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Dec 2015
The City Gas Distribution (CGD entities seem to have got a big boost from two directives, one from the government ordering cessation of LPG subsidy to high income consumers and the other from the Supreme Court (SC) banning sale of high end diesel vehicles in Delhi.
8The Piped Natural Gas (PNG) segment in the CGD business had now become competitive in relation to subsidized LPG after the allocation of cheaper domestic gas to this segment, coupled with a series of downward revision in domestic gas prices.
8Earlier the PNG segment stayed under-penetrated even in major cities where a PNG network is available because LPG was a cheaper option.
8With the removal of subsidy for consumers in the higher earning bracket, there is now a significant advantage of PNG over LPG. The differential is now about 33% and this should result in a change in the consumer preference in
favour of piped gas.
8Then again, the SC ban on high end diesel cars and a directive that taxis must compulsorily convert to CNG have given a fresh lease of life to the CNG business.
8Mandatory conversion, weakening sentiments towards diesel vehicles and reducing gas prices could thus give a fillip to CNG sales in particular and the CGD segment in general.
8When combined with a faster coverage of more areas under CGD and fast track clearance of CNG stations, this segment is likely to witness an unprecedented boom.
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8The Piped Natural Gas (PNG) segment in the CGD business had now become competitive in relation to subsidized LPG after the allocation of cheaper domestic gas to this segment, coupled with a series of downward revision in domestic gas prices.
8Earlier the PNG segment stayed under-penetrated even in major cities where a PNG network is available because LPG was a cheaper option.
8With the removal of subsidy for consumers in the higher earning bracket, there is now a significant advantage of PNG over LPG. The differential is now about 33% and this should result in a change in the consumer preference in
favour of piped gas.
8Then again, the SC ban on high end diesel cars and a directive that taxis must compulsorily convert to CNG have given a fresh lease of life to the CNG business.
8Mandatory conversion, weakening sentiments towards diesel vehicles and reducing gas prices could thus give a fillip to CNG sales in particular and the CGD segment in general.
8When combined with a faster coverage of more areas under CGD and fast track clearance of CNG stations, this segment is likely to witness an unprecedented boom.
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The PNGRB has set a tough Minimum Work Programme (MWP) for each Geographical Area, thereby making it challenging for City Gas Distribution (CGD) units to stick to it.
8The first year target has been set at 15% of the total connections, and this is the toughest to achieve given the high amount of initial clearances and approvals required to commence operations.
8The implementation and operation of a city gas distribution network requires a host of approvals from a number of agencies, such as the National Highways Authority of India, municipal corporations, public works departments, and pollution control boards. Obtaining multiple approvals from various civic and governmental agencies and authorities calls for extensive liaison work, besides time and this will stretch the manpower resources of smaller companies.
8Further, the Right of Way (RoW) and Right of Usage (RoU) have to be acquired from private land owners which can be a long drawn process.
8Thus, there are several hurdles that the CGD players can face resulting in delays in implementing projects.
8While there have been instances in the past when companies have been granted extensions upon requests citing delays in obtaining approvals, this remains under the discretion of PNGRB.
8The Performance Bank Guarantees (PBGs), which were not in the bidding criteria in earlier rounds, were also significantly lower (up to Rs 0.5 billion) in the past as compared to some of the PBGs that have been furnished by companies in Bid-Round 4 (upto Rs 45 billion). The significant increase in PBGs submitted is on account of the changed nature of the bidding process as per which, in the case of a ‘tie’ in network/compression charges bid for by two or more companies, the company furnishing the higher PBG wins the bid.
8However, submission of a higher PBG can turn out to be counter-productive if the company does not meet the first year MWP and PNGRB decides to take action against the company by encashing the proportionate amount (one-fifth) of the PBG.
8The high probability of delays in implementation and the resulting risk of invocation of the PBG would continue to weigh on the credit profile of recent bid winners.
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8The first year target has been set at 15% of the total connections, and this is the toughest to achieve given the high amount of initial clearances and approvals required to commence operations.
8The implementation and operation of a city gas distribution network requires a host of approvals from a number of agencies, such as the National Highways Authority of India, municipal corporations, public works departments, and pollution control boards. Obtaining multiple approvals from various civic and governmental agencies and authorities calls for extensive liaison work, besides time and this will stretch the manpower resources of smaller companies.
8Further, the Right of Way (RoW) and Right of Usage (RoU) have to be acquired from private land owners which can be a long drawn process.
8Thus, there are several hurdles that the CGD players can face resulting in delays in implementing projects.
8While there have been instances in the past when companies have been granted extensions upon requests citing delays in obtaining approvals, this remains under the discretion of PNGRB.
8The Performance Bank Guarantees (PBGs), which were not in the bidding criteria in earlier rounds, were also significantly lower (up to Rs 0.5 billion) in the past as compared to some of the PBGs that have been furnished by companies in Bid-Round 4 (upto Rs 45 billion). The significant increase in PBGs submitted is on account of the changed nature of the bidding process as per which, in the case of a ‘tie’ in network/compression charges bid for by two or more companies, the company furnishing the higher PBG wins the bid.
8However, submission of a higher PBG can turn out to be counter-productive if the company does not meet the first year MWP and PNGRB decides to take action against the company by encashing the proportionate amount (one-fifth) of the PBG.
8The high probability of delays in implementation and the resulting risk of invocation of the PBG would continue to weigh on the credit profile of recent bid winners.
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The jury is till out on whether the merger of ONGC Mangalore Petrochemicals Ltd with MRPL will provide for better synergy or will it be too unwieldy.
Pros
8There are those who argue amalgamation to be beneficial. The key feedstock (naphtha and aromatics streams) for the operations of OMPL is sourced from MRPL, which would be met captively post the amalgamation while providing flexibility to the management in sourcing of crude so as to maximise the yield depending upon the market dynamics and crack spread available for the respective products. With the amalgamation, the plants of MRPL and OMPL can be operated at optimum utilisation to allow for maximization of Gross Refining Margin (GRM) and maximisation of combined margins.
