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Nov 2015
Qatar has one of the world's largest reserves of gas -- at about 14% of the world's reserves -- and has been actively campaigning for gas to substitute other dirty fuels.
8In a recent interview, Abdullah bin Hamad Al Attiyah, former deputy prime minister of Qatar, and the head of the Emir's court, said that the world may not be able to push through emission caps as every country will work for its own interest.
8"There is talk that in December, in Paris, there will be a new agreement on emissions, but it will take 20 years: caps have been imposed every year, and yet we are still discussing how
to reduce emissions; it’s a very complicated issue," he said in an interview.
8According to him, gas is going to around for a long time to come.
8Qatar is also now looking at a different price for crude. "We can forget about oil going back to US$100 a barrel for the next decade, and we can live with that as long as Qatar and the industry adapt to the new situation. The necessary steps have been taken, and the Qatari government has based its new budget on the price of oil being between US$45 and US$50 a barrel for the foreseeable future," he added.
8He also thinks Australian LNG projects that are coming up will not make money. "If newcomers like Australia start to open supply, they will only be able to generate cashflow, they will never generate a profit. It will be very, very difficult for new projects if the price of oil continues on its present course. No one can compete with us as newcomers: we’ve been in the market for the last 15 years or more and we already cover the whole cost of production and shipping, so we know we are in a very strong position".
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8In a recent interview, Abdullah bin Hamad Al Attiyah, former deputy prime minister of Qatar, and the head of the Emir's court, said that the world may not be able to push through emission caps as every country will work for its own interest.
8"There is talk that in December, in Paris, there will be a new agreement on emissions, but it will take 20 years: caps have been imposed every year, and yet we are still discussing how
to reduce emissions; it’s a very complicated issue," he said in an interview.
8According to him, gas is going to around for a long time to come.
8Qatar is also now looking at a different price for crude. "We can forget about oil going back to US$100 a barrel for the next decade, and we can live with that as long as Qatar and the industry adapt to the new situation. The necessary steps have been taken, and the Qatari government has based its new budget on the price of oil being between US$45 and US$50 a barrel for the foreseeable future," he added.
8He also thinks Australian LNG projects that are coming up will not make money. "If newcomers like Australia start to open supply, they will only be able to generate cashflow, they will never generate a profit. It will be very, very difficult for new projects if the price of oil continues on its present course. No one can compete with us as newcomers: we’ve been in the market for the last 15 years or more and we already cover the whole cost of production and shipping, so we know we are in a very strong position".
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Seismic studies have identified many prospective areas within the Kangra Recess.
8So far, about 895 LKM of seismic data were outsourced for re-processing to M/s.Thrust Belt Imaging (TBI), a Canadian company with expertise in processing of seismic data, from Thrust and Fold Belts.
8The results of this recently completed project show significant improvements over the earlier processed lines.
8Based on this new dataset, a systematic review of the subsurface architecture of the area covered by the seismic lines was carried out and it shows some interesting locales from the hydrocarbon perspective.
8In 2013, another 745 GLK data pertaining to Kangra Recess were reprocessed at ONGC's Dehradun centre using GeoTomo software to improve the overall image quality
8And the study has thrown up several new prospective locales thereby encouraging ONGC to go in for a 12 well drilling programme.
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8So far, about 895 LKM of seismic data were outsourced for re-processing to M/s.Thrust Belt Imaging (TBI), a Canadian company with expertise in processing of seismic data, from Thrust and Fold Belts.
8The results of this recently completed project show significant improvements over the earlier processed lines.
8Based on this new dataset, a systematic review of the subsurface architecture of the area covered by the seismic lines was carried out and it shows some interesting locales from the hydrocarbon perspective.
8In 2013, another 745 GLK data pertaining to Kangra Recess were reprocessed at ONGC's Dehradun centre using GeoTomo software to improve the overall image quality
8And the study has thrown up several new prospective locales thereby encouraging ONGC to go in for a 12 well drilling programme.
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Two locations have been identified for ONGC's drilling programme in the block.
8Based on techno-economic inference, the initial in-place reserves have been estimated at 383 BCF in location 1.
8In the second location, the initial in-place reserves have been pegged at 225 BCF.
8In all six wells each are meant to be drilled in the two locations.
8In location 1, the depth of each well has been estimated at 4500 metres
8In location 2, the well depth is likely to be 1500 metres
8The development plan will be worked out when the results of the exploratory drilling programme come in.
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8Based on techno-economic inference, the initial in-place reserves have been estimated at 383 BCF in location 1.
8In the second location, the initial in-place reserves have been pegged at 225 BCF.
8In all six wells each are meant to be drilled in the two locations.
8In location 1, the depth of each well has been estimated at 4500 metres
8In location 2, the well depth is likely to be 1500 metres
8The development plan will be worked out when the results of the exploratory drilling programme come in.
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One doomsday scenario speaks of defaults over the next few years by oil and gas companies that had borrowed heavily to fund their work.
8The defaults can then spread to countries that are dependent on oil exports.
8Nearly all of the other OPEC countries need $100+ prices to fund their budgets. While some are still flush with funds and it will take a long while for them to run out of money, others may not.
8A gaint like Saudi Arabia too may face problems, It has a growing population, so it needs rising oil exports just to maintain its 2014 level of exports per capita. The country is not in a position reduce its exports by say 10% to 25% to help the rest of the world correct the price of oil. It would lose market share and likely not get it back. Losing market share would permanently leave a 'hole' in its budget that could never be refilled.
8Most oil and gas borrowers are already having to pay a premium over the market just to be able to borrow.
8Defaults and cutbacks will happen in other commodities too.
8There is a widespread belief that if prices remain low, someone will come along, buy the distressed assets at low prices, and ramp up production as soon as prices rise again. If prices never rise for very long, though, this won't happen. The bankruptcies that occur will mean the end for that particular resource play.
8The world won't really be able to get prices back up to where they need to be to extract the resources.
8Thus low prices, with no way to get them back up, and no hope of making a profit on extraction, are likely the way finite limits on using economic resources will be reached
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8The defaults can then spread to countries that are dependent on oil exports.
8Nearly all of the other OPEC countries need $100+ prices to fund their budgets. While some are still flush with funds and it will take a long while for them to run out of money, others may not.
8A gaint like Saudi Arabia too may face problems, It has a growing population, so it needs rising oil exports just to maintain its 2014 level of exports per capita. The country is not in a position reduce its exports by say 10% to 25% to help the rest of the world correct the price of oil. It would lose market share and likely not get it back. Losing market share would permanently leave a 'hole' in its budget that could never be refilled.
8Most oil and gas borrowers are already having to pay a premium over the market just to be able to borrow.
8Defaults and cutbacks will happen in other commodities too.
8There is a widespread belief that if prices remain low, someone will come along, buy the distressed assets at low prices, and ramp up production as soon as prices rise again. If prices never rise for very long, though, this won't happen. The bankruptcies that occur will mean the end for that particular resource play.
8The world won't really be able to get prices back up to where they need to be to extract the resources.
8Thus low prices, with no way to get them back up, and no hope of making a profit on extraction, are likely the way finite limits on using economic resources will be reached
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The ONGC Board has approved the Field Development Plan of the Madanam Field, with an area of 140 sq. kms, under 4th round of NELP in 2004 to JV of ONGC (60% PI as operator) and BPRL (40% PI), located about 50 Km. north of Karaikal district in Tamil Nadu.
8The filed is small but extraction makes economic sense even at the currently low price of oil and gas
8The project envisages cumulative production of 1.048 Million tonnes of oil by 2027-28 and 2.702 BCM of gas by 2032-33 at a total investment of US$ 100.13 Million (ONGC Share of US$ 60.08 Million i.e. Rs.390.52 Crore).
8The project scope includes drilling of 15 wells in addition to existing 3 wells, installation of associated facilities and pipelines.
8Suppliers of goods and services can expected a steady stream of orders from ONGC in getting the field to the development phase.
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8The filed is small but extraction makes economic sense even at the currently low price of oil and gas
8The project envisages cumulative production of 1.048 Million tonnes of oil by 2027-28 and 2.702 BCM of gas by 2032-33 at a total investment of US$ 100.13 Million (ONGC Share of US$ 60.08 Million i.e. Rs.390.52 Crore).
8The project scope includes drilling of 15 wells in addition to existing 3 wells, installation of associated facilities and pipelines.
8Suppliers of goods and services can expected a steady stream of orders from ONGC in getting the field to the development phase.
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Three more hydrocarbon discoveries were made by ONGC last month. Among them are:
8B-127N-1, BOFF PML, Mumbai Offshore Basin, Western Shallow Offshore: Exploratory well B-127N-1 was drilled to a depth of 3235 m. On conventional testing 3 zones in Panna formation of Paleocene age produced oil & gas. On conventional testing 14 m sands in the interval 2960-2940 m, produced oil @ of 102 bopd and gas @ 138,749 m3/day. Two other shallower objects in Panna formation also produced oil & gas on testing. This new prospect discovery will augment oil potential of B-127 cluster.
8KGOS041NAML#1 (Malhar#1), NELP block KG-OSN-2004/1, Krishna Godavari Shallow Offshore: The well was drilled to a depth of 2617 m. On conventional testing 15.5 m
sands in the interval 1917 – 1958.5 m in Godavari Clay formation of Pliocene age, produced gas @ 280,611 m3/day through 24/64” choke. This 7th new prospect discovery in the south western part of the block will add to the development potential of the block.
8Rokhia-62, Konaban nomination PML, A&AA Onland Basin, Tripura : The well was drilled down to a depth of 3356 m. Interval 2440-2437 m in Middle Bhuvan formation of Miocene age, on testing produced gas @ 63100 m3/d through 6 mm bean. This new pool discovery will augment ongoing production from the Rokhia field. The discovery in the Rokhia field is about 14 Km South West of Agartala town in the state of Tripura.
8With this, ONGC has so far notified 10 new discoveries (5 new prospect and 5 new pool) so far in 2015-16. Details
8B-127N-1, BOFF PML, Mumbai Offshore Basin, Western Shallow Offshore: Exploratory well B-127N-1 was drilled to a depth of 3235 m. On conventional testing 3 zones in Panna formation of Paleocene age produced oil & gas. On conventional testing 14 m sands in the interval 2960-2940 m, produced oil @ of 102 bopd and gas @ 138,749 m3/day. Two other shallower objects in Panna formation also produced oil & gas on testing. This new prospect discovery will augment oil potential of B-127 cluster.
8KGOS041NAML#1 (Malhar#1), NELP block KG-OSN-2004/1, Krishna Godavari Shallow Offshore: The well was drilled to a depth of 2617 m. On conventional testing 15.5 m
sands in the interval 1917 – 1958.5 m in Godavari Clay formation of Pliocene age, produced gas @ 280,611 m3/day through 24/64” choke. This 7th new prospect discovery in the south western part of the block will add to the development potential of the block.
8Rokhia-62, Konaban nomination PML, A&AA Onland Basin, Tripura : The well was drilled down to a depth of 3356 m. Interval 2440-2437 m in Middle Bhuvan formation of Miocene age, on testing produced gas @ 63100 m3/d through 6 mm bean. This new pool discovery will augment ongoing production from the Rokhia field. The discovery in the Rokhia field is about 14 Km South West of Agartala town in the state of Tripura.
8With this, ONGC has so far notified 10 new discoveries (5 new prospect and 5 new pool) so far in 2015-16. Details
8ONGC's Q-2 FY’16 Gross Revenue was Rs 20,732 Crore as against Rs 20,732 Crore for the same period in the previous year. The net profit was at Rs 4,842 crore as against Rs 5445 crore last year. The lower profits have to be juxtaposed against the fact that the subsidy bill has fallen to Rs 559 crore in the quarter from a whopping Rs 13,461 crore for the same period in the previous year. The company's crude oil, condensate and natural gas production increased from 12.793 MMToe in Q2 FY’15 to 12.976 MMToe in Q2 FY’16, an increase of 1.4%.
8BPCL plans to install a 72 station flexi carousel machine for filling cylinders within existing LPG plant at Loni in Ghaziabad District. The existing LPG plant is supplying demand of LPG cylinders in the region but the carousel will expand the bottling capacity of the plant. The project cost has been estimated at Rs 40 crore.
