Higher ethanol mix fuels alarm among gas dealers in Kolkata
The Centre’s plans to blend 22.5% ethanol with petrol has caused alarm among petroleum dealers in the city, who fear numerous problems in the mix caused because of Kolkata’s high humidity. Already, the E10 Gasohol mix that is used (10% ethanol mixed with petrol or gasoline) causes multiple problems because of Kolkata’s humidity, thanks to ethanol’s hygroscopic (water absorbing) property, and experts and dealers fear the problems will worsen because of the higher percentage of ethanol mix that is being planned, unless remedial measures are adopted by oil marketing companies. 10 per cent ethanol is mixed with Petrol or Galsoline to produce to E10 Gasohol. This causes multiple problems in a humid city like Kolkata thanks to Ethanol’s hygroscopic property (absorbing water). Now, the union government is aiming at blending 22.5 per cent ethanol with petrol. This blending, experts said, would cause greater problems in humid areas like Kolkata, if remedial measures are not adopted by oil marketing companies (OMCs). Already, as reported by TOI on June 21, petroleum dealers found ‘phase separation’ in their tanks, almost in three distinct layers. “I checked only two days back, immediately after the fuel came to my gas station, and found specific gravity or density varying by 14 points. While the declared density of the fuel is 751.1cc, I found fuel density of 662.4cc at the middle layer of the tank, 766.2cc at the lower layer and 757cc at the upper layer. When I questioned the oil marketing company (OMC) about the aberration, the company’s representative asked me to make an average. The average comes to 765cc. So, there is a difference of 14cc,” complained a south Kolkata petroleum dealer. The petroleum dealer said the OMC cannot challenge him as the fuel is kept in a sealed fuel box given to him by the OMC. “If they accuse me of adulteration, I will ask them to compare the fuel of my tank with that of the ‘company box’. They would not find any difference. So, clearly, something is wrong at their end,” the dealer said. We recommend this Video for you BABA NETWORK LTD. Recommended By Colombia “This happens because of absorption of water by the ethanol,” said auto emission consultant Somendra Mohan Ghosh. “Phase separation describes what happens to Gasohol (ethanol-blended petrol or gasoline) when water is present. When gasoline containing even small amounts of ethanol comes in contact with water, either liquid or in the form of humidity, the ethanol will pick up and absorb some or all of that water. When it reaches a saturation point, the ethanol and water will ‘phase separate’, actually coming out of solution and forming two or three distinct layers in the tank, giving three distinct density levels,” he explained. Automobile expert and former NIT director Prabir Kumar Bose said: “OMCs need to mix certain additives with the gasoline so as to minimize the hygroscopic property of ethanol. Besides, the OMCs must maintain a dehydrated ambience so as not to allow ethanol to get exposed to water or humidity.” The variation of density is correlated with fuel consumption. While ethanol reduces carbon monoxide emission by 30%, phase separation causes more pollution and engine trouble. The problem will increase manifold if the blend goes up above 20%, said experts. Moreover, most car engines are not programmed to burn ethanol-blended fuel. Abroad, cars have branding on the basis of its engine’s choice of fuel. Vehicles with flexi-fuel choice can burn ethanol-blended gasoline efficiently. However, in cities like Kolkata, the E10 Gasohol is being dispensed from unleaded petrol dispensers, Ghosh said. However, proper bio ethanol plant is coming up in Assam. The plant will start making ethanol from bamboo in North-East. 40,000 litres of second generation ethanol could be produced there. He said boost to ethanol production could cut India’s huge crude oil imports bill, which is pegged at Rs 7 lakh crore per annum. This Ethanol blended fuel of course will have additives to neutralize its hygroscopic property. Pat Lafontaine Jersey
Re 1 hike in kerosene will save Rs 700 cr for system: ONGC
In the light of the government hiking kerosene prices by 25 paise a litre, upstream companies like ONGC are likely to benefit. AK Srinivasan of ONGC said the upstream revenue sharing burden will come down as the prices keep going up. “Any one rupee increase in the price will bring about a reduction of Rs 700 crore to the total system,”he said. About Rs 1096 crore subsidy was met by the company in FY16, he said. Currently, the company has a capital expenditure plans of about Rs 30,000 crore. He sees the net average realisation of USD 45-47 a barrel. As regards crude production, he said, the company has been able to maintain decline rates of 3-4 percent. He also spoke about operating costs, which was Rs 4200 crore in the quarter gone by. He said the company had to carry out somer repair work. Dre Kirkpatrick Authentic Jersey
