GAIL pipeline project: HC directs TN to file status report
The Madras High Court has directed the Tamil Nadu government to file a status report on the stipulation of guideline and market value as on January 1, 2016 for determining the compensation amount for lands acquired for a gas pipeline project of Gas Authority of India Limited (GAIL) as directed by the Supreme Court. A bench, comprising Chief Justice Sanjay Kishan Kaul and Justice R Mahadevan, gave the direction yesterday on a PIL filed by one G Mutharasi, seeking implementation of the project, which had met with a stiff opposition from the farmers. When the matter came up for hearing, GAIL’s counsel submitted the February 2 Supreme Court order, allowing the state government to stipulate the circle rates or guideline value and the market value to determine the compensation amount for the land acquired. The litigation over acquisition of land by GAIL for the project between Kochi-Kootanad-Mangaluru-Bengaluru went up to the apex court as farmers were against acquisition of their land. The Supreme Court, while upholding the project, had confirmed that the land owners were entitled to an additional 30 per cent of the amount determined towards compensation. GAIL submitted that the state government had not specified the rates even after the apex court’s order. The Government Pleader (GP) sought time to place the status report. The petitioner submitted that natural gas was the cheapest fuel to produce electricity and the power supply position in Tamil Nadu would deteriorate if the project was not implemented. He prayed for a direction to implement the project. Jarrett Allen Womens Jersey
Can India Become An LNG Juggernaut?
In the world of liquefied natural gas (LNG), no market is watched with more interest or more potential excitement than India. In 2015 the country with the second-largest population on earth imported 15 million tons of LNG, but some forecasters predict it will import nearly 50 million by 2030. LNG faces a critical juncture, with some 40-50 million tons reckoned to be “homeless” by 2020 unless new contracts are signed; this has placed buyers like India and Japan in privileged positions, with the leverage to re-negotiate existing LNG contracts (which are generally signed for long-term, fixed amounts) and take advantage of a global glut to make short-term and spot price buys, minimizing divergence with market prices. India, currently the world’s fourth largest LNG importer, may turn into an LNG juggernaut, taking in the new production from Australia, the U.S., Iran and elsewhere. It has announced plans to increase re-gasification capacity to 55 million metric tons in order to feed demand. But the key question remains: is that demand reliable? Indian Oil, the state-run refining company, has announced that it expects to earn 15 percent of its total revenue from gas-related projects by 2021. At the moment, gas trading contributes only 5 percent to the company’s bottom line, and India overall relies on gas for 6.5 percent of its energy needs, lagging behind the global average of 23.8 percent. India Oil is set to invest $27 billion in oil and natural gas inside India, including a planned “mega refinery” in partnership with foreign capital. The company has reportedly secured 13 million tons of LNG regasification capacity across terminals in India, and has retained a commitment to importing two cargos of LNG from the Dahej import terminal every month. The terminal is run by Petronet, the country’s single largest LNG importer, which has been exploiting low prices to feed a “buying binge:” it’s expanding Dahej’s capacity from 10 million cubic meters a year to 15 million and is constructing a brand new terminal in the Indian province of Gangavaram on the East coast. These projects come with a high price tag, but Petronet can apparently afford it: the company reported a 55 percent increase in net profit for the first quarter (ending June), though the increase amounts to total net profits of $56 million, chump change for energy majors. The commercial ambition of India’s energy companies is matched by that of India’s government, which wants natural gas to account for 15 percent of overall energy use, an official said on September 6. Greater imports are needed to make up for India’s stagnant natural gas production. In 2015 the country’s production fell by 5 percent, while it’s per capita average (39 cubic meters) lags far behind the world average (369 cubic meters). There remains a vast number of Indians, estimated at some 280 million, who do not have access to reliable sources of electricity. Increased interest in imports is matched by a desire to grow domestic production: India is currently holding bid rounds for 67 new fields. There are also plans for a domestic natural gas hub, so that domestic prices can be traded more efficiently. India is superbly placed to take advantage of a growing ocean of LNG that is building worldwide. Qatar, long the world’s leader in LNG exports, re-negotiated its long-term contract with Indian importers through RasGas last December and remains India’s major LNG supplier. Indeed, it was the RasGas deal which sent Indian LNG prices falling earlier this year. But Qatar’s position is being challenged by Iran and Australia, which are each particularly well-positioned