H1FY16 performance highlight
8Essar Oil Ltd has posted the following Q2 2015-16 performance:
-- at 4.47 MMT vs. 5.04 MMT in Q2 FY15; impacted due to planned shutdown
--Gross Revenue at Rs 15,561 crore vs.Rs 24,194 crore in Q2FY15; impacted due to lower throughput & lower oil prices
--Current Price Gross Refining Margin (CP GRM) at $9.33/bbl vs $7.03 /bbl in Q2 FY15; up 33%
--EBITDA at Rs 1,382 crores vs Rs 1,061 crores in Q2 FY15; up 30%
--PAT at Rs 201 crores vs. Rs 234 crores in Q2 FY15
--Raniganj CBM production at 0.64 million scmd Details
8BPCL plans to install a 72 station flexi carousel machine for filling cylinders within existing LPG plant at Loni in Ghaziabad District. The existing LPG plant is supplying demand of LPG cylinders in the region but the carousel will expand the bottling capacity of the plant. The project cost has been estimated at Rs 40 crore.
H1FY16 performance highlight
8Essar Oil Ltd has posted the following Q2 2015-16 performance:
-- at 4.47 MMT vs. 5.04 MMT in Q2 FY15; impacted due to planned shutdown
--Gross Revenue at Rs 15,561 crore vs.Rs 24,194 crore in Q2FY15; impacted due to lower throughput & lower oil prices
--Current Price Gross Refining Margin (CP GRM) at $9.33/bbl vs $7.03 /bbl in Q2 FY15; up 33%
--EBITDA at Rs 1,382 crores vs Rs 1,061 crores in Q2 FY15; up 30%
--PAT at Rs 201 crores vs. Rs 234 crores in Q2 FY15
--Raniganj CBM production at 0.64 million scmd Details
The DGH is working on granting mining leases for CBM operations for Coal India Ltd and its subsidiaries in an independent format from other CBM licenses.
8It has been made clear in the notification that all relevant CBM related regulations will have to be adhered to by CIL
8The same set of royalties and taxes as applicable to other CBM players will also be applicable for CIL.
8The FDP will be have to be submitted within 24 months of grant of a CBM mining lease and this can be extended by 12 months if suitable justifications are given. There will be penalties for further delays.
8Importantly CIL will not be allowed to alienate CBM lease rights.
8Of importance is the condition that CIL will not be allowed to involve third parties for CBM exploitation expect through equity participation with central or state PSUs with experience in CBM operations. And here again, the majority stake will be with Coal India Ltd.
8Then again, another caveat is that CBM mining will be done prior to coal mining operations or at least simultaneously.
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8It has been made clear in the notification that all relevant CBM related regulations will have to be adhered to by CIL
8The same set of royalties and taxes as applicable to other CBM players will also be applicable for CIL.
8The FDP will be have to be submitted within 24 months of grant of a CBM mining lease and this can be extended by 12 months if suitable justifications are given. There will be penalties for further delays.
8Importantly CIL will not be allowed to alienate CBM lease rights.
8Of importance is the condition that CIL will not be allowed to involve third parties for CBM exploitation expect through equity participation with central or state PSUs with experience in CBM operations. And here again, the majority stake will be with Coal India Ltd.
8Then again, another caveat is that CBM mining will be done prior to coal mining operations or at least simultaneously.
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GAIL Gas Ltd has begun pipeline laying activities for its Bangalroe City Gas Distribution (CGD) project.
8A total of 360 km of MDPE main lines and service lines of 20 mm to 12 mm OD will be laid to various pipe gas customers.
8Given that the lines will have to laid through heavily populated areas, the laying will be done over six phases of 69 km each.
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8A total of 360 km of MDPE main lines and service lines of 20 mm to 12 mm OD will be laid to various pipe gas customers.
8Given that the lines will have to laid through heavily populated areas, the laying will be done over six phases of 69 km each.
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Reliance Industries Ltd is awaiting CRZ clearance for its 486 km Dahej Nagothane Ethane pipeline.
8The pipeline will be laid by Reliance Gas Pipelines Ltd, a wholly owned subsidiary of RIL.
8The pipeline will used for transproting 1.4 MMTPA of liquid ethane.
8Of the total 486 km, 256 km is to be laid in Gujarat. The CRZ clearance is needed as the pipeline has to traverse through several water bodies.
8The pipeline will be laid across the CRZ areas using Horizontal Drilling technology, which will ensure that is is at least five metres below the water bodies
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8The pipeline will be laid by Reliance Gas Pipelines Ltd, a wholly owned subsidiary of RIL.
8The pipeline will used for transproting 1.4 MMTPA of liquid ethane.
8Of the total 486 km, 256 km is to be laid in Gujarat. The CRZ clearance is needed as the pipeline has to traverse through several water bodies.
8The pipeline will be laid across the CRZ areas using Horizontal Drilling technology, which will ensure that is is at least five metres below the water bodies
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Among the orders secured by EIL in Q-2 2015-16 were the following
8A Delhi Jal Board order for PMC servics for NGT orders
8PMC for the fifth oil berth at Jawahar Deep in Mumbai Harbour
8EPCM for Propylene Derivative Petrochemical Project in BPCL's Kochi refinery
8Hiring of consultancy services for Integrity Check of Platforms for ONGC
8Change order for additional scope of services for the 4 lakh BPSD refinery and 6 lakh TPA Polypropylene Plant in Nigeria
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8A Delhi Jal Board order for PMC servics for NGT orders
8PMC for the fifth oil berth at Jawahar Deep in Mumbai Harbour
8EPCM for Propylene Derivative Petrochemical Project in BPCL's Kochi refinery
8Hiring of consultancy services for Integrity Check of Platforms for ONGC
8Change order for additional scope of services for the 4 lakh BPSD refinery and 6 lakh TPA Polypropylene Plant in Nigeria
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Engineers India Ltd (EIL) has turned in a reasonably good Q2 performance despite challenging circumstances on the ground.
8The turnover stood at Rs 510 croreas against Rs 463 crore in Q2 last year.
8For the half year however H-1 numbers were up marginally at Rs 970 crore as against Rs 967 crore in the previous year with the turnkey segment showing a stronger performance this half than consultancy.
8Margins were better, with Q-2 PAT at Rs 69 crore against Rs 58 crore previously. Q-2 performance was better than Q-1 as the PAT for the first half, at Rs 126 crore, as against Rs 139 crore in previous year.
8Total business secured however has slowed down, with Q2 acquisition at Rs 129 crore as against Rs 385 crore for the corresponding period last year. Consultancy contracts have a bigger share in the basket than turnkey jobs indicating a slowdown in the core sectors in which it operates.
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8The turnover stood at Rs 510 croreas against Rs 463 crore in Q2 last year.
8For the half year however H-1 numbers were up marginally at Rs 970 crore as against Rs 967 crore in the previous year with the turnkey segment showing a stronger performance this half than consultancy.
8Margins were better, with Q-2 PAT at Rs 69 crore against Rs 58 crore previously. Q-2 performance was better than Q-1 as the PAT for the first half, at Rs 126 crore, as against Rs 139 crore in previous year.
8Total business secured however has slowed down, with Q2 acquisition at Rs 129 crore as against Rs 385 crore for the corresponding period last year. Consultancy contracts have a bigger share in the basket than turnkey jobs indicating a slowdown in the core sectors in which it operates.
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Even for those who believe that the oil and gas industry is going to survive the current round of turmoil and uncertainty, the future will have to being about urgent changes in the way business is done in the sector.
8Producers must commit to unwavering innovation through the oil and gas price cycles if they are to meet demand safely and at competitive cost through to 2050 and beyond.
8The first challenge is to be able to raise short-term production
8The other involves attacking capital costs and operating expenses head on. Both place an emphasis on efficiency.
8A focus on efficiency is not new to the oil and gas sector but has been limited to select industry ‘pockets of excellence’ such as shale gas
8But technological advances must by soaked by all segments of the oil and gas industry.
8The following improvements will have to be brought about in the E&P industry:
--Automation and mechanization – automating high-cost, repetitive oil and gas activities. Drilling automation is an opportunity area that is attracting significant research and development attention.
--Data-driven analytics – leveraging the ‘big data revolution’ to develop solutions that draw key insights from high-volume data streams, such as detecting when a piece of equipment is going to fail or identifyingb‘sweet spots’ in unconventional oil and gas plays.
--Robotics and unmanned systems – adapting technologies developed in the defence and manufacturing sectors to oil and gas operating environments. Applications include deploying robots to inspect difficult-to-access elements such as offshore risers, and piloting unmanned aerial systems into areas that are dangerous for human intervention.
--Optimization – applying sophisticated modelling and simulation tools to increase production regularity and run equipment and facilities closer to their designed capacities.
8A common thread running through these areas is the increasingly critical and enabling role of digital technologies.
8Evidence analysed by IHS Energy in the past decade confirms that digital technologies applied in practice can improve oilfield performance on several fronts, including:
--Increasing oil and gas production by 2–8%.
--Reducing facility capital costs by 1–3%.
--Lowering operating costs by 5–25%.
Comment: Unlike disruptive technologies such efficient electric vehicles and large battery storage capacities, technological advancement in the oil & gas sector can only be incremental. But where incremental change is good enough in an environment where the competitors are evolving at a disruptive pace remains a moot point Details
8Producers must commit to unwavering innovation through the oil and gas price cycles if they are to meet demand safely and at competitive cost through to 2050 and beyond.
8The first challenge is to be able to raise short-term production
8The other involves attacking capital costs and operating expenses head on. Both place an emphasis on efficiency.
8A focus on efficiency is not new to the oil and gas sector but has been limited to select industry ‘pockets of excellence’ such as shale gas
8But technological advances must by soaked by all segments of the oil and gas industry.
8The following improvements will have to be brought about in the E&P industry:
--Automation and mechanization – automating high-cost, repetitive oil and gas activities. Drilling automation is an opportunity area that is attracting significant research and development attention.
--Data-driven analytics – leveraging the ‘big data revolution’ to develop solutions that draw key insights from high-volume data streams, such as detecting when a piece of equipment is going to fail or identifyingb‘sweet spots’ in unconventional oil and gas plays.
--Robotics and unmanned systems – adapting technologies developed in the defence and manufacturing sectors to oil and gas operating environments. Applications include deploying robots to inspect difficult-to-access elements such as offshore risers, and piloting unmanned aerial systems into areas that are dangerous for human intervention.
--Optimization – applying sophisticated modelling and simulation tools to increase production regularity and run equipment and facilities closer to their designed capacities.
8A common thread running through these areas is the increasingly critical and enabling role of digital technologies.
8Evidence analysed by IHS Energy in the past decade confirms that digital technologies applied in practice can improve oilfield performance on several fronts, including:
--Increasing oil and gas production by 2–8%.
--Reducing facility capital costs by 1–3%.
--Lowering operating costs by 5–25%.
Comment: Unlike disruptive technologies such efficient electric vehicles and large battery storage capacities, technological advancement in the oil & gas sector can only be incremental. But where incremental change is good enough in an environment where the competitors are evolving at a disruptive pace remains a moot point Details
According to latest reports, GAIL is making progress is constucting the Kochi-Mangalore-Bangalore pipeline on multiple fronts in Kerala.
8Negotiations with the farmers are currently clearing 2 km/day along the 500 km stretch of Kochi-Mangalore pipeline in the state
8The ROU has been signed along 250 km of the tract, with the state government is standing by GAIL in these negotiations.
8There is still mounting opposition to the laying of the pipeline in two districts while other five of the overall seven districts have been taken onboard.
8The Tamil Nadu leg of the pipeline is dependent on an order from the Supreme Court where the state had taken GAIL to court for trying to acquire ROU from farmers. The state had insisted that the pipeline be routed through the 8ROU available for hghways but GAIL objected saying that it will be hazardous to do so. The Supreme Court had called for status quo while both parties argued before it.
8GAIL believes that a positive verdict will come from the Supreme Court and thereafter it will 18 months to complete and about six months to mobilize the resources for the Kochi-Bangalore leg.
8The work on the Kochi-Mangalore stretch of the pipeline will get completed in a similar duration.
8Meanwhile, for the Jagdishpur Haldia pipeline, a survey has been carried out and the company is waiting for commitment of gas from Ministry of Fertiliser to take the process further.
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8Negotiations with the farmers are currently clearing 2 km/day along the 500 km stretch of Kochi-Mangalore pipeline in the state
8The ROU has been signed along 250 km of the tract, with the state government is standing by GAIL in these negotiations.
