Nature of LNG business is changing
Former Cheniere Energy boss Charif Souki says the answer to the glut of natural gas is even lower prices, which he says his new exporter Tellurian Investments will supply. Natural gas prices hit a more than one-month low this week due to warm weather in the U.S., as well as a persistent global oversupply. But Souki told CNBC that low prices were key to rebalancing the market. The founder and former chief executive of U.S. liquefied natural gas (LNG) pioneer Cheniere Energy, Souki co-founded Tellurian Investments this year with Martin Houston, the former chief operating officer of BG Group. Souki said Tellurian would look to undercut competitors’ prices by about 17 percent when it started shipping in six years’ time – a price reduction Souki told CNBC could be achieved by engaging producers early in the process and through better engineering. Tellerian’s LNG terminal in Louisiana is expected to be operational by 2022, by which time Souki said he expected supply-side dynamics to have tightened up as the abundant current supply reduced prices, spurring demand. The founder and former chief executive of U.S. liquefied natural gas (LNG) pioneer Cheniere Energy, Souki co-founded Tellurian Investments this year with Martin Houston, the former chief operating officer of BG Group. Souki said Tellurian would look to undercut competitors’ prices by about 17 percent when it started shipping in six years’ time – a price reduction Souki told CNBC could be achieved by engaging producers early in the process and through better engineering. Tellerian’s LNG terminal in Louisiana is expected to be operational by 2022, by which time Souki said he expected supply-side dynamics to have tightened up as the abundant current supply reduced prices, spurring demand. Record natural gas volumes being exported by Russia to Europe were contributing to the current glut, while new markets were coming on board on a “weekly basis,” Souki said. Emerging producers included India, Abu Dhabi and Vietnam, he said. The broad array of suppliers meant that natural gas should be priced on a standalone basis, rather than as it is currently, through a reference to oil or petroleum prices, the LNG veteran said. “You don’t have any justification to indexation to anything else anymore,” he said, adding, “On that basis, it makes sense to be the low cost producer.” As for how the next U.S. president would influence energy policy in the world’s biggest economy, Souki said he expected continuity from a Hillary Clinton administration. “She understands the balance between environment concerns and the need for clean energy and at the same time the very, very important role that natural gas plays on the global basis and the important role that the U.S. can play now that it has become natural gas rich and has the ability to export to other countries,” he said. Souki did not comment on what he expected from a Donald Trumpadministration, as he noted that he did not expect the Republican candidate to win. “If he does, I might have to reconsider my nationality,” said the outspoken Egyptian-American. Eddie Jackson Authentic Jersey
Cairn India to invest $100 million in Rajasthan gas fields
Vedanta group company Cairn India plans to invest $100 million with focus on Rajasthan gas fields. The company is targeting to increase gas production to 40-45 million standard cubic feet per day (mmscfd) by 2017 and to 100 mmscfd by 2018/19. The capital investment is estimated for FY17 with 80 per cent focus for development of Raageshwari Deep Gas(RDG) project and completion activities of Mangala Enhanced Oil Recovery (EOR), a company spokesperson said. “The project is being developed in a phased manner to realise capital efficiency while maintaining production growth and is progressing on track. As part of Phase-1, eight out of the 15 wells have been brought online and will start adding to the production as per plan. Rest of the wells are also planned to be brought online by December 2016,” the spokesperson said. Contract for low-cost augmentation of the existing facility will be awarded shortly. Tendering for enhancement of existing pipeline capacity is in advance stage and contract is expected to be awarded during Q3 FY17, he said. Completion of Phase-1 is expected to increase the gas production to 40-45 mmscfd by end of H1 CY17. For Phase-2, tendering activity for new gas processing terminal and drilling rig is ongoing according to plan. Completion of Phase-2 will increase the gas production upwards of 100 mmscfd and condensate production to about 5,000 barrels of oil equivalent per day. Since early 2013, the Rajasthan joint-venture (JV) is selling Raageshwari gas and delivering into GSPL’s Gujarat Grid and fertiliser units. GSPL, along with its JV partners, is laying a pipeline up to Barmer for offtaking higher volumes of natural gas through its Mehsana Bhatinda pipeline. Gas production from Rageshwari increased from 28 mmscfd in Q1 FY17 to 33 mmscfd in Q2 FY17, amounting to three bcf (billion cubic feet), helped by initial well productivity post conclusion of the hydro-frac campaign. Total gas sales were 1.6 bcf, at an average rate of 17.2 mmscfd. In-line with the focus on improving productivity and enhancing recovery through technology adoption, the expected ultimate gas recovery has increased by 26 per cent compared to the initial estimates. “While the JV wishes to ramp-up gas sales from RGD from current volutes, it is in discussion with the government and looks forward to a higher allocation,” the company said. Texas Rangers Authentic Jersey
