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May 2016

With two units now at the implementation phase, there will be an incremental demand for around 5 mmscmd of gas.
8At least two more units are going to go through with capital approval either by this year end or early 2017. The government thinks there will be others as well.
8Cumulatively, if four units are put up, it will amount to around 10 mmscmd of incremental gas.
8Will GAIL have an automatic monopoly over supply of gas to these units? It looks like the gas major will retain its stranglehold.
8Like a benign godfather, it looks after the interest of the fertilizer industry. The buyers of gas are not complaining either. Take or pay provisions are usually avoided if a urea unit runs into sudden trouble and the spare gas supply is smoothened out through GAIL's inter-state network.
8It will require a concerted effort by standalone gas suppliers to wean the fertilizer industry away from the comfort of dealing with GAIL.
8GAIL has got every stakeholder in this industry pretty much under its influence.
8The inter-ministerial committee that handles the distribution of gas is happier dispensing a higher subsidy amount on higher priced long term gas than go through the trouble of buying and distributing gas from lone wolf suppliers.
8This is one cozy party into which outsiders are not welcome.
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There are many equipments which are common between the oil & gas and fertilizer industry.
8Our interactions with the petroleum industry shows that many suppliers are not tuned in to the fertilizer industry simply because demand did not exist so far and there was only the limited maintenance market to cater to.
Among the equipments required by a standard sized urea-ammonia unit are:
-- Desulphurization unit
-- Reactors
-- Compressors
-- Pumps
-- Drums
-- Towers/Columns
-- Waste heat boilers
-- Heaters
-- Furnace
-- Tanks
-- Condensers
-- Strippers
-- Absorbers
-- Mixers
-- Valves.
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8Also go to our sister website, www.indianfertilizer.com, for more information. We provide key contacts and future RFQ dates for critical equipment with advanced software tools available for the first time in India. Details
The website carries here the full details of two new fertilizer units that the government is planning to set up over and above the four that were mentioned earlier.
8Complete information is given in terms of:
8Project capacity and configuration
8Offsite and utilities (Power, steam, water, inert gas, instrument air, effluent treatment, cooling tower, safety/fire fighting, gas metering and refurbishment of non-plant building facilities).
8Commissioning time of 26 months
8Economic payback period: 6 years
8Bar chart showings project schedule
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Goaded by the government, the Indian fertilizer industry seems to have woken up from a long slumber.
8After decades of inactivity, two giant urea-ammonia complexes --each worth Rs 6000 crore -- have gone past the capital approval stage.
8The EPC contracts have been awarded, and RFQs for contractor packages have begun to come out.
8The good news is that a few more such units are going through various approval stages.
8A handful more, if not all, are going to come through.
8For those suppliers of equipment and services for the downstream oil and gas industry, the fertilizer industry has not been an area of interest so far.
8But it can well be now.
8This is because the fertilizer industry has been moribund for not just one but for more than two decades. In this period however the downstream oil and gas sector has grown rapidly.
8Clear business opportunities are available in this industry now.
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How prepared is the automobile industry in India to become BS-VI compliant by 2020?
8It is the diesel segment that will require significant technology upgradation compared to petrol vehicles.
8Overall, industry participants suggest that cost of petrol cars may increase by Rs 20,000-30,000 for a car, while the increase for diesel vehicles could be in the range of Rs. 75,000-100,000/vehicle.
8For medium and heavy vehicles, the cost is going to be higher, at around Rs. 100,000-150,000 or 10% of current vehicle cost.
8Component manufacturers suggest that while there won’t be significant changes in engine or after treatment systems to meet BS-IV norms, for BS-VI standards, the two wheeler industry will have to adopt Electronic Fuel Injection (EFI) systems,  while the exhaust systems will have to be tweaked.
8Collectively, these changes will increase cost of 2Ws by approximately Rs. 5,000-6,000 (or 10% for mid-size motorcycle).
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The full picture of how much investment will be needed by Indian public sector refineries to become BS-VI compatible is still not clear.
8But clearly this is one segment where business opportunities are available for suppliers of equipment and services.
8The website carries here an analysis of price hikes required under three different investment scenarios, starting from Rs 30,000 crore onwards.
8The price hike needed to elicit a 12% return will vary depending upon the investment involved.
8The impact could be higher for PSU refineries as they would have to incur disproportionately larger share of investments owing to the vintage nature of their plants. Comparatively, part of the capacities in the private sectors is already capable of refining high sulphur crude, which will provide them a competitive advantage.
8Given the past experience wherein refineries were allowed to pass on a limited premium, downstream RoCE could come under pressure.
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For freight rates to increase, scrapping activity needs to stay high in the years ahead since the inflow of new vessels is expected to be high while the demand outlook is weak.
8The average age of vessels scrapped is predicted to decline during 2016 and 2017.
8Fleet utilisation is expected to remain low for the next two to three years but there are hopes that it will start recovering somewhat in 2018.
8Still, much depends on the share of the orderbook that is delivered and the number of vessels scrapped.
