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Dec 2015
For the management too, there must be adequate disclosure standards.
The following questions may require answers:
8Does the company provide compensation and incentive packages for senior management linked to HSE and social impact performance and its results?
8Does the company require third party independent auditing of HSE operations?
8Does the company rely on third party databases -- there is no third party data base in India as yet but clearly the DGH can create such a database -- for information to evaluate potential contractors before hire?
8Does the company disclose notices of violations of environment safety norms?
Click on Reports for more Details
The following questions may require answers:
8Does the company provide compensation and incentive packages for senior management linked to HSE and social impact performance and its results?
8Does the company require third party independent auditing of HSE operations?
8Does the company rely on third party databases -- there is no third party data base in India as yet but clearly the DGH can create such a database -- for information to evaluate potential contractors before hire?
8Does the company disclose notices of violations of environment safety norms?
Click on Reports for more Details
A company such as Cairn must be able to answer the questions on the use of toxic chemicals and water management practices in their polymer flooding programme in the Barmer bloock.
Toxic chemicals:
8Does the company provide quantitative reporting on reducing the toxicity of injection luids?
8Does the company state that as a practice it will not use diesel in injection fluids?
8Does the company state a practice to not use BTEX in injection fluids?
Water Management:
8Does the company report principal practices used to test cement integrity, such as use of cement evaluation logs, or temperature, acoustic, or ultrasonic measures?
8Does Cairn disclose whether it routinely assesses groundwater quality after it drills?
8Does it disclose the percentage of flowback water managed and reused for subsequent operations?
8Does Cairn disclose the aggregate quantity of water used for operations?
8Does it report the share of water sourced from various types (e.g., x% groundwater, y% surface water, z% flowback water, etc.)
8Does the company state it has a policy of using non-potable water sources to the fullest extent technically practicable?
8Does Cairn report the intensity of its water use—the amount of water required to produce measurable units of energy (e.g., gallons/million BTU[MMBTU])?
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Toxic chemicals:
8Does the company provide quantitative reporting on reducing the toxicity of injection luids?
8Does the company state that as a practice it will not use diesel in injection fluids?
8Does the company state a practice to not use BTEX in injection fluids?
Water Management:
8Does the company report principal practices used to test cement integrity, such as use of cement evaluation logs, or temperature, acoustic, or ultrasonic measures?
8Does Cairn disclose whether it routinely assesses groundwater quality after it drills?
8Does it disclose the percentage of flowback water managed and reused for subsequent operations?
8Does Cairn disclose the aggregate quantity of water used for operations?
8Does it report the share of water sourced from various types (e.g., x% groundwater, y% surface water, z% flowback water, etc.)
8Does the company state it has a policy of using non-potable water sources to the fullest extent technically practicable?
8Does Cairn report the intensity of its water use—the amount of water required to produce measurable units of energy (e.g., gallons/million BTU[MMBTU])?
Click on Reports for more Details
The Barmer polymer flooding plan will require high volumes of water that will be mixed with chemicals and pumped deep into the reservoir.
8Access to water is a problem too as Rajasthan is water stressed.
8Some of the water containing intentionally added chemicals returns to the surface and must be stored. treated, reused, or disposed of safely.
8One of the highest risk pathways for water contamination of surface and ground water is through surface spills and leaks of this return water.
8Management of water risks must be a core priority for Cairn given its aggressive polymer flooding programme..
8And is it doing a good job of it?
8This is something difficult to find out as adequate data is not disclosed.
8The problem is that adequate reporting standards have not evolved yet, making monitoring for stakeholders all that more difficult.
8Pre-drill testing of water quality is useful for providing baseline data against which claims of water contamination can be measured. Post-drill monitoring is important for continued evaluation of water quality to ensure timely action should any problem arise.
8Development of a new generation of injection chemicals that can work cost-effectively with non-potable water is also a step forward but it is not know whether a due process is laid down in India.
8In tandem with rapid technological innovation, companies have been scaling up waste treatment operations and waste treatment.
8There is now a need for government appointed international consultants to tell us how to make the reporting process more transparent.
Click on Reports for more Details
8Access to water is a problem too as Rajasthan is water stressed.
8Some of the water containing intentionally added chemicals returns to the surface and must be stored. treated, reused, or disposed of safely.
8One of the highest risk pathways for water contamination of surface and ground water is through surface spills and leaks of this return water.
8Management of water risks must be a core priority for Cairn given its aggressive polymer flooding programme..
8And is it doing a good job of it?
8This is something difficult to find out as adequate data is not disclosed.
8The problem is that adequate reporting standards have not evolved yet, making monitoring for stakeholders all that more difficult.
8Pre-drill testing of water quality is useful for providing baseline data against which claims of water contamination can be measured. Post-drill monitoring is important for continued evaluation of water quality to ensure timely action should any problem arise.
8Development of a new generation of injection chemicals that can work cost-effectively with non-potable water is also a step forward but it is not know whether a due process is laid down in India.
8In tandem with rapid technological innovation, companies have been scaling up waste treatment operations and waste treatment.
8There is now a need for government appointed international consultants to tell us how to make the reporting process more transparent.
Click on Reports for more Details
The website also carries here another map depicting the following:
8Strategic locations of existing LNG infrastrure, existing and future locations
8Connectivity of these locations with the pipeline network.
8All-India pipeline grid and the manner in which PLL's installations can cater to it
Click on Reports for more Details
8Strategic locations of existing LNG infrastrure, existing and future locations
8Connectivity of these locations with the pipeline network.
8All-India pipeline grid and the manner in which PLL's installations can cater to it
Click on Reports for more Details
Cairn India Ltd has boasted that its polymer flooding programme in Rajasthan's Barmer field is one of the largest in the world.
8The flooding will involve pumping a massive 400,000 barrels of chemical landen fluid per day into the earth by end of 2015-16.
8This plan is only for the Mangla field but more chemical laden fluids will be pumped in when the EOR plan is extended to other fields in the block.
8The problem here is of disclosure. How safe is the flooding programme?
8The toxic chemicals used in such operations have generated significant public concern and become a flashpoint for public controversy in the west.
8These chemicals, if released into the environment, can have a range of harmful spinoffs based on their toxicity, mobility, solubility, volatility, and persistence.
8Cairn must provide an undertaking to use “environmentally friendly” fluids and provide specifics that would allow other stakeholders to evaluate the effectiveness of these initiatives.
8US companies now ensure that diesel is completely eliminated from fluids that are pumped into the reservoirs. Can Cairn give such an undertaking?
8Then again, companies have also taken out the suite of benzene, toluene, ethylbenzene, and xylene (BTEX) chemicals from injection fluids. Isn't it possible for Cairn to do so too?
8Some companies have begun employing chemical hazard rating systems for managing and reducing the toxicity of injection chemicals, can Cairn do it too?
8Companies such as BHP Billiton have reported that 81% of its injection fluids contain chemicals that satisfy its most demanding toxicity reduction criteria which exclude endocrine disruptors, known or suspected carcinogens, mutagens, reproductive toxicants, or US government listed “priority pollutants”. Cairn India must take the initiative and start the process of doing this in India too .
8If not, then it is the job of the government to ensure that the massive amounts of chemicals pumped into the Barmer reservoirs are safe from the environment and human health point of view.
Click on Reports for more Details
8The flooding will involve pumping a massive 400,000 barrels of chemical landen fluid per day into the earth by end of 2015-16.
8This plan is only for the Mangla field but more chemical laden fluids will be pumped in when the EOR plan is extended to other fields in the block.
8The problem here is of disclosure. How safe is the flooding programme?
8The toxic chemicals used in such operations have generated significant public concern and become a flashpoint for public controversy in the west.
8These chemicals, if released into the environment, can have a range of harmful spinoffs based on their toxicity, mobility, solubility, volatility, and persistence.
8Cairn must provide an undertaking to use “environmentally friendly” fluids and provide specifics that would allow other stakeholders to evaluate the effectiveness of these initiatives.
8US companies now ensure that diesel is completely eliminated from fluids that are pumped into the reservoirs. Can Cairn give such an undertaking?
8Then again, companies have also taken out the suite of benzene, toluene, ethylbenzene, and xylene (BTEX) chemicals from injection fluids. Isn't it possible for Cairn to do so too?
8Some companies have begun employing chemical hazard rating systems for managing and reducing the toxicity of injection chemicals, can Cairn do it too?
8Companies such as BHP Billiton have reported that 81% of its injection fluids contain chemicals that satisfy its most demanding toxicity reduction criteria which exclude endocrine disruptors, known or suspected carcinogens, mutagens, reproductive toxicants, or US government listed “priority pollutants”. Cairn India must take the initiative and start the process of doing this in India too .
8If not, then it is the job of the government to ensure that the massive amounts of chemicals pumped into the Barmer reservoirs are safe from the environment and human health point of view.
Click on Reports for more Details
Methane emissions in oil and gas installations is a major problem associated with global warming as it is a tremendously potent greenhouse gas, having a “global warming potential” at least 84 times that of carbon dioxide over a 20-year time frame.
8Substantial quantities of carbon dioxide can also be generated by the burning off (“flaring”) of methane gas associated with oil production,
8Already US regulations adopted in 2012 require green completions at newly completed gas wells to maximize capture of gas, and avoid flaring or venting.
8Technical experts generally agree that cost-effective emission reduction measures are currently available to substantially reduce methane and other air emissions.
8India's methane emissions are not properly tracked and the next effort of the government should be to evolve transparent benchmarks for emission control.
8A set of parameters can surely be evolved, including reductions in NOX and VOC emissions from emission control efforts.
8Other measures to take on emissions could well include converting a percentage of corporate vehicle fleets to lower emission fuels; bringing down methane emission rates from drilling, completion, and production operations; replacement of a certain targeted percentage or number of high-bleed valves replaced with lower emission valves; and defining the scope and frequency of leak detection and monitoring exercises.
8The International Energy Agency has identified minimizing methane emissions from upstream oil and gas production as one of four key global greenhouse gas mitigation opportunities, noting that reductions in such emissions could account for nearly 15% of the total greenhouse gas reductions needed by 2020 to keep the world below a 2°C increase in temperature, a level above which catastrophic global impacts are predicted to occur
8How far down this road has Cairn gone in this direction in Barmer is not known yet.
