NOC to hire 50 more gas tankers to boost imports
Nepal Oil Corporation (NOC) has decided to hire another 50 tankers from two Indian companies to transport liquefied petroleum gas (LPG) in a bid to boost imports. Mukunda Ghimire, spokesperson for NOC, said that the board had okayed the temporary measure. He added that two Delhi-based transport companies would be supplying the bullet tankers for this month. NOC has arranged to hire 35 tankers from Ram Batra’s company and 15 from Satish Sharma’s company. Petrol and diesel supplies have improved after the end of the embargo, but cooking gas shortages persist in the market. Ghimire said that NOC moved to hire the extra tankers after its sole supplier Indian Oil Corporation (IOC) agreed to increase LPG supplies to Nepal. NOC had recently requested the Indian government through the Nepal Embassy in New Delhi to increase the monthly consignment of LPG to 40,000 tons from 23,000 tons. “After receiving the Indian government’s assurance, we acted to hire additional bullet tankers,” said Ghimire. According to NOC, 523 bullet tankers belonging to seven Indian shipping companies have been transporting LPG from IOC’s depots in Barauni, Haldia and Mathura to Nepal. Ghimire said that more than 10 percent of these tankers were out of service. It takes around 10 days for a bullet tanker to transport LPG from the depot in India to Nepal. “The length of the route is also one of the factors behind the short supply of LPG in Nepal whenever there is a crisis.” Meanwhile, NOC has also permitted Nepali companies to operate LPG bullet tankers, breaking the monopoly of Indian companies. “However, due to the slow progress of the plan, we have decided to hire Indian companies to supply tankers as a temporary measure,” said Ghimire. Last month, the state-owned oil monopoly had given the go-ahead to Nepali LPG bottlers to acquire 450 bullet tankers. “However, they have been saying that it will take at least eight to nine months to get them,” Ghimire said. There are 55 LPG bottling plants in the country, and there are more than 5 million gas cylinders in circulation.
Oil prices extend losses on looming gasoline glut
Oil prices dropped for a third session in a row on Tuesday, as weakening demand for gasoline and persistent doubts on whether crude producers will be able to reach an agreement to rein in a worldwide supply glut dragged on the market. Growth in gasoline use has been one of the strongest pillars supporting demand across the fuel complex in both North America and Asia and has been largely credited for providing a floor under crude prices that have slumped as much as 70 percent since mid-2014 due surplus supply. The decline on Tuesday follows data showing U.S. gasoline demand during January fell for the first time in 14 months, while overall U.S. oil demand fell 1 percent that month from a year ago. Front month U.S. West Texas Intermediate ( WTI) crude was trading at $35.51 per barrel at 0652 GMT, down 19 cents from their last settlement. International Brent futures were down. “Crude prices and timespreads have weakened in recent days in line with softer fundamentals,” consultancy Energy Aspects said. “Although Q2 is always a slow period for crude demand amidst peak refinery works, it seems like Asia may have somewhat overdone the crude buying and is therefore pausing for breath.” In Asia, traders have stored excess gasoline on tankers as onshore storage facilities in Singapore and Malaysia are filled to the rims.
China firm wins Myanmar approval for $3 bln refinery
Chinese state-controlled commodity trader Guangdong Zhenrong Energy Co has won approval from the Myanmar government to build a long-planned $3 billion refinery in the Southeast Asian nation in partnership with local parties including the energy ministry, company executives said on Tuesday. The project, which also includes an oil terminal, storage and distribution facilities, would be one of the largest foreign investments in decades in Myanmar. Myanmar currently imports most of its fuel. The Myanmar Investment Committee granted the Chinese firm approval to build a 100,000 barrels-per-day (bpd) refinery in the southeast coastal city of Dawei, Li Hui, a vice president of Guangdong Zhenrong and head of the company’s refining business, told Reuters. The Chinese firm will hold 70 percent of the project, and the remaining 30 percent shared by three Myanmar firms – military-linked Myanmar Economic Holdings Limited, Myanmar Petrochemical Corp, an entity affiliated with the country’s energy ministry and Yangon Engineering Group, controlled by privately-run HTOO Group of Companies, Li said. As the approval came before the government led by Aung San Suu Kyi’s National League for Democracy was sworn in, Li said his firm was ready to work with the new Myanmar authorities to ensure the project gets off the ground. “We are confident (about the project) as it has taken into considerations interests from all parties and the refinery will benefit the local people as well as the economic development of the country,” said Li.
