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Jan 2016
Owning and hiring out LNG ships is not going to be an easy task for GAIL.
8For reference purposes, the website carries here detailed estimates of shipping costs from LNG plants in Australia, Russia, US and Canada to the LNG buying hub of Himeji in Japan.
8The cost is calculated on the basis of a 140,000 m3 LNG tanker notionally hired at $32,000 per day.
8The costs take into account Panama and Suez canal tariffs as well as longer waiting time navigating them. Trips across the arctic are also factored in.
8Clearly shipping costs are different depending upon the destination.
8These shipping costs are important determinants of what the landed costs are going to be for LNG in an increasingly competitive environment where every cent/mmbtu will be taken into account by picky buyers.
8It has also been speculated that that LNG tankers could have to compete with other ships for Panama Canal capacity therefore leading to bottlenecking at the canal and this will eventually reflect on the end price of LNG.
8It is not known yet whether GAIL has the sophistication needed to take all these parameters into account while arriving at the conclusion that it requires to employ 12 new LNG carriers to ship LNG from the US to India.
8Is it possible that freight costs will plummet if enough LNG terminals are not built and if the demand for gas slows down as is predicted by the IEA.
8The new vessels contracted by GAIL will be expensive to build and if their costs are hard coded into freight, the gas major may end up paying more than others a few years down the line if world trade in LNG is less robust than what is predicted resulting in a fall in freight rates.
Will GAIL be at a disadvantage in relation to those who will have more flexible delivery models?
8Given the massive uncertainty that has engulfed the gas trading business, GAIL's exposure to the gas business involving tens of billions of dollars can emerge as a point of worry if things go wrong..
8Does GAIL really have the balance sheet to take into account the wide gyrations that may take place in the future?
8What will happen if it takes a wrong turn where the road forks? A wrong decision can just about wipe out the company, for the tsunami that has descended today on the world oil and gas market is testing the strength of not just the world's biggest oil and gas companies but also of countries such as Saudi Arabia and Russia.
8Only the strongest will survive in this business and while the GAIL brass is known to be risk takers in comparison to their staid public sector cousins, is it taking too much of a risk?
8This is a question that only time will answer.
Click on Details for more Details
8For reference purposes, the website carries here detailed estimates of shipping costs from LNG plants in Australia, Russia, US and Canada to the LNG buying hub of Himeji in Japan.
8The cost is calculated on the basis of a 140,000 m3 LNG tanker notionally hired at $32,000 per day.
8The costs take into account Panama and Suez canal tariffs as well as longer waiting time navigating them. Trips across the arctic are also factored in.
8Clearly shipping costs are different depending upon the destination.
8These shipping costs are important determinants of what the landed costs are going to be for LNG in an increasingly competitive environment where every cent/mmbtu will be taken into account by picky buyers.
8It has also been speculated that that LNG tankers could have to compete with other ships for Panama Canal capacity therefore leading to bottlenecking at the canal and this will eventually reflect on the end price of LNG.
8It is not known yet whether GAIL has the sophistication needed to take all these parameters into account while arriving at the conclusion that it requires to employ 12 new LNG carriers to ship LNG from the US to India.
8Is it possible that freight costs will plummet if enough LNG terminals are not built and if the demand for gas slows down as is predicted by the IEA.
8The new vessels contracted by GAIL will be expensive to build and if their costs are hard coded into freight, the gas major may end up paying more than others a few years down the line if world trade in LNG is less robust than what is predicted resulting in a fall in freight rates.
Will GAIL be at a disadvantage in relation to those who will have more flexible delivery models?
8Given the massive uncertainty that has engulfed the gas trading business, GAIL's exposure to the gas business involving tens of billions of dollars can emerge as a point of worry if things go wrong..
8Does GAIL really have the balance sheet to take into account the wide gyrations that may take place in the future?
8What will happen if it takes a wrong turn where the road forks? A wrong decision can just about wipe out the company, for the tsunami that has descended today on the world oil and gas market is testing the strength of not just the world's biggest oil and gas companies but also of countries such as Saudi Arabia and Russia.
8Only the strongest will survive in this business and while the GAIL brass is known to be risk takers in comparison to their staid public sector cousins, is it taking too much of a risk?
8This is a question that only time will answer.
Click on Details for more Details
The arrival of budget batteries -- that are capable of storing enough power to run a household -- coupled with cheaper solar power will allow a growing number of consumers to pull the plug on old-fashioned electricity networks in 2016 and beyond.
8What is more, in large parts of India, where there is no grid connectivity, the need for building them will no longer be necessary.
8Solar panel prices have already plummeted, and batteries look set to follow in the near future as manufacturers hone new technologies and ramp up production.
8Tesla, the world's largest battery producer, says it can slash the cost of its own batteries by more than a third with a bigger, better factory. That’s plausible: costs dropped by 14 percent on average every year between 2007 and 2014.
8It has been estimated that battery prices will tumble by 70 percent over the next five years.
8The prospect of being able to generate, store and manage their own power may prompt some customers to leave the grid.
More than a fifth of India’s population does not have access to electricity. Rather than waiting for infrastructure to expand, Prime Minister Narendra Modi’s government is offering a 30 percent subsidy to encourage homeowners to use solar to become self-sufficient.
Click on our Reports section for more. Details
8What is more, in large parts of India, where there is no grid connectivity, the need for building them will no longer be necessary.
8Solar panel prices have already plummeted, and batteries look set to follow in the near future as manufacturers hone new technologies and ramp up production.
8Tesla, the world's largest battery producer, says it can slash the cost of its own batteries by more than a third with a bigger, better factory. That’s plausible: costs dropped by 14 percent on average every year between 2007 and 2014.
8It has been estimated that battery prices will tumble by 70 percent over the next five years.
8The prospect of being able to generate, store and manage their own power may prompt some customers to leave the grid.
More than a fifth of India’s population does not have access to electricity. Rather than waiting for infrastructure to expand, Prime Minister Narendra Modi’s government is offering a 30 percent subsidy to encourage homeowners to use solar to become self-sufficient.
Click on our Reports section for more. Details
Prime Minister Narender Modi's two-hour interaction with some of the big guns of the international oil and gas industry has broken the logjam over how to push the Indian oil and gas industry ahead, according to reliable sources.
Please click on Details to find out more on what transpired in the meeting and how it was organized
8Also find out more on how the current stalemate in the sector has been broken despite a big government lobby that is opposed to raising the price of gas as it would amount to subsidizing private investments with public funds as the price rise will be a pass through for the subsidy driven industrial sectors such as fertilizer and power where the gas will be used.
8Expect some big announcement in the budget of 2016-17 on gas pricing for the E&P sector as the government eventually veers around to the view that what is needed is investments to shore up a slowing economy.
8This is likely to be good news for equipment and service providers for the upstream industry in India.
8Click on Details for all that transpired in the meeting. Details
Please click on Details to find out more on what transpired in the meeting and how it was organized
8Also find out more on how the current stalemate in the sector has been broken despite a big government lobby that is opposed to raising the price of gas as it would amount to subsidizing private investments with public funds as the price rise will be a pass through for the subsidy driven industrial sectors such as fertilizer and power where the gas will be used.
8Expect some big announcement in the budget of 2016-17 on gas pricing for the E&P sector as the government eventually veers around to the view that what is needed is investments to shore up a slowing economy.
8This is likely to be good news for equipment and service providers for the upstream industry in India.
8Click on Details for all that transpired in the meeting. Details
How long will it take for oil-rich Gulf sheikhdoms to run out of money if oil prices continue to remain low?
8With U.S. crude oil prices falling below $40 per barrel in December, they have no choice but to reach into these rainy-day savings.
8For now, they can hold on to some of their trophy assets, like strategic investments in Volkswagen or Barclays. But if crude prices keep tumbling, a fire sale will be hard to avoid.
8During the most recent energy boom, the six members of the Gulf Cooperation Council (GCC) – including Saudi Arabia, Qatar and Kuwait – amassed sovereign funds worth more than $2.3 trillion.
8These assets have traditionally comprised a mix of debt and other securities, in addition to influential stakes in some of the world’s biggest companies such as Glencore, VW and Barclays.
8Large chunks of this cash are now being repatriated back to the region to finance widening budget deficits, which this year are expected to be in the region of 13 percent of GDP in the GCC.
8Calculations are that should oil prices average $56 per barrel this year, then GCC states would need to liquidate some $208 billion of their overseas assets, or just below 10 percent of their sovereign fund holdings just to balance their budget
8But if oil prices fall to $20 a barrel, as Goldman Sachs has warned, the GCC states may have to sell $494 billion worth of booty in 2016
8This is provided they maintain the lavish rates of public spending that the region’s populations have become accustomed to.
