India to save Rs 200 billion from new gas import deal with Qatar: PM Modi
India will save as much as Rs 200 billion as it has renegotiated a long-term gas import deal with Qatar, Prime Minister Narendra Modi said on Monday. India buys 7.5 million tons a year of liquefied natural gas (LNG) per annum from Qatar. The price formula for this was fixed 13 years back and the rate went out of sync when global energy prices slumped last year. “We are dependent on other nations to meet our requirement of energy and petroleum (oil) supplies. And so long-term agreements have been entered into to get assured quantity at a pre-determined price,” Modi said in his Independence Day address to the nation from the Red Fort. In the changed world economic scenario, the Qatar LNG price posed a huge burden on Indian economy, he said, adding that India used its foreign policy to reopen the price. “What was Qatar’s right and we were bound to pay, we managed to get Qatar to renegotiate…to make possible something which was impossible,” he said. India will save Rs 200 billion by renegotiating the LNG price lower, Modi said. “They (Qatar) were entitled to take Rs 200 billion (as per the long-term signed contract) but our diplomatic ties ensured that we renegotiate the terms.” RasGas of Qatar supplies LNG to India under a 25-year long term contract since 2004. Bobby Orr Womens Jersey
Shah panel to submit report on ONGC-RIL gas dispute by Aug 31
Government has extended by one month the tenure of A P Shah Committee looking into the dispute over natural gas migrating from state-owned ONGC’s idle blocks in KG basin to neighbouring fields of Reliance Industries. The Committee will now submit its report by August 31, Oil Minister Dharmendra Pradhan said today. “Government constituted a single member committee comprising of Ajit Prakash Shah former Chief Justice of DELHI High Court on December 15, 2015 to look into the dispute between RIL and ONGC regarding ONGC blocks (KG-DWN-98/2 & Godavari PML) and RIL block (KG-DWN-98/3) in Krishna Godavari basin,” he said in a written reply to a question in Rajya Sabha here. The Committee was to submit its report by July 31. “However, considering the volume of work involved and complexity of the issue, the Committee has sought extension till August 31, 2016 for submission of the report which has been agreed by the Government,” he said. The panel is looking into “acts of omission and commission” as well as compensation to ONGC. “Terms of References (TORs) to the committee includes looking into the issue of gas migration and give its recommendations in this regard,” he said. Pradhan said the committee has conducted hearings and has taken written submission from all stakeholders. “The next course of action will be decided by the government after getting the recommendations of the Committee,” he said. It has been asked to “quantify the unfair enrichment, if any, to the contractors of the adjacent block KG-DWN-98/3 (KG-D6) and measures to prevent future unfair enrichment to these contractors on account of gas migration.” It has also been asked to “recommend action to be taken to make good the loss to ONGC/government on account of such unfair enrichment to the contractors.” RIL has 60 per cent interest in KG-D6 block, while Niko holds 10 per cent stake. BP holds the remaining 30 per cent. DeGolyer and MacNaughton (D&M), had in its November 30 report, established that reservoirs in ONGC’s Krishna Godavari basin KG-DWN-98/2 (KG-D5) and the Godavari-PML are connected with Dhirubhai-1 and 3 (D1 & D3) field located in the KG-DWN- 98/3 (KG-D6) Block of RIL. It states that as much as 11.122 billion cubic meters of ONGC gas has migrated from Godavari-PML and KG-DWN-98/2 to KG-D6. Of the 58.68 bcm of gas produced from KG-D6 block since April 1, 2009, 49.69 bcm belongs to RIL and 8.981 bcm could have come from ONGC’s side, D&M said. Fran Tarkenton Authentic Jersey
Ministry of Petroleum and Natural Gas ensures dispatch of loaded trucks on open wagons to Tripura to mitigate fuel crisis
The supply of Petroleum products to Tripura has been severely affected due to heavy rains and washing away of the Highway- NH 44, leading to the state. Reaching fuel to the rain ravaged state has become a herculean task after a large portion of the road had been washed away. The Ministry of Petroleum and Natural Gas, after a thorough review on the availability of POL products in the state, has paved the way for movement of petroleum products by rail to mitigate the impending crisis. The Ministry of Petroleum and Natural Gas in deliberations with the Ministry of Railways has organized the transportation of POL products through RORO (Roll On Roll Off), wherein the trucks carrying bulk products and LPG cylinders are loaded on open railway wagons for fuel movement. The rake carrying Indian oil trucks was flagged off from Bhanga, Assam to reach Chraibari, Tripura today. This is the first such initiative of such kind in North east. Simultaneously, Indian oil trucks are also being re-routed through the alternate circuitous route, reserved exclusively for POL and LPG movement. Traditionally, Indian Oil supplies POL products to Tripura from its Depot at Dharmanagar, Tripura. Since October, 2014, the products are received at Dharmanagar depot from Guwahati depot by road, due to suspension of rail movement caused by track conversion from Metre gauge to Broad gauge. Though The Railways has restored the section for passenger traffic, the POL movement has not yet been restored. New York Mets Womens Jersey
There will be anomaly with petroleum out of GST: Hasmukh Adhia
