Putin launches natural gas pipeline supply to Crimea
Russian President Vladimir Putin launched a natural gas pipeline linking Crimea to Russia’s gas pipeline system, which will allow the inhabitants of the peninsula to receive a continuous supply of gas. During the ceremony, Vladimir Putin said via video conference that this is another important outcome for the development of Crimea and its future, Efe news reports. He announced that two power plants will be built within the next two years to meet all the electricity needs of the peninsula’s inhabitants. The length of the natural gas pipeline is 358.7 km. Ukraine has not given up on retaking Crimea, which Kiev considers territory occupied by Russia, while Moscow says that Crimea inhabitants opted mostly to join the Russian federation through a referendum. DeSean Jackson Jersey
Mexico to raise gas price by 20 per cent
Mexico announced double-digit price increases Tuesday for gasoline and diesel, its latest move to deregulate the energy sector and open the key oil industry to private investment and foreign competition. From the first of the year, the maximum price of gasoline will rise by 20.1 percent and diesel by 16.5 percent, the finance ministry said. And that is just the beginning of the end for the country’s longtime fuel subsidies. From February 18, the price ceiling set by the government will be adjusted every 24 hours, the ministry said in new regulations published in the official government gazette. Then, from late March, “supply and demand will determine the price,” said the head of the National Organization of Petroleum Retailers, Jose Carlos Femat Romero. Market pricing will start with the northern states of Baja California and Sonora, and gradually be rolled out nationwide through the end of 2017, he told AFP. The move is part of a landmark energy reform by President Enrique Pena Nieto, who is trying to breathe new life into Mexico’s gigantic but stagnant oil industry. Pena Nieto signed the reforms into law in August 2014, ending a 76-year-old state monopoly on oil drilling and reopening the sector to foreign companies. State oil company Pemex had previously held a monopoly on gasoline and diesel sales and distribution. Finance Minister Jose Antonio Meade sought to persuade Mexicans that the shift to market pricing was not all bad news. “In the country’s history, gasoline has practically always gone up,” he said in a radio interview. “We are going to divorce the price of oil from fiscal and political considerations.” But the price increases are expected to fuel inflation. That, combined with the US Federal Reserve’s recent decision to raise its key interest rate, prompted Mexico’s central bank to hike its own interest rate two weeks ago for the second time in a month. Kyle Van Noy Authentic Jersey
IOC’s Mathura refinery despatches BS VI fuel for testing
IOC’s Mathura refinery has despatched BS VI high-speed diesel (HSD) to two auto companies to test viability and compatibility as part of its efforts to provide cleaner fuel for an eco-friendly environment. “Though the government has set a very stringent target of April 2017 for meeting BS IV and April 2020 for BS VI standard fuel quality, the Mathura refinery has completed the target ahead of the set deadline,” said S M Vaidya, GM, IOC Mathura Refinery. While Honda was supplied five barrels of BS VI standard HSD fuel, Mahindra & Mahindra Chennai received the same full one tanker (20 KL). Vaidya said: “BS VI standard HSD will contain only 10 PPM sulphur and motor spirit will be high standard also… since MS VI is also ready for testing, the refinery is having an interaction with automobile companies on this count.” He thanked Sanjiv Singh, Director Refineries, IOC, for helping complete the target ahead of the schedule. BS VI standard HSD and BS VI standard motor spirit, according to Vaidya, were prepared in the refinery without addition of any machinery. By October 2017, a new unit will go on stream at the refinery, where only BS VI standard HSD and high quality motor spirit will be produced on a mass scale. Expressing “time-bound commitment” of Indian Oil to provide required quantity of BS VI compliant HSD and MS fuel, he said it would enable automobile industries to re-design and test their engines with upgraded BS VI fuel in Indian climatic and road conditions. Interacting with reporters today, Vaidya felt that this would come as a moral booster for the entire automobile industry as oil companies are geared up to meet the target of BS IV and BS VI. Marcus Allen Womens Jersey
IGL may drop Rs 5,000 upfront deposit for piped gas
