Chinese ship opens new trade route via Pakistani port
Pakistan’s top civilian and military leaders traveled to the country’s southwest on Sunday to open a new international trade route by seeing off a Chinese ship that’s exporting goods to the Middle East and Africa from the newly built Gwadar port. The first convoy of Chinese trucks carrying goods for sale abroad has arrived in Pakistan amid tight security using a road linking Gwadar to China’s northwestern Xinjiang region, the government said in a statement. Prime Minister Nawaz Sharif said that Pakistan will provide best possible security to foreign investors to enable them to use the Chinese-funded port+ for international trade. Amid security concerns for foreign workers, the Pakistani army has created a special force to guard the new trade routes and the port, which is located in insurgency-wracked Baluchistan province where an overnight blast at a shrine killed nearly 50 people. The attack was claimed by the Islamic State group and Pakistani officials said it was aimed at harming the Chinese-funded projects in the southwest and elsewhere in the country. China is building a network of roads and power plants under a project known as China-Pakistan Economic Corridor+ that is expected to absorb $46 billion in Chinese investment in the coming decades. China and Pakistan have long maintained close political and military relations, based partly on mutual antipathy toward neighbour India. Gwadar port is located on the Arabian Sea and it occupies a strategic location between South Asia, Central Asia and the Middle East. The port is also located at the mouth of the Persian Gulf, just outside the Straits of Hormuz. China is seeking convenient and reliable access to the Arabian Sea and the Indian Ocean. Chinese ships now use the Strait of Malacca, a narrow passage between the Malay Peninsula and Indonesia. The proposed new route would give China access to the Persian Gulf region and the Middle East. Todd Gurley Womens Jersey
GAIL scraps USD 7-bn LNG tender
After dragging for more than two years, state-owned gas utility GAIL India Ltd has scrapped a USD 7 billion tender for hiring newly built ships to ferry LNG from US after bidders did not agree to ‘Make-in-India’ terms. GAIL, which was forced by the Oil Ministry to add the Make-in-India condition to its tender, will now hire the ships from the global spot or current market to transport liquefied natural gas (LNG), a top official said. Two Japanese bidders — a consortium of Mitsui OSK Lines (MOL)-Nippon Yusen Kabushiki Kaisha (NYK Line) and Mitsui & Co and a consortium comprising Mitsubishi Corporation-Kawasaki Kisen Kaisha Ltd (K Line) and GasLog, had sought several deviations from the tender conditions, which were not agreeable to GAIL. “We discussed with both the bidder the deviations they sought for over six months but when they didn’t agree, we were left with no option but to cancel the tender,” the official said. In the tender, GAIL sought to time-charter nine newly built LNG ships of a cargo capacity of 150,000-180,000 cubic meters to LNG it has tied up from Sabine Pass and Cove Point LNG projects in US, with supplies slated to start from December 2017. Bids were sought in lots of three, with the condition that one of the three ship will be built at an Indian shipyard. The official said since Indian shipyards neither had technology or experience of building the highly specialised LNG ships, the bidder sought sovereign performance guarantee for the ones built in India. After postponing the deadline thrice, GAIL had in February last year scrapped the tender to hire nine LNG carriers to ferry gas from the US, with a caveat that three of them be made in India. At that point, no foreign shipyard was willing to share LNG ship-building technology. Negotiations that followed saw Cochin Shipyard strike a deal with Samsung Heavy Industries to cooperate in construction of the vessels. It has also been licensed by GTT of France to build LNG carriers with the Mark III membrane containment system. However, L&T Shipbuilding, which had a deal with Hyundai Heavy Industries, has pulled out of the bidding as it turns its focus to defence projects. Pipavav Defence and Offshore Engineering has teamed up with Daewoo Shipbuilding & Marine Engineering (DSME) of South Korea for ship-building. The tender was re-floated on September 15, 2015. After the deadline was postponed thrice, two consortiums put in bids on March 31 this year. The official said according