Indian companies can take part in oil and gas projects in Russia’s offshore Arctic
Indian companies can take part in development of oil and gas fields on the Russian Arctic shelf, Russian President Vladimir Putin said in his article “Russia and India: 70 years together” for The Times of India newspaper, published on Tuesday to commemorate 70th anniversary of establishment of diplomatic ties between two countries. “The possibilities for the participation of Indian companies in joint hydrocarbons exploration and production projects in the Russian Arctic shelf are currently under consideration,” the Russian President said. The two countries are successfully pursuing cooperation in the traditional energy resources sphere, he said. In particular, “the purchase of a block of shares in the Russian company “Vankorneft” made by the Indian consortium of companies has become the biggest bilateral deal in the oil industry,” Putin said. “There are also good prospects for cooperation in the solar energy field, modernization of the existing power plants and construction of new ones in the territory of India,” he added. Large-scale projects are carried out in mechanical engineering, chemical and mining industries, aircraft construction, pharmaceutics and medicine, the Russian leader said. “One of the priorities is to boost the trade turnover and improve its structure, as well as stimulate economic activity of our business communities,” Putin said. “I am referring to enhancing industrial cooperation and increasing supplies of high-tech products, creating a better business and investment environment, and using systems of payments in national currencies,” the Russian President noted. “The decision to start negotiations on a free trade area agreement between the Eurasian Economic Union and India adopted in December 2016 is of particular importance,” Putin said. “The possibilities of creating the International North South Transport Corridor are being explored,” he added. All these factors are to “promote the development of our bilateral and regional cooperation,” the Russian President said. Furthermore, “Russia is committed to long-term participation in the “Make in India” program initiated by Prime Minister Narendra Modi,” Putin said. Larry Webster III Authentic Jersey
OVL steps up efforts to recover $400 mil from Sudan in oil dues
ONGC Videsh Limited has stepped up efforts to recover $400 million as dues from Sudan on its investment in oil assets including setting up a pipeline network connecting to the Red Sea, company officials said on Wednesday. In 2003, OVL, the overseas arm of state-owned Oil and Natural Gas Corporation, bought a 25% stake in the Greater Nile Oil Project that managed blocks 1, 2 and 4 in undivided Sudan. China Petroleum Company has a 40% stake in GNOP, Malaysia’s Petronas a 30% share and state-owned Sudapet holds the remaining 5%. These blocks are located in the Muglad basin, about 780 km southwest of Khartoum, the capital of Sudan. The project had started production in 1999 with an initial area of 49,500 sq km in the Muglad basin. But after the creation of South Sudan and Sudan as two separate countries in July 2011, blocks 2A, 2B and 4N came under Sudan, while blocks 1A, 1B and 4S went to South Sudan. At present, the total area of the blocks under GNPO is 29,749 sq km. The Sudanese project produced around 50,000 b/d while the 4N project was in the exploration stage, officials said. OVL’s outstanding dues were related to Sudan’s local refineries using crude from GNOP as against its share. After the division of the African country, the Sudanese government’s share of total crude output in Sudan was not sufficient to meet demands of local refineries and foreign companies such as OVL were asked to sell their share of crude oil to the government. “We have intensified efforts to recover our dues through the diplomatic channel. But it is difficult to predict when the amount will be received,” said a senior OVL official. OVL has 37 projects across 16 countries, including Azerbaijan, Bangladesh, Brazil, Colombia, Kazakhstan, Mozambique, Myanmar, Russia, South Sudan, Sudan, Venezuela, Vietnam and New Zealand. Micah Hyde Authentic Jersey
Itochu to buy into Indian LPG terminal