Cons
8The counter view is that MRPL will be remain vulnerable to exposure in the movement in crack spreads between naphtha and aromatic streams and the finished products which are cyclical in nature, as well as to import duty differentials between finished products and feedstock, and exchange rate movements.
8Owing to depressed crack spreads as the capacity additions are currently out pacing demand, coupled with inadequate feedstock from MRPL which was in the midst of its own capacity expansions, OMPL reported sizeable losses in its first year of operations.
8The company’s cost structure is also elevated because of usage of liquid hydrocarbons as a fuel for process requirement and power generation instead of natural gas which was envisaged at the time of conceiving of project.
The market for petrochemicls is highly competitive and MRPL will find the going tough in this market, which is dominated by big players such as RIL
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Pros
8There are those who argue amalgamation to be beneficial. The key feedstock (naphtha and aromatics streams) for the operations of OMPL is sourced from MRPL, which would be met captively post the amalgamation while providing flexibility to the management in sourcing of crude so as to maximise the yield depending upon the market dynamics and crack spread available for the respective products. With the amalgamation, the plants of MRPL and OMPL can be operated at optimum utilisation to allow for maximization of Gross Refining Margin (GRM) and maximisation of combined margins.
Cons
8The counter view is that MRPL will be remain vulnerable to exposure in the movement in crack spreads between naphtha and aromatic streams and the finished products which are cyclical in nature, as well as to import duty differentials between finished products and feedstock, and exchange rate movements.
8Owing to depressed crack spreads as the capacity additions are currently out pacing demand, coupled with inadequate feedstock from MRPL which was in the midst of its own capacity expansions, OMPL reported sizeable losses in its first year of operations.
8The company’s cost structure is also elevated because of usage of liquid hydrocarbons as a fuel for process requirement and power generation instead of natural gas which was envisaged at the time of conceiving of project.
The market for petrochemicls is highly competitive and MRPL will find the going tough in this market, which is dominated by big players such as RIL
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Dec 31 : Standing Committee raps ministry for poor response-III: Ministry gets a rap on the knuckles
The Parliamentary Standing Committee has castigated the petroleum ministry for its cavalier reply to its recommendations on curbing vehicular pollution and moving towards an automated check of in-use vehicles.
8The committee had suggested that automated centres be set up in all the states and a centralized national data centre should also be established at the earliest for collecting information from all PUC centres regarding polluting vehicles.
8The Committee had further recommended that if needed a plan scheme might be formulated with an allocation of specific funds for that purpose. The Committee had also expected the ministry to coordinate with the Ministry of Road Transport & Highways and state governments to realize that objective.
8"The Committee, however, are appalled to note that the Ministry have not even cared to mention a word regarding Pollution under Control System in its combined reply. Further, it also reflects that the it has not coordinated well with the Ministry of Road Transport & Highways even for eliciting information on pollution and its control system. The Committee are concerned to note that the Ministry of P&NG appears to have shunned its responsibility to play a leading role in the implementation of Auto Fuel Policy. In view of this fact, the Committee reiterate that the Ministry of P&NG must coordinate sincerely with the Ministry of Road Transport & Highways for the implementation of Pollution under Control System (PUC) and come out withresults as desired by the Committee."
8"The Committee had also expected the Ministry of P&NG to request State Governments to provide feedback on Sunder Committee at the earliest which had recommended to reduce the periodicity of inspection and maintenance and certification of private vehicles from the existing 15 years."
8"While submitting the status regarding Inspection and Maintenance System, the Ministry of Road, Transport and Highways has informed that out of the 10 I&C centres proposed to be set up during 11th Five Year Plan, the work has started only in six centres and out of 10 centres proposed for 12th plan period, only four have been sanctioned till date. But no timeframe has been prepared for completion of these centres," the Committee said.
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8The committee had suggested that automated centres be set up in all the states and a centralized national data centre should also be established at the earliest for collecting information from all PUC centres regarding polluting vehicles.
8The Committee had further recommended that if needed a plan scheme might be formulated with an allocation of specific funds for that purpose. The Committee had also expected the ministry to coordinate with the Ministry of Road Transport & Highways and state governments to realize that objective.
8"The Committee, however, are appalled to note that the Ministry have not even cared to mention a word regarding Pollution under Control System in its combined reply. Further, it also reflects that the it has not coordinated well with the Ministry of Road Transport & Highways even for eliciting information on pollution and its control system. The Committee are concerned to note that the Ministry of P&NG appears to have shunned its responsibility to play a leading role in the implementation of Auto Fuel Policy. In view of this fact, the Committee reiterate that the Ministry of P&NG must coordinate sincerely with the Ministry of Road Transport & Highways for the implementation of Pollution under Control System (PUC) and come out withresults as desired by the Committee."
8"The Committee had also expected the Ministry of P&NG to request State Governments to provide feedback on Sunder Committee at the earliest which had recommended to reduce the periodicity of inspection and maintenance and certification of private vehicles from the existing 15 years."
8"While submitting the status regarding Inspection and Maintenance System, the Ministry of Road, Transport and Highways has informed that out of the 10 I&C centres proposed to be set up during 11th Five Year Plan, the work has started only in six centres and out of 10 centres proposed for 12th plan period, only four have been sanctioned till date. But no timeframe has been prepared for completion of these centres," the Committee said.
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The fact that the petroleum ministry has not taken action on a Parliamentary Standing Committee recommendation for a multi-sectoral approach for implementation of Auto Fuel Policy and the constitution of an inter-ministerial committee comprising of Secretaries of concerned Ministries to deal with with issues, arising out of the implementation of the Auto Fuel Vision and Policy 2025 vis-à-vis the expenditure that would be incurred to implement the entire gamut of issues dealt in the policy, came in for acute criticism from the Committee.
8All that the petroleum ministry is willing to say is that it is in the process of firming up its views before responding to the suggestions.