to the tender condition while two ships were to be built at the shipyards of their foreign collaborators, one carrier has to be built in India. The tender document provides for the Indian shipyard taking 5 per cent to 13 per cent in the liquefied natural gas (LNG) carrier that it will build. This condition was not there in the original tender floated in 2014. Also, GAIL has a right to take up to 10 per cent equity stake in any or all of the nine ships. Shipping Corporation of India (SCI), which is to operate the carriers, will have a right to 26 per cent interest, according to the document. GAIL has tied up 5.8 million tons per annum of LNG from the US which the newly built ships will ferry. Maurkice Pouncey Authentic Jersey
KG-Basin gas migration penalty: Reliance serves arbitration notice on govt
With an arbitration notice from Reliance Industries Ltd (RIL) — coupled with having to handle ONGC officers who erred during a period prior to his regime — Petroleum Minister Dharmendra Pradhan finds himself in a bind. Contesting the Centre’s compensation notice of $1.55 billion for migrated gas that flowed from ONGC’s adjacent fields in the Krishna-Godavari Basin during the weekend, RIL and its partners have sent an arbitration notice. Based on the recommendations of the Justice AP Shah Committee, the Centre has made a claim against RIL-BP-Niko for gas said to have flown from the neighbouring blocks. Sources told BusinessLine RIL and its partners in the KG-D6 block have sent a notice to the Centre on the grounds that the compensation claim is based on misinterpretation of key elements of the production sharing contract (PSC), and is without precedent in the global oil and gas industry. While government and RIL officials remained non-committal on the arbitration notice, sources associated with the developments said: “The contractors are within their rights to opt for arbitration as per the PSC, but, it does not close the dialogue process between the government and the contractors. While the issue can be challenged, work on further development of the fields can simultaneously continue.” A tougher challenge for the Centre is how to fix accountability of those in ONGC and the Directorate General of Hydrocarbon (DGH), who were supposedly in the know on the gas migration, which is being contested now. Pradhan had, on November 10, said he is bound by the law. The Shah panel had also pulled up ONGC for not making proper disclosure when it first came to know about the gas migration. “It is not easy, as the period involved is six-seven years back. How do you fix responsibilities for those who have already retired? None of the current set-up of ONGC or DGH is involved,” pointed out another official. “Whatever action is taken, it has to be ensured that the current set-up is not demotivated.” Confirming the continuity of reservoirs, the Shah committee had said US-based independent consultant DeGoyler & MacNaughton’s report must form the basis for the migration of gas till 2015. Ryan Murray Authentic Jersey
Aban Offshore in discussion with lenders on repayment issues
The company has nine out of 18 rigs working while others are idle at the end of September. Aban Offshore is in talks with its lenders to settle the issues related to repayment of loans, at a time when the offshore drilling contract business has been highly competitive and almost half of its rigs are idle at present. Outstanding payments from Iran is around $250 million as of September, this year, said senior management officials of the company. It is expected to repay $120 million this year and plans are to pay back $130-140 million in FY18. According to reports in September last year, the company had a total debt of around $2.2 billion. Responding to a question by analysts in an earnings call, on whether there is a need to restructure the company’s debt repayment obligation to manage the debt given that it is very low principal payments, S Srinivasan, senior vice president, Aban Offshore Ltd, said the company is in constant discussion with its lenders on how to address the issue. There has been some delay in repayments because the collection has also been delayed from Iran, the market size is down, among other issues. “We have been discussing with the bankers to see how it can be done,” he said. However, he refused to reveal more on the talks, stating that nothing has been finalised yet. The company has nine out of 18 rigs working while others are idle. The market continues to be sluggish because of the oil prices and the company is facing extreme competition in terms of bidding, he added. “We are incurring some losses on idle rigs, which is less than $10,000 per rig for idle rig. We have on cycled the rigs, so it can go for any work, small or long term at the earliest possible opportunity,” he said. This year, the company is repaying debt of about $120 million and in FY18, it is expected to pay around $130-140 million. While it is getting some amount of payments from Iran, which was earlier facing a sanction, but still it has to receive a large sum from that country, he added. Sam Reinhart Jersey