to feed India’s LNG demand. Energy diplomacy during 2016 has brought Iran and India closer together, with India recently expressing interest in constructing a terminal in Iran for facilitating exports back to India. Iran’s LNG output has not yet reached its potential, but expectations that it could compete with Qatar are running high. Australia has already built a significant LNG infrastructure and is ready to export. Massive projects like Chevron’s Gorgon facility are finally in a position to begin exporting large quantities of LNG. Japan’s Tokyo Gas Co. recently accepted its first cargo from Gorgon, a further sign that the facility’s much-publicized woes may finally be at an end. Other ailing LNG projects are benefiting from more capital, a sign that whatever the current market conditions, Australian commitment to LNG production remains strong. Global conditions point to thriving small-scale LNG production, even as high-profile mega projects like Gorgon struggle. Like other countries worldwide, India’s natural gas ambitions are one part economic, one part political. India has committed itself to bringing down its greenhouse gas emissions. Coal accounts for 61 percent of its total energy use, and like China, India has shown an interest in moving away from coal as an energy source. Global commitment to reducing greenhouse gases are helping to feed demand for cleaner natural gas, but the transition from dirtier fuel sources has been slow, while competition from renewable energy sources has been tougher than expected. India is trying to accelerate the transition by feeding natural gas to power plants, including nine in the southern part of the country, while the government is trying to encourage shipping to adopt natural gas as a new fuel source. But challenges lie in the way of India’s LNG ambitions. In the summer, the big story was India snapping up LNG adrift on the European market, for want of a buyer. The price was plummeting, a glut was exceeding demand, and India was well positioned to feed growing domestic demand. Imports from March to May soared, only to stagnate in July. Total imports this year are more than 20 percent higher than last year, but that may be a product of low prices rather than actualized demand: importers are taking advantage of favorable market conditions to snatch up LNG while they can. Despite government interest in LNG as a new, clean energy source, there has been a commitment within the government of prime minister Narendra Modi
To reduce emissions, Govt may exempt LNG from import duty
Addressing a meeting in Bengaluru, he said that in addition to building new gas pipelines, India would also increase its gas regasification capacity from 21 mmt to 55 mmt and this increased capacity of 34 mmt would enable the country to push more gas in the market. On gas economics, he commented that the Government would be willing to consider exempting LNG from import duty like crude oil, given that gas is a clean and environment-friendly fuel and without a doubt will help reduce emissions. The minister referred the KG basin, which is a major gas reserve, as the “North Sea for India”. He also spoke about the Gujarat case where the gas share of 26 per cent is higher than the world share of 24 per cent, and referred to the Government’s aspiration to replicate this across India. In his address at the workshop attended by CEOs and senior leaders from the oil & gas industry covering the entire gas value chain, the minister touched on several issues including Climate Change, gas infrastructure and pipelines, domestic gas supply, gas economics and innovative technology to boost the gas share in India’s energy mix. Pradhan stated that Bengaluru is a city where everything starts, and that Bengaluru is a good starting place for creating new gas markets. He began his address on the climate note, observing that India is not the world’s most polluting country. He highlighted that India has committed to carbon emission reduction in the COP21 summit and that gas will play a key role in India’s drive to combat climate change. On augmenting gas distribution, GAIL has approximately 15,000 km pipelines laid out for gas transport and plans to build another 15,000km gas pipelines, Pradhan noted. In his address to the technology companies, the minister mentioned the technological innovations, and new mechanisms for India, for example Caterpillar developing an economical technology to replace currently used diesel by gas in DG sets. He also stressed that developing India-specific models like Bio CNG, waste to gas, Syn gas from coal etc are the other areas to be looked for innovative economic solutions. Pradhan also mentioned that there will be enough market to absorb new volumes of gas in India in the form of new anchor customers like 100 new smart cities rather than only relying on the traditional anchor segments like power and fertilisers. Further, urban areas are fast expanding and developing a market for gas, replacing LPG and will help enable channel LPG in rural areas where women use animal waste and fire wood for cooking, which is a big health hazard. He asked the participants at the workshop to prepare an actionable plan and stressed on implementation and hitting the market rather than an intellectual discussion only or a societal debate. He