Probe blames refinery for gas leak
KOCHI: A detailed investigation conducted by Factories & Boilers into the recent gas leak at Ambalamedu has revealed that the accident was caused by venting of hydrocarbon gases from BPCL-Kochi Refinery functioning in the area. The agency also issued specific instructions to the PSU on preventing such accidents in future. As many as 25 students and two teachers of Ambalamedu Government Vocational Higher Secondary School were admitted to hospital after being exposed to the leaked gas. District Collector K Mohammed Y Safirulla in a statement issued here on Monday said the accident was caused by gas released from the crude oil distillation unit of BPCL-Kochi Refinery (CDU-III), during its installation. “When such procedures are carried out, for starting up vacuum distillation units, there will be venting of hydrocarbon gases for a short duration. Venting of gas from the hot well of the vacuum distillation unit is done in order to normalise the unit. It is a procedure followed universally,” said the Collector. The Collector said the gas cloud from the unit had settled on the premises of the school, due to the weather condition prevailed at the time of the incident. The cloudy sky prevented gas from escaping into the atmosphere. “To prevent such incidents from occurring again, the ‘direct vent provision’ should be blinded and gas should be vented through a scrubber and then to the flare stack,” added the District Collector. Johnny Unitas Authentic Jersey
Jharkhand becomes first state to launch DBT in Kerosene
Jharkhand has become the first state in the country to launch the ambitious Direct Benefit Transfer in Kerosene (DBTK) scheme, the petroleum ministry said in a statement today. The scheme aims at eliminating subsidized Kerosene from the supply chain for better targeting of beneficiaries, eliminate pilferage and black-marketing and cut down adulteration of the cheap cooking and lighting fuel with diesel. Jharkhand has initiated roll-out of the scheme in four identified districts — Chatra, Hazaribagh, Khunti and Jantara – beginning 1 October. “Under the DBTK Scheme, Public Distribution System (PDS) kerosene is being sold at non-subsidised price and subsidy, as admissible, is being transferred to consumers directly into their bank accounts,” the ministry said. The statement also clarified the government’s initiative is aimed at rationalising subsidy based on the approach to cut subsidy leakages but not subsidy. The DBTK scheme, which works on the lines of a similar programme for LPG subsidy, was initially to be rolled out across 40 districts in nine states from 1 April 2016. However, lack of bank accounts and their seeding with Aadhaar numbers coupled with problems in creating biometric database of beneficiaries had pushed back the launch of the ambitious plan to introduce DBTK. Under the scheme, consumers pay the non-subsidized price of kerosene at the time of purchase. Subsequently, the amount of subsidy is directly transferred to the bank account of the beneficiary. In order to avoid any inconvenience to the beneficiaries during the initial purchase through payment of un-subsided price, an initial amount of subsidy is credited to all eligible beneficiaries. Oil minister Dharmendra Pradhan had earlier said the centre is hopeful of covering at least 33 districts in nine states in 2016-17 calling it “A substantial leap forward in the reform process”. In a bid to incentivize states to implement DBTK, the states are given cash incentive of 75 per cent of subsidy saving during the first two years, 50 per cent in the third year and 25 per cent in the fourth year. The scheme is being launched initially in Jharkhand, Chhattisgarh, Haryana, Himachal Pradesh, Madhya Pradesh, Maharashtra, Punjab, Rajasthan and Gujarat. Phillip Lindsay Womens Jersey
Saudi cabinet says eager for oil market stability
Saudi Arabia welcomed on Monday an agreement reached in Algiers last week on restraining oil output, and said it hoped for further cooperation between oil producers inside and outside OPEC to help the interests of producers and consumers. “The council of ministers stressed the kingdom’s keen desire for the stability of the international oil market in the interest of producers and consumers, the energy industry and the world economy,” state news agency SPA quoted a statement by the cabinet as saying. The cabinet also said Saudi Arabia was “ready to participate in any collective action” to achieve this goal. Lee Smith Jersey
A ‘larger’ oil cartel may emerge
For oil importing countries, OPEC’s decision to cut its oil production on assurance that influential non-OPEC producers (Russia) would also join in, seems like a collusive tactic to force oil prices up. Oil prices, which have fallen by over 70% in the past two years, have dramatically reduced the exports earnings of all OPEC members, thereby “putting strains on their fiscal position”, as OPEC puts it. Before Russia and others join in formally (though many feel that Russia is already in), the OPEC has reached a rare consensus among its 14 members to cut the group’s production by about half-a-million barrels per day. It is the first ever commitment by OPEC to collectively cut its production since oil prices started falling in early 2014. The proposed move has upped oil prices by 5%, sent global energy stocks soaring but has left oil importing countries sulking. “I