GAIL pipeline breakdown in Vizag affects LPG cylinder deliveries
Jyoti Radhakishan has been living on food from restaurants for the last few days as she didn’t have an LPG cylinder replacement that was booked last month. While she is coping with the difficulty, scores of other households too are having to look for alternatives in the face of acute shortage. The shortage and delay, attributed to breakdown in Gas Authority of India Limited (GAIL) pipeline in Visakhapatnam is having a huge toll in Secunderabad. The city gets LPG supplies from the bottling units in Cherlapally via this pipeline. “The problem began on October 24. It will take another 10 days for the supply to improve,” said Ashok Kumar, president of city’s Gas Dealers Association. The string of Diwali holidays also affected the cylinder delivery schedule, he added. “Many who booked cylinders on November 1 are still waiting,” said V Ranga Rao, a resident of Secunderabad. According to oil companies, the city needs some 2,000 tons of LPG every day. “GAIL is carrying out repair-maintenance on pipelines. The LPG supply will stabilise soon,” said Madhukar Ingole, Hindustan Petroleum Corporation Limited (HPCL) representative in Telangana. Oil companies managed just about 1,000 tons of LPG during the supply-shortage period. HPCL, Bharat Petroleum Corporation Limited (BPCL) and Indian Oil Corporation Limited (IOCL) have four bottling units. The twin cities of Hyderabad-Secunderabad have 13 lakh domestic and commercial connections while neighbouring Rangareddy district has 13 lakh connections. Jake Guentzel Authentic Jersey
Puma Energy Acquires BP Terminal in Northern Ireland
Puma Energy, the globally integrated midstream and downstream energy company, today announced that it has signed a purchase agreement with BP to buy its bulk storage fuel terminal in Belfast, Northern Ireland. The addition takes Puma Energy’s global network of bulk storage terminals to 100, culminating in a total storage volume of 7.9 million m3 of storage capacity. This acquisition builds on the purchase of the 1.4 million m3 capacity Milford Haven Terminal in 2015, further supporting Puma Energy’s growth within the European Market, and helping to ensure high quality, reliable fuels supply to Northern Ireland. The Belfast Terminal provides storage for gasoline, distillates and aviation fuels, with road gantry loading facilities and a Jetty Berth capable of handling MR class vessels. The site comprises 20 bulk fuel storage tanks with a working capacity of ca. 143 000 m3. The 53 acre former refinery site is located between George Best Belfast City Airport and Belfast Harbour in NI. The refinery was opened in 1964 and converted to a Terminal in 1982. Puma Energy has a wealth of experience in the construction, maintenance and operation of terminals and offshore mooring systems to the highest international standards. Commenting on the acquisition, Puma Energy’s CEO Pierre Eladari said, “This deal marks an additional milestone in the growth of our business, further supporting Puma Energy’s position as one of the largest independent, integrated midstream and downstream companies operating today”. About Puma Energy Puma Energy International is a global integrated midstream and downstream oil company active in 47 countries. Formed in 1997 in Central America, Puma Energy has since expanded its activities worldwide, achieving rapid growth, diversification and product line development. The company directly manages over 7,844 employees. Headquartered in Singapore, it has regional hubs in Johannesburg (South Africa), San Juan (Puerto Rico), Brisbane (Australia) and Tallinn (Estonia). Puma Energy’s core activities in the midstream sector include the supply, storage and transportation of petroleum products via a network of over 100 bulk storage terminals. Puma Energy’s activities are underpinned by investment in infrastructure which optimises supply chain systems, capturing value as both asset owner and marketer of product. Puma Energy’s downstream activities include the distribution, retail sales and wholesale of a wide range of refined products, with additional product offerings in the lubricants, bitumen, LPG and marine bunkering sectors. Puma Energy currently has a global network of over 2,468 retail service stations and supplies 62 airports. Puma Energy also provides a robust platform for independent entrepreneurs to develop their businesses, by providing a viable alternative to traditional market supply sources. Andy Lee Womens Jersey