Petroleum being out of the goods and services tax (GST) initially will create some anomaly as tax credit on some of the inputs to oil industry may not be given, said Revenue Secretary Hasmukh Adhia in an e-mailed interview. He tells Dilasha Seth that the Central Board of Excise and Customs (CBEC) is working out a plan to recast the organisational structure once GST is implemented. Excerpts: You have said both the Centre and states will have administrative power to assess and scrutinise businesses. However, states want the sole power over entities with up to Rs 150 million of annual turnover. Is there a solution to this tussle? The issue of cross empowerment for the purpose of removing dual control will have to come up for discussion in the meeting of the GST Council. We will continue to make efforts with the states to arrive at a consensus on this. There are fears that inflation will rise, at least in the short run, if the rates are not kept within 18 per cent. Is this fear justified? Whether or not GST will cause inflationary pressure is itself a moot question. If the exemption list and rate structure are properly designed, one can avoid having inflationary pressure, but we need to watch inflation number after GST is implemented. What are the key inputs the ministry has got over the draft model GST Bill? We have received 40,000 pages of representations from various organisations mainly from financial services, information technology and transportation sectors. We are examining this and we will try to make changes in the draft law if required. There are fears that the tax regime for the oil & gas industry will make compliance difficult. Products such as kerosene, naptha and liquid petroleum gas would be under GST’s ambit, while five items in the basket – crude oil, natural gas, aviation fuel, diesel and petrol – are excluded for the initial years. Do you plan to address this anomaly? Yes, there would be some anomaly created because of the fact that the petroleum sector is out of the GST’s purview. Some of the inputs to the petroleum sector industry might carry GST burden, which can stay as accumulated duty which is not VAT able. We will look at this issue in due course. Can the Congress’ demand of capping GST rate at 18 per cent in the GST Act be met? The rate and rate structure can only be based on facts and figures on the existing revenue of State and Centre, which are to be discussed in the GST Council. At the moment, it is not possible to say ‘yes’ or ‘no’ to any such artificial number. The decision on rates will also depend on the list of exempt items, list of demerit commodities, etc. Will there be rationalisation of workforce under CBEC to implement GST? CBEC at present looks after Customs, Excise and Service Tax. In metropolitan cities, Excise and Service Tax Commissionerates are separate, but in other places the work of Excise as well as Service Tax is done by the same Commissionerate. The CBEC is working out a plan in which the organisational structure can be recast once GST is implemented. Bryan Little Authentic Jersey
Government may supply pooled gas to phosphatic and potassic fertiliser manufacturers
Providing a breather to Deepak Fertilisers and Petrochemicals Corp. Ltd, and state-run firms—Rashtriya Chemicals and Fertilisers Ltd (RCF) and Gujarat State Fertilizer and Chemicals Ltd (GSFC)—the government may allow supply of pooled gas to these companies to manufacture phosphatic (P) and potassic (K) fertilisers. This comes in the backdrop of the National Democratic Alliance government focussing its energy on reviving the rural economy making irrigation and urea availability an important part of its game plan. The government last year approved gas supply at uniform price to all fertiliser units for urea production through a pooling mechanism. However, the guidelines related to supply of gas to fertiliser units producing phosphatic and potassic nutrients are yet to be finalised. “Recently, the inter-ministerial committee, headed by the fertilisers secretary, decided that P&K manufacturers may be supplied pooled gas meant for urea production to manufacture P&K fertilisers as well. The matter has been referred to the minister for chemicals and fertilizers, after which it will need the Cabinet’s approval,” said a senior fertiliser ministry official on condition of anonymity. Phosphatic fertilisers contain phosphorus in any organic or inorganic form, and include the commonly used di-ammonium phosphate. Potassic fertilisers are the ones which contain potassium in absorbed form. The commonly used potassic fertilisers include muriate of potash and sulphate of potash. “The government had earlier decided to charge the highest existing re-gassified liquefied natural gas price from P&K manufacturers. However, the inter-ministerial committee has come to a conclusion that it will not be viable for the companies,” said another government official from the ministry who also did not want to be named. InfraCircle had earlier reported that the Union government plans to recover Rs. 15 billion as dues from Deepak Fertilisers, RCF and GSFC for using subsidised fuel to manufacture fertiliser. In 2010, India implemented nutrient-based subsidy policy for phosphatic and potassic fertiliser producers. This resulted in market pricing of these fertilisers as opposed to urea, the most commonly used fertiliser in India, which is controlled and currently sold at a fixed price. Given the market pricing for phosphatic and potassic fertilisers, the government in 2014 decided to divert the subsidised APM gas to urea plants. The