India gets first Iranian oil parcel for emergency reserves
India has received the first parcel of Iranian oil to partly fill its strategic storage in southern India, Mangalore Refinery and Petrochemicals Ltd, which imported the very large crude carrier (VLCC), said on its website. MRPL shipped in 2 million barrels of Iranian oil in the VLCC Dino. India will fill half of the storage with 6 million barrels of Iranian oil while continuing talks with United Arab Emirates and Saudi Arabia for the remainder. A second parcel to be procured by Bharat Petroleum Corp. is scheduled to arrive around Oct. 25, two sources with direct knowledge of the matter said. India, which is seeking to hedge against energy security risks as it imports about 80 percent of its oil needs, is building emergency storage in vast underground caverns at three locations in southern India to hold a total of 36.87 million barrels of crude, enough to cover almost two weeks of demand. Lamarcus Joyner Womens Jersey
IOC to lay India’s longest LPG pipeline
State-owned Indian Oil Corp (IOC) plans to lay the nation’s longest LPG pipeline from Gujarat coast to Gorakhpur in eastern Uttar Pradesh to cater to growing demand for cooking gas in the country. IOC plans to import LPG at Kandla in Gujarat and move it through the 1,987 kilometer pipeline to Gorakhpur via Ahmedabad (in Gujarat), Ujjain, Bhopal (in Madhya Pradesh), Kanpur, Allahabad, Varanasi and Lucknow (in Uttar Pradesh). The pipeline will carry 3.75 million tons per annum of LPG, IOC said in an application to the sector regulator PNGRB seeking approval for the pipeline project. LPG will be fed into the pipeline at Kandla port as well as IOC’s Koyali refinery in Gujarat. This will be the biggest LPG pipeline in the country. GAIL currently operates a 1,415-km line from Jamnagar in Gujarat to Loni near here. The line carries 2.5 million tons of LPG annually. GAIL also has a 623-km Vizag-Secunderabad pipeline. IOC also has a 274-km pipeline from Panipat in Haryana to Jalandhar. “The demand for LPG is increasing consistently in recent year. Further, due to Government of India’s emphasis to make LPG – a clean and environmental friendly fuel, available to every domestic household in the country, LPG demand is expected to increase at much steeper rate in the coming year,” IOC said in the application. IOC expected the deficit between what its refineries produce and the demand to reach about 10 million tons per annum by 2031-32. LPG demand has grown 10.5 per cent this fiscal with just abouthalf of the 8.4 million tons consumed being locally produced. “Considering the deficit figures for LPG, it is essential to import LPG at the nearest port and then transport it to the bottling plants through the most economical modes,” IOC said. IOC said it is building additional import capacities at Paradip, Cochin and Kandla to meet the increasing requirements of imports. “West coast remains most suitable to import LPG to met the demand of North and Central India. Though there is a common carrier pipeline to link West Coast to North ie Jamnagar-Loni pipeline, there is no LPG pipeline in existence or in construction to link West Coast to Central India or Eastern India,” it said. The proposed pipeline will connect eight of IOC’s LPG bottling plants in Central and Northern India. The Petroleum and Natural Gas Regulatory Board (PNGRB) has sought ‘expression of interest’ from companies wishing to take capacity in the pipeline. 25 per cent of the capacity will be reserved for third parties. IOC caters to nearly half of country’s 18 crore LPG consumers. B.J. Hill Jersey
Dharmendra Pradhan launches Rs 5,000cr national seismic programme in Mahanadi Basin
Oil minister Dharmendra Pradhan on Wednesday launched the national seismic programme to carry out assessment of unappraised areas across the country for potential oil and natural gas reserves. The massive 2D seismic survey, which will cost the government more than Rs 5,000 crore, has been launched here on Mahanadi basin (onshore) in Odisha. “Our government’s is giving a lot of focus to hydrocarbon data. ” Pradhan said at the launch at Tarang village. As much as 48% of the Indian sedimentary basin remains unappraised, and there has been no major finding in new sediments in the last 25 years, he added. ONGC will carry out the national seismic programme (NSP) in most parts of the country while Oil India Ltd will undertake the project in northeastern states. NSP will cover an estimated 48,243 line kilometre, covering 26 sedimentary basins divided into 11 units. “In addition to the national seismic programme, we are carrying out a reassessment of hydrocarbon data of existing sedimentary basins. The third big thing is the single platform where all the data is being brought together, or the national data repository, which we will be dedicating to the nation very soon,” the minister said. On Wednesday, ONGC began the survey work on the Mahanadi basin (onland). Pradhan said he was hopeful the survey work would eventually