More cover for Indira Gandhi canal, oil wells
Considering the escalating tension between India and Pakistan, wide action plan is being made to beef up security of Indira Gandhi canal, the lifeline of western Rajasthan. In similar ways, arrangements are being made for the additional security to oil wells, gas pipelines in Jaisalmer and Barmer. The water points of PHED have also been secured. Additional chief engineer of the India Gandhi canal project, K L Jakhar said that looking to the present scenario, district administration has asked for complete details of the project as how much water is flowing at which places along with other information. He further said that based on the report, the district administration will deploy necessary security forces at important bridges and heads. On the other hand, security has been beefed up at leading oil areas in J0aisalmer and Barmer and a meeting was organized at Ramgarh to review the security arrangements in this regard. According to sources, in this meeting, Oil India, Focus Energy and ONGC have been directed to tighten their security. Similarly, GAIL has been directed to increase the security of gas thermal power project as well as its gas pipeline. Directions have been given to take necessary steps so that no unknown and suspicious persons enter the oil gas wells, thermal projects or near the water source. It is to be mentioned that during the Indo-Pak war in 1971, Pakistani soldiers had poisoned the only well at Longewala and no one can fetch water from the well, 45 years post poisoning. District collector Sudhir Sharma said that PHED officers have been asked to deploy more guards near the water sources. He said that Cairn Energy has been directed to tighten the security of its oil wells so that no outsider can enter. Sharma further informed that he along with SP took a stock of the villages near the fencing and asked the villagers to inform on seeing any suspicious person and to be ready to face any situation. Damien Wilson Womens Jersey
India, Bangladesh discuss cooperation in hydrocarbons
With Bangladesh recently allowing passage of Indian trucks carrying petroleum products to the Indian state of Tripura through the former’s territory, India and the neighbouring nation on Wednesday discussed other areas of bilateral cooperation in hydrocarbons. According to an Indian Petroleum Ministry release, Union Petroleum Minister Dharmendra Pradhan met here with Bangladeshi Minister of State for Energy and Mineral Resources Nasrul Hamid and thanked him for permitting Indian trucks to pass through Bangladesh. “Pradhan discussed with his Bangladesh counterpart the issue of supply of high speed diesel (HSD) from the Siliguri terminal of Numaligarh Refineries Ltd to Parbatipur depot of Bangladesh Petroleum Corporation,” the statement said. “Both sides are working on details of the proposed pipeline project — the Indo-Bangla Friendship Pipeline — between Siliguri and Parbatipur,” it said. Indian Oil Corp (IOC) had last month transported petroleum products from the northeastern state of Assam to Tripura through Bangladesh. The arrangement was due to the difficulties faced in carrying petrol and diesel through the Indian roads of the region. The new route via Bangladesh saves time and costs in carrying petroleum products from Assam to Tripura as the existing over 400 km mountainous route requires more than ten hours to traverse. The short-term India-Bangladesh deal on shipping petroleum products was valid till September 30. “Both Ministers also discussed the status of various Indian proposals that have been shared with the Bangladeshi side, including the setting up of LPG import terminal at Chittagong by IOC and its onward transportation by road to the Tripura bottling plant,” the statement said. “Petronet LNG Ltd (PLL) in Kutubdia Island near Chittagong is finalising an MoU with Petrobangla on setting up of the LNG terminal.” The two ministers also reviewed the progress on work being done by Engineers India Ltd on the expansion of Eastern Refineries Ltd, Chittagong, it added. Tom Kuhnhackl Jersey
Cabinet clears ONGC Videsh’s extra 11 per cent stake buy in Russia’s Vankor fields