Safety of LPG consumers and the households is the prime concern while distributing new LPG connections
Government of India is committed to provide LPG as a clean cooking fuel across India through Pradhan Mantri Ujjwala Yojana (PMUY). More than 9 million new connections have been released to the women from BPL households in the last 6 months. Safety of LPG consumers and the households is the prime concern of the Government as well as the Oil Marketing Companies(OMCs) while distributing new LPG connections – whether under PMUY or otherwise. While issuing new connections to the beneficiaries, Safety/Insurance handouts with pictorial depictions have been given to them. A Safety briefing is also being imparted to the beneficiaries at the time of installation of LPG connection. In addition, Safety melas/ Safety Clinics are being organized in the villages to make the new consumers aware of the safety procedures. These efforts are being further stepped up to avoid any unfortunate incidents related to the use of LPG. Ministry of Petroleum and Natural Gas is also continuously monitoring the settlement of Insurance claims related to past LPG accidents and monthly meetings are being held with the Insurance Companies and OMCs on the subject. The pendency in this regard has come down from 51% in June 2016 to 33.76% in October 2016 and all efforts are being made to clear all pending cases in 3 months. Geoff Swaim Jersey
Operation of four fuel dispensers stopped
The legal metrology department has stopped operation of four fuel dispensers erected in four different petrol pumps in Kalamassery and Irumpanam. The department initiated action on Tuesday after finding irregularities in the volume of petrol supplied through these dispensers corresponding to the price. “It was found during the inspection that the volume of petrol supplied was less by an average 35ml corresponding to the price entered. This is a violation according to the legal metrology act, 2009. But not everyone might be intentionally manipulating the dispenser, sometimes technical issues might be the reason,” said R Ram Mohan, deputy controller of legal metrology, central zone, Ernakulam, who led the inspection. “The dispensers can be used in the petrol pumps once the irregularities are resolved and verified by the department officials,” he said. The inspection covered 52 petrol pumps in the central zone, which includes districts of Palakkad, Idukki and Thrissur apart from Ernakulam. “The petroleum dealers should renew the licenses of the fuel dispensers every year. However, the department conducts routine inspections so as to prevent any sort of irregularities,” Mohan said. Officials from legal metrology had conducted similar inspections few months back but did not find any irregularities then. Petrol pumps that did not exhibit the certificate issued by the legal metrology department were warned. “The certificate verifies that the dispenser machines in the petrol pumps are verified and found fully functional as per the guidelines of legal metrology Act. It is mandatory that every petrol pump should exhibit the certificate publicly. This is the right of customers,” he said. Manipulations in the volume of lubricants sold in the petrol pumps were also found by the department on Tuesday. “The glass tubes and containers used for measuring the volume of oil should also carry the certificate of the legal metrology department. Warnings were issued to the pumps that did not adhere to this guideline,” he said. Ron Francis Jersey
ONGC’s aggressive plan to explore more gas in Tripura
“Currently, four high-capacity rigs, including one hired from China, are in operation to drill new wells and three other rigs are also in operation to maintain production from existing wells,” he added. Agartala, Oct 26 : State-owned ONGC, by deploying a record number of rigs, including one from China, has embarked on an aggressive road-map to explore more natural gas in the northeastern state of Tripura, bordering Bangladesh. “We have undertaken an ambitious plan to explore more natural gas in Tripura. The state has vast reserves of natural gas,” Oil and Natural Gas Corporation (ONGC) Executive Director S.C. Soni told IANS. “Currently, four high-capacity rigs, including one hired from China, are in operation to drill new wells and three other rigs are also in operation to maintain production from existing wells,” he added. “From January (2017), the number of high-capacity rigs would be increased to eight from the existing four to further step up drilling operations in various parts of the state.” Soni, who had headed operations in Mumbai High, said ONGC is currently drilling 14 to 15 wells per year. With the deployment of the additional rigs, the number would go up to 20 to 22 a year. ONGC has so far drilled about 210 wells in Tripura, more than half of which are gas-bearing, Soni said. He said that a 110 million-tonne high-capacity rig valued at more than Rs 230 million was deployed last week in the Kunjaban