8There is still mounting opposition to the laying of the pipeline in two districts while other five of the overall seven districts have been taken onboard.
8The Tamil Nadu leg of the pipeline is dependent on an order from the Supreme Court where the state had taken GAIL to court for trying to acquire ROU from farmers. The state had insisted that the pipeline be routed through the 8ROU available for hghways but GAIL objected saying that it will be hazardous to do so. The Supreme Court had called for status quo while both parties argued before it.
8GAIL believes that a positive verdict will come from the Supreme Court and thereafter it will 18 months to complete and about six months to mobilize the resources for the Kochi-Bangalore leg.
8The work on the Kochi-Mangalore stretch of the pipeline will get completed in a similar duration.
8Meanwhile, for the Jagdishpur Haldia pipeline, a survey has been carried out and the company is waiting for commitment of gas from Ministry of Fertiliser to take the process further.
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The government has now ruled out general cadre IAS officers from being the DGH by sticking to a narrow qualification and experience criterion for the job.
8Earlier there was a thinking that the government may expand the search to people with general administrative ability.
8The incumbent will necessarily have to possess a Master's degree in geology or geophysics or petroleum geology with sixteen years of experience in the upstream sector in the field of planning, execution and monitoring of projects and development plans for oil and natural gas
8The other qualification is a Bachelor's degree in Petroleum Engineering with 17 years of experience designated areas.
8Other desirable degrees are a doctorate or an MBA or a Post Graduate in Management.
8The job will be for five years or until retirement at 60
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8Earlier there was a thinking that the government may expand the search to people with general administrative ability.
8The incumbent will necessarily have to possess a Master's degree in geology or geophysics or petroleum geology with sixteen years of experience in the upstream sector in the field of planning, execution and monitoring of projects and development plans for oil and natural gas
8The other qualification is a Bachelor's degree in Petroleum Engineering with 17 years of experience designated areas.
8Other desirable degrees are a doctorate or an MBA or a Post Graduate in Management.
8The job will be for five years or until retirement at 60
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Given the breathtaking pace of change in the world of energy today, the Talcher coal gasification plant -- promoted by GAIL, RCF and Coal India Ltd -- seems to be no longer a viable proposition until more information is available on how energy costs are going to behave a few years from now.
8It is now established that governments will levy a carbon emission cost that may well make the cost of coal too high for gasification purposes to produce urea.
8The mathematics are still being worked out, but it has been established by BP in a detailed set of calculations that even a modest $40 per tonne of CO2 emission makes natural gas a lowest cost option in relation to coal.
8However with a higher carbon tax -- and this tax may even go up to $100 per tonne -- using Carbon Capture and Storage technology becomes more viable for users of coal and gas. Under this scenario too gas becomes a cheaper option than coal.
8There are however caveats to the advantage of gas over coal. The calculations have been done only for natural gas in the US and not for LNG.
8The use of LNG -- as is likely in India -- may well be more expensive than coal or renewable energy, everything else being the same.
8Essentially, the cost of coal will depend upon the quantum of carbon tax and the competitiveness of renewable energy in relation to coal based power. In case there is switch from coal based power to renewal energy, the price of coal may fall to very lower levels on account of lack of demand.
8Since a coal gasification plant will have to take into account a long term cost-benefit perspective, it will be impossible to put together such an enterprise, particularly in India where the pricing uncertainty is going to be higher than in the US, unless all the variables are captured accurately in a modeling exercise.
8The way the energy scenario is evolving right now, and given the yet unknown consequences of disruptive technology, it is impossible to predict where coal will figure in the energy equilibrium a few years from now.
8Till the dust settles down, it will be foolhardy to start a gasification project using technologically challenging high ash content --and therefore high cost -- Indian coal.
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8It is now established that governments will levy a carbon emission cost that may well make the cost of coal too high for gasification purposes to produce urea.
8The mathematics are still being worked out, but it has been established by BP in a detailed set of calculations that even a modest $40 per tonne of CO2 emission makes natural gas a lowest cost option in relation to coal.
8However with a higher carbon tax -- and this tax may even go up to $100 per tonne -- using Carbon Capture and Storage technology becomes more viable for users of coal and gas. Under this scenario too gas becomes a cheaper option than coal.
8There are however caveats to the advantage of gas over coal. The calculations have been done only for natural gas in the US and not for LNG.
8The use of LNG -- as is likely in India -- may well be more expensive than coal or renewable energy, everything else being the same.
8Essentially, the cost of coal will depend upon the quantum of carbon tax and the competitiveness of renewable energy in relation to coal based power. In case there is switch from coal based power to renewal energy, the price of coal may fall to very lower levels on account of lack of demand.
8Since a coal gasification plant will have to take into account a long term cost-benefit perspective, it will be impossible to put together such an enterprise, particularly in India where the pricing uncertainty is going to be higher than in the US, unless all the variables are captured accurately in a modeling exercise.
8The way the energy scenario is evolving right now, and given the yet unknown consequences of disruptive technology, it is impossible to predict where coal will figure in the energy equilibrium a few years from now.
8Till the dust settles down, it will be foolhardy to start a gasification project using technologically challenging high ash content --and therefore high cost -- Indian coal.
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What would seem like a good investment for a cash rich oil and gas company today given that it wants to diversify its assets away from high emission projects into something where the future is secure?
8Offshore wind energy is one good space to occupy.
8Onshore wind energy is already established in India but there has beenno movement on offshore wind generation till now,
8The technology behind offshore wind energy is now established. Over 8.7 GW offshore wind capacity has already been installed around the world and approximately an equal capacity is under construction. There are offshore wind farms existing and under development in United Kingdom (4494 MW), Denmark (1271 MW), Germany (1049 MW), Belgium (712 MW), China (670 MW), The Netherlands (247 MW) and Sweden (212 MW).
8What is more a recent study by BP has established that costs of wind energy will be lowest among renewable energy options though offshore energy cost will be higher.
8Going ahead, the use of lighter materials, improved aerodynamic control, better operation and maintenance strategies, and site-specific turbine design will reduce cost and raise efficiency levels, making this segment an viable investment destination for those companies wanting to escape from the fossil fuel sector.
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8Offshore wind energy is one good space to occupy.
8Onshore wind energy is already established in India but there has beenno movement on offshore wind generation till now,
8The technology behind offshore wind energy is now established. Over 8.7 GW offshore wind capacity has already been installed around the world and approximately an equal capacity is under construction. There are offshore wind farms existing and under development in United Kingdom (4494 MW), Denmark (1271 MW), Germany (1049 MW), Belgium (712 MW), China (670 MW), The Netherlands (247 MW) and Sweden (212 MW).
8What is more a recent study by BP has established that costs of wind energy will be lowest among renewable energy options though offshore energy cost will be higher.
8Going ahead, the use of lighter materials, improved aerodynamic control, better operation and maintenance strategies, and site-specific turbine design will reduce cost and raise efficiency levels, making this segment an viable investment destination for those companies wanting to escape from the fossil fuel sector.
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The website carries here the full technical details of the BPCL's Mumbai refinery.
8This includes detailed VGO feed properties
8Also carried here are the full details of its DHT naphtha properties
8Details are also given of the proposed feed of CRR tail gas
8Full product specifications for the refinery for LPG, heavy naphtha, light naphtha, ATF, light and heavy diesel cut, unconverted oil and SKO are documented
8The kind of product quality guarantees that the company is looking for are also highlighted
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8This includes detailed VGO feed properties
8Also carried here are the full details of its DHT naphtha properties
8Details are also given of the proposed feed of CRR tail gas
8Full product specifications for the refinery for LPG, heavy naphtha, light naphtha, ATF, light and heavy diesel cut, unconverted oil and SKO are documented
8The kind of product quality guarantees that the company is looking for are also highlighted
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BPCL is now embarking on a plan to eliminate the 25% gas oil feed in its CLG licensed two stage 2 MMTPA hydrocracker in its Mumbai refinery.
8The two-state hydrocaracker (5900 MT/D) lives on 75% Vacuum Gas Oils (VGO) while the balance is made up of 25% Gas oil components
8The plan is to raise the VGO feed from 4550 MT/D to 5900 MT/D (100% VGO processing), thereby dispensing with Gas Oils.
8The trick will be for a process licensor to provide technology that invovles minimum modifications to equipment to ensure that the revamp does not adversely affect the existing production of 260 TMTPA of LOBS.
8The idea is to integrate new equipments with existing Hydrocracker unit without any fuss when the turnaround takes place for about 22 days in February 2017.
8The challenge will be to carry out detailed planning so that maximum jobs can be executed while the plant is in operation.
8Over and above, it will have to be ensured that all recommended modifications can be accommodated within the existing unit without deviating from OISD norms.
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8The two-state hydrocaracker (5900 MT/D) lives on 75% Vacuum Gas Oils (VGO) while the balance is made up of 25% Gas oil components
8The plan is to raise the VGO feed from 4550 MT/D to 5900 MT/D (100% VGO processing), thereby dispensing with Gas Oils.
8The trick will be for a process licensor to provide technology that invovles minimum modifications to equipment to ensure that the revamp does not adversely affect the existing production of 260 TMTPA of LOBS.
8The idea is to integrate new equipments with existing Hydrocracker unit without any fuss when the turnaround takes place for about 22 days in February 2017.
8The challenge will be to carry out detailed planning so that maximum jobs can be executed while the plant is in operation.
8Over and above, it will have to be ensured that all recommended modifications can be accommodated within the existing unit without deviating from OISD norms.
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The Modi government has now put together a new offshore wind policy believing that there is reasonable amount of energy that can be generated across the coast from Rameshwaram and Kanyakumari in Tamil
Nadu and off the Gujarat coast
8A preliminary assessment suggests potential to establish around 1 GW capacity wind farm each along the coastline of Rameshwaram and Kanyakumari in Tamil Nadu.
8The wind farms can stretch up to 200 kms of its Exclusive Economic Zone, where India has the right to construct structure such as wind farms.
8But building these offshore farms is not going to be all that simple. Cabling will have to be done subsea, then there is logistics involved in installing turbines, managing offshore security and ensuring grid connectivity. An economic amount of energy has to be generated to ensure viability.
8Then there will also be tricky governmental interfaces, involving security clearance for surveys as well as men and material.
8The new policy calls for international competitive bidding in which international companies will be allowed to participate.
8The connectivity till shore will have to ensured by the developer. From there on, grid connection will be guaranteed as well as land for sub stations and accompanying infrastructure.
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Nadu and off the Gujarat coast
8A preliminary assessment suggests potential to establish around 1 GW capacity wind farm each along the coastline of Rameshwaram and Kanyakumari in Tamil Nadu.
8The wind farms can stretch up to 200 kms of its Exclusive Economic Zone, where India has the right to construct structure such as wind farms.
8But building these offshore farms is not going to be all that simple. Cabling will have to be done subsea, then there is logistics involved in installing turbines, managing offshore security and ensuring grid connectivity. An economic amount of energy has to be generated to ensure viability.
8Then there will also be tricky governmental interfaces, involving security clearance for surveys as well as men and material.
8The new policy calls for international competitive bidding in which international companies will be allowed to participate.
8The connectivity till shore will have to ensured by the developer. From there on, grid connection will be guaranteed as well as land for sub stations and accompanying infrastructure.
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Surveys to assess wind strength as well as oceanographic and bathymetric surveys will have to be done by the government before sites can be identified for bidding. Government agencies will handle the surveys but the private sector can also get involved in a manner akin to speculative surveys in the E&P sector.
8Offers will be invited from developers and a minimum work programme will be drawn up.
8Companies inimical to India will be debarred.
8The broad parameters of the contract will include the time frame for completion of the installation and commissioning of the wind farm, period of contract, committed Minimum Work Programme (MWP) in terms of project capacity in the allocated block, monitoring and inspection by government agencies and a decommissioning plan.
8Bundling schemes with power from other sources and centralized procurement may be part of the deal so as to make the whole process viable.
8Fiscal incentives as available to onshore power will be provided.
8What will be allowed will be Foreign Direct Investment (FDI) participation, Public Private Partnership, and international collaborations.
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8Offers will be invited from developers and a minimum work programme will be drawn up.
8Companies inimical to India will be debarred.