The cabinet has approved ONGC Videsh’s purchase of an additional 11 percent stake in Russia’s Vankor oil fields from Rosneft for $930 million, raising the Indian firm’s stake in the project to 26 percent, a government statement said. The latest move brings the investment by Indian companies in Russia’s east Siberian fields to $5.5 billion, aiding the country’s sanctions-hit economy. “This would go a long way to create a new energy bridge between the two strategic partners,” Oil Minister Dharmendra Pradhan tweeted on Wednesday. Russia is keen to develop and deepen economic ties with India and sell oil to one of the world’s fastest-growing economies at a time when revenues have been hit by a plunge in global oil prices. Prime Minister Narendra Modi, who wants to cut the country’s oil imports by 10 percent in six years, is steering efforts to buy. foreign energy assets, taking advantage of low global oil prices and a slowdown in China’s overseas purchases. In May, ONGC Videsh, the overseas investment arm of explorer Oil and Natural Gas Corp, paid $1.284 billion for a 15 percent stake in Vankorneft, which owns the Vankor fields. With the latest move, Indian companies together own 49.9 percent of Vankorneft. Brandon Davidson Womens Jersey
No change in gas pricing formula, says Petroleum Minister
The Government today ruled out changes in formula for pricing of domestic natural gas even though the formulation has driven down rates below the production cost. The NDA-government had in October 2014 fixed a formula based on rates prevalent in gas-surplus economies of US/ Mexico, Canada and Russia to price gas produced in a import dependent economy. As rates slumped in the near stagnant gas-surplus economies, rates were cut for four consecutive times, the last being on October 1 to $2.5 per million British thermal unit. “The formula approved in October 2014 stands… There will be no changes in that,” Petroleum Minister Dharmendra Pradhan told reporters here. He was asked if the government was looking at changes in the formula by looking at demands for a floor or minimum price for producers like ONGC and OIL who are making losses at current rates. “That formula stands,” he said categorically. While originally the formula was to apply to all the existing as well as future production, the government earlier this year made some course correction to allow limited pricing freedom to yet-to-be-produced gas from difficult areas like deepsea or high-pressure-high-temperature fields. Gas produced from difficult fields was allowed a rate capped to maximum price of alternate fuel. This rate for six month beginning October 1 was fixed at $5.3 per mmBtu. Rating agency Fitch in a note today said while the lower gas prices will not significantly hurt the borrowing capacity of Oil India Ltd, it will be selling natural gas at a loss. Price of natural gas produced by Oil and Natural Gas Corp (ONGC), OIL and Reliance Industries locally was cut by 18 per cent to $2.5 per million British thermal unit (mmBtu) based on its gross heat value for 6—month period from October On net heat value basis, the price will be $2.78. The rate compares to average cost of production of about $3.59 per mmBtu for ONGC and $3.06 for OIL, without taking into account return on capital. As per a new mechanism approved by the government in October 2014, the price of domestically produced natural gas is to be revised every six months —— April 1 and October 1 —— using weighted average or rates prevalent in gas—surplus economies of US/Mexico, Canada and Russia. For October 1, 2016 to March 31, 2017, the rate has been fixed at $2.5 per mmBtu compared to $3.06 per mmBtu previously. The price of gas between October 1, 2015 and March 31, 2016 was $3.81 per mmBtu and $4.66 in the prior six month period. Next change is due on April 1. Archie Manning Jersey
Indian Oil Corporation plans to lay 2,000-km LPG pipeline from Kandla to Gorakhpur
Indian Oil Corporation is planning to lay a 2,000-km pipeline to carry liquefied petroleum gas (LPG) from its Kandla import terminal on the west coast to Gorakhpur in the deep east to cater to growing demand for cooking gas in the country. The operator of the largest liquid hydrocarbon pipeline network in the country submitted an ‘expression of interest’ to the downstream regulator, the Petroleum and Natural Gas Regulatory Board, to lay, build and operate a common carrier LPG pipeline. Following this, the board has begun a public consultation on the matter. The pipeline could cost Rs 5,000-6,000 crore to build, according to industry executives. Read More: Indian Oil Corporation plans to lay 2,000-km LPG pipeline from Kandla to Gorakhpur In the first five months of the current financial year, India’s LPG consumption grew 10.5% over that a year ago, a rate that’s likely to sustain as the government aims to expand cooking gas consumer base 60% in three years. Of the 8.4 million metric tonnes consumed between April and August, just a little more than half was produced locally. The expected growth in local demand will, therefore, increase India’s dependence on import. “The deficit between indigenous supply and demand of LPG linked to IOCL’s bottling plants is expected to reach a level of about 10 mmtpa (million metric