‘No LPG subsidy without Aadhaar’
For the past one week, LPG consumers who do not posses Aadhaar cards have not received subsidy in their bank accounts. Stating that they were acting as per the directive of the Ministry of Petroleum and Natural Gas, distributors say consumers should provide Aadhaar details before September 30 for subsidy could be credited. Though Aadhaar compliance has been quite high in the State at 87 per cent (of the 7.21 crore population 6.30 crore have cards), in Chennai and surroundings it is only 70 per cent. Sources in Census Directorate said biometric details of 6.85 crore persons in the State have been recorded. Consumer activist T. Sadagopan said in several cases distributors misplaced know your customer forms and details. Distributors make it clear that details of Aadhaar have to be submitted before September 30 James Daniels Jersey
Govt mulls for fresh mining lease license to OIL
The state government has decided to initiate fresh mining lease to Oil India Ltd, for execution of 10 MW Gas based Power Project at Kumchai. The decision was taken in a meeting attended by Minister Power, NCER & Research, T.N. Thongdok, Minister Mines Kamlung Mossang, Parliamentary Secretary, Mines, T. Taku, Commissioner (Power) and other senior officers of Geology & Mining, Oil India Ltd., DGM & HoP, A. K. Baruah at the conference hall of Minister Power on July 7. The meeting discussed the execution of 10MW Gas based Power Project at Kumchai and Thermal Power Plant at Kharsang. The Oil India was directed to take up for issuance of fresh Forest Clearance with the PCCF on priority. Minister Power, Thongdok pointing out that since the two projects were declared as CSR schemes of Oil India Ltd to Arunachal Pradesh, the schemes should have been owned by the State Govt, and therefore the question of purchase of power does not arise. Also the royalty of the gas to be utilized for the power plant should be paid to the State, he added. Thongdok suggested that the State Govt may take up the issue with the Ministry of Coal & Mines for awarding the project under CSR scheme to Arunachal Pradesh as declared by the then Union Minister (P&NG), and likewise the Oil India Ltd. should take it up at their own level. Stating that the recruitment of technical/non-technical staff is being conducted in Assam, Minister Mines, Kamlung Mossang called for conducting such recruitments in the state to benefit the local unemployed youths. The DGM, Oil India Ltd. was requested to consider this in future recruitments. On the establishment of a coal based thermal power plant at Kharsang, Minister Power stated that the state government should propose a coal-pit thermal power plant at Kharsang and accordingly the proposal should be submitted to the Ministry of Coal and Mines urgently. It was informed that the Commissioner (Power) has already been informed to prepare DPR in consultation with the Department of Geology & Mines. The foundation stone of the proposed 10 MW gas based power project at Kumchai and Nursing School at Namsai was laid at Itanagar by the then Union Minister for Petroleum and Natural Gas Veerappa Moily as a CSR scheme. However the Oil India Ltd desired for signing of the MoU with the state government for purchase of power from the Project. There was no provision for employment of local people of Arunachal and royalty to the State Govt in the MoU proposed by Oil India Ltd. Earlier, officials from Oil India Ltd informed that the available gas from the existing well presently is about 30,000 SCMD whereas the required amount is 55,000 SCMD for the proposed 10 MW project. The construction period of the proposed project will be one year and will require drilling of three more wells to supplement the present availability of gas by another 25,000 SCMD, which is the actual requirement for the project. As the mining lease permission and forest clearance issued by the State Govt for the present wells have expired, the OIL officials requested for issuing of fresh mining lease permission and forest clearance. Marc Gasol Jersey
IOCL bets on petrochemical, gas marketing portfolios for growth