field, near Agartala. Its 109-foot mast height is suitable for operations up to 5,000 metres depth and is equipped with the latest technology and all safety features. The company earlier this month hired the Chinese rig for Rs 0.95 million per day. The truck-mounted rig can drill up to 3,500 metres. “Additionally, being a mobile rig, precious time would be saved in moving it and its accessories from one location to the other,” Soni noted. “The ONGC board had earlier approved a plan to invest Rs 50.50 billion by 2022 to explore for more gas in Tripura,” said Soni, a technocrat who has vast experience in managing high-value projects. “Under this plan, new wells would be drilled and additional surface facilities would be created to increase gas production from 5.1 million standard cubic metres per day (MSCMD) to at least 6.25 MSCMD from Tripura’s gas fields, he said. ONGC has so far discovered 11 gas fields in the state, seven of which are in production, said Soni, who is also the asset manager of ONGC Tripura. Under the investment plan to produce and supply 6.25 MSCMD to various consumers, including production of electricity, for another 15 to 20 years, at least 153 wells are to be drilled, he said. “To enhance gas production, processing and supply capabilities, the GCS (Gas Collection Centre) in Sonamura, Gojalia and Konaban would be upgraded and around 900 km gas pipelines would be laid.” The company had earlier commissioned its first commercial power project in India, located in southern Tripura and run by ONGC Tripura Power Company (OTPC), formed by ONGC, the Tripura government and Infrastructure Leasing and Financial Services Limited (IL&FS). The 726 MW gas-based combined cycle power project (hydro and natural gas) is located at Palatana, 60 km from Tripura capital Agartala. “Electricity is being supplied to seven of the eight northeastern states from Palatana. Also 100 MW of power is being supplied to Bangladesh since March,” Soni said. “The generation capacity of the OTPC power project is likely to be increased to 1,090 MW in the near future. Work is going on in this direction,” a top OTPC engineer told IANS, on condition of anonymity. ONGC has also committed to supply gas to another state-owned company, North Eastern Electric Power Corporation (Neepco), which set up a 100 MW power project at Monarchak, 70 km south of here. Besides, ONGC, which had started its operation in Tripura in 1972, has been supplying gas to various Tripura government and Neepco-owned power projects in the state. ONGC has also planned to set up a Rs 50 billion fertiliser plant in northern Tripura in association with the state government and Chambal Fertilisers and Chemicals Ltd, a Rajasthan-based private company. Ryan Kalil Womens Jersey
Congress targets Modi over ‘plan to buy out GSPC’
Congress on Tuesday targeted prime minister Narendra Modi, saying he had asked petroleum minister Dharmendra Pradhan to plan an Oil and Natural Gas Corporation buyout of loss-making Gujarat State Petroleum Corporation. “Who took this decision for ONGC to buy GSPC? When most experts say there is very little chance to extract any gas from GSPC’s reserves. Why should ONGC then buy GSPC?” Congress spokesperson Jairam Ramesh asked. “Why should ONGC take on GSPC’s loans of Rs 200 billion for something that is valued at a mere Rs 30 billion?” he asked. He said the Centre’s proposal was against 600,000 small shareholders of ONGC and 200 foreign and Indian institutional investors. The leader said that in 2005, the then chief minister of Gujarat, Modi, had claimed that GSPC had found 20 trillion cubic feet (tcf) of gas in Krishna-Godavari basin. After 11 years, it turned out only 1 tcf, he said. But based on the claim, 15 public sector banks had loaned Rs 200 billion to GSPC, which was now unable to service the debt, he added. He cited comptroller and auditor general that GSPC wasted taxpayers’ money through suspicious transactions with dubious companies in India, Yemen, Egypt, Indonesia, among others. Ramesh linked Modi with a corporate group asking why the petroleum ministry had asked Indian Oil Corporation and GAIL to invest in Adani Group’s liquefied natural gas project in Dhamra (Odisha) set up last year. Isaiah Pead Authentic Jersey
ONGC’s aggressive plan to explore more gas in Tripura
“Currently, four high-capacity rigs, including one hired from China, are in operation to drill new wells and three other rigs are also in operation to maintain production from existing wells,” he added. Agartala, Oct 26 : State-owned ONGC, by deploying a record number of rigs, including one from China, has embarked on an aggressive road-map to explore more natural gas in the northeastern state of Tripura, bordering Bangladesh. “We have undertaken an ambitious plan to explore more natural gas in Tripura. The state has vast reserves of natural gas,” Oil and Natural Gas Corporation (ONGC) Executive Director S.C. Soni told IANS. “Currently, four high-capacity rigs, including one hired from China, are in operation to drill new wells and three other rigs are also in operation to maintain production from existing wells,” he added. “From January (2017), the number of high-capacity rigs would be increased to eight from the existing four to further step up drilling operations in various parts