tonnes per annum) by 2031-32. Considering the aforementioned 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,” the company said in its ‘expression of interest’. It further said, “Additional import capacities are being built at Paradip, Cochin, Kandla etc to meet the increasing requirement of imports. West coast remains the most suitable to import LPG to meet the demand of North and Central India.” The company plans to raise the capacity of its LPG import terminal at Kandla to 5 mmtpa from the current 1.5 mmtpa. The proposed pipeline comprising 1,841 km of mainline and 146 km branch lines to Ujjain and Varanasi will have a carrying capacity of 3.75 mmtpa. The pipeline will have intermediate pump stations at Koyali refinery and at Indore. It will deliver LPG to bottling plants at Ahmedabad, Ujjain, Bhopal, Kanpur, Allahabad, Varanasi, Lucknow and Gorakhpur. The proposed pipeline will also draw fuel from Gujarat refinery and connect the company’s eight LPG bottling plants whose capacities are also planned to be raised. Indian Oil Corporation currently operates and maintains nearly 12,000 km of hydrocarbon pipelines. The company caters to nearly half of the country’s 18 crore LPG consumers. Indian Oil, Hindustan Petroleum and Bharat Petroleum together operate about 188 LPG bottling plants with a bottling capacity of about 15.2 mmtpa. State firms sold nearly 17.2 million tonnes of LPG in 2015-16. Ty Montgomery Authentic Jersey
India and Russia may agree to create an “energy bridge”
India and Russia may agree to create an “energy bridge” – envisaging a gas supply pipeline – at their next annual summit in Goa on October 15, besides additional stakes for Indian companies in oil and gas fields in the Arctic and Baltic regions. The oil and gas sector is emerging as the next big area of bilateral cooperation after defence. When Prime Minister Narendra Modi meets President Vladimir Putin, India and Russia could agree to set up the pipeline for gas supply from Russia. India and Russia launched an industry-level working group on gas delivery from Russia at an inter-governmental commission held in New Delhi in September and directed their ministries to finalise “concrete outcomes” in key areas of trade and investment before the summit. The working group was led by Gazprom, Russia’s biggest gas company, and a group of Indian companies “for creating an ‘energy bridge’ between the two countries through possible gas pipelines for direct gas delivery from Russia to India,” the Ministry of External Affairs said in a statement dated September 13. Indian and Russian oil and gas companies are working towards finalisation of investments in each other’s countries, the ministry said. Senior officials told ET that Indian energy companies are exploring investment options in Russian assets in the Baltic and Arctic regions. The Cabinet Committee on Economic Affairs (CCEA) on September 28 granted approval to a consortium of state-owned companies to purchase stakes in companies operating two Russian oilfields for more than $3 billion to augment India’s energy security. The consortium of Oil India Ltd., Indian Oil Corporation Ltd. and Bharat Petro Resources Ltd. will acquire a 23.9% stake in JSC Vankorneft and a 29.9% holding in LLC Taas-Yuryakh. The stakes will be bought from Rosneft Oil Company, Russia’s national oil company, which owns both the operators. Earlier last month, Oil & Natural Gas Corporation, India’s biggest energy explorer, agreed to buy an additional 11% stake in Vankormneft, owner of the Vankor oil and gas fields in Siberia, Rosneft’s second-largest by output, which accounts for 4% of Russia’s production. “Daily production from the field is around 421,000 barrels per day (bpd) of crude oil on an average and together with the earlier acquisition of 15%, ONGC Videsh’s share of daily oil production from Vankor will be about 110,000 bpd,” ONGC said in a statement on September 14. Once the transaction is completed, ONGC Videsh, the company’s overseas arm, will have a 26% stake in JSC Vankorneft. Following his visit to Russia in June, Petroleum & Natural Gas Minister Dharmendra Pradhan said a consortium of Indian oil companies led by ONGC Videsh was considering purchase of part of the $11 billion stake that Russia was selling in Rosneft. Brett Pesce Jersey
Vadodara Gas Ltd reduces prices of CNG, PNG