8Demand is not expected to be strong enough to absorb all the vessels entering the fleet.
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Current freight rates show excess capacity in the shipping industry
8The strength in tanker earnings is about to disappear
8Only low bunker prices will have supporting profitability
8Second hand values remain stable
8Contracting activity seems to be finally slowing
8The majority of the order book is to be delivered in 2016
82016 will be a record year for scrappings.
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The global shipping industry is at the cusp of dramatic change and it is time for Indian companies to take notice.
The following major trends will have an impact in the future:
8The fourth industrial revolution could redesign parts of the shipping industry within a decade or two. Yet the impact of exponential technologies tends to be underestimated.
8Seaborne traffic will become less relevant for future growth of the global economy
8There will be a low future growth of seaborne traffic.
8Trade volumes will decline even as economies expand
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Niko Resources, the 10% stakeholder in the D-6 block continued to default on its loan obligations to its creditors on account of the dramatic crash in price of oil and gas.
8Creditors have taken the company to court and orders have been granted the right to creditors for "summary judgement" without specifying the amount.
8The problem is that even if the creditors were to obtain court orders, the company cannot be squeezed for money because it does not have any.
8Some of the creditors have become more pragmatic.
8The only way out is to hang in with Niko until prices improve and buyers can be found for the company's stranded assets.
8The management on its part is pushing for retaining Niko's core assets until the situation improves.
8Will the situation improve at all, or will Niko continue to default on its obligations for an interminable period of time?
8That remains a moot question.
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For reference purposes the website carries here the following tenders:
8Refurbishment & Testing of Dry Gas Seals of Recycle Gas Compressor, Panipat Refinery [IOC]  Details
8Soil Resistivity and PH Survey of pipelines, Vijaipur [GAIL]  Details
8Procurement of Flare Gas Flow Meters, Pata [GAIL]  Details
8Statutory inspection of Pressure Vessels and Health Monitoring of Plant Pipings, Vaghodia [GAIL]  Details
8Contract for supply of High Speed Diesel for a period of two years [GAIL]  Details
8Dehumidification & Temperature Control Agency for Process Columns of DCU and SRU units, Panipat Refinery [IOC]  Details
You can also click on Tenders for more
For reference purposes the website carries here the following Newsclips:
8Discovered Small Field Bidding Round to be launched on 25th May  Details
8Burning all fossil fuels would scorch Earth: Study  Details 
8BP's oil search strategy shrinks with budget cuts Details 
8Oil prices fall as Iran firm on boosting output  Details 
8Essar Oil UK reports $244 million profit  Details
8India seeks rights to operate Iran oil field Details
8Coal ministry releases Rs 677 crore as compensation to previous allottees  Details
8Government seeks bids for oil, gas fields in first auction since 2010  Details
8Adani, Ambanis biggest losers in Modi's 2 years; Tata, Bharti, Birlas top gainers  Details
8After benefits of cheap oil, India counts cost of reduced Gulf remittances  Details
8Slump in LNG prices delays production at Mozambique gas field  Details
You can also click on Newsclips for more Details
Depressed market conditions are an opportunity for operators who remain active in the deepwater segment.
8They will benefit from an oversupply of new rigs.
8With a multi-year average construction time, many offshore rigs under construction were contracted in an environment of higher oil prices.
8Considering the overabundance of new rigs, rig day rates are likely to be depressed until the supply overhang is absorbed.
8In addition, declining rig utilization and supply costs will lower operation costs and provide incentives for rigs to stay in operation.
8Day rates for contractors have dropped 20 to 40 percent globally, as have a drop in the global commodities market, including steel.
8Though cost savings vary by region, major markets have seen their development forward breakeven points drop between 7 and 21 percent.
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ONGC  is spending Rs 34.000 crore in the next three years in KG-DWN-98/2 and RIL too is lining up more investments in new discoveries in the KG Basin.
8Yet India does not figure as a big destination for offshore deepwater oil and gas manufacturing industry.
8There are other destinations which are more important than India.
8Globally, this segment has suffered an investment loss of  $213 billion and more cut backs are expected in 2016.
8The cut backs are having an impact that is certainly not insignificant.
8In 2015, for example, Brazil sold only 37 of the 266 blocks it made available.
8Find out the really big destinations for deepwater development projects in the world.
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Indian promoters of gasification plants are now looking at the small-scale LNG facilities that are now possible with new technology.
8The lack of an adequate pipeline distribution network and difficulty in accessing and supplying gas through GAIL's monopoly trunk lines have pushed entrepreneurs to look for smaller regasification plants that can cater to a single cluster of companies.
8These smaller facilities, combined with small-scale ships, are expected to complement the large liquefaction and regasification facilities.
8Some power and fertilizer companies have begun mooting the idea of owning their own regas facilities but they are still a long way from becoming a reality.
8Construction of the smaller facilities should also be smoother and less uncertain than the large facilities seen today.
8However, by the mid-2020s, new large-scale liquefaction capacity will be needed to meet the growing demand across the globe. If those facilities are not sanctioned by the end of the decade, the near-term feast could become a famine leading to a sharp increase in LNG prices over the course of the following decade.