8The broad parameters of the contract will include the time frame for completion of the installation and commissioning of the wind farm, period of contract, committed Minimum Work Programme (MWP) in terms of project capacity in the allocated block, monitoring and inspection by government agencies and a decommissioning plan.
8Bundling schemes with power from other sources and centralized procurement may be part of the deal so as to make the whole process viable.
8Fiscal incentives as available to onshore power will be provided.
8What will be allowed will be Foreign Direct Investment (FDI) participation, Public Private Partnership, and international collaborations.
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Clearly, offshore energy is a good place for Indian E&P companies to look for new opportunities as they already have the bitter-sweet experience of working in Indian waters.
8Understanding the business and security environment is important, and no one would have a better first hand experience on this than the likes of RIL, GSPC, OIL and ONGC.
8The work programme however is unlikely to be as complicated as the Minimum Work Programme in E&P. It will be a fairly straightforward document where the installation activities will be monitored to ensure that a project comes up on time.
8No one has better experience than E&P companies in dealing with the complicated and sometimes rather whimsical requirements of the Indian security apparatus.
8The government is talking of 1000 MW of wind farms each along the coastline of Rameshwaram and Kanyakumari in Tamil Nadu.
8That's a large volume of power and the cost involved will be high but just like onshore wind energy, costs are going to fall once competition and innovation are at play. The projection is that by 2020, costs will fall by as much as 40%.
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8Understanding the business and security environment is important, and no one would have a better first hand experience on this than the likes of RIL, GSPC, OIL and ONGC.
8The work programme however is unlikely to be as complicated as the Minimum Work Programme in E&P. It will be a fairly straightforward document where the installation activities will be monitored to ensure that a project comes up on time.
8No one has better experience than E&P companies in dealing with the complicated and sometimes rather whimsical requirements of the Indian security apparatus.
8The government is talking of 1000 MW of wind farms each along the coastline of Rameshwaram and Kanyakumari in Tamil Nadu.
8That's a large volume of power and the cost involved will be high but just like onshore wind energy, costs are going to fall once competition and innovation are at play. The projection is that by 2020, costs will fall by as much as 40%.
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The new trends will be the introduction of turbines which are larger and higher reliability that will optimize energy capture and lower operating costs.
8Generators are now learning to put greater activity at the front end of the project including early involvement of suppliers, multi-variable optimisation of wind farm layouts, more Front End Engineering and Design (FEED) and more extensive site surveys.
8The focus now is on exploitation of economies of scale and productivity improvements including greater standardization, capturing and building on learning by doing and better procurement.
8Optimisation of current installation methods and use of mass produced support structures in water depths greater than 35 metres are the other new developments.
8There are also floating offshore sites coming up, that can viably be set up in deepwater sites.
8A 34 MW plant was set up by Statoil off the coast of Scotland. Transmission costs are higher so you go further away from the shore but that is compensated by higher wind speeds at deeper seas.
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8Generators are now learning to put greater activity at the front end of the project including early involvement of suppliers, multi-variable optimisation of wind farm layouts, more Front End Engineering and Design (FEED) and more extensive site surveys.
8The focus now is on exploitation of economies of scale and productivity improvements including greater standardization, capturing and building on learning by doing and better procurement.
8Optimisation of current installation methods and use of mass produced support structures in water depths greater than 35 metres are the other new developments.
8There are also floating offshore sites coming up, that can viably be set up in deepwater sites.
8A 34 MW plant was set up by Statoil off the coast of Scotland. Transmission costs are higher so you go further away from the shore but that is compensated by higher wind speeds at deeper seas.
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The concerted campaign by Big Oil to keep fossil fuels relevant in a world increasingly hostile to carbon emissions is gaining momentum ahead of the 21st session of the United Nations Conference of Parties to the UN Framework on Climate Change (COP21).
8The focus is to attack the anti-fossil fuel lobby that now has an upper hand in the debate.
8The idea seems to be criticize the claims of battery storage and electric vehicles advocates that these new technologies can replace oil and gas by as early as 2030 and not later than 2050.
8That it is a concerted campaign is evident from the surprisingly similar arguments mouthed by all big oil and gas companies such as BP, Eni, Stat Oil and even Shell.
8One white paper brought out by well known energy infrastructure company Kinder Morgan claims that electric vehicles sales will stay confined to urban areas and perhaps in small fleet vehicles that return to a central location on a regular basis ignoring the fact that batteries will be available that will charge in minutes instead of hours and they can be plugged in anywhere.
8The company also argues that in addition to their cost and range disadvantages, the environmental footprint of electric vechicles can be surprisingly large. The environmental and health impacts of vehicles using electricity generated from coal may be as much as 80 percent greater than driving a gasoline-powered vehicle.
8Kinder Morgan goes on to say that ethanol can be a replacement for gasoline but it has now been proved, the company argues, that conventional ethanol consumption actually has a greater negative impact on the environment than gasoline.
8The strength of renewal power will come from breakthroughs in battery technologies that will take care of the intermittency problem. But, according to Kinder Morgan, such batteries are expensive and unreliable or both.
8The average U.S. residential utility customer uses about 30 kilowatt-hours of electricity each day – but the cutting-edge residential battery today only puts out 2 kilowatts of continuous power, about enough to run a vacuum cleaner, but not enough to dry your clothes.
8Multiple batteries, each costing more than $7,000, would be needed to maintain sufficient power in the average home. In fact, to provide the same amount of power as a standard generator would take eight batteries and a monetary investment 15 times greater than for the standard $3,700 generator.
8In this context, natural gas provides the best option now that it is established that coal is a "dirty" fuel, is the conclusion of the company as are similar conclusions reached by Big Oil companies.
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8The focus is to attack the anti-fossil fuel lobby that now has an upper hand in the debate.
8The idea seems to be criticize the claims of battery storage and electric vehicles advocates that these new technologies can replace oil and gas by as early as 2030 and not later than 2050.
8That it is a concerted campaign is evident from the surprisingly similar arguments mouthed by all big oil and gas companies such as BP, Eni, Stat Oil and even Shell.
8One white paper brought out by well known energy infrastructure company Kinder Morgan claims that electric vehicles sales will stay confined to urban areas and perhaps in small fleet vehicles that return to a central location on a regular basis ignoring the fact that batteries will be available that will charge in minutes instead of hours and they can be plugged in anywhere.
8The company also argues that in addition to their cost and range disadvantages, the environmental footprint of electric vechicles can be surprisingly large. The environmental and health impacts of vehicles using electricity generated from coal may be as much as 80 percent greater than driving a gasoline-powered vehicle.
8Kinder Morgan goes on to say that ethanol can be a replacement for gasoline but it has now been proved, the company argues, that conventional ethanol consumption actually has a greater negative impact on the environment than gasoline.
8The strength of renewal power will come from breakthroughs in battery technologies that will take care of the intermittency problem. But, according to Kinder Morgan, such batteries are expensive and unreliable or both.
8The average U.S. residential utility customer uses about 30 kilowatt-hours of electricity each day – but the cutting-edge residential battery today only puts out 2 kilowatts of continuous power, about enough to run a vacuum cleaner, but not enough to dry your clothes.
8Multiple batteries, each costing more than $7,000, would be needed to maintain sufficient power in the average home. In fact, to provide the same amount of power as a standard generator would take eight batteries and a monetary investment 15 times greater than for the standard $3,700 generator.
8In this context, natural gas provides the best option now that it is established that coal is a "dirty" fuel, is the conclusion of the company as are similar conclusions reached by Big Oil companies.
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The good news coming on climate change is that carbon dioxide emissions growth has been zero in 2014 in comparison to 2013.
8In other words, economic growth is now being achieved without an increase in emissions.
8Will the trend continue? A lot depends on energy conservation and fuel choices from now. All of Africa and most of the developing world are yet to run through the economic growth cycle and this is where the main problem lies. If in most parts of Africa distributed renewable energy sources an be established then the continent can skip going through the fossil fuel route to energy generation entirely.
8Already renewable energy cost is equivalent to that of fossil fuel derived energy and this can help turn the trend.
8The new data show that CO2 emissions related to the energy sector, which is the source of nearly two-thirds of human-generated greenhouse gases, rose 2.2% in 2013 to total 32.2 gigatonnes, compared with the 0.6% increase in 2012 but registered zero growth in 2014.
8The new IEA analysis of the official 2013 data shows that emerging economies’ emissions grew 4%, largely because of increased coal consumption, while there was no change in emissions by more developed countries that include most IEA members.
8Two-thirds of global emissions came from just ten countries, divided equally between emerging and more developed economies
8On a per-capita basis, however, China’s emissions were just over two-fifths of those of the United States, though the countries are moving in opposite directions, as the new IEA data find that US per-capita emissions fell 16% from 1990 while China’s tripled as its gross domestic product per capita surge.
8The big challenge for India is how to avoid such a steep rise in emissions as noticed in China.
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8In other words, economic growth is now being achieved without an increase in emissions.
8Will the trend continue? A lot depends on energy conservation and fuel choices from now. All of Africa and most of the developing world are yet to run through the economic growth cycle and this is where the main problem lies. If in most parts of Africa distributed renewable energy sources an be established then the continent can skip going through the fossil fuel route to energy generation entirely.
8Already renewable energy cost is equivalent to that of fossil fuel derived energy and this can help turn the trend.
8The new data show that CO2 emissions related to the energy sector, which is the source of nearly two-thirds of human-generated greenhouse gases, rose 2.2% in 2013 to total 32.2 gigatonnes, compared with the 0.6% increase in 2012 but registered zero growth in 2014.
8The new IEA analysis of the official 2013 data shows that emerging economies’ emissions grew 4%, largely because of increased coal consumption, while there was no change in emissions by more developed countries that include most IEA members.
8Two-thirds of global emissions came from just ten countries, divided equally between emerging and more developed economies
8On a per-capita basis, however, China’s emissions were just over two-fifths of those of the United States, though the countries are moving in opposite directions, as the new IEA data find that US per-capita emissions fell 16% from 1990 while China’s tripled as its gross domestic product per capita surge.
8The big challenge for India is how to avoid such a steep rise in emissions as noticed in China.
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The crude carriers market is waiting for a slowdown in US crude production, riding on the hope that trade will move up once the supply glut ends.
8But this is turning out to be wishful thinking. Oil prices remained under pressure, and the supply gut, it seems, is here to stay.
8Even though US production is cooling down, it seems to be not enough as inventories seem to be rising rather than falling, leaving little hope that a meaningful downward production shift could take place anytime soon.
8There was some bullishness in the freight market with Middle East and African markets firming week-on-week, as chatterers have begun booking November dates more aggressively.
8VLCC rates had weakened earlier but recovered last week on support by buyers.
8But the recovery is on a weak footing say analysts
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8But this is turning out to be wishful thinking. Oil prices remained under pressure, and the supply gut, it seems, is here to stay.
8Even though US production is cooling down, it seems to be not enough as inventories seem to be rising rather than falling, leaving little hope that a meaningful downward production shift could take place anytime soon.
8There was some bullishness in the freight market with Middle East and African markets firming week-on-week, as chatterers have begun booking November dates more aggressively.
8VLCC rates had weakened earlier but recovered last week on support by buyers.
8But the recovery is on a weak footing say analysts
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Even as crude prices fall and markets remain unsteady, it is surprising to see that there is a reasonably big build up of new orders for crude carriers.
8The strong trend of ordering that the sector has been witnessing seems to be gaining further momentum, with more and more owners opting for new capacity
8Despite the healthy volumes of ordering, the irony is that prices for new vessels are still moving downwards, raising more doubts in regards to the future financial performance of ship building yards, particularly if there is a slowdown in orders.
8DSME, the world’s second largest shipyard, was bailed out last week by Korea Development Bank and Export-Import Bank of Korea. The amount of the bailout, which totals up to 4.2 trillion won in loans and equity, clearly outlines the degree of the problems and paints a gloomy picture of the shipbuilding industry.
8In terms of recently reported deals, Latsco has placed an order for two firm plus two oponal MRs (50,000dwt) at Hyundai Mipo, in S.Korea for a price of $ 35.5m each and delivery set in 2017 to 2018.
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8The strong trend of ordering that the sector has been witnessing seems to be gaining further momentum, with more and more owners opting for new capacity
8Despite the healthy volumes of ordering, the irony is that prices for new vessels are still moving downwards, raising more doubts in regards to the future financial performance of ship building yards, particularly if there is a slowdown in orders.