Click on Reports for more Details
8Substantial quantities of carbon dioxide can also be generated by the burning off (“flaring”) of methane gas associated with oil production,
8Already US regulations adopted in 2012 require green completions at newly completed gas wells to maximize capture of gas, and avoid flaring or venting.
8Technical experts generally agree that cost-effective emission reduction measures are currently available to substantially reduce methane and other air emissions.
8India's methane emissions are not properly tracked and the next effort of the government should be to evolve transparent benchmarks for emission control.
8A set of parameters can surely be evolved, including reductions in NOX and VOC emissions from emission control efforts.
8Other measures to take on emissions could well include converting a percentage of corporate vehicle fleets to lower emission fuels; bringing down methane emission rates from drilling, completion, and production operations; replacement of a certain targeted percentage or number of high-bleed valves replaced with lower emission valves; and defining the scope and frequency of leak detection and monitoring exercises.
8The International Energy Agency has identified minimizing methane emissions from upstream oil and gas production as one of four key global greenhouse gas mitigation opportunities, noting that reductions in such emissions could account for nearly 15% of the total greenhouse gas reductions needed by 2020 to keep the world below a 2°C increase in temperature, a level above which catastrophic global impacts are predicted to occur
8How far down this road has Cairn gone in this direction in Barmer is not known yet.
Click on Reports for more Details
In India, it is usually the local community that takes the brunt of the adverse spinoffs of E&P activity.
8Concerns of people have have rarely come in the way of E&P operations
8A perusal of most EIA studies show that community concerns are given lip service and the entire effort is at providing some meager funds for welfare work and a few jobs for the local unemployed youth.
8But a lot needs to be done.
8Does the company describe major identified community impact concerns and the company’s response or actions to resolve such concerns?
8Does the company disclose its internal processes for capturing and addressing local concerns?
8Does the company disclose its internal processes for reporting local concerns, and data about resolving those concerns, upward within the company?
8Does the company have a clearly stated policy to reimburse state and local authorities for road damage caused by its operations?
Click on Reports for more Details
8Concerns of people have have rarely come in the way of E&P operations
8A perusal of most EIA studies show that community concerns are given lip service and the entire effort is at providing some meager funds for welfare work and a few jobs for the local unemployed youth.
8But a lot needs to be done.
8Does the company describe major identified community impact concerns and the company’s response or actions to resolve such concerns?
8Does the company disclose its internal processes for capturing and addressing local concerns?
8Does the company disclose its internal processes for reporting local concerns, and data about resolving those concerns, upward within the company?
8Does the company have a clearly stated policy to reimburse state and local authorities for road damage caused by its operations?
Click on Reports for more Details
In today's information scare times, actual maps depicting the spread of pipeline infrastructure is difficult to come by.
In this context, the website carries here the latest expandable maps on Indian existing and proposed gas pipeline network in the country.
The following data is carried on the map:
8Existing P/L Network : Pipeline route totaling up to 16200 kms (430 mmscmd)
8Proposed additional pipeline network : 15000 kms
8Under Construction : 8000 kms (400 mmscmd)
The information is further divided into:
8GAIL's existing and proposed pipeline routes
8RGTIL's East West pipeline and new pipeline routes
8GSPL's existing and proposed pipelines
8PNGRB's proposed EOI pipelines and future proposed pipelines
8GGCL's existing pipelines
8IOC's existing pipelines
8Essar's proposed pipelines
8Locations of existing and proposed LNG terminals
Click on Reports for more Details
In this context, the website carries here the latest expandable maps on Indian existing and proposed gas pipeline network in the country.
The following data is carried on the map:
8Existing P/L Network : Pipeline route totaling up to 16200 kms (430 mmscmd)
8Proposed additional pipeline network : 15000 kms
8Under Construction : 8000 kms (400 mmscmd)
The information is further divided into:
8GAIL's existing and proposed pipeline routes
8RGTIL's East West pipeline and new pipeline routes
8GSPL's existing and proposed pipelines
8PNGRB's proposed EOI pipelines and future proposed pipelines
8GGCL's existing pipelines
8IOC's existing pipelines
8Essar's proposed pipelines
8Locations of existing and proposed LNG terminals
Click on Reports for more Details
For reference purposes, the website carries here a map showing the following features
8Kochi Mangalore pipeline with major towns and cities on its route
8Kottanad Bangalore pipeline along with major towns and cities enroute.
8Kochi Kayamkulam pipeline
The pipeline stretches are depicted in terms of:
8Segments which have been delayed
8Stretches which have been completed
8And segments where no decision has been taken
Click on Reports for more Details
8Kochi Mangalore pipeline with major towns and cities on its route
8Kottanad Bangalore pipeline along with major towns and cities enroute.
8Kochi Kayamkulam pipeline
The pipeline stretches are depicted in terms of:
8Segments which have been delayed
8Stretches which have been completed
8And segments where no decision has been taken
Click on Reports for more Details
In the month of November, crude oil production barely managed to cross the fence, production (including condensate) during November, 2015 was at 3.039 MMT, just 0.55% higher than the target for the month.
8When compared with corresponding period of last year, production was down by a considerable 3.30%
8Cumulatively also, crude oil production during April-November, 2015 was 24.870 MMT which is 1.37% higher than target for the period and 0.37% lower than the production during the corresponding period in the previous year.
8ONGC’s crude oil production during November, 2015 was 1.837 MMT which is 0.45% lower than the target for the month and 1.28% lower than the production achieved in the corresponding month of the previous year.
8ONGC’s cumulative production during April-November, 2015 was 14.988 MMT which is 0.28% lower than the cumulative target and 1.08% higher than the production during the corresponding period of last year.
8The shortfall in ONGC’s production during the month was due to following reasons:
-- Gujarat, Mehsana: Less Air injection in the Santhal field, increasing water cut, power shut down, ceasure of high potential wells in the Nandasan field and de-optimization of gas lift.
-- Gujarat, Ahmedabad: Poor influx, ceasure of wells, increase in water cut, power shutdown & delayed / less gain from the Gamij Field.
-- Gujarat, Cambay: Less than envisaged production from Nadiad and Vadatal.
-- Assam: Low Gas injection pressure, power shutdown and poor influx.
-- Tamilnadu, Karaikal: Less than anticipated production from the Madanam field.
-- Offshore: Less production from Cluster-7 & WO-16 in Mumbai High
Click on our Reports section for more. Details
8When compared with corresponding period of last year, production was down by a considerable 3.30%
8Cumulatively also, crude oil production during April-November, 2015 was 24.870 MMT which is 1.37% higher than target for the period and 0.37% lower than the production during the corresponding period in the previous year.
8ONGC’s crude oil production during November, 2015 was 1.837 MMT which is 0.45% lower than the target for the month and 1.28% lower than the production achieved in the corresponding month of the previous year.
8ONGC’s cumulative production during April-November, 2015 was 14.988 MMT which is 0.28% lower than the cumulative target and 1.08% higher than the production during the corresponding period of last year.
8The shortfall in ONGC’s production during the month was due to following reasons:
-- Gujarat, Mehsana: Less Air injection in the Santhal field, increasing water cut, power shut down, ceasure of high potential wells in the Nandasan field and de-optimization of gas lift.
-- Gujarat, Ahmedabad: Poor influx, ceasure of wells, increase in water cut, power shutdown & delayed / less gain from the Gamij Field.
-- Gujarat, Cambay: Less than envisaged production from Nadiad and Vadatal.
-- Assam: Low Gas injection pressure, power shutdown and poor influx.
-- Tamilnadu, Karaikal: Less than anticipated production from the Madanam field.
-- Offshore: Less production from Cluster-7 & WO-16 in Mumbai High
Click on our Reports section for more. Details
OIL’s crude oil production during November 2015 was 0.264 MMT which is 10.56% lower than the target for the month and 7.18% lower than the production achieved in the corresponding month of 2014
8Cumulatively also production during April-November, 2015 was 2.180 MMT which is 7.80% lower than the cumulative target and 4.80% lower than the production during the corresponding period of last year.
8Reasons for shortfall in production are given below:
-- Rise in water cut in wells of Greater Chandmari and Greater Hapjan Fields
-- Permanent loss at Makum and Hapjan OCS after re-opening of wells
-- Loss of 3 days production during Bandhs
-- Less than planned contribution from workover and new wells.
JV and private fields produce better results
8Joint Venture crude oil production during November, 2015 was 936.647 TMT which is 6.39% higher than the target for the month and 5.97% lower than the corresponding month of last year.
8JVs’ cumulative production during April-November, 2015 was 7702.189 TMT which is 7.90% higher than the cumulative target and 1.80% lower than the production during the corresponding period of last year.
8Reasons for shortfall in production are given below:
-- Cairn: Natural decline in Ravva, Mangala and underperformance of Bhagyam wells in RJ-ON-90/1
-- RIL: Under performance of wells in KG-D6
-- JV of ONGC,BG&RIL: Natural decline in Panna Mukta
-- GEOENPRO: Sand ingress in Kharsang
Click on our Reports section for more. Details
8Cumulatively also production during April-November, 2015 was 2.180 MMT which is 7.80% lower than the cumulative target and 4.80% lower than the production during the corresponding period of last year.
8Reasons for shortfall in production are given below:
-- Rise in water cut in wells of Greater Chandmari and Greater Hapjan Fields
-- Permanent loss at Makum and Hapjan OCS after re-opening of wells
-- Loss of 3 days production during Bandhs
-- Less than planned contribution from workover and new wells.
JV and private fields produce better results
8Joint Venture crude oil production during November, 2015 was 936.647 TMT which is 6.39% higher than the target for the month and 5.97% lower than the corresponding month of last year.
8JVs’ cumulative production during April-November, 2015 was 7702.189 TMT which is 7.90% higher than the cumulative target and 1.80% lower than the production during the corresponding period of last year.