Itochu will help run a liquefied petroleum gas receiving terminal in eastern India, seeing a chance to bolster gas sales in the country as Prime Minister Narendra Modi promotes higher use of the fuel. The Japanese trading house will spend 2.5 billion rupees ($38.6 million) in July to buy a 19.7% stake in Hindustan Aegis LPG, the operator of the facility in the state of West Bengal. In the same month, the Mumbai-based company will begin operating the terminal, which has an annual LPG storage capacity of 2.5 million tons. Hindustan Aegis will receive tank leasing fees from gas importers. In addition to India, Itochu operates LPG import hubs in Japan and the Philippines. It sells 6 million tons of LPG annually to countries such as Japan, South Korea and the Philippines. With help from its Indian business, the trading house targets 10 million tons in annual sales by 2020. India’s LPG demand ranks third worldwide by volume, trailing the U.S. and China. Demand is estimated to grow from about 21 million tons in 2016 to around 25 million tons by 2022, says India’s Petroleum Planning & Analysis Cell. Imports currently meet about half of India’s LPG needs, with demand on the rise from factories and power plants. Jonas Siegenthaler Jersey
OVL steps up efforts to recover $400 mil from Sudan in oil dues
ONGC Videsh Limited has stepped up efforts to recover $400 million as dues from Sudan on its investment in oil assets including setting up a pipeline network connecting to the Red Sea, company officials said on Wednesday. In 2003, OVL, the overseas arm of state-owned Oil and Natural Gas Corporation, bought a 25% stake in the Greater Nile Oil Project that managed blocks 1, 2 and 4 in undivided Sudan. China Petroleum Company has a 40% stake in GNOP, Malaysia’s Petronas a 30% share and state-owned Sudapet holds the remaining 5%. These blocks are located in the Muglad basin, about 780 km southwest of Khartoum, the capital of Sudan. The project had started production in 1999 with an initial area of 49,500 sq km in the Muglad basin. But after the creation of South Sudan and Sudan as two separate countries in July 2011, blocks 2A, 2B and 4N came under Sudan, while blocks 1A, 1B and 4S went to South Sudan. At present, the total area of the blocks under GNPO is 29,749 sq km. The Sudanese project produced around 50,000 b/d while the 4N project was in the exploration stage, officials said. OVL’s outstanding dues were related to Sudan’s local refineries using crude from GNOP as against its share. After the division of the African country, the Sudanese government’s share of total crude output in Sudan was not sufficient to meet demands of local refineries and foreign companies such as OVL were asked to sell their share of crude oil to the government. “We have intensified efforts to recover our dues through the diplomatic channel. But it is difficult to predict when the amount will be received,” said a senior OVL official. OVL has 37 projects across 16 countries, including Azerbaijan, Bangladesh, Brazil, Colombia, Kazakhstan, Mozambique, Myanmar, Russia, South Sudan, Sudan, Venezuela, Vietnam and New Zealand. Andre Hal Authentic Jersey
IOC, Oil India, BPCL in talks to buy 49% stake in Russia’s Vankor field
Indian Oil Corp (IOC) and its partners are in talks to buy 49 per cent stake in Russia’s Vankor cluster oilfields to consolidate their presence in the energy-rich Arctic region. IOC, Oil India Ltd and Bharat PetroResources Ltd (a unit of Bharat Petroleum Corp. Ltd or BPCL) is looking at buying a stake in Suzunskoye, Tagulskoye and Lodochnoye fields – collectively known as Vankor Cluster, sources privy to the development said. ONGC Videsh Ltd (OVL), the overseas arm of state-owned Oil and Natural Gas Corp (ONGC), is also interested in the fields. Rosneft, Russia’s national oil company that owns the fields, wants to retain a majority stake and is keen to sell only up to 49 per cent stake. In case OVL is accommodated, the entire 49 per cent stake would have to be split between the Indian companies. OVL may possibly take 26 per cent in proportion of the stake it bought in the main Vankor oilfield. OIL-IOC-BPRL may take 23.9 per cent stake in line with its holding in the main Vankor field. Vankorneft, a subsidiary of Rosneft, is developing the Vankor oil and gas condensate field, situated in the northern part of Eastern Siberia. In 2013, Vankorneft was chosen as an operator on development of new fields of Vankor cluster – Suzunskoye, Tagulskoye and Lodochnoye fields, located close to the Vankor field. The reserves of Suzunskoye field exceed 56 million tonnes of oil and condensate, and 35 billion cubic meters of gas. Last year, OVL first acquired 15 per cent stake in Russia’s second biggest oilfield of Vankor for $1.268 billion and then bought another 11 per cent for $930 million. The 26 per cent stake would give OVL 7.31 million tonnes of