8DSME, the world’s second largest shipyard, was bailed out last week by Korea Development Bank and Export-Import Bank of Korea. The amount of the bailout, which totals up to 4.2 trillion won in loans and equity, clearly outlines the degree of the problems and paints a gloomy picture of the shipbuilding industry.
8In terms of recently reported deals, Latsco has placed an order for two firm plus two oponal MRs (50,000dwt) at Hyundai Mipo, in S.Korea for a price of $ 35.5m each and delivery set in 2017 to 2018.
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IOC is looking at a life extension study of the ageing Guwahati-Siliguri petroleum products pipeline that has a capacity of 1.4 MMTPA.
8The pipeline was built in the 1960s with a capacity of 0.481 MMTPA but the capacity was gradually expanded by building booster pumping stations and replenishing MLPUs along the route to 1.4 MMTPA
8The pipeline had 57 mainline valves, 13 C.P. Stations, and as many as 10 HDD crossings.
8The pipeline is occasionally damaged through washouts and floods and once it ruptiured due to high tensile residual stress on a cold fabricated bend.
8Pertinently repairs and replacements have been done with adequate due diligence as per ASME B.31.4. There have been mostly Type-B kind of repairs
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8The pipeline was built in the 1960s with a capacity of 0.481 MMTPA but the capacity was gradually expanded by building booster pumping stations and replenishing MLPUs along the route to 1.4 MMTPA
8The pipeline had 57 mainline valves, 13 C.P. Stations, and as many as 10 HDD crossings.
8The pipeline is occasionally damaged through washouts and floods and once it ruptiured due to high tensile residual stress on a cold fabricated bend.
8Pertinently repairs and replacements have been done with adequate due diligence as per ASME B.31.4. There have been mostly Type-B kind of repairs
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Dr Kaushik Deb, A BP economist, has called for elimination of subsidies not just on electricity in India but also on LPG and SKO and other sectors such as fertilizers.
8He has heralded the diesel price decontrol as a paradigm shift in Indian fiscal policy and expects more such targeting by the Modi government in the near future. "All we need now is a happy ending," he says.
8The reality however is much more complicated than what Deb envisages and these matters there is never a happy ending
8A recent survey has shown three quarters of the rural households rely totally on traditional biomass for cooking because the high upfront cost to secure an LPG connection too much of a burden.
8Then again, high recurring monthly expenditure have been found by 88% of the rural respondents as a significant impediments to LPG adoption.
8In face of such daunting figures, it is indeed very insensitive on the part of multinationals like BP to call for elimination of subsidy on LPG and SKO.
8No government will ever be able to eliminate subsidy on LPG both on moral and ethical grounds leave alone political expediency.
8The finance minister is fully aware that there is a need to cut the subsidy on fertilizers but that is easier said than done. A move to transfer fertilizer subsidy directly to the farmer has been stymied by the fact that actual tiller is different from the owner of land.
8The ground realities are different in India and a cry for elimination of subsidies can only come from a company unschooled in the dynamics of this country.
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8He has heralded the diesel price decontrol as a paradigm shift in Indian fiscal policy and expects more such targeting by the Modi government in the near future. "All we need now is a happy ending," he says.
8The reality however is much more complicated than what Deb envisages and these matters there is never a happy ending
8A recent survey has shown three quarters of the rural households rely totally on traditional biomass for cooking because the high upfront cost to secure an LPG connection too much of a burden.
8Then again, high recurring monthly expenditure have been found by 88% of the rural respondents as a significant impediments to LPG adoption.
8In face of such daunting figures, it is indeed very insensitive on the part of multinationals like BP to call for elimination of subsidy on LPG and SKO.
8No government will ever be able to eliminate subsidy on LPG both on moral and ethical grounds leave alone political expediency.
8The finance minister is fully aware that there is a need to cut the subsidy on fertilizers but that is easier said than done. A move to transfer fertilizer subsidy directly to the farmer has been stymied by the fact that actual tiller is different from the owner of land.
8The ground realities are different in India and a cry for elimination of subsidies can only come from a company unschooled in the dynamics of this country.
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Ahead of the he 21st session of the United Nationas Conference of Parties to the UN Framework on Climate Change (COP21), the biggest energy companies in the world are coming out with their own solutions to the control carbon emissions to limit global warming.
8But there seems to be a concerted effort among these companies to push usage of gas as the cleanest fuel in the future.
8The fossil fuel lobby is promoting the usage of gas along with Carbon Capture and Storage as a clean energy option.
8BP had come out with a Technology Outlook at promotes gas and so has Total and other companies.
8There is increasing nervousness among the oil and gas major against the lobby that is now calling for a complete elimination of fossil fuels from the energy basket.
8The lobby is for setting ambitious targets for renewable energy and battery storage technology and for keeping the world's reserves of fossil fuels untapped underground.
8The oil and gas majors in turn are now trying to say that fossil fuel usage will continue through the century as it will not be able to restrict temperature change to 2 degrees.
8The two lobbies are expected to work hard in the COP21 to present their view points.
8But the world seems to on the side of those who claim that disruptive technologies must be encouraged to ensure that the 2 per cent target is met.
8The fate of the fossil fuel industry hangs in balance as of now, all depending upon how aggressively global leaders push for steps to control climate change. Details
8But there seems to be a concerted effort among these companies to push usage of gas as the cleanest fuel in the future.
8The fossil fuel lobby is promoting the usage of gas along with Carbon Capture and Storage as a clean energy option.
8BP had come out with a Technology Outlook at promotes gas and so has Total and other companies.
8There is increasing nervousness among the oil and gas major against the lobby that is now calling for a complete elimination of fossil fuels from the energy basket.
8The lobby is for setting ambitious targets for renewable energy and battery storage technology and for keeping the world's reserves of fossil fuels untapped underground.
8The oil and gas majors in turn are now trying to say that fossil fuel usage will continue through the century as it will not be able to restrict temperature change to 2 degrees.
8The two lobbies are expected to work hard in the COP21 to present their view points.
8But the world seems to on the side of those who claim that disruptive technologies must be encouraged to ensure that the 2 per cent target is met.
8The fate of the fossil fuel industry hangs in balance as of now, all depending upon how aggressively global leaders push for steps to control climate change. Details
RIL is among the top 10 companies in the world to have pledged support to the global effort to keep global effort to limit global warming to two degrees centigrade by the end of the 21st century.
8The chief executive officers of 10 of the world's largest oil and gas companies -- which together provide almost a fifth of the oil and gas production and supply nearly 10% of the world's energy declared their collective support for an effective agreement to be reached in the 21st session of the United Nationas Conference of Parties to the UN Framework on Climate Change (COP21).
8Besides RIL, the other companies are BG Group, BP, Eni, Pemex, Respol, Saudi Aramco, Shell, Statoil and Total.
8The CEOs who signed the petition include Helge Lund, BG Group; Bob Dudley, BP; Claudio Descalzi, Eni; Emilio Lozoya, Pemex; Mukesh Ambani, Reliance Industries; Josu Jon Imaz, Repsol; Ben van Beurden, Royal Dutch Shell; Amin Nasser, Saudi Aramco; Eldar Sætre, Statoil; and Patrick Pouyanné,
Total.
8The pledged to promote natural gas as it significantly reduces lifecycle emissions than any other fossil fuel as also contribute to R&D for long term solutions to reduce green house emissions along with fostering partnerships and multi-stakeholder initiatives to accelerate climate change solutions.
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8The chief executive officers of 10 of the world's largest oil and gas companies -- which together provide almost a fifth of the oil and gas production and supply nearly 10% of the world's energy declared their collective support for an effective agreement to be reached in the 21st session of the United Nationas Conference of Parties to the UN Framework on Climate Change (COP21).
8Besides RIL, the other companies are BG Group, BP, Eni, Pemex, Respol, Saudi Aramco, Shell, Statoil and Total.
8The CEOs who signed the petition include Helge Lund, BG Group; Bob Dudley, BP; Claudio Descalzi, Eni; Emilio Lozoya, Pemex; Mukesh Ambani, Reliance Industries; Josu Jon Imaz, Repsol; Ben van Beurden, Royal Dutch Shell; Amin Nasser, Saudi Aramco; Eldar Sætre, Statoil; and Patrick Pouyanné,
Total.
8The pledged to promote natural gas as it significantly reduces lifecycle emissions than any other fossil fuel as also contribute to R&D for long term solutions to reduce green house emissions along with fostering partnerships and multi-stakeholder initiatives to accelerate climate change solutions.
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A lot of people will say that comparing IOC's refinery performance with that of RIL is not really fair. It is like comparing apples to oranges.
8But nevertheless some facts are important to note.
8IOC's Q2 GRM stands at USD 5.76 a barrel and instead of a profit, the company posted a net loss of Rs 329 crore on an Income from operations of Rs. 1,11,664 crore.
8The low GRM is accounted for a host of factors including inventory loss on account of fluctuation in crude price.
8But compare IOC's performance with RIL see the difference.
8RIL’s GRM for 2Q FY 2015-16 stood at a seven year high of $ 10.6/bbl. RIL’s premium over the regional Singapore benchmark widened to $ 4.3/bbl during the second quarter, the highest level since 2009.
8How did RIL do it? RIL benefited from product mix flexibility, robust risk management coupled with opportunistic crude sourcing and lower energy costs.
8It is not fair to compare IOC's refineries spread all over the country, some with antique technology and low economies of scale with RIL's gigantic refining capacity of 60 MMT.
But nevertheless IOC must learn to do things with more agility.
8Now that ministerial permission is not required for sourcing crude, the company must be more flexible with its product mix, it should be able to hedge more than it has done against currency and crude price fluctuations. There is a strong case to invest more out of the profits it has earned so far in energy cost saving projects.
8And like RIL, it must strategize for opportunistic crude sourcing. Details
8But nevertheless some facts are important to note.
8IOC's Q2 GRM stands at USD 5.76 a barrel and instead of a profit, the company posted a net loss of Rs 329 crore on an Income from operations of Rs. 1,11,664 crore.
8The low GRM is accounted for a host of factors including inventory loss on account of fluctuation in crude price.
8But compare IOC's performance with RIL see the difference.
8RIL’s GRM for 2Q FY 2015-16 stood at a seven year high of $ 10.6/bbl. RIL’s premium over the regional Singapore benchmark widened to $ 4.3/bbl during the second quarter, the highest level since 2009.
8How did RIL do it? RIL benefited from product mix flexibility, robust risk management coupled with opportunistic crude sourcing and lower energy costs.
8It is not fair to compare IOC's refineries spread all over the country, some with antique technology and low economies of scale with RIL's gigantic refining capacity of 60 MMT.
But nevertheless IOC must learn to do things with more agility.
8Now that ministerial permission is not required for sourcing crude, the company must be more flexible with its product mix, it should be able to hedge more than it has done against currency and crude price fluctuations. There is a strong case to invest more out of the profits it has earned so far in energy cost saving projects.
8And like RIL, it must strategize for opportunistic crude sourcing. Details
Hydraulic fracturing is gaining traction in India and there is a need for a better understanding of this technology among all stakeholders including frackers, government run environment impact study agencies and landowners.
8The impact of pumping huge amounts of chemical laden water for fracking purposes and the consequent impact on ground water reservoirs is now a subject of a wide ranging investigation in the US
8There is also water that gets thrown up in the production process and the investigation will center on whether adequate effluent treatment facilities are in place or whether technical parameters have to be fine-tuned make treated water safe.
8The fluids coming out of a well (hydrocarbons and produced water) can be far more toxic than those being used for fracturing purposes. Therefore, the key is responsible well construction, operation and isolation of potable water.
8This includes inspection, testing and monitoring of the tubing tubing-casing annulus and other casing annuli, as well as monitoring and testing of the potable groundwater through which they pass.
8The investigation is also looking at the water acquisition process, as a vast amount of water is consumed in hydraulic fracturing.
8There will also be an attempt to translate best practices into regulatory guidelines for hydraulic fracturing.
8The whole well completion process is also under scrutiny.