lead to enhanced exploration and production (E&P) activities in Odisha. “Work on such surveys in these parts in the 80s had even resulted in some evidence of onland gas findings,” he said. The presence of gas has been established about 30 km offshore of Dhamra in a discovery by Reliance in the past. In fact ONGC has sought time from the government to pursue further exploration at two deep water blocks that the company hasn’t surrendered, said senior officials present. ONGC CMD Dinesh K Saraf and Odisha steel and mines minister Prafulla Kumar Mallik were among those present. ONGC, which has already begun survey in Saurashtra, aims to have three-fourths of the total area in the country to be appraised by 2020. In Odisha the survey will be carried out in about 2,500 line kilometres divided into the Bhadrak-Jajpur area and the smaller Chilika Lake area at a cost Rs 79.57 crore. Lorenzo Mauldin Womens Jersey
Kerosene Subsidy Likely to Decline 25% this Fiscal Year
India’s kerosene subsidy is poised to fall sharply as higher supply of cooking gas and rural electrification have encouraged the government to cut supply of the inefficient and polluting fuel that is often diverted to adulterate diesel. The Centre is reducing kerosene supply by 5% a quarter which, along with additional voluntary cuts by some states, small increases in retail prices, and roll out of direct cash transfer for beneficiaries, is estimated to reduce sales and subsidy by 25% by the end of this fiscal year. “There is a consensus emerging between the Centre and the states that subsidy will have to be targeted,“ Oil Minister Dharmendra Pradhan told ET. And the effort at targeting subsidy has been greatly aided by the availability of Aadhaar and national socio-economic database, he said. “With increased access to power and cooking gas, everybody doesn’t need subsidised kerosene,“ Pradhan said, adding that the states have also realised that their revenue collection from petrol pump sales was lower as some of the subsidised kerosene made way to the gray market and states, therefore, have reason to support targeting of subsidy. Oil ministry officials said the decline in kerosene consumption this year would be the steepest ever. Consumption has been shrinking in lower single digits annually for a decade. Sale of subsidised Kerosene, meant for lighting and cooking for the poor, fell 4.2% to 6.8 million metric tonnes in 2015-16. But this year until August, the fall has been much sharper at 10%. In August, the consumption fell 17%. The trend would amplify as the financial year draws to a close as the Centre is reducing the alloca tion of subsidised kerosene to states by 5% every quarter. So, a 10% reduction in allocation has already been made by the middle of the current year, and another 10% cut would be achieved by March, officials said. The allocations to states are being slashed mostly in proportion to the issue of fresh cooking gas connections. States with the higher number of fresh cooking gas subscriptions face deeper kerosene cuts. State oil companies have added about 1.4 crore new cooking gas subscribers so far this year. Oil ministry officials expect an addi tional 5% reduction in kerosene consumption with some states taking voluntary cuts and the launch of direct transfer of kerosene subsidy helping reduce diversion. Brandon Crawford Womens Jersey
India’s LNG demand set to double in next 4 years: Report
India, the world’s fourth largest liquefied natural gas (LNG) importer, is set to see its demand for LNG double in the next four years, courtesy a glut in the global market and the country’s own increasing demand from the power and fertilizer sector. India is the largest LNG importer after Japan, Korea, and China and its import capacity over the next four years is expected to double to 45 million tonnes per annum (MTPA) against 22 MTPA currently, says a 5 October report by Citi Research. The report adds that India’s LNG demand increased from 14 to 16 million metric tonnes (MMT) from FY15-FY16, and has the potential to touch 30 MMT by FY20. “We believe India’s LNG demand has the potential to increase from 16 to 30 MMTPA over FY16-20E, even if we limit our exercise to clearly identifiable demand contributors already connected to the grid,” Citi Research said. One of the key reasons for the spike in demand could be due to the revival of gas-based power generation in India as a result of the lower LNG prices brought on by the oncoming global LNG glut, which could drive Asian spot prices to below 10% to Brent in 2017 (against 11-12% currently). In recent months, Indian LNG imports have risen substantially, with volumes at 1.62 MMT in August, up 9% on a monthly basis and 35% on a yearly basis. This has been aided by falling LNG prices as well as the government’s efforts in increasing gas consumption (especially the power & fertiliser pooling policies introduced last year). The report states that Essar Group plans to restart its two captive gas-based power capacities at Hazira in Gujarat (500 MW + 515 MW), subject to availability of re-gasification capacity. Both these plants have been shut since 2013, but the economics have now turned favourable as the alternative is to buy relatively more expensive power from the grid. In addition, Essar will also require LNG for the gas requirement at its steel plant in Hazira and its refinery at Vadinar. “A recent feasibility report released by the Essar Group highlights a total LNG demand estimate of 3.9 MMTPA from the aforementioned power, refinery, and steel plants,” the report stated. Also, there is potential for 7 million standard cubic metres per day (mscmd) of additional gas consumption by the fertiliser sector due to additional production of 3.7 MMT of urea by existing units over the next four years as part of the pooling mechanism. Refineries, petrochemicals and small industries in Gujarat could also add to the increase in LNG demand. On an average, the Indian refinery sector consumes about 10-15 mscmd. Oil minister Dharmendra Pradhan launched the Gas for India campaign last month, targeted at promoting gas usage in the country. The campaign will educate citizens on the various benefits of using gas as the preferred fuel, in a bid to raise the share of gas in the country’s energy basket to 15% from the current 6.5%, which is substantially below the world average of 24%. Apart from efforts to communicate the benefits of using gas as a fuel, the government is also setting up infrastructure for gas usage and promoting a nationwide gas grid. As part of this move, the government has launched a project on city gas distribution (CGD) network in smart cities to encourage the urban population to shift from LPG (Liquefied Petroleum Gas) to PNG (piped natural gas). The LPG freed up will then be given to below poverty line families under a scheme that was launched by Prime Minister Narendra Modi in May, which aims to supply 50 million free LPG connections to the BPL families over a period of five years. However, the lack of pipeline infrastructure is preventing large scale adoption of LNG in the country. India’s current gas pipeline infrastructure is heavily skewed toward the western, northern and southern parts of the country that account for 75% of the network and 90% of consumption. “Although there are several pipelines planned for the unconnected regions of the country, there has been little progress on them and hence our estimates on demand from the sectors highlighted earlier are not dependent on their completion and we only include contributions from sources where we feel the existing infrastructure is sufficient to handle the demand,” the report said. Dwight Clark Jersey
Russia, Turkey Agree to Build Gas Pipeline Under Black Sea
Russia and Turkey agreed to build a natural-gas pipeline under the Black Sea that could be up and running by the end of 2019, capitalizing on a recent improvement in relations between the two nations. Approval for Turkish Stream — a dual pipeline project consisting of one link serving the Turkish market and another one possibly to southern Europe — was signed in the presence of presidents Vladimir Putin and Recep Tayyip Erdogan in Istanbul on Monday. Russia has long sought to cut its reliance on gas shipments through Ukraine, which account for about 40 percent of its exports to Europe. A link to Bulgaria, known as South Stream, was scrapped in 2014 after being opposed by the European Union. An alternative route through Turkey was shelved last year when relations deteriorated following the downing of a Russian military jet by the Turkish air force near the Syrian border. Tensions eased after Erdogan apologized for the incident in June. Putin said after holding talks with Erdogan that a mechanism for providing a discount on gas prices had been agreed upon. Gazprom PJSC, the world’s biggest gas producer, has been ordered to work out precise numbers for a gas discount for Turkey, Russian Energy Minister Alexander Novak told reporters. “The deal is a piece of the puzzle in reducing transit dependence on Ukraine, but does not represent a major coup for Gazprom in terms of European market access,” said Emily Stromquist, a London-based analyst at Eurasia Group, in an e-mail. “This pipeline is a reroute option.” Price Dispute The Turkey gas link, originally designed to make the nation a new gas hub for the EU and replace Ukraine from 2020, has also been held up by gas-supply pricing disputes. Its annual capacity, initially planned at 63 billion cubic meters with four lines, was later halved. Gazprom had agreed to provide a 10.25 percent discount to Turkey’s state-run energy company, Botas Boru Hatlari Ile Petrol Tasima AS, as part of the pipeline deal before the project stalled. Botas filed an arbitration claim last October, seeking price revisions dating back to December 2014. While the link to Turkey could also help Gazprom access southeastern European gas markets, including Greece and Italy, it can only transport a limited amount of gas to the region because only