Looking to push up the conversion rate from liquefied petroleum gas (LPG) to piped natural gas (PNP) by domestic consumers, some of the natural gas distribution companies like Indraprastha Gas Limited (IGL) and Haryana City Gas Distribution Ltd (HCGDL) are considering waiving off the deposit amount of Rs 5,000 on every connection and replacing it with a rental of Rs 25-50 per month. While Haryana City Gas has yet to thoroughly study the financial implication of such a move, E S Ranganathan, managing director of IGL, told DNA Money that the gas company is likely to do away with the upfront deposit on every PNG connection in the Delhi-National Capital Region (NCR) soon. He said the plan has to be approved by his finance department and the Petroleum and Natural Gas Regulatory Board (PNGRB). It will not require the petroleum ministry’s nod. The IGL chief has even worked out the math of such a move. “What we are thinking is, suppose we charge as rent of Rs 25-50 a month, we can waive the Rs 5,000 paid upfront for each connection. This is anyway the customer’s money, which is returned when his service is disconnected,” he said. Ranganathan said currently IGL earns an interest of 6% on Rs 5,000 per year, which comes to Rs 300. He said this annual Rs 300 income per customer from the deposit could translate into a rent of Rs 25 per month. According to him, this will make it easier for new users to start using PNG, for which IGL has already laid the pipeline in areas under its jurisdiction. For instance, IGL, which has over 0.676 million customers in Delhi-NCR, has already spent aggressively on infrastructure to supply natural gas to domestic users, but in many areas, people were still not voluntarily shifting to PNG. Close to 0.25 million residents in these areas are still to make the switch; “there is a pipe reaching right till their homes, but since they have not opted for it, we have not connected it to their house”. Ranganathan feels one of the reasons for people not going in for the PNG connection was the upfront deposit. Initially, he tried to come around this problem by providing easier payment option of equated monthly installment (EMI) to customers but failed to make much dent with it. “When we went for EMI scheme of three installments of around Rs 1,500. People never accepted it. Now, we have introduced an EMI of Rs 500 per bill. This, too, is not working. It’s a human tendency. For instance, if you are paying Rs 800 per month and after shifting (to PNG), I suddenly give you Rs 700 bill for gas plus Rs 500 EMI, you will think I was spending Rs 800 and now I am spending Rs 1,200 per month and think it is expensive,” said IGL head. Rahul Chopra, CEO of HCGDL that distributes PNG in Gurugram, said his company will also evaluate the option and take a decision. He believes the monthly rental option was a more workable solution than deposit model to increase the use of PNG. “I think it is workable and will help increase the conversion rate (from LPG to PNG)”. Citing an example, he said that Haryana Gas had laid pipelines in front of many apartments in Gurugram, where conversion rate was barely 30-40%. “One of the reasons for this was high deposits. Also, many people do not opt for PNG because they are tenants. If there is monthly rent, then they can just take the connection and pay rent for it,” he said. Today, Haryana City Gas has 13 compressed natural gas (CNG) stations and 15,000 PNG domestic connections in Gurugram. Chopra said his company was targeting PNG connections of up to 0.1 million in the next few years. “Gurugram has a population of around 0.4-0.5 million and a 20%-30% penetration would help us break-even faster”. Mahanagar Gas Ltd (MGL), Gujarat Gas Company Ltd (GGCL) and others also take an upfront deposit for PNG connection and have not removed it yet. Clinton Portis Authentic Jersey
City Gas Distributors In A Sweet Spot
City gas distribution companies are poised to gain from rising crude prices and growing adoption of environment-friendly fuels. West Texas Intermediate crude has surged more than 17.6 percent since November 30, when the Organization of Petroleum Exporting Countries announced an agreement to cut production by 1.2 million barrels per day. “The OPEC decision will certainly benefit the city gas distributors,” Jal Irani, senior vice president of Edelweiss Financial Services told BloombergQuint on the phone. With the price of competing fuel, like petrol and diesel rising, the switch to much more economical CNG becomes viable. Jal Irani, Senior VP, Edelweiss Financial Services. Oil marketing companies have hiked prices of petrol and diesel twice since OPEC’s decision, and CRISIL Research expects the trend to