LPG terminal’s relocation to new site not feasible: IOC
With the People’s Combine Against the Puthuvype LPG Terminal deciding to intensify their protest against the terminal, India Oil Corporation (IOC), in a statement, clarified the shifting of the terminal to Ambalamedu is not technically feasible. The total cost of the project is Rs 7.15 billion and the corporation has already spent Rs 3.26 billion on it. The storage terminal was constructed at an expense of Rs 1.56 billion, while the Multi-User Liquid Terminal (MULT) Jetty was completed after spending Rs 1.70 billion. As LPG is colourless and odourless, a sulphur-based chemical, Ethyl Mercaptan, is added to LPG to detect the same in case of leakages. The constituents of LPG – Propane and Butane – will be brought in ship tankers to the MULT Jetty. They need to be stored separately in dedicated storage vessels, blended and then mixed with Ethyl Mercaptan at the storage terminal. It is unsafe to transport the odourless LPG to Ambalamedu, which is far away from the city, it stated. The National Green Tribunal (NGT) had last December granted nod to continue with the project. As per CRZ notification, storage of LPG is permitted in the coastal areas. The NGT had dismissed the allegation the plant will pose threat to life and property. The IOC has taken all safety measures, including steps to prevent sea erosion, said IOC general manager S Dhanapandian. The Supreme Court also upheld the Environmental Clearance granted to the project. At present, there is no hitch to go ahead with the project, he said. The IOCL, BPCL, Petronet LNG and Cochin Port Trust have joined hands with IIT Madras for construction of a series of groynes to protect the shore in the coastal areas of Puthuvype. The IIT has recommended to build ‘short groynes’ and the NGT has endorsed the same. The total cost of the project is Rs 7.15 billion and the corporation has already spent Rs 3.26 billion on it. The storage terminal was constructed at an expense of Rs 1.56 billion, while the Multi-User Liquid Terminal (MULT) Jetty was completed after spending Rs 1.70 billion. Doug Kotar Jersey
ONGC wants $8.3 price for CBM gas from West Bengal
Oil and Natural Gas Corp (ONGC) wants a gas price of at least USD 8.35 to break even on producing coal-seam gas (CBM) from Raniganj block in West Bengal after part of its acreage was taken away for building of an airstrip. ONGC does not want to relinquish the block which holds some 43 billion cubic metres of in-place reserves and is instead looking at alternate options like deviated drilling from outside the airstrip. Of the 350 square kilometer area in North Raniganj coal-bed methane (CBM) block, 7.05 sq km is part of an Airport City Project (BAPL). Top officials said the project BAPL overlaps 7.05 sq km. To compound the problem, Ardhagram coal block falling in assessment area has been allotted to OCL Iron Steel. “This has reduced the scope for ONGC to produce CBM gas from the block,” an official said. Two options are under consideration but none of them would be viable unless a gas price of at least USD 8.35 per million British thermal unit (mmBtu) is paid, he said. In the first option, the entire BAPL overlap area is excluded and 67 wells drilled on the remaining area. But the break-even price of gas for the investment made would come at USD 8.77 per mmBtu. The other option is to consider drilling eight deviated and two vertical wells in the overlap area apart from the 67 vertical wells, officials said adding the break-even price of gas under this option comes to USD 8.35 per mmBtu. “The project is commercially not viable on standalone basis. The break-even price in both the options is significantly higher than the expected realisation price,” an official said. The price it wants is higher than CBM gas sold from similar blocks and more than double of the USD 3.06 per mmBtu price set by the government for most of the domestically produced conventional natural gas. ONGC has stakes in three other CBM blocks in Bokaro, Jharia and North Karanpura in Jharkhand. Of the total nine CBM blocks allocated to ONGC, five have already been relinquished due to poor output potential. It plans to produce first gas from the Bokaro, Jharia and North Karanpura blocks in July. ONGC is the operator of the Raniganj North block with 74 per cent stake, while the remaining 26 per cent is with Coal India Ltd. The firm has partnerships in other blocks, too, with CIL holding 10 per cent stake in Jharia and Indian Oil Corporation holding 20 per cent stake in Bokaro and North Karanpura. ONGC has sold gas from its Bokaro CBM block for USD 5.77 per mmBtu on a gross calorific value basis. State gas utility GAIL India is buying gas found below coal-seams in the North Karanpura block at USD 5.56 per mmBtu while private sector company Positron Energy would offtake gas from Jharia CBM block at USD 6.12 per mmBtu. ONGC expects peak volumes to touch 3 million standard cubic metres per day. Essar Oil and Gas Exploration and Production (EOGEPL) has sold CBM gas from its Raniganj block for USD 7.1 per mmBtu. Reliance Industries’ Sohagpur gas at today’s oil price comes to USD 7.15 per mmBtu on GCV basis. Alexander Wennberg Authentic Jersey