8At that rate of divestment these sheikhdoms – which pump about a fifth of the world’s oil – would almost drain their funds entirely by 2020.
Click on our Reports section for more Details
8With U.S. crude oil prices falling below $40 per barrel in December, they have no choice but to reach into these rainy-day savings.
8For now, they can hold on to some of their trophy assets, like strategic investments in Volkswagen or Barclays. But if crude prices keep tumbling, a fire sale will be hard to avoid.
8During the most recent energy boom, the six members of the Gulf Cooperation Council (GCC) – including Saudi Arabia, Qatar and Kuwait – amassed sovereign funds worth more than $2.3 trillion.
8These assets have traditionally comprised a mix of debt and other securities, in addition to influential stakes in some of the world’s biggest companies such as Glencore, VW and Barclays.
8Large chunks of this cash are now being repatriated back to the region to finance widening budget deficits, which this year are expected to be in the region of 13 percent of GDP in the GCC.
8Calculations are that should oil prices average $56 per barrel this year, then GCC states would need to liquidate some $208 billion of their overseas assets, or just below 10 percent of their sovereign fund holdings just to balance their budget
8But if oil prices fall to $20 a barrel, as Goldman Sachs has warned, the GCC states may have to sell $494 billion worth of booty in 2016
8This is provided they maintain the lavish rates of public spending that the region’s populations have become accustomed to.
8At that rate of divestment these sheikhdoms – which pump about a fifth of the world’s oil – would almost drain their funds entirely by 2020.
Click on our Reports section for more Details
Until recently, there was talk of India finally emerging from China’s shadow in the global growth stakes. Helped by a controversial overhaul of its GDP statistics, the Indian economy was slated to expand by 7.5 percent in 2015 and more in 2016.
8India growth rate seemed to have surpassed that of China was struggling to maintain the nearly 7 percent pace promised by its leaders. The recent blood bath in the Chinese stock market has added to fears that China's economy is likely to have crash landing instead of just slowing down.
8The prospect of sustained rapid growth by India drew the attention of the world.
8But things are not going all that well in India as of now, as the latest data shows a contraction of industrial production in the midst of a export slowdown that has led some economist to question whether India can achieve a growth rate higher than 5-6 per cent in the current year.
8The earlier euphoria has died down a bit.
Moreover, it does not look like India can power the world economy when the rest of it is slowing down rapidly.
8The Indian economy accounts for little more than 3 percent of global output. China is almost four times as large, while the United States is still responsible for more than a fifth of all economic activity.
8On current projections, India will produce about 7 percent of global growth in 2016 while the United States and China will together be responsible for about 45 percent of GDP expansion.
8Put another way, India’s growth rate would need to rise by about 3 percentage points in order to add 0.1 percentage point to next year’s expected global growth rate of 3.3 percent. China could have the same impact with a 1 point increase in the pace of expansion. For the United States, an extra half point would suffice.
8With Europe stuck in the doldrums and Japan struggling to recover, the world economy still depends heavily on its two largest growth engines, both of which are sputtering. A severe slowdown in China as is likely or a stalled recovery in the United States would be felt around the world.
8By comparison, India’s economic performance, no matter how impressive, will barely register.
Click on our Reports section for more. Details
8India growth rate seemed to have surpassed that of China was struggling to maintain the nearly 7 percent pace promised by its leaders. The recent blood bath in the Chinese stock market has added to fears that China's economy is likely to have crash landing instead of just slowing down.
8The prospect of sustained rapid growth by India drew the attention of the world.
8But things are not going all that well in India as of now, as the latest data shows a contraction of industrial production in the midst of a export slowdown that has led some economist to question whether India can achieve a growth rate higher than 5-6 per cent in the current year.
8The earlier euphoria has died down a bit.
Moreover, it does not look like India can power the world economy when the rest of it is slowing down rapidly.
8The Indian economy accounts for little more than 3 percent of global output. China is almost four times as large, while the United States is still responsible for more than a fifth of all economic activity.
8On current projections, India will produce about 7 percent of global growth in 2016 while the United States and China will together be responsible for about 45 percent of GDP expansion.
8Put another way, India’s growth rate would need to rise by about 3 percentage points in order to add 0.1 percentage point to next year’s expected global growth rate of 3.3 percent. China could have the same impact with a 1 point increase in the pace of expansion. For the United States, an extra half point would suffice.
8With Europe stuck in the doldrums and Japan struggling to recover, the world economy still depends heavily on its two largest growth engines, both of which are sputtering. A severe slowdown in China as is likely or a stalled recovery in the United States would be felt around the world.
8By comparison, India’s economic performance, no matter how impressive, will barely register.
Click on our Reports section for more. Details
ONGC has drawn up a plan to drill 35 exploratory wells in its fields in Cauvery basin in Tamil Nadu, at a project cost of Rs. 700 crore.
8The original plan has now been temporarily trimmed to 21 wells, and this is basically done as the remaining 14 wells fall in the Cuddalore district for which public hearing could not be conducted due to the recent floods in Tamil Nadu. Once the hearing is completed, all 35 wells will be drilled
8The total estimated cost for drilling all 21 wells was projected at Rs. 400 crore.
8By drilling these wells in the L-1, Kuthalam, Kali & Greator Kali, Bhuvangiriand and Neyveli PMLs in the Cauvery basin, the likely accretion is going to be about about 20 – 25 MMt (O+OEG) of Initially Inplace Reserves. However the upside potential in the block is envisaged in the order of a sizeable 200 MMt (O+OEG).
8The drilling location for the proposed for the 21 wells as of now are in the following districts:
-- Ariyalur(6),
-- Thanjavur (5),
-- Nagapattiam(9),
-- Tiruvarur(1)
Click on our Reports section for more Details
8The original plan has now been temporarily trimmed to 21 wells, and this is basically done as the remaining 14 wells fall in the Cuddalore district for which public hearing could not be conducted due to the recent floods in Tamil Nadu. Once the hearing is completed, all 35 wells will be drilled
8The total estimated cost for drilling all 21 wells was projected at Rs. 400 crore.
8By drilling these wells in the L-1, Kuthalam, Kali & Greator Kali, Bhuvangiriand and Neyveli PMLs in the Cauvery basin, the likely accretion is going to be about about 20 – 25 MMt (O+OEG) of Initially Inplace Reserves. However the upside potential in the block is envisaged in the order of a sizeable 200 MMt (O+OEG).
8The drilling location for the proposed for the 21 wells as of now are in the following districts:
-- Ariyalur(6),
-- Thanjavur (5),
-- Nagapattiam(9),
-- Tiruvarur(1)
Click on our Reports section for more Details
A total of 35 wells are proposed to be drilled
8The target depths of these locations range from 3000 m to 5200 m.
8About 4 to 5 acres of land will be acquired for each well.
8Drilling is expected to continue for about 60-75 days for each well in the block.
8The power requirement of the drilling rig will be met by using six diesel generator sets with a diesel consumption of about 6 KI/ day.
Click on our Reports section for more. Details
8The target depths of these locations range from 3000 m to 5200 m.
8About 4 to 5 acres of land will be acquired for each well.
8Drilling is expected to continue for about 60-75 days for each well in the block.
8The power requirement of the drilling rig will be met by using six diesel generator sets with a diesel consumption of about 6 KI/ day.
Click on our Reports section for more. Details
Details are also carried here on the drilling programme in terms of:
8Geological details of the drilling programme
8Drilling technology involved
8Electro logging details
8Types of logs
8Power requirement details
8Water requirement
8Solid removals
8Details of drilling cuts and waster residual muds
8Testing details
8Chemicals needed
Click on Reports for more Details
8Geological details of the drilling programme
8Drilling technology involved
8Electro logging details
8Types of logs
8Power requirement details
8Water requirement
8Solid removals
8Details of drilling cuts and waster residual muds
8Testing details
8Chemicals needed
Click on Reports for more Details
For reference purposes, the website also carried here detail of the well locations in the following arrangement:
8Name of the location
8Type of well
8Total depth
8Latitude and Longitude
8Basement details
8Geographical accessibility to these wells.
Click on our Reports section for more. Details
8Name of the location
8Type of well
8Total depth
8Latitude and Longitude
8Basement details
8Geographical accessibility to these wells.
Click on our Reports section for more. Details
ONGC is planning to spend $500 million in a plan for joint development of KG-OSN-2004/ 1 block and its adjacent PML block GS-49-2 which lies off the east coast of India.