8Reasons for shortfall in production are given below:
-- Cairn: Natural decline in Ravva, Mangala and underperformance of Bhagyam wells in RJ-ON-90/1
-- RIL: Under performance of wells in KG-D6
-- JV of ONGC,BG&RIL: Natural decline in Panna Mukta
-- GEOENPRO: Sand ingress in Kharsang
Click on our Reports section for more. Details
Natural gas production during November, 2015 was at 2716.200 MMSCM, which is 7.27% lower than the target for the month and 3.92% lower than the production during corresponding period last year.
8Cumulative natural gas production during April-November, 2015 was 21960.009 MMSCM which is 5.93% lower than the target for the period and 2.33 lower than the production during corresponding period of last year.
8ONGC’s natural gas production during November, 2015 was 1776.830 MMSCM which is 10.93% lower than the target for the month and 3.76% lower than the production achieved in the corresponding month of last year. ONGC’s cumulative natural gas production during April-November, 2015 was 14453.152 MMSCM which is 8.09% lower than the cumulative target and 1.67% lower than the production during the corresponding period of last year.
8Reasons for the shortfall are given below:
-- Eastern Offshore: Delay in commencement of production from one deep water well. Closure of both the deep water wells of G1 field (G1-10 & 11) due to problem with the sub-sea Master Control system. Production resumed from both the wells in end November/ beginning December, 2015.
-- Offshore, Bassein & Satelite: Less production from new well/side-track wells and decline in Bassein fields
-- Gujarat, Ahmedabad: Closure of wells due to unplanned shut down of GAIL Gas line from Ahmedabad/Kalol to Ramol. Decline in associated gas production in South Kadi & Gamji fields
-- Andhra Pradesh, Rajahmundry: Closure of 42 wells due to repair of GAIL pipelines in Tatipaka-Lanco & Endamaru-Oduru sections.
-- Assam: Decline in associated gas production in Geleki & Lakwa fields
-- Tripura: Less off take by consumers due to operational issues.
-- Tamilnadu, Cauvery: Closure of wells due to less off-take by consumers in Ramnad area in Karaikal.
Click on our Reports section for more. Details
8Cumulative natural gas production during April-November, 2015 was 21960.009 MMSCM which is 5.93% lower than the target for the period and 2.33 lower than the production during corresponding period of last year.
8ONGC’s natural gas production during November, 2015 was 1776.830 MMSCM which is 10.93% lower than the target for the month and 3.76% lower than the production achieved in the corresponding month of last year. ONGC’s cumulative natural gas production during April-November, 2015 was 14453.152 MMSCM which is 8.09% lower than the cumulative target and 1.67% lower than the production during the corresponding period of last year.
8Reasons for the shortfall are given below:
-- Eastern Offshore: Delay in commencement of production from one deep water well. Closure of both the deep water wells of G1 field (G1-10 & 11) due to problem with the sub-sea Master Control system. Production resumed from both the wells in end November/ beginning December, 2015.
-- Offshore, Bassein & Satelite: Less production from new well/side-track wells and decline in Bassein fields
-- Gujarat, Ahmedabad: Closure of wells due to unplanned shut down of GAIL Gas line from Ahmedabad/Kalol to Ramol. Decline in associated gas production in South Kadi & Gamji fields
-- Andhra Pradesh, Rajahmundry: Closure of 42 wells due to repair of GAIL pipelines in Tatipaka-Lanco & Endamaru-Oduru sections.
-- Assam: Decline in associated gas production in Geleki & Lakwa fields
-- Tripura: Less off take by consumers due to operational issues.
-- Tamilnadu, Cauvery: Closure of wells due to less off-take by consumers in Ramnad area in Karaikal.
Click on our Reports section for more. Details
Oil India Ltd performed much better when it came to natural gas production as compared to crude output during November, 2015. Gas output was at 255.660 MMSCM which is 0.70% lower than the target for the month and 9.50% higher than the production achieved in the corresponding month of last year.
8Cumulatively also, natural gas production during April-November, 2015 was at 1853.959 MMSCM, which was 7.83% lower than the cumulative target and 1.52% higher than the production during the corresponding period of last year.
8Reasons for the shortfall are given below:
-- Shortfall is mainly due to low uplifitment by the Lakwa Thermal Power Station and Brahmaputra Crackers & Polymers Limited.
-- Issues related to land acquisition delayed movement of rigs to proposed forward locations.
-- In KG Basin, the drilling of the first HPHT well could not start due to resistance by local villagers on Rig movement over the Vivekananda Bridge. However, with OIL’s continuous efforts and liaison with local authorities, rig movement was started
-- The areas planned for seismic survey during the year 2015-16 in Assam and AP are mostly in very low lying catchment areas of the Brahmaputra which were flooded from April to June, 2015 due to early onset of monsoon in the area. The post monsoon operation will start from mid-December, 2015 as the water level in the area has receded now.
JV gas production flat:
8Moreover, JVs’ natural gas production during November, 2015 was 683.710 MMSCM, which was 0.99% higher than the target for the month and 8.48% lower than the production achieved in the corresponding month of last year.
Reasons for the shortfall are given below:
-- RIL (KG-D6): Underperformance of MA wells.
-- JV of BG, RIL & ONGC (M&S Tapti): Operatorhas proposed field abandonment.
-- Cairn(CB-OS/2 & Ravva): Decline in gas production
-- GSPC(KG-OSN-2001/3): Decline in gas production
-- CBM: Extended dewatering in Raniganj South (GEECL), Delayed forest clearance in Raniganj East (Essar).
Click on our Reports for more. Details
8Cumulatively also, natural gas production during April-November, 2015 was at 1853.959 MMSCM, which was 7.83% lower than the cumulative target and 1.52% higher than the production during the corresponding period of last year.
8Reasons for the shortfall are given below:
-- Shortfall is mainly due to low uplifitment by the Lakwa Thermal Power Station and Brahmaputra Crackers & Polymers Limited.
-- Issues related to land acquisition delayed movement of rigs to proposed forward locations.
-- In KG Basin, the drilling of the first HPHT well could not start due to resistance by local villagers on Rig movement over the Vivekananda Bridge. However, with OIL’s continuous efforts and liaison with local authorities, rig movement was started
-- The areas planned for seismic survey during the year 2015-16 in Assam and AP are mostly in very low lying catchment areas of the Brahmaputra which were flooded from April to June, 2015 due to early onset of monsoon in the area. The post monsoon operation will start from mid-December, 2015 as the water level in the area has receded now.
JV gas production flat:
8Moreover, JVs’ natural gas production during November, 2015 was 683.710 MMSCM, which was 0.99% higher than the target for the month and 8.48% lower than the production achieved in the corresponding month of last year.
Reasons for the shortfall are given below:
-- RIL (KG-D6): Underperformance of MA wells.
-- JV of BG, RIL & ONGC (M&S Tapti): Operatorhas proposed field abandonment.
-- Cairn(CB-OS/2 & Ravva): Decline in gas production
-- GSPC(KG-OSN-2001/3): Decline in gas production
-- CBM: Extended dewatering in Raniganj South (GEECL), Delayed forest clearance in Raniganj East (Essar).
Click on our Reports for more. Details
The production of petroleum products across the industry during November, 2015 stood at 19.695 MMT, representing a 5.26% growth over the planned monthly target of 18.711 MMT.
8Cumulative production during April-November, 2015 was recorded to be 150.564 MMT which is 1.84% higher than the target for the period and 2.45% higher than the production during the corresponding period of last year.
8Out of the lot, PSU's share of production during November, 2015 was 10.547MMT which remained 1.79% higher than the target for the month and 2.30% higher than the production achieved in the corresponding month of last year.
8However any localized shortfall that occurred during the month of November can be attributed to ongoing works at IOCL's Bangaigaon refinery, CPCL's Manali refinery and MPRL's Mangalore refinery.
8In addition to this, throughput from IOCL's Guwahati and Digboi refinery and also from NRL's refinery was on the lower side due to less availability of crude.
8The JV refineries also surpassed their target by 13.85% during the month, thereby producing 1.409 MMT during month of November.
8The production by private sector refineries were however lower than their target by 8.82%. The private refineries produced 7.738 MMT during the month.
8Cumulative production in private refineries during April-November, 2015 was 57.971 MMT which is 0.19% lower than the cumulative target and 2.37% lower than the production during the corresponding period of last year.
Click on Reports for more details on refinery-wise capacity utilization and production of petroleum products during the month of November, 2015 and cumulatively for the period April-November, 2015 with regard to April-November,2014. Details
8Cumulative production during April-November, 2015 was recorded to be 150.564 MMT which is 1.84% higher than the target for the period and 2.45% higher than the production during the corresponding period of last year.
8Out of the lot, PSU's share of production during November, 2015 was 10.547MMT which remained 1.79% higher than the target for the month and 2.30% higher than the production achieved in the corresponding month of last year.
8However any localized shortfall that occurred during the month of November can be attributed to ongoing works at IOCL's Bangaigaon refinery, CPCL's Manali refinery and MPRL's Mangalore refinery.
8In addition to this, throughput from IOCL's Guwahati and Digboi refinery and also from NRL's refinery was on the lower side due to less availability of crude.
8The JV refineries also surpassed their target by 13.85% during the month, thereby producing 1.409 MMT during month of November.
8The production by private sector refineries were however lower than their target by 8.82%. The private refineries produced 7.738 MMT during the month.
8Cumulative production in private refineries during April-November, 2015 was 57.971 MMT which is 0.19% lower than the cumulative target and 2.37% lower than the production during the corresponding period of last year.
Click on Reports for more details on refinery-wise capacity utilization and production of petroleum products during the month of November, 2015 and cumulatively for the period April-November, 2015 with regard to April-November,2014. Details
The website carries here, for reference purposes, a snapshot of India`s oil and gas data (updated upto November 2015) prepared by the PPAC.
The following details are carried in the document which can serve as a ready reckoner:
8Selected indicators of the Indian economy
8Import dependency
8Estimated balance of trade
8Indigenous crude oil production
8Domestic oil and gas production vis-a-vis overseas production
8CBM development in India
8Refineries: Installed Capacity and Crude Oil Processing
8High sulphur (HS) and low sulphur (LS) crude oil processing
8Gross Refining Margins (GRM) across companies and refineries
8GRM of North-East refineries, excluding excise duty benefit
8Gas Pipelines under execution or production
8Production and consumption of petroleum products
8Existing and upcoming LNG Terminals
8Details of conversion factors and volume conversion.