Comment: In India, regulatory authorities are too ill quipped to handle such investigative work. To make it more convenient, Indian agencies must enter into knowhow sharing agreements with their counterparts in the US. Given that India's population density is far higher than that of the US, adequate monitoring of hydraulic fracturing processes will become imperative to protect the environment. Details
8The impact of pumping huge amounts of chemical laden water for fracking purposes and the consequent impact on ground water reservoirs is now a subject of a wide ranging investigation in the US
8There is also water that gets thrown up in the production process and the investigation will center on whether adequate effluent treatment facilities are in place or whether technical parameters have to be fine-tuned make treated water safe.
8The fluids coming out of a well (hydrocarbons and produced water) can be far more toxic than those being used for fracturing purposes. Therefore, the key is responsible well construction, operation and isolation of potable water.
8This includes inspection, testing and monitoring of the tubing tubing-casing annulus and other casing annuli, as well as monitoring and testing of the potable groundwater through which they pass.
8The investigation is also looking at the water acquisition process, as a vast amount of water is consumed in hydraulic fracturing.
8There will also be an attempt to translate best practices into regulatory guidelines for hydraulic fracturing.
8The whole well completion process is also under scrutiny.
Comment: In India, regulatory authorities are too ill quipped to handle such investigative work. To make it more convenient, Indian agencies must enter into knowhow sharing agreements with their counterparts in the US. Given that India's population density is far higher than that of the US, adequate monitoring of hydraulic fracturing processes will become imperative to protect the environment. Details
The PNGRB has accorded permission to Central UP Gas Ltd for setting up daughter booster stations at Unnao, Fatehpur and Ghatamour in UP. The permission is subject to the usual terms and conditions of the regulator.
8The regulator has accorded authorization to Indian Oil Adani Gas Ltd for development of a City Gas Distribution network in the geographical area of Dharwad in Karnataka.The tariff charged however will be guided by the recent Supreme Court Judgement.
8THe PNGRB has completed the open house discussions with stakeholders over its notice for amendment of the PNGRB (Authorizing Entities to Lay, Build, Operate or Expand City or Local Natural Gas Distribution Networks) Regulations, 2008. Comments on these amendments came from Synergy Steels, Resonance Energy, Mahanagar Gas, Gujarat Gas, Indraprastha Gas, GAIL and Maharashtra Natural Gas.
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8The regulator has accorded authorization to Indian Oil Adani Gas Ltd for development of a City Gas Distribution network in the geographical area of Dharwad in Karnataka.The tariff charged however will be guided by the recent Supreme Court Judgement.
8THe PNGRB has completed the open house discussions with stakeholders over its notice for amendment of the PNGRB (Authorizing Entities to Lay, Build, Operate or Expand City or Local Natural Gas Distribution Networks) Regulations, 2008. Comments on these amendments came from Synergy Steels, Resonance Energy, Mahanagar Gas, Gujarat Gas, Indraprastha Gas, GAIL and Maharashtra Natural Gas.
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Petronet LNG is in the process of expanding the capacity of its Dahej terminal from 15 to 15.5 MMTPA.
8Bids have been invited for regasification facilities.
8To leave out frivolous bidders, the company has said that the lead consortium partner should have a turnover of a minimum of $125 million a yaer with a debt equity ratio of less than 3.0.
8The bids are for an EPC contractor responsible for overall detailed engineering, procurement and overall management and commissioning of the project.
8The contractor will also need the experience of setting up at least one regasification terminal with a minimum capacity of 2.5 MMTPA in the last 10 years.
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8Bids have been invited for regasification facilities.
8To leave out frivolous bidders, the company has said that the lead consortium partner should have a turnover of a minimum of $125 million a yaer with a debt equity ratio of less than 3.0.
8The bids are for an EPC contractor responsible for overall detailed engineering, procurement and overall management and commissioning of the project.
8The contractor will also need the experience of setting up at least one regasification terminal with a minimum capacity of 2.5 MMTPA in the last 10 years.
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US gas prices are go down further on higher domestic production and a lower demand.
8With the breach of $2.40/mmbtu level on NYMEX, the bearishness has intensified
8Lower price levels are likely in the months ahead as US production continues to rise.
8Demand for gas on the other hand is to decline by around 6% this year
8Both technical and fundamental factors do not seem to be acting favourable for natural gas. Record production and inventories, expectations of reduced demand from the residential and commercial sector on a forecast of above average winter temperature is expected to keep downward pressure despite falling rig counts.
8There is a dire projection that the price may actually reach the $2/mmbtu level.
8In this context, the landed spot LNG price is India may see further declines, driven by low prices in the US and declining freight rates of LNG carriers.
8Depending upon the landed price of gas, it remains a moot point whether some of the KG Basin discoveries are going to be viable or not.
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8With the breach of $2.40/mmbtu level on NYMEX, the bearishness has intensified
8Lower price levels are likely in the months ahead as US production continues to rise.
8Demand for gas on the other hand is to decline by around 6% this year
8Both technical and fundamental factors do not seem to be acting favourable for natural gas. Record production and inventories, expectations of reduced demand from the residential and commercial sector on a forecast of above average winter temperature is expected to keep downward pressure despite falling rig counts.
8There is a dire projection that the price may actually reach the $2/mmbtu level.
8In this context, the landed spot LNG price is India may see further declines, driven by low prices in the US and declining freight rates of LNG carriers.
8Depending upon the landed price of gas, it remains a moot point whether some of the KG Basin discoveries are going to be viable or not.
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A BP Report on New Technology in the Energy Sector shows the multinational's increasing nervousness over the rapid pace at which disruptive technologies are evolving in the energy sector.
8For the first time BP seems to be tentative about what the future has in store. It concludes the report by claiming that the future is indeed "uncertain".
8In the midst of increasing pressure to decarbonize the global economy, the multinational no doubt continues to remain a votary of the oil and gas sector, claiming that even by 2050, half of the global energy supply will be fossil fuel based.
8This stand goes against the now widely held view that by 2050, rapid changes in technology, along with an urgent need to keep global warming to not more than 2 degrees by the end of the century, will have to entail keeping most of the world's current fossil fuel deposits untapped.
8BP admits that battery storage technology is moving at a rapid pace and so is rapidity at which electric cars are becoming cost efficient, but the multinational continues to claim that progress in these fronts may not move rapidly enough to substitute the use of liquid fuels in the transportation segment or gas based power with solar and wind power.
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8For the first time BP seems to be tentative about what the future has in store. It concludes the report by claiming that the future is indeed "uncertain".
8In the midst of increasing pressure to decarbonize the global economy, the multinational no doubt continues to remain a votary of the oil and gas sector, claiming that even by 2050, half of the global energy supply will be fossil fuel based.
8This stand goes against the now widely held view that by 2050, rapid changes in technology, along with an urgent need to keep global warming to not more than 2 degrees by the end of the century, will have to entail keeping most of the world's current fossil fuel deposits untapped.
8BP admits that battery storage technology is moving at a rapid pace and so is rapidity at which electric cars are becoming cost efficient, but the multinational continues to claim that progress in these fronts may not move rapidly enough to substitute the use of liquid fuels in the transportation segment or gas based power with solar and wind power.
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BP in fact draws up a pessimistic outlook on global warming.
8The multinational projects that emissions from energy use will rise 25% over the next two decades.
8And this will mean efforts to limit global warming to 2 degrees are going to fail.
8This is because of the massive surge in demand for energy from developing countries while energy demand goes down in the developed world.
8Accepting that the target will not be achieved is perhaps a realistic approach but is also convenient for BP, fr if the 2% limit is forcefully enforced, then there will no room for fossil fuels in the paradigm.
8BP knows that the world cannot do without fossil fuels just yet but it also knows that governments will impose a tax on CO2 emissions.
8In the scenarios that BP has always been very good at building, gas based power will substitute coal based power as the cheapest source of electricity in the US by the year 2050 when a tax on carbon emission is levied.
8The best option that the multinational is pushing for is to use nascent Carbon Capture Storage with new generation Combine Cycle Gas Turbine technology to produce electricity from gas.
8The BP calculation shows that utility scale photovolatic technology will be at least 30% more expensive than gas based power by 2050, even assuming that there is a tax of between $80 to $100 per tonne of CO2 emission.
Offshore wind energy cost will however compete with gas based power by 2050, the BP study shows, but the power so generated will contribute marginally to global electricity supply.
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8The multinational projects that emissions from energy use will rise 25% over the next two decades.
8And this will mean efforts to limit global warming to 2 degrees are going to fail.
8This is because of the massive surge in demand for energy from developing countries while energy demand goes down in the developed world.
8Accepting that the target will not be achieved is perhaps a realistic approach but is also convenient for BP, fr if the 2% limit is forcefully enforced, then there will no room for fossil fuels in the paradigm.
8BP knows that the world cannot do without fossil fuels just yet but it also knows that governments will impose a tax on CO2 emissions.
8In the scenarios that BP has always been very good at building, gas based power will substitute coal based power as the cheapest source of electricity in the US by the year 2050 when a tax on carbon emission is levied.
8The best option that the multinational is pushing for is to use nascent Carbon Capture Storage with new generation Combine Cycle Gas Turbine technology to produce electricity from gas.
8The BP calculation shows that utility scale photovolatic technology will be at least 30% more expensive than gas based power by 2050, even assuming that there is a tax of between $80 to $100 per tonne of CO2 emission.
Offshore wind energy cost will however compete with gas based power by 2050, the BP study shows, but the power so generated will contribute marginally to global electricity supply.
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BP continues to claim that the oil and gas sector will remain an important energy producing segment even by the year 2050.
8The multinational says that the limit on peak oil is now off. In fact there is much more oil and gas reserves trapped in the reservoirs below than the world will need in the foreseeable future.
8The calculation is that there are 45 trillion boe of oil and gas ‘originally in place’, of which only 2 trillion boe have been produced to date.
8The company says that technological innovations will keep production cost low.
8Oil recovery factors will go up dramatically so that existing fields will increase recoverable volumes of light oil by 30%.
8Also technological advances will allow untapped deepwater fields to be viable too.
8Developments in remote sensing, automated operations and data analytics will make the all important difference.
8Extraction costs will go down by 25% by 2050.
BP has also laid out the kind of new technology that will come into play in the years ahead in the oil and gas sector.
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8The multinational says that the limit on peak oil is now off. In fact there is much more oil and gas reserves trapped in the reservoirs below than the world will need in the foreseeable future.
8The calculation is that there are 45 trillion boe of oil and gas ‘originally in place’, of which only 2 trillion boe have been produced to date.
8The company says that technological innovations will keep production cost low.
8Oil recovery factors will go up dramatically so that existing fields will increase recoverable volumes of light oil by 30%.
8Also technological advances will allow untapped deepwater fields to be viable too.
8Developments in remote sensing, automated operations and data analytics will make the all important difference.
8Extraction costs will go down by 25% by 2050.
BP has also laid out the kind of new technology that will come into play in the years ahead in the oil and gas sector.
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What BP is trying to cleverly establish is that the oil and gas industry is the safest bet to cater to the growing energy needs of the world.
8It is also trying to predict the death of the coal industry, dubbing coal based power as "dirty" and expensive.
8By reducing fugitive emissions in the hydrocarbon extraction and supply pipeline, and by using nascent Carbon Capture and Storage technology, BP is trying to sell gas based power to the world through its Technology Outlook.
8The multinational also says gas extraction, supply and the consequent production of power involves the usage of far less water than coal.
8Whether the multinational's pitch is going to find approval remains a moot point.
8BP thinks that coal based power will be substituted by gas based power which will be supplemented by renewable technologies such as wind and solar PV accounting for a higher share of generation.
8In the transport sector too, the multinational does not see battery powered vehicles making a big dent by 2050 and it expects the segment to remain fuelled mainly by oil-based liquid fuels and, to a lesser extent, biofuels. BP expects engines and vehicles to become lighter, more efficient and smarter, complemented by advanced, increasingly efficient lubricants and fuels but it does not see the death of the conventional car.
8It says technology will evolve but the retail outlets dispensing petrol and diesel will continue to be in business in 2050.
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8It is also trying to predict the death of the coal industry, dubbing coal based power as "dirty" and expensive.
8By reducing fugitive emissions in the hydrocarbon extraction and supply pipeline, and by using nascent Carbon Capture and Storage technology, BP is trying to sell gas based power to the world through its Technology Outlook.
8The multinational also says gas extraction, supply and the consequent production of power involves the usage of far less water than coal.
8Whether the multinational's pitch is going to find approval remains a moot point.