8The ministry did acknowledge that there will be a need to carry out environmental impact, health impact and toxicology related periodic source apportionment studies in various cities and regions after implementation of BS IV norms in the entire country as recommended by the Expert Committee on Auto Fuel Policy but did not go beyond this point to comment on the Committe's main recommendation.
8The Parliamentary Committee said that a Joint Secretary led inter-ministerial committee was set up by the government but it appeared to be a "low level" committee and wanted the interface to be upgraded to a secretary-level interaction.
8What is more, the JS level committee was set up only to sort out pollution relation issues and was not comprehensive enough to encompass the entire gamut of issues connected the Vision 2025 policy.
8The Standing Committee also lamented the fact that a study has not been commissioned yet to assess the benefits that would arise out of the implementation of Auto Fuel Vision and Policy 2025 vis-à-vis the expenditure that would be incurred to implement the entire gamut of issues dealt in the policy.
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8All that the petroleum ministry is willing to say is that it is in the process of firming up its views before responding to the suggestions.
8The ministry did acknowledge that there will be a need to carry out environmental impact, health impact and toxicology related periodic source apportionment studies in various cities and regions after implementation of BS IV norms in the entire country as recommended by the Expert Committee on Auto Fuel Policy but did not go beyond this point to comment on the Committe's main recommendation.
8The Parliamentary Committee said that a Joint Secretary led inter-ministerial committee was set up by the government but it appeared to be a "low level" committee and wanted the interface to be upgraded to a secretary-level interaction.
8What is more, the JS level committee was set up only to sort out pollution relation issues and was not comprehensive enough to encompass the entire gamut of issues connected the Vision 2025 policy.
8The Standing Committee also lamented the fact that a study has not been commissioned yet to assess the benefits that would arise out of the implementation of Auto Fuel Vision and Policy 2025 vis-à-vis the expenditure that would be incurred to implement the entire gamut of issues dealt in the policy.
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Guidleines for CGD stations in highways readied
The petroleum ministry has put the finishing touches to a set of draft guidelines for allowing multiple gas marketing entities a faster roll-out of CNG stations along highways and in cities/towns across the country
8This is in tandem with expansion of the National Gas Grid and proliferation of new CGD networks.
8The public consultation on the draft guidelines has been completed.
8On finalization of the draft guidelines, multiple gas marketing entities will be able to develop their respective CNG retail network based on their techno-commercial feasibility.
Fuel economy and emission norms should be given equal priority
8The Parliamentary Standing Committee has recommended that the government should an equal priority to vehicular emission norms along with the declaration of fuel economy standards of vehicles.
Star rating for fuel economy
8Another recommendation was that the star rating of fuel economy for new vehicles will not only help consumers in their decision making but also spur competitiveness among automobile manufactures to produce more fuel efficient vehicles.
8The Committee recommended that the petroleum ministry should coordinate the efforts of PCRA with the BEE of the Ministry of Power for expeditious implementation of the labeling programme.
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The petroleum ministry has put the finishing touches to a set of draft guidelines for allowing multiple gas marketing entities a faster roll-out of CNG stations along highways and in cities/towns across the country
8This is in tandem with expansion of the National Gas Grid and proliferation of new CGD networks.
8The public consultation on the draft guidelines has been completed.
8On finalization of the draft guidelines, multiple gas marketing entities will be able to develop their respective CNG retail network based on their techno-commercial feasibility.
Fuel economy and emission norms should be given equal priority
8The Parliamentary Standing Committee has recommended that the government should an equal priority to vehicular emission norms along with the declaration of fuel economy standards of vehicles.
Star rating for fuel economy
8Another recommendation was that the star rating of fuel economy for new vehicles will not only help consumers in their decision making but also spur competitiveness among automobile manufactures to produce more fuel efficient vehicles.
8The Committee recommended that the petroleum ministry should coordinate the efforts of PCRA with the BEE of the Ministry of Power for expeditious implementation of the labeling programme.
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The government has made it clear that no cess will be levied on crude and petroleum products to garner capital for the Rs 80,000 crore refinery upgradation programme to meet new fuel emission norms.
8The Parliamentary Standing Committeefor the petroleum ministry had strongly urged the ministry to take a decision on the recommendation to levy a High Sulphur Cess of 75 paise per litre on BS-III fuel to raise Rs.10,000 crore and special fuel upgradation cess of 75 paise per litre on all gasoline and diesel sold in India to mobilize another Rs.64000 crore to fund fuel upgradation projects of refineries as envisaged in the Auto Fuel Vision and Policy 2025.
8The government has now rejected the claim for levy of a cess, claiming that there is no real need for one.
8In its reply, the petroleum ministry said, "as both diesel and petrol are deregulated products, the OMCs can pass on the additional costs to consumers and imposition of cess is no longer necessary."
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8The Parliamentary Standing Committeefor the petroleum ministry had strongly urged the ministry to take a decision on the recommendation to levy a High Sulphur Cess of 75 paise per litre on BS-III fuel to raise Rs.10,000 crore and special fuel upgradation cess of 75 paise per litre on all gasoline and diesel sold in India to mobilize another Rs.64000 crore to fund fuel upgradation projects of refineries as envisaged in the Auto Fuel Vision and Policy 2025.
8The government has now rejected the claim for levy of a cess, claiming that there is no real need for one.
8In its reply, the petroleum ministry said, "as both diesel and petrol are deregulated products, the OMCs can pass on the additional costs to consumers and imposition of cess is no longer necessary."
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For reference purposes, the website carries here the gazette notification on the government's marginal oil and gas field policy.
8State-wise, basin-wise, field-wise data is given for those who may be interested in bidding for such fields.
8In all, 69 fields are to be auctioned out.