Click on Reports for more information Details
The following details are carried in the document which can serve as a ready reckoner:
8Selected indicators of the Indian economy
8Import dependency
8Estimated balance of trade
8Indigenous crude oil production
8Domestic oil and gas production vis-a-vis overseas production
8CBM development in India
8Refineries: Installed Capacity and Crude Oil Processing
8High sulphur (HS) and low sulphur (LS) crude oil processing
8Gross Refining Margins (GRM) across companies and refineries
8GRM of North-East refineries, excluding excise duty benefit
8Gas Pipelines under execution or production
8Production and consumption of petroleum products
8Existing and upcoming LNG Terminals
8Details of conversion factors and volume conversion.
Click on Reports for more information Details
For reference purposes, the website carries here details of geographical areas currently covered by Piped Natural Gas along with the number of PNG connections in each area.
The data is given in the following format:
8State
8Geographical Area
8PNG connections
8Also given here are details in a similar format of cities which are likely to be covered by the end of 2016.
Click on Reports for more Details
The data is given in the following format:
8State
8Geographical Area
8PNG connections
8Also given here are details in a similar format of cities which are likely to be covered by the end of 2016.
Click on Reports for more Details
The website carries here the latest information on long term gas supply contracts entered into by domestic LNG distributors.
The data is given in terms of:
8Name of supplier
8Name of the buyer
8Quantity contracted
8Term period contracted for
Click on Reports for more Details
The data is given in terms of:
8Name of supplier
8Name of the buyer
8Quantity contracted
8Term period contracted for
Click on Reports for more Details
The petroleum ministry has clarified that no deal has yet been arrived at by Petronet LNG Ltd with RasGas of Qatar for fresh terms for supply of long term LNG.
8Both parties are currently in hectic parleys but no deal has been struck.
8The problem is that the price of the long-term contract will take a longer time to align with the current market prices due to the contract price being linked to a 60-month rolling JCC average.
8One option is to compress the 60-month rolling benchmark to a lower number in order to be able to bring down the price of RasGas LNG to those comparable to spot LNG prices.
8The problem arises from the fact that there will be very few takers for long term gas at a price that is higher than the average spot price for LNG.
8The present negotiations are taking place at a time when the contract provides for take or pay provisions to be squared up by December and in the backdrop of a default in fulfilling some of the covenants of the long term agreement by PLL.
8Without a deal, PLL will have to end up paying a hefty penalty for deferred deliveries besides having to palm off higher prices for LNG to its offtakers.
Click on Details for more Details
8Both parties are currently in hectic parleys but no deal has been struck.
8The problem is that the price of the long-term contract will take a longer time to align with the current market prices due to the contract price being linked to a 60-month rolling JCC average.
8One option is to compress the 60-month rolling benchmark to a lower number in order to be able to bring down the price of RasGas LNG to those comparable to spot LNG prices.
8The problem arises from the fact that there will be very few takers for long term gas at a price that is higher than the average spot price for LNG.
8The present negotiations are taking place at a time when the contract provides for take or pay provisions to be squared up by December and in the backdrop of a default in fulfilling some of the covenants of the long term agreement by PLL.
8Without a deal, PLL will have to end up paying a hefty penalty for deferred deliveries besides having to palm off higher prices for LNG to its offtakers.
Click on Details for more Details
Petronet LNG Ltd has always been in the eye of a storm..
8On April 27, 2015, the petroleum minister had informed Parliament that the company was being investigated for alleged irregularities in gas purchase contracts.
8Subsequent, an article written by Surya P Sethi, former Principal Advisor for Power and Energy in the Government of India, alleged that Petronet had indulged in massive irregularities since inception.
8These irregularities have cost the nation tens of billions of dollars, he said
8Sethi went on to claim that the company had entered into dubious contracts at the behest of vested interests that benefited from keeping Indian LNG import prices high.
8"Establishing mala fides would provide Government of India the legal basis for renegotiating these contracts," insists Sethi
Click on Details to find out more on the specific charges levied by Sethi. Details
8On April 27, 2015, the petroleum minister had informed Parliament that the company was being investigated for alleged irregularities in gas purchase contracts.
8Subsequent, an article written by Surya P Sethi, former Principal Advisor for Power and Energy in the Government of India, alleged that Petronet had indulged in massive irregularities since inception.
8These irregularities have cost the nation tens of billions of dollars, he said
8Sethi went on to claim that the company had entered into dubious contracts at the behest of vested interests that benefited from keeping Indian LNG import prices high.
8"Establishing mala fides would provide Government of India the legal basis for renegotiating these contracts," insists Sethi
Click on Details to find out more on the specific charges levied by Sethi. Details
For reference purposes, the website carries here the following details on the E&P sector in India:
8Details of exploratory work carried out by all operators for the period 2012-13 to 2015-16 (up to September).
8Name of the operator
8Location
8Quantum of 2D seismic surveys conducted
83D surveys conducted
8Exploratory wells drilled.
Click on Reports for more Details
8Details of exploratory work carried out by all operators for the period 2012-13 to 2015-16 (up to September).
8Name of the operator
8Location
8Quantum of 2D seismic surveys conducted
83D surveys conducted
8Exploratory wells drilled.
Click on Reports for more Details
The website also carries here information on all hydrocarbon discoveries made by all operators under NELP for the years 2012-13 to 2015-16 (up to September):
The data is given in terms of;
8Name of operator
8State
8Discovery made in terms of:
--Oil
--Gas
8The data is then further divided in terms of quantum of oil, condensate and gas found in each discovery.
Click on Reports for more Details
The data is given in terms of;
8Name of operator
8State
8Discovery made in terms of:
--Oil
--Gas
8The data is then further divided in terms of quantum of oil, condensate and gas found in each discovery.
Click on Reports for more Details
For reference purposes, the website carries here comprehensive details on the following:
8Turkmenistan-Afghanistan-Pakistan-India pipeline
8Details of the proposed Russia-India pipeline
8Sector-wise use of gas in 2014-15
8Pipeline capacity utilization in 2014-15
Click on Reports for more Details
8Turkmenistan-Afghanistan-Pakistan-India pipeline
8Details of the proposed Russia-India pipeline
8Sector-wise use of gas in 2014-15
8Pipeline capacity utilization in 2014-15
Click on Reports for more Details
The website also carries here oil and gas related data on the North East of India in terms of:
8Total volume of 2D and 3D seismic surveys carried out by OIL and ONGC
8Total prognosticated hydrocarbon reserves
8Total investments made by ONGC, OIL and private operators between 2010-2015
8Latest crude oil and gas production
8Installed refining capacity
Click on Reports for more Details
8Total volume of 2D and 3D seismic surveys carried out by OIL and ONGC
8Total prognosticated hydrocarbon reserves
8Total investments made by ONGC, OIL and private operators between 2010-2015
8Latest crude oil and gas production
8Installed refining capacity
Click on Reports for more Details
For reference purposes, the website carries here the demand-supply gap of petroleum products for the year years 2013-14, 2014-15 and 2015-16 (up to September).
The data is given in the following format:
8Name of the product
8Production
8Demand
8Demand-Supply Gap
There is a clear demand supply gap in
8Naphtha
8MS
8ATF
8SKO
8HSD
8LDO
8Fuel Oil
8Bitumen
The quantum of shortage is given here. And the gap is plugged through imports. Over the last three years, the demand supply gap is showing signs of closing.
Some interesting trends are noticed over a period time, including higher usage of Fuel Oil, HSD, ATF and LPG, among others.
Click on Reports for more Details
The data is given in the following format:
8Name of the product
8Production
8Demand
8Demand-Supply Gap
There is a clear demand supply gap in
8Naphtha
8MS
8ATF
8SKO
8HSD
8LDO
8Fuel Oil
8Bitumen
The quantum of shortage is given here. And the gap is plugged through imports. Over the last three years, the demand supply gap is showing signs of closing.
Some interesting trends are noticed over a period time, including higher usage of Fuel Oil, HSD, ATF and LPG, among others.
Click on Reports for more Details
For reference purposes, the website also carries here the year wise and product wise value of imports up to September, 2016.
The data is given in the following format:
8Year
8Name of the product
8Quantity imported
8Value in dollars
8Value in reports
Also carried here is the country-wise import of petroleum products in terms of:
8Year
8Name of the country
8Quantum of imports
Click on Reports for more Details
The data is given in the following format:
8Year
8Name of the product
8Quantity imported
8Value in dollars
8Value in reports
Also carried here is the country-wise import of petroleum products in terms of:
8Year
8Name of the country
8Quantum of imports
Click on Reports for more Details
Private participation in Indian ports using the Public Private Partnership (PPP) model has not quite worked in India
8In a scanting indictment, the CAG has claimed that a total capacity addition of 751.71 Million Metric Tonne per Annum (MMTPA) was proposed under the PPA format.
8But a capacity of only 264.69 MMTPA was achieved from 35 projects completed by March 2014.
8The PPP projects could contribute only 33 per cent to the total capacity of major ports
8According to the CAG, the PPP model suffered from major infirmities.
Click on Reports for more Details
8In a scanting indictment, the CAG has claimed that a total capacity addition of 751.71 Million Metric Tonne per Annum (MMTPA) was proposed under the PPA format.
8But a capacity of only 264.69 MMTPA was achieved from 35 projects completed by March 2014.
8The PPP projects could contribute only 33 per cent to the total capacity of major ports
8According to the CAG, the PPP model suffered from major infirmities.
Click on Reports for more Details
Is it time for the government to provide targeted LPG subsidy only to the poor?
8Some would say that the time is ripe considering low current subsidy
8Targeted subsidy only for the poor who are not able to afford LPG at unsubsidized prices will mean that the subsidy will be denied to well-off consumers
8Although the definition of well-off consumer is not yet final, there are reports that the government may decide to exclude consumers with annual income of more than Rs. 10 lakh or owners of a car or a house.
8There could be significant savings in LPG subsidies if the plan is implemented as LPG is used intensively in urban areas which have large population of consumers who can afford unsubsidized LPG prices.