RBI exploring modalities of oil payments to Iran: Raghuram Rajan
The Reserve Bank of India is holding discussions with Tehran on modalities of payment of reported dues of $6.5 billion for oil imports, Governor Raghuram Rajan today said. “We are discussing with them (Iran) the way they want to be paid and certainly, we will work with them on when and how we pay them. I don’t think it will happen as a lumpsum. It is going to be staggered,” Rajan said during the customary post-policy call with analysts. He, however, did not disclose the quantum of payments to be made to the Middle East country, which is getting ready for a life post sanctions. Indicating that the commitments will be honoured, Rajan said meeting the payment should not be a concern as the country has over $350 billion in its forex kitty at present. In August 2015, a central government official had said RBI will be assisting Indian refiners to clear over $6.5 billion of past dues they owe to Iran for crude oil purchases.. The central bank, which previously facilitated payment of oil import bill to Iran, had agreed to help in creating the payment channels to clear the past dues. The then finance secretary Rajiv Mehrishi had led a four member delegation to Tehran in July 2015 to discuss modalities of clearing the dues. After the US and western powers in 2011 blocked payment channels in a bid to bring Iran to the negotiating table over its controversial nuclear programme, RBI had facilitated oil payments to Iran via Turkey. Iran and six world powers last year sealed an accord to curb the Islamic Republic’s nuclear programme in return for ending sanctions. The lifting of sanctions is expected to open up banking channels for Tehran. India is keen that repayment of dues since February 2013 should be done in a staggered manner so as to avoid a run on the rupee.
ONGC gets green nod for Rs 350 crore drilling project in Gujarat
State-owned ONGC has received green nod for its Rs 350 crore project of drilling 22 exploratory wells in NELP-9 blocks located at Banaskantha, Gandhinagar and Ahmedabad districts of Gujarat. According to the proposal, wells would be drilled in blocks CB-CNN-2010/1, 6 and 9, which were awarded to ONGC way back in March 2012 through the NELP-9 bidding process. The petroleum exploratory licence to start the activities as per the production sharing contract (PSC) was granted in February 2013. The initial contract period is seven years. “Based on the views of the expert appraisal committee (EAC), the union environment ministry has given environmental clearance to the ONGC drilling project in Gujarat subject to strict compliance of specific and general conditions,” a senior government official said. The clearance has been granted only for exploratory drilling of 22 wells. In case development drilling is to be done in future, the company should take prior clearance from the ministry, the official said. The total cost of the project is Rs 350 crore. Each well will be drilled up to a depth of 3,000 metres. Among conditions specified, the company has been asked to prepare an oil spillage prevention scheme and comply with the guidelines of disposal of solid waste, drill cutting and drilling fluids for onshore drilling operations. The company has been asked to take necessary measures to prevent fire hazards, containing oil spill and soil remediation as needed. On completion of drilling, the company has been asked to plug the drilled wells safely and obtain a certificate of environment safety from the authority concerned. ONGC is engaged in hydrocarbon exploration and production activities in about 26 sedimentary basins of India, owns and operates more than 11,000 kilometres of pipelines in India and contributes 80 per cent of the country’s crude oil production.
Myanmar: Indian Oil Corp to enter fuel market
Myanmar Petroleum Products Enterprise (MPPE) opened a tender to cooperate as a joint venture (JV) for import, storage, distribution and sale of all petroleum products expect liquefied petroleum gas and liquefied natural gas, reported The Economic Times. The JV will be for a maximum of 30 years, extendable for two 10-year periods. MPPE will hold 51% of the equity while a foreign company will hold the rest. MPPE has been present in Myanmar´s fuel business for a long time. It currently owns four main fuel terminals and 24 sub-terminals. After being privatized in 2010, MPPE sold its 216 gas stations to private companies across the country expect for 12 pumps. The company now wants to re-enter the fuel retailing business of Myanmar, where 70 private companies run the country´s 1163 filling stations, with a foreign partner by the side.