Among the highlights are:
8Single license for conventional and non-conventional hydrocarbons
8No restriction on exploration during contract period
8Gas and crude pricing to be market determined
8NELP royalty rates to apply
8Customs duty exemption to apply
8Contract duration of 20 years
8Everyone is eligible to bid
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8State-wise, basin-wise, field-wise data is given for those who may be interested in bidding for such fields.
8In all, 69 fields are to be auctioned out.
Among the highlights are:
8Single license for conventional and non-conventional hydrocarbons
8No restriction on exploration during contract period
8Gas and crude pricing to be market determined
8NELP royalty rates to apply
8Customs duty exemption to apply
8Contract duration of 20 years
8Everyone is eligible to bid
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Dec 31 : Gas dynamics in India-III: Competitive liquid fuel pricing cuts into gas suppliers' margins
In India, liquid fuels continue to provide competition to the use of gas in the industrial sector.
8The demand for industrial use has to be catered through the RLNG route and competitiveness of this segment continues to be weak as liquid fuels become competitive.
8Both demand we well margins continue to be weak in the industrial CGD section because of the higher cost of LNG.
8This is evident from the fact that GAIL -- which has a market 60% in India -- saw a decline in marketing volumes of around 9% in 2014-15 along with materially lower margins on RLNG and inventory loss on LNG.
8This had led to a fall in marketing profit (measured as PBIT per mmbtu) during the year.
8Despite an increase in spot LNG volumes, the margins have declined to Rs. 8.1 /mmbtu in Q2 2015-16 due to increase in competition with the fall in prices of liquid fuels.
8Besides, the lower marketing margins on most of incremental RLNG volumes coming from power sector also impacted margins for GAIL
8The gas major therefore continued to defer costlier long-term RasGas LNG volumes.
8The “take or pay” liabilities on long-term RasGas volumes would get crystallized by Q4 2015-16 as take or pay quantities are settled at the end of 2015.
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8The demand for industrial use has to be catered through the RLNG route and competitiveness of this segment continues to be weak as liquid fuels become competitive.
8Both demand we well margins continue to be weak in the industrial CGD section because of the higher cost of LNG.
8This is evident from the fact that GAIL -- which has a market 60% in India -- saw a decline in marketing volumes of around 9% in 2014-15 along with materially lower margins on RLNG and inventory loss on LNG.
8This had led to a fall in marketing profit (measured as PBIT per mmbtu) during the year.
8Despite an increase in spot LNG volumes, the margins have declined to Rs. 8.1 /mmbtu in Q2 2015-16 due to increase in competition with the fall in prices of liquid fuels.
8Besides, the lower marketing margins on most of incremental RLNG volumes coming from power sector also impacted margins for GAIL
8The gas major therefore continued to defer costlier long-term RasGas LNG volumes.
8The “take or pay” liabilities on long-term RasGas volumes would get crystallized by Q4 2015-16 as take or pay quantities are settled at the end of 2015.
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The profitability of the RLNG portfolio of Indian gas suppliers lies in the working out a settlement with RasGas in solving both the problem of deferred cargoes and the price of long term RLNG.
8GAIL, IOC and BPCL have the marketing rights (in the ratio of 60%:30%:10%) for PLL’s RasGas long-term (LT) R-LNG from the Dahej terminal through a 25 year take-or-pay agreement.
8The RasGas LNG prices are determined based on a formula taking into account the slope of the 12-month average crude oil prices (JCC) subject to floor and cap based on a 60-month average.
8As the average crude oil prices of the last 60 months remained significantly higher than the current crude oil prices (due to the sharp fall in crude oil prices over the last few months), the floor of the formula will keep RasGas LNG prices at materially higher level than the current liquid fuel and spot LNG prices.
8The RasGas RLNG is expected to be costlier by 25-40% over naphtha during the next 2-3 years if crude oil prices stay at current low levels.
8This is clearly an unsustainable situation and the pricing formula will be required to be tweaked to reduce the high difference between the prices of long term and spot RLNG by linking the price of LNG with recent crude oil prices (which are currently higher due to floor linked with 60-month average crude oil prices).
8What is more, the current long term RasGas LNG prices are 70-80% higher than spot LNG prices. The high price differential is leading to pressure on the demand and marketing margins on RasGas RLNG in view of lower prices of liquid fuels and spot LNG.
8Discussions are on to ensure a waiver of the “take or pay” liabilities arising from deferment of more than 30% of committed volumes in 2015 (against 10% deferment allowed in the contract).
8A revision in pricing formula, which links gas prices to the recent trajectory of oil prices, would be critical for the profitability of marketers of RasGas LNG volumes.
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8GAIL, IOC and BPCL have the marketing rights (in the ratio of 60%:30%:10%) for PLL’s RasGas long-term (LT) R-LNG from the Dahej terminal through a 25 year take-or-pay agreement.
8The RasGas LNG prices are determined based on a formula taking into account the slope of the 12-month average crude oil prices (JCC) subject to floor and cap based on a 60-month average.
8As the average crude oil prices of the last 60 months remained significantly higher than the current crude oil prices (due to the sharp fall in crude oil prices over the last few months), the floor of the formula will keep RasGas LNG prices at materially higher level than the current liquid fuel and spot LNG prices.
8The RasGas RLNG is expected to be costlier by 25-40% over naphtha during the next 2-3 years if crude oil prices stay at current low levels.
8This is clearly an unsustainable situation and the pricing formula will be required to be tweaked to reduce the high difference between the prices of long term and spot RLNG by linking the price of LNG with recent crude oil prices (which are currently higher due to floor linked with 60-month average crude oil prices).
8What is more, the current long term RasGas LNG prices are 70-80% higher than spot LNG prices. The high price differential is leading to pressure on the demand and marketing margins on RasGas RLNG in view of lower prices of liquid fuels and spot LNG.
8Discussions are on to ensure a waiver of the “take or pay” liabilities arising from deferment of more than 30% of committed volumes in 2015 (against 10% deferment allowed in the contract).
8A revision in pricing formula, which links gas prices to the recent trajectory of oil prices, would be critical for the profitability of marketers of RasGas LNG volumes.