8Further, it could be the right time to stop LPG subsidy for high income consumers as the current subsidy levels on LPG are low (Rs. 100-140 / cylinder over last 3 months) and thus, the step will not have an adverse financial impact for the consumers of LPG, a politically sensitive product as it is a household cooking fuel.
8Assuming consumption of one cylinder every 45 days, the impact on the household budget could be limited to Rs. 75-100 per month at the current level of global crude oil and LPG prices. Further, the savings in subsidy through the step could be material as per month consumption of LPG in richer households would be relatively higher than those in poorer ones. Overall, the savings in LPG subsidies could be Rs. 2000 to Rs 3000 crore annually if subsidy is stopped for 10-20% households, which may have a consumption level which is 1.25-1.5 times the average consumption.
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8Some would say that the time is ripe considering low current subsidy
8Targeted subsidy only for the poor who are not able to afford LPG at unsubsidized prices will mean that the subsidy will be denied to well-off consumers
8Although the definition of well-off consumer is not yet final, there are reports that the government may decide to exclude consumers with annual income of more than Rs. 10 lakh or owners of a car or a house.
8There could be significant savings in LPG subsidies if the plan is implemented as LPG is used intensively in urban areas which have large population of consumers who can afford unsubsidized LPG prices.
8Further, it could be the right time to stop LPG subsidy for high income consumers as the current subsidy levels on LPG are low (Rs. 100-140 / cylinder over last 3 months) and thus, the step will not have an adverse financial impact for the consumers of LPG, a politically sensitive product as it is a household cooking fuel.
8Assuming consumption of one cylinder every 45 days, the impact on the household budget could be limited to Rs. 75-100 per month at the current level of global crude oil and LPG prices. Further, the savings in subsidy through the step could be material as per month consumption of LPG in richer households would be relatively higher than those in poorer ones. Overall, the savings in LPG subsidies could be Rs. 2000 to Rs 3000 crore annually if subsidy is stopped for 10-20% households, which may have a consumption level which is 1.25-1.5 times the average consumption.
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GAIL is planning to hire a third party agency to carry out ultrasonic thickness survey for its pipeline network in Maharastra region.
8In Maharashtra region, GAIL is transporting natural gas from ONGC Uran and other sources to various consumers in Silvassa, Trombay, Uran, Belapur, Tarapur, Pune, Dabhol and Alibaug regions through its dedicated pipeline networks and supply terminals.
8Accordingly, piping at various gas terminals and above ground pipelines will be inspected in line with guidelines of OISD-130 to ascertain the remaining wall thickness of pipes.
8Where ever these codes are silent, the same shall be governed by sound engineering practices.
8The entire work will be completed within 12 months after receiving the work order.
Click on the Reports for more. Details
8In Maharashtra region, GAIL is transporting natural gas from ONGC Uran and other sources to various consumers in Silvassa, Trombay, Uran, Belapur, Tarapur, Pune, Dabhol and Alibaug regions through its dedicated pipeline networks and supply terminals.
8Accordingly, piping at various gas terminals and above ground pipelines will be inspected in line with guidelines of OISD-130 to ascertain the remaining wall thickness of pipes.
8Where ever these codes are silent, the same shall be governed by sound engineering practices.
8The entire work will be completed within 12 months after receiving the work order.
Click on the Reports for more. Details
For reference purposes, the website carries here details of the gas terminals and piping details in GAIL locations in Maharashtra.
The names of the terminals are carried for the following regions:
8Trombay Network
8Belapur, Silvassa, Kalyan, DUPL Network
8Alibaug & Maangaon Region APM / RLNG Network:
8Dabhol, Ratnagiri Network:
Click on Reports for more Details
The names of the terminals are carried for the following regions:
8Trombay Network
8Belapur, Silvassa, Kalyan, DUPL Network
8Alibaug & Maangaon Region APM / RLNG Network:
8Dabhol, Ratnagiri Network:
Click on Reports for more Details
The government's move to advance the implementation of BS-V norms from April 1, 2019 and BS-VI norms from April 1, 2021 will translate into orders worth Rs 80,000 crore for equipment and service providers in the Indian refining sector.
8This will come as a massive boost to the equipment and service industry in India at a time when business has been slow.
8The Saumitra Chaudhuri Committee report -- dubbed as the “Draft Auto Fuel Vision & Policy 2025” -- had recommended a roll out of BS-IV specifications in a phased manner covering the entire country by April 1, 2017 followed by the roll out of BS-V specs in a phased manner covering the entire country by April 1, 2020.
8But the deadlines have been advanced by the Modi government.
How is the Rs 80,000 crore investment to be funded?
8The Saumitra Chaudhuri Committee had suggested the imposition of a Special Fuel Upgradation Cess, which will accrue to OIDB to finance the modernization projects at the refineries.
8The worry however is that the premium that will be set may not be enough to take care of the investment and elicit a reasonable return.
8A healthy premium is a pre-requisite for achieving meaningful returns from these investments.
Click on Reports for more Details
8This will come as a massive boost to the equipment and service industry in India at a time when business has been slow.
8The Saumitra Chaudhuri Committee report -- dubbed as the “Draft Auto Fuel Vision & Policy 2025” -- had recommended a roll out of BS-IV specifications in a phased manner covering the entire country by April 1, 2017 followed by the roll out of BS-V specs in a phased manner covering the entire country by April 1, 2020.
8But the deadlines have been advanced by the Modi government.
How is the Rs 80,000 crore investment to be funded?
8The Saumitra Chaudhuri Committee had suggested the imposition of a Special Fuel Upgradation Cess, which will accrue to OIDB to finance the modernization projects at the refineries.
8The worry however is that the premium that will be set may not be enough to take care of the investment and elicit a reasonable return.
8A healthy premium is a pre-requisite for achieving meaningful returns from these investments.
Click on Reports for more Details
The Gross Refinery Margins of Indian refineries are likely to be under severe pressure in 2016.
8This is because GRMs are expected to remain subdued globally in the medium term due to global refinery capacity additions outstripping the growth in demand
8The demand growth of petroleum products is expected to remain moderate amidst expectations of Chinese consumption growth slowing down.
8Delays in commissioning of some of the proposed projects and closure of unviable refinery capacities may however lead to some upside in GRM levels over the medium term but the light-heavy differentials, which aid the GRMs of complex refineries, are expected to remain moderate in the medium term on account of a rapid completion of complex refineries and conversion projects which are likely to result in increased demand for heavy and sour crudes.
8Following an outlook of subdued international refining margins and moderate import-duty differentials between petroleum products and crude oil, GRMs of domestic refineries are also expected to remain weak over the medium term.
8Their profit metrics will continue to be sensitive to the volatility in Indian Rupee (INR) against the US Dollar (USD), inventory gains or losses arising from volatility in crude prices and import duty protection levels.
8Already, GRMs of Indian refining companies were dampened by the large inventory losses in Q2 2015-16 as the international prices of crude oil declined by about 22% during this period from $ 60/barrel levels on June 30, 2015 to $ 47/barrel on September 30, 2015. The inventory losses may extend to Q3 2015-16 as crude oil prices which are currently (as of mid December 2015) below $ 40/barrel may close the quarter at these levels.
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8This is because GRMs are expected to remain subdued globally in the medium term due to global refinery capacity additions outstripping the growth in demand
8The demand growth of petroleum products is expected to remain moderate amidst expectations of Chinese consumption growth slowing down.
8Delays in commissioning of some of the proposed projects and closure of unviable refinery capacities may however lead to some upside in GRM levels over the medium term but the light-heavy differentials, which aid the GRMs of complex refineries, are expected to remain moderate in the medium term on account of a rapid completion of complex refineries and conversion projects which are likely to result in increased demand for heavy and sour crudes.
8Following an outlook of subdued international refining margins and moderate import-duty differentials between petroleum products and crude oil, GRMs of domestic refineries are also expected to remain weak over the medium term.
8Their profit metrics will continue to be sensitive to the volatility in Indian Rupee (INR) against the US Dollar (USD), inventory gains or losses arising from volatility in crude prices and import duty protection levels.
8Already, GRMs of Indian refining companies were dampened by the large inventory losses in Q2 2015-16 as the international prices of crude oil declined by about 22% during this period from $ 60/barrel levels on June 30, 2015 to $ 47/barrel on September 30, 2015. The inventory losses may extend to Q3 2015-16 as crude oil prices which are currently (as of mid December 2015) below $ 40/barrel may close the quarter at these levels.
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With a large number of complex refineries capable of processing Sour crude going on steam, the Light-Sweet and Heavy-Sour differentials declined to $ 2.9/bbl in Q2 FY 2015-16 as against US$ 3.4/bbl in Q1 FY 2015-16 and the ten year average of US$ 4.2/bbl. This has happened even as fuel oil cracks weakened.
8The ability of complex refiners to leverage the price differential between light-sweet and heavy-sour crudes to earn higher GRMs vis-à-vis relatively simpler refiners diminishes with the decline in the differential.
8So is the differential going to be big enough for more conversions to take place?
8The cost-economics of the Sweet-Sour spread will have to be worked out more cautiously from now onwards.
Crack Spreads Decline
8Meanwhile, Crack spreads declined across the barrel in Q2 2015-17 as compared to Q1. Naphtha crack spreads declined in Q2 2015-16 as compared to Q1 but continued to show strength on account of healthy petrochemical demand and strong gasoline cracks which prompted naphtha blending and reforming to gasoline.
8Gasoline cracks declined in Q2 2015-16 vis-à-vis Q1 but remained strong overall due to domestic demand in China and India and the highest US demand since 2007 owing to low pump prices amid unplanned refinery outages.
In the middle of the barrel, Gasoil cracks declined in Q2 vis-à-vis Q1 owing to high supplies out of China and India which elevated stock levels in the Asian region and high refinery runs to exploit attractive light distillate cracks resulted in surplus gasoil.
8Jet/Kero cracks declined in Q2 over Q1 owing to high supplies and high stock levels.
8At the bottom of the barrel, Fuel Oil cracks declined in Q2 owing to high supplies and stocks due to higher refinery runs amid poor demand growth with smaller less complex Chinese refineries shifting slowly to crude oil.