8The integrated development plan has two variants for onshore facilities either at Mori (near an existing GCS) or at Odalarevu.
8The KG-OSN-2004/1 block along with the GS-49 license has a peak potential of 7.2 MMm3/d of gas with nine producers to deliver a cumulative gas production of around 14.14 (11.10+3.04) BCM over a period of 16 years.
8The IRR is attractive enough: at 15.6% for KG-OSN-2004/ and a lucrrative 38% in GS-49-2
Click on our Reports section for more. Details
8The integrated development plan has two variants for onshore facilities either at Mori (near an existing GCS) or at Odalarevu.
8The KG-OSN-2004/1 block along with the GS-49 license has a peak potential of 7.2 MMm3/d of gas with nine producers to deliver a cumulative gas production of around 14.14 (11.10+3.04) BCM over a period of 16 years.
8The IRR is attractive enough: at 15.6% for KG-OSN-2004/ and a lucrrative 38% in GS-49-2
Click on our Reports section for more. Details
8The project is broadly segmented into the following:-
-- Construction of new onshore facilities at Odalarevu or Mori.
-- Drilling and completion of 7 new wells in KG-OSN-2004/1 and 2 new wells in GS-49-2 prospect.
-- Drilling of 7 wells in KG-OSN-2004/1 with cased hole gravel pack completion.
-- Two new wells at GS-49-2 with dual packer and dual string completions with 2 7/8 tubing.
-- Subsea pipeline from offshore to new onshore terminal with a carrying capacity of 6.4 MMSCMD of gas.
-- Six platforms, one each at AL-1-A, SA-1-A, SA-1-B, NL-2-A and NL-3-B wells along with one more platform at GS-49-2-A/B.
-- Two subsea wells tied back to the nearest platform AL-1-A.
-- Subsea pipeline tied back to the new onshore facilities at Odalarevu/Mori.
-- New onshore facility is to be constructed for 8 MMSCMD of gas.
Click on our Reports section for more Details
-- Construction of new onshore facilities at Odalarevu or Mori.
-- Drilling and completion of 7 new wells in KG-OSN-2004/1 and 2 new wells in GS-49-2 prospect.
-- Drilling of 7 wells in KG-OSN-2004/1 with cased hole gravel pack completion.
-- Two new wells at GS-49-2 with dual packer and dual string completions with 2 7/8 tubing.
-- Subsea pipeline from offshore to new onshore terminal with a carrying capacity of 6.4 MMSCMD of gas.
-- Six platforms, one each at AL-1-A, SA-1-A, SA-1-B, NL-2-A and NL-3-B wells along with one more platform at GS-49-2-A/B.
-- Two subsea wells tied back to the nearest platform AL-1-A.
-- Subsea pipeline tied back to the new onshore facilities at Odalarevu/Mori.
-- New onshore facility is to be constructed for 8 MMSCMD of gas.
Click on our Reports section for more Details
The KG-OSN-2004/1 block, located off the Narsapur coast and south of GS-49 PML, close to the river mouth of the Vashishta Godavari, covers a total area of 1131 skm .
Exploratory exploratory drilling in the block commenced in April, 2011 through drilling of well Chandrika South which resulted in a discovery non-associated gas in the hitherto untested Tertiary Pliocene channel play. The second well Alankari#1 also led to a gas discovery from the Late Miocene-Lower Pliocene sub unconformity play. Subsequently, three more new gas discoveries, Saveri#1, NANL#2 and NANL#1, were made.
8As on date, a total of nine wells have been drilled in the block, out of which five were discovery wells viz. Chandrika South (CS#1), Alankari (AL#1), Saveri (SA#1), NANL#2, and NANL#1 while two were dry.
8A total of in-place GIIP of 17.37 BCM has been established within the contract area of the block with ultimate reserves of 12.41 BCM.
8The analysis indicates that the Chandrika South channel extends southward into the open acreage and the total GIIP and Ultimate reserves are 19.39 BCM and 13.80 BCM respectively.
8As per the approved DOC, total gas production potential from Alankari, Saveri, Chandrika South, NANL-3 and NANL-2 fields of KG-OSN-2004/1 block including the open acreage reserve of CS-1, with a total of seven producers from these five fields, can be a peak gas rate of 6.2 MMSCMD
Click on our Reports section for more. Details
Exploratory exploratory drilling in the block commenced in April, 2011 through drilling of well Chandrika South which resulted in a discovery non-associated gas in the hitherto untested Tertiary Pliocene channel play. The second well Alankari#1 also led to a gas discovery from the Late Miocene-Lower Pliocene sub unconformity play. Subsequently, three more new gas discoveries, Saveri#1, NANL#2 and NANL#1, were made.
8As on date, a total of nine wells have been drilled in the block, out of which five were discovery wells viz. Chandrika South (CS#1), Alankari (AL#1), Saveri (SA#1), NANL#2, and NANL#1 while two were dry.
8A total of in-place GIIP of 17.37 BCM has been established within the contract area of the block with ultimate reserves of 12.41 BCM.
8The analysis indicates that the Chandrika South channel extends southward into the open acreage and the total GIIP and Ultimate reserves are 19.39 BCM and 13.80 BCM respectively.
8As per the approved DOC, total gas production potential from Alankari, Saveri, Chandrika South, NANL-3 and NANL-2 fields of KG-OSN-2004/1 block including the open acreage reserve of CS-1, with a total of seven producers from these five fields, can be a peak gas rate of 6.2 MMSCMD
Click on our Reports section for more. Details
The GS-49 field -- which is going to be developed together with KG-OSN-2004/1 block -- is located in the shallow waters of Krishna Godavari Basin at the mouth of the Vasishta Godavari river.
8The field has two culminations and is considered to be the south-western extension of the onshore field Kasavadasupalem in to the offshore arch.
8The first lateral well GS-49-1 drilled on the north-eastern culmination from an on-land spot went dry as it encountered the sands at a structurally unfavourable position.
8The well GS-49-2 was the second well drilled on the structure on the south-western culmination at a structurally favourable position and encountered multi-stack reservoirs within Ravva.
8The total GIIP estimated is 3.94 BCM of NANG.
8The ultimate producible reserves are 3.04 BCM.
8Peak production is slated at 1 mmscmd
Click on our Reports section for more. Details
8The field has two culminations and is considered to be the south-western extension of the onshore field Kasavadasupalem in to the offshore arch.
8The first lateral well GS-49-1 drilled on the north-eastern culmination from an on-land spot went dry as it encountered the sands at a structurally unfavourable position.
8The well GS-49-2 was the second well drilled on the structure on the south-western culmination at a structurally favourable position and encountered multi-stack reservoirs within Ravva.
8The total GIIP estimated is 3.94 BCM of NANG.
8The ultimate producible reserves are 3.04 BCM.
8Peak production is slated at 1 mmscmd
Click on our Reports section for more. Details
The existing facilities in the vicinity of the blocks GS-49-2 and KG-OSN-2004/1 are at Mori GCS (A GCS for the G-1/GS15 block) which is around 20 km away and Odalarevu which is around 48 km out.
8One option to evacuate the well fluid gathered at NANL-3 to the nearest landfall point is through an 18 inch 20 km flow line.
8Based on the availability of well head pressures, well fluid is planned to be received at the Mori onshore handling facility at 45 ksc during the initial 3 years and at 25 ksc from the 4-7 year and at 10 ksc beyond the 8th year.
8The advantage of selecting Mori as a landfall point lies in the fact that lesser gas export line size and length is required and no compressor is required for the initial 3 years.
8Whereas new land acquisition for shore handling facilities, creation of new facilities and requirement of utilities comes on negatives for this site
8The second option is to lay a 22 inch, 48 Km long pipeline connecting NANL-3 to an shore handling facilities located at Odalarevu.
8Based on the availability of well head pressures, well fluid is planned to be received at Odalarevu at 25 ksc during the initial 7 years and at 10 ksc beyond the 8th year.
8The operational flexibility, sharing of some of the existing overhead utilities and non requirement of land acquisition makes it a better option.
8Whereas compressor requirement from 1st year onwards and additional subsea pipeline of approx. 28 Kms come as its drawbacks.
Click on our Reports section for more. Details
8One option to evacuate the well fluid gathered at NANL-3 to the nearest landfall point is through an 18 inch 20 km flow line.
8Based on the availability of well head pressures, well fluid is planned to be received at the Mori onshore handling facility at 45 ksc during the initial 3 years and at 25 ksc from the 4-7 year and at 10 ksc beyond the 8th year.