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Price competitiveness in some industrial segments notwithstanding, higher volumes of LNG will continue to be imported to India in the future.
8Import of RLNG in Q2 20015-16 was at 4.09 MMT, which was 36.4% higher on a YOY basis from 3.00 MMT in the corresponding period in the previous year, clearly prodded on by low international spot gas prices.
8On a half yearly basis the LNG import volumes increased 28.9% from 5.99 MMT in H1 2014-15 to 7.72 MMT for the same period this year on account of low spot prices.
8R-LNG demand is expected to remain high in the near term because of the low natural gas production from the KG-D6 fields and limited upside in production expected from other fields.
8Over the medium to long term, even though domestic natural gas supply is expected to increase due to commercialization of new gas discoveries, the demand for RLNG will continue to derive support from sectors which have demonstrated the capacity to absorb higher priced gas like the industrial segment
8The improvement in affordability of the fertilizer sector due to policy changes will be an important factor for the upswing as also the narrowing of differential between domestic gas and spot gas rices and a sharp increase in global RLNG supplies.
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8Import of RLNG in Q2 20015-16 was at 4.09 MMT, which was 36.4% higher on a YOY basis from 3.00 MMT in the corresponding period in the previous year, clearly prodded on by low international spot gas prices.
8On a half yearly basis the LNG import volumes increased 28.9% from 5.99 MMT in H1 2014-15 to 7.72 MMT for the same period this year on account of low spot prices.
8R-LNG demand is expected to remain high in the near term because of the low natural gas production from the KG-D6 fields and limited upside in production expected from other fields.
8Over the medium to long term, even though domestic natural gas supply is expected to increase due to commercialization of new gas discoveries, the demand for RLNG will continue to derive support from sectors which have demonstrated the capacity to absorb higher priced gas like the industrial segment
8The improvement in affordability of the fertilizer sector due to policy changes will be an important factor for the upswing as also the narrowing of differential between domestic gas and spot gas rices and a sharp increase in global RLNG supplies.
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There is also a revival of demand from the power sector with about 10 mmscmd of gas auctioned off to revive stranded gas based power projects. Actual demand was lower at around 7 mmscmd for the June to September 2015-16 period, but the response to the auction for Octobert-15 to march-16 has been better with incremental RLNG requirement of around13 MMSCMD
8Actual volumes may be lower but this will give an impetus to gas suppliers through higher pipeline volumes as most of the trunk pipelines are under-utilised.
8Besides, the demand from power sector still has potential for further upside as some regulatory issues related to the scheme are not yet resolved in some states.
8Even though the transmission companies are providing discount on the applicable pipeline tariffs for the incremental volumes, the same would, nonetheless, lead to a moderate increase in operating profit of suppliers players as the variable cost of transmission is very low.
8Further, although GAIL and GSPC are charging lower marketing margins for power sector RLNG, the incremental volumes are leading to additional marketing profits made on power sector volumes.
8Overall, GAIL and GSPC stand to gain moderately from the additional cash generation on transmission and marketing of power sector volumes even as the pipeline tariffs and marketing margins will be materially lower than the same on other RLNG volumes.
8Further, the scheme is envisaged for two years and its successful implementation in future rounds would be the key to the sustenance of the additional sources of profits.
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8Actual volumes may be lower but this will give an impetus to gas suppliers through higher pipeline volumes as most of the trunk pipelines are under-utilised.
8Besides, the demand from power sector still has potential for further upside as some regulatory issues related to the scheme are not yet resolved in some states.
8Even though the transmission companies are providing discount on the applicable pipeline tariffs for the incremental volumes, the same would, nonetheless, lead to a moderate increase in operating profit of suppliers players as the variable cost of transmission is very low.
8Further, although GAIL and GSPC are charging lower marketing margins for power sector RLNG, the incremental volumes are leading to additional marketing profits made on power sector volumes.
8Overall, GAIL and GSPC stand to gain moderately from the additional cash generation on transmission and marketing of power sector volumes even as the pipeline tariffs and marketing margins will be materially lower than the same on other RLNG volumes.
8Further, the scheme is envisaged for two years and its successful implementation in future rounds would be the key to the sustenance of the additional sources of profits.
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Asian spot LNG prices are currently at around $ 7.4/mmbtu and have slid from about $ 8.1/mmbtu in September 2015, as against the expectation of increase in prices due to winter heating requirements.
8The decline in spot prices is due to the fall in the price of crude oil derived competing fuels.
8Crude oil prices have declined from about US$ 60/barrel as on June 30, 2015 to about US$ 36-37/barrel (mid-December) now.
8Additionally Japan has recommenced operations of two of its nuclear plants- one in August and one in October 2015 and going forward start up of additional Japanese nuclear plants could reduce the demand for LNG which could have a dampening effect on spot prices.
8Also international crude oil prices are expected to remain subdued in the near term owing to a weak Chinese economy along with higher supplies from Iran once the sanctions are lifted.
8The possibility of more crude flooding the international markets with the Congress voting to lift the ban on US crude oil exports and the failure of OPEC to agree on a production ceiling in its last meeting in December 2015 are the other contributory factors.
8The glut of LNG liquefaction terminals also means that suppliers have begun hunting for markets for gas and this is likely to lead to a discounting war that will benefit the buyers of gas.
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8The decline in spot prices is due to the fall in the price of crude oil derived competing fuels.
8Crude oil prices have declined from about US$ 60/barrel as on June 30, 2015 to about US$ 36-37/barrel (mid-December) now.
8Additionally Japan has recommenced operations of two of its nuclear plants- one in August and one in October 2015 and going forward start up of additional Japanese nuclear plants could reduce the demand for LNG which could have a dampening effect on spot prices.
8Also international crude oil prices are expected to remain subdued in the near term owing to a weak Chinese economy along with higher supplies from Iran once the sanctions are lifted.