of the state.” Soni, who had headed operations in Mumbai High, said ONGC is currently drilling 14 to 15 wells per year. With the deployment of the additional rigs, the number would go up to 20 to 22 a year. ONGC has so far drilled about 210 wells in Tripura, more than half of which are gas-bearing, Soni said. He said that a 110 million-tonne high-capacity rig valued at more than Rs 230 million was deployed last week in the Kunjaban field, near Agartala. Its 109-foot mast height is suitable for operations up to 5,000 metres depth and is equipped with the latest technology and all safety features. The company earlier this month hired the Chinese rig for Rs 0.95 million per day. The truck-mounted rig can drill up to 3,500 metres. “Additionally, being a mobile rig, precious time would be saved in moving it and its accessories from one location to the other,” Soni noted. “The ONGC board had earlier approved a plan to invest Rs 50.50 billion by 2022 to explore for more gas in Tripura,” said Soni, a technocrat who has vast experience in managing high-value projects. “Under this plan, new wells would be drilled and additional surface facilities would be created to increase gas production from 5.1 million standard cubic metres per day (MSCMD) to at least 6.25 MSCMD from Tripura’s gas fields, he said. ONGC has so far discovered 11 gas fields in the state, seven of which are in production, said Soni, who is also the asset manager of ONGC Tripura. Under the investment plan to produce and supply 6.25 MSCMD to various consumers, including production of electricity, for another 15 to 20 years, at least 153 wells are to be drilled, he said. “To enhance gas production, processing and supply capabilities, the GCS (Gas Collection Centre) in Sonamura, Gojalia and Konaban would be upgraded and around 900 km gas pipelines would be laid.” The company had earlier commissioned its first commercial power project in India, located in southern Tripura and run by ONGC Tripura Power Company (OTPC), formed by ONGC, the Tripura government and Infrastructure Leasing and Financial Services Limited (IL&FS). The 726 MW gas-based combined cycle power project (hydro and natural gas) is located at Palatana, 60 km from Tripura capital Agartala. “Electricity is being supplied to seven of the eight northeastern states from Palatana. Also 100 MW of power is being supplied to Bangladesh since March,” Soni said. “The generation capacity of the OTPC power project is likely to be increased to 1,090 MW in the near future. Work is going on in this direction,” a top OTPC engineer told IANS, on condition of anonymity. ONGC has also committed to supply gas to another state-owned company, North Eastern Electric Power Corporation (Neepco), which set up a 100 MW power project at Monarchak, 70 km south of here. Besides, ONGC, which had started its operation in Tripura in 1972, has been supplying gas to various Tripura government and Neepco-owned power projects in the state. ONGC has also planned to set up a Rs 50 billion fertiliser plant in northern Tripura in association with the state government and Chambal Fertilisers and Chemicals Ltd, a Rajasthan-based private company. Eddie Goldman Jersey
Pradhan asks states to help bring petro products under GST
Oil Minister Dharmendra Pradhan today nudged the states to agree on bringing all petroleum products under the Goods and Services Tax (GST) regime. Speaking at the Global Investors Meet here, he said petroleum is currently under ‘state list’ for the the purpose of taxation under GST. “GST Council will decide on this (taxation of petroleum products). On behalf of the industry, I would request the states to allow petroleum products to be brought under GST taxation,” he said. As per the GST Constitutional Amendment Bill, petroleum products like LPG, kerosene and naptha would attract GST. However, other products — crude oil, natural gas, petrol, diesel, high speed diesel and aviation turbine fuel — have been excluded from GST for initial years. Hence, these products will continue to be taxed in the hands of the states as they are being taxed at present. The GST Council, which consist of Union Finance Minister and state counterparts, will decide on the date of inclusion of these products in the GST basket and rates thereon. Pradhan also asked Madhya Pradesh Chief Minister Shivraj Singh Chouhan to support bringing all petroleum products under the Goods and Services Tax (GST) regime. “In the last 3-4 years, there is a healthy growth of petroleum products in Madhya Pradesh. I will request the Chief Minister that he should agree to (petro items coming under) GST. There would be no loss to the state on account of taxation of petroleum products,” he said. With two different kinds of taxation structure, in the new regime the oil and gas industry would have to comply with both the current tax regime as well as GST. According to experts, GST would have a negative impact on the oil and gas industry due to compliance with dual taxation regime and non-creditable tax costs. Pradhan said petrol consumption in rural areas is growing by 10 per cent every year. On the occasion, there were total seven MOUs signed today for setting up solar power plants and oil marketing and infrastructure facility in the state. Neyveli Lignite Corp (NLC) and Madhya