IOCL plans to invest Rs 430 billion for implementation of various petrochemical projects in the next four years. Petrochemical and gas marketing is the next big bet Indian Oil Corp. Ltd (IOCL) is taking in a bid to expand its business beyond the core of refining and marketing. “We are bullish on our new businesses, that is, petrochemicals and gas marketing. There is tremendous demand for petrochemicals, where we are now the second largest player in India,” said B. Ashok, Chairman, IOCL. IOCL, the country’s largest refiner and marketer, has 20% market share in the petrochemicals segment and plans to invest Rs. 430 billion for implementation of various petrochemical projects in the next four years. In natural gas marketing, the company would be investing around Rs. 78 billion over the same period. IOCL has implemented petrochemical projects worth Rs. 208 billion up to 2015-16. Reliance Industries is the market leader in petrochemicals with a 38% market share while Gail India holds a 15% market share and Bharat Petroleum Corporation Ltd and Haldia Petrochemicals Ltd account for the remaining 27% between them. Over the years, IOCL has been expanding its business verticals and into getting newer areas. While in the pre-1999 era IOCL was only a refining and marketing company, post 1999 it has expanded into petrochemicals and natural gas. From 2009 onward, the company has expanded in the upstream or exploration and production sector as well as alternative energy. “Going forward, we are implementing several petchem projects, one of them being the polypropylene plant at Paradip, Orissa for Rs. 31.50 billion. And we are confident that our bottomline from the petrochemicals vertical will improve significantly in the years to come,” added Ashok. In an emailed reply, IOCL said the additional investments it is making in the sector will further enhance integration of its refineries with the petrochemical units with respect to feedstock, utilities, return streams, etc. It will ensure continuous supply of feedstock and utilities at competitive price. Apart from integration, value addition in the petrochemical streams is also envisaged. At present Panipat (Haryana) and Koyali (Gujarat) refineries are integrated. Paradip (Odisha) and Barauni (Bihar) are expected to be integrated in the next five years. IOCL, which sells its petrochemical products under the brand of Propel, registered the highest ever sales of petrochemicals at 2.538 million tons in 2015-16, as against 2.477 million tons in the previous year. The Petrochemicals segment has contributed more than Rs. 220 billion (5%) to the total revenue. With petrochemical sector being one of the fastest growing sectors in the Indian economy, IndianOil envisages petrochemicals to contribute 10% of the corporate revenue and 40% in profits in the next three to five years. “The corporation is now the second largest polymer supplier in the country with Propel grades covering over 80% of the plastics applications, and with over 50 polymer grades introduced and stabilised in the domestic market,” IOCL said in its fourth quarter statement. With two new destinations, France and Germany, added during the year, Propel petrochemicals are now being exported to 71 countries, and polymer intermediates to 53 countries, the statement added. For financial year 2015-16, IOCL’s net profit was Rs. 103.99 billion against Rs. 52.73 billion in the last fiscal. Income from operations for FY-16 came in at Rs.3.50 trillion as compared to Rs.4.37 trillion in 2014-15. Petchem contributes 5% of total income for IOCL. The segment contributed 30% of the total profit before tax for FY16 against 35% for FY 15. “Expanding into new businesses would give IOCL a natural hedge against its core business of refining and marketing which is heavily dependent on crude oil price movements. Last fiscal 5% of IOCL’s total revenue came from Petchem, providing it a good cushion against the inventory losses of Rs. 97.31 billion that the company registered,” said an analyst with a domestic brokerage on the condition of anonymity as he is not allowed to talk to the media. While China accounts for 25% of the demand from the global petrochemicals market, India is the leader in the rest of Asia-Pacific, with increasing demand for products containing petrochemicals. India’s flourishing manufacturing sector is expected to give a further fillip to the regional market for petrochemicals. In the natural gas marketing segment, for the first time in 2015-16, IOCL imported nine Liquefied Natural Gas (LNG) cargoes on its own. This is in addition to LNG sourced through its joint venture Petronet LNG Ltd. IOCL marketed 1.929 million tons of natural gas during the year 2015-16, registering a 6.9% growth in sales over the previous year. Sale of over 19,000 tons of gas was achieved through the offer of ‘LNG at the Doorstep’ facility for customers located away from gas pipelines. Tommy Wingels Womens Jersey
BGR Energy bags Rs 23 billion contract from APGENCO