oil. The consortium of OIL-IOC-BPRL acquired 23.9 per cent stake in the field at a cost of $2.02 billion, giving them 6.56 million tonnes of oil. Rosneft continues to hold the remaining 50.1 per cent shares of JSC Vankorneft. The field has recoverable reserves of 2.5 billion barrels. Besides, the OIL-IOC-BPRL consortium has taken another 29.9 per cent stake in a separate Taas-Yuryakh oilfield in East Siberia for $1.12 billion. The investments have taken the total outlay in Russia this year to $5.46 billion. These investments will give India 15.18 million tonnes of oil equivalent. The investment made compares to $28.48 billion investment by Indian companies overseas in the past 50 years, giving it about 10 million tonnes of oil equivalent. While Vankor produces about 442,000 barrels of oil per day (4 per cent of Russian crude oil production), Taas currently produces about 21,000 barrels per day of oil, and a peak of 1,00,000 bpd is expected by 2021. Ray Bourque Authentic Jersey
GDF Suez Cape Ann deal heralds new liquidity for FSRUs
Höegh-owned, Engie-chartered GDF Suez Cape Ann will be the first floating storage and regasification unit (FSRU) based in India. H-Energy has fixed the vessel at Jaigarh in the west of the country from June next year. Various India-based FSRU projects have stalled, mostly because of cost and projected demand. H-Energy chief executive Darshan Hiranandani tells LNG World Shipping that he fixed GDF Suez Cape Ann for a very keen price. “Two years ago FSRU charter rates were so expensive that only governments or super-majors could afford these ships, to support 20-year offtake contracts,” he said. Mr Hiranandani’s comments raise an intriguing question – what does it cost to charter an FSRU? LNG carrier charter rates are transparent. In May, modern ships lifting Atlantic Basin LNG spot cargoes were earning US$30,000-US$45,000/day. “General LNG rates have fallen substantially, but that has been a trend for longer than two years,” says MSI director Stuart Nicoll. “ A lot of old LNG ships are seeking conversion, which should mean more interested parties bidding for FSRU work. “That should certainly make the FSRU market a lot more competitive.” Simpson Spence Young (SSY) Gas director Debbie Turner says that without knowing how Engie will support the H-Energy charter, it is impossible to determine the rate. “H-Energy got a cheaper deal [because they] have a small FSRU,” Ms Turner says. No market If GDF Suez Cape Ann is affordable, this must be because the market is deteriorating or oversupplied – or because the ship’s circumstances have changed, Mr Nicoll says. “The ship is on long-term charter to Engie, at what seems to be a very high rate if you take Höegh’s accounts at face value, having cost nearly US$300 million to build. “There was a break clause in the initial 20-year charter last year or at any time thereafter giving two year’s notice, but it doesn’t seem to have been exercised. That would imply that Engie needs a decent income on the vessel to cover its costs. This is especially the case after GDF Suez Cape Ann’s employment fell through on the Tianjin project.” There is not yet a market for FSRUs, says Drewry senior research analyst LNG Shresth Sharma. “Usually, there is no general charter rate for FSRUs. It depends on the vessel specification – new-built or old, contract duration, vessel-employment flexibility, and so on,” he says. Rates that FSRUs have fixed in four earlier deals suggest a figure for some tonnage, see table. “In 2013-2015, the rate has hovered between US$120,000-US$150,000/ day,” Mr Sharma says. “However, of late the charter rate for FSRUs has also been coming under pressure and rates are currently around US$100,000 per day.” Another broker, speaking off the record, highlights the variables: “I am intrigued by H-Energy’s comments. FSRUs have not come down that much in price. They are still around US$110,000-US$135,000/day, depending on the project requirements. “This really is the question. Project requirements saw an Excelerate vessel fixed into Israel at around US$170,000/ day. Why? They took the infrastructure from the Gulf Gateway and placed it offshore Israel, then put the total cost into the charter hire. And within a one-year time period.” The broker says Golar LNG Partners fixed its larger FSRUs for US$125,000-US$135,000/day. Other deals offered a golden handshake. “The second FSRU that went into Egypt gave a very cheap rate for the first six months, then went back up to the US$120,000s for the remainder,” the broker says. “These vessels