also advised the group that a successful implementation strategy is one where all parties are aligned and on board and, hence, it is important to convince all stakeholders across the gas value chain. Earlier, UK Deputy High Commissioner Dominic McAllister complimented the Indian Government on the amazing economic pace and significant policy and regulatory reforms it has achieved. PTI adds from Guwahati: Assam Chief Minister Sarbananda Sonowal on Saturday urged Petroleum Minister Dharmendra Pradhan for sustained and uninterrupted gas supply to small tea growers. Sonowal, in a telephone discussion with Pradhan, sought to ensure uninterrupted gas supply to tea gardens and soon start the construction work of a super speciality hospital in Sivasagar, proposed by the ONGC. Pradhan assured all cooperation in supplying gas to small tea growers and assured that construction work of the hospital in Sivasagar would soon be started, the Chief Minister said on Saturday. Matt Stajan Jersey
OVL seeks oil in lieu of $537 million due from Venezuela
ONGC Videsh Ltd, the overseas arm of state-owned Oil and Natural Gas Corp (ONGC), is seeking $537 million worth of crude oil in lieu of cash due for its share of sales from a Venezuelan oilfield. OVL owns 40 per cent of the San Cristobal field and had invested about $190 million in the project in 2008. State-run Petroleos de Venezuela SA, or PDVSA, holds the remaining stake. “We have not been paid for our share of oil from the field for last few years,” a company official said. San Cristobal project covers an area of 160.18 square kilometres in the Zuata Subdivision of proliferous Orinoco Heavy Oil belt in Venezuela. The field currently produces about 28,000 barrels a day, down from a peak of 38,000 bpd. The official said OVL had received its dividend from sale of crude oil produced from the field totalling $56.224 million for 2008. But dividends for 2009 to 2013, totalling $537.631 million, remained unpaid due to cash flow difficulties being faced by PDVSA. During 2015-16, OVL’s share of crude oil production was 0.585 million tons as compared to 0.645 million tons during the previous fiscal. It’s share of investment in the project was Rs 25.9971 billion ($486.69 million) till March 31, 2016. Since PdVSA is facing a cash crunch, OVL wants its share of revenue from the field be paid in form of crude oil. “We want to be given physical oil which we can sell in international market to recover our dues,” he said. Venezuela, the cash-strapped OPEC member and holder of the world’s biggest oil reserves, has been unable to pay foreign partners on some of its projects as revenues slumped along with crude prices and as funds were diverted to social programs and fuel subsidies. The Latin American nation earns almost all of its export revenue from oil. It is already repaying loans outstanding to China with crude and OVL is keen a similar deal. Oil Minister Dharmendra Pradhan had discussed the past dues with visiting Venezuelan Foreign Minister Delcy Rodriguez and Oil Minister Eulogio del Pino last month. Another option was to deduct the outstanding from the money Indian firms like Reliance Industries and Essar Oil pay to import crude oil from Venezuela. But since all of the revenue from oil sales is budgeted by Venezuelan government, that option is ruled out, the official said. Venezuela is India’s fourth largest source of crude oil, supplying some 23.6 million tons or 12 per cent of the country’s annual import in 2015-16. OVL, along with Indian Oil Corp (IOC) and Oil India Ltd, also holds 18 per cent stake in Venezuela’s Carabobo-1 project, which currently produces about 16,000 bpd of oil and is expected to reach 90,000 bpd by end of 2017. Calle Rosen Authentic Jersey
India’s Iran oil imports surge to highest in at least 15 years in Aug
India’s daily oil imports from Iran in August surged to their highest in at least 15 years as the OPEC producer boosted its shipments to recoup market share ceded to rivals Saudi Arabia and Iraq under pressure from economic sanctions. India received about 576,000 barrels per day (bpd) of Iranian oil in August, up about 10 percent from July, according to trade sources and ship arrival data compiled by Thomson Reuters Supply Chain & Commodities Research. The August oil imports from Iran are likely a record although reliable data is available only back to 2001. Iran used to be India’s second-biggest oil supplier – a position now held by Iraq – before sanctions aimed at Tehran’s nuclear programme began undercutting its petroleum trade. The sanctions were lifted in January, and in August, Iran’s crude exports, excluding condensate, rose to near pre-sanctions levels at 2.11 million bpd, with loadings headed for India surpassing those for China, Tehran’s top oil client. India’s oil imports from Iran last month were nearly triple the 199,000 bpd taken in August a year ago, according to the tanker arrival data. In April-August, the first five months of India’s current fiscal year, Iran’s share in its overall imports surged to 10.7 percent, its highest since 2010/11. India’s Iran oil purchases rose nearly 70 percent to 451,000 bpd over those five months from about 266,000 bpd in the same period a year ago, the data showed. India’s oil imports from Iran are set to surge to a seven-year high in the year that began April 1, with the nation’s state-owned and private refiners together buying at least 400,000 bpd on average. In the first eight months of 2016, India’s oil imports from Tehran rose 84 percent to about 395,000 bpd, the data showed, in comparison with 214,000 bpd a year ago. Private refiner, Essar Oil, was the top Indian client of Iran in August, followed by Indian Oil Corp and Mangalore Refinery and Petrochemicals Ltd. Laken Tomlinson Jersey
