gandhi International (IGI) Airport during an event marking the arrival of the country’s first biofuel-powered aircraft operated by SpiceJet. Road transport and highways minister Nitin Gadkari, commerce minister Suresh Prabhu and Minister of State for Civil Aviation Jayant Sinha were also present on the occasion. “I would like to congratulate the Indian Institute of Petroleum. The oil ministry will soon come out with a new Bio-ATF policy. Under GST, bio-diesel taxation has been reduced to 12 per cent from 18 per cent. Similarly, ethanol is now taxed at 5 per cent as compared to 18 per cent earlier. The bio-fuel industry is set to gather pace, whether it is bio-diesel, ethanol blending, bio-CNG, ethanol procurement or 2G ethanol production,” Pradhan said. Low-cost carrier SpiceJet operated a demonstration flight of its biofuel-powered Bombardier Q400 aircraft from Dehradhun to Delhi today. The fuel for the flight – which comprised 25 per cent biofuel made from Jatropha crop and 75 per cent ATF — was developed by Indian Institute of Petroleum. Around 20 people, including officials from aviation regulator DGCA and SpiceJet, travelled in the test flight. The duration of the flight was around 25 minutes. “Today’s historic milestone is in-sync with Prime Minister Narendra Modi’s vision of promoting bio-fuels to create wealth from waste, reduce import dependency, lower carbon emissions and usher in a new momentum to take India forward on the path of prosperity,” Pradhan said in a social media post. The government had earlier this year approved the National Policy on bio-fuel, which allows blending of ethanol produced from damaged foodgrains, rotten potatoes, corn and sugar beet with petrol, hoping to cut oil imports by Rs 4,000 crore in the current financial year alone. The policy provides for viability gap funding (VGF) scheme for setting up 2G Ethanol bio refineries at a cost of Rs 5,000 crore in six years in addition to additional tax incentives and higher purchase price as compared to first generation biofuels. Fuel cost accounts for around 50 per cent of an airlines expenses in India. In a bid to reduce operational costs of airline operators, the country’s aviation industry has been appealing to the Goods and Service Tax (GST) council to include ATF under the ambit of GST.
Is Mahanagar Gas Stock Rout Justified?
Shares of Mumbai’s only city gas distributor Mahanagar Gas Ltd. have declined by more than a third since its last peak in November despite the government’s push to increase the consumption of cleaner fuels in India. The slide can be attributed to three main reasons—a promoter selling stake, rupee depreciation and higher gas prices. Promoter Selling Stake Royal Dutch Shell Group’s subsidiary BG Asia Pacific Holdings Pte. Ltd., which is a promoter of Mahanagar Gas, has so far sold 22.5 percent stake, according to data compiled by BloombergQuint from exchanges. BG Asia Pacific changed its strategy to invest more in the upstream exploration businesses. It offloaded shares in two tranches, selling at a discount to the prevailing market price. The company’s left with 10 percent. According to the Securities and Exchange Board of India’s listing regulations, it can’t sell the remainder until July 1, 2019. Rupee Depreciation In the last one year, the rupee depreciated by close to 9.5 percent against the U.S. dollar, while gas prices rose. Mahanagar Gas purchases fuel using dollars—which means it needs to pay more if the Indian currency weakens. Rising Input Gas Prices Moreover, rising administered gas prices for explorers in India increased investor concerns about the company’s ability to maintain margins. …But Stays Most Preferred Pick Yet, Mahanagar Gas, according to Bloomberg data, is the most-preferred pick among the three listed city gas distributors with only four analysts rating it a ‘Sell’ out of the 23 tracking the stock. Here’s why: Room To Protect Margins Compressed and piped natural gas, which are used as alternatives to petrol, diesel and liquefied petroleum gas, are at least 30-40 percent cheaper. That gives Mahangar Gas the room to increase retail prices. In the last one year, the company has hiked CNG and PNG prices thrice, helping it maintain margins. Cleaner Fuel Push To Aid Volumes Natural gas is cleaner and less polluting than conventional fuels, one of the reasons why the government wants to increase its percentage in the energy mix from 6 percent to 15 percent by 2030. Besides helping India reduce its carbon footprint