India seeks ways to continue Iran oil imports without triggering sanctions
India hopes to avoid an abrupt end to oil imports from Iran without triggering sanctions even as it readies a rupee payment mechanism for oil imports from the Islamic Republic. The US and India haven’t had any conversation yet on possible exemption but officials believe that the door for negotiations is still open despite strong words from the US recently to eliminate oil import from Iran. Officials see a window of opportunity because a recent update in the US treasury’s website lists circumstances in which the US government can waive sanctions. The tough words from the US are certainly aimed at the better compliance of sanctions by all countries as well as at making it harder for importing countries to negotiate waivers, an official said. The US is probably trying to lower importing countries’ expectations before any negotiation on waivers start, he said. It has been learnt that Nikki Haley, the US envoy to UN and close Trump aide, during her recent visit to Delhi called for cutting import of Iranian oil, but was politely told that it would be extremely difficult for India to make any significant cut. Ties between India and Iran range from the energy trade to connectivity projects, and cutting trade between the two countries could hurt India’s long-term interests, experts said. Indian and US officials are likely to meet this month to figure out the implications of the Iran sanctions for India. There are some hints from the US of possible exemptions to purchase a reduced quantity of oil from Iran, officials said. On June 26, a US state department official said India or China would receive no waiver of sanctions and their companies risk secondary sanctions if they continued importing oil from Iran from November 4. But just the next day, on June 27, the US Treasury Department updated its FAQs on Iran sanctions, leaving scope for the waiver, an Indian official said, citing this as a sign that the US would be amenable to discussing exemptions. The FAQs refer to a provision for waiver of the sanctions if the secretary of the Treasury determines that a waiver is necessary to the national interest of the United States. The document also provides for the secretary of state, in consultation with other secretaries, determining if any country has ‘significantly reduced the volume of Iranian crude oil purchase’. The secretary of state would ‘consider relevant evidence in assessing each country’s efforts to reduce the volume of crude oil imported from Iran’. For Indian officials, these words represent US flexibility in dealing with certain importers like India if the latter were to make efforts towards reducing supplies from Iran over a period of time. RUPEE PAYMENT MECHANISM Meanwhile, India is preparing a rupee payment mechanism for Iranian oil import. “We are coordinating with the central banks of India and Iran to put together this mechanism. More than one Indian banks are available for this,” an official said. During the last sanctions, UCO Bank alone handled rupee payment for oil imports from Iran. Part of the rupee payment was used by Iran for purchasing food, drugs, and chemicals from India but most of it was transferred to the Islamic Republic after the sanctions were lifted in 2016. It wasn’t clear if India would persist with imports from Iran if the US waivers didn’t materialize. During the last Iran sanctions, US had allowed India to import certain quantity for which the payments were made in the rupee. Officials didn’t say if the companies will be able to, or want to, use the rupee payment mechanism without the waiver because that could mean antagonizing the US. Tyreek Hill Jersey
US sanctions on Iran won’t disrupt crude supplies: Indian refineries
Indian refiners are confident that US sanctions on Iran will not disrupt crude oil supplies because the global marketNSE 0.00 % has abundant supplies and numerous sellers. Top executives in refining firms said they were waiting for guidance from the government about purchasing crude oil from Iran, which is India’s third-biggest supplier of crude oil. “There is no reason to panic. Nobody will stop refining if supply from Iran halts,” said an executive at a state oil firm that heavily imports Iranian oil. Indian refineries are configured to process several varieties of crude, not just Iranian, and therefore a supply from some other country can easily replace Iranian shortfall if any in future, the executive added. Indian officials and executives at state oil companies were jolted two days back after US president Donald Trump demanded zero import of Iranian oil by India, and other importing countries, from November 4 when US sanctions on Iran related to the petroleum sector take effect. They had presumed