India’s oil consumption to outpace China’s this year, Platts Analytics
Oil consumption in India is likely to increase by 7-8% this year, overtaking the demand growth in China for the third year in a row, as the demonetisation impact is expected to be for a short-term, according to Platts. The demand for LPG (liquefied petroleum gas) and transport fuels will increase, while demand for naphtha will get a boost due to new petrochemical projects. “For the third year in a row, India’s oil demand growth will outpace China’s demand growth,” Platts Analytics said in a note, while adding that it was likely to rise at around 7% to 4.13 million barrels a day in 2017 as compared with 3% in China’s oil demand to 11.5 million barrels a day. The cash crunch after the move of demonetisation is likely to dampen temporarily the country’s consumption for oil products in the first 3-month period or maybe a slight longer period, it said. “Whereas the growth fundamentals for oil demand in India continue to be high, slow growth in the starting months of this year due to demonetisation may dampen the overall growth of oil demand in 2017 to a little below of 2016 levels of 9%,” it said. “The dramatic increase in oil demand in India highlights no faltering signs. The country will continue to be a driver of growth in Asia in 2017, Platts said. Indian government’s drive for clean fuel, sharp expected growth in demand for transport and air travel, and the insatiable rise in petrochemicals will serve as a driver for petrol, LPG, jet fuel and naphtha, supporting oil products to reach close to double-digit growth this year, equivalent to the growth seen in 2016, if not higher. Diesel demand is likely to increase by around 4.5-5% in 2017, a little lower than the levels in 2016, as demonetisation had impacted the rural incomes. The demand for LPG is likely to grow by around 10.5% year-on-year in 2017, as compared to the estimated 11% in 2016. However, the demand for naphtha is likely to witness a double-digit growth. Juan Lagares Authentic Jersey
HPCL to restart crude unit at Vizag refinery in 2-3 days – Chairman
Hindustan Petroleum Corp will restart a 36,000 barrels per day crude unit at its Vizag refinery in 2-3 days, its chairman M. K. Surana said on Monday. HPCL had shut the crude unit at 166,000 bpd southern Indian plant last Friday following a minor fire in its crude unit due to a pipeline leak, the company spokesman said on Saturday. Remaining units at the refinery were operating normally, the spokesman had said. Chase Utley Authentic Jersey
India fuel consumption to hit 200 million tonnes in 2016/17 – Oil Ministry
India’s fuel consumption is likely to hit 200 million tonnes in 2016/17, an oil ministry executive said on Monday, in what would be the highest such level in at least 16 years. “Demand for petroleum products is increasing as the economy grows. India has the best growth amongst the large economies in the world … we have massive hunger for petroleum products,” said oil ministry Additional Secretary A K Sawhney. India’s fuel consumption surged 10.9 percent to 183.5 million tonnes in 2015/16. A level of 200 million tons would compare to almost 1 billion tonnes in U.S. fuel consumption and to around 575 million tonnes of demand in China. Kansas City Chiefs Womens Jersey
US reservoir evaluation firm puts gas reserves in Deen Dayal West field at about 1trillion cubic ft
Oil & Natural Gas Corporation, India’s biggest energy exploration company, has invested about $1 billion to operate what could turn out to be the toughest field on its hands, where the reserves have been drastically scaled down and the potential output is pegged lower than the initial estimates. ONGC acquired an 80 per cent stake held by Gujarat State Petroleum Corp (GSPC) in the Deen Dayal West field and six other areas in the Krishna Godavari Basin off the country’s east coast, the state-owned explorer said on December 23. While the company said the acquisition of operatorship rights in the block “fits well with the strategy of ONGC to enhance natural gas production from domestic fields” at a faster pace, there are indications that the field was not a viable option. ET has followed the at-times tense negotiations between the two companies over the past few months. Now, there is evidence that the road ahead for ONGC will indeed be difficult and at variance with the lofty claims that have been made. The challenge for ONGC lies in the findings by Ryder Scott Petroleum Consultants, a Houston-based reservoir evaluation firm hired to certify the hydrocarbons present and recoverable in the KG-OSN-2001/3 block. In a 100-page report submitted in November, Ryder Scott placed the gas reserves in the Deen Dayal West field at about 1 trillion cubic feet (tcf), a top official with direct knowledge of the matter told ET. One tcf of natural gas is enough to heat 15 million US homes for one year or generate 100 billion units of electricity. “Initially, we were told by GSPC that gas reserves were around 14 tcf, then asked to work around 7 tcf. There is now an indication that around 1 tcf of gas present in KG-OSN-2001/3 block,” the official said, requesting anonymity. Still, the gas may not be easy to recover as it is a difficult field, with extremely high temperature and pressure, the official said. “We have done due diligence for this deal,” AK Dwivedi, Director (Exploration) at ONGC, said after the board approved the