in accordance with the COP-21 protocol, that would reduce the oil import bill. Mahanagar Gas’ volumes jumped over the last two years. With natural gas penetration at just 30 percent in Maharashtra, the growth potential is huge for city gas distributors, according to a Kotak Securities report. Mahanagar Gas has exclusive mandate to lay, build, expand and operate gas network in Mumbai till 2020, in Thane urban and adjoining municipalities until 2030, and in Raigad district till 2040. Cheaper Than Peers Despite being India’s most profitable listed city gas distribution company, it trades at a steep discount to its peers. It offers highest upside for investors. Ronnie Lott Womens Jersey
ONGC now looks to HPCL to fuel retail expansion plans
The impending merger of state-run Hindustan Petroleum Corp. Ltd (HPCL) and Mangalore Refineries and Petrochemicals Ltd (MRPL) may put a break on MRPL’s fuel retailing expansion plans, leaving its parent Oil and Natural Gas Corp. Ltd (ONGC) to fulfil these ambitions through HPCL, said two officials aware of the development. MRPL is a wholly owned subsidiary of ONGC and operates a 15 million tons per annum refinery in Mangalore, Karnataka. This January, ONGC acquired the government’s 51.11% stake in HPCL through an all-cash deal of ?369.15 billion. “MRPL has six fuel retail outlets. At best it can expand to a few more. But HPCL has 15,127 retail outlets. MRPL can never match that. Though MRPL is not competing with HPCL, in all probability, ONGC’s retail ambitions will be fulfilled with HPCL now onboard,” said one of the officials mentioned above. Post merger with HPCL, the fuel retail outlets of MRPL could be rebranded as HPCL’s. MRPL’s retail outlets are called HiQ, he said. Currently, MRPL relies on oil marketing companies (OMCs) Indian Oil Corp. Ld, Bharat Petroleum Corp. Ltd and HPCL to market its products in the fuel retail space. This results in lower offtake of products from MRPL with OMCs sometime preferring to bring in products from outside Karnataka to meet the state’s demand. As a result of this, MRPL is forced to rely on exports, resulting in marginally lower realization for the products. “MRPL is setting up retail outlets within its span of influence and expects to overcome this weakness in the medium term. Expected synergies from the acquisition of HPCL, by the parent company, ONGC are also expected to mitigate the lack of retail penetration,” said MRPL in its annual report for 2017-18. MRPL entered the fuel retail segment in 2008 and till 2013 it had plans to roll out 120 fuel retail outlets in the first phase of its retail expansion strategy. The company has the approval to set up 500 retail outlets and its parent ONGC has an approval to set up 1,100 retail outlets. Setting up a fuel retail outlet, including the land cost, requires around Rs.50 million. MRPL has gone slow on its retail plans as, like other OMCs, it was declined subsidy (compensation for selling fuels below market price). “MRPL wanted to be a significant player in fuel retailing, but being a standalone refinery, which is not part of any oil marketing company, it does not get compensated by the government for selling fuel below market price. The company fears that in the wake of higher oil prices, the government may once again require the OMCs to share the fuel subsidy burden. This will render MRPL’s retail outlets uncompetitive,” said the second official mentioned above. Crude oil prices have climbed 11.5% and is currently hovering around $74.5 a barrel. Mark Andrews Jersey
Gas pipelines at Surat airport: ONGC told to find solution
The district administration has directed Oil and Natural Gas Corporation (ONGC) to work out a solution for rerouting or covering of the buried sour gas pipelines passing through Surat airport, which are proving to be a major irritant in the proposed extension of runway from 2,905 metres to 3,810 metres. District collector Dr Dhaval Patel in a meeting held with officials of ONGC and Airports Authority of India (AAI) two days ago discussed the issue of the buried sour gas pipelines passing through the airport. The meeting was held after the state government and the AAI jointly decided to take ONGC on board to work out a solution for rerouting or covering of the pipelines in the airport area in a time-bound manner. ONGC had invited expression of interest (EoI) for the safe operation of the buried pipeline six months ago, but things are moving at a snail’s speed. Kentavius Street Womens Jersey