BGR Energy Systems has bagged a ? 23 billion contract for executing Balance of Plant systems and civil works for APGENCO’s power project in Krishna district. The company has informed the BSE that the EPC contract is for the Dr Narla Tata Rao Thermal Power Station, Stage – V (1X800MW) unit – 8 at Ibrahimpatnam in Andhra Pradesh. The contract completion period is 36 months from the date of award. Charley Taylor Jersey
IOCL bets on petrochemical, gas marketing portfolios for growth
IOCL plans to invest Rs 430 billion for implementation of various petrochemical projects in the next four years. Petrochemical and gas marketing is the next big bet Indian Oil Corp. Ltd (IOCL) is taking in a bid to expand its business beyond the core of refining and marketing. “We are bullish on our new businesses, that is, petrochemicals and gas marketing. There is tremendous demand for petrochemicals, where we are now the second largest player in India,” said B. Ashok, Chairman, IOCL. IOCL, the country’s largest refiner and marketer, has 20% market share in the petrochemicals segment and plans to invest Rs. 430 billion for implementation of various petrochemical projects in the next four years. In natural gas marketing, the company would be investing around Rs. 78 billion over the same period. IOCL has implemented petrochemical projects worth Rs. 208 billion up to 2015-16. Reliance Industries is the market leader in petrochemicals with a 38% market share while Gail India holds a 15% market share and Bharat Petroleum Corporation Ltd and Haldia Petrochemicals Ltd account for the remaining 27% between them. Over the years, IOCL has been expanding its business verticals and into getting newer areas. While in the pre-1999 era IOCL was only a refining and marketing company, post 1999 it has expanded into petrochemicals and natural gas. From 2009 onward, the company has expanded in the upstream or exploration and production sector as well as alternative energy. “Going forward, we are implementing several petchem projects, one of them being the polypropylene plant at Paradip, Orissa for Rs. 31.50 billion. And we are confident that our bottomline from the petrochemicals vertical will improve significantly in the years to come,” added Ashok. In an emailed reply, IOCL said the additional investments it is making in the sector will further enhance integration of its refineries with the petrochemical units with respect to feedstock, utilities, return streams, etc. It will ensure continuous supply of feedstock and utilities at competitive price. Apart from integration, value addition in the petrochemical streams is also envisaged. At present Panipat (Haryana) and Koyali (Gujarat) refineries are integrated. Paradip (Odisha) and Barauni (Bihar) are expected to be integrated in the next five years. IOCL, which sells its petrochemical products under the brand of Propel, registered the highest ever sales of petrochemicals at 2.538 million tons in 2015-16, as against 2.477 million tons in the previous year. The Petrochemicals segment has contributed more than Rs. 220 billion (5%) to the total revenue. With petrochemical sector being one of the fastest growing sectors in the Indian economy, IndianOil envisages petrochemicals to contribute 10% of the corporate revenue and 40% in profits in the next three to five years. “The corporation is now the second largest polymer supplier in the country with Propel grades covering over 80% of the plastics applications, and with over 50 polymer grades introduced and stabilised in the domestic market,” IOCL said in its fourth quarter statement. With two new destinations, France and Germany, added during the year, Propel petrochemicals are now being exported to 71 countries, and polymer intermediates to 53 countries, the statement added. For financial year 2015-16, IOCL’s net profit was Rs. 103.99 billion against Rs. 52.73 billion in the last fiscal. Income from operations for FY-16 came in at Rs.3.50 trillion as compared to Rs.4.37 trillion in 2014-15. Petchem contributes 5% of total income for IOCL. The segment contributed 30% of the total profit before tax for FY16 against 35% for FY 15. “Expanding into new businesses would give IOCL a natural hedge against its core business of refining and marketing which is heavily dependent on crude oil price movements. Last fiscal 5% of IOCL’s total revenue came from Petchem, providing it a good cushion against the inventory losses of Rs. 97.31 billion that the company registered,” said an analyst with a domestic brokerage on the condition of anonymity as he is not allowed to talk to the media. While China accounts for 25% of the demand from the global petrochemicals market, India is the leader in the rest of Asia-Pacific, with increasing demand for products containing petrochemicals. India’s flourishing manufacturing sector is expected to give a further fillip to the regional market for petrochemicals. In the natural gas marketing segment, for the first time in 2015-16, IOCL imported nine Liquefied Natural Gas (LNG) cargoes on its own. This is in addition to LNG sourced through its joint venture Petronet LNG Ltd. IOCL marketed 1.929 million tons of natural gas during the year 2015-16, registering a 6.9% growth in sales over the previous year. Sale of over 19,000 tons of gas was achieved through the offer of ‘LNG at the Doorstep’ facility for customers located away from gas pipelines. Sean Kuraly Womens Jersey