8The advantage of selecting Mori as a landfall point lies in the fact that lesser gas export line size and length is required and no compressor is required for the initial 3 years.
8Whereas new land acquisition for shore handling facilities, creation of new facilities and requirement of utilities comes on negatives for this site
8The second option is to lay a 22 inch, 48 Km long pipeline connecting NANL-3 to an shore handling facilities located at Odalarevu.
8Based on the availability of well head pressures, well fluid is planned to be received at Odalarevu at 25 ksc during the initial 7 years and at 10 ksc beyond the 8th year.
8The operational flexibility, sharing of some of the existing overhead utilities and non requirement of land acquisition makes it a better option.
8Whereas compressor requirement from 1st year onwards and additional subsea pipeline of approx. 28 Kms come as its drawbacks.
Click on our Reports section for more. Details
For our readers, the website carries here the following details of the joint development programe:
8Names of well platforms and wells along with their coordinates
8Distance and infill sizes of fuel lines and gas lines
8Well-wise water depths
8Details of infill infrastructure
8Facilities at the well platforms
8Details of the onshore facilities individually in the new onshore facilities
8Pros and Cons of onshore facilities in the two sites
8Gas handling facilities
8Schematic depiction of the development plans
Click on Reports for more Details
8Names of well platforms and wells along with their coordinates
8Distance and infill sizes of fuel lines and gas lines
8Well-wise water depths
8Details of infill infrastructure
8Facilities at the well platforms
8Details of the onshore facilities individually in the new onshore facilities
8Pros and Cons of onshore facilities in the two sites
8Gas handling facilities
8Schematic depiction of the development plans
Click on Reports for more Details
As reported by the website on Monday, there is a marked slow down in private sector investment in the Indian economy and the gap should be filled by public sector investment if the economy is to move on at a rapid pace.
8The same story holds true in the oil and gas sector, where almost all investments will come from the public sector companies and not from the private sector for some time to come.
The immediate big ticket investments are:
8Rs 53,000 crore investment by ONGC in the KG-DWN-98/2 block
8Rs 3000 crore investment in the KG-OSN-2004/1 and GS-49-2 blocks
8Rs 80,000 crore refinery upgradation plan to meet fuel emission norms
8Rs 5000 crore terminal in Ennore by IOC
A set of big projects are in the pipeline, including:
8A possible Rs 60,000 crore refinery to be built by IOC, BPCL and HPCL in Ratnagiri
8Rs 37,000 crore Rajasthan refinery by HPCL
8There are a host of other projects too.
8A look at the investment plans of all public sector PSUs show that each of them have large capex plans
Click on Reports for more. Details
8The same story holds true in the oil and gas sector, where almost all investments will come from the public sector companies and not from the private sector for some time to come.
The immediate big ticket investments are:
8Rs 53,000 crore investment by ONGC in the KG-DWN-98/2 block
8Rs 3000 crore investment in the KG-OSN-2004/1 and GS-49-2 blocks
8Rs 80,000 crore refinery upgradation plan to meet fuel emission norms
8Rs 5000 crore terminal in Ennore by IOC
A set of big projects are in the pipeline, including:
8A possible Rs 60,000 crore refinery to be built by IOC, BPCL and HPCL in Ratnagiri
8Rs 37,000 crore Rajasthan refinery by HPCL
8There are a host of other projects too.
8A look at the investment plans of all public sector PSUs show that each of them have large capex plans
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All kinds of geopolitical factors are at work when it comes to the Turkmenistan-Afghanistan-Pakistan-India gas pipeline.
8The latest is that the Japanese have stepped in to push the pipeline -- as a counter weight to China -- but it is doing so very quietly.
8Recently, Japanese Prime Minister Shinzo Abe paid a significant visit to Central Asia meeting, among others, with Turkmenistan leaders.
8He was accompanied with a business delegation. Contracts worth $18 billion were signed between Japan and Turkmenistan.
8A good chunk of this money will go into developing the Galkynysh gas field, the second largest gas field in the world, which is meant to feed gas to the TAPI pipeline.
8Turkmenistan has signed agreements with Japanese companies to develop this field.
8Japan wants the TAPI pipeline to work as it will ease Turkmenistan's dangerous dependency on China, which currently seems to have a stranglehold on the country's gas supply contracts.
8Turkmenistan is keen to find an escape route from its gas supply contracts with Russia and China and it sees the building of TAPI pipeline as a way out.
8Japan and India work together to contain China but they do this quietly so as not to upset the dragon.
8In the long run, Japan also sees the possibility of bringing gas to Indian ports via a pipeline from Turkmenistan for onward transmission to Japan through liquefaction terminals.
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8The latest is that the Japanese have stepped in to push the pipeline -- as a counter weight to China -- but it is doing so very quietly.
8Recently, Japanese Prime Minister Shinzo Abe paid a significant visit to Central Asia meeting, among others, with Turkmenistan leaders.
8He was accompanied with a business delegation. Contracts worth $18 billion were signed between Japan and Turkmenistan.
8A good chunk of this money will go into developing the Galkynysh gas field, the second largest gas field in the world, which is meant to feed gas to the TAPI pipeline.
8Turkmenistan has signed agreements with Japanese companies to develop this field.
8Japan wants the TAPI pipeline to work as it will ease Turkmenistan's dangerous dependency on China, which currently seems to have a stranglehold on the country's gas supply contracts.
8Turkmenistan is keen to find an escape route from its gas supply contracts with Russia and China and it sees the building of TAPI pipeline as a way out.
8Japan and India work together to contain China but they do this quietly so as not to upset the dragon.
8In the long run, Japan also sees the possibility of bringing gas to Indian ports via a pipeline from Turkmenistan for onward transmission to Japan through liquefaction terminals.
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Here are some of the other geopolitical developments around the pipeline.
More than anyone else, it is Turkmenistan which is interested in building the pipeline in order to get away from being dependent on China and Russia as buyers for its gas. This is because both these countries have their own games to play. Russia has already cut its purchase of gas from Turkmenistan by half. There are also worries that Russia's $400 billion gas sharing deal with China may leave Turkmenistan high and dry sometime in the future.
Then again, Kazakhstan, another significant energy producer, has recently shown interest in joining the TAPI pipeline as a supplier of gas. Joining of Kazakhstan will only make the pipeline more feasible.
The security situation in Afghanistan is considered a challenge for the implementation of TAPI pipeline. One factor that is favourable is that US forces have slowed down their withdrawal from Afghanistan and the two countries have signed a long-term security agreement. American forces on the ground will ensure a more conducive environment in which to build the pipeline and provide adequate security to it.
Pakistan is a stakeholder in the pipeline and it sees an economic interest in buying it. The Pakistani power ministry has reportedly said that it will use its influence over the Afghan Taliban to ensure TAPI’s security.
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More than anyone else, it is Turkmenistan which is interested in building the pipeline in order to get away from being dependent on China and Russia as buyers for its gas. This is because both these countries have their own games to play. Russia has already cut its purchase of gas from Turkmenistan by half. There are also worries that Russia's $400 billion gas sharing deal with China may leave Turkmenistan high and dry sometime in the future.
Then again, Kazakhstan, another significant energy producer, has recently shown interest in joining the TAPI pipeline as a supplier of gas. Joining of Kazakhstan will only make the pipeline more feasible.
The security situation in Afghanistan is considered a challenge for the implementation of TAPI pipeline. One factor that is favourable is that US forces have slowed down their withdrawal from Afghanistan and the two countries have signed a long-term security agreement. American forces on the ground will ensure a more conducive environment in which to build the pipeline and provide adequate security to it.
Pakistan is a stakeholder in the pipeline and it sees an economic interest in buying it. The Pakistani power ministry has reportedly said that it will use its influence over the Afghan Taliban to ensure TAPI’s security.
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IOC had always wanted to hit it big in the gas supply business. And is now well on its way to doing so.
8The company has entered into a firm GSPA with Petronet LNG Ltd for an extra 0.3 MMTPA of LNG beginning January, 2015.
8This is in addition to the existing long term GSPA of 2.25 MMTPA executed in September, 2003.
8The extra LNG comes to PLL from RasGas in Qatar, which has signed up to supply an additional 1 MMTPA of LNG on top of the earlier purchase agreement for 7.5 MMTPA.
8The pricing terms for supply of the extra 1 MMTPA of gas are on a different set of parameters from that of the 7.5 MMTPA that was already on a long term contract and whose pricing too has been readjusted in consonance with ground realities.
8Clearly, Qatar brought down the price of LNG as it was worried about losing the Indian market to other international players.