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8The ability of complex refiners to leverage the price differential between light-sweet and heavy-sour crudes to earn higher GRMs vis-à-vis relatively simpler refiners diminishes with the decline in the differential.
8So is the differential going to be big enough for more conversions to take place?
8The cost-economics of the Sweet-Sour spread will have to be worked out more cautiously from now onwards.
Crack Spreads Decline
8Meanwhile, Crack spreads declined across the barrel in Q2 2015-17 as compared to Q1. Naphtha crack spreads declined in Q2 2015-16 as compared to Q1 but continued to show strength on account of healthy petrochemical demand and strong gasoline cracks which prompted naphtha blending and reforming to gasoline.
8Gasoline cracks declined in Q2 2015-16 vis-à-vis Q1 but remained strong overall due to domestic demand in China and India and the highest US demand since 2007 owing to low pump prices amid unplanned refinery outages.
In the middle of the barrel, Gasoil cracks declined in Q2 vis-à-vis Q1 owing to high supplies out of China and India which elevated stock levels in the Asian region and high refinery runs to exploit attractive light distillate cracks resulted in surplus gasoil.
8Jet/Kero cracks declined in Q2 over Q1 owing to high supplies and high stock levels.
8At the bottom of the barrel, Fuel Oil cracks declined in Q2 owing to high supplies and stocks due to higher refinery runs amid poor demand growth with smaller less complex Chinese refineries shifting slowly to crude oil.
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Gross under recoveries of public sector oil marketing companies (OMCs) are expected go down by a whopping 58% from Rs 72,300 crore in 2014-15 to Rs 30,000 crore in 2015-16.
8The estimates have been made by a research paper taking into account an average Indian basket crude oil price of $ 51/bbl and INR/$ of 65 for 2015-16.
8Based on actual, under recoveries have declined by 69% (yoy) to Rs. 15,940 crore -- including cash reimbursement under DBTL -- in the first half of 2015-16 from Rs. 51,110 crore in the corresponding period in the previous year in line with lower global prices of crude oil at $ 55 /bbl against $ 104 /bbl in the first half of 2014-15.
8Indian Basket of crude oil prices have largely remained lower than $ 60 /bbl over the last seven months (averaging $ ~54 in April to October 2015 period).
8Soft level of crude oil prices are expected to lead to materially lower under-recoveries on LPG and Kerosene, while deregulated diesel and petrol prices would ensure no subsidy burden on auto fuels (viz. diesel and petrol).
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8The estimates have been made by a research paper taking into account an average Indian basket crude oil price of $ 51/bbl and INR/$ of 65 for 2015-16.
8Based on actual, under recoveries have declined by 69% (yoy) to Rs. 15,940 crore -- including cash reimbursement under DBTL -- in the first half of 2015-16 from Rs. 51,110 crore in the corresponding period in the previous year in line with lower global prices of crude oil at $ 55 /bbl against $ 104 /bbl in the first half of 2014-15.
8Indian Basket of crude oil prices have largely remained lower than $ 60 /bbl over the last seven months (averaging $ ~54 in April to October 2015 period).
8Soft level of crude oil prices are expected to lead to materially lower under-recoveries on LPG and Kerosene, while deregulated diesel and petrol prices would ensure no subsidy burden on auto fuels (viz. diesel and petrol).
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Under recoveries are coming down not just due to a fall in crude prices but also because of savings accruing from the Direct Benefit Transfer Scheme for LPG.
8About 10% of total live connections were found to be fake or multiple connections, which have been disconnected or surrendered.
8Direct transfer of subsidy to bank accounts is helping the government to significantly reduce leakage of LPG which in the past had been getting diverted for commercial and Auto-LPG purposes.
8With DBTL in place, the OMCs are selling domestic LPG at market price while the subsidy is being directly transferred to the accounts of customers.
8OMCs transfer subsidies to bank accounts of consumers and later recover the LPG subsidies from a bank account (oil pool account) created by the government. As the LPG subsidies in the last few months have hovered around Rs. 100-140 per cylinder while the government is transferring the subsidy at Rs. 255 / cylinder; the oil pool account is currently in surplus.
8What are the options for the government? It can either withdraw surplus from the oil pool account in the fourth quarter of 2015-16 or it may keep it there to provide a cushion for future under-recoveries if crude oil prices increase significantly.
8Overall, the subsidy burden is reducing with a significant fall in leakages of LPG
8With DBTL covering almost all LPG customer population, timely subsidy reimbursement and prevailing soft crude oil prices, the OMCs are witnessing material fall in working capital intensity, thereby leading to reduction in short-term debt levels, decline in interest costs and improvement in liquidity position.
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8About 10% of total live connections were found to be fake or multiple connections, which have been disconnected or surrendered.
8Direct transfer of subsidy to bank accounts is helping the government to significantly reduce leakage of LPG which in the past had been getting diverted for commercial and Auto-LPG purposes.
8With DBTL in place, the OMCs are selling domestic LPG at market price while the subsidy is being directly transferred to the accounts of customers.
8OMCs transfer subsidies to bank accounts of consumers and later recover the LPG subsidies from a bank account (oil pool account) created by the government. As the LPG subsidies in the last few months have hovered around Rs. 100-140 per cylinder while the government is transferring the subsidy at Rs. 255 / cylinder; the oil pool account is currently in surplus.
8What are the options for the government? It can either withdraw surplus from the oil pool account in the fourth quarter of 2015-16 or it may keep it there to provide a cushion for future under-recoveries if crude oil prices increase significantly.
8Overall, the subsidy burden is reducing with a significant fall in leakages of LPG
8With DBTL covering almost all LPG customer population, timely subsidy reimbursement and prevailing soft crude oil prices, the OMCs are witnessing material fall in working capital intensity, thereby leading to reduction in short-term debt levels, decline in interest costs and improvement in liquidity position.
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In line with the success of DBT for LPG, the government is rolling out a direct benefit transfer for Kerosene.
8The diversion of kerosene for adulteration in diesel and petrol is high in India as per various studies and the step to provide direct benefit into the bank accounts of actual consumers may significantly reduce the leakage (similar to 8the case of diversion of domestic LPG for commercial and Auto-LPG purposes).
8The actual household consumption of kerosene as cooking or lighting fuel could be materially lower than current total consumption of kerosene in the country, and this leads to a high wastage of subsidies.
DBT for Kerosene may also be targeted to only those households, which are Below Poverty Line (BPL).
8The estimated savings from DBT for kerosene could be huge (at around 30-40% of total under-recoveries on kerosene) but implementation will be a major challenge as the kerosene distribution is through the public distribution system (PDS) handled by respective state governments.
8Thus, to move from PDS to DBT may pose political challenges for the central government, especially from high consuming states like UP (contributing 18% of total consumption in India), West Bengal (11%) and Bihar (9%) which are ruled by the parties who are not part of the ruling coalition at the centre.
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8The diversion of kerosene for adulteration in diesel and petrol is high in India as per various studies and the step to provide direct benefit into the bank accounts of actual consumers may significantly reduce the leakage (similar to 8the case of diversion of domestic LPG for commercial and Auto-LPG purposes).
8The actual household consumption of kerosene as cooking or lighting fuel could be materially lower than current total consumption of kerosene in the country, and this leads to a high wastage of subsidies.
DBT for Kerosene may also be targeted to only those households, which are Below Poverty Line (BPL).
8The estimated savings from DBT for kerosene could be huge (at around 30-40% of total under-recoveries on kerosene) but implementation will be a major challenge as the kerosene distribution is through the public distribution system (PDS) handled by respective state governments.
8Thus, to move from PDS to DBT may pose political challenges for the central government, especially from high consuming states like UP (contributing 18% of total consumption in India), West Bengal (11%) and Bihar (9%) which are ruled by the parties who are not part of the ruling coalition at the centre.
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Post implementation of the direct transfer scheme for LNG, the diversion of domestic LPG for commercial and Auto-LPG purposes has decreased.
8This is reflected in the high Auto-LPG demand growth rate of 7.5% (yoy) during H1 2015-16 against a demand decline of 23.7% for the corresponding period in the previous year.
8Similarly, LPG (non-domestic), used for commercial purposes has grown 38.6% (yoy) in H1 2015-16 against a fall of 11.5% in H1 2014-15.
8Despite cancellation of fake domestic connections and lower diversions, LPG (domestic) demand continued to grow at 6.4% (yoy) in H1 2015-16, although at a much lower 11.3% for 2014-15.
The LPG demand growth is driven by fresh connections (9.28 million fresh connections and 5.21 million DBCs in H1 2015-16) and lower LPG prices as compared to alternate fuels.
8With regards to sensitivity of under-recoveries to crude oil prices and foreign exchange rate, gross under-recovery for 2015-16 is estimated to increase by Rs. 8000 crore for every one Rupee (INR) depreciation against the dollar, while the under recovery could increase by around Rs 9000 crore with every $ 1 /bbl increase in crude oil prices.
8As per the estimates by a research firm, for every $ 1 /bbl decline in Indian Basket crude oil prices, the under-recovery on PDS kerosene is expected to decrease by Rs. 0.40 /litre each while the domestic LPG subsidy would decrease by Rs. 7 per cylinder.
8Further, with every one Rupee depreciation against the dolar, the under-recovery on kerosene is projected to increase by Rs.0.40 /litre, while the direct LPG subsidy could increase by Rs. 6 per cylinder.
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8This is reflected in the high Auto-LPG demand growth rate of 7.5% (yoy) during H1 2015-16 against a demand decline of 23.7% for the corresponding period in the previous year.
8Similarly, LPG (non-domestic), used for commercial purposes has grown 38.6% (yoy) in H1 2015-16 against a fall of 11.5% in H1 2014-15.
8Despite cancellation of fake domestic connections and lower diversions, LPG (domestic) demand continued to grow at 6.4% (yoy) in H1 2015-16, although at a much lower 11.3% for 2014-15.
The LPG demand growth is driven by fresh connections (9.28 million fresh connections and 5.21 million DBCs in H1 2015-16) and lower LPG prices as compared to alternate fuels.