continue in 2017. We expect the price of petrol to rise 5-8 percent and that of diesel by 6-8 percent over the next 3-4 months after decision by the OPEC. CRISIL Research Report In the first seven months of the financial year 2016-17, the consumption of natural gas in India grew around 8.5 percent. The demand for petrol and diesel rose 8.9 percent in the same period, while crude oil prices increased 22.2 percent. The growing demand translated into higher stock prices, with Indraprastha Gas Ltd. and Mahanagar Gas Ltd. outperforming the BSE Oil & Gas Index in the last six months. Mahanagar Gas listed on the stock exchanges on July 1. Climate Commitments Edelweiss Securities expects COP21 commitments adopted by 185 nations including India to also improve the prospects of city gas distributors. With widespread pollution across cities on one hand and COP21 commitments on the other, city gas companies are clearly poised for biggest gains. Edelweiss Securities Report At the 21st session of the Conference of the Parties in Paris last year, countries agreed to cut emissions in a bid to keep the global average increase in temperatures below 2 degree celsius. India has committed to generating at least 40 percent of its electricity from non-fossil fuels by 2030. The recent pollution control initiatives by the Delhi government also boosted demand. Indraprastha Gas, which gets all of its revenue from Delhi and the National Capital Region, saw its natural gas volumes grow by double digits in the last two quarters. The ‘Maharashtra City Taxi Scheme 2016’, which could make the use of liquefied petroleum gas or compressed natural gas mandatory for all taxis and radio cabs operating in the state, is expected to aid Mahanagar Gas, which runs gas distribution networks in Mumbai, Thane, and Raigad. The management told analysts in the earnings conference call that it expects the law to come into effect by February. The company has already signed gas supply agreements with Ola and Uber. The two taxi aggregators together have around 20,000 vehicles in Mumbai, and only 3,000-4,000 of them run on CNG, according to Edelweiss’ estimates. Mahanagar Gas will also experience a surge in volumes as new auto rickshaw permits get issued and more state-owned buses start using CNG. 15,000-17,000 additional auto permits in the pipeline implies bright volume prospects for MGL. Edelweiss Securities Report Virtual Monopolies: Above all, Indraprastha Gas and Mahanagar Gas have a virtual monopoly in their respective markets since the Petroleum and Natural Gas Regulatory Board allows five-year marketing exclusivity and 25-year network exclusivity to the winner of compressed natural gas networks. Even if the marketing exclusivity ends, new players will find it tough to break into the market, Ambit Capital said in a report to clients. It would be difficult for other players to get into city gas distribution given that building a compressed natural gas retailing network in a crowded city area and getting domestic allocations where the benefit proposition to the consumer is not quite robust. Ambit Capital Report Client Profile: Gujarat Gas Ltd., another city gas distributor, hasn’t seen the same demand growth due to its unfavourable sales mix. Indraprastha Gas and Mahanagar Gas have similar product profiles with compressed natural gas and pipelined natural gas accounting for 80-85 percent of sales, while Gujarat Gas caters more to industrial and commercial clients. In the second quarter, Gujarat Gas’ industrial gas volumes declined 12 percent. Unlike power and large industrial users where gas competes with coal/liquid-fuel, city distribution has unique advantages of convenience, competitive costs and regulatory support. Ambit Capital Report With pollution concerns on the rise, more industrial and commercial establishments are expected to shift to natural gas. That, in turn, will benefit not only Gujarat Gas but also Indraprastha Gas and Mahanagar Gas. “City gas distribution companies look like a good bet because it gets consumed on the CNG side and the PNG side as well, and the requirement will persist going forward,” Mayuresh Joshi, a fund manager at Angel Broking told BloombergQuint on the phone. “With the cost of gas coming down and new distribution centres opening, the longer run benefits still hold.” Phil Kessel Authentic Jersey
Railways to run passenger trains on LNG, cut diesel costs by 20%
