Shifting NTPC plant not practical, need to run it on LNG: CM
Kerala Chief Minister Pinarayi Vijayan said that it was not practical to shift NTPC’s sick naphtha-run power plant to Brahmapuram and speedy steps should be taken to convert it to LNG to make it viable. The chief minister was replying to a submission by Opposition Leader, Ramesh Chennithala, on the need to breathe new life into NTPC’s 360 mw plant at Kayamkulam. Chennithala said the plant was non-operational for long, causing a huge loss. “There is a need to protect the plant and it should not be allowed a slow death.” Vijayan said non-availability of LNG was the main problem with regard to the plant and steps are needed to be taken to lay the pipeline from Kochi to Kayamkulam as soon as possible. “We should take steps to bring LNG from Kochi (terminal) to Kayamkulam. The relocation of the plant is not practical,” Vijayan said. State’s Power Minister Kadakampally Surendran said the government was not aware if any decision had been taken by NTPC to shift the plant to Brahmapuram in Ernakulam district. Though there was no production from the plant, KSEB was forced to pay a fixed charge of Rs 18 crore every month, as per the power purchase agreement, he said. “We requested the Centre to provide LNG at a lower rate. We also requested for time to meet Union Power Minister to express the state’s demands,” he said. Chennithala said though the plant was initially envisaged to run on coal, it was later shifted to naphtha. However, using naphtha was expensive and to make it viable, it should be converted to LNG, he said, adding there should be coordinated efforts to preserve the plant. The Rajiv Gandhi Combined Cycle Power Plant (also known as Rajiv Gandhi CCPP Kayamkulam) was fuelled by imported and indigenous naphtha. Kerala is the major beneficiary of the plant, which has been facing problem due to higher power cost. Kareem Martin Womens Jersey
ONGC Boosts Operations Off India Via New, Expanded Deals Worth $60 Million
Oil and Natural Gas Corp. Ltd. (ONGC) expanded the scope of its operational activities offshore India through new and expanded contracts, amounting to approximately $60 million, with two services providers. Subsea services provider Seamec Ltd., a subsidiary of India’s HAL Offshore, said Friday in a company announcement on the Bombay Stock Exchange that the scope of its activities has been expanded to meet ONGC’s tender requirements and it will now deploy additional fleet assets for the contract. The firm will deploy vessel SEAMEC II and a remotely operated vehicle (ROV) together with personnel for the three-year long ONGC assignment, which is worth around $33.44 million. Separately, Fugro Survey (India) Pvt Ltd. has bagged a $26 million offshore geotechnical site investigation contract for the KG-DWN-98/2 project offshore the east coast of India, the company said Friday in a press release. Fugro’s workscope comprises the gathering of site specific geotechnical and geohazard data to aid in the design and later installation of wellheads, manifolds, platforms, FPSO (floating production, storage and offloading) anchors, umbilicals, pipelines and flow lines within the field. The firm will deploy its deepwater geotechnical vessel, Fugro Voyager, to undertake work in water depths ranging from 164 feet (50 meters) to 4,921 feet (1,500 meters), commencing before the end of third quarter 2016. Upon completion of the fieldwork, Fugro will carry extensive laboratory testing, data analysis, interpretation and integration with previous Fugro-acquired AUV Geophysical and Metocean data to provide site characterization reports. In other development, ONGC is looking for buyers for gas produced from a new deepwater field — the Vashishta & S1 — in the Krishna-Godvari (KG) Basin located offshore India’s east coast. The field is the first to supply gas under a new government policy that permit companies to charge a higher rate for output from fields that are complex and challenging to develop, local media The Economic Times reported Friday. According to ONGC Director (Offshore) Tapas Sengupta, a well at Vashishta & S1 field has been in operations for about a month, producing around 17.66 million standard cubic feet per day (0.5 million standard cubic meters a day) of gas, which is now sold at the government-set domestic natural gas price of $3.06 per unit. While ONGC wants to fetch higher natural gas prices, current global prices may weigh on such hopes. “This is a test case for ONGC. It is a challenge for ONGC to derive a strategy for getting the right price for all future production from deepwater fields,” Sengupta said, as quoted in The Economic Times. Ricardo Allen Womens Jersey
Natural gas share in Indian fuel basket stands only at 6.5%: Petroleum Minister