Vadodara Gas Ltd (VGL), a joint venture company formed by the Vadodara Municipal Corporation and GAIL Gas Ltd, has reduced piped natural gas (PNG) prices for domestic use and compressed natural gas (CNG) for automobiles. VGL will now provide PNG to domestic users at a rate of Rs 22.90 per cubic meter against the previous rate of Rs 23.50 per cubic meter. The new prices have become effective from October 1. The price of CNG has been revised to Rs 42.50 per kg against Rs 44 per kg earlier. The new CNG prices came into effect from Tuesday. VGL took the decision following an intimation from the Petroleum Planning and Analysis Cell (PPAC) of the union ministry of petroleum and natural gas. The PPAC had on September 30 informed VMC regarding a reduction in the basic price of natural gas provided under the administrative price mechanism. VGL officials said that there was a reduction of around 15 per cent in the basic price. Earlier, the prices had been reduced in the month of April this year. VGL caters to around 79,000 domestic gas consumers and around 40,000 vehicle owners in the city. Derek Roy Authentic Jersey
Indian Oil lines up Rs 18,000 cr to raise Panipat refinery capacity
Indian Oil Corporation, the nation’s largest oil firm, plans to invest Rs 18,000 crore to raise capacity of its Panipat refinery in Haryana to 25 million tonnes (mt) by 2020, larger than previously planned. IOC had previously planned to raise capacity of Panipat refinery from 15 mt to 20.2 mt, but now it is looking at raising the capacity straightway to 25 mt, its Director (Refineries) Sanjiv Singh said here. “We have land at Panipat refinery site and so we are looking at going straight to 25 million tonnes,” he said. “We have to look at the capacity of the pipeline, which carries crude oil from west coast to the refinery before finalising if the capacity should be expanded to 20.2 million tonnes as planned earlier or go straight to 25 million tonnes.” IOC owns and operates 11 out of India’s 23 refineries with a combined refining capacity of 80.7 mt per annum. Singh said the company board will shortly take up investment approval for the Panipat expansion as well as that of capacity upgrade at Koyali refinery in Gujarat and Mathura unit in Uttar Pradesh. It is looking to scale up its Koyali refinery capacity to 18 mt from 13.7 mt currently while a 3-mtpa capacity addition is planned at Mathura. “We have land at both Koyali and Mathura, so the expansion would not be a problem,” he said. The IOC board had only last week approved over Rs 9,800 crore investment in expansion of its Barauni refinery in Bihar and setting up a petrochemical unit at the Panipat refinery complex. The board, in its meeting on Thursday, approved expansion of the Barauni refinery to 9 mtpa from 6 mtpa. The expansion along with downstream polypropylene unit will cost Rs 8,287 crore, Singh said. “We have three small crude distillation units at Barauni currently. We plan to pull them down and build new crude processing units. The options before us are to set up one big unit of 9 mt or two units of 6 mt and 3 mt,” he said. The Barauni expansion will be completed by 2021-22. The expansion would meet rising demand in eastern India, particularly in Bihar, Jharkhand and eastern Uttar Pradesh, he said. Also, the board accorded “in-principle” approval for implementation of Olefin recovery project along with expansion of existing naphtha cracker unit, MEG (monoethylene glycol) revamp and benzene expansion unit modifications at Panipat at an estimated cost of Rs 1,527 crore”, he said. The Panipat refinery was commissioned in 1998 with a capacity of 6 mtpa. The refining capacity was doubled to 12 mtpa in 2006 and then raised to 15 mtpa in 2010. Once expanded, this will cater to fuel needs of north and western India. “We are working on raising fuel quality specifications to meet Euro-VI standards at our refineries and so, the Panipat expansion too is being reconfigured to meet the new specifications,” he said. Kyle Palmieri Womens Jersey
Haldia Petro gets nod to set up fuel stations
Haldia Petrochemicals Ltd has received the nod from the Ministry of Petroleum and Natural Gas to set up 50 retail outlets that will sell petrol and diesel, but with a rider stating that it will have to invest a minimum of Rs 20 billion in the sector. The decision should help promote competition and result in lower costs for petrol and diesel, better service, quality and more choice for consumers. Government sources said that the proposal was approved within a month. The HPL project is a consortium of the Government of West Bengal, The Chatterjee Group, the TATAs and Indian Oil Corporation set up in 1994 at an investment of Rs 58.64 billion. “The entry of more number of private players in fuel retailing will make the sector more competitive… this is an indication of the government’s continued emphasis on promoting ‘ease of doing business and is also in line with ‘Make in India’,” said a senior official in government. Reliance and Essar are already into fuel retailing along with public sector majors like