Pradesh New and Renewable Energy Department (MPNRED) signed an MoU to set up 1,000 MW solar power plant, followed by an agreement between IOC, OIL India and Madhya Pradesh Urja Vikas Nigam Ltd (MPUVN) for 500 MW solar facility, NTPC and MPNRED for 500 MW solar power plant, PTC and MPNRED for 500 MW facility and NHDC Ltd and MPNRED for 140 MW solar project. Besides five MoUs on solar projects, there were two agreements signed for oil marketing and infrastructure facilities. One MoU was signed between BPCL and MPNRED for setting up an ethanol plant and the other by IOC and MP Trade and Investment Facilitation Corporation (TRIFAC) for developing oil marketing infrastructure in the state. State-run companies like NTPC, Neyveli Lignite will work towards making the state a solar power hub. Pradhan said there are 1.65 lakh houses in the state and 56 lakh family had LPG connection till 2014. “In the last two years, we have added 30 lakh more, and in the coming two years in MP, 50 lakh more LPG connections will come,” he said. Keith Tkachuk Jersey
Soon, a Policy for Contract Extension of Oil & Gas Blocks
The government is framing a policy that will guide Cairn India’s request for renewal of contract to operate its prolific Barmer oil and gas block, as well as 27 other energy blocks, lifting uncertainty around contract extensions that forced a legal tussle between the Vedanta group firm and the government. Cairn India, controlled by billionaire Anil Agarwal, is seeking to extend the contract to operate the oil and gas block in Barmer, Rajasthan, by 10 years after the initial 20year agreement runs out in 2020. Cairn, which controls about a quarter of the country’s crude output, has been urging the court for several months now to force a deadline on the government for deciding on the issue. An oil ministry official said that instead of taking a company-specific decision for Cairn India, the government has decided to frame a policy that will guide the contract extension in 28 blocks, including that of Barmer. This group of 28 blocks, the official said, is referred to as the Pre-NELP `exploration’ blocks, or the blocks that were auctioned before the NELP , or New Exploration Licensing Policy , came into being. In March, the cabinet had approved a renewal policy for Pre-NELP `discovered’ fields that also applied to another set of 28 smalland medium-sized discovered fields. Under this policy, the government’s share of profit petroleum during the extended period of contract shall be 10% higher than the share during the initial period. During the extension, the royalty and cess shall be payable at the prevailing rates by all the contractors in proportion to their participating interest. The policy also outlined guidelines on pre-requisites for grant of ex tension, cri terion for evaluation of a request, a time-frame for consideration of a request, duration of extension, seat of arbitration, etc. The oil mini stry official, who did not want to be named, did not say if the new policy being considered for the Pre-NELP exploration blocks will be a copy of the policy announced in March. He said the terms and conditions are still being contemplated. The terms for extension are at the heart of the delay with both the government and the contractor, Cairn India, trying to extract a larger share of profit for itself in the new contract. Kenneth Dixon Jersey
Pradhan launches Ujjwala LPG scheme in Amethi
Union minister of state for petroleum Dharmendra Pradhan on Saturday attacked Amethi MP Rahul Gandhi for turning down the government’s formal invite to attend the inauguration of the Rajiv Gandhi Petroleum Technology Institute (RGPTI). Mocking Rahul’s absence at the inauguration of the RGPTI permanent campus citing his “busy schedule”, Pradhan said it was not unnatural that a “big man” like Rahul was unable to find time for his constituency. Congratulating the RGPTI management for naming the auditorium where the function was held after Swami Vivekananda, Pradhan also proposed, on the basis of a voice vote, that a statue of Vivekananda be installed there and be unveiled by Amethi MP Rahul Gandhi, this time “on a date of his convenience.” Launching the NDA government’s ambitious Ujjawala scheme, the minister gave away 1,000 free gas connections to Amethi’s poor. On his arrival in Amethi, a Congress-BJP poster war was also on display between Fursatganj and RGPTI, with both parties claiming credit for the permanent campus. “In eight years since the enactment of the law for RGPTI, the UPA government gave Rs 129 crore, while the Modi-led NDA government doled out Rs 302 crore,” said Pradhan. On Friday, the Congress vice-president had tweeted his letter to Pradhan in which he had said the UPA government had first proposed the idea of setting up RGPTI. Referring to the decision to retain the name of the institute after late ex-prime minister Rajiv Gandhi, Pradhan said a debate should be conducted on why important institutions are named after family members. “What about Netaji Subhash Chandra Bose, Sardar Vallabhbhai Patel, Swami Vivekananda, Lal Bahadur Shastri and many others who contributed to the freedom struggle?” Pradhan asked. Pradhan also promised a skill centre on the campus to ensure 70% jobs to Amethi’s people. Captain Munnerlyn Authentic Jersey