one interconnecting pipeline between those countries — still under construction — allows third party access, according to Sijbren de Jong, an analyst at The Hague Centre for Strategic Studies. Securing Deliveries Rather than significantly boosting Russian gas supply into Europe, Turkish Stream benefits Gazprom by keeping its gas from being displaced by competitors, he said. “What Gazprom and Russia are trying to do is pre-empt gas deliveries from Azerbaijan and maybe in the future, Iran,” he said in an e-mail. This “is key, in my view.” Turkey will own an onshore pipeline connected to the first part of the undersea Turkish Stream, while the second onshore line through its territory – possibly toward the EU – could be owned by a joint venture, Novak said. Gas demand in Turkey reached 43.6 billion cubic meters in 2015, according to the BP Statistical Review. Its biggest suppliers last year were Russia, Iran and Azerbaijan. It received its first cargo of U.S. shale gas at the end of September. Stephen Curry Womens Jersey
ONGC bets on its relinquished blocks under new hydrocarbon exploration policy
Under criticism for falling production, state-run Oil and Natural Gas Corp. Ltd (ONGC) is betting big on the new hydrocarbon exploration policy based on a revenue-sharing model. ONGC’s strategy stems from some of the blocks on offer under the new Hydrocarbon Exploration and Licensing Policy (HELP) been relinquished by the state-run explorer, even as it had done work on them. Surrender of blocks is mandatory once an explorer exhausts the time period allotted for it. With the New Exploration Licensing Policy unable to attract the desired level of investments, the National Democratic Alliance approved marketing freedom for crude oil and natural gas under HELP in March this year. “The ongoing activities will continue. At the same time, we are waiting for HELP so whenever the new areas are offered we will be bidding. Lot of mandatory relinquishment has happened for last several years, those areas will be available and then of course some of the deep-water areas as well. These areas will be targeted and as far as our past experiences are concerned, we should be able to win some of these areas,” said a senior ONGC executive requesting anonymity. “Past experiences say so,” confirmed another ONGC executive aware of the strategy who also didn’t want to be identified. The first HELP round is expected next year. This also comes at a time when production is declining from ONGC’s assets. Its crude oil output fell to 6.34 million tonne (MT) in the June quarter compared with 6.48 MT last year. Similarly, its gas production was down 5.6% to 5.49 billion cu. meters. The new policy marks 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. The cost recovery model was also criticised by the Comptroller and Auditor General of India due to it being inadequate to incentivise private contractors to reduce capital expenditure. The new policy also allows for exploration for all types of hydrocarbon resources including coal-bed methane or gas hydrates under a single licence. Moreover, an open acreage approach would finally allow firms to choose the areas of their liking for exploration. Experts remain circumspect about the new exploration policy. “It shall be interesting to see how HELP pans out. The government has come up with a new licensing policy replacing the old one with open acreage policy. It is only once the bids are over and production begins will it be open for analysis,” said Raju Kumar, partner at EY, a consultancy. Queries emailed to an ONGC spokesperson on 5 October remained unanswered. ONGC is grappling with fall in domestic production due to sliding yields from its ageing fields. Worried that the falling natural gas prices will affect its profitability, ONGC also plans to approach the government to seek concessions such as lower taxes and levies to shore up its finances, InfraCircle reported on 6 October. This comes in the backdrop of the natural gas price being cut by 18% to $2.50 per million British thermal unit on 30 September for a period of six months till March helping consumers. According to ONGC’s Perspective Plan 2030, it plans to produce 130 million tonne (MT) of oil and natural gas with 70 MT coming from its domestic production and the rest from its overseas subsidiary, ONGC Videsh Ltd. ONGC’s turnover slid 21.41% to Rs.177.84 billion in the first quarter of financial year 2016-17. It had posted Rs.226.28 billion as turnover during the same period last year. Seth Roberts Authentic Jersey
OVL to raise $900 million bridge loan to finance Vankor buy