the new sanctions would be a re-run of the previous Iran sanctions when India received waivers and continued to import a significant quantity. Officials in the ministries of external affairs, oil and finance are grappling with the import of Trump’s latest statement on Iran sanctions. “This is not about oil companies,” said another oil company executive. “The country has to take a call. And how effective diplomatic channels are will determine the outcome of the issue for us,” he said. The executive said companies haven’t received any clear instruction from the government yet but were ‘naturally cautious’ since the matter was still evolving. “We don’t need special preparation. We can easily find crude if we need to replace Iranian oil,” he said. India refiners prefer Iranian oil as it comes with freight discount and a longer credit period. EThad first reported on June 15 that India was mulling seeking US exemptions on Iran sanctions, and considering paying for Iranian oil in rupee using a banking channel that had no exposure to the US after State Bank of India told refiners it wouldn’t support payment to Iran from November 4. Indian refiners use euro to pay for Iranian oil, routing the payment via State Bank of India and Germany-based bank Europaeisch-Iranische Handelsbank AG (EIH). Iran sanctions could become one key issue in the US-India diplomatic ties that has hit a low lately. Kemal Ishmael Authentic Jersey
India rethinks decision to split up gas utility GAIL
India is working on plans to enable gas utility GAIL to keep its marketing and pipeline operations separate without breaking up the company, India’s oil minister said on Thursday. The government had said in January that it wanted to split the company into two – one for laying pipelines and the other for marketing and petrochemicals – to encourage more transparency between the two operations. “My job is not to create more companies, my job is to create more accessibility through policy,” Dharmendra Pradhan, India’s oil minister said on Thursday. GAIL (India) Ltd is the country’s biggest gas marketing and trading firm and owns most of the nation’s pipelines, giving it a dominant position in the country’s energy market. Investors, private companies and consultants have said that GAIL’s dominance in pipeline infrastructure across the country conflicts with its business of marketing and trading of natural gas. Pradhan said: “Gail must be seen to be transparent,” adding that Gail was working on a model to keep its pipeline and marketing businesses independent of each other. “My job is to create more transparency and a neutral platform so that other companies can also utilise that infrastructure,” Pradhan said. He did not give a reason for the government’s change of position on splitting up the company, which was seen earlier as a move to raise money by selling its marketing arm to a state-owned oil refining and marketing company. The country’s top two refiners Indian Oil Corp Ltd and Bharat Petroleum Corp Ltd had shown interest in integrating GAIL’s marketing arm with their business. ‘Unbundling’ of GAIL was one of the three key steps towards creating a natural gas marketplace in India, the other two being forming a trading hub and open access to gas pipelines, the head of India’s gas regulator D K Sarraf had told Reuters in April. “The unbundling will happen but not in a physical form,” Sarraf said on Thursday. Prime Minister Narendra Modi aims to increase the use of natural gas in its energy mix to 15 percent by 2030 from 6.5 percent now. Myles Turner Authentic Jersey
Anadarko to make final investment decision on building LNG export terminal in Mozambique
On Wednesday, US oil and gas producer Anadarko Petroleum said it expects to make a final investment decision in the first half of 2019 on whether to build the first liquefied natural gas (LNG) export terminal in Mozambique. Mitchell Ingram, Anadarko’s executive vice-president, international, deep water and exploration, said at the World Gas Conference in Washington, DC, that it was ready to move forward with the Mozambique project after lining up enough customers for the LNG. Ingram said the company was in the process of making the sales agreements binding and ramping up financing for the project. “Once we complete that, we will be ready to make a final investment decision in the first half of 2019.” He spoke a couple of weeks after Anadarko and its partners in the Mozambique project signed sales agreements with units of Tokyo Gas and Centrica. That deal with the Japanese and UK energy companies calls for the delivery of 2.6-million tons per annum (MTPA) from the start-up of production in Mozambique until the early 2040s. Other firms lined up to buy gas from the project include units of Électricité de France, Japanese utility Tohoku Electric Power, and Thailand’s state-run PTT. Anadarko’s partners in the project include units of Mitsui & Co of Japan and ONGC Videsh of India, among others. The Mozambique project, which