Brace for a pollution-free train ride soon. Indian Railways has decided to move towards using Liquefied Natural Gas, commonly called LNG, to run its passenger trains, converting all its exiting locomotives into dual-fuel based. The driving power cars, which so far have been using diesel as its fuel, would now be retro-fitted to use LNG as well, for the first time, sources said. The aim is to cut down on diesel consumption by 20%. To achieve this, the locomotives have to be overhauled with enhanced safety features as LNG is a hazardous inflammable fuel, sources in Railway Board said. The development comes at a time when petroleum prices are now on an uptrend with most oil marketing companies raising retail prices of diesel by as much as Rs 1.80 a litre beginning this week. In contrast, use of LNG would mean significant savings for the Railways as the country has recently renegotiated a long-term deal with Petronet LNG Ltd in December reworking a 25-year contract with Qatar’s RasGas Co, resulting in prices dropping by almost half. Indian Railways has firmed up the plan under which it would convert existing and new driving power cars of diesel-run trains, called DEMUs into dual-fuel system. Initially, all Cummins 1400 HP engines would be taken up for conversion, which are either new or freshly-overhauled engines done after 18,000 hours of run. Since LNG is seen as a highly hazardous material, safety has to be uppermost in the mind of the manufacturers, sources said. The converted driving power cars should have safety and protection features for engines and manufacturers should demonstrate its safe and trouble-free field operation. The system offered should also have suitable safety devices for the safe operation of LNG storage, which can only be sourced from manufacturers having a minimum three years’ experience in manufacturing and supply of such LNG tank systems. Retro-fitting the LNG tank has to be carefully done as it has to be mounted on a moving platform moving at high speed, needing automatic safety system and alarm with manual override systems, Indian Railways documents mentioned. Indian Railways have been toying with the idea of using alternative environment-friendly fuel to partially replace diesel that runs its locomotives. Use of Compressed Natural Gas as an alternate fuel has been experimented upon on DEMU engines to see the environmental impact and studies by Research Design and Standard Organisation, the R&D wing of the Railways, showed 30% savings in operation and maintenance cost of about Rs 27 lakh per engine per year. However, using LNG is more economical for commercial operations. Beau Bennett Authentic Jersey
OMCs eye over 50% of retail sales in cashless mode by March
Bharat Petroleum on Monday said cashless transactions at its outlets have jumped to 26% after November 8 when high value notes were banned, from 10% time before and expects at least half of all transactions to turn cashless by March. Retail sale of oil products — petrol, diesel, CNG/PNG and LPG — in volume terms account for around 7.3 trillion transactions per annum, according to BPCL. “We hope by end March, all the state-run oil marketers expect over 50% of the retail transactions to be in cashless mode carried out through loyalty cards, debit/credit, e-wallets, or even NEFT etc. After the demonetization announcement on November 8, non-cash payments have crossed 26% at our pumps,” BPCL executive director (retail) George Paul said here today. Towards achieving this target, BPCL today tied up with SBI, HDFC Bank, and some other major banks to install PoS terminals apart from joining hands with Paytm, FreeCharge, Oxigen, Reliance Jio, SBI Buddy, and Fino for enabling mobile-wallet transactions at its retail outlets. Paul said the three state-run oil marketing companies together have 5,3000 pumps and over 78,000 LPG agencies. These outlets together clock daily transactions worth Rs 500 crore (petrol), Rs 450 crore (diesel & CNG) and Rs 50 crore (LPG), which in volume terms work out to be 7.2-7.3 trillion transactions per day. Before the noteban, BPCL was doing only around 10% daily transactions cashless across the country, which was worth only Rs 50 crore. In Maharashtra, the share of cashless transaction is close to 23.75% for all OMCs, Paul said, adding in Mumbai, 54.53% of transactions at its retail outlets are cashless. Across the state, the cashless transaction for BPCL is around 32% of its total sales, he added. BPCL has installed PoS machines at all its filling stations in Mumbai, Navi Mumbai, Thane and Raigad district, Paul said. He also said since the pumps were allowed to dispense cash, over 3,000 pumps together have distributed around Rs 155 crore to customers since the note ban announcement. Derek MacKenzie Authentic Jersey
India’s Top Oil Producer Spends $1.2 Billion to Buy Gas Block