The oil industry is losing the burn of Asian demand
After half a year of strong oil price rises, Asian crude demand is slowing and by some measures falling, and many market participants suspect it is not just a cyclical phenomenon, but also a product of more permanent structural changes. With years of annual economic growth of 7-10 percent in China and similar recent figures from India, Asia-Pacific has overtaken the Americas to become the world’s biggest oil consuming region, accounting for almost 40 percent of global demand. But an industry that has come to rely on Asia’s booming thirst for oil could soon be scratching around for growth. Thomson Reuters Eikon data shows that Asian crude oil tanker imports have fallen, albeit from record levels, for four straight months and by 12 percent since March to around 82 million tons (20 million barrels per day), slightly below last year’s levels. Much of the surprise decline is explained by conditions in China, the region’s biggest consumer, accounting for 27 percent of Asia-Pacific demand and 13 percent of global demand. With its long-term growth outlook now camped perhaps permanently below 7 percent, most analysts expect vehicle sales in China will slow accordingly. They have already slipped to 2.1 million at the end of May, down from a peak of almost 2.8 million in December 2015. Refiners across Asia said that was starting to hit their business. “Asian oil demand growth is slowing down. China, Asia’s largest market, is experiencing sluggish demand,” said a South Korean refiner. As domestic refiners sell off surplus fuel, China’s exports of diesel and gasoline, the main refined fuels for industrial and passenger vehicles, have both soared. “Asia refiners have already started to pull back… and there are reports of (oil) cargoes struggling to sell,” said Adam Longson of Morgan Stanley this week in a note to clients, adding that demand in the third quarter could fall further. Ship brokers say traders have started chartering supertankers to store supplies that consumers can’t absorb. One key pillar of recent demand is never coming back. Analysts think China has nearly finished building its strategic petroleum reserves (SPR). Oil analysts at JPMorgan estimated in a note to clients last week that the SPR was now at 400 million barrels, which they believed was close to capacity. “Our model suggests a 15 percent month-on-month decline in China’s crude oil net imports in September, or a loss of 1.2 million barrels versus August and 0.8 million barrels less from the 12-month average,” they said. EFFICIENCY SAVINGS Structural changes in demand are not limited to China. For Asia’s most developed oil markets, Japan and South Korea, analysts say long-term demand will steadily fall. Japan’s oil consumption, once 6 million barrels per day (bpd) and 10 percent of global demand, has fallen to not much more than 3.5 million bpd, or under 5 percent of world consumption. It will fall further as government consolidates its refiners. “There are various factors. Nuclear power generation has restarted, pushing down energy demand. When nuclear plants shut down (after the 2011 Fukushima disaster), Japan imported lots of crude. Other factors include shrinking population, saturated status of automobiles and efficiency improvement,” said Kaname Gokon, strategist at brokerage Okato Shoji. The situation is similar in South Korea. “Korea’s oil demand is at a standstill, and demand is expected to decrease because of greenhouse gas emissions policy and alternative fuel. On top of that, if a growing number of people switch to use electric cars, oil demand is bound to fall,” said Moon Young-seok, senior researcher at state-run Korea Energy Economics Institute. Even in India, the industry’s big hope to compensate for slower demand in China, demand for new cars is tepid. While Indian motorbike sales remain strong, the number of new cars sold has fallen below 215,000 per month, down from almost 260,000 in October and well below the monthly record of just over 300,000 more than four years