U.S. Taps India as Asia’s Debut Buyer of American Shale Gas
Gail India Ltd. bought the second shipment of liquefied natural gas from Cheniere Energy Inc.’s Sabine Pass plant in Louisiana in a deal that makes it the first Asian importer of U.S. shale gas. The nation’s biggest supplier will receive the cargo, bought on spot basis, at the Dabhol import terminal on the country’s west coast by mid-April, Vandana Chanana, a company spokeswoman, said Friday by e-mail. Faith Parker, a spokeswoman at Cheniere in Houston, didn’t immediately respond to a voice mail left outside office hours and an e-mail sent Friday morning. The deal marks the beginning of U.S. LNG exports into the world’s biggest importing region of the super-chilled fuel, just as regional producers from Australia to Papua New Guinea ramp up supplies. India last year overtook South Korea as the world’s second-biggest importer of the fuel on a spot and short-term basis as buyers took advantage of a slump in prices brought on by the crash in crude oil and an oversupply. “This is the first and definitely will not be the last shipment to go to India from the U.S. Gulf Coast,” Chris Rumley, a senior LNG and natural gas consultant at Poten & Partners, said by telephone from Houston on Friday. “There is terminal capacity in India and if the price is competitive against alternative fuels, then there’s a market there for it.” Higher Price The delivered price of the cargo is about $5 per million British thermal units, according to two people with direct knowledge of the matter, who asked not to be identified because the information is private. Chanana declined to comment on commercial terms. That’s higher than the $4.30 per million British thermal units now paid by customers in northeast Asia for spot cargoes, according to assessments by the World Gas Intelligence publication. Prices crashed 78 percent from the peak in February 2014. The price slump supported demand for spot cargoes in India. Imports rose 45 percent to 9.7 million tons in 2015, the biggest increase in spot and short-term traded volumes last year, according to the International Group of LNG importers annual report published this week. India imported a total of 14.6 million tons of LNG last year, unchanged from a year earlier, according to the group. Tanker Route The Clean Ocean LNG tanker left Sabine Pass on March 15 after loading the second export cargo from the terminal. It’s sailing toward South Africa, according to ship-tracking data on Friday. Some analysts had expected the vessel to go elsewhere, perhaps to South America because of demand there for the power-plant fuel and because of the content of the gas Cheniere was producing. “We initially thought when it left it would be Rio or Kuwait, because of there being hotter gas, meaning higher ethane and C+ content, in the tanks when they started to liquefy,” Jason Lord, LNG analyst for energy data provider Genscape Inc., said by telephone from Boulder, Colorado. “Their regas facilities and grid tend to be able to handle that better in the Atlantic basin. Potentially, this one in India can handle that.” The first batch of LNG from the Cheniere terminal was shipped to Brazil in February, marking the start of U.S. shale gas exports. The third cargo on the GasLog Salem is also set to go to Brazil, while the destination of the fourth shipment on the Energy Atlantic is still unclear, according to the ship-tracking data
Essar Oil plays the ‘made in UK card’ to gain retail market share
Essar Oil is playing the ‘made in UK’ card and pricing products aggressively to grab a bigger piece of the fuel-retailing pie that has been thus far dominated by global energy conglomerates such as BP and Shell. The company has opened six retail outlets, making its debut in the consumer segment, and has plans to run 400 outlets in three years. “Retail venture is aimed at derisking. With our efforts, we have already turned around the Stanlow refinery but now there is limited opportunity in the refinery business,” Naresh Nayyar, executive chairman of Essar Oil UK, told ET. Billionaire brothers Shashi Ruia and Ravi Ruia-led Essar Group acquired the refinery from Royal Dutch Shell in July 2011 and has been able to turn around its performance and capture 15% of the UK’s road transport fuel demand. Essar Oil UK has turned around the loss making unit with a record net profit of $ 187 million in 2015-16 and its highest ever operating profit of $ 340 million in the period, primarily by rationalising operations, increasing efficiencies, diversifying the crude basket and implementing margin improvement programmes. The company has made a quiet foray into the retail business, focusing more on local branding and marketing exercise to leverage of its local presence with the tagline “direct from our UK refinery .” The Essar outlets offer prices at discount to competitors and have managed to clock 20% average revenue growth. “We have grown 45% since we moved to Essar and competitive pricing is a key factor but it also helps that the branding is bright to look at. The chanllege for these guys is to build a big network so that we can use fuel card. A lot of independent companies have talked about entering energy business but this is backed by a multi billion conglmerate and thats why the likes of BP and shell are worried this time,” Shane Thakrar, CEO of HKS Group told ET. His company runs 61 outlets across the country which includes one Essar outlet at Coalville, Leicestershire. SB Prasad, chief commercial officer retail of Essar UK said: “For us to make a dent in this market as an Indian company was tough. We are building a brand that conveys that our refinery is local unlike others.”