acquisition. “We worked around reserves of 1.05 tcf and did due diligence around that. These were our estimates also.” According to senior ONGC officials, Ryder Scott has also projected a gas recovery rate of about 19 per cent, against ONGC’s estimate of about 24 per cent. GSPC defended the deal, saying the field holds potential that ONGC is capable of exploiting. “Yes, I know that it is a high temperature field, but with potentiality and gas recovery is possible with technique of hydro fracking. We have done that in adjoining field D4,” said JN Singh, Managing Director of GSPC. “This is a fair deal for both ONGC and GSPC. Our infrastructure only is worth about .Rs 8,000-9,000 crore with undersea pipelines and onshore infrastructure. ONGC has the technical expertise and financial muscle, which we lack.” However, GSPC wasn’t able to start commercial gas production at the field even after investing over $3 billion and amassing Rs 20,000 crore of debt. The road to the deal was a rocky one. ONGC will pay $995 million for the 80 per cent stake and operatorship rights for the field in KG-OSN-2001/3 block and $200 million for the six other discoveries. Both ONGC and GSPC had differences over the quantity of reserves in the block, the amount of capital and the operating expenditure needed, prices for gas and condensate from the block and the discount rate to calculate the net asset value, according to official sources. According to Singh of GSPC, who spoke to ET in October, the differences between the companies would be resolved because both “are government bodies.” Top ONGC and GSPC officials confirmed to ET that meetings were held with petroleum ministry officials in December to work out the modalities of the deal. The main worries were the volume of gas reserves and the viability of the field, even as GSPC maintained that ONGC had the technical capability to develop the asset. “We shared our concerns that gas reserves are less than 2 tcf against claims of 14 tcf – that also very difficult to recover. That it is not an economically viable option for us,” according to an ONGC official familiar with the developments in the deal. T Natarajan, joint managing director of GSPC, said, “ONGC has the capability and resources to develop DDW field. They have also done their internal study.” Jake Rudock Jersey
Petrobangla moves to sign deal soon
The government has moved afresh to initiate a deal with Qatar’s Ras Gas to import expensive LNG six years after inking a MoU, said sources. A high-level government team is expected to visit Qatar within this month to discuss elaborately on issues regarding the quantity of liquefied natural gas (LNG) to be imported from Qatar and its pricing, LNG Cell Chief of Petrobangla Md Quamruzzaman told the FE Saturday. State-run Petrobangla earlier had inked a memorandum of understanding (MoU) with Qatar in January 2011 to import around 4.0 million tonnes of LNG annually. It later extended the deadline of the MoU twice due to delaying of works to build LNG import terminal. Petrobangla inked a ‘confidentiality’ deal with Qatar’s Ras Gas in Doha in October 2015 to facilitate import of LNG. Inking the initial agreement would be a follow-up deal after signing of the ‘confidentiality deal, said Petrobangla official. Officials said, Petrobangla has now been ‘liberal’ to award deals to private sector for building LNG terminals under Quick Enhancement of Electricity and Energy Supply (Special Provision) Act, 2010 bypassing competitive tendering process. Petrobangla, also known as Bangladesh Oil, Gas and Mineral Corporation, inked the first final deal with US-based Excelerate Energy Bangladesh Ltd for construction of the South Asian country’s first LNG terminal – a FSRU (floating, storage and re-gasification unit) – at Moheshkhali island in the Bay of Bengal on July 18, 2016. Excelerate is now working to implement the project having the LNG import handling capacity of up to 700 million cubic feet per day (mmcfd), said Mr Quamruzzaman. It later inked a MoU on December 29, 2016 with India’s Petronet to build another LNG import terminal at Kutubdia island having a capacity to handle around 1,000 mmcfd of imported LNG. Petrobangla again initiated a deal with Summit LNG Terminal Company Pvt Ltd on January 4, 2017 to build another FSRU at Moheshkhali island having the capacity to handle around 500 mmcfd of gas. It has now moved to sign another deal with Indian Reliance to build another LNG terminal at Moheshkhali island, said a senior Petrobangla official. State-run Power Cell has also planned separately to build a LNG terminal in the same area at Moheshkhali, said officials. Under the deals, Petrobangla would have to pay charges and fees to the LNG terminal builders even if it does not import LNG through the terminals, said Petrobangla sources. Excelerate would charge around US$0.59 per unit (1,000 cubic feet) of natural gas as service charge and costs for tag boat operation, port facility etc. Costs for Petronet, Summit and Reliance are almost similar to that of Excelerate. Petrobangla has estimated that the government would have to spend around $1.57 billion annually to import LNG only through the terminal to be built by Excelerate at an estimated cost for LNG at US$8 perMcf. Bangladesh is now reeling under acute natural gas crisis with daily average output of around 2,700 mmcfd of gas against the demand for over 3,300 mmcfd, according to Petrobangla. The country started facing natural gas crisis from 2009 with rapid industrialisation forcing Petrobangla to ration natural gas supplies to gas-guzzling industries, power plants, CNG (compressed natural gas) filling stations and households. Micah Hyde Authentic Jersey