8The possibility of more crude flooding the international markets with the Congress voting to lift the ban on US crude oil exports and the failure of OPEC to agree on a production ceiling in its last meeting in December 2015 are the other contributory factors.
8The glut of LNG liquefaction terminals also means that suppliers have begun hunting for markets for gas and this is likely to lead to a discounting war that will benefit the buyers of gas.
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A time has come for the oil and gas industry to look at all kinds of disruptive technologies that can impact their world in the future.
8One such development talks of a new carbon capture methodology that calls for erection of first-generation nano factories that will capture CO2 directly from the atmosphere and permanently sequestering the gas
8The manufacturing cost of such nano factories will be at around $1000/kg, and that would enable the atmospheric capture of CO2 at a total lifetime cost of about $21/tonne CO2, far less expensive than the $70-$200/tonne CO2 and higher estimated for conventional atmospheric carbon capture technologies.
8For an installation cost of $2.74 trillion/year over 10 years followed by a maintenance cost of $0.91 trillion per year, a network of direct atmospheric CO2 capture plants could be put in place around the world that would be powerful enough to reduce global CO2 levels by ~50 ppm per decade, easily overwhelming current anthropogenic emission rates.
8This is sufficient to return Earth’s atmosphere to pre-industrial carbon dioxide levels of near 300 ppm within 40 years from launch of program, and thereafter to maintain the atmosphere in this ideal condition indefinitely, eliminating one of the primary drivers of global climate change on our planet.
8Lower cost later-generation nanofactories may allow the deployment of a global system of similar capacity for an annual installation and maintenance cost of $4.04 billion per year, capturing and permanently sequestering atmospheric CO2 using marine “carbon capture islands” at a total lifetime cost of about $0.08/tonne CO2. The cost is driven so extraordinarily low because the mature nanofactory, manufacturing atomically precise product for ~$1/kg, can also manufacture a cheap source of solar energy to power the CO2 capture and sequestration process.
8Interestingly, these nano factories can easily be used to control other climate-relevant greenhouse gases such as nitrous oxidea nd even to avoid the buildup of potentially catastrophic levels of methane or hydrogen sulfide adding only minor additional system costs.
Comment: This sounds like a revolutionary new technology that will allow the world to happily burn fossil fuel without a care in the world. Assuming that the technology is realistic, the burden of setting up such factories will perhaps fall as a tax on fossil fuels. And this will really push up the price of coal and oil without the money going directly into the hands of the producers.
Click on Reports to learn more about what this buzz about nano factories is all about Details
8One such development talks of a new carbon capture methodology that calls for erection of first-generation nano factories that will capture CO2 directly from the atmosphere and permanently sequestering the gas
8The manufacturing cost of such nano factories will be at around $1000/kg, and that would enable the atmospheric capture of CO2 at a total lifetime cost of about $21/tonne CO2, far less expensive than the $70-$200/tonne CO2 and higher estimated for conventional atmospheric carbon capture technologies.
8For an installation cost of $2.74 trillion/year over 10 years followed by a maintenance cost of $0.91 trillion per year, a network of direct atmospheric CO2 capture plants could be put in place around the world that would be powerful enough to reduce global CO2 levels by ~50 ppm per decade, easily overwhelming current anthropogenic emission rates.
8This is sufficient to return Earth’s atmosphere to pre-industrial carbon dioxide levels of near 300 ppm within 40 years from launch of program, and thereafter to maintain the atmosphere in this ideal condition indefinitely, eliminating one of the primary drivers of global climate change on our planet.
8Lower cost later-generation nanofactories may allow the deployment of a global system of similar capacity for an annual installation and maintenance cost of $4.04 billion per year, capturing and permanently sequestering atmospheric CO2 using marine “carbon capture islands” at a total lifetime cost of about $0.08/tonne CO2. The cost is driven so extraordinarily low because the mature nanofactory, manufacturing atomically precise product for ~$1/kg, can also manufacture a cheap source of solar energy to power the CO2 capture and sequestration process.
8Interestingly, these nano factories can easily be used to control other climate-relevant greenhouse gases such as nitrous oxidea nd even to avoid the buildup of potentially catastrophic levels of methane or hydrogen sulfide adding only minor additional system costs.
Comment: This sounds like a revolutionary new technology that will allow the world to happily burn fossil fuel without a care in the world. Assuming that the technology is realistic, the burden of setting up such factories will perhaps fall as a tax on fossil fuels. And this will really push up the price of coal and oil without the money going directly into the hands of the producers.
Click on Reports to learn more about what this buzz about nano factories is all about Details
Now that oil prices are tumbling down rapidly, how is Saudi Arabia coping up?
8This is a question that haunts the oil and gas industry, as it is only this country that has the capacity to influence the global price of crude by either continuing to vigorously pump large volumes of oil as it is currently doing to keep prices low or cut its production by a reasonable quantity to push prices up.
8Latest estimates show that the drop in prices is hurting Saudi Arabia but not enough for it to call a truce with the US shale oil producers.
8Oil revenues -- which make up 73% of the total revenue -- are down 23% in 2015 while actual expenditure is up 13%.
8The increase in spending has mainly resulted from the additional salaries for civil and military Saudi employees, beneficiaries of social security and retirees.
8Public finance are holding up pretty well despite adverse cash flows.
8Public debt will stand at only 5.8%t of the GDP in 2015, up from 2 percent in 2014.
8The country is now trying to prune costs and a series of belt tightening measures have been taken.
8But at current debt levels, the county can continue to push its war with the US shale oil producers for a very long time indeed.
8So don't expect Saudi Arabia to pull out of the war anytime soon.
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8This is a question that haunts the oil and gas industry, as it is only this country that has the capacity to influence the global price of crude by either continuing to vigorously pump large volumes of oil as it is currently doing to keep prices low or cut its production by a reasonable quantity to push prices up.
8Latest estimates show that the drop in prices is hurting Saudi Arabia but not enough for it to call a truce with the US shale oil producers.