8The glut in the LNG supply market, with aggressive new players entering the market, pushed Qatar to halve the price of LNG while pushing the Indian side to buy an extra 1 MMTPA on term basis on easier terms.
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8The company has entered into a firm GSPA with Petronet LNG Ltd for an extra 0.3 MMTPA of LNG beginning January, 2015.
8This is in addition to the existing long term GSPA of 2.25 MMTPA executed in September, 2003.
8The extra LNG comes to PLL from RasGas in Qatar, which has signed up to supply an additional 1 MMTPA of LNG on top of the earlier purchase agreement for 7.5 MMTPA.
8The pricing terms for supply of the extra 1 MMTPA of gas are on a different set of parameters from that of the 7.5 MMTPA that was already on a long term contract and whose pricing too has been readjusted in consonance with ground realities.
8Clearly, Qatar brought down the price of LNG as it was worried about losing the Indian market to other international players.
8The glut in the LNG supply market, with aggressive new players entering the market, pushed Qatar to halve the price of LNG while pushing the Indian side to buy an extra 1 MMTPA on term basis on easier terms.
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In today's depressed oil and gas environment, Aegis Logistics Ltd has drawn up a Rs 400 crore plan to set up a "necklace" of LPG, liquid POL products, petrochemical and chemical terminals around India's coast line
8The plans are to spend Rs 400 crore within the next 18-24 months in Pipavav, Kochi and Haldia to set up additional facilities.
8The company has already set up India's largest integrated bulk liquid cum LPG terminal in Mumbai and also the largest private bulk iiquid terminal at Kochi port.
8The other facilities include a liquid and pressurized LPG storage terminal at Pipavav, a liquid bulk storage terminal at Haldia and an LPG bottling and blending unit at Kheda, Gujarat.
Click on Reports for more on what the company is immediately looking to do. Details
8The plans are to spend Rs 400 crore within the next 18-24 months in Pipavav, Kochi and Haldia to set up additional facilities.
8The company has already set up India's largest integrated bulk liquid cum LPG terminal in Mumbai and also the largest private bulk iiquid terminal at Kochi port.
8The other facilities include a liquid and pressurized LPG storage terminal at Pipavav, a liquid bulk storage terminal at Haldia and an LPG bottling and blending unit at Kheda, Gujarat.
Click on Reports for more on what the company is immediately looking to do. Details
Loss of lives on account of an industrial accident -- where neglect has been clearly established through the chain of command of a company -- deserves the severest of punishments.
8Yet, in India, such accidents go lightly punished. It seems only a token fine is all that is imposed.
8Clause 49 of Chapter IX of the PNGRB Act is very clear: "Every person who wilffully removes, destroyes or damages any pipeline shall for each such oiffence be punishable with imprisonment, which may extend to three years or with fine which may extend to twenty five crore rupees or with both..."
8Willful misconduct has been clearly established on the part of GAIL by an independent investigation by OISD and upheld by the PNGRB in case of the KG Basin accident. Or else a fine, even of Rs 20 lakh, would not have been imposed.
8A similar neglect or willful damage has been confirmed by AGCL as well.
The PNGRB needs to answer the following questions to everyone's satisfaction:
--Why was a civil penalty of Rs 20 lakh imposed on GAIL when the penalty should have been Rs 25 crore.
--Why were no proceedings initiated against GAIL officials right up the management chain for willful damage, when independent investigation has proved that such neglect did occur.
--Clause 50 of Chaper IX states it clearly: "Where an offence under this Act has been committed by a company, every person who at the time the offence was committed was in charge of, and was responsible to, the company for the conduct of business of the company, as well as the company, shall be deemed to be guilty of the offence and shall be liable to be proceeded against and punished accordingly.
--Why hasn't the PNGRB invoked Clause 50 of Chapter IX of the PNGRB Act as yet?
8That is the question that needs an answer.
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8Yet, in India, such accidents go lightly punished. It seems only a token fine is all that is imposed.
8Clause 49 of Chapter IX of the PNGRB Act is very clear: "Every person who wilffully removes, destroyes or damages any pipeline shall for each such oiffence be punishable with imprisonment, which may extend to three years or with fine which may extend to twenty five crore rupees or with both..."
8Willful misconduct has been clearly established on the part of GAIL by an independent investigation by OISD and upheld by the PNGRB in case of the KG Basin accident. Or else a fine, even of Rs 20 lakh, would not have been imposed.
8A similar neglect or willful damage has been confirmed by AGCL as well.
The PNGRB needs to answer the following questions to everyone's satisfaction:
--Why was a civil penalty of Rs 20 lakh imposed on GAIL when the penalty should have been Rs 25 crore.
--Why were no proceedings initiated against GAIL officials right up the management chain for willful damage, when independent investigation has proved that such neglect did occur.
--Clause 50 of Chaper IX states it clearly: "Where an offence under this Act has been committed by a company, every person who at the time the offence was committed was in charge of, and was responsible to, the company for the conduct of business of the company, as well as the company, shall be deemed to be guilty of the offence and shall be liable to be proceeded against and punished accordingly.
--Why hasn't the PNGRB invoked Clause 50 of Chapter IX of the PNGRB Act as yet?
8That is the question that needs an answer.
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There seems to be bad news ahead for the Indian economy in 2016 and beyond.
8The expectation that the Indian economy will soar after the new government is ushered has been belied.
The following factors seem to be worrisome for the economy:
8Private-sector fixed-capital investment, as a share of gross domestic product, peaked at 33.6% in 2011-12 and has since trended down to the current low of 28.7%.
8Maharashtra and Karnataka, for example, both experienced a cumulative decline of about 15% in projects; the declines in Gujarat and Tamil Nadu were sharper, at more than 20%.
8As for ‘Make in India’, the reality is that capacity creation in manufacturing has suffered a cumulative decline of 35% from its peak in 2011 till now. The cumulative decline in services is 13%.
817% of Indian bank loans are stressed, a significant share of which may not be repaid.
8External conditions will also hold down investment in 2016. The US economy has recovered, but the Chinese motor has slowed markedly, and growth in Japan and much of Europe remains sluggish. That inevitably means fewer incentives in India to invest in export-oriented sectors.
8But, whatever the state of the global economy, the bottom line is that India cannot attain its potential without a strong revival in investment. If the economy is to achieve the double-digit growth rates that China once boasted, India will need to build much more production capacity and infrastructure.
8The solution cannot be to focus primarily on public sector investment or to woo foreign investors, which is the policymakers' current approach.
8When India's economy was growing at 8 to 9 per cent during the boom years of the last decade, its exports were surging at an annual pace of 25 per cent. No economy has sustained an expansion of 8 per cent without a major contribution from export growth. With India's exports estimated to have fallen by 5 per cent in 2015, the economy is currently expanding at a 5 to 6 per cent pace (as opposed to the 7 to 8 per cent growth claimed by official data)
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8The expectation that the Indian economy will soar after the new government is ushered has been belied.
The following factors seem to be worrisome for the economy:
8Private-sector fixed-capital investment, as a share of gross domestic product, peaked at 33.6% in 2011-12 and has since trended down to the current low of 28.7%.
8Maharashtra and Karnataka, for example, both experienced a cumulative decline of about 15% in projects; the declines in Gujarat and Tamil Nadu were sharper, at more than 20%.
8As for ‘Make in India’, the reality is that capacity creation in manufacturing has suffered a cumulative decline of 35% from its peak in 2011 till now. The cumulative decline in services is 13%.
817% of Indian bank loans are stressed, a significant share of which may not be repaid.
8External conditions will also hold down investment in 2016. The US economy has recovered, but the Chinese motor has slowed markedly, and growth in Japan and much of Europe remains sluggish. That inevitably means fewer incentives in India to invest in export-oriented sectors.
8But, whatever the state of the global economy, the bottom line is that India cannot attain its potential without a strong revival in investment. If the economy is to achieve the double-digit growth rates that China once boasted, India will need to build much more production capacity and infrastructure.
8The solution cannot be to focus primarily on public sector investment or to woo foreign investors, which is the policymakers' current approach.
8When India's economy was growing at 8 to 9 per cent during the boom years of the last decade, its exports were surging at an annual pace of 25 per cent. No economy has sustained an expansion of 8 per cent without a major contribution from export growth. With India's exports estimated to have fallen by 5 per cent in 2015, the economy is currently expanding at a 5 to 6 per cent pace (as opposed to the 7 to 8 per cent growth claimed by official data)
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A number of other projects are currently under implementation in the refinery. The cost totals up to Rs. 3650 crore.
8To improve the distillate yield in CPCL's Manali refinery, a Residual Upgradation Project is under implementation with an estimated cost of Rs 3110.36 crore.