ONGC Videsh Ltd (OVL) will raise a bridge loan of close to $900 million overseas to fund acquisition of an additional 11 per cent stake in Russia’s Vankor oilfield. OVL, the overseas arm of state-owned Oil and Natural Gas Corp (ONGC), last week got government nod to raise its stake in Russia’s second biggest oil field of Vankor to 26 per cent at an investment of $930 million. It will buy the sake from Russian national oil company, Rosneft. “The acquisition needs some approvals by the Russian government. Once they come in, we will make the payment,” an official said. The company, he said, will raise a bridge loan of 6 to 9 months from overseas financial institutions. A long term financing through foreign currency bonds, will be raised to replace the bridge loan. “The deal is effective May 2015. It is a producing field. So the profits that accrued from sale of oil (to Rosneft for the 11 per cent share) for one-and-half-years will be deducted from sale consideration and payments will be made,” he said. The amount of bridge loan to be raised will depend on this final number, he said. OVL, which had previously bought 15 per cent stake in Vankor from Russian national oil firm Rosneft for $1.268 billion, will an additional 3.2 million of oil equivalent on top of 4.11 million tons secured earlier. Besides OVL’s 26 per cent, a consortium of comprising Oil India (OIL), Indian Oil Corporation (IOC) and Bharat PetroResources (BPRL) has acquired 23.9 per cent stake in the field at a cost of $2.02 billion, giving them 6.56 million tons of oil. Jason Croom Authentic Jersey
Get Ready! Petrol, Diesel Prices Set To Go Up Sharply
Get ready to pay more for petrol and diesel when their prices are revised later this month. Oil marketing companies are likely to revise their prices sharply higher, following a jump in global oil prices. Get ready to pay more for petrol and diesel when their prices are revised later this month. Oil marketing companies are likely to revise their prices sharply higher, following a jump in global oil prices. Petrol currently costs Rs. 64.72 a litre in Delhi and diesel Rs.52.61 per litre. Global oil prices have jumped to over one-year highs of around $53 a barrel on growing expectations of an output cut by major oil producers. Oil prices firmed up after Russia said it was ready to join the Organization of Petroleum Exporting Countries (OPEC) in limiting crude output and Algeria called for similar commitments from other non-OPEC producers. Global oil prices have gained almost 15 per cent since OPEC provisionally agreed last month to cut production for the first time in eight years. The Indian crude basket, composed of 73 per cent sour grade Dubai and Oman crudes, with sweet grade UK Brent making up the rest, breached the psychological level at $50 per barrel on Friday. Petrol and diesel prices are deregulated in India, which means they are linked to market rates. Normally, state-owned fuel retailers Indian Oil Corp (IOC), Bharat Petroleum Corp and Hindustan Petroleum Corp revise rates of the fuel on a fortnightly basis based on the average oil price and foreign exchange rate in the preceding fortnight. India imports more than three-fourth of its crude oil requirements. So apart from global oil prices, the value of the rupee as well as the margins of oil marketing companies and the various government levies determine the final price of petrol and diesel price in India. The Organization of the Petroleum Exporting Countries aims to agree on cutting about 700,000 barrels per day (bpd), bringing its output to 32.5-33.0 million bpd by the time it meets in Vienna for its policy meeting on November 30. It will be OPEC’s first output reduction in eight years and comes two years after prices crashed from highs above $100 a barrel. Global oil prices have been very volatile this year. They had dropped to 12-year-lows of below $30 per barrel in February before currently hovering around over one-year high levels of $53. Josh Morrissey Womens Jersey
GAIL places order for 345 km pipeline laying job
GAIL India, the nation’s biggest gas marketer, has placed orders for laying work of a 345-km section of the Jagadishpur-Haldia-Bokaro-Dhamra gas pipeline, helping expedite the Rs 13,000-crore project. “GAIL has initiated a major step towards the construction of the Jagadishpur-Haldia-Bokaro-Dhamra natural gas pipeline (JHBDPL) by approving placement of orders for pipeline laying work of 345 km from Phulpur to Dobhi,” the company said in a statement. The cost of the 345-km stretch would be Rs 3.06 billion and contracts have been placed on JSIW Infrastructure Pvt Ltd and IL&FS Engineering & Construction Co Ltd. Laying work would commence by the end of October and is targeted to be completed by December 2018, it said. The government is supporting the project by providing 40 per cent of the project cost or Rs 51.76 billion as capital grant over a five year period. The project will cost Rs 129.40 billion. The first phase at a project cost of Rs 32 billion and will span 755 km to cover Phulpur, Mani, Gorakhpur, Varanasi, Dobhi, Silao, Patna and Barauni. Pipeline construction is already under progress along Gaya-Barauni-Patna section. The 2,539 km long JHBDPL is scheduled for completion by December 2020 and will connect major cities and towns enroute for commencing piped natural gas to homes across Uttar Pradesh, Bihar, Jharkhand, West Bengal and Odisha. John Kuhn Jersey