8BP thinks that coal based power will be substituted by gas based power which will be supplemented by renewable technologies such as wind and solar PV accounting for a higher share of generation.
8In the transport sector too, the multinational does not see battery powered vehicles making a big dent by 2050 and it expects the segment to remain fuelled mainly by oil-based liquid fuels and, to a lesser extent, biofuels. BP expects engines and vehicles to become lighter, more efficient and smarter, complemented by advanced, increasingly efficient lubricants and fuels but it does not see the death of the conventional car.
8It says technology will evolve but the retail outlets dispensing petrol and diesel will continue to be in business in 2050.
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It is understandable that BP's scenarios building exercises tend to foster a case for the continued survival of the oil and gas industry well into this century.
8But is the multinational intuitively biased against building scenarios that are inimical to its very survival?
8Has it given due weightage to disruptive technologies that can challenge the conventional conclusions arrived at by its scientists?
8BP's costing analysis of different sources of power has been built by some of the best scientists in the world and this template is likely to be hotly debated across research institutions.
8The BP's reports biggest weakness could well be its inability to fully grasp the transformative power of disruptive technology. While the multinational is trying to position gas a transition fuel well into 2050, is it possible that battery storage technology will evolve at a pace that makes the transition redundant. The switch can be directly from coal to renewal energy, as is now being predicted by a growing number of research agencies.
8The reason why gas comes in as a substitute to coal is its ability not just replace the "dirty" fuel but also because combine cycle gas based power plants can act as base load generating stations to supplement intermittent renewable energy supply.
8What if the intermittency problem -- of solar power not being available at night and wind power fluctuating with the speed of wind -- is solved through advances in power storage technology? What happens then?
8And what if there is a consensus that global warming has to be halted at any cost and the cost per tonne of carbon emission is upped to a level that even gas based power, leave alone coal based power, too becomes uneconomical?
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8But is the multinational intuitively biased against building scenarios that are inimical to its very survival?
8Has it given due weightage to disruptive technologies that can challenge the conventional conclusions arrived at by its scientists?
8BP's costing analysis of different sources of power has been built by some of the best scientists in the world and this template is likely to be hotly debated across research institutions.
8The BP's reports biggest weakness could well be its inability to fully grasp the transformative power of disruptive technology. While the multinational is trying to position gas a transition fuel well into 2050, is it possible that battery storage technology will evolve at a pace that makes the transition redundant. The switch can be directly from coal to renewal energy, as is now being predicted by a growing number of research agencies.
8The reason why gas comes in as a substitute to coal is its ability not just replace the "dirty" fuel but also because combine cycle gas based power plants can act as base load generating stations to supplement intermittent renewable energy supply.
8What if the intermittency problem -- of solar power not being available at night and wind power fluctuating with the speed of wind -- is solved through advances in power storage technology? What happens then?
8And what if there is a consensus that global warming has to be halted at any cost and the cost per tonne of carbon emission is upped to a level that even gas based power, leave alone coal based power, too becomes uneconomical?
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BP admits in its report that stationary energy storage for electricity-grid services is disruptive in its capacity to support the integration of renewable energy sources with the electricity grid.
8If the technology works out, there will be no need for buildings to be even connected to the grid.
8However it suits BP to remain skeptical of this technology even though developments in this electricity storage field has always beaten time lines by a wide margin.
8Already in some countries, the cost of possible storage technology along with cost of renewable power generation is equaling conventional power tariffs.
8But according to BP, the technology will not make it as its widespread adoption may not meet safety and performance requirements while being cost competitive.
8"Performance requirements include the ability to ramp to full power in minutes, sustain full power for hours, cycle between charging and discharging with high efficiency and operate for thousands of cycles. The development and/or demonstration of novel technologies, such as flow batteries, molten-salt batteries and compressed air storage, are still required", BP claims.
8But BP at the same time admits that in the near term, energy storage technologies available now, such as lithium batteries, will increasingly be deployed for off-grid and local distribution systems, setting the stage for the uptake of large-scale grid storage.
8If the BP scientists were to build a few more scenarios, and were to tweark their model a bit, gas as a fuel for the power sector can be eliminated from the equations.
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8If the technology works out, there will be no need for buildings to be even connected to the grid.
8However it suits BP to remain skeptical of this technology even though developments in this electricity storage field has always beaten time lines by a wide margin.
8Already in some countries, the cost of possible storage technology along with cost of renewable power generation is equaling conventional power tariffs.
8But according to BP, the technology will not make it as its widespread adoption may not meet safety and performance requirements while being cost competitive.
8"Performance requirements include the ability to ramp to full power in minutes, sustain full power for hours, cycle between charging and discharging with high efficiency and operate for thousands of cycles. The development and/or demonstration of novel technologies, such as flow batteries, molten-salt batteries and compressed air storage, are still required", BP claims.
8But BP at the same time admits that in the near term, energy storage technologies available now, such as lithium batteries, will increasingly be deployed for off-grid and local distribution systems, setting the stage for the uptake of large-scale grid storage.
8If the BP scientists were to build a few more scenarios, and were to tweark their model a bit, gas as a fuel for the power sector can be eliminated from the equations.
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The BP Technology Outlook does have some interesting insights.
8One is that gas hydrate will go into commercial use and it will be as much of a disruption as shale oil and gas has been.
8BP says that gas hydrates represent an enormous recoverable resource at least of the order of shale gas.
8Gas hydrate resources are global and Asian economies that are heavily dependent on imported energy are making gas hydrate recovery a strategic imperative.
8By 2050 gas hydrate recovery may account for 5% or more of all global gas production, if public and private sector initiatives develop safe and cost-effective extraction technologies based on depressurization, thermal stimulation and chemical or gas injection.
8India will be in a good position to tap gas hydrates because they are found in abundance and the country has been the forefront of gas hydrate research.
8If technological breakthroughs happen, will gas hydrates be the answer to India's energy needs in the future?
8In today world, when technology is moving at an unpredictable speed and companies as big and as knowledgeable as BP are trying to struggle to keep pace with change, nothing is impossible.
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8One is that gas hydrate will go into commercial use and it will be as much of a disruption as shale oil and gas has been.
8BP says that gas hydrates represent an enormous recoverable resource at least of the order of shale gas.
8Gas hydrate resources are global and Asian economies that are heavily dependent on imported energy are making gas hydrate recovery a strategic imperative.
8By 2050 gas hydrate recovery may account for 5% or more of all global gas production, if public and private sector initiatives develop safe and cost-effective extraction technologies based on depressurization, thermal stimulation and chemical or gas injection.
8India will be in a good position to tap gas hydrates because they are found in abundance and the country has been the forefront of gas hydrate research.
8If technological breakthroughs happen, will gas hydrates be the answer to India's energy needs in the future?
8In today world, when technology is moving at an unpredictable speed and companies as big and as knowledgeable as BP are trying to struggle to keep pace with change, nothing is impossible.
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BP admits that electric vehicles and grid power storage batteries can adversely impact fossil fuel demand but does not explore the subject beyond a point.
8BP says that battery technologies for transportation are improving to meet performance demands.
8Particular progress is being made on battery reliability, costs, safety and capacity for enhan
8t-generation batteries, such as rechargeable lithium sulphur batteries, are expected to increase energy capacity threefold by 2025 from 150Wh/kg to 450Wh/kg and to reduce vehicle weight and cost.
8It says next-generation batteries could be established in the electric vehicle market by 2025–30.
8Policy makers are likely to encourage the switch to battery operated cars, BP says.
8But there are already predictions that battery operated cars will be cost compatible by 2020 rather than 2025.
8And yet BP continues to claim that it expect vehicles to remain fuelled mainly by oil-based liquid fuels in the year 2050. Vehicular technology will improve and power trains will get a massive induction of IT led technology but they will remain fueled by gas or liquids and not battery.
8Triumphantly, the company declares that liquid fuels will be much more difficult to displace from commercial transport such as shipping, trucks and aircraft, however, due to their high energy density.
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8BP says that battery technologies for transportation are improving to meet performance demands.
8Particular progress is being made on battery reliability, costs, safety and capacity for enhan
8t-generation batteries, such as rechargeable lithium sulphur batteries, are expected to increase energy capacity threefold by 2025 from 150Wh/kg to 450Wh/kg and to reduce vehicle weight and cost.
8It says next-generation batteries could be established in the electric vehicle market by 2025–30.
8Policy makers are likely to encourage the switch to battery operated cars, BP says.
8But there are already predictions that battery operated cars will be cost compatible by 2020 rather than 2025.
8And yet BP continues to claim that it expect vehicles to remain fuelled mainly by oil-based liquid fuels in the year 2050. Vehicular technology will improve and power trains will get a massive induction of IT led technology but they will remain fueled by gas or liquids and not battery.
8Triumphantly, the company declares that liquid fuels will be much more difficult to displace from commercial transport such as shipping, trucks and aircraft, however, due to their high energy density.
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So in the light of all these dramatic changes, where does India figure?
8What happens to its oil and gas industry? And to the coal fired conventional power sector?
8Given the depressing projections, will a private sector entrepreneur still put up a coal based power project with a 20 year life cycle when anything can happen in between. What if the cost of carbon emission is pegged too high, or what if solar power generation increases at a disruptive pace. Then is it possible that the plant will go out of business?
8Will gas based power be more economical then, even though India does not have a comparative advantage in its usage?
8Will the commoditization of LNG market lead to a perpetually low landed price of gas, making gas based power a viable long term alternative, at the cost of coal based power?
8Nothing is impossible any more given the way technology is progressing. No one is now looking at a 10 or a 20-year time horizon anymore in the energy sector because of the frightening pace of change.
8What happens to the gas reserves trapped in the KG Basin? Will new technology lower the cost of production to a level where it can compete with the landed price of LNG?
8If gas based power is going to be a transition fuel, before renewable energy takes over, how long will this phase last in India?
8The next 10 years are going to be the most challenging years for the Indian energy industry. A lot of today's giants will fade and die unless the top brass is glued in to the changes that are on the anvil.
8Anything is possible and nothing can be ruled out.
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8What happens to its oil and gas industry? And to the coal fired conventional power sector?
8Given the depressing projections, will a private sector entrepreneur still put up a coal based power project with a 20 year life cycle when anything can happen in between. What if the cost of carbon emission is pegged too high, or what if solar power generation increases at a disruptive pace. Then is it possible that the plant will go out of business?
8Will gas based power be more economical then, even though India does not have a comparative advantage in its usage?
8Will the commoditization of LNG market lead to a perpetually low landed price of gas, making gas based power a viable long term alternative, at the cost of coal based power?
8Nothing is impossible any more given the way technology is progressing. No one is now looking at a 10 or a 20-year time horizon anymore in the energy sector because of the frightening pace of change.
8What happens to the gas reserves trapped in the KG Basin? Will new technology lower the cost of production to a level where it can compete with the landed price of LNG?
8If gas based power is going to be a transition fuel, before renewable energy takes over, how long will this phase last in India?
8The next 10 years are going to be the most challenging years for the Indian energy industry. A lot of today's giants will fade and die unless the top brass is glued in to the changes that are on the anvil.
8Anything is possible and nothing can be ruled out.
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One question that is not going to asked anymore is whether gas pricing should be market based for yet to be developed E&P blocks.
8The rapid pace of change in the oil and gas sector has made that question irrelevant.
8And this is the best time for deregulation of gas pricing as no one is going to ask any uncomfortable questions.
8For even if the price of gas is freed, the KG Basin offshore reserves may not be viable at the current landed price of LNG.
8So it is a double whammy as of now. At the current gas price, production is not viable and even a "premium" for new gas will not make tapping the KG Basin reservoirs economically viable.
8But given that both gas and oil prices are highly volatile, slight global mismatches in the demand and supply of gas can get prices shooting higher.
8A higher price is only possible temporarily because American shale gas producers will rev up production, making it impossible to keep prices high beyond a point.
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8The rapid pace of change in the oil and gas sector has made that question irrelevant.
8And this is the best time for deregulation of gas pricing as no one is going to ask any uncomfortable questions.
8For even if the price of gas is freed, the KG Basin offshore reserves may not be viable at the current landed price of LNG.
8So it is a double whammy as of now. At the current gas price, production is not viable and even a "premium" for new gas will not make tapping the KG Basin reservoirs economically viable.
8But given that both gas and oil prices are highly volatile, slight global mismatches in the demand and supply of gas can get prices shooting higher.