see this understanding (among OPEC) with a lot of suspicion,” says R.S. Sharma, head of FICCI’s hydrocarbon committee and former chairman, ONGC. “There are a lot of sectarian differences among OPEC members — most notably between Iran and Saudi Arabia — which might scuttle the success of this agreement. How individual members respond to this collective agreement (to cut production) is something to be seen. Who would be producing what quantum of oil is yet to be decided and that is where individual calculations might differ,” says the Delhi-based energy expert. Many, especially the poorer members of the cartel, would still insist that the Saudis make a bigger sacrifice (cut) to keep the consensus going. Higher oil prices, resulting from the OPEC’s decision to cut back production, is ‘likely to have a cascading impact on India’s fiscal scene and inflation dynamics.’ Oil earnings have been the lifeline of OPEC and Russia that together produce about half of the global oil. Traditionally, both having been fierce rivals, are eying the same global oil market. “Russia joining hands with OPEC is a big news which may take oil up to $60 a barrel. Any further escalation in oil prices would depend on global oil demand which looks quite weak at the moment,” feels Sharma. The global oil market remains oversupplied by 1.5 million barrel/day, and therefore someone (other than OPEC) has to cut more to “balance’ the market. Lower oil prices have greatly benefited India that imports over 80% of its crude oil requirements, mainly from the OPEC. Cheaper energy imports have helped it to keep inflation under control. This may change now. Higher oil prices, resulting from the OPEC’s decision to cut back production, is “likely to have a cascading impact on India’s fiscal scene and inflation dynamics”, says Abnish Kumar, Director & research head, Amrapali Aadya Trading & Investment.
Petronas weighs sale to exit $27 billion Canada LNG project
Malaysian state oil firm Petroliam Nasional Bhd is considering selling its majority stake in a $27 billion Canadian liquefied natural gas (LNG) plant, three people familiar with the matter said this week. Petronas, as the company is known, said in a statement on Saturday that it “categorically denied” the Reuters report on Friday that the company is considering the stake sale. “Petronas reiterates that, together with the project partners, it will study the conditions that come with the approval and conduct a total review of the project prior to making a decision on the next steps forward,” the company said in a statement on Saturday. Petronas is weighing options for the project as a more than 50 percent slide in crude oil prices since the middle of 2014 has hit the group´s profits and prompted cuts to capital expenditure and jobs. Amid the cost-cutting, the economics of the Canadian project – which took three years to get approval due to environment concerns – have been called into question as LNG prices have fallen more than 70 percent in two years. Petronas was given the go-ahead for the C$36 billion ($27.34 billion) project by the Canadian government earlier this week. It said then that executives would study the 190 conditions imposed by the authorities and conduct a review before deciding on the next steps. The sources said Petronas has been considering a sale for months, after it became apparent that a Canadian approval was possible, but had yet to take a final decision. Other options are also being considered, including putting it on ice. “They are going to be looking at gas prices, costs and returns before they make the final decision,” said one of the sources. “It is a very tough call.” The Canadian project is Petronas´ biggest foreign investment and seen as a sign of Malaysia´s global energy ambitions. An exit would underscore the financial constraints at the state-run firm and also the soft outlook for LNG prices. Last month, Petronas reported an 85 percent slide in second-quarter profit and labelled the industry outlook “gloomy” well into 2017. It has committed to paying 16 billion ringgit to the government coffers this year, down nearly 40 percent from its year-ago contribution. Petronas signed on for the project in 2012 through the acquisition of Canada´s Progress Energy. It has faced several hurdles. Aboriginal and environmental groups have said the project would threaten a salmon habitat. The liquefied natural gas price decline added to concerns, and there is also a growing supply glut as other projects went live. If Petronas goes ahead with a sale, finding a buyer in current market conditions would be difficult, the sources said. Petronas was considering its options as far back as a year ago, a separate industry source said, but he added it would be difficult to sell in the current environment given that Canadian projects are more expensive. If Petronas opts to suspend the Canada project, it would be put on ice until gas prices begin to turn around and Petronas is confident of securing long-term contracts at reasonable prices, said the sources, who declined to be identified as the negotiations are not public. Other liquefied natural gas projects in British Columbia have also faced delays, underlining the market outlook. In July, Royal Dutch Shell and its partners pushed back a decision on building an LNG export terminal, and Chevron has delayed the scheduled 2017 start of its Kitimat liquefied natural gas project. Petronas has minority partners for the project in China, India, Japan and Brunei. Darwin Barney Authentic Jersey