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Pakistan claims that it is importing LNG at the "cheapest rate in Asia" from Qatar.
8This tall claim was made by Paksitani petroleum minister Shahid Khaqan Abbasi on Monday,
8Qatar is the world's largest supplier of LNG and to stay on top, it has adapted a layer market penetration strategy across the world.
8Petronet LNG had renegotiated its long term offtake deal with Qatar last year.
8Volumes of Qatari long term cargoes processed at the Dahej regasification terminal had begun to fall but the price cut subsequent to the renegotiation ensured that they are back up again, replacing third party and short term cargoes.
8But given that a significant differential still exists between spot and contract prices in India, is there further scope for renegotiations?
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India's push to build the Chabhar port in Iran with a $500 million infusion announced by Prime Minister Narendra Modi has both economic and geopolical spinoffs for the entire region.
8The Gwadar port is just 72 nautical miles from the Gwadar port -- built with Chinese help -- in Pakistan's restive Balochistan province.
8There is also the talk of working on a deepwater pipeline from Iran and Oman and another from Iran  to India though not much progress has been made so far in this direction.
8The  port will also allow landlocked Afganistan for use as a transport hub.
8Recently, The Indian Cabinet also approved accession to the Ashgabat Agreement, between Oman, Iran, Turkmenistan and Uzbekistan, enabling India to use the existing framework for transport and transit arrangements.
8This will feed into the grander project of a North-South Transit Corridor linking Eurasia to the Indian Ocean.
8In all of this, Chabahar will be the lynchpin.
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The website carries here a report on the toxic impact of air pollution in India on account of coal based power plants.
8Average particular matter (PM) levels on the other hand has come down dramatically in China.
8A map shows the drastic difference in PM levels in the Northern belt of India and across the Himalayas in China.
8China is also subsidizing natural gas usage. Gas is being promoted as a climate friendly alternative to coal.
8The Indian gas industry however is doing little to promote the use of gas.
8As climate change mitigation imperatives kick in, India will have to take action to promote the use of gas
8Presently the government is pushing its usage in a narrow sense by trying to promote LPG use in households.
8Unless a constituency is built up by the gas industry itself, affirmative government action, like in China, to promote its usage in the economy as a whole is unlikely to happen.
8This is where companies such as Petronet LNG, GAIL, city gas distribution companies, RIL and ONGC can find a common rallying point.
8Someone has to take the initiative soon.
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Indian crude oil imports are likely to see a spike in Q-2 2016-17 before settling down again, according to projections made by an Indian research agency.
8Projections are that imports will move up in July, 2015.
8But high crude prices are unsustainable and are likely to come back again.
8Value of imports is expected to fall back again by December, 2015.
8Incidentally, Indian Oil Corporation has been adjudged as one of the top picks by a brokerage house.
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The line pipe market in India is showing signs of revival according to Welspun Industries, one of the world's largest manufacturers.
8The uptake is coming from the oil and gas industry.
8Globally however the entry barriers are going up. Delay in Final Investment Decision by oil and gas companies have also come in the way of growth.
8The volatility in the steel market is also a source of worry.
8The company has registered a 1+ million MT production for the fourth year in a row.
8The current order book stands at 913K MT.
8Despite the headwinds, the PAT is up.
8Good performance indeed.
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The long delayed petrochemical plant of ONGC Petro Additions Ltd (OPaL) is expected to go on stream this year.
8Commissioning activities are currently on, with the Furnace Refractory dry out of its Dual Feed Cracker Unit (DFCU), one of the key units of this mega petrochemical project.
The facility is made up of:
8A Dual Feed Cracker with a capacity to produce 1100 KTPA Ethylene
8400 KTPA Propylene along with Polymerisation Units and various associated Units consisting of Pyrolysis Gasoline Hydrogenation Unit, Butadiene and Benzene.
8The polymer plants of OPaL have a 2X360 KTPA of LLDPE/HDPE Swing unit, a 1X340 KTPA of Dedicated HDPE unit and a 1x340 KTPA of PP plant.
8The company is now beginning to conduct branding activities for its products in the market.
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For reference purposes the website carries here the following tenders:
8Operation & upkeeping of Mobile Oil Spill Recovery Unit, Barauni [IOC]  Details
8Supply of Spares for Steam Turbine Inlet Valve Emerson Make Actuator and Pneumatic Positioner, Paradip Refinery [IOC]  Details
8Supply of Capillary Type Pressure Gauges, Rajasthan [IOC]  Details
8Rectification of IPS anomalies defects of pipelines, Rajasthan [IOC]  Details
8Overhauling of oil water separator at Lube Blending Plant, Trombay [IOC]  Details
You can also click on Tenders for more
For reference purposes the website carries here the following Newsclips:
8CIL subsidiary bags NTPC coal block consultancy project  Details
8Oil discoveries sink to lowest since 1952: Morgan Stanley  Details 
8India sidesteps Pakistan in trade with big investment push for Iran's Chabahar Details 
8GMR to set up an LNG terminal at Andhra's Kakinada port with a funding of Rs 471 crore  Details 
8Ahead of OPEC meeting, Iran says no plans to freeze oil exports  Details
8Oil prices won't top $100 a barrel: Daniel Yergin, Vice Chairman IHS Inc.  Details
8Israel's government approves Leviathan natural gas deal  Details
8Egypt's gas projects to increase production to 5.5-6 bln cfd by end-2019  Details
8Oil spills affecting marine, mangrove forest in Paradip  Details
8Iran and India sign port deal, other economic agreements Details
8Oilfield sale date set  Details
8A glance at signed MoU between Iran and India  Details
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Innovations are now taking place around software packages for upstream work.