8This project involves installation of a Delayed Coker Unit and revamping of the existing hydrocracker unit along with other associated facilities. The project is under implementation.
8As a risk reduction measure and in order to provide an intrinsically passive and safe environment, a Mounded Bullet Project is also under implementation for LPG and petrochemical feed stock storage at an estimated cost of Rs 279 Crores.
8A new 42 “ Crude Oil Pipeline Project, from the Chennai Port to the Manali Refinery, with enhanced safety features, is also being planned to ensure reliable and fast crude transfer from the port to the refinery. The estimated cost of the project is Rs. 257.87crore.
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8To improve the distillate yield in CPCL's Manali refinery, a Residual Upgradation Project is under implementation with an estimated cost of Rs 3110.36 crore.
8This project involves installation of a Delayed Coker Unit and revamping of the existing hydrocracker unit along with other associated facilities. The project is under implementation.
8As a risk reduction measure and in order to provide an intrinsically passive and safe environment, a Mounded Bullet Project is also under implementation for LPG and petrochemical feed stock storage at an estimated cost of Rs 279 Crores.
8A new 42 “ Crude Oil Pipeline Project, from the Chennai Port to the Manali Refinery, with enhanced safety features, is also being planned to ensure reliable and fast crude transfer from the port to the refinery. The estimated cost of the project is Rs. 257.87crore.
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The PNGRB last week imposed a fine of Rs two lakh on state owned Assam Gas Company Ltd (AGCL) for gross negligence in pipeline upkeep that lead to the loss of seven lives in Assam in September, 2014.
8The regulator noted that the fault for the blast was entirely on account of AGCL.
The company itself has admitted to the following lapses:
--The pipeline was carrying wet gas without provision for removal of water and condensate
--The pipeline network did not have pigging facilities
--The PESO approval for continuing pipeline operations was not taken
--The company did not have important documents such as the pipebook and as built drawings
--It failed to comply with recommendations of third party inspection agency
--It continued operations of the network without a proper health assessment.
8In other words, AGCL took full responsibility for the blast
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8The regulator noted that the fault for the blast was entirely on account of AGCL.
The company itself has admitted to the following lapses:
--The pipeline was carrying wet gas without provision for removal of water and condensate
--The pipeline network did not have pigging facilities
--The PESO approval for continuing pipeline operations was not taken
--The company did not have important documents such as the pipebook and as built drawings
--It failed to comply with recommendations of third party inspection agency
--It continued operations of the network without a proper health assessment.
8In other words, AGCL took full responsibility for the blast
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The website does not understand how the PNGRB could impose a token penalty of Rs two lakh on AGCL when seven lives were loss on account of gross and deliberate negligence in the maintenance of its pipeline network in Assam.
8Is this meant to be just a light rap on the knuckles for bad conduct?
8Can such a small penalty serve as a dis-incentive for a pipeline company?
8Section 28 of the PNGRB provides for a maximum civil penalty of Rs one crore for a transgression
8In this context, what yardstick was used to impose a penalty of Rs two lakh only? If loss of seven lives is equivalent to a civil penalty of Rs two lakh, will a one crore penalty require the death of 350 people in an industrial disaster?
8The PNGRB had imposed a civil penalty of Rs 20 lakh on GAIL when 22 people lost their lives on June 27, 2014 after a blast took place in the gas major's pipeline network in the KG Basin. What is even more galling is the fact that GAIL has contested the Rs 20 lakh penalty on the ground that the regulator is not authorized to impose such a penalty.
8Is the imposition of a Rs two lakh fine, in some grotesque manner, proportional to the number of people killed in Assam, for it that is so, the penalty should have been slightly higher.
8The penalties, according to the regulator, are imposed as per the networth of the company. If so, what kind of a networth will be needed to impose a civil penalty amounting to Rs one crore?
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8Is this meant to be just a light rap on the knuckles for bad conduct?
8Can such a small penalty serve as a dis-incentive for a pipeline company?
8Section 28 of the PNGRB provides for a maximum civil penalty of Rs one crore for a transgression
8In this context, what yardstick was used to impose a penalty of Rs two lakh only? If loss of seven lives is equivalent to a civil penalty of Rs two lakh, will a one crore penalty require the death of 350 people in an industrial disaster?
8The PNGRB had imposed a civil penalty of Rs 20 lakh on GAIL when 22 people lost their lives on June 27, 2014 after a blast took place in the gas major's pipeline network in the KG Basin. What is even more galling is the fact that GAIL has contested the Rs 20 lakh penalty on the ground that the regulator is not authorized to impose such a penalty.
8Is the imposition of a Rs two lakh fine, in some grotesque manner, proportional to the number of people killed in Assam, for it that is so, the penalty should have been slightly higher.
8The penalties, according to the regulator, are imposed as per the networth of the company. If so, what kind of a networth will be needed to impose a civil penalty amounting to Rs one crore?
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Life is cheap in India and nothing underscores that more than the Rs 20 lakh fine imposed on GAIL for the pipeline blast that took the llives of 22 people on June 27, 2014.
8All of them died while they were still sleeping on account of gross negligence by GAIL and its management.
8This has been established beyond doubt by the PNGRB itself but even then the regulator has refused to take action as per Chapter IX of the Act.
8This gross of act of negligence must be subjecedt to scrutiny not just by the judicial system but also by a Parliamentary Committee.
8It has been established that GAIL knew about the precarious condition of the pipeline and yet done nothing to repair it.
8The gas major was found to be repairing the pipeline on a regular basis using only temporary measures.
The pipeline was designed for dry gas while wet gas was allowed to be ferried
8A dehydration plant was meant to be set up but never was.
8There were suggestions made to use a corrosion inhibitor but that was ignored by GAIL
8Scrapper pigging was not carried out in the pipeline even though this was essential to take out water and condensate
8No procedures were laid down on how temporary repairs should be carried out and this was the main reason why the blast occurred.
8A rig residue analysis, which is important to understand the health of a pipeline system, was never carried out
8Worst was that the command control structure that was an essential part of the safety regulations was there only on paper.
8What were the consequences: 22 innocent people were burnt to death in their sleep and many more were injured?
8What action action was taken against the management of GAIL? Nothing at all!
8Did anyone go to jail for loss of lives on account of willful neglect? No!
8Was there a criminal charge on any GAIL official for loss of lives? No!
8Was anyone punished or sacked? No!
8This incident and its aftermath is a telling commentary on how the oil and gas industry functions in India.
8And government needs to fix this anomaly with utmost urgency.
Click Reports section for more Details
8All of them died while they were still sleeping on account of gross negligence by GAIL and its management.
8This has been established beyond doubt by the PNGRB itself but even then the regulator has refused to take action as per Chapter IX of the Act.
8This gross of act of negligence must be subjecedt to scrutiny not just by the judicial system but also by a Parliamentary Committee.
8It has been established that GAIL knew about the precarious condition of the pipeline and yet done nothing to repair it.
8The gas major was found to be repairing the pipeline on a regular basis using only temporary measures.
The pipeline was designed for dry gas while wet gas was allowed to be ferried
8A dehydration plant was meant to be set up but never was.
8There were suggestions made to use a corrosion inhibitor but that was ignored by GAIL
8Scrapper pigging was not carried out in the pipeline even though this was essential to take out water and condensate
8No procedures were laid down on how temporary repairs should be carried out and this was the main reason why the blast occurred.
8A rig residue analysis, which is important to understand the health of a pipeline system, was never carried out
8Worst was that the command control structure that was an essential part of the safety regulations was there only on paper.
8What were the consequences: 22 innocent people were burnt to death in their sleep and many more were injured?
8What action action was taken against the management of GAIL? Nothing at all!
8Did anyone go to jail for loss of lives on account of willful neglect? No!
8Was there a criminal charge on any GAIL official for loss of lives? No!
8Was anyone punished or sacked? No!
8This incident and its aftermath is a telling commentary on how the oil and gas industry functions in India.
8And government needs to fix this anomaly with utmost urgency.
Click Reports section for more Details
A fresh paper on global natural gas pricing has established that obstacles to international trade in LNG are weakening rapidly.
8In addition, natural gas markets are thickening, thereby reducing transaction costs.
8A new regression model establishes that the volume of international trade in natural gas would more than double if all obstacles to trade were eliminated.
8Consumption would increase slightly in countries with no current natural gas consumption, rising from 0 to 2.0 percent of world consumption.
8However, the bulk of the consumption increase would occur in large economies that already have to import most of their natural gas. Their share of world gas consumption increases from 64.4 to 72.2 percent.