are all in the region of 170,000m³ and can process up to 7.4 million tonnes a year.” A second broker says Turkish project partners Kolin, Kalyon and Etki Liman fixed GDF Suez Cape Ann sistership Neptune for a very low US$20,000-30,000/day, “plus significant additional operating expenditure, increasing the total costs to US$50,000-70,000/day. From the shipowner point of view, this may be a competitive deal; this project had an element of urgency”. Segments This second broker sees FSRU charters as a three or four-tier market: • First-generation FSRUs, built in the 2000s • Modern, standard-sized FSRUs circa 170,000m³, owned by Höegh, BW Gas and Golar • Barge-based FSRUs/converted floating storage units (FSUs) • Mitsui OSK’s 260,000m³, 2017-built FSRU, now seeking a short-term fixture “Charter rates for some of those older ships can be quite competitive, particularly when the vessel in question has been unemployed as an FSRU,” this broker says. “It probably doesn’t cost much more than US$100,000/day to charter such a ship.” The fourth tier is a category of one: Mitsui OSK’s (MOL’s) giant FSRU to be delivered this summer and chartered to Uruguay-based Gas Sayago to import up to 4 mta. However, Montevideo will not need the FSRU until autumn 2018. MOL director Takeshi Hashimoto told this publication in January that he hoped to fix the FSRU “for about one year”. Industry sources name Turkey, Argentina and Hong Kong as prospective suitors. MOL is said to be negotiating a short-term deal of US$130,000/day – if the counterparty is solid. Höegh LNG president Sveinung Støhle says Hong Kong Electric (HKE) wants a 170,000m³-260,000m³ FSRU. Enarsa of Argentina is said to be looking for an FSRU the size of a Q-flex or even a Q-max LNG carrier for the Puerto Rosales project. Brokers doubt these large FSRUs will become the norm. “We don’t anticipate a trend towards building bigger units,” says the second. “Ships on this scale do not offer the flexibility that is the unique selling point of an FSRU. “To build it for a specific project, you need a 20-year charter agreement to justify the cost – all of that comes at a price. You can only justify having so much more storage for a market of significant demand. “Bigger FSRUs might seem the perfect solution to a high-demand market. But ordering such a unit presents a greater risk than usual for owner and financier.” Liquidity All the brokers feel the FSRU business is changing, in terms of pricing and liquidity. By June, Höegh and BW Gas had received the first two of six FSRUs
Gujarat Gas enters into non-binding MoU with PLL
Gujarat Gas has entered into a non-binding MoU with Petronet LNG (PLL) for exploring – dispensing and marketing of LNG including the L-CNG at GGL CNG stations. Earlier in January, Petroleum and Natural Gas Regulatory Board (PNGRB) had granted permission to the company to lay, build, operate or expand city or local natural gas distribution network (CGD) in Ahmedabad, Gujarat. Gujarat Gas (formerly known as GSPC Distribution Networks ), has emerged as India’s largest city gas distribution player with presence spread across 19 Districts in the State of Gujarat and Union Territory of Dadra Nagar Haveli and Thane GA which includes Palghar district of Maharashtra. Kareem Martin Womens Jersey
GAIL India To Invest Rs 10 billion To Help Dabhol LNG Terminal Operate All Year
GAIL India will invest. Rs 10 billion on the liquified natural gas terminal at the Ratnagiri Gas and Power Private (RGPPL) to make it an all-weather port by 2019, said BC Tripathi, chairman, GAIL. RGPPL, the second avatar of the troubled Dabhol power project, is in the process of demerging the power plant and the LNG terminal to make the project financially more viable as the project continues to struggle to keep afloat even after a decade since banks and public sector units stepped in to revive it. We will hold over 70% in the demerged LNG terminal and our aim would be to convert it into an all-weather port so that we can run it at full capacity, Tripathi said. After the original promoter of the project Enron declared bankruptcy in 2001, it was taken over for revival by RGPPL, backed by the government, in 2005. GAIL and NTPC are the biggest shareholders with 25.1% each, while the government of Maharashtra owns 13.51% and lenders have a 35.47% stake. Post the demerger, GAIL would be a majority stakeholder in the LNG terminal, while NTPC would lead the power project that would run a 500 mw unit. We hope to give the contract for the breakwater project and expect it to be operational by monsoon in 2019, said Tripathi. A breakwater is an offshore structure built to break the intensity of the waves so that the terminal can work all year. Right now, this terminal cannot operate for almost five months between June and September since the choppy sea poses risks to the ships. The company had hoped to award the project by October last year but it has been delayed. The demerger of the power plant and the LNG regasification unit has been delayed since lenders such as Power Finance Corp and LIC had put forth conditions. The power plant is in pact to supply 500 mw to the Indian Railways Jordan Hicks Authentic Jersey