ago. While industry doesn’t expect Asian oil demand to decline outright, they say the growth seen over the past decade may never be revisited. The fuel economy standards of new cars, which stagnated below 30 miles per gallon (mpg) between 1980 and 2010, have improved to around 40 mpg now and are expected to rise to mid-50 mpg by the early 2020s, according to industry estimates. That’s without considering the rise of hybrid or pure electric vehicles. “Energy efficiency will play a huge role in slowing the growth in global demand, as energy use per unit of economic output is likely to fall by 40 percent (between 2014 and 2040),” U.S. oil giant ExxonMobil says in its 2016 outlook. Micheal Haley Womens Jersey
Reliance Industries seeks government nod to supply subsidised LPG
Reliance Industries has sought the government nod to distribute subsidised cooking gas to households in a bid to capture a fast-growing market where consumer base is targeted to expand by 60% in three years. Reliance Industries has recently written to the oil ministry expressing interest in distributing subsidised cooking gas to households, beginning with cities, officials said. The company has also requested the government to treat it on par with state distributors such as Indian Oil and Bharat Petroleum on the subsidy front, they said. At present, only state-run companies distribute subsidised cylinders as the government doesn’t subsidise private players for selling cooking gas at lower than market rates. The oil ministry has now asked its wing, Petroleum Planning and Analysis Cell (PPAC), to examine Reliance’s request, officials said. Reliance Industries declined to comment. With the implementation of direct cash transfer, the issue of subsidy is less complicated today. At present, the state companies first recover full price for the gas cylinder 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. More than one crore consumers have already given up cooking gas subsidy in the country while many others with an annual income of more than Rs 10 lakh — numbers haven’t yet been declared by the government — have been barred from receiving the subsidy. For private players, this offers a ready market where non-subsidised consumers seek better services. But Reliance’s plan is not to restrict itself to just these customers. If it gets government nod to distribute subsidised cooking gas, or liquefied petroleum gas (LPG), it can trigger a bitter battle for market share in cities long dominated by state companies. Domestic LPG consumption rose 6.6% in May, nearly 45% of which was imported. State companies have a target to add 10 crore LPG consumers in three years to the current active base of 16.7 crore consumers as part of the government drive to take clean fuel to every corner of India. Most of the new customers will come from the interiors of the country and the companies need to set up new bottling plants and draft thousands of distributors to serve them efficiently. Bigger cities are, meanwhile, shifting from LPG to piped gas for their cooking fuel, although the pace is much slower than the one seen in the adoption of LPG cylinders. The biggest incremental requirement of LPG in future would therefore come mainly from smaller towns and rural areas. Mario Kempe Womens Jersey
Oil losses mount as world markets hit by Brexit woe
Oil prices fell further in Asian trade today, tracking losses across equities and currency markets as fresh fears about the impact of Britain’s exit from the EU sent investors fleeing high-risk assets. A warning from the Bank of England that there was evidence risks from the June 23 Brexit vote “have begun to crystallise” sent shudders through world markets, with the pound diving to levels not seen since mid-1985 and stock markets diving. The uncertainty unleashed by Europe’s second biggest economy leaving the European Union battered the oil market this week, with Brent diving 4.3% and West Texas Intermediate shedding 4.9% yesterday. The contracts today extended the losses. At 0330 GMT Brent was down 30 cents, or 0.63%, at $47.66, while WTI eased 33 cents, or 0.71%, to $46.27. The two are well down from the levels above $52 touched at the start of last month. “Uncertainties and concerns over how Brexit will influence the market is expected to last for a long time, increasing volatility in oil prices,” Will Yun, commodities analyst at Hyundai Futures in Seoul, told Bloomberg News. “Even when we see a decline in stockpiles in the US, it’s not strong enough to push prices up unless there are some major production cuts.” Adding to the downward pressure is news that oil cartel OPEC had boosted output in June, adding to an already painful global oversupply. Ernie Stautner Jersey