8The focus is on getting operators to work faster and more efficiently in their oil fields in an environment where funding is short and returns are low.
8For a keen industry observer it is easy to buy into these developments.
8The truth is that most new oilfield technology comes from four guys leaving a company. They are impatient with their inability to pursue their idea where they are working so they quit to start something from their garage.
8The flood of talented people out of work now could create a spate of  startups.
8In this business, industry experience is a big plus. Veterans in the field know the problems that plague operations, and what it takes to build something that stands up to field use.
8Closer home, is ONGC capable of fostering a start-up culture encompassing its research institutes and Indian software entrepreneurs?
8Will the E&P major promote an ONGC employee who wants to quit his job and put software to an innovative idea that can improve well productivity?
8The oil major can perhaps fund a venture capitalist who can scout for smart ideas in the E&P sector, not just nationally but across the world. ONGC can leave the scouting and funding to its partner, for should the public sector giant begin looking for software entrepreneurs under its own L-1 selection process, it may never find them.
8Big funding is not required for such programmes. For the cost of one deepwater well in the KG Basin, it can fund at least two dozen software outfits.
8In all probability such investment will elicit a higher rate of return than what is anticipated from Rs 34,000 crores that is going to be invested into the KG-DWN-98/2 deepwater block.
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Innovation seems to be the new mantra in the offshore oil and gas business.
8The industry is talking about Staoil's ability in the last 24 months to cut the average cost of offshore development from USD 70/bbl to USD 41/bbl last year. The company is trying to push this cost lower still.
8Most people think of innovation as new technology but it is in fact existing technology used in another way.
8Statoil is now working on “subsea factories” that move processing from offshore platforms to the seafloor.
8Last year, the company demonstrated it could successfully locate a large gas-compression system on the seabed. Now Statoil is working to take what was learned from this technical achievement and reduce its cost and complexity enough to make it a widely used option.
8Are such innovations possible in the KG Basin?
8Perhaps not, given turbulent seas, unstable seabed and high water depth.
8But given that there is enough room for innovation in sub-sea technology, has ONGC looked at some out-of-the-box solutions to surmount the drilling and production hurdles in the KG-DWN-98/2 block?
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Natural gas production during April 2016 was 2488.07 MMSCM which is 1.33% lower than the target for the month and 6.83% lower than the corresponding period of last year.
8Natural gas production by ONGC during April, 2016 was 1630.95 MMSCM which is 0.59% higher than the monthly target,  but 8.49% less when compared with April 2015.
8 Reasons for the shortfall in ONGC's production are as under:
-- Mumbai High: Reconstruction activities under “Reconstruction of BPA & BPB Platforms” Project
-- Eastern Offshore: Closure of both the sub-sea wells of G-1 field for carrying out tie-in works for hooking of well S2AB with G-1 facilities
-- Ankleshwar: Decline in production in major fields of Ankleshwar
-- Tripura: Less off-take by OTPC (one unit under maintenance), Baramura TSECL & NEEPCO Monarchak unit
-- Tamil Nadu, Cauvery: Closure of wells due to less off-take by consumers.
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Refinery production in terms of crude oil processed during the month of April, 2016 was 20.155 MMT which surpassed the target set for the month by 5.16 percent.
8PSU refinery production during April, 2016 at 11.136 MMT was at par with target
8BPCL’s Mumbai and Kochi refineries showed lower throughput due to the unplanned shutdown of its crude and VGO units respectively.
8Refinery production by NRL and BORL was lower too due to planned shutdowns.
8IOCL’s Paradip refinery also recorded lower throughput as its secondary units are still under commissioning and stabilization. 
8The impetus came from JV refineries whose output, at 1453.77 TMT, was 12.23% higher than the target for the month.
8Private refineries too scored better, with production in the month at 7565.32 TMT, which is 12.33% higher than target and 11.87% above the production achieved in the corresponding month of the previous year.
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OIL's gas production during April, 2016 was 250.35 MMSCM which is 5.66% higher than the monthly target and 28.51% higher when compared with April 2015.         
8Natural gas production by Pvt. /JVs during April 2016 was 606.77 MMSCM which is 8.53% lower than the monthly target.
8Reasons for the shortfall in production are as under:
-- Underperformance of wells of KG-OSN-2001/3 (GSPC).