The share of natural gas in India’s fuel basket is 6.5 per cent as compared to the world average of 23.8 per cent. This is according to the Minister of State (Independent Charge) for Petroleum & Natural Gas Dharmendra Pradhan who referred to the BP Statistical Review of World Energy, June 2015 in a written reply a question in the Lok Sabha on Monday. Pradhan’s reply also stated that in order to increase the share of gas in the fuel basket, several steps have been taken by the government including approval of Hydrocarbon Exploration and Licensing Policy as well as approval of a policy to auction 67 discovered small fields belonging earlier to ONGC and Oil India. “Marketing and pricing freedom for new gas production from Deepwater, Ultra Deepwater and High Pressure-High Temperature areas subject to certain condition has been allowed,” the reply stated. Pradhan’s reply also stated that Indraprastha Gas Ltd in collaboration with Ituk Manufacturing India Pvt Ltd has launched a pilot programme to run two wheelers on CNG, which will also help promote the use of natural gas a fuel. In a separate reply, Pradhan said that the policy to auction 67 discovered small fields has been notified in October last year. Pradhan also said that in spite of a natural decline from existing ageing mature fields, oil & gas companies have been able to maintain the level of production. Charles Mann Womens Jersey
Narendra Modi govt puts hefty $1 bn burden on ONGC, Oil India
Government-owned explorers ONGC and Oil India face an additional royalty burden of more than $1 billion after the Narendra Modi government decided that they would have to pay royalty to crude oil-producing states such as Assam, Gujarat, Andhra Pradesh, Rajasthan and Tamil Nadu at ‘pre-discount’ rates. “It has been decided that ONGC and Oil India will pay royalty to all similarly placed crude oil-producing states at pre-discount prices effective February 1, 2014, pending the outcome of the special leave appeal filed by ONGC before the Supreme Court,” said a petroleum ministry order dated July 15. This means ONGC and Oil India would have to pay royalty to the states based on their gross realisation on sale of crude oil and not on the net price. This is despite the fact that the shift from gross to net price for royalty was made in 2008, in concurrence with the petroleum ministry. The difference between the gross and net price is the subsidy burden borne by these upstream companies to compensate state-run IOC, HPCL and BPCL for selling sensitive petroleum products below market cost. Though the exact additional burdens on ONGC and Oil India because of the ministry’s stance are not immediately known, officials say their combined additional payout would be $1 billion. DK Sarraf, chairman and managing director, and AK Srinivasan, director (finance) at ONGC, could not be reached for comments, as both are travelling overseas. Thanks to the drastic fall in global crude oil price that reduced India’s oil subsidy substantially, in FY16, ONGC reported gross realisation of $48.26/barrel. After forking out for subsidy at $1.12/barrel, its net realisation stood at $47.14/barrel. In FY15, ONGC gross realisation was $85.28/barrel and after sharing $40.41/barrel towards subsidy, its net realisation dropped to $44.87/barrel. “We have decided Assam and oil-producing states will get additional royalty from ONGC and Oil India. Assam might get above R1,400 crore,” said petroleum minister Dharmendra Pradhan. ONGC and Gujarat are embroiled in a legal tussle over the calculation of royalty payments. In November 2013, the Gujarat High Court ordered ONGC to pay R10,000 crore dues to the state till September 2013 to make up for the royalty dues. The ‘maharatna’ PSU appealed in the Supreme Court against the Gujarat HC order and on February 13, 2014, the apex court stayed the high court order, but told ONGC to pay royalty at the pre-discount price starting February. In October 2003, upstream companies were directed to make good a part of the under-recoveries of oil-marketing companies. However, the Centre initially said the revenue of states in terms of royalty should not be affected by the discount offered to OMCs. Based on this direction, ONGC from April 2003 started paying royalty to the Centre for its offshore fields at the post-discount price, while for onshore fields it paid royalty on the pre-discount price. But ONGC realised that royalty payments to the states were in excess of the statutory limit of 20% of the price realised by the company, as mentioned in the Oilfields (Regulation and Development) Act of 1948, and in 2008 got the oil ministry agree to the shift towards net price for royalty to states. Aldrick Rosas Womens Jersey
Reliance’s fuel exports dip below 10 million tons in April-June