8With regards to sensitivity of under-recoveries to crude oil prices and foreign exchange rate, gross under-recovery for 2015-16 is estimated to increase by Rs. 8000 crore for every one Rupee (INR) depreciation against the dollar, while the under recovery could increase by around Rs 9000 crore with every $ 1 /bbl increase in crude oil prices.
8As per the estimates by a research firm, for every $ 1 /bbl decline in Indian Basket crude oil prices, the under-recovery on PDS kerosene is expected to decrease by Rs. 0.40 /litre each while the domestic LPG subsidy would decrease by Rs. 7 per cylinder.
8Further, with every one Rupee depreciation against the dolar, the under-recovery on kerosene is projected to increase by Rs.0.40 /litre, while the direct LPG subsidy could increase by Rs. 6 per cylinder.
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It is now final: Chambal Fertilizers Ltd will be the first private sector fertilizer company to go ahead with a new standard urea-ammonia plant under the new policy paradigm.
8This is going to come as a huge shot in the arum for the Modi's government's gas pooling policy for the fertilizer industry, were price of domestic gas is pooled with imported LNG price to arrive at a common price.
8The LOI for the EPC contract has been handed over to Toyo Engineering but a go-ahead to begin contracting work has not been conveyed yet as Chambal is currently going through a capital approval process.
8Traditionally, Toyo ties up with its KBR for its ammonia know-how.
8This is good news for equipment and service providers, for the project cost is estimated at Rs 6,000 crore.
8Gas suppliers too stand to gain, as the requirement for the new plant will be roughly 2.4 mmscmd of gas
8Another fertilizer plant, the Ramagundam plant, promoted by RCF and EIL, is already going ahead with contracting.
8So total orders worth Rs 12,000-13,000 crore are on the anvil and this is good news indeed for the sector, which hasn't seen fresh investments in many decades.
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8This is going to come as a huge shot in the arum for the Modi's government's gas pooling policy for the fertilizer industry, were price of domestic gas is pooled with imported LNG price to arrive at a common price.
8The LOI for the EPC contract has been handed over to Toyo Engineering but a go-ahead to begin contracting work has not been conveyed yet as Chambal is currently going through a capital approval process.
8Traditionally, Toyo ties up with its KBR for its ammonia know-how.
8This is good news for equipment and service providers, for the project cost is estimated at Rs 6,000 crore.
8Gas suppliers too stand to gain, as the requirement for the new plant will be roughly 2.4 mmscmd of gas
8Another fertilizer plant, the Ramagundam plant, promoted by RCF and EIL, is already going ahead with contracting.
8So total orders worth Rs 12,000-13,000 crore are on the anvil and this is good news indeed for the sector, which hasn't seen fresh investments in many decades.
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The decision by Chambal is going to be a trend setter as the private sector is now showing interest in the setting up of new ammonia-urea plants.
8Will this now nudge other private and cooperative sector fertilizer companies to jump into the fray?
8The private sector attitude will be that of wait-and-watch as Chambal's progress will be watched by others with keen interest before they jump in.
8Part of the enthusiasm emanates from the fact that Bhartias are stakeholders in Chambal, and they have a wide exposure to the oil and gas industry. They have a stake in GSPC-led block in the deepwater KG Basin where gas is already being produced. Then again they have interests in several onland oil and gas blocks. Their understanding of the domestic gas industry is deeper than the rest of the fertilizer industry.
8Also, Chambal had survived on imported LNG so far for its Gadepan plants. Of the total requirement of 4 mmscmd of gas, as much as 2.28 msmcmd was based on long and medium term LNG. In fact their plant had to take a shutdown as it did not make sense to produce urea because of the high LNG content under the pricing paradigm in the earlier policy. In that sense they are not afraid to handle a situation where the dependency on LNG is high, for they have survived under such circumstances.
8It is therefore not surprising that Chambal has been more aggressive in pursuing fresh brownfield capacity than any other private player in the business.
8As far as this website is concerned, we will be able to provide our readers with advance information on future RFQ dates for equipment and services as well as key progress parameters over the next three years that these fertilizer projects will take to be completed.
8A software package will soon be available to those who want to track all fertilizer projects over hundreds of parameters in real time. This will come with live analyst support, so all you have to do is to call him should you need any clarification on a project.
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8Will this now nudge other private and cooperative sector fertilizer companies to jump into the fray?
8The private sector attitude will be that of wait-and-watch as Chambal's progress will be watched by others with keen interest before they jump in.
8Part of the enthusiasm emanates from the fact that Bhartias are stakeholders in Chambal, and they have a wide exposure to the oil and gas industry. They have a stake in GSPC-led block in the deepwater KG Basin where gas is already being produced. Then again they have interests in several onland oil and gas blocks. Their understanding of the domestic gas industry is deeper than the rest of the fertilizer industry.
8Also, Chambal had survived on imported LNG so far for its Gadepan plants. Of the total requirement of 4 mmscmd of gas, as much as 2.28 msmcmd was based on long and medium term LNG. In fact their plant had to take a shutdown as it did not make sense to produce urea because of the high LNG content under the pricing paradigm in the earlier policy. In that sense they are not afraid to handle a situation where the dependency on LNG is high, for they have survived under such circumstances.
8It is therefore not surprising that Chambal has been more aggressive in pursuing fresh brownfield capacity than any other private player in the business.
8As far as this website is concerned, we will be able to provide our readers with advance information on future RFQ dates for equipment and services as well as key progress parameters over the next three years that these fertilizer projects will take to be completed.
8A software package will soon be available to those who want to track all fertilizer projects over hundreds of parameters in real time. This will come with live analyst support, so all you have to do is to call him should you need any clarification on a project.
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Will the Essar Oil led consortium's claim to develop the Ratna & R Series field be rejected by the Modi government?
8At one point in time before the new government assumed power, Esssar's claim for an upward revision in the Cost Recovery Limit (CRL) for the field -- since 20 years had elapsed since the LOI was first awarded -- was rejected
8The ministry then went by the findings of the DGH that a higher cost recovery limit would reduce government take on the field.
8A view was gathering momentum that a firm contract was never signed with the consortium even though an LOI was issued and signed.
8The law ministry had at one point said that a firm contract did not exist as only an LOI was awarded but this position changed later when the ministry turned around and said that a firm contract did exist for hand over of the field to the consortium
8At that point, the petroleum ministry's option was that the law ministry was not right in changing its views
8Then again, an opinion of the law minister and the Attorney General that the "the administrative ministry may decide the matter upon the issue in an objective, fair and reasonable manner keeping public interest in view", further went on to clarify that the there was no `concluded contract`
8The ministry had also said that the finance ministry had consistently refused to commit that a conclusive contract existed nor was it willing to consider reimbursement of past costs incurred by ONGC in this producing field before it was taken away and offered for bidding
8What stand this government takes on the subject is still to be seen.
8In case Essar's claim is rejected, the field will go back to ONGC.
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8At one point in time before the new government assumed power, Esssar's claim for an upward revision in the Cost Recovery Limit (CRL) for the field -- since 20 years had elapsed since the LOI was first awarded -- was rejected
8The ministry then went by the findings of the DGH that a higher cost recovery limit would reduce government take on the field.
8A view was gathering momentum that a firm contract was never signed with the consortium even though an LOI was issued and signed.
8The law ministry had at one point said that a firm contract did not exist as only an LOI was awarded but this position changed later when the ministry turned around and said that a firm contract did exist for hand over of the field to the consortium
8At that point, the petroleum ministry's option was that the law ministry was not right in changing its views
8Then again, an opinion of the law minister and the Attorney General that the "the administrative ministry may decide the matter upon the issue in an objective, fair and reasonable manner keeping public interest in view", further went on to clarify that the there was no `concluded contract`
8The ministry had also said that the finance ministry had consistently refused to commit that a conclusive contract existed nor was it willing to consider reimbursement of past costs incurred by ONGC in this producing field before it was taken away and offered for bidding
8What stand this government takes on the subject is still to be seen.
8In case Essar's claim is rejected, the field will go back to ONGC.
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The CAG has claimed that pussyfooting by the government in awarding the Ratna & R-Series field to an Essar Oil led consortium for 20 years has lead to a production loss of a massive Rs 26,200 crore.
8The government's take to the tune of Rs 1105 crore was forgone as a consequence.
8In addition, the CAG claims that the idling and non-maintenance of existing facilities in the Ratna field since September 1994, would result in an avoidable financial burden of Rs 1086 crore that will now be required for re-development of the field.
8The auditor said that the government's indecision was directly against the national interest as it resulted in the deferment of domestic production of oil and gas of substantial value.
8Keeping in view the fact that it was a producing field, it is imperative that a decision is taken by govenrment in the matter at the earliest so as to find a resolution to this long pending issue and the field is put to production again without further delay, the CAG has claimed..
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8The government's take to the tune of Rs 1105 crore was forgone as a consequence.
8In addition, the CAG claims that the idling and non-maintenance of existing facilities in the Ratna field since September 1994, would result in an avoidable financial burden of Rs 1086 crore that will now be required for re-development of the field.
8The auditor said that the government's indecision was directly against the national interest as it resulted in the deferment of domestic production of oil and gas of substantial value.
8Keeping in view the fact that it was a producing field, it is imperative that a decision is taken by govenrment in the matter at the earliest so as to find a resolution to this long pending issue and the field is put to production again without further delay, the CAG has claimed..
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The website carries here a report on the LNG market in India and future prospects of Petronet LNG Ltd. (PLL).
8There is talk now of PLL working out a deal with RasGas of Qatar for a rolling three-month pricing formula that will bring the price of LNG to around $8/mmbtu.
8The report says that the current five-year rolling matrix gives a price of $13/mmbtu when the spot price is in the range of $7-8/mmbtu.
8This is the reason why a large volume of long term RasGas supply was not picked up by PLL.
8Because of low crude prices, the RasGas formula will see a fall in the price of long term gas, going down to around $8/mmbtu by 2020.
8Yearly projections are also carried here of how this price would behave right up to 2020, assuming the current pricing formula is not changed.
8The price curve in this case will head downwards over a five year period because of low prevailing crude prices whereas the problem is of what to do at present given the wide gulf between the long term price and the spot price of LNG.