-- Less gas production from CBM-blocks (ESSAR/RIL/GEECL) due to various issues like dewatering, lack of pipelines and consumers.
-- Under performance of wells of KG D6 due to sand ingress and water loading
-- M&S Tapti: Production stopped in March 2016.
-- Natural Decline in Ravva, PY-1 and Hazira.
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Crude oil production by OIL during April, 2016 was 261.41 TMT, which is 0.43% higher than the monthly target, but 6.88% less when compared to April 2015.
8Production by private and joint venture companies during the month was 893.90 TMT, which is 1.07% lower than the monthly target.
8Reasons for the shortfall in production are:
-- Panna/Mukta: Less production due to planned shutdown of the SBM from 28.04.2016 to 03.05.2016
-- Cairn: Less production from RJ-ON-90/1 block due to closure of  two high water cut wells. There was also general under production from the Rajasthan fields. Less production from CB-OS/2 due to stoppage of gas lift compressors for maintenance
-- Natural decline in the Ravva field.
-- Under performance of wells of KG D6 due to sand ingress and water loading
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Indigenous crude oil production  during April,  2016 was at 2956.81 TMT. This is 0.14 percent lower than the monthly target and 2.27 percent below the production achieved in April 2015.
8Whereas ONGC's crude oil production during the month  was 1801.51 TMT, which is 0.25 percent higher than the monthly target, it was marginally (0.76 percent) less when compared to output in April 2015.
8The dip in production volumes can be attributed to various factors. Among them is the reconstruction work going on in the BPA & BPB Platforms at Mumbai High which affected condensate receipt at ONGC's Hazira terminal.
8Moreover, less than envisaged production due to less air injection in the Santhal fields, stoppage of air injection in the Lanwa field due to high H2S and an overall increase in the number of sick wells and water cut added to the shortfall.
8In Assam also, low gas lift pressure in the Geleki field due to non-availability of gas lift compressors lowered production.
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A business development opportunity has arisen for a Rs 40 crore expansion of an LPG bottling plant by a public sector company.
8The plant already has a bottling capacity of 60 TMTPA along with a bulk storage capacity which is made up of 4x140 MT bullets and 2 x 590 MT spheres, totaling up to 1740 MT
8The company is now planning to raise the LPG storage capacity by adding 3 x 1000MT mounded storage vessels.
8This will be done by dismantling the existing bulk storage capacity altogether.
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LNG supplies out of the East Cost of Australia is a dead loss even before the gas goes into liquefaction
8Latest data shows that East Coast gas production cost lies between A$5.50/mmbtu and A$6.00/mmbtu at the well head. Converting this at the current exchange rate of $0.76 gives production costs of US$4.18-4.56/mmbtu.
8Added to this is the cost of piping of gas to the $ 70 billion Gladstone LNG facility in the East Coast.
8This cost adds a further by A$0.96 /mmbtu or US$0.73/mmbtu. There are gas fields further away from the terminal and piping cost will be higher from there.
8Total costs for East Coast gas are therefore around US$4.91/mmbtu to US$5.29/mmbtu prior to liquefaction and shipping.
8These costs compare to a current US Henry Hub price of under US$2/mmbtu after the gas is piped to the Hub.
8The inescapable conclusion is that Australian East Coast gas is high cost gas by any yardstick.
8This massive Australian investment is most likely to become a stranded asset.
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No other country has a grimmer projection about the future of the LNG market than the Australia.
8One reason for it is that a new set of high cost LNG liquefaction terminals are coming on stream but without a market to cater to.
8New projections now claim that the market will face a serious demand crisis, particularly in Asia which is Australia's biggest market.
8The crisis may continue well up to the year 2030.
8These estimates are more pessimistic than the report released by the Chief Economist of the Australian government, which said that the market would remain tough up to 2030.
8While there will be a glut of LNG in the market, the demand estimates will be lower than what the Chief Economist had assumed because of unexpected shrinkage of the LNG market in Japan and Korea.
8Conditions for LNG producers have become far more competitive and difficult and will likely remain so up to 2030, the report concludes.
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A research agency has posted that gas demand is likely to be better this year as city gas competitiveness has improved after the cut in price in long term gas by RasGas.
8The agency quoted a City Gas Company to have reported that there is enough demand for non-pooled LNG by the power sector. If true, this is quite a turning point.
8"Benign" spot LNG prices seem to be helping in pushing gas to customers, the agency claims.
8Even though liquid fuels continue to provide competition to LNG in the industrial segment, outside of the power and fertilizer segments, CGD companies are currently getting "buy" recommendations from brokerage houses.
8However no data has been proffered to back these claims
8Nevertheless, the report makes for interesting reading.
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CBM production seems to be showing no signs of taking off so far.
8The prognosticated CBM reserves from existing discoveries have been pegged at 9 TCF but it still a moot point when output from these blocks is going to pick up speed.
8Total commercial production of CBM in April was a little more than 1 mmscmd
8Production no doubt has gone up from around 29 mmscmd in April last year to 37 mmscmd in April, 2016 but this rise in output is not really very eye catching given that the potential is much higher.