Turkmenistan sets up company for TAPI project financing
Turkmenistan has established a company for financing Turkmenistan-Afghanistan-Pakistan-India (Tapi) gas pipeline project and allocated US $2 billion from its own resources to implement the project, which will be completed by end-2019 to export gas to Kabul, Islamabad and New Delhi. The four nations as part of the gas pipeline project had already registered the company in November 2014 in which Afghanistan, Pakistan and India would have five percent shareholding each and the remaining 85 percent stake would be held by Turkmenistan. The investment agreement pertains to five percent shareholding of each of the three gas-importing countries, which means an initial investment of around $200 million. The National Assembly”s Standing Committee on Petroleum and Natural Resources in its last meeting expressed serious reservations over Pakistan government” imposition of a levy for financing of the project. The committee members argued that there was no need to imposition of levy, when 85 percent stake was held by Turkmenistan. Sources said there were two types of investment in Tapi project as $15 billion for developing field. This project had been awarded to Japanese companies that were working to extract gas against service fee and they would not become shareholders in gas field. Other portion was the pipeline project, which requires pipeline material and compressors as well as around $10 billion fund to lay pipeline. Earlier, Asian Development Bank (ADB) was playing role of transaction advisor. Therefore, it had expressed inability to join this project as financier due to conflict of interest being transaction advisor. However, it had surrendered its role as transaction advisor now and offered $1 billion to finance this project. The ADB is being dominated by Japan and the bank made offer of financing after Japanese companies” consortium won contract of developing gas field in Turkmenistan from where gas is to be supplied to Pakistan, Afghanistan and India under the Tapi pipeline project. Islamic Development Bank (IDB) dominated by Saudi Arabia had also offered $500 million to finance Tapi pipeline project. The Tapi Company is to achieve financial close of the project by end of this year. Sources said security survey in Afghanistan work completed, adding the mine swiping work had been initiated. Turkmenistan will invest around $25 billion to deliver 3.2 billion cubic feet of gas per day (BCFD) to energy-hungry Afghanistan, Pakistan and India by December 2019, which will continue for 25 years. A gas sale and purchase agreement had already been signed in 2013 to set the pricing mechanism, under which the gas price at Turkmenistan border would be around 20 percent cheaper than Brent crude. Pakistan and India will receive 1.325bcfd of gas each, while Afghanistan will get 500mmcfd. Slater Koekkoek Authentic Jersey
2,288 tons of diesel arriving from India
Bangladesh Petroleum Corporation (BPC) is paying $5.5 per barrel to the Indian supplier while other international suppliers charge $4. BPC Chairman Abu Hena Md Rahmatul Muneem told the Dhaka Tribune: “The deal is a part of a cooperation plan between the two neighbours. “The diesel shipment will arrive by rail on Sunday.” The purchase of 2,288 tonnes of diesel was confirmed in late 2015, ahead of another 2,200 tonnes of diesel shipment in 2016. The deal was made between BPC and Numaligarh Refinery Ltd (NRL), a subsidiary of Indian state-owned Bharat Petroleum Corporation. Forty coaches will ship the fuel from Siliguri to Parbatipur in Dinajpur – a 516km journey over three days, beginning on January 12 and arriving on January 15. The previous shipment in March 2016 had Bangladesh pay $7 per barrel for the 2,200 tonnes of diesel purchased from NRL. Officials said the price has come down from $7 to $5.5 per barrel this time because of the fall in international market prices. The costs of fuel transportation and the loss from evaporation will be covered from the premium. Tom Kuhnhackl Womens Jersey
Demonetisation: Digital payments more than double at OMCs’ fuel outlets
Before demonetisation, few retail outlets in the country had digital payment options Digital transactions at fuel outlets have more than doubled to Rs 4.80 billion daily from Rs 1.50 billion in the pre-demonitisation days. On a daily basis, the sale of petrol, diesel and compressed natural gas comes to around Rs 18 billion. “This means, of the Rs 540 billion business that we are doing on a monthly basis, about 26-28 per cent, or around Rs 144 billion, is through cashless transactions,” said an official source. Before demonetisation, only a couple of thousands of retail outlets in the country had digital payment options which has now increased to 37,828 fuel outlets. After demonetisation on December 8, finance minister Arun Jaitley had announced a 0.75 per cent discount on cashless purchases of petrol and diesel. This amount is likely to be absorbed by oil marketing companies like Indian Oil Corporation Ltd, Bharat Petroleum Corporation Ltd and Hindustan Petroleum Corporation Ltd which may come to around Rs 24 billion on an annual basis. According