Maharashtra Government decides to demerge Ratnagiri Gas and Power Pvt Ltd
Maharashtra Government today decided to demerge Ratnagiri Gas and Power Pvt Ltd (RGPPL) into two independent companies – electricity generation centre and Regassified Liquefied Natural Gas (RLNG) terminal. The decision was taken at a Cabinet meeting chaired by Chief Minister Devendra Fadnavis, an official said. The RGPPL is shut since November 2013 due to unavailability of gas. The Cabinet also approved the Court Infrastructure Policy. The policy will be helpful for construction of court buildings and residential quarters for judges as well as expansion and repairs of existing infrastructure, he added. Gale Sayers Womens Jersey
Forum strives to make Mysuru kerosene free
Sarvajananga Hitha Rakshana Forum has urged the government to make Mysuru a kerosene free city. Forum’s state president Venugopal on Thursday said, “Food and civil supplies department should ensure LPG connections to every household in Mysuru.” Presently, kerosene usage has come down in Bengaluru. There is sharp decrease in kerosene usage by 70%. Only 30,000 litres kerosene is being used as against 90,000 litres earlier. Delhi and Chandigarh have been declared as kerosene free states in India. Bangalore is set to become the first city in the state to become kerosene free. The government should encourage kerosene consumers to shift to LPG connections as soon as possible. Poor families who lack a ration card and cannot afford to get LPG connections under the new scheme, the government should provide connections to them. Centre’s Pradhan Mantri Ujjwala Yojana will facilitate to make the state free of kerosene, he stated. Dan McCullers Womens Jersey
ONGC looking to lower operation costs to boost profits
In an attempt to shore up its profitability, state-run Oil and Natural Gas Corp. Ltd (ONGC) plans to leverage depressed oil prices to lower its operational costs. This comes in the backdrop of low cost of oilfield services as the crude oil price for the Indian energy basket fell by $15.22 per barrel in the first quarter of the current financial year compared with the same period last year. The Indian energy basket represents the Oman, Dubai and Brent crude average. ONGC registered a 21% dip in its net profit for the June quarter. The public sector firm reported a net profit of Rs. 42.33 billion in the quarter under review compared with Rs .53.68 billion in the year-ago period as its hydrocarbon production also dropped. “We are bringing about an improvement in our internal processes. The top management is driving a cultural change for better results,” said A.K. Dwivedi, director-exploration at ONGC. “Also, the cost of services hired is low in the market, we plan to capitalise on that to reduce costs,” he added. The company’s turnover also 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. ONGC chairman and managing director, D.K. Sarraf, had attributed the fall in profit to depressed global crude oil prices at a conference in New Delhi on 8 September. According to ONGC’s Perspective Plan 2030, the public sector firm plans to produce 130 million ton (MT) of oil and natural gas with 70 MT coming from its domestic production and the rest from its overseas subsidiary, ONGC Videsh Ltd. However, it is facing dropping production from its wells. So far in the current financial year, its crude oil output fell to 6.34 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 (bcm). ONGC produced 57.38 MT of oil and oil-equivalent gas in 2015-16 compared with 58.34 in 2014-15. “We also plan to bring about an improvement in the operating and internal cost,” said Dwivedi. This comes in the backdrop of India’s stagnant hydrocarbon production. The government has made energy security one of the primary areas of focus in its economic policy in order to achieve fast and sustainable long-term development. “Exploratory activities will not see any reduction,” said Dwivedi. Experts believe these measures will help the company. “Apart from these measures, ONGC is also concentrating on developing onshore fields. These investments will be beneficial once production starts. Moreover by then, global crude oil prices will firm up as well,” said Sanjay Grover, partner at consultancy firm EY. According to the petroleum ministry, India has 763.47 MT of crude oil and 1,488.73 bcm of natural gas reserves. The country’s petroleum product consumption grew 4.15% in 2014-15 to 165 MT. Analysts believe the Indian petroleum product consumption story will continue. “Fitch Ratings expects consumption growth for petroleum products to remain strong over the medium term. Consumption increased by 7.8% in the first quarter of the fiscal year to end-March 2017 compared with 10.9% in FY16. We expect growth to moderate to around 5-6% in FY17 and thereafter. We also expect continued strong gasoline consumption growth of around 9-10% over the medium term, supported by robust passenger-vehicle sales amid low crude-oil prices,” Fitch Rating wrote in a 12 September report. Derrick Rose Womens Jersey