8Bulk of the production ramp up is from Essar's Raniganj field but supply is clearly not enough to support the Rs 6000 crore Matix fertilizer plant which was built to be fed on gas from the field.
8A fertilizer plant needs a gas supply of 2.4 mmscmd to run at full capacity and what Raniganj is being able to achieve is significantly below this level.
8There is a certain minimum gas requirement to start a standard sized urea-ammonia plant and unless that happens the Matix plant is going to be staying idle.
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Natural gas consumption jumped 10.9% to 4543 msmcmd in April 2016 from 4051 mmscmd over the same month last year.
8Consumption has speeded up despite a 7% fall in gross domestic production, from 2671 mmscmd to 2488 mmscmd.
8The higher consumption was catered by increased LNG supply in April.
8LNG consumption is up from 4051 mmscmd in April, 2015 to 4,543 mmscmd in April, 2016.
8This means that India's import dependency has gone up, from 36% in April last year to 47% now.
8Pertinently, the higher consumption of gas is accounted for by a government sponsored enhancement in demand from the fertilizer and power sector.
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For reference purposes the website carries here the following tenders:
8Supply of Ethylene Di Chloride, Panipat [IOC]  Details
8Supply of Line Pipe with Fittings, Assam [OIL]  Details
8Supply of Pressure Control Valve Spares, Panipat [IOC]  Details
8Installation of Magnetic Markers on Cross Country Hydrocarbon pipelines, Chennai [IOC]  Details
8Complete Overhauling of Breechlock Exchangers, Panipat Refinery [IOC]  Details
You can also click on Tenders for more
For reference purposes the website carries here the following Newsclips:
8OVL raises $1.2-bn foreign loans to buy Russia's Vankor stake  Details
8Cairn India CEO Mayank Ashar resigns  Details 
8Oil Search to buy rival InterOil for $2.2 bn in PNG deal Details 
8India to sign contract on Chabahar port during PM Narendra Modi's Iran visit Details 
8Indian refiners clear part of $6.4 billion dues to Iran ahead of PM Narendra Modi's visit  Details
8Export of crude detrimental to national interest: Centre to HC  Details
8Qatargas sells first LNG spot cargo to Japan's JERA  Details
8Technip, FMC to merge into $13 bln oil services firm Details
8Egypt Govt has released bank guarantee after auditing expenditure by GSPC: Saurabh Patel Details
8Israel close to sealing offshore gas deal after compromise  Details
8Gulf remittances fall 2.2%, offset by slide in oil imports  Details
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8IOC is planning to build an 18-inch product pipeline from Haldia to Barauni.
8Swapan Das Gupta has resigned as UTI's nominee director on the Board of L&T Ltd.
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The website also carries here state-wise data on number of oil and gas discoveries made in India as on April 1, 2016
The data is split into:
8Discoveries made by ONGC on nomination basis
8Discoveries by OIL on nomination basis
8Discoveries made under the PSC regime
8Cumulative oil and gas discoveries made in India
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For reference purposes the website carries here details of state-wise exploration data in India updated up to April 1, 2016.
The data is carried here in the following format:
82D seismic surveys conducted
83D surveys conducted
8Exploratory wells drilled
The data is split up into exploration work done by
8ONGC on nomination basis
8OIL on nomination basis
8In the PSC regime
8Al parties cumulatively on an all-India basis
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BPCL is conducting a valuation exercise for its Brazilian JV, which is 50% owned by the public sector refiner, through Bharat PetroResoures Ltd, while the other half is owned by Videocon Industries Ltd.
8The JV holds stakes in 6 deepwater blocks in Brazil across three concessions, dubbed Campos Basin (BM-C-30), Sergipe Alagoas Basin (BM-SEAL-11) and Potiguar Basin (BM-POT-16).
8The exercise is not just to impute a value to its participating interest in the blocks but also to assess the resource potential of these blocks and the money that will be needed to invest in them.
8The consultant will also assess a fair value of the JV assets by extrapolating data from past and recent  M&A deals.
8BPCL is looking at a cost benefit exercise before making up its mind to invest further in these assets or dispose them off.
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The gas market has become so volatile that it is difficult to project how prices are going to behave through the rest of 2016.
8The EIA has estimated that Henry Hub prices are going to rise whereas a highly rated global agency has projected this week that gas prices determined through Gas on Gas competition will fall by another 25% to 30% during the course of 2016 from $3.75/mmbtu in Q-1 2016.
8Oil indexed gas prices will fall too by a similar proportion, but from a much higher base value than the Gas on Gas base price for Q-1, 2016.
8Given the differences in the assessment of gas price, decision makers should be careful while planning their next steps.
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The website also carries here global and country-wise data on movements in following types of gas prices over a 10 year period:
 -- Bilateral monopoly prices
 -- Prices based on Gas on Gas competition
 -- Netback from final product prices
 -- Cost of Service prices
 -- Prices determined on social and political parameters
 -- Below cost prices
 -- No cost prices
8Indian policy makers can gain a better perspective on various pricing models followed around the globe from this exercise.