8Oil revenues -- which make up 73% of the total revenue -- are down 23% in 2015 while actual expenditure is up 13%.
8The increase in spending has mainly resulted from the additional salaries for civil and military Saudi employees, beneficiaries of social security and retirees.
8Public finance are holding up pretty well despite adverse cash flows.
8Public debt will stand at only 5.8%t of the GDP in 2015, up from 2 percent in 2014.
8The country is now trying to prune costs and a series of belt tightening measures have been taken.
8But at current debt levels, the county can continue to push its war with the US shale oil producers for a very long time indeed.
8So don't expect Saudi Arabia to pull out of the war anytime soon.
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Iraq is a minefield for oil and gas companies but some of the world's largest companies -- PetroChina, BP, Exxom Mobil, ENI and Shell -- continue to remain active in service contact deals in the war torn country.
8India on the other hand has not been following an active policy of investment in Iraq, OPEC's second largest oil producer.
8Driven by lower prices, Iraq will in most likelihood will abandon the service contract model in favour of a more conducive production sharing agreement.
8It has recently sent out an invitation to PetroChina and Exxon Mobil for talks to develop some of its Southern oil fields.
8According to reports PetroChina is more interested than Exxon Mobil in pushing more investment in Iraq.
8Should OVL try its hand in Iraq and put in an attractive bid as well?
8If the big majors of the world can survive in Iraq, there is no reason why OVL can't.
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8India on the other hand has not been following an active policy of investment in Iraq, OPEC's second largest oil producer.
8Driven by lower prices, Iraq will in most likelihood will abandon the service contract model in favour of a more conducive production sharing agreement.
8It has recently sent out an invitation to PetroChina and Exxon Mobil for talks to develop some of its Southern oil fields.
8According to reports PetroChina is more interested than Exxon Mobil in pushing more investment in Iraq.
8Should OVL try its hand in Iraq and put in an attractive bid as well?
8If the big majors of the world can survive in Iraq, there is no reason why OVL can't.
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Apologists for building these nano factories claim that the cost of global warming will be far higher than the money needed to set up these units.
8According to a recent analysis by Citibank, cost of change will amount to $20 trillion/yr by 2060 if there is a 1.5 °C temperature increase, $44trillion/yr at a 2.5 °C temperature increase, and $72 trillion/yr at a 4.5 °C temperature increase.
8In this context, paying $2-3 trillion/yr -- and much less later when the technology matures -- to avoid a $20-$72 trillion/yr worldwide cost seems like a reasonable and intelligent choice.
8In effect what can happen is that while a power plant emits CO2 in one part of the world, a nano factory complex can sit in another part -- where, for example, solar power is easily available to fire these factories which will also be located near geological formations in which the gas can be sequestered.
8Clearly, a rapid rise in global temperatures can threaten the very existence of the human race but ingenious minds are at work around the globe to prevent such a catastrophic event from occurring even as the human kind happily goes around burning fossil fuel while conducting their day to day business.
Click on Report to understand the entire business of carbon sequestering and how it can work in many different ways to reduce the carbon foot print of the human race. Details
8According to a recent analysis by Citibank, cost of change will amount to $20 trillion/yr by 2060 if there is a 1.5 °C temperature increase, $44trillion/yr at a 2.5 °C temperature increase, and $72 trillion/yr at a 4.5 °C temperature increase.
8In this context, paying $2-3 trillion/yr -- and much less later when the technology matures -- to avoid a $20-$72 trillion/yr worldwide cost seems like a reasonable and intelligent choice.
8In effect what can happen is that while a power plant emits CO2 in one part of the world, a nano factory complex can sit in another part -- where, for example, solar power is easily available to fire these factories which will also be located near geological formations in which the gas can be sequestered.
8Clearly, a rapid rise in global temperatures can threaten the very existence of the human race but ingenious minds are at work around the globe to prevent such a catastrophic event from occurring even as the human kind happily goes around burning fossil fuel while conducting their day to day business.
Click on Report to understand the entire business of carbon sequestering and how it can work in many different ways to reduce the carbon foot print of the human race. Details
Hindustan Petroleum Corporation Limited (HPCL) is planning to expand the system capacity of its Mundra-Delhi Pipeline (MDPL) from the exisiting 5 MMTPA to 6.9 MMTPA at a cost of Rs1520 crore.
8This will be done by way of installing additional pump facilities at Bhachau and Pindwara stations.
8Along with this, a 280Km extended spur line will be laid from Palanpur station to HPCL's proposed marketing terminal near Vadodra, Gujarat.
8Out of the total cost, Rs.950 is allocated for laying of pipelines, Rs.450 crore for setting up a terminal at Vadodra and the rest Rs.120 crore for Bachau and Pindwara stations.
8The proposed project is expected to be completed in a period of 24 months after getting statutory clearance. clearances.
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8This will be done by way of installing additional pump facilities at Bhachau and Pindwara stations.
8Along with this, a 280Km extended spur line will be laid from Palanpur station to HPCL's proposed marketing terminal near Vadodra, Gujarat.
8Out of the total cost, Rs.950 is allocated for laying of pipelines, Rs.450 crore for setting up a terminal at Vadodra and the rest Rs.120 crore for Bachau and Pindwara stations.
8The proposed project is expected to be completed in a period of 24 months after getting statutory clearance. clearances.
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The pipeline is proposed to be laid to transfer MS, HSD and SKO from the existing Tap off location at Palanpur in Gujarat up to Vadodara.
8The products shall be made available to this pipeline from the existing MDPL pipeline.
8The proposed pipeline is planned to cater the demand of petroleum products in Western India including the areas of Indore, Surat, Sagar among others
8The capacity of the pipeline will be 8000 hr/yr.
8The new receipt station cum marketing terminal at Vadodara will have a total capacity of 2,10,000 KL.
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8The products shall be made available to this pipeline from the existing MDPL pipeline.