is located between both the Asia-Pacific and European markets, will consist of two liquefaction trains with the capacity to produce 12.88MTPA to support development of the Golfinho/Atum fields located entirely within Offshore Area 1. Ingram said Anadarko managed to squeeze about $4bn out of the cost of building the onshore part of the project, bringing the cost down to about $600 a ton, which, according to a Reuters calculation, would bring the total to about $7.7bn. In the past, Anadarko has said it was looking to raise about $14bn to $15bn for the project. Officials at the company were not immediately available to comment on the latest total cost estimate. The company has said it expects to complete the facility in the 2023-24 timeframe. As consumers shift from coal to cleaner burning gas for power generation and other uses, demand for LNG is expected to exceed supply in 2022 or 2023, according to a report from energy consultant Wood Mackenzie. In 2017, global LNG sales rose 9.9% to a record 289.8-million tons, according to the International Association of Liquefied Natural Gas Importers (GIIGNL). Anadarko made its first discovery in Offshore Area 1 in 2010. In total, Ingram said the company and its partners have discovered about 21-trillion cubic metres of recoverable natural gas in the field. Ingram said this project paves the way for significant future expansion of up to 50MTPA in the future. Anadarko has said the Golfinho/Atum project will also supply initial volumes of about 28-million cubic metres per day of natural gas for domestic use in Mozambique. Ramik Wilson Jersey
BP’s acquisition of UK’s largest EV charging firm may deepen ties with RIL
Majority of Britain’s electric vehicle (EV) may soon start running on British Petroleum’s charge. BP on Thursday announced that it has entered into an agreement to purchase Chargemaster, the UK’s largest electric vehicle (EV) charging company. Chargemaster operates the UK’s largest public network of EV charging points, with over 6,500 across the country. It also designs, builds, sells and maintains EV charging units for a wide range of locations, including services for home charging. BP’s presence in India is majorly in the areas of technology and upstream oil and gas sector. It is in 30 per cent partnership with Reliance Industries Ltd (RIL) for its major blocks including the flagship KG-D6 that has seen a drop in natural gas production over the last few years. Tufan Erginbilgic, chief executive, BP Downstream, said: “Bringing together the UK’s leading fuel retailer and its largest charging company, BP Chargemaster will deliver a truly differentiated offer for the country’s growing number of electric vehicle owners. “At BP we believe that fast and convenient charging is critical to support the successful adoption of electric vehicles. Combining BP’s and Chargemaster’s complementary expertise, experience and assets is an important step towards offering fast and ultra-fast charging at BP sites across the UK and to BP becoming the leading provider of energy to low carbon vehicles, on the road or at home.” The Mukesh Ambani-promoted largest private sector oil and gas player in India is looking to foray into electric vehicle segment. BP’s takeover of Chargemaster could in future help RIL use some of its unviable auto fuel vending outlets in India for EV charging. India had initially planned to shift passenger vehicles completely to electric by 2030 but later changed gears by saying that no EV policy is on the anvil. Chargemaster is the operator of the UK’s largest EV charging network and the leading supplier of EV charging infrastructure. Acquisition is an important step in scaling up and deploying a fast and ultra-fast charging network on BP’s UK forecourts. Chargemaster to be rebranded BP Chargemaster BP is present in India as RIL’s 30% partner in its oil and gas block RIL is looking to enter the EV segment RIL and BP announced last year a joint collaboration in other areas as well Marcus Murphy Womens Jersey
Clean Fuel Policy in India Raises Demand for LPG
The demand for kerosene in India has remained stable since it dropped two years ago after the announcement of a new government policy in May 2016. The policy encourages the use of LPG as a cleaner cooking fuel option by offering free connections in rural areas. Kerosene competes with LPG in rural Indian markets for both commercial and residential applications, so the government subsidies have affected the access and demand of LPG directly. The two forms of kerosene used in India are Aviation Turbine Fuel (ATF) and Superior Kerosene Oil (SKO). An LPG connection is a government subsidized program meant to provide heating and cooking resources to impoverished families. An LPG canister or cylinder weighs 14.2kg when full. The first cylinder is provided free of cost for people who have an income below the poverty line. The refill of the cylinder is provided at a subsidized rate and the payment of refill can be done in monthly