8India has evolved two sets of regulated prices -- one is a netback price while the other is an alternative fuel linked price. China on the other hand has linked city gas prices to alternate fuels across the country.
8Could India have selected a better pricing model?
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For reference purposes, the website also carries here yearly gas price movements for the period 2005-2015 in the following regions;
8North America
8Europe
8Latin America
8Asia
8Asia Pacific
8Africa
8Middle East
8The data shows a wide variation in price.
8This information will be helpful to policy makers, who are usually pinned down by short term projections, to gain a better perspective from long term trends.
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India is was on the top quartile in terms of price paid for gas in 2015 in a survey of 50 countries done by an international consultancy.
8The average price paid by India was $7.75/mmbtu last year.
8In comparison, the price of gas in Pakistan was less than $4/mmbtu
8In Bangladesh, the price was $3/mmbtu.
8The good news however was that India paid a lower price for gas than Japan, South Korea and China.
8This was because domestic the domestic gas price was pegged low by government regulations.
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It is time now for the government to begin looking for new talent in the petroleum ministry.
8The oil industry is far too complex to be left entirely in the hands of people with little or no training in the intricacies of the oil business.
8Generalist officers will just not suffice and that is really the harsh truth.
8A typical petroleum ministry bureaucrat brings with him good judgement and common sense honed through years of administrative experience.
8But the deployment of just these skills to solve intricate oil industry issues can only deliver sub-optimal results.
8The matrices on which policy decisions are taken are just not adequate. 
8Neither the DGH nor the PPAC or other agencies such as the PNGRB have the intellectual capacity or the processing power needed to handle the problems that loom ahead in the sector.
 8The background material on which key decisions are taken is often shallow and bereft of critical analyses.
8Modeling exercises are rarely done. The hard numbers are just not there on which decisions should ordinarily be based.
8The information flows in a closed and self serving loop, involving public sector companies and a clutch of government agencies.
8A time has come for Dharmendra Pradhan to reach over his officialdom to build a talent base which will produce independent research and suggest out-of-the-box solutions in accordance with his requirment. He can then hand over some of these ideas to the bureaucracy to test out through their traditional feedback channels, involving the PPAC, the DGH, the OISD and public as well as private sector companies.
8But how will he go about hiring such a team and how will he fund it? How can he ring fence the team from the bureaucracy? And who should make up this team?
8Pradhan can speak to global oil sector consultants which have opened offices in Mumbai and Delhi. They can come up with ideas on how to build a team -- and they need not necessarily work from a office -- and how to get the team to work for him.
8As for the issues that trouble the petroleum industry, Pradhan knows them well enough. Or this website can suggest what the key concerns are and supply him with a long list.
8A few good ideas is all he needs.
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Petroleum ministry agencies have a rich volume of data which can be put to use for econometric modeling exercises.
8These exercises can help resolve a whole lot of issues that ail the industry at present
8How gas demand and supply react to price differentials is one such modeling exercise worth doing. 
8The price differentials which will have to be taken into account are not just between domestic gas and LNG but also between short term and long term LNG.
8The pooled price for the fertilizer industry is nothing but a weighted average of these prices.
8An exercise is also needed to calculate the demand elasticity of gas in relation to the differential between the price of gas and that of equivalent liquid fuels in Kcal terms.
8This is a calculation that the buyer of gas does with greater due diligence than the supplier of gas in India
8The government must also calculate the adverse impact of a monopoly infrastructure and lack of transparency in the sharing of pipeline capacity by GAIL on demand and end price of gas. Here again modeling is possibly based on which different scenarios can be derived. Useful conclusions can be drawn from such exercises and GAIL can be asked to finetune its pipeline access and gas pricing policies accordingly.
8An international agency can also be tapped to do the job.
8These kind of exercises can be conducted over a range of issues plaguing the sector.
8If the modeling is done right, the conclusions will come out clearly.
8The advantage will be that the government can then come up with policy prescriptions based on extrapolations from real data rather than on assumptions and gut feeling.
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Given that the Indian market is highly price sensitive, it will not be possible for a large price differential to exist between spot and long term gas in India for too long a period of time.
8The differential between the two is reported to be more than 15% currently and this should be a point of worry for RasGas.
8City gas distribution companies are already complaining loudly about their inability to compete with liquid fuels when it comes to soliciting business from Indian industry.
8Even through take or pay provisions are in vogue for long term gas, everyone knows by now that market share will be lost if the price is not right or the differential is too wide.
8The volume of long term gas will go down at Dahej and short term gas and third party gas share will go up if the differential persists.
8This the new reality that long term players must get used to in India.
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The fight for the Indian market between spot and long term gas suppliers will get bloodier in the months ahead.
8A perusal of the break-up of  Petronet LNG's regasification capacity between long term, short term and third party usage shows that their share had been fluctuating wildly in the last one year.