so-called APM mechanism does not exist anymore and refers to the price of gas produced by state-owned upstream explorers such as Oil and Natural Gas Corp. Ltd and Oil India Ltd from the blocks awarded to them on a nomination basis. While APM gas supplies to Deepak Fertilisers were stopped as it was manufacturing complex fertilisers, the gas supply continued for RCF and GSFC as any cut in supplies would have affected urea production. These firms have stated to the government that their plants are configured in a manner that any stoppage of gas supplies would affect both urea, and phosphatic and potassic production. Experts though think this is the right step, a mechanism is required to give pooled gas to P&K manufacturers. “The country imports significant amount of P&K fertilisers. So supply of gas to domestic entities will ensure domestic availability,” said Neeru Abrol, former chairman and managing director of National Fertilizers Ltd. Queries emailed to the spokespersons for the ministries of chemicals and fertilizers, and petroleum and natural gas, Deepak Fertilisers, RCF, GSFC and GAIL (India) Ltd on 10 August remained unanswered. The government has made a provision of Rs. 700 billion on account of fertiliser subsidies in the Union budget of 2016-17. Evgeny Kuznetsov Womens Jersey
Government to align ethanol price with global market
After paying a fixed price for ethanol used for doping in petrol, the government said it will move towards ‘market dynamic’ pricing system where rates would move in tandem with international trend. In a bid to boost agrarian economy, the government had in December 2014 fixed a price of Rs 48.50-49.50 per litre for ethanol public sector oil companies were to buy from sugar mills for blending with petrol. This rate is about 20 per cent more than the current cost of producing petrol .. We want to link the price to market dynamics. Government will move towards market dynamic pricing system,” Oil Minister Dharmendra Pradhan said at conference on bio-fuels here. He said at present 10 per cent sugarcane extracted ethanol is being mixed with petrol and sold in eight sugarcane producing states of Uttar Pradesh, Karnataka, Maharashtra, Andhra Pradesh, Telangana, Haryana, DELHI and Bihar. At the remaining places, 5 per cent ethanol is being mixed in petrol. Also, doping of non-edible oil, called bio-diesel, in diesel will begin this fiscal with 110 million litres being contracted, he said. Pradhan said with India’s fuel demand slated to rise exponentially, ethanol and bio-diesel market of Rs 65 billion can jump to Rs 1000 billion in next few years. By 2022, 4.50 billion litre of ethanol, costing about Rs 230 billion, and 6.75 billion litre of bio-diesel, worth Rs 270 billion, would be required considering a nominal fuel growth of 5-6 per cent, he said adding the requirement would be substantially higher if the 2014-15 and 15-16 growth average of 11-12 per cent is taken. Craig Kimbrel Authentic Jersey
India’s Numaligarh Refinery plans $3 billion expansion to treble capacity
India’s Numaligarh Refinery Ltd (NRL) plans a $3 billion expansion of its 60,000 barrels per day (bpd) refinery in the northeastern state Assam, its managing director P Padmanabhan said. He said his firm is awaiting a response from the oil ministry on the plan to treble the refinery capacity to 180,000 bpd. NRL, with some refineries of Indian Oil Corp, meets the fuel demand for the northeastern part of the country. The company plans to shut the refinery for two-three weeks in September for maintenance, catalyst change at a hydrocracker and hooking up a diesel hydrotreater with the existing unit, he said. “We are building up stock to meet demand in the region… there will not be any shortages,” Padmanabhan told Reuters. NRL is majority owned by refiner Bharat Petroleum Corp. He said other refineries in the region are not planning a maintenance shutdown of units and will ensure availability of fuels in the region. “If required, BPCL will supply the fuel,” he added. Carlton Fisk Authentic Jersey
GAIL may face loss on US contract owing to price mismatch
Shares of GAIL have increased by over 25 per cent in the past five months on hopes that the country’s largest gas transmission company will report better earnings in the future following an increase in pipeline tariffs. While this is true, investors also need to consider the possible loss that the company will bear on its US gas contracts if the current sharp mismatch between the contract price and the spot price of gas persists in the future. GAIL had signed two long-term contracts to procure total 5.8 million metric tonnes per annum (MMTPA) of gas with supply starting 2018. At the current level of Henry Hub price, a benchmark for the US gas price, the landed cost of the gas will be at 75 per cent premium to the spot gas rate. If this difference persists when the gas is delivered two years later, it will be difficult for GAIL to sell costlier gas to domestic clients because they may prefer to source cheaper gas from other suppliers. The final gas pricing will be a function of several factors including the difference between the benchmark price and spot rate as well as trend in crude oil price. However, the risk is high since GAIL has not secured customer tie-ups for US contracts. This is unlike its long-term contract with Qatar-based RasGas Company which is under back-to-back arrangement. The event may also offset the benefit of higher tariffs for the company’s five gas pipelines. In addition, Bloomberg reported that NTPC is seeking to terminate the long-term gas supply contract with GAIL due to higher price. It means there is a potential risk to GAIL’s earnings due to supply of high-priced gas contracts amid a glut in global LNG market. Analysts believe that Asia may become a major market for the oversupplied global LNG as the economics of selling to Europe does not work due to steep competition from Russian gas supplier Gazprom. Credit Suisse estimates that GAIL may have to take a haircut of $1/mmbtu to sell US LNG into Asia, resulting in a $300 million (about Rs 2,000 crore) annual loss. At Tuesday’s closing of Rs 379.5, the stock traded at 13.4 times FY18 earnings, which is higher than the longterm average and therefore, reflecting that the market is under-pricing the risk from the US gas contracts. John Miller Jersey