Indian Oil Corporation, Hindustan Petroleum Corporation and Bharat Petroleum Corporation. The entry of Haldia could make it more challenging for the incumbents to dominate the market. As per the current policy, a company investing or proposing to invest Rs 20 billion in exploration and production (E&P), refining, pipelines or terminals is eligible for authorization for marketing transportation fuels — motor spirit (MS), high speed diesel (HSD) and aviation turbine fuel (ATF). Officials in Haldia Petrochemical could not be reached for comment. However, sources in the company confirmed that it has firmed up plans to set up 50 retail outlets for marketing of petrol in Purbi Medinipur, Paschim Medinipur, Bbankura and Purulia districts. In the second phase HPL will set up another 50 retail outlets in the districts of Howrah, south 24 Parganas, North Parganas, Hooghly, Nadia and Burdwan. The third phase will see it expand across other parts of the country. Deatrich Wise Jr Authentic Jersey
RIL’s KG basin compensation bill could be over $1.3 billion
The oil ministry is set to ask Reliance Industries Ltd to pay the government over $1.3 billion for allegedly drawing about 8.9 billion cubic metres (BCM) of gas that flowed into its deep-water block in the Krishna Godavari basin from the neighbouring field of state-owned Oil and Natural Gas Corp. Ltd. The Justice A.P. Shah panel, which went into ONGC’s claim that the fields of the two companies were connected, said in his report submitted to oil ministry on 31 August that the government should quantify the ‘unfair enrichment’ that allegedly accrued to Reliance due to flow of gas from ONGC’s field to Reliance’s during the six years from 2009. The compensation will be calculated at the then prevailing gas price without any allowance for cost of production, said a government official involved in the deliberations, who asked not to be named. Without allowing for costs, the benefit of gas from ONGC’s field that went to Reliance works out to over $1.3 billion, taking gas price of 4.2 per million British thermal unit (but) that prevailed for most of the 2009-15 period. The price was increased once towards the end of the period by the government, which could drive the compensation a bit higher. One BCM, a unit of volume, of gas accounts for 35.7 trillion Btu, a unit of energy which is used in gas pricing. Emails sent to Reliance and ONGC on Friday evening remained unanswered at the time of publishing. Reliance is expected to make a statement after it receives any communication from the government. “It is simple arithmetic of quantum of gas produced (by Reliance) which flowed from the adjacent connected field (of ONGC) and the price of gas that prevailed at that time. Recovery of cost of production from revenue is permitted only for gas that belongs to the field licensed to the contractor concerned,” explained the government official cited above. This is despite the fact that Reliance’s contract with the government for the KG D6 block is based on profit sharing. Under the profit-sharing regime, companies vie for contracts based on how much cost they can recover and how much profit they can share with the government at different rates of production. The Shah panel also said whatever benefit the company received in terms of the migrated gas was liable to be returned to the government of India, not to ONGC, which the panel said had no ownership rights over the natural resource. The ministry then asked the upstream regulator the Director General of Hydrocarbons (DGH) to calculate the compensation. The government is likely to finalise the figure shortly. While making the recommendation, Justice Shah relied on the estimate of gas flow between the fields arrived at by DeGolyer and MacNaughton, the US-based consultancy jointly hired by the companies. The government has since revamped the hydrocarbon licensing regime to cut down litigation and to improve the ease of doing business. Before new oil and gas blocks will be auctioned under the new Hydrocarbon Exploration Licensing Policy (HELP) cleared by union cabinet on March 10, the oil ministry will launch a massive communication drive to make investors aware of the contractual provisions, which could help in reducing litigation. “The new revenue sharing regime under HELP, which replaced the earlier profit-sharing formula in oil and gas contracts, does not require cost approvals and is less prone to interpretations and subjectivity in decision making,” said Anish De, partner and head of oil and gas, KPMG in India. De said that having a quick dispute resolution mechanism for industries across sectors will help in improving the ease of business in the country. Kendall Fuller Jersey