India’s biggest oil and gas producer will pay as much as $1.2 billion to buy a majority stake in a gas field off the country’s east coast, aiming to boost production as the country seeks to cut energy imports. State-owned Oil and Natural Gas Corp. Ltd.’s board approved the purchase of an 80 percent stake in Gujarat State Petroleum Corp.’s deepwater block in the Krishna Godavari basin, it said in a statement on Friday. The New Delhi-based company will pay $995.26 million for the Deen Dayal West Field, the largest discovery in the KG-OSN-2001/3 block, with estimated natural gas reserves of 1.1 trillion cubic feet. It will pay? another $200 million for six other discoveries in the block located in the Bay of Bengal. The block has likely total reserves of at least 11.2 trillion cubic feet, according to GSPC’s annual report for the year ended March 31. “The acquisition fits well with the strategy of ONGC to enhance natural gas production from domestic fields on a faster pace,” the company said, adding that trial gas production from Deen Dayal West Field has already started. The deal will help expedite production of gas from the block critical to achieve Prime Minister Narendra Modi’s goal of reducing import dependency of hydrocarbons by 10 percent by 2022. The companies will share infrastructure and reduce costs in an area where both have spent or plan to spend at least $3 billion each. The deal is critical for GSPC, a company owned by the government of the western state of Gujarat, as it is at least four years behind schedule in starting commercial gas production despite having completed construction of a processing platform, gas pipeline and an onshore terminal. ONGC said the acquisition will help it develop faster its discoveries in the Yanam and Godavari areas as well as gas discoveries in its KG-DWN-98/2 block. Marcus Allen Authentic Jersey
Gazprom says Russia supplied nearly one-third of Europe’s gas in 2016
Russia supplied nearly a third of Europe’s gas needs in 2016, a record amount despite tensions with the European Union and a desire by the bloc to reduce its dependence on Russian supplies. The latest issue of Gazprom’s magazine Blue Fuel said “the share of Gazprom’s gas in Europe grows steadily and has almost reached about 1/3rd in the European gas consumption”. The company has estimated it supplied 31 percent of European gas supplies in 2015, which was already a record. “We are also on track to hit this year an absolute record of annual gas exports, both of Soviet times and the history of modern Russia,” it added. The EU overall imports around half of its natural gas needs, but the bloc has become increasingly concerned about Gazprom’s role as a dominant supplier since Russian supplies were twice disrupted during price disputes with Ukraine. With some eastern European states nearly completely dependent on Russian gas, the EU suspected Gazprom may have abused its dominant position to charge higher prices and opened a probe. Talks between the two sides have progressed in recent months on reaching an amicable agreement where Gazprom avoids paying a fine. For months, Gazprom officials have been arguing that the increasing shipments despite greater availability of liquefied natural gas shows that Europe can’t do without Russian gas and should allow the construction of additional pipelines. “Gazprom remains the only supplier able to securely provide significant additional volumes to its clients in Europe,” said the company magazine. Oliver Ekman-Larsson Authentic Jersey
Petroleum Minister directs Oil Marketing Companies to take all possible remedial measures to ease out the situation in Manipur
In view of the economic blockade imposed by United Naga Council (UNC) on vehicles going to Manipur from 1st November, 2016, supplies of POL products have been severely constrained. MOS (I/C), Petroleum & Natural Gas Dharmendra Pradhan today reviewed the stock position in the State of Manipur. He directed the Oil Marketing Companies (OMCs) to take all possible remedial measures to ease out the situation. Currently, the OMCs are moving supplies under heavy security protection via alternate route NH-35 (via Jiribum) after shifting supply base to Guwahati, from normal base at Tinsukia. So far, the OMCs have moved 8 (eight) convoys to Manipur which consisted of 975 TTs. Last convoy, which entered Manipur via Jiribum border on 25th December early morning, is now reaching Imphal. The OMCs and the Ministry are in constant touch with the State Government. The convoy movement is being done as per advice of State Government. Loaded TTs for the next convoy have already been lined up at Jiribum (Assam – Manipur border). Aaron Nola Womens Jersey