India’s Iran oil imports set to surge to 7-year high in 2016/17
India is set to import at least 400,000 barrels per day (bpd) of Iranian oil in the year from April 1, with refiners looking to ramp up purchases after the sanctions targeting Tehran ended in January, industry sources familiar with the matter said. Average annual imports at that level in the fiscal year just begun would be the highest in at least seven years, and would carry forward a bump in purchases that lifted March shipments to a five-year high for a month at 506,100 bpd. Iran was India’s second biggest oil supplier – a position now belonging to Iraq – before economic sanctions aimed at Iran’s nuclear programme hampered its trade relations, forcing the South Asian nation to tap alternative suppliers. The plans for higher annual imports by India are a sign that Tehran is beginning to regain market share after the lifting of sanctions. Iran has said it will continue increasing its oil output and exports until it reaches the market position it held in the pre-sanctions era. India’s state refiners – Indian Oil Corp, Mangalore Refinery and Petrochemicals Ltd, Bharat Petroleum and Hindustan Petroleum – told Iran in February that together they are willing to buy about 240,000 bpd in the year begun in April, the industry sources said. Among private refiners Essar Oil is willing to lift about 120,000 bpd, they said, and HMEL has indicated it will buy a small quantity with an option to raise volumes. The Indian oil companies and the National Iranian Oil Co (NIOC) – which handles Tehran’s oil sales – did not respond to requests for comment. IOC aims to buy 80,000 bpd from Iran with an option for another 40,000 bpd, MRPL will buy about 90,000-100,000 bpd, while HPCL and BPCL plan to buy about 20,000 bpd each, the sources said. In addition to these volumes and the barrels Essar is looking to buy, private refiner Reliance Industries is seeking to buy 100,000-120,000 bpd Iranian oil, mainly heavy grades, Reuters reported in February. It is not clear, however, how much of the heavy grades Reliance will be able to purchase as many of the barrels have already been committed. Last month, Reliance made spot imports of Iranian oil, its first such purchase since 2010. The Indian refiners are expected to finalise their annual contract deals with Iran soon, the sources said. The Indian buyers are being drawn in part by freight discounts that increase as more barrels are purchased, although the concession is much less than the free shipping that Iran was offering under pressure from sanctions, the sources said. Purchases from Tehran could still be impacted by the availability of insurance cover for installations processing Iranian oil and the resumption of banking channels to facilitate payments and opening of letter of credits (LCs). Last month ship insurers stepped in to help plug a shortfall in cover for transporting Iranian oil as U.S. reinsurers are still restrained by Washington’s sanctions. However, there is still no clarity on whether reinsurers will facilitate cover for refineries processing Iranian oil, the sources said. Iran last month gave a list of about a dozen banks, mainly European, that have accounts with Turkey’s Halkbank to clear a part of about $6 billion dues pending with Indian firms.
Essar Oil plays the ‘made in UK card’ to gain retail market share
Essar Oil is playing the ‘made in UK’ card and pricing products aggressively to grab a bigger piece of the fuel-retailing pie that has been thus far dominated by global energy conglomerates such as BP and Shell. The company has opened six retail outlets, making its debut in the consumer segment, and has plans to run 400 outlets in three years. “Retail venture is aimed at derisking.With our efforts, we have already turned around the Stanlow refinery but now there is limited opportunity in the refinery business,” Naresh Nayyar, executive chairman of Essar Oil UK, told ET. Billionaire brothers Shashi Ruia and Ravi Ruia-led Essar Group acquired the refinery from Royal Dutch Shell in July 2011 and has been able to turn around its performance and capture 15% of the UK’s road transport fuel demand. Essar Oil UK has turned around the loss making unit with a record net profit of $ 187 million in 2015-16 and its highest ever operating profit of $ 340 million in the period, pri marily by rationalising operations, increasing ef ficiencies, diversifying the crude basket and implementing margin improvement programmes. The company has made a quiet foray into the retail business, focusing more on local branding and marketing exercise to leverage of its local presence with the tagline “direct from our UK refinery .” The Essar outlets offer prices at discount to competitors and have managed to clock 20% average revenue growth. “We have grown 45% since we moved to Essar and competitive pricing is a key factor but it also helps that the branding is bright to look at. The chanllege for these guys is to build a big network so that we can use fuel card. A lot of independent companies have talked about entering energy business but this is backed by a multi billion conglmerate and thats why the likes of BP and shell are worried this time,” Shane Thakrar, CEO of HKS Group told ET. His company runs 61 outlets across the country which includes one Essar outlet at Coalville, Leicestershire. SB Prasad, chief commercial officerretail of Essar UK said: “For us ro make a dent in this market as an Indian company was tough. We are building a brand that conveys that our refinery is local unlike others.”