Reliance Industries exported less than 10 million tons of petroleum products for the first time after three quarters, mainly because of increased demand at home. The company exported 9.8 million tons of petroleum products in April-June. In the quarter ended March, the country’s largest petroleum exporter dispatched 10.8 million tons for the overseas market. The company’s exports of refined products during the first quarter of 2016-17 were higher than the 8.5 million tons in the first quarter of 2015-16, pointing to a slow recovery in the export market. The demand for petrol in the domestic market rose 10 per cent, diesel 4.7 per cent and jet fuel 11 per cent during April-June. Exports constituted the bulk of Reliance Industries’ petroleum sales, cornering 59 per cent of the total volume, the company said in a presentation to analysts. Domestic sales undertaken from its own retail outlets and to bulk customers and public sector companies were 4.1 million tons while captive consumption was 2.7 million tons. Reliance Industries’ export earnings continued to dishearten analysts, declining 9.4 per cent to Rs 332.82 billion ($4.9 billion) during the quarter from Rs 367.17 billion in the corresponding period of the previous year due to lower product prices. Of this, exports of refined products were Rs 286.10 billion ($4.2 billion) during the first quarter of 2016-17 as compared to Rs 323.52 billion in the same period a year ago. “Higher retail and PSU sales resulted in lower exports, quarter on quarter,” the company said. Initiatives, including automation, helped the company’s 1,022 retail outlets. These included adding 72 outlets during the quarter. Sales volumes of petrol and diesel were up 21 per cent, quarter on quarter. “The retail outlet throughput was 230 kilolitres per month during the quarter compared to 160 kilolitres per month of key competitors,” the company said. Trans-connect loyalty sales accounted for 30 per cent of diesel sales. Key initiatives in retail included strategic tie-ups with service providers for providing credit solutions. The company also enhanced its supply infrastructure to service retail, bulk and PSU oilmarketing companies through five terminals owned by it and nine hired ones besides 19 depots. The company re-secured its customer base with more than 3.8 per cent market share in bulk sales of diesel after deregulation in October 2014. It also received extension of supplies to Indian Railways and the state transport unit in Pune. “Every 10th Indian Railway locomotive is fuelled by RIL,” the company said. Further, Reliance Industries’ LPG business sales grew by 10 per cent, year on year, to 214,000 tons. During the quarter, it also tested and developed 4 KG LPG cylinder which it plans to launch next month. Retail ATF sales volume grew 38 per cent y-o-y. RIL now has substantial market share at 10 out of 25 airports where it operates, the company said. Troy Brouwer Jersey
MIDC, ONGC in talks over water treatment project
ONGC and MIDC are in talks to set up a Rs 4-5 billion desalination plant at Uran that will yield 20 MLD water, ensuring self-sufficiency for the oil and gas major. Preliminary talks have already been held and a high-level MIDC team is scheduled to visit the plant site in the coming week to do a reconnaissance. MIDC is the principal supplier of 17 MLD treated water to ONGC for the oil refining and natural gas production processes at their Uran unit. However, ONGC took a severe hit last year in June when production process suffered due to erratic supply, said sources. The oil and gas giant is looking for regular supply, as shutting down plants due to erratic water supply affects the processing units. A day’s loss is pegged at several millions. This season, ONGC is getting around 13-14 MLD which is short of its requirement. MIDC has signed MoU with Singapore government for sharing technology on use of recycled water. This will help the state industrial development agency to join the open bidding process for the prestigious project, said MIDC sources. The desalination project will supply treated water through a costly reverse osmosis membrane treatment that only allows water to permeate and filters out all dissolved solids. High pressure is required for the process which yields fairly pure water. But a further disinfection treatment can also be done, if required, where the treated water is exposed to sun rays in open storage tanks for oxidation. Matt Bosher Jersey
Pipe dream becomes a reality
CNG is being piped to around 1,200 houses on a trial basis. After years of grand plans and promises, Bengaluru is set to join a select group of cities where cooking gas is piped directly to the kitchen. Over the past fortnight, GAIL Gas Ltd (formerly Gas Authority of India Ltd) has started supplying natural gas to around 1,200 houses in BEL Colony in north Bengaluru as well as around 50 houses in HSR Layout on a ‘testing/trial’ basis. The network is expected to expand in the coming years. The natural gas is being pumped from Dabhol in Maharashtra. “I had been using piped gas in Mumbai and knew the advantages. The moment I had the chance to get it in Bengaluru, I grabbed the opportunity,” said Anuraj Jain, a resident of HSR Layout, whose apartment complex is connected to the piped gas network. One of the biggest concerns of residents was the safety aspect, but