8Third party regasification share started gaining ground at Dahej in Q-2 2015-16, going up further in Q-3 but a cut in the long term LNG price by Qatar helped restore the share of long term gas in Q4 2015-16.
8The ruling RasGas price in Q-4 was $5/mmbtu
8Third party regas volumes were squeezed to a mere 27 tbtu in comparison to 109 tbtu of long term gas in Q-4, 2015-16.
8In Q-2, the situation was different, with third party share in the processing capacity at Dahej at 79 tbtu whereas the RasGas share had climbed to just 39 tbtu.
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For reference purposes the website carries here the following tenders:
8AMC for DCS system of LPG Recovery Plant and Mounded Bullets of LPG Plant [OIL]  Details
8Invitation to Original Equipment Manufacturers for enlistment in Suggested Vendor List of EPC projects of Offshore Engineering Services, Mumbai Region [ONGC]  Details
8Procurement of Pressure Transmitters, Assam [OIL]  Details
8Hiring of surveillance and patrolling services for pipelines [OIL]  Details
You can also click on Tenders for more
For reference purposes the website carries here the following Newsclips:
8Mixed bag for India's oil firms as explorers spend less, while refiners meet Capex targets  Details
8Australia's Gorgon LNG export facility restarting operations -Chevron  Details 
8Burnt by oil price crash, Europe's oil majors warm up to green energy investments Details 
8India plans investment treaty with Qatar during PM Narendra Modi ’s visit Details 
8U.S. may curb coal cleanup subsidy  Details
8Norway offers new offshore drilling licenses in Barents Sea  Details
8UK's BP offloads 11.5 per cent stake in Castrol India for Rs 2,075 crore  Details
8Coal India arm Western Coalfields Ltd slashes e-auction coal price by 20 percent Details
8Centre to Delhi HC: Will not allow Cairn India export surplus crude oil  Details
86 months on, oil firms yet to take up safety measures  Details
8Export of crude detrimental to national interest: Centre to High Court  Details
8Will oil at $50/barrel worry India?  Details
You can also click on Newsclips for more Details
Prime Minister Narender Modi on his trip to Tehran must push for a conceptual study, perhaps even going up to a pre-FEED study, of an offshore pipeline from Iran to India.
8The Iranians can be enticed to pay for 50% of the cost of the study and, for adequate comfort, their contribution can be deducted from the outstanding dues of Indian oil companies to Iran.
8As the crow flies, the distance from the Iranian coast to India across the Arabian sea is short.
8A pipeline from Iran is an alluring dream and the Prime Minister should chase it up. On one side there is an energy starved nation of 1.2 billion people while the other end there are gas reserves that total up to 200O TCF.
8If he is looking for big ticket projects, nothing can be grander in scale or can fire the imagination more than a deepwater pipeline from the Gulf to India.
8It will be a first-of-its-kind pipeline in the world. Indian pipe manufacturers can be exorted to build these high strength line pipes and Indian consultancies such as EIL and L&T Gulf can participate actively in the project along with the likes of Saipem and Chevron which have the requisite technology.
8Modi can even package it as a Make in India programme. Some of the credit will also rub off on petroleum minister Dharmendra Pradhan.
8And what is more, Modi will have very little to lose on this gamble. He only has to bear half of the cost to be incurred in  the feasibility and pre-FEED studies. If the studies turn in a negative result and the pipeline is, at best, just a pipe dream, the Prime Minister will not be faulted for having tried. And there will always be other big projects to move on to.
8If indeed a pipeline is justified, just the geo-political spinoff is worth the investment, even if the economic return is marginally negative in a scenario of low global LNG prices for the next 10 years or so.
8One big leverage that Pakistan has over India  is its capacity to veto its neigbour's access to the energy resources in West and Central Asia. One of the pivots of Chinese foreign policy is to encourage Pakistan to block off India's access to the other side, even as it builds its own energy corridor that will run from the Gawadar port through Pakistan Occupied Kashmir into China.
8An undersea pipeline will end this blackmail. Even if online pipelines are built, Pakistan will always know that India has an alternative in hand.
8What is more, if one undersea pipeline is viable, a few more can also be built along the same lines as the first pipeline.
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Cairn India Ltd is planning to expand its crude oil carrying capacity from 200,000 bopd to 300, 000 bopd through its pipeline to Bhogat in the west coast of India. The company also plans to increase the gas carrying capacity from 6.3 mmscd to 40 mmscd along with development of a new gas pipeline from Raaqeshwari to Palanpur
8Environment clearance is expected shortly for IOC's proposal  for setting up a Diesel Hydrotreating unit (DHDT), a Gasoline Desulphurization unit (FCC-GDS), a Hydrogen Generation unit (HGU) and the attendant evamp of  the ISOM and MSQ  units in IOC's Gujarat refinery as part of the company's plans to convert the refinery's HSD production from BS-IV to BS-VI grade.
8Permission is also expected for a Gasoline Hydrotreatment Unit (GTU) and associated facilities to produce 100% BS-VI MS in BPCL's Mumbai Refinery
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