You will soon get diesel delivered at your doorsteps, courtesy IOC
State-run oil marketing companies like Indian Oil Corporation (IOC) are likely to launch home delivery of diesel within two months, once Petroleum and Explosives Safety Organisation (Peso) comes up with a regulation in this regard. “So far, there are no norms in place for home delivery of petrol and diesel. Peso is working on it and we would certainly like to go ahead with it once a regulation is in place. We are more aggressive on diesel, as it is a much safer fuel compared to petrol for handling,” said Sanjiv Singh, chairman of IOC. The idea for home delivery of fuel was mooted by petroleum minister Dharmendra Pradhan at a meeting of the consultative committee of Members of Parliament in Srinagar early this year as the effort may increase digital transactions in the sector. “Peso is likely to come up with the regulations in two months and once it is in place, we will launch home delivery of diesel,” said B S Canth, director of marketing in IOC. The idea was floated in order to reduce the long queues outside fuel outlets and to get it delivered at doorsteps. Walt Weiss Jersey
IndianOil, partners look for cheaper site for Pacific NorthWest LNG terminal
Indian Oil Corporation Ltd said it is in talks with its partners to scout for an alternative, cheaper site for the Pacific Northwest LNG terminal after the recent pullout of the lead developer cast doubt on the future of the Canadian project. Malaysia’s state-owned Petroliam Nasional Bhd (Petronas), which held a majority 62 percent stake in the proposed C$36 billion ($29 billion) Pacific NorthWest LNG Project in British Columbia, said last week it was abandoning the plan due to weak global prices. Sanjiv Singh, chairman of Indian Oil, which has a 10 percent stake in the Canadian project, said the company remained interest in going ahead with at least part of the plan. “We are very much positive going ahead with the upstream part of it, which is gas production. Liquefaction and transportation further in the liquid form we are not pursuing, I mean, we don’t want to pursue very aggressively as of now,” he told a news conference. “We are also looking at a different location which might be much less expensive than the earlier one,” Singh said. Indian Oil’s head of business development, G.K. Satish, said consortium partners are talking about alternatives. He declined to comment on write-offs IOC might be taking in the next quarter for investment in the Canadian LNG project. Petronas’s pullout dealt a blow to the project and its partners which would now have to invest additional capital to complete the project. Indian Oil is the first partner to suggest the project could still go ahead, in modified form. “Cost of liquefaction, transportation and retail outside Canada has gone up. And today we are finding that it may not be very attractive at the present prices,” Singh said. The other partners in the project are Chinese oil and gas giant Sinopec, with 15 percent, Japex Montney Ltd, with 10 percent, and Petroleum Brunei, with 3 percent. Petronas may have to write off up to $800 million for work already done on the Canadian project, analysts say. Japan Petroleum Exploration Co (Japex) said on Wednesday it would take a loss of about C$102 million ($82 million) due to the scrapping of the project. Indian Oil Corp planned to lift 1.2 million tonnes of the super-cooled fuel for 20 years from the British Columbia project for its 5 million tonne a year regasification LNG plant at Ennore in eastern India. Indian Oil was expecting deliveries from the western Canadian project to begin in 2020. The company said it also expected a “slight delay” from Cameron LNG project in the United States and will see deliveries by the end of 2018. Indian Oil will float a tender to import 2 million barrels of high sulphur U.S. crude in August. It intends to import high sulphur oil from the United States for as long as benchmark WTI prices are depressed, Finance Director A.K. Sharma said. Tim Heed Womens Jersey
Prices of subsidised LPG zoom 16 per cent since Modi took charge
The prices of subsidised cooking gas zoomed by 16 per cent, from Rs 414 per cylinder when the Bharatiya Janata Party (BJP) government came to power in May 2014 to Rs 479.77 in August 2017, despite global crude oil prices dipping by about 49 per cent. The Narendra Modi-led government had stormed to power in 2014 on the back of serious corruption charges against the Congress-led regime and the rise in prices of commodities like cooking gas, against which the BJP had raised its voice. Interestingly, the price of liquefied petroleum gas (LPG) was revised 22 times by oil marketing companies (OMCs) like Indian Oil Corporation (IOC), Bharat Petroleum Corporation (BPCL), and Hindustan Petroleum Corporation (HPCL) since May 2014, when the BJP government took charge. However, on the back of a 49 per cent drop in international crude prices, from $102.71 a barrel on May 30, 2014, to $52.16 (Brent crude) on August 3, 2017, prices of non-subsidised cylinders dipped 44 per cent, from Rs 928.50 per cylinder in May 2014 to Rs 524 in August 