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8There is talk now of PLL working out a deal with RasGas of Qatar for a rolling three-month pricing formula that will bring the price of LNG to around $8/mmbtu.
8The report says that the current five-year rolling matrix gives a price of $13/mmbtu when the spot price is in the range of $7-8/mmbtu.
8This is the reason why a large volume of long term RasGas supply was not picked up by PLL.
8Because of low crude prices, the RasGas formula will see a fall in the price of long term gas, going down to around $8/mmbtu by 2020.
8Yearly projections are also carried here of how this price would behave right up to 2020, assuming the current pricing formula is not changed.
8The price curve in this case will head downwards over a five year period because of low prevailing crude prices whereas the problem is of what to do at present given the wide gulf between the long term price and the spot price of LNG.
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While the cost economics stand up well against LPG vs PNG and for CNG vs diesel and petrol, it does not work when supplies to the industrial segment is concerned.
8This is because cheap domestic gas is not made available to the industrial sector.
8The comparison then has to be LNG vs liquid fuels such as naphtha, fuel oil and LDO.
8The price differential between domestic gas (at $4.2/mmbtu) and LNG is 100% or more. Now that liquid fuel prices are lower, industrial furnaces would rather use naphtha than LNG.
Why the government said "no" to gas price decontrol:
8The government has understood the politics of low cost domestic gas and this is the reason why it has announced that there is no move now to decontrol the price of gas.
8For if the domestic gas price is freed -- as demanded by E&P companies operating in India -- the price of PNG and CNG will shoot up. And this will have serious political undertones.
8Then again, urea units are dependent on domestic gas to a large extent. If the price goes up, so does the subsidy to the fertilizer sector as fuel cost is a pass through.
8A chunk of the power sector too is dependent on the supply of domestic gas.
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8This is because cheap domestic gas is not made available to the industrial sector.
8The comparison then has to be LNG vs liquid fuels such as naphtha, fuel oil and LDO.
8The price differential between domestic gas (at $4.2/mmbtu) and LNG is 100% or more. Now that liquid fuel prices are lower, industrial furnaces would rather use naphtha than LNG.
Why the government said "no" to gas price decontrol:
8The government has understood the politics of low cost domestic gas and this is the reason why it has announced that there is no move now to decontrol the price of gas.
8For if the domestic gas price is freed -- as demanded by E&P companies operating in India -- the price of PNG and CNG will shoot up. And this will have serious political undertones.
8Then again, urea units are dependent on domestic gas to a large extent. If the price goes up, so does the subsidy to the fertilizer sector as fuel cost is a pass through.
8A chunk of the power sector too is dependent on the supply of domestic gas.
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Once a deal is struck with RasGas on the pricing of long term volumes, the flow of long term LNG into Dahej is likely to smoothen out.
8Projections made by the research reports shows that volumes will fall to around 7 MMTPA in 2015-16, down from 8.75 MMTPA in 2014-15.
8However, there will be climb back again on account of robust demand in 2016-17.
8The projection shows the volume going back up to 8.8 MMTA next year.
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8Projections made by the research reports shows that volumes will fall to around 7 MMTPA in 2015-16, down from 8.75 MMTPA in 2014-15.
8However, there will be climb back again on account of robust demand in 2016-17.
8The projection shows the volume going back up to 8.8 MMTA next year.
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The website also carries here original research done by the report on mix of PLL's volume ramp up over the next five years, going up to the year 2020.
The projected volume is segmented over the following parameters:
8Dahej long term contract volumes
8Dahej spot contract volumes
8Kochi Contract volumes
8Kochi spot volumes.
8What is depicted is the mix of these volumes over the two terminals.
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The projected volume is segmented over the following parameters:
8Dahej long term contract volumes
8Dahej spot contract volumes
8Kochi Contract volumes
8Kochi spot volumes.
8What is depicted is the mix of these volumes over the two terminals.
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An analysis made by the report shows that PLL's spot cargo delivery prices have gone up from the lows seem in Q-4 2014-15.
8The climb up was rather sharp.
8After falling to Rs 19.4/tbtu in Q-4 2014-15 from a high of Rs 54.6/tbtu exactly a year ago, the price has risen to Rs 34.4/tbtu in Q2 2015-16.
8But gas prices were falling again, and given the looming glut of LNG terminals, prices are likely to fall than rise from now onwards for some time to come.
8Data is also provided here on the increase in sport volumes in PLL's Dahej terminal over the last eight quarters.
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8The climb up was rather sharp.
8After falling to Rs 19.4/tbtu in Q-4 2014-15 from a high of Rs 54.6/tbtu exactly a year ago, the price has risen to Rs 34.4/tbtu in Q2 2015-16.
8But gas prices were falling again, and given the looming glut of LNG terminals, prices are likely to fall than rise from now onwards for some time to come.
8Data is also provided here on the increase in sport volumes in PLL's Dahej terminal over the last eight quarters.
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The research report also provides data on capex and capex/MTPA for LNG terminals in India.
The data is given for the following:
8Dahej Terminal
8Dahej expansions
8Kochi terminal
8GAO: Dabhol terminal
8Shell's Hazira unit
8GSPC's Mundra terminal
8IOC's Ennore receiving station
8The capex range from a low of Rs 3.800/MTPA for the initial Dahej capacity to Rs 10,300/MTPA for the Ennore terminal.
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The data is given for the following:
8Dahej Terminal
8Dahej expansions
8Kochi terminal
8GAO: Dabhol terminal
8Shell's Hazira unit
8GSPC's Mundra terminal
8IOC's Ennore receiving station
8The capex range from a low of Rs 3.800/MTPA for the initial Dahej capacity to Rs 10,300/MTPA for the Ennore terminal.
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Data is also carried here denominated in $/mmbtu on how spot monthly prices have behaved from April, 2014 to October, 2015.
8Wile prices came down steadily from a high of $18/mmbtu in April, 2015 and slipped to $11 in September, 2014, it began climbing up subsequently.
8The price reached $15/mmbtu before sliding down to $8/mmbtu in March, 2015.
8Prices have been more or less at this range for the ensuing months before firming up to $9/mmbtu in September and October.
8Can the price of LNG go down further?
8The price may fall if gas prices continue to go down. Once fresh LNG liquefaction terminals come up, supply will exceed demand, and distress selling will rampant. That is when lower prices will be evident in the future
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8Wile prices came down steadily from a high of $18/mmbtu in April, 2015 and slipped to $11 in September, 2014, it began climbing up subsequently.
8The price reached $15/mmbtu before sliding down to $8/mmbtu in March, 2015.
8Prices have been more or less at this range for the ensuing months before firming up to $9/mmbtu in September and October.
8Can the price of LNG go down further?
8The price may fall if gas prices continue to go down. Once fresh LNG liquefaction terminals come up, supply will exceed demand, and distress selling will rampant. That is when lower prices will be evident in the future
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BPCL plans to undertake a comprehensive energy saving programme in its Kochi refinery, where the capacity stands expanded from 9.5 MMTPA to 15.5 MMTPA.
8The company is now in a position to produce 100% high sulphur crude.
8The exercise will identify the various points in the refinery where energy saving is possible.
8The cost benefit of each energy saving scheme will be identified before it is implemented.
The exercise will identify The following:
8Estimated savings in energy units and how much does it translate into in monetary terms
8Full list of recommended equipment with list of manufacturers with proven track record, make or model of the typical equipment to be installed or detailed description of untypical equipment
8Datasheet and nameplate details that is necessary for savings estimation
8Approximate Investments calculation
8Simple payback period or IRR payback period or both
Click on Reports for a list of 22 areas where BPCL thinks energy saving is possible in the Kochi refinery. Details
8The company is now in a position to produce 100% high sulphur crude.
8The exercise will identify the various points in the refinery where energy saving is possible.
8The cost benefit of each energy saving scheme will be identified before it is implemented.
The exercise will identify The following:
8Estimated savings in energy units and how much does it translate into in monetary terms
8Full list of recommended equipment with list of manufacturers with proven track record, make or model of the typical equipment to be installed or detailed description of untypical equipment
8Datasheet and nameplate details that is necessary for savings estimation
8Approximate Investments calculation
8Simple payback period or IRR payback period or both
Click on Reports for a list of 22 areas where BPCL thinks energy saving is possible in the Kochi refinery. Details
The website carries herea comprehensive exercise that established the cost savings possible with the use of Piped Natural Gas in relation to LPG cylinders.
8The calculations strip down the data into a common denominator in terms of GCV that is translated into Kcal/kg for both forms of domestic gas.
8The data found that PNG is cheaper by anywhere between 12 to 34% depending upon the share of non-subsidized LPG cylinders per household.
8The calculations have been done with data pertaining to the National Capital Region.
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8The calculations strip down the data into a common denominator in terms of GCV that is translated into Kcal/kg for both forms of domestic gas.
8The data found that PNG is cheaper by anywhere between 12 to 34% depending upon the share of non-subsidized LPG cylinders per household.
8The calculations have been done with data pertaining to the National Capital Region.
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The website carries here a set of calculations that show that CNG remains the most affordable fuel for transportation in the National Capital Region.
8At current prices, CNG remains 19% cheaper than diesel and 56% cheaper than petrol in Delhi.
8One of the main reason for the differential is that even though crude and product prices have crashed by 50% over last one year, domestic fuel price changes has been much less (10% diesel price cut
since March 2015).
8This is because of the government’s decision to mop up the cushion by imposing excise duties on petrol and diesel. The result is that retail prices of liquid fuels have not gone down enough.
8The study shows that CNG fuel economics to remain favourable in the medium term, which in turn, will continue to drive discretionary demand.
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8At current prices, CNG remains 19% cheaper than diesel and 56% cheaper than petrol in Delhi.
8One of the main reason for the differential is that even though crude and product prices have crashed by 50% over last one year, domestic fuel price changes has been much less (10% diesel price cut
since March 2015).
8This is because of the government’s decision to mop up the cushion by imposing excise duties on petrol and diesel. The result is that retail prices of liquid fuels have not gone down enough.
8The study shows that CNG fuel economics to remain favourable in the medium term, which in turn, will continue to drive discretionary demand.
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