Adani Gas slashes PNG, CNG prices
A day after the Union ministry of petroleum and natural gas cut prices of domestically-produced natural gas, city gas distribution company Adani Gas Ltd reduced prices of piped natural gas (PNG) and compressed natural gas (CNG) on Saturday. The company slashed prices of PNG for domestic households by Rs 13.81 per metric million british thermal unit (mmbtu) to Rs 510.15 per mmbtu (approx Rs 19.43 per cubic metre). Earlier, the price was Rs 523.96 per mmbtu (Rs 19.96 /cubic metre) excluding VAT. CNG prices have been reduced by Rs 1.10 to Rs 44.70 a kg from Rs 45.80 a kg including all taxes. The new prices are effective from October 1, 2016. Martin Havlat Jersey
Kerala CM promises all support to GAIL project
Kerala Chief Minister Pinarayi Vijayan has pitched for time-bound implementation of the much-delayed GAIL pipeline project in Kerala, saying it was “essential” to ensure “pollution-free” and “sustainable development” in the state. In a Facebook post, he said it was not proper to curtail development in the name of pollution and usage of environment-friendly fuel like CNG was a solution to this. The state should be connected to GAIL’s natural gas grid to get CNG at a cheaper rate, he said. “It is not proper to stop development for controlling pollution. The solution to this is to use green and clean fuel in place of those creating pollution. CNG is one such fuel which has been recognised as environment-friendly the world over,” the chief minister said. Detailing the significance of linking the state to GAIL’s natural gas grid, Vijayan said, “It is essential to connect Kerala with this national natural gas pipeline grid for sustainable development.” The grid will be connected with LNG Petronet at Kochi. The 900-km gas pipeline project of GAIL, passing through Kerala, Karnataka and Tamil Nadu, has been facing a delay due to land acquisition issues in Kerala and Tamil Nadu. In Kerala, of the 550-km stretch, only about 44 km inside Ernakulam city has been completed so far. Tamil Nadu and Karnataka together account for about 384 km of the project. Two pipelines, one from Kochi to Mangaluru passing through the coastal districts of Kerala and another connecting Bengaluru and Kochi, are to be laid. Protests from the residents of the areas through which the pipelines would pass have caused the delay. The 50 lakh tonnes per annum capacity of the Petronet LNG terminal at Puthuvype in Kochi has not been able to fully utilise its capacity due to the delay in laying of the pipelines. Petronet sources said things have picked up after the LDF government came to power in the state. “The GAIL pipeline project has a significant role to ensure pollution-free and sustainable development in the state. So, the state government is promising all support for the completion of the project,” Vijayan added. Demar Dotson Womens Jersey
ONGC, OIL making losses on natural gas production
State-owned ONGC and Oil India are making losses on natural gas production after government cut rates for the fourth consecutive time to bring down selling price to below the cost of production. Price of natural gas produced by Oil and Natural Gas Corp (ONGC), OIL and Reliance Industries locally was cut by 18 per cent to USD 2.5 per million British thermal unit (mmBtu) based on its gross heat value for six month period beginning October 1. On net heat value basis, the price will be USD 2.78. “Our average cost of production is about USD 5.14 per mmBtu. It comes to about USD 3.59 per mmBtu without taking into account return on capital,” said a senior ONGC official. For Oil India Ltd, the cost of production, without taking into account the return on capital, comes to about USD 3.06. “Gas production is now a loss making business as irrespective of cost of production we have to continue paying royalty and other taxes,” the official said. 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 was on Friday announced to be USD 2.5 per mmBtu compared to USD 3.06 per mmBtu previously. The price of gas between October 1, 2015 and March 31, 2016 was USD 3.81 per mmBtu and USD 4.66 in the prior six month period. Next change is due on April 1. The reduction in natural gas prices would mean lower raw material cost for compressed natural gas (CNG) and natural gas piped to households (PNG) and would translate into reduction in retail prices. It would also mean lower feedstock cost for power generation and manufacturing of fertilisers. But for producers, it means lower revenue. Every dollar dip in gas price results in Rs 4,000 crore hit in revenue of ONGC on an annual basis. The current price reduction would hit its revenue by about Rs 1,000 crore. Alongside the price cut, the government also announced a sharp reduction in cap price based on alternate fuels for undeveloped gas finds in difficult areas like deepsea which are unviable to develop as per the existing pricing formula. The cap for October 1, 2016 top March 31, 2017 will be USD 5.3 per mmBtu, down from USD 6.61 in April 1 to September 30 period. The official said ONGC had used this flexibility to sell about 1.4 million standard cubic meters per day of gas from a Mumbai offshore field. “We sold the gas at USD 5.05 per mmBtu to (state gas utility) GAIL India Ltd. Fortunately, that price remains under the lower cap,” he said. Indian gas prices are calculated by taking weighted average price at Henry Hub of the US, National Balancing Point of the UK, rates in Alberta (Canada) and Russia with a lag of one quarter. So, the rates for October 1, 2016 to March 31, 2017 period were based on average price at the international hubs during July 1, 2015 to June 30, 2016. Ty Sambrailo Womens Jersey