8The countries with the largest increase in net exports will be the United States (up 8,250 billion cubic feet (bcf)), Russia (7,872 bcf), and Iran (4,600 bcf), and the countries with the largest increase in net imports will be China (10,466 bcf), Japan (2,190 bcf), and Germany (2,170 bcf).
8Several countries shift from net importer of gas to net exporter, including Argentina, Kuwait, Mexico, Thailand, Ukraine, the United Arab Emirates, the United States, and Venezuela.
8On the other hand, Colombia, Denmark, and Kazakhstan shift from being a net exporter to a net importer.
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8In addition, natural gas markets are thickening, thereby reducing transaction costs.
8A new regression model establishes that the volume of international trade in natural gas would more than double if all obstacles to trade were eliminated.
8Consumption would increase slightly in countries with no current natural gas consumption, rising from 0 to 2.0 percent of world consumption.
8However, the bulk of the consumption increase would occur in large economies that already have to import most of their natural gas. Their share of world gas consumption increases from 64.4 to 72.2 percent.
8The countries with the largest increase in net exports will be the United States (up 8,250 billion cubic feet (bcf)), Russia (7,872 bcf), and Iran (4,600 bcf), and the countries with the largest increase in net imports will be China (10,466 bcf), Japan (2,190 bcf), and Germany (2,170 bcf).
8Several countries shift from net importer of gas to net exporter, including Argentina, Kuwait, Mexico, Thailand, Ukraine, the United Arab Emirates, the United States, and Venezuela.
8On the other hand, Colombia, Denmark, and Kazakhstan shift from being a net exporter to a net importer.
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LNG contracting is under going a sea change and this is helping to raise price competition in global markets.
8Spot and short-term contracts have increased from 5 percent of total LNG trade in 2000 to 27 percent in 2014, and their prevalence is predicted to continue to increase.
8Nonetheless, there is a glut of tankers and ongoing shipbuilding is expected to further increase oversupply until at least 2017, when Australian and U.S. exports are forecast to ramp up.
8Both of these situations lead to a thicker LNG market which, when combined with a demand by importers for shorter contract durations, further lowers the barriers to entry for LNG traders.
8In addition to the increased prevalence of short-term contracts, long-term contracts are becoming more flexible in terms of their destination, quantities purchased, pricing, and price review provisions.
8This flexibility has allowed Middle East gas headed to Europe to instead be diverted to the currently much higher priced Asian-Pacific countries.
8While these trends are leading towards convergence in natural gas prices, it may still be many years before everything is evens out.
8For example, it is predicted that the price of Japanese natural gas will fall from 4.4 times the U.S. price in 2013 but still be 1.9 times the U.S. price by 2040.
8Market liberalization (which is only a part of eliminating trade obstacles) was a slow process: in the United States and the United Kingdom, the transition from regulatory pricing and long-term contracts to market-based pricing took many years.
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8Spot and short-term contracts have increased from 5 percent of total LNG trade in 2000 to 27 percent in 2014, and their prevalence is predicted to continue to increase.
8Nonetheless, there is a glut of tankers and ongoing shipbuilding is expected to further increase oversupply until at least 2017, when Australian and U.S. exports are forecast to ramp up.
8Both of these situations lead to a thicker LNG market which, when combined with a demand by importers for shorter contract durations, further lowers the barriers to entry for LNG traders.
8In addition to the increased prevalence of short-term contracts, long-term contracts are becoming more flexible in terms of their destination, quantities purchased, pricing, and price review provisions.
8This flexibility has allowed Middle East gas headed to Europe to instead be diverted to the currently much higher priced Asian-Pacific countries.
8While these trends are leading towards convergence in natural gas prices, it may still be many years before everything is evens out.
8For example, it is predicted that the price of Japanese natural gas will fall from 4.4 times the U.S. price in 2013 but still be 1.9 times the U.S. price by 2040.
8Market liberalization (which is only a part of eliminating trade obstacles) was a slow process: in the United States and the United Kingdom, the transition from regulatory pricing and long-term contracts to market-based pricing took many years.
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ONGC has proposed to drill additional five exploratory wells in the Sivasagar district of Assam apart from its ongoing drilling campaign in the region, at a cost of Rs 270.72 crore.
8ONGC has been actively pursuing hydrocarbon exploration and production is Sivasagar for more than six decades and it believes that there is still a lot of reserves locked up in the sub-surface structures.
8A total of 5.64 MMT of Initially In place (IIP) hydrocarbons are envisaged from this project.
8The wells have been finalized after detailed in-house interpretation of 3D-seismic data, inputs from nearby wells and other G&G data using the latest interpretation software.
8The new locations -- dubbed as RNRS-6, RCH-49, RMH-5, RLKM-11 and RPD-10—will be drilled in North Rudrasagar, Charali, Lakwa, Laiplingaon-Extension PML and Sivasagar PEL respectively.
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8ONGC has been actively pursuing hydrocarbon exploration and production is Sivasagar for more than six decades and it believes that there is still a lot of reserves locked up in the sub-surface structures.
8A total of 5.64 MMT of Initially In place (IIP) hydrocarbons are envisaged from this project.
8The wells have been finalized after detailed in-house interpretation of 3D-seismic data, inputs from nearby wells and other G&G data using the latest interpretation software.
8The new locations -- dubbed as RNRS-6, RCH-49, RMH-5, RLKM-11 and RPD-10—will be drilled in North Rudrasagar, Charali, Lakwa, Laiplingaon-Extension PML and Sivasagar PEL respectively.
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The main area of attention in the drilling programme is the North Rudrasagar PML, which remains ONGC's most important oil producing field in Assam. The area of this lease is 149 square kilometers.
8This PML area forms a part of North Assam shelf and is valid upto its validity extends to January, 2026.
8This area is highly prospective for hydrocarbon exploration where oil and gas have been previously discovered, it is currently producing from the Sylhet and Tura Formations of Palaeocene to Lower Eocene.
8However some sub-surface structures within the PML are still unexplored and have untapped hydrocarbon potentials.
8One location NRAA has been planned to exploring these pools.
8The Charali PML is another oil producing field with an area of 51.63 square kilometers, it has a PML validity up to March, 2019
8This field has been producing hydrocarbon from the the Barail reservoirs (BMS and BCS) of Oligocene age and Tipam reservoirs of Miocene age.
8One exploratory well location, dubbed CHAS, is planned to be drilled to explore the Barails and Pre-Barail Sylhet and Tura reservoirs.
Click on our Reports section for more. Details
8This PML area forms a part of North Assam shelf and is valid upto its validity extends to January, 2026.
8This area is highly prospective for hydrocarbon exploration where oil and gas have been previously discovered, it is currently producing from the Sylhet and Tura Formations of Palaeocene to Lower Eocene.
8However some sub-surface structures within the PML are still unexplored and have untapped hydrocarbon potentials.
8One location NRAA has been planned to exploring these pools.
8The Charali PML is another oil producing field with an area of 51.63 square kilometers, it has a PML validity up to March, 2019
8This field has been producing hydrocarbon from the the Barail reservoirs (BMS and BCS) of Oligocene age and Tipam reservoirs of Miocene age.
8One exploratory well location, dubbed CHAS, is planned to be drilled to explore the Barails and Pre-Barail Sylhet and Tura reservoirs.
Click on our Reports section for more. Details
The Lakwa and Laiplingaon Extension PMLs are other important oil producing fields of ONGC with an area of 172.49 square kilometers and 26 square kilometers respectively.
8These PML areas form the part of North Assam shelf and has been producing hydrocarbons for more than three decades from Barails and Tipams formations.
8A 20 years lead has has been obtained which a validity upto 2028
8So far, 681 wells (including exploratory and development wells) have been drilled in these mining leases with depths ranging from 2259m to as deep as 5113m.
8These PMLs are highly prospective and oil and gas have been discovered and produced from a large stratigraphic column ranging from Tura to Girujan formations.
8However there are sub-surface structures which still have untapped hydrocarbons and two locations, MHAE and LKBE, are planned for exploration of these pools.
8Then again in the Panidihing PML, the 20.65 sq km area has a lease validity up to 2024.
8Exploratory well location PDAK has been planned to drill in this area with an objective to explore Pre-Barail Tura, Sylhet Formations and Basement.
Click on our Reports section for more. Details
8These PML areas form the part of North Assam shelf and has been producing hydrocarbons for more than three decades from Barails and Tipams formations.
8A 20 years lead has has been obtained which a validity upto 2028
8So far, 681 wells (including exploratory and development wells) have been drilled in these mining leases with depths ranging from 2259m to as deep as 5113m.