2017. Also, in an effort to reduce the subsidy burden or to completely do away with the subsidy, OMCs are authorised to increase prices of subsidised domestic LPG cylinders by Rs 4 per month till March 2018. “The government stands committed and will continue to provide subsidy assistance to the needy and poor households,” said an official close to the development. The subsidy amount on a 14.2-kg cylinder transferred to the accounts of Delhi consumers stands at Rs 86.54 currently, which the government wants to do away with or reduce to the range of Rs 40 per cylinder by March 2018. The current national average of LPG subsidy per cylinder comes to the tune of about Rs 58 per cylinder. This comes at a time when the Modi government is increasing the penetration of LPG through the Pradhan Mantri Ujjwala Yojana, by providing 50 million new connections to women belonging to below poverty line (BPL) families over a period of three years, starting from financial year 2016-17. So far, over 25 million connections have been given under the scheme. “With the expansion of LPG coverage, it is an imperative to rationalise the subsidy component so as to ensure that while the needy and poor are fully protected, at the same time, the affluent households should pay little more price given their rising income and higher paying ability,” the aforementioned official added. In July 2016, Delhi was declared a kerosene-free city. If you consider the prices prevailing in Kolkata, from May 2014 up till now, they have also seen a 57 per cent surge, from Rs 14.9 per litre to Rs 23.36 per litre. In the past three years, the total number of households having LPG connections has remarkably increased from 140 million in April 2014 to 210 million in July 2017. The LPG penetration has increased from 56 per cent to 76 per cent in that period. According to the BJP government, the step to decontrol prices was initiated by the Manmohan Singh government. In June 2010, an empowered group of ministers met under the chairmanship of then finance minister Pranab Mukherjee to look into the issue. “It was in this meeting that it was decided that the price of domestic LPG will be increased by Rs 35 per cylinder in Delhi, with corresponding increases in other parts of the country. Thereafter, the price would be periodically revised based on the increase in paying capacity as reflected in the rising per capita income,” said the official. Interestingly, all key Opposition leaders, including Sharad Pawar, Mamata Banerjee, Kamal Nath, Sushilkumar Shinde, Murli Deora, and M K Alagiri, were present at that meeting. In June 2010, petrol prices were deregulated and linked to international markets, which was followed by diesel prices in October 2014. However, despite these hikes, LPG prices in India remain below international standards. Earl Thomas III Jersey
CAG audit report on MRPL’s Planning and Implementation, laid in Parliament
The Comptroller and Auditor General has reported deficiencies in planning and execution of capital projects, operation of processing units, and operation of support facilities, leading to cost and time overruns at Mangalore Refinery and Petrochemicals Ltd. These discrepancies have been highlighted in the performance audit report on the Planning and Implementation of Phase III Expansion Project of Mangalore Refinery and Petrochemicals Ltd, tabled in Parliament on Wednesday. CAG notes that the initial project cost to increase the refinery capacity from 11.82 mmtpa to 15 mmtpa was estimated at Rs 79.43 billion in 2006. The estimates of cost underwent changes from time to time due to change in capacity and the addition and deletion of various units. As of October 2015, the total adjusted estimated cost of the project worked out to Rs 163.23 billion. Against this, the company had incurred an expenditure of Rs 148.32 billion by March 2016. The project, which was initially proposed to be completed in June 2010, was actually completed in June 2015. Chidobe Awuzie Jersey
South Asia becomes global LNG hotspot as Bangladesh enters market
South Asia, long a backwater for energy markets, is emerging a hotspot for liquefied natural gas (LNG), with Pakistan and Bangladesh set to join India as major consumers, helping to ease global oversupply that has dogged this market for years. Only India and Pakistan currently import LNG in South Asia, taking in a combined 25 million tonnes, or 8 per cent of global demand last year. With a fast growing population, strong economic growth and soaring energy demand, Pakistan and Bangladesh are leading the way by developing more import projects. “Both countries already have extensive gas infrastructure due to legacy production from domestic gas fields,” said Chong Zhi Xin, principal Asia LNG analyst at energy consultancy Wood Mackenzie. “As domestic production has failed to keep up with demand, both markets are a natural fit for LNG imports,” he noted. Pakistan started importing LNG only in 2015, and surprised some in the industry by developing its first terminal within schedule and budget. A second is about to become operational and a third is expected to be completed next year. With