Discovered small fields may be offered in first HELP round
India’s first bid round to implement its new Hydrocarbon Exploration Licensing Policy (HELP) may also offer some of the discovered small fields (DSF), if there are no takers for them. With the nine bid rounds under the New Exploration Licensing Policy unable to attract the desired level of investments, the National Democratic Alliance government approved marketing freedom for crude oil and natural gas under HELP in March this year. These discovered fields were earlier held by state-run Oil and Natural Gas Corp. Ltd (ONGC) and Oil India Ltd. DSF bidding was launched in New Delhi on 25 May 2016. Under this round, India is offering 46 contract areas with 67 oil and gas fields, estimated to hold over 625 million barrels of oil and oil equivalent gas in-place, spread over 1,500 sq. km. “If there are discovered small fields that remain unsold after the bids, they shall be added with the fields under HELP,” said a petroleum ministry official requesting anonymity. With bid submission deadline for discovered small fields extended, first round under HELP may be delayed. Another government official, who also did not want to be named, confirmed the development. The first bid round under HELP will mark the culmination of the government’s bet for a revenue-sharing model from the controversial cost-recovery model which involves cost recovery by firms before the government receives its share of the revenue. Also, state-run ONGC is betting on its relinquished blocks under HELP. Experts concur with the government’s strategy. “The discovered small fields have been the government’s primary concern after which it shall concentrate on HELP. With fields remaining unsold they have to find a way to utilise them,” said Sanjay Grover, partner at EY, a consultancy. Queries emailed to a petroleum ministry spokesperson on 8 October remained unanswered. This comes in the backdrop of India’s stagnant hydrocarbon production. The government has made energy security one of the primary areas of focus in its economic policy in order to achieve fast and sustainable long-term development. India has 26 sedimentary basins covering an area of 3.14 million sq. km, out of which seven basins have established commercial productions in progress. India has a total reserve of 763.476 million tonne of crude oil and 1,488.73 billion cu. metre of natural gas. DeSean Jackson Jersey
Oil Ministry probes role of ONGC, DGH officials in RIL gas flow case
The Oil Ministry has launched a probe into the role played by officials at ONGC and regulator DGH for their alleged inaction on information about the state- owned firm’s natural gas flowing into adjoining fields of Reliance Industries in the KG basin. Oil and Natural Gas Corp (ONGC) had in late 2013 claimed that it suspected extension of reservoirs from its blocks in the Bay of Bengal into RIL’s KG-D6. This was based on seismic data available to it at least since 2007. Confirming sending notice to RIL and its partners BP plc of UK and Canada’s Niko Resources for “unfairly enriching” by producing natural gas belonging to ONGC, Oil Minister Dharmendra Pradhan said his ministry is probing the role played by “”those in office” in the ministry, ONGC as well as DGH in the entire issue. “All stakeholders are being looked into as to what role they had played in those days,” he told reporters here. Oil Secretary K D Tripathi is overseeing the probe to find if there were any errors of omission or commission in not taking timely acting on the information provided by the seismic data that ONGC’s natural gas was seeping into KG-D6. “This is an internal mechanism (of investigation). Whosoever is found responsible (for lapses) will be disclosed publicly,” Pradhan said. ONGC has had two Chairmen, R S Sharma and Sudhir Vasudeva, after seismic data is believed to have thrown