8These PMLs are highly prospective and oil and gas have been discovered and produced from a large stratigraphic column ranging from Tura to Girujan formations.
8However there are sub-surface structures which still have untapped hydrocarbons and two locations, MHAE and LKBE, are planned for exploration of these pools.
8Then again in the Panidihing PML, the 20.65 sq km area has a lease validity up to 2024.
8Exploratory well location PDAK has been planned to drill in this area with an objective to explore Pre-Barail Tura, Sylhet Formations and Basement.
Click on our Reports section for more. Details
Drilling operations will be carried out using an onland drilling unit
8The rig will be provided with solids handling system comprising of shale shakers (1200 GPM), de-sander (1200 GPM) and de-silter (1200 GPM) and a degasser with a vacuum pump.
8The well depths may range from 3775 to 4900 meters, however variation in depths may be possible due to inherent geological uncertainties of exploratory wells.
8The power requirement of the drilling rig will be met by using four diesel generator sets with a diesel consumption of about 4.8 KL/day.
8Each drill site requires around 1.96 hectares of land (140m x 140m).
8Only water based drilling mud will be used for the drilling operations.
8The drilling will continue for about 6-9 months for each well, depending on target depth.
Click on our Reports section for more. Details
8The rig will be provided with solids handling system comprising of shale shakers (1200 GPM), de-sander (1200 GPM) and de-silter (1200 GPM) and a degasser with a vacuum pump.
8The well depths may range from 3775 to 4900 meters, however variation in depths may be possible due to inherent geological uncertainties of exploratory wells.
8The power requirement of the drilling rig will be met by using four diesel generator sets with a diesel consumption of about 4.8 KL/day.
8Each drill site requires around 1.96 hectares of land (140m x 140m).
8Only water based drilling mud will be used for the drilling operations.
8The drilling will continue for about 6-9 months for each well, depending on target depth.
Click on our Reports section for more. Details
Chennai Petroleum Corporation Limited (CPCL) is planning to invest Rs. 350.33 crore to upgrade and revamp its existing Diesel Hydro De-Sulphurisation (DHDS) unit to meet BS IV and BS-V standards.
8The proposed DHDS will also entail the raising of the throughput from 1.80 MMTPA to 2.34 MMTPA.
8The revamp will also treat Straight Run VGO with a capacity of 0.5 MMTPA.
8The DHDS unit is proposed to be revamped to meet the new specifications for diesel as outlined in the revised “Auto Fuel Vision and Policy” .
8Presently the BS-IV specification diesel with sulphur content of 350 ppm wt is being supplied to major cities and BS-III specification diesel with sulphur content of 50 ppm wt is being supplied to rest of the country.
8As per AFV recommendation, 100% BS-IV specification fuels have to be supplied by 1st April 2017 and 100% BS-V specification fuels by 1st April 2020.
8The construction will be carried out in different phases spanning a period of 10 to 12 months.
Click on our Reports section for more. Details
8The proposed DHDS will also entail the raising of the throughput from 1.80 MMTPA to 2.34 MMTPA.
8The revamp will also treat Straight Run VGO with a capacity of 0.5 MMTPA.
8The DHDS unit is proposed to be revamped to meet the new specifications for diesel as outlined in the revised “Auto Fuel Vision and Policy” .
8Presently the BS-IV specification diesel with sulphur content of 350 ppm wt is being supplied to major cities and BS-III specification diesel with sulphur content of 50 ppm wt is being supplied to rest of the country.
8As per AFV recommendation, 100% BS-IV specification fuels have to be supplied by 1st April 2017 and 100% BS-V specification fuels by 1st April 2020.
8The construction will be carried out in different phases spanning a period of 10 to 12 months.
Click on our Reports section for more. Details
This DHDS revamp will also help reduce the emission of sulphur into the atmosphere.
8The main objectives of the revamp are as follows:-
-- To increase the capacity by 30 percent.
-- To include the Delayed Coker Unit (DCU) streams into the feed
-- To produce treated diesel, meeting BS-V norms (10 wt ppm. Sulphur).
8The existing DHDS is designed for treating afeed consisting of Straight Run Gas Oil, Light Vacuum Gas Oil, Spindle Oil and FCCUs LCO.
8The revamped DHDS will be capable of processing additional cracked gas oils and naphtha produced from the DCU.
Click on our Reports section for more. Details
8The main objectives of the revamp are as follows:-
-- To increase the capacity by 30 percent.
-- To include the Delayed Coker Unit (DCU) streams into the feed
-- To produce treated diesel, meeting BS-V norms (10 wt ppm. Sulphur).
8The existing DHDS is designed for treating afeed consisting of Straight Run Gas Oil, Light Vacuum Gas Oil, Spindle Oil and FCCUs LCO.
8The revamped DHDS will be capable of processing additional cracked gas oils and naphtha produced from the DCU.
Click on our Reports section for more. Details
The expansion scope mainly involves replacement of an existing reactor with a new reactor and the addition of a hot separator drum, stabilizer reflux drum, stripper air condenser, feed exchanger and naphtha recycle reflex pumps.
8Off-site requirements will be met by existing units which have enough capacity margins to support the proposed expansion.
8The proposed capacity expansion does not require any new process or new raw materials.
8The existing effluent treatment plant and other treatment systems have adequate design capabilities to handle the additional pollutant loads from expansion as there are no changes in characteristics.
Click on our Reports section for more. Details
8Off-site requirements will be met by existing units which have enough capacity margins to support the proposed expansion.
8The proposed capacity expansion does not require any new process or new raw materials.
8The existing effluent treatment plant and other treatment systems have adequate design capabilities to handle the additional pollutant loads from expansion as there are no changes in characteristics.
Click on our Reports section for more. Details
As we ring in the new year, we extend our gratitude to all our well wishers, associates and friends for being with us through the past year and its challenges.
8We have had a fruitful year and a very enthusiastic response from our readers.
8Our mailers are widely read and on an average count, they reach around 20,000 viewers five days a week.
8Our subscription base now includes hundreds of companies, made up of multinationals as well as public and private sector companies.
8We have built our equity with diligent work and perseverance and we are aware that our readers know and acknowledge that.
8Our website is viewed by policy makers, industry representatives, suppliers of goods & services, global raw material and finished product suppliers and the media.
8Understandably, what we write has always been taken seriously by policy makers and industry leaders.
8We support the government in its endeavor to rejuvenate the industry through new policies and initiatives while retaining our independence as a credible voice that speaks up for every stakeholder.
8Our standards of reportage are impeccable and we guarantee 100 per cent accuracy of the information we publish. We validate our news and analyses from multiple sources
8Moreover the information we curate and garner for you is from authentic, bonafide and legitimate sources and our advantage remains our ability to analyze data and put it up in a reader friendly format. We do not violate any rule of confidentiality either of companies or of the government.
8We are going to bring out more products in the new year, including a sophisticated software based business opportunities projection tool which is currently under testing. The software will project future RFQ dates and key contracts for equipment and services in the oil & gas, power and fertilizer sector.
8We deeply appreciate your support and good will in our constant endeavour to bring you the best critical intelligence in the segments that we operate.
8Wishing you a very happy and bright new year! Details
8We have had a fruitful year and a very enthusiastic response from our readers.
8Our mailers are widely read and on an average count, they reach around 20,000 viewers five days a week.
8Our subscription base now includes hundreds of companies, made up of multinationals as well as public and private sector companies.
8We have built our equity with diligent work and perseverance and we are aware that our readers know and acknowledge that.
8Our website is viewed by policy makers, industry representatives, suppliers of goods & services, global raw material and finished product suppliers and the media.
8Understandably, what we write has always been taken seriously by policy makers and industry leaders.
8We support the government in its endeavor to rejuvenate the industry through new policies and initiatives while retaining our independence as a credible voice that speaks up for every stakeholder.
8Our standards of reportage are impeccable and we guarantee 100 per cent accuracy of the information we publish. We validate our news and analyses from multiple sources
8Moreover the information we curate and garner for you is from authentic, bonafide and legitimate sources and our advantage remains our ability to analyze data and put it up in a reader friendly format. We do not violate any rule of confidentiality either of companies or of the government.
8We are going to bring out more products in the new year, including a sophisticated software based business opportunities projection tool which is currently under testing. The software will project future RFQ dates and key contracts for equipment and services in the oil & gas, power and fertilizer sector.
8We deeply appreciate your support and good will in our constant endeavour to bring you the best critical intelligence in the segments that we operate.
8Wishing you a very happy and bright new year! Details