IOC open to foreign investment in Konkan refinery
Indian Oil Corporation Ltd (IOCL) is likely to finalise the location for its mega petroleum refinery on the Konkan coast soon. The Maharashtra government has shown the refinery firm six sites the company for setting up the largest refinery in the country, which will be built at a cost of Rs 1760 billion (trillion). IOCL is also on the lookout for a foreign partner who will co-invest in the project. B Ashok, chairman of IOCL, said, “Considering the demand growth in our country, we feel that there is definitely a need for setting up a very large capacity in the west coast because it has natural advantage in terms of crude import and coast because it will give us tremendous flexibility in terms of crude sourcing and so on and we have identified Maharashtra as a state where we need to put up this refinery. IOCL will take the leadership role in this which already we have some sort of an understanding within the three companies (BPCL, HPCL and IOCL).” He said the company is now evaluating at least half a dozen pieces of land shown to the company, adding that he is hopeful that they will firm up the plan soon. “Because it’s going to be an integrated refining and petrochemicals complex, the technological side of the new complex is being worked out. We are almost clear about what are the fuels or what products are going to be manufactured here and so on. We have already made an assessment of that and once we are able to firm up the land we should go through the approval process very quickly,” he said. The refinery could be a venture where even foreign investment can potentially be invited, he said. “But at the moment, we have an understanding between three oil marketing companies — IOCL, BPCL and HPCL and between three of us, shareholding will be in the ratio of 50%, 25%, 25%, or 2:1:1. But if there is going to be investment from abroad, then our stakes will shrink accordingly.” Ashok said all the required environmental precautions will be adhered to while setting up the refinery. “Environment issues we need to factor in when we are setting up such a large project. It is going to be a really mega venture, today whatever facilities we are putting up, it is all after being mindful and taking into account the current green environment which is prevalent all over the world. We cannot have emissions beyond a level, we cannot produce products which are unacceptable in the marketplace. All those things have been factored,” he said. The cost assessment, Ashok said, for the refinery is about Rs 1760 billion. “We are aware of the people (foreign players) who are interested in the project of this size. The quantum of land required for the refinery, we have asked for, is around 15,000 acre, but there is no hard and fast rule of 15,000 acre; it has to be above a threshold point, but depending upon the condition of the land, the green area that we need to position there, we will have to take a view as to what is available and whether we can construct it. However, 30% will go away for the green belt for this, he said Derek Rivers Authentic Jersey
Petronet awaits govt nod for use of LNG as fuel in vehicles
Petronet LNG Ltd is betting big on the usage of LNG as a fuelling option to meet India’s transportation requirements, Prabhat Singh, Managing Director & CEO, PLL, has said. “We are awaiting a green signal from the government following a proposal to the Ministry of Road, Transport and Highways to use LNG as a fuel in vehicles along with other existing fuels,” he said. LNG, which is cheaper than compressed natural gas (CNG), is not an approved fuel for vehicles right now. However, its widespread usage will reduce the cost of road transportation as well as the country’s dependence on crude requirements, he told BusinessLine in a one-to-one interaction. India consumes around 195 million tons of crude-based oil products today and the figure is likely to go up to 230 million tons by 2022, resulting in higher dependence on crude and additional foreign exchange spending. Given the low processing cost to convert LNG as fuel compared to other fuelling options, he said the differential saving in terms of energy equivalence would be $12 dollar per barrel compared to crude. “When we are graduating to a better fuel for the future, there will be savings in our foreign exchange kitty and an increase in fuel quantity,” he said. To create awareness on the use of natural gas for road transportation, he said PLL has approached Tata Motors to procure 100 trucks with LNG fuelling options to operate in the country. “We are exploring the option to deploy some of these trucks initially on the Kochi-Mangaluru stretch on a pilot basis by outsourcing it to fleet owners.” he said. The new government in Kerala is positive towards this move and has assured us hand-over of land at 3-4 locations to set up LNG filling stations and storage units. The Kerala government is in the process of introducing 1,000 buses run on CNG fuel. “We have mooted a proposal to convert at least 100 buses to LNG fuel for inter-city movement,” Singh added. Vance McDonald Womens Jersey