deliberations as well as the experience of other cities eventually convinced them to try piped gas, he said. At BEL Colony, Manjunath Kundgol’s family shifted to piped gas nearly a month ago and says there has been almost no difference in the quality of gas. “It is convenient, as there is no question of the cylinder getting over or waiting for a replacement. We have been told by GAIL that piped gas is cheaper, but we have to wait for the bill to know the cost advantage,” a family member said. The huge BEL canteen in the premises too runs primarily on piped gas now. More households soon The Dabhol to Bengaluru pipeline was commissioned nearly three years allowing GAIL to venture into household gas supply. GAIL authorities said 320 km of pipelines have been laid in Bengaluru. These can serve 4,000 households. By March 2017, the company aims to serve 20,000 households. Currently, only those in HSR Layout, Bellandur, Dollar’s Colony, Singasandra and Manganammapalya can apply to GAIL for piped gas. Over 250 households have sent online requests, officials claimed. The request is followed by a technical feasibility study after which piped connection is provided. The application can cost as much as Rs. 5,800, but officials believed the long-term cost of CNG usage is lower than LPG cylinders. The rate of CNG has been currently fixed at Rs. 22 per standard cubic metre, which is 15 per cent cheaper than subsidised LPG. Adam Humphries Womens Jersey
Assam to receive pre-discounted crude royalty
Assam will get crude oil royalty at pre-discounted price similar to Gujarat with effect from February 1, 2014. According to statement issued by Assam government, “In an order issued by the Ministry of Petroleum and Natural Gas, Government of India on Friday the matter of onshore royalty at pre-discounted prices was examined and based on the interim decision of the Supreme Court dated 13th February, 2014 it was decided that ONGC Limited and Oil India Limited would pay royalty to all similarly placed crude oil producing states, including Assam at pre-discounted prices with effect from 1st February 2014. Russell Bodine Authentic Jersey
Reliance Industries close to starting gas production from CBM blocks in MP
Reliance Industries is on the verge of starting commercial production of natural gas from its coal-bed methane (CBM) blocks in Madhya Pradesh. In a presentation to analysts post April-June earnings announcement, RIL said test gas production from Phase-1 facilities of Sohagpur-West block has commenced while the pipeline that will take the fuel to the consumers is under testing and pre-commissioning. Initial output is likely to be one million standard cubic meters per day of gas. A peak production of 3.5 mmscmd is envisaged from the two Sohagpur blocks in the state. RIL holds 3 CBM blocks — 495 square kilometer Sohagpur (East) and 500 sq km Sohagpur (West) in Madhya Pradesh and Sonhat in Chhattisgarh. “Test gas production from Phase I facilities of Sohagpur West Block has commenced from GGS 11 (Gas Gathering Station) and 107 well-sites,” RIL said. Phase-1 development envisages drilling and completion of 229 wells and installation of 2 gas gathering stations (GGS). RIL, through its subsidiary Reliance Gas Pipelines Ltd, is laying a 312-km pipeline to transport coal gas (CBM) produced from Shahdol in Madhya Pradesh to Phulpur near Allahabad in Uttar Pradesh. “Testing, pre-commissioning and commissioning activities are in progress for Shahdol-Phulpur pipeline,” RIL said. The pipeline will have a capacity to transport 4.3 million standard cubic metres per day (mmscmd) of gas, including 0.875 mmscmd capacity that will be available for any third party for open access on non-discriminatory basis. The pipeline will travel from Shahdol to Jaysing Nagar- Beohari-Gurh and culminate at Phulpur. At Phulpur, the pipeline may be hooked into state-owned gas utility GAIL India Ltd’s main Hazira-Vijaypur-Jagdishpur trunk gas pipeline. Michael Raffl Jersey
ONGC seeks buyers for deep-water field in KG Basin
Oil and Natural Gas Corporation (ONGC) is seeking buyers for gas from a new deepwater field in the KG Basin, which will be the first to supply under the new policy that allows companies to charge a much higher rate for output from challenging fields. A well at Vashishta & S1 field off the eastern coast, one of many difficult gas fields that have been allowed by the government to extract higher price, has been producing for about a month, pumping out half a million standard cubic metres a day, said Tapas Kumar Sengupta, director (offshore) at ONGC. The gas produced from this well is currently sold at $3.06 per unit, the government-set price available to domestic natural gas, he said. ONGC wants higher prices, but a global rate collapse may be a hurdle. “This is a test case for ONGC. It is a challenge for ONGC to derive a strategy for getting the right price for all future production from deep water fields,” said Sengupta. Andy Pettitte Jersey