India’s record diesel demand to continue in 2017, growth to slow
India’s diesel demand is expected to rise to record levels again this year as a slew of infrastructure projects boosts use of the transport and industrial fuel, although a government-induced cash shortage will hold growth to its slowest in three years. Increased fuel efficiency, a fall in commercial vehicle sales, and the use of other fuels for power generation are also expected to dent demand growth for diesel, analysts and traders told Reuters. “The first quarter saw delayed effects of demonetisation but I think (diesel demand) should improve as there are a number of projects going on such as road and railways, which should drive diesel demand up,” said Tushar Bansal, director of Ivy Global Energy, a Singapore-based consultancy. India has budgeted a record $59 billion for 2017/18 for infrastructure such as ports, roads, railways and power. The world’s third largest oil consumer guzzled 6.955 million tonnes of diesel in April, the highest so far this year and near a record of 6.958 million tonnes hit in May 2016, the latest government data showed. Still, a weak first quarter is expected to hold India’s diesel demand growth at 1.6 to 3 percent this year, a gain to 1.63 million to 1.65 million barrels a day, analysts from energy consultancies FGE and Wood Mackenzie said. This is the slowest annual growth for diesel since 2014, down from a rise of more than 5 percent in 2015 and 2016. “The slowdown is a result of the demonetization drive, which dampened economic growth for a few months since its implementation in November last year,” said Sri Paravaikkarasu, head of FGE’s East of Suez Oil. April sales of India’s commercial vehicles, which consume mainly diesel, fell 23 percent year-on-year, for instance. Sales of passenger cars and motorcycles, however, mostly powered by gasoline, have started to recover. Woodmac expects India’s diesel growth to moderate at 3.2 percent a year over 2017 to 2025, down from an average annual growth rate of 3.9 percent from 2010 to 2016. “The main reasons for a slowdown lies in increasing fuel efficiency, more substitution (for) oil, primarily diesel, in the power sector and a bearish outlook for diesel cars in India,” said Sushant Gupta, research director for Woodmac’s Asia-Pacific refining. Still India’s diesel demand growth in 2017 accounts for one third of Asia’s demand growth for the fuel, he said. “It is a positive story compared with China, where we expect diesel demand to be in slow decline. Mike Hull Womens Jersey
ONGC’s onshore domestic crude production rises 2.4 pc in FY17
The state-run ONGC has seen reversal in onshore domestic crude oil production as it increased to 5.97 MMT during the fiscal year ended March from 5.82 MMT in FY16, logging a growth of 2.4 per cent due to early monetisation of discoveries at Ankleshwar, Cauvery (Madnam) and Rajahmundry (Keshnapalli West), among others. ONGC Chairman and Managing Director D K Sarraf today also said that the last fiscal year has been “excellent” one as the company had as many as 23 new discoveries compared to 17 in 2015-16. “Around 60 per cent of the discoveries have been monetised in the same year,” Sarraf told reporters here. Of the 23 new discoveries made in last fiscal, 13 discoveries were in the onshore wells and 10 in the offshore wells, he said. The production is expected to jump further to 6.05 MMT during the current year backed by similar monetisation of Ahmedabad (Gamij) and Mehsana besides existing ones in Cauvery (Madnam) and Rajahmundry (Keshnapalli West). The company drilled its highest-ever number of wells — 501 — during FY17, against 392 in FY16 and 401 in FY15. The Central government’s initiative for `Reassessment of Hydrocarbon Resources (HC)’ in Indian sedimentary basins which is being undertaken by ONGC is expected to get complete by end of November this year, Sarraf said. Curtis Samuel Womens Jersey