CNG, PNG prices cut in Delhi NCR by IGL
City gas distributor Indraprastha Gas Ltd (IGL) has cut prices of automobile fuel Compressed Natural Gas (CNG) and household Piped Natural Gas (PNG) in Delhi-National Capital Region (NCR). The third price cut in less than a year follows the centre’s latest move to reduce domestic natural gas prices 20 per cent to $2.50 per unit for six months effective 1 October. The revision in prices would result in a decrease of Rs 1.40 per kg in the consumer price of CNG in Delhi and Rs 1.60 per kg in the consumer price of CNG in Noida, Greater Noida and Ghaziabad. The new consumer price of Rs. 35.45 per kg in Delhi and Rs 40.60 per kg in Noida, Greater Noida & Ghaziabad would be effective from tonight. The price of CNG in Delhi remains the lowest in the entire country. “With the objective to boost CNG refuelling during non-peak hours, IGL will continue to offer a discount of Rs 1.50 per kg in the selling prices of CNG for filling between 12 am to 5 am at select outlets. Thus, the consumer price of CNG would be Rs.33.95 per kg in Delhi and Rs 39.10 per kg in Noida, Greater Noida & Ghaziabad during 12 am to 5 am at the select CNG stations across the region,” the gas supplier said in a statement today. The company has also reduced domestic PNG prices from tomorrow. The consumer price of PNG to Delhi households is being reduced by Re 1 per standard cubic meter (scm) from Rs 24 per scm to Rs 23 per scm. Due to differential tax structure in Uttar Pradesh, the applicable price of domestic PNG to households in Noida, Greater Noida and Ghaziabad would be Rs 24.35 per scm. It is being reduced by Rs 1.15 per scm from the existing Rs 25.50 per scm. IGL — a joint venture of GAIL (India) Ltd, Bharat Ptroleum Corp (BPCL) and the Delhi Government — currently supplies PNG to nearly 480,000 households in Delhi and over 190,000 households in Noida, Greater Noida and Ghaziabad. “The revision in retail prices of CNG and domestic PNG has been effected after taking into account the overall impact on the cost as a result of the reduction in prices of domestically produced natural gas notified by the government,” the company said. It also claimed that with the revised price, CNG would offer over 60 per cent savings towards the running cost when compared to petrol-driven vehicles at the current level of prices. When compared to diesel driven vehicles, the economics in favour of CNG at revised price would be over 32 per cent, it said. IGL currently caters to over 850,000 CNG vehicles in the capital, which include nearly 550,000 private cars. The company is also augmenting its CNG refuelling infrastructure to meet the rapidly growing demand as a result of increased number of vehicles switching to CNG mode. Dale Hawerchuk Authentic Jersey
IGL to set up city gas distribution network in Rewari
Indraprastha Gas Limited (IGL) has been authorized by Petroleum & Natural Gas Regulatory Board (PNGRB) to lay City Gas Distribution (CGD) network in the geographical area of Rewari in Haryana, M Ravindran, Chairman, IGL said. Addressing the shareholders, Mr. Ravindran also gave an overview of future plans of the organization involving consolidation of its presence in existing areas as well as expansion in new geographies in view of the focus of the government to move the country towards a gas based economy. Referring to various initiatives taken by the government recently like developing national gas grid to cover all corners of the country and promotional campaign being undertaken to communicate benefits of natural gas, he said that IGL is fully geared up to seize the emerging opportunities in the CGD sector. Highlighting the initiatives undertaken by IGL to promote the usage of clean fuels due to increasing environmental concerns, Mr Ravindran shared information about the first of its kind pilot project in the country to run two wheelers on CNG being undertaken by the company. Speaking about augmentation of CNG infrastructure undertaken by IGL wherein 16 new CNG stations had been made operational in 2015-16 and work had also started on another 78 CNG stations, which were subsequently made operational in the first quarter of 2016-17. He added that this had resulted in IGL recording highest ever sale of 29.5 lakh per day last month, which is the highest for any CGD company on a single day. Referring to addition of 75,000 new domestic PNG customers by IGL in 2015-16, Mr Ravindran gave an overview of the marketing activities being undertaken by IGL to give boost to PNG segment. He added that IGL has been making conscious efforts to enhance customer experience by upgrading its services while leveraging technologies to its advantage. He informed that IGL has implemented Business Communication Management application to facilitate customers with optimized and improved call center operations over IVR to enable users to track, consolidate and respond in timely manner to customer complaints received through multiple channels. Joel Ward Womens Jersey