Bangladesh set to join the club of importers next year, the region could import 80–100 million tonnes a year by the mid 2020s, analysts said. This makes South Asia the world’s second biggest import region, ahead of Europe. Bangladesh boom Bangladesh, a country of over 160 million people, could import as much as 2,500 million cubic feet per day (mmcfd) of LNG, equivalent to around 17.5 million tons per year, by 2025, said Nasrul Hamid, Bangladesh’s state minister for energy and power. With its own gas reserves depleting and seeking to almost double power capacity to 24,000 megawatt (MW) by 2021, Bangladesh is tapping cheap and plentiful supplies on world markets and investing heavily in LNG. Several floating storage and regassification units (FSRU), the first developed by private U.S. company Excelerate Energy, are due to begin importing cargoes starting 2018. “We are working on two FSRU’s from which gas will start flowing (by) next July,” Hamid told Reuters. Both FSRUs will be deployed off Moheshkhali Island in the Bay of Bengal, in the southeast of the country. They will have a combined capacity of 7.5 million tonnes a year. Two more FSRUs are planned, though no exact dates have been finalised. In addition, state-run Petrobangla signed a preliminary deal with India’s Petronet in December to set up an onshore terminal to regasify a further 7.5 million tonnes a year of LNG on Kutubdia Island, just to the north of Moheshkhali, at a cost of $950 million. “By 2025, depending on our national demand, we will import anywhere from 2,000 to 2,500 mmcfd gas,” Hamid said. Those imports would add to plans from India and Pakistan to buy 50 million and 30 million tonnes of LNG per year, respectively, by the mid-2020s. “LNG imports in South Asia are expected to rise four-fold from 22 million tonnes per year in 2016 to over 80 million tonnes per year by 2030,” said Mangesh Patankar, head of Asia/Pacific business development at energy consultancy Galway Group. Should all plans in the region go ahead and Sri Lanka also starts LNG imports, this figure could rise to 100 million tonnes, industry project data shows. That would push South Asia’s demand ahead of Europe as the world’s second biggest LNG import region by 2020, though it would still lag North Asia’s 150 million tonnes of annual imports. The boom in demand will help ease oversupply in LNG markets, which have resulted in a more than 70 per cent price fall from their 2014 peaks to $5.75 per million British thermal units. Supply talks “We are looking for a mixture of both long-term contracts and the spot market,” Hamid said. HE added that the nation was in talks with Qatar’s RasGas and Indonesia’s Pertamina for long-term deals, while it also planned to import significant amounts of its future demand via the freely traded spot market. Rupantarita Prakritik Gas, part of Petrobangla, in June posted a notice looking for LNG suppliers for spot cargoes from 2018. However, not everyone believes Bangladesh and Pakistan will achieve their LNG ambitions. “It is likely to be an overly ambitious target… China took more than 10 years to reach 20 million tonnes of LNG imports. In India, it took 13 years to reach the same amount,” said Chong Zhi Xin. He also noted that the low domestic gas prices also required LNG imports to be subsidised in Bangladesh and Pakistan. Thus, “As LNG imports increase, so does the subsidy bill. Without pricing reforms, it would be a challenge for Pakistan and Bangladesh to fulfil their LNG import ambitions.” Hamid, however, is confident. In order to meet surging demand, he said LNG was part of an even bigger plan. “The solutions are FSRU, land-based LNG, deep sea exploration in the Bay of Bengal, and transnational (gas) grids ,” he said. Kevin Faulk Womens Jersey
ONGC finds gas, oil offshore West and East India
ONGC has three new offshore discoveries, the company revealed in its latest results statement. In the SWMH ML lease in the Mumbai Offshore basin, the company drilled exploratory well WO-24-3 (WO-24-C) to a depth of 2,360 m (7,743 ft). The well tested intervals in the Basal Clastics, Mukta and Panvel formations. All flowed gas and condensate. In the KG Offshore basin offshore eastern India, well GD-10-1(AA) in the KG-OS-DW-III PEL block was drilled to a depth of 2,829 m (9,281 ft), with two hydrocarbon zones tested in the Godavari clay formation. Both flowed gas. Finally, well GS-29#11 (GS-29-AL) in the GS-29 Extn. PML concession in the same basin was drilled to a depth of 2,718 m (8,917 ft). A sand objective in a Pliocene interval test-flowed oil and gas, boosting the company’s reserves at the Pliocene level in the GS-29 area and potentially improving prospects for a development. Danny Shelton Jersey
Indian Oil Corporation aims to source a tenth of oil needs from own assets