8A higher price is only possible temporarily because American shale gas producers will rev up production, making it impossible to keep prices high beyond a point.
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This website believes that the Modi government should reject two big proposals that Numaligarh refinery, a subsidiary of Bharat Petroleum Corporation Ltd (BPCL), is pushing for approval. One seeks a Rs 20,000 crore expansion of the refinery in Assam from 3 to 9 MMTPA and the other calls for installing a bio-refinery project using bamboo as the feedstock.
8BPCL has asked the central government for a Rs.8,800 crore capital subsidy for the Rs.20,000 crore expansion plan
8The capital subsidy alone will not be enough to make the refinery viable. BPCL has said that the excise duty relief of 50% already available on products sold by the Numaligarh refinery because it is based in the North East, should be made 100% to enable the expansion to take place.
8When the refinery is expanded, most of the the extra capacity will only cater to demand originating outside of the North East. The industrial climate in the region is poor and it is unlikely that enough demand for petroleum products will be created there to keep a 9 MMTPA refinery going. There are three other refineries already operational in Assam and jostling for market share. What is the point of importing crude via a pipeline all the way from the East Coast, either from Haldia or Paradip, and then taking finished products back, perhaps for the same distance to the mainland through a pipeline that will run parallel to the one importing crude?
8A 6 MMTPA refining capacity is sought to be built with a capital subsidy of Rs 8000 crore and a excise duty relief amounting to a whopping Rs 8400 crore a year! The 50% excise duty relief on the existing 3 MMTPA capacity is Rs 600 crore a year. And if the capacity is expanded by another 6 MMTPA and 100% relief is granted as sought by BPCL, the figure totals up to Rs 7200 crore on the incremental capacity. If duty relief is to cover the entire 9 MMTPA capacity, the subsidy will come to Rs 8400 crore.
8The question that immediately comes to mind is what really prompts BPCL to come up with such a preposterous demand and yet maintain a straight face. The only plausible answer is that the new government will buy the argument that the capacity is coming up in industry-deficient and militancy ridden North East of India where industrialization should be promoted. This was exactly the logic on which the existing refinery was set up when Rajiv Gandhi signed the Assam Accord with the agitating All Assam Students Union in 1984. But a lot of a water has flown down the Brahmaputra since then. It is stagnating crude production from the Assam fields that has prompted BPCL to suggest a 1,350 km crude import pipeline all the way from Paradip to feed the refinery expansion. It is also a well established fact that a state-of-art refinery employs very few people and the Numaligarh refinery per say had little or no economic linkages with the rest of Assam's economy. The crude is processed within the refinery and while some of the petrol and diesel is distributed locally the rest is shipped out to the mainland
8And who has really befitted from it? It is just a few hundred people employed in the refinery. Ironically though, the Numaligarh refinery has accentuated the social divide in Upper Assam as a small class of privileged public sector employees is created from amongst the mass of un-empowered and impoverished people dotting the surrounding landscape. A few hundred people lead an ivory tower existence amidst tight CISF provided security at Numaligarh with virtually no connection with the local economy or population. The crude is piped into the refinery from Oil India's fields around Duliajan and shipped out and that's about all there is to it. Clearly the model of using large publicly funded and subsidy driven industrial plants to act as a catalyst for industrial development of the North East has failed to work.
8It is also a myth that Numaligarh can help sell Indian petroleum products in Bangaldesh and Myanmar. The route to Myanmar is long and torturous, and traverses difficult terrain. A pipeline will be unviable given low offtake in areas bordering India and the fragile border roads will not be able to take the load of tankers ferrying MS and HSD from the plains of Assam to the Burmese border. 8A pipeline to Bangladesh may make more economic sense but it may not be an easy country to do business with. Currently we have a friendly regime in the neigbouring nation but when the tide turns and the regime changes, anything can happen.
8The website believes that it will not be wise for the Modi government to dole out a Rs 8,800 crore capital subsidy on a Rs 8400 crore excise relief to the refinery.
8If indeed the government is a mood to dole out subsidies, the capacity can be set up elsewhere in mainland India without any subsidy and can then be notionally attributed to Numaligarh refinery. The capital subsidy saved can be used through a Special Purpose Vehicle to develop schools, hospitals and infrastructure in Upper Assam. The annual excise dole sought by BPCL should be used to maintain and expand the infrastructure created by the capital subsidy.
8The Assam economy and its people will benefit much more that way than through an expansion of the Numaligarh refinery.
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8BPCL has asked the central government for a Rs.8,800 crore capital subsidy for the Rs.20,000 crore expansion plan
8The capital subsidy alone will not be enough to make the refinery viable. BPCL has said that the excise duty relief of 50% already available on products sold by the Numaligarh refinery because it is based in the North East, should be made 100% to enable the expansion to take place.
8When the refinery is expanded, most of the the extra capacity will only cater to demand originating outside of the North East. The industrial climate in the region is poor and it is unlikely that enough demand for petroleum products will be created there to keep a 9 MMTPA refinery going. There are three other refineries already operational in Assam and jostling for market share. What is the point of importing crude via a pipeline all the way from the East Coast, either from Haldia or Paradip, and then taking finished products back, perhaps for the same distance to the mainland through a pipeline that will run parallel to the one importing crude?
8A 6 MMTPA refining capacity is sought to be built with a capital subsidy of Rs 8000 crore and a excise duty relief amounting to a whopping Rs 8400 crore a year! The 50% excise duty relief on the existing 3 MMTPA capacity is Rs 600 crore a year. And if the capacity is expanded by another 6 MMTPA and 100% relief is granted as sought by BPCL, the figure totals up to Rs 7200 crore on the incremental capacity. If duty relief is to cover the entire 9 MMTPA capacity, the subsidy will come to Rs 8400 crore.
8The question that immediately comes to mind is what really prompts BPCL to come up with such a preposterous demand and yet maintain a straight face. The only plausible answer is that the new government will buy the argument that the capacity is coming up in industry-deficient and militancy ridden North East of India where industrialization should be promoted. This was exactly the logic on which the existing refinery was set up when Rajiv Gandhi signed the Assam Accord with the agitating All Assam Students Union in 1984. But a lot of a water has flown down the Brahmaputra since then. It is stagnating crude production from the Assam fields that has prompted BPCL to suggest a 1,350 km crude import pipeline all the way from Paradip to feed the refinery expansion. It is also a well established fact that a state-of-art refinery employs very few people and the Numaligarh refinery per say had little or no economic linkages with the rest of Assam's economy. The crude is processed within the refinery and while some of the petrol and diesel is distributed locally the rest is shipped out to the mainland
8And who has really befitted from it? It is just a few hundred people employed in the refinery. Ironically though, the Numaligarh refinery has accentuated the social divide in Upper Assam as a small class of privileged public sector employees is created from amongst the mass of un-empowered and impoverished people dotting the surrounding landscape. A few hundred people lead an ivory tower existence amidst tight CISF provided security at Numaligarh with virtually no connection with the local economy or population. The crude is piped into the refinery from Oil India's fields around Duliajan and shipped out and that's about all there is to it. Clearly the model of using large publicly funded and subsidy driven industrial plants to act as a catalyst for industrial development of the North East has failed to work.
8It is also a myth that Numaligarh can help sell Indian petroleum products in Bangaldesh and Myanmar. The route to Myanmar is long and torturous, and traverses difficult terrain. A pipeline will be unviable given low offtake in areas bordering India and the fragile border roads will not be able to take the load of tankers ferrying MS and HSD from the plains of Assam to the Burmese border. 8A pipeline to Bangladesh may make more economic sense but it may not be an easy country to do business with. Currently we have a friendly regime in the neigbouring nation but when the tide turns and the regime changes, anything can happen.
8The website believes that it will not be wise for the Modi government to dole out a Rs 8,800 crore capital subsidy on a Rs 8400 crore excise relief to the refinery.
8If indeed the government is a mood to dole out subsidies, the capacity can be set up elsewhere in mainland India without any subsidy and can then be notionally attributed to Numaligarh refinery. The capital subsidy saved can be used through a Special Purpose Vehicle to develop schools, hospitals and infrastructure in Upper Assam. The annual excise dole sought by BPCL should be used to maintain and expand the infrastructure created by the capital subsidy.
8The Assam economy and its people will benefit much more that way than through an expansion of the Numaligarh refinery.
Click on our Reports section for more Details
The website believes that Numaligarh refinery should not go ahead with the bio-refinery in the North East of India.
8The procurement and transportation of 450,000 tonnes of bamboo will severely stress the fragile ecological balance in the North East as the Bamboo will be sourced from all over the region, spread over different states.
8Already bamboo sourcing process adopted by the public sector Ashok Paper Mills Ltd is a mess, with unscrupulous forest contractors illegally denuding last tracks of virgin bamboo forests. Local villagers are exploited by the contractors and the harvest of bamboo is done in unscientific and ecologically damaging manner.
8The demand for another 450,000 tonnes of bamboo by NRL will only escalate the scale of ecological disaster
8What is more, the government has withdrawn excise duty and other tax relief given for new industrial units in the North East
8Given that prices of chemicals have fallen in recent months, the bio-refinery in the North East may be susceptible to market volatility of the kind that NRL may not be able to handle.
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8The procurement and transportation of 450,000 tonnes of bamboo will severely stress the fragile ecological balance in the North East as the Bamboo will be sourced from all over the region, spread over different states.
8Already bamboo sourcing process adopted by the public sector Ashok Paper Mills Ltd is a mess, with unscrupulous forest contractors illegally denuding last tracks of virgin bamboo forests. Local villagers are exploited by the contractors and the harvest of bamboo is done in unscientific and ecologically damaging manner.
8The demand for another 450,000 tonnes of bamboo by NRL will only escalate the scale of ecological disaster
8What is more, the government has withdrawn excise duty and other tax relief given for new industrial units in the North East
8Given that prices of chemicals have fallen in recent months, the bio-refinery in the North East may be susceptible to market volatility of the kind that NRL may not be able to handle.
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Numaligarh Refinery Ltd plans to set up a bio-refinery to produce chemicals and ethanol in Assam by using bamboo as the feedstock.
8The bio-refinery will produce 48,900 MT of ethanol, 11,100 MT of acetic acid, 18,600 MT of furfural alcohol, 160,000 MT of biocoal (to combustion) and 30,000 MT of stillages.
8The complex will consume a massive 450,000 tonnes of green bamboo.
8The project is being set up at a cost of Rs 663 crore. The debt-equity ratio will be 70:30.
8Under various scenarios, the IRR for the project, as drawn up by PWC, varies between 14 to 16%.
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8The bio-refinery will produce 48,900 MT of ethanol, 11,100 MT of acetic acid, 18,600 MT of furfural alcohol, 160,000 MT of biocoal (to combustion) and 30,000 MT of stillages.
8The complex will consume a massive 450,000 tonnes of green bamboo.
8The project is being set up at a cost of Rs 663 crore. The debt-equity ratio will be 70:30.
8Under various scenarios, the IRR for the project, as drawn up by PWC, varies between 14 to 16%.
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Nishi Vasudeva has been anointed as Platts "Asia CEO of the Year" for exemplary leadership in steering HPCL to its best financial performance since its 1974 formation. According to Platts, the refining and marketing company showed a personal best in profits, well beyond its decades' highest profit from the prior year.
8Given such stellar performance on one hand, it is still unclear how, on the other hand, a company like MRPL, which works more or less under the same paradigm as HPCL can turn in such unashamedly poor results.
8MRPL has posted a GRM of $0.34/bbl in Q-2, 2015-16, thus notching up a GRM of just $3.56/bbl for the first half of the year.
8The company's net Q-2 loss is a whopping Rs 910 crore as against a similar loss of Rs 951 crore for the same period in the previous year.
8Sure there are differences between HPCL and MRPL, but is there also a difference in leadership?
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8Given such stellar performance on one hand, it is still unclear how, on the other hand, a company like MRPL, which works more or less under the same paradigm as HPCL can turn in such unashamedly poor results.
8MRPL has posted a GRM of $0.34/bbl in Q-2, 2015-16, thus notching up a GRM of just $3.56/bbl for the first half of the year.
8The company's net Q-2 loss is a whopping Rs 910 crore as against a similar loss of Rs 951 crore for the same period in the previous year.
8Sure there are differences between HPCL and MRPL, but is there also a difference in leadership?
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