to the Dharmendra Pradhan-led ministry of oil, share of digital transactions in company-owned company-operated outlets have zoomed to 55 per cent. India has 53,522 retail outlets owned by public sector undertakings, of that 33,169 got point of sale (PoS) machines as of January first week. “We have submitted documents to banks for another 20,000 PoS machines. By March this year, we expect to have 100 per cent digital outlets in the country,” the official added. From November 8 onwards, petroleum ministry has organised more than 33,000 customer awareness programmes, 40,000 standees have been placed to spread digital literacy and also launched promotion drives in all the languages. However, later the digitalisation drive had led to confusion on who will bear the brunt for a levy of 1 per cent charged on all credit card transactions, and between 0.25 per cent to 1 per cent on all debit card transactions. Following this, All India Petroleum Dealers Association and Consortium of India Petroleum Dealers (CIPD) announced that from 9 January it would not accept cards. However, with intervention from Pradhan, the associations later went back on the decision. On Thursday, Pradhan assured that neither the consumers nor the dealers will be bearing the cost for additional charges levied on card transactions at petrol pump outlets. Boomer Esiason Authentic Jersey
India’s 2016 Iran oil imports hit record high with refiners resuming purchase
India’s annual oil imports from Iran surged to a record high in 2016 as some refiners resumed purchases after the lifting of sanctions against Tehran, according to ship tracking data and a report compiled by Thomson Reuters Oil Research and Forecasts. The sharp increase propelled Iran into fourth place among India’s suppliers in 2016, up from seventh position in 2015. It used to be India’s second-biggest supplier before sanctions. For the year, the world’s third biggest oil consumer bought about 473,000 barrels per day (bpd) of oil from Iran to feed expanding refining capacity, up from 208,300 bpd in 2015, the data showed. In December, imports from Iran trebled from a year earlier to about 546,600 bpd. In 2015 refiners slowed purchases due to sanctions which choked payment routes, insurance and halved Iran’s exports. Indian refiners Reliance Industries, Hindustan Petroleum, Bharat Petroleum and HPCL-Mittal Energy Ltd (HMEL) last year resumed imports from Tehran, attracted by the discount offered by Iran. “In most of 2016 there was a fight among Gulf producers to increase their market share and lifting of sanctions against Iran has intensified that fight,” said Ehsan ul Haq, senior analyst at London-based consultancy KBC Energy Economics. In April-December, the first nine months of this fiscal year, Iranian supplies to India averaged a record 530,300 bpd, up from about 400,000 bpd before sanctions tightened against Tehran. India’s 2016 Iranian oil imports were the highest in at least six years, according to the Reuters data. Government data going back over a longer period shows the average was the highest since the 2001-02 fiscal year. Overall, India imported 4.3 million bpd oil in 2016, up 7.4 percent from the previous year. Middle-East Jump Rising imports from Iran and Iraq lifted the Middle Eastern share in India’s crude diet to 64 percent in 2016, reversing a declines in recent years, partly due to rising prices for Atlantic Basin oil tied to Brent. The average premium for Brent jumped against Dubai crude to more than $3 a barrel in 2016 from around $1.80 in 2015. “In 2016 Iran ramped up its output to regain market share while Iraq segregated its production into Basra Light and Heavy to attract customers. Basra Heavy was sold at a discount, making it more attractive than rival grades,” said Haq. Iran’s share of Indian oil imports surged to 11 percent in 2016 from 5 percent in 2015. Saudi Arabia remained the top supplier to India last year followed by Iraq and Venezuela. Imports from Latin America declined for a second year, with its share of imports shrinking to about 16 percent from 18 percent, while Africa’s share fell to about 15 percent from a fifth. “Low oil prices brought down production in Latin America while Nigerian barrels were impacted by violence in the Niger Delta. Also falling U.S. oil output impacted trade flows, with some Latin American and African oil finding a place in the U.S.,” Haq said. Nick Perry Authentic Jersey
Ministry leaning towards second generation ethanol from agri waste: Pradhan
The Petroleum and Natural Gas Ministry is gearing up to move towards second generation ethanol from agriculture waste. Dharmendra Pradhan, Minister of State – Independent Charge, Ministry of Petroleum and Natural Gas, said the country is moving heavily towards ethanol blended fuel, although for the present, it is committed to procuring from sugar industries. “Nevertheless, we are also contemplating second generation ethanol from agriculture waste, ethanol from rice straw, from different biodiversity, through chemical processes and using alternative technology.“Incidentally, towards this move, we laid the foundation for one such plant in Punjab on December 25. We are planning 11 more such pilot plants in different parts of the country, including one in Tamil Nadu,” he said in reply to a query. The Punjab project is expected to become operational in two years, he said without further elaboration. Kyler Fackrell Jersey