IOC aims to raise its refining capacity by about 89 percent to 3 million barrels per day (bpd) by 2030 by setting up new plants and expanding some existing ones, it said. India, the world’s third biggest oil consumer, imports about 80 percent of its oil requirements as its local production has not increased for decades. But the country wants to create integrated oil companies with activities both in oil production and refining by combining state-run oil firms. In its quest to become an integrated oil firm, IOC wants to expand its current portfolio of its oil and gas blocks. The refiner has a stake in eight domestic and nine overseas oil and gas blocks in Libya, Gabon, Nigeria, Yemen, Venezuela, Russia, Canada and USA, it said in the annual report. IOC, the country’s largest fuel retailer, controls 50 percent of the downstream marketing infrastructure and is beefing up its sales network to cater to rising fuel demand in India, the world’s third biggest oil importer. The refiner owns the largest crude oil and product pipelines network of about 12,848 kilometers and aims to add 8,000 kilometers by 2021. IOC also wants to tap refining and fuel retail opportunities in emerging markets in Southeast Asia and Africa. It is opening offices in Singapore, Malaysia and Bangladesh. IOC currently operates fuel retail and terminal operation in Sri Lanka and Mauritius. To tap India’s growing demand for gas, IOC plans to commission its 5 million tonnes a year LNG terminal in southern Indian in 2018-19, the annual report said. Kevin Huber Authentic Jersey
Bangladesh boom: Why South Asia has emerged as the new global LNG hotspot
South Asia, long a backwater for energy markets, is emerging as a hotspot for liquefied natural gas (LNG), with Pakistan and Bangladesh set to join India as major consumers, helping to ease global oversupply that has dogged this market for years. Only India and Pakistan currently import LNG in South Asia, taking in a combined 25 million tonnes, or 8 per cent of global demand last year. But with a fast growing population, strong economic growth and soaring energy demand, more import projects are being developed, lead by Pakistan and Bangladesh. “Both countries already have extensive gas infrastructure due to legacy production from domestic gas fields,” said Chong Zhi Xin, principal Asia LNG analyst at energy consultancy Wood Mackenzie. “As domestic production has failed to keep up with demand, both markets are a natural fit for LNG imports.” Pakistan only started importing its first LNG in 2015, and surprised some in the industry by developing its first terminal within schedule and budget. A second is about to become operational and a third is expected to be completed next year. With Bangladesh set to join the club of importers next year, the region could import 80-100 million tonnes a year by the mid 2020s, analysts said, making it the world’s second biggest import region, ahead of Europe. Bangladesh Boom Bangladesh, a country of over 160 million people, could import as much as 2,500 million cubic feet per day (mmcfd) of LNG, equivalent to around 17.5 million tonnes per year, by 2025, said Nasrul Hamid, Bangladesh’s state minister for energy and power. With its own gas reserves depleting and seeking to almost double power capacity to 24,000 megawatt (MW) by 2021, Bangladesh is tapping cheap and plentiful supplies on world markets and investing heavily in LNG. Several floating storage and regasification units (FSRU), the first developed by private U.S. company Excelerate Energy, are due to begin importing cargoes starting in 2018. “We are working on two FSRU’s from which gas will start flowing (by) next July,” Hamid told Reuters. Both FSRUs will be deployed off Moheshkhali Island in the Bay of Bengal, in the southeast of the country. They will have a combined capacity of 7.5 million tonnes a year. Two more FSRUs are planned, though no exact dates have been finalised. In addition, state-run Petrobangla signed a preliminary deal with India’s Petronet in December to set up an onshore terminal to regasify a further 7.5 million tonnes a year of LNG on Kutubdia Island, just to the north of Moheshkhali, at a cost of $950 million. “By 2025, depending on our national demand, we will import anywhere from 2,000 to 2,500 mmcfd gas,” Hamid said. Those imports would add to plans from India and Pakistan to buy 50 million and 30 million tonnes of LNG per year, respectively, by the mid-2020s. “LNG imports in South Asia are expected to rise four-fold from 22 million tonnes per year in 2016 to over 80 million tonnes per year by 2030,” said Mangesh Patankar, head of Asia/Pacific business development at energy consultancy Galway Group. Should all plans in the region go ahead and Sri Lanka also start imports, this figure could rise to 100 million tonnes, industry project data shows. That would push South Asia’s demand ahead of Europe as the world’s second biggest LNG import region by 2020, though it would still lag North Asia’s 150 million tonnes of annual imports. The boom in demand will help ease oversupply in LNG markets, which have resulted in a more than 70 percent price fall from their 2014 peaks to $5.75 per million British thermal units. Supply Talks Hamid said Bangladesh was in talks with Qatar’s RasGas and Indonesia’s Pertamina for long-term deals, while it also planned to import significant amounts of its future demand via the freely traded spot market. “We are looking for a mixture of both long-term contracts and the spot