Reliance Industries eyes LPG customers who have surrendered subsidy
Reliance Industries (RIL) is looking to lure away many of the one crore cooking gas consumers who have surrendered subsidy from state oil companies in a bid to challenge the neartotal dominance of state firms in cooking gas distribution. “They are a potential for us,” a senior executive at Reliance Industries said, referring to customers who don’t want subsidy but could be lured away with better service. The executive requested not to be named. Reliance currently has a minuscule consumer base for cooking gas, or liquefied petroleum gas (LPG), mainly because the government currently provides subsidy only to customers of state firms such as Indian Oil, Bharat Petroleum and Hindustan Petroleum. The government has been encouraging well-off people to give up cooking gas subsidy, resulting in about 1.04 crore consumers giving up their subsidy claim in a little more than a year. More people are expected to opt for this. India has about 17 crore cooking gas consumers, mostly being served by state-run distributors. Reliance currently distributes 15-kg LPG cylinders to 10 lakh domestic customers mostly in Gujarat and Maharashtra, and also in Madhya Pradesh and Rajasthan, the executive said. The subsidy most cooking gas consumers in the country receive from the government has prevented private cooking gas distributors from building any significant presence. But the expanding base of non-subsidised consumers as well as fast shrinking subsidy amount, which is down to Rs 64 per 14-kg cylinder from Rs 168 in just a year, have boosted private players’ chance. Instead of selling the LPG its produces at its Gujarat refinery to state companies, Reliance would like to distribute it directly to consumers. The company has also recently sought the government support for distributing subsidised cooking gas. “We are saying that why should you deny our customers the subsidy. You can directly give subsidy, you don’t even have to involve us. Those consumers deserve as much as the consumers of the public sector companies do,” the company executive said. “Until such time they (government) actually start a direct disbursal, directly into (customers’) bank accounts, and not through oil companies, it will be difficult for them to do it; that’s what they (government) are saying,” the executive said. The government is evaluating Reliance’s proposal, oil ministry officials said. At present, the state companies first recover full price for the cooking gas from consumers and then within days transfer the subsidy amount to the customers’ bank account. Within a month, the government reimburses companies for the total subsidy transferred. Meanwhile, the government is also squeezing the LPG subsidy by allowing state companies to raise the price by Rs 2 per cylinder every month for the past two months. Besides, the government is also working on a plan to enhance private sector’s presence in LPG bottling from which state players can source refills as the country aims to add 10 crore new LPG consumers in three years. Tennessee Titans Authentic Jersey
India’s oil exploration regime received thumbs up from industry, shows survey
India’s oil exploration regime has received overwhelming support from the industry, a high profile survey has shown. Over 95% of Indian hydrocarbon industry leaders consider the recent policy changes in the sector to be pro-business and transparent, and over 80% rated the present investment conditions in India’s hydrocarbon market to be quite positive. A survey done by EyeOn consultancy and PetroFed, 214 respondents from public and private sector across the hydrocarbon industry supply valuechain, put forward an optimistic view of the future of the Indian hydrocarbon sector, with 93.5% expecting significant to moderate growth over the next five years. On the policy front, a third of the respondents preferred boosting private investments in the domestic exploration and production (E&P) sectors and increasing India’s E&P portfolio and investments abroad to reduce hydrocarbon import dependency by 10%,a target set by the Union oil minister a couple of months ago. The Hydrocarbon Exploration Licensing Policy (HELP) has been highlighted in the survey, with about 65% respondents welcoming the shift from production/profit-sharing to revenue-sharing contracts and introduction of open acreage policy and more than 64% expecting a successful rounds of bidding for the discovered small fields. 77.3% of the survey sample recommended encouraging transition to a gas-based economy and increasing the use of biofuels, in the context of global concern for reducing CO2 emissions. However, 63.6% sought development of relevant infrastructure as the key to accelerate gas usage and increase the share of gas in India’s energy mix. Josh Norman Authentic Jersey