installments. The Kayrros forecast shows a larger increase in LPG demand in Q2 2018 as compared to kerosene demand. The Kayrros forecast predicts a slight decrease for kerosene demand in Q1 2019 as compared to a constant, larger increase for LPG demand in the same quarter. Aside from India, the Kayrros forecast shows the demand for kerosene will increase in other monitored countries in the next few months due to an increase in global air traffic. Kayrros observed an opposite trend from India in Mexico. Forecasts showed a similar increase in kerosene demand in Mexico during May and June. Kerosene demand will further increase in Q2 2018, while LPG demand will decrease in Q2 2018. The decrease in LPG demand in Mexico comes from competition with natural gas. New pipelines in Mexico give access to natural gas in many new regions. According to EnergySecretariat (Sener) estimates, cooking accounts for about 60% of the country domestic demand. Benjamin Watson Authentic Jersey
Union rig workers vote to strike at Total’s North Sea oil fields
Members of the Unite union who work at Total’s North Sea offshore oil and gas fields voted in favour of strike action on Thursday, the union said in a statement Unite said the strike over pay and working hours would begin next month and that members were still deciding what type of industrial action to take. Unite said specific dates would be announced next week, the strike would affect Total’s Alwyn, Dunbar and Elgin-Franklin platforms. A spokeswoman for Total said the firm believes changing to a three week on/off rota would keep the UK operations competitive and help attract future investment. The Unite workers had been operating under a two weeks on and three week off rotation. Total said that it has offered a salary increase to compensate for the longer time offshore, “We have started a structured process of meetings and workshops that will hopefully allow us to reach a consensus…Our objective is to seek a rota system that both enhances overall safety and is the most efficient – in this way we will ensure the long term sustainability of our business in the North Sea,” Jean-Luc Guiziou, the managing director of Total E&P UK, said in a statement. Matt Read Authentic Jersey
Norway’s Supreme Court rules in favour of state in pipeline tariff dispute
Norway’s Supreme Court ruled on Thursday in favour of the government in a lawsuit brought by owners of the Gassled gas network over tariffs, ending a legal fight the owners said raised questions about Norway as an investment destination. Shareholders in Gassled had argued the government acted unlawfully when cutting pipeline tariffs and that it would cost them a combined 15 billion Norwegian crowns ($1.8 billion) in lost earnings through 2028. “There was no ground to make the change in regulation invalid,” the unanimous five-strong Supreme Court panel said. The case against the government was pursued by four investment companies – Solveig Gas, Silex Gas, Infragas and CapeOmega, which together hold a combined 48.2 percent of Gassled that transports Norway’s gas to the rest of Europe. Some of the companies involved have said Norway’s unexpected decision to lower gas transportation tariffs would hurt its image as an investment destination. The Nordic country is Europe’s second-largest gas supplier after Russia. While tariffs were cut by 90 percent for some future gas resources that are added to the network, Gassled’s owners will still receive accumulated payment of 122 billion crowns by 2028, a reduction of 14.7 billion, Norway’s energy ministry said. “The owners have received a reasonable return on their investments,” the ministry said in a statement, adding that lower pipeline fees could boost the extraction of offshore gas. The four investment companies were originally owned by Allianz, UBS, the Abu Dhabi Investment Authority, Canada’s Public Sector Pension Investment Board, the Canada Pension Plan Investment Board and France’s Caisse des Depots. In October 2017, UBS and Caisse des Depots said they were selling their stakes to CapeOmega, but would still help pay legal costs. The government cut tariffs shortly after the four investors bought their stakes in Gassled in 2011 and 2012 from ExxonMobil , Total, Statoil – now know as Equinor – and Royal Dutch Shell for 32 billion crowns. At least two of the partners said they would continue to be “prudent owners”. “We now need to understand this judgement. Today is definitely not the day to decide (on our stance to other investments),” Silex Gas CEO Kurt Georgsen told Reuters. “We will focus on our role in Gassled. We will make sure that Gassled stays,” Solveig Gas CEI Trygve Pedersen said. “That doesn’t say if we will look at other projects in the future or not. I do not want to comment on hypothetical scenarios. So far we have only made investments in Gassled,” he added. The partners will have to pay the state’s legal costs, estimated at over 5.3 million crowns ($646,000), ruled the court. Devin Funchess Authentic Jersey