market,” Hamid said. Rupantarita Prakritik Gas, part of Petrobangla, in June posted a notice looking for LNG suppliers for spot cargoes from 2018. Not everyone believes Bangladesh and Pakistan will achieve their LNG ambitions. “It is likely to be an overly ambitious target… China took more than 10 years to reach 20 million tonnes of LNG imports. In India, it took 13 years to reach the same amount,” said Chong Zhi Xin. Low domestic gas prices also required LNG imports to be subsidised in Bangladesh and Pakistan, he said. “As LNG imports increase, so does the subsidy bill. Without pricing reforms, it would be a challenge for Pakistan and Bangladesh to fulfil their LNG import ambitions.” Hamid, however, is confident. In order to meet surging demand, he said LNG was part of an even bigger plan. “The solutions are FSRU, land-based LNG, deep sea exploration in the Bay of Bengal, and transnational (gas) grids,” he said. Paul Postma Jersey
In line with govt decision to raise rates every month, subsidised LPG price hiked by Rs 2 per cylinder
Subsidised cooking gas (LPG) price was today hiked by over Rs 2 per cylinder in line with the government decision to raise rates every month to eliminate all subsidies by fiscal end. A subsidised 14.2-kg of cylinder now costs Rs 479.77 in Delhi as against Rs 477.46 previously, according to Indian Oil Corp, the nation’s largest fuel retailer. Oil Minister Dharmendra Pradhan had yesterday told Lok Sabha that the government has asked state-run oil companies to raise subsidised cooking gas (LPG) prices by Rs 4 per cylinder every month to eliminate all the subsidies by March next year. The government had previously asked IOC, Bharat Petroleum Corp Ltd (BPCL) and Hindustan Petroleum Corp Ltd (HPCL) to raise rates of subsidised domestic LPG (liquefied petroleum gas) by Rs 2 per 14.2-kg cylinder per month (excluding VAT). Now, the quantum has been doubled so as to bring down the subsidy to nil, he said in a written reply in the Lok Sabha. Every household is entitled to 12 cylinders of 14.2-kg each at subsidised rates in a year. Any requirement beyond that is to be purchased at market price. According to IOC, a non-subsidised LPG or market priced cooking gas costs Rs 524 per cylinder in Delhi, down from Rs 564 till yesterday. Simultaneously, the oil companies also raised price of aviation turbine fuel or jet fuel by 2.3 per cent in line with rising global oil rates. ATF now costs Rs 48,110 per kilolitre, Rs 1097 per kl more than Rs 47,013 previously. State-owned oil firms revise rates of LPG and ATF on 1st of every month based on average oil price and foreign exchange rate in the previous month. Today’s hike in the LPG price is third since the May 30 order of the oil ministry to raise rates by Rs 4 per cylinder every month. The last hike was on July 1 when rates were up by a steep Rs 32 per cylinder — the steepest increase in six years. This hike was because of the May 30 order as well as reflection of hiked tax rates under the Goods and Services Tax (GST) regime. There are as many as 18.11 crore customers of subsidised LPG in the country. These include 2.6 crore poor women who were given free connections during the last one year under the Pradhan Mantri Ujjwala Yojna. There are another 2.66 crore users of non-subsidised cooking gas. Alex Erickson Womens Jersey
OPINION: Open up LPG market to private enterprise
It is welcome the Centre has asked oil companies to raise domestic LPG (cooking gas) prices by Rs4 per cylinder every month until the entire subsidy of about Rs87 per cylinder is wiped out. Following the implementation of direct benefits transfer for LPG to below poverty line (BPL) households, it makes no sense to provide such consumption subsidies for the non-poor. We do need to better allocate resources, for much-needed social and physical infrastructure. Note that the amount involved in providing subsidies on household fuels is huge and rising, about Rs30,000 crore per annum. Subsidised kerosene, a sooty pre-modern fuel and a poor source of light, needs to be promptly replaced with aids like solar lanterns. It should hugely improve public health. We also need to revamp market design for domestic LPG, complete with norms for sharing bulky infrastructure for supply and storage. What’s required is proactive policy to have parallel marketing of LPG, instead of simply mandating the trio of public sector oil companies to monopolise and corner the market. The efficiency gains from a more competitive LPG market would be very significant indeed. It would boost entrepreneurship, step up supply and is actually likely to reduce costs and prices going forward, transparently. Piped supply of gas in towns would be cheaper than distribution via cylinders. Composite cylinders would lower costs, as compared to steel ones. The government had earlier asked the LPG retailers to revise prices by Rs2 per month, to gradually remove the subsidy involved. The move now is to fast-track the price revision, so as to better allocate scarce resources. The upfront subsidy distorts the market, breeds corruption and comes in the way of efficiency improvement. Jordan Reed Authentic Jersey