up leads about its blocks being connected with RIL fields. The Directorate General of Hydrocarbons (DGH) first had S K Srivastava and then R N Choubey as the head. It is alleged that while ONGC initially refused to act on the information, DGH did not take cognizance of the issue when the state-owned firm finally acted and brought the issue to its notice in 2013. “It is not just ONGC, but also (petroleum) ministry and DGH which is being investigated,” Pradhan said. His ministry had on November 3 issued a notice to RIL, Niko and BP plc seeking $1.47 billion for producing in the seven years ended March 31, 2016 about 338.332 million British thermal unit of gas that had seeped or migrated from state- owned ONGC blocks into adjoining KG-D6. After deducting $71.71 million royalty paid on the gas produced and adding an interest at the rate of Libor plus 2 per cent, totalling $149.86 million, a total demand of $1.55 billion was made on RIL, BP and Niko. ONGC had in 2014 moved the Delhi High Court seeking Rs 110 billion compensation for its gas that RIL had produced. Under the court’s direction, an independent consultant D&M was appointed to establish connectivity across reservoirs. After D&M quantified the gas that had migrated from ONGC blocks to KG-D6, the ministry appointed a one-man panel headed by Justice (Retd) A P Shah to recommend compensation RIL and partners should pay. It however stated that the compensation should be paid to the government and not to ONGC. Pradhan said the Supreme Court has clearly established that all natural resources belong to the State and using that premise the government is claiming compensation from RIL. Martavis Bryant Authentic Jersey
India’s fuel demand rose 8.1 % year-on-year in October
India’s fuel demand rose 8.1 percent in October compared with the same month last year. Consumption of fuel, a proxy for oil demand, totalled 16.49 million tonnes, data from the Petroleum Planning and Analysis Cell (PPAC) of the oil ministry showed. Sales of gasoline, or petrol, were 13.8 percent higher from a year earlier at 2.11 million tonnes. Cooking gas or liquefied petroleum gas (LPG) sales increased 10.3 percent to 1.86 million tonnes, while naphtha sales surged 4.8 percent to 1.11 million tonnes. Sales of bitumen, used for making roads, were 6.9 percent lower, while fuel oil use edged up 8.3 percent in October. Donovan Smith Authentic Jersey
World’s first Very Large Ethane Carrier delivered for Reliance Industries Limited
Mitsui O.S.K. Lines, Ltd. of Japan today announced the delivery of the world’s first Very Large Ethane Carrier (VLEC), Ethane Crystal, built by Samsung Heavy Industries (SHI), to energy and petrochemicals major Reliance Industries Limited (RIL) yesterday. MOL was appointed by Reliance to undertake site supervision of the construction of the six new VLECs ordered by the company and also to be the operator and the manager of these vessels. P.M.S. Prasad, Executive Director and Member of the Board, Reliance Industries Limited, named the vessel as “Ethane Crystal” in the naming ceremony held at SHI, Geoje, South Korea, on October 26, a press release from MOL said. RIL had placed the order for the six VLECs in July 2014. The VLECs will serve to transport Ethane from the United States of America to India, and are the largest vessels ever built for transportation of ethane at an industrial scale. MOL will be the first shipping company in the world to operate such VLECs. The vessels adopt GTT Mark III as a containment system which is unique for ethane transportation, and are designed to cater to latest safety and environment regulations, the release said. MOL will operate the fleet of six VLECs to provide efficient, safe and reliable Ethane transportation for use as a feedstock in large petrochemical complexes owned and operated by Reliance, it said. “Ethane transportation project is a splendid example where an innovative business model was used to meet the customer’s requirements. MOL utilized its experience, knowhow, and network built over the years as one of the largest LNG carrier owners and operators and, significant experience as owners and operators of LPG carriers in order to obtain this business. “MOL’s experience in LNG / LPG segments and its unmatched service, safety, reliability and efficiency precisely met the stringent requirements of Reliance prior being appointed as a suitable shipping partner for Ethane Transportation Project,” the release added. Nickell Robey-Coleman Authentic Jersey