8The proposed pipeline is planned to cater the demand of petroleum products in Western India including the areas of Indore, Surat, Sagar among others
8The capacity of the pipeline will be 8000 hr/yr.
8The new receipt station cum marketing terminal at Vadodara will have a total capacity of 2,10,000 KL.
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Palnapur-Vadodra pipelinesystem will broadly comprise of the following:
-- 280Km cross country pipeline of 18 inch dia between Planpur and Vadodra.
-- Two set of two main pump and one side pump alongside a small 400KVA DG set at Bhachaua nd Pindwara.
-- Six SV stations with 25KVA capacity DG sets on the Palnpur-Vadodra pipeline.
-- One IP station with 25KVA capacitiy DG set on the Planpur-Vadodara pipeline.
-- Vadodra terminal will consist of three DG sets of 625KVA, 250KVA and 160 KVA capacity.
8The power supply will be met through state electricity Boards, and a 33KV switchyard has been envisaged for extending a 6.6 KV power supply system to the pumping units.
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-- 280Km cross country pipeline of 18 inch dia between Planpur and Vadodra.
-- Two set of two main pump and one side pump alongside a small 400KVA DG set at Bhachaua nd Pindwara.
-- Six SV stations with 25KVA capacity DG sets on the Palnpur-Vadodra pipeline.
-- One IP station with 25KVA capacitiy DG set on the Planpur-Vadodara pipeline.
-- Vadodra terminal will consist of three DG sets of 625KVA, 250KVA and 160 KVA capacity.
8The power supply will be met through state electricity Boards, and a 33KV switchyard has been envisaged for extending a 6.6 KV power supply system to the pumping units.
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The pipeline will be routed through a 18 m RoW traversing agricultural land, hence no rehabilitation and resettlement (R&R) issues.
8The projects economics provide a reasonable IRR as petroleum products ferried through a pipeline system is much efficient than road and railways.
8As the pipeline route crosses though many canals, roads, railway tracks and agricultural land, the drilling work to cover these areas will be done using the HDD (Horizontal Directional Drilling) technique.
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8The projects economics provide a reasonable IRR as petroleum products ferried through a pipeline system is much efficient than road and railways.
8As the pipeline route crosses though many canals, roads, railway tracks and agricultural land, the drilling work to cover these areas will be done using the HDD (Horizontal Directional Drilling) technique.
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Consumption in the fertilizer sector dropped by 2.2 percent from 1,218 MMSCM in November, 2014 to 1,191 MMSCM in November, 2015.
8This is primarily due to low offtake in the Northern region especially in Uttar Pradesh and Punjab compared to last year.
8Southern region saw a 27 percent growth in gas consumption and Western region’s consumption increased by 14 percent subsequent to the new fertilizer pooling mechanism in the urea sector
8On cumulative basis, overall sales during April to November, 2015 has increased marginally by 0.9 percent to 9,778 MMSCM from 9,693 MMSCM during April to November, 2014."
8For the economy as a whole, natural gas sales fell short of target and saw a decline of 2.33 percent in November, 2015 as compared to same month last year. The total consumption for November, 2015 was 3,138 MMSCM as compared to 3,213 MMSCM during November, 2014.
8Cumulatively also, for the period April to November, gas sales declined by 4.04 percent from 25,403 MMSCM in FY 2014-15 to 24,774 MMSCM in FY 2015-16.
8Natural gas consumption has shown an overall decline predominantly due to reduction in domestic gas production and lower off-take of gas in core sectors.
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8This is primarily due to low offtake in the Northern region especially in Uttar Pradesh and Punjab compared to last year.
8Southern region saw a 27 percent growth in gas consumption and Western region’s consumption increased by 14 percent subsequent to the new fertilizer pooling mechanism in the urea sector
8On cumulative basis, overall sales during April to November, 2015 has increased marginally by 0.9 percent to 9,778 MMSCM from 9,693 MMSCM during April to November, 2014."
8For the economy as a whole, natural gas sales fell short of target and saw a decline of 2.33 percent in November, 2015 as compared to same month last year. The total consumption for November, 2015 was 3,138 MMSCM as compared to 3,213 MMSCM during November, 2014.
8Cumulatively also, for the period April to November, gas sales declined by 4.04 percent from 25,403 MMSCM in FY 2014-15 to 24,774 MMSCM in FY 2015-16.
8Natural gas consumption has shown an overall decline predominantly due to reduction in domestic gas production and lower off-take of gas in core sectors.
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Petrol or Motor spirit recorded a high growth of 17.2 percent during November, 2015 as compared to November, 2014 and a cumulative growth of 14.6 percent for the period April to November, 2015.
8This is an extremely fast rate of growth and there are two sides to it. The high growth means an increase in vehicular growth that is going to continue unabated for many years. For despite a very high increase in the ownership of passenger vehicles in India in last few years, the ownership levels per capita of passenger vehicles are still very low compared to other emerging economies and developed countries, indicating a trend of continuous healthy growth in MS.
8Then again, the declining prices of MS have resulted in general to greater usage of cars and two wheelers and consumer preference for petrol driven vehicles.
8The other side of the picture is that India's contribution to the carbon emissions will outpace those of others in the world and that's bad news as a whole. Apologists however can always turn around and claim India's teeming millions cannot be denied the luxury of motorized travel when others in thw world had enjoyed this privilege for several decades now.
8There is also the question of India's growing dependence on imported crude as a result of the sharp increase in consumption. Once prices rise, this is going to hurt more than before.
8MS consumption recorded growths of 8.8 percent in 2013-14 and 11.2 percent in 2014-15, clearly indicating that growth in petrol consumption is driven by healthy growth in automobile Industry.
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8This is an extremely fast rate of growth and there are two sides to it. The high growth means an increase in vehicular growth that is going to continue unabated for many years. For despite a very high increase in the ownership of passenger vehicles in India in last few years, the ownership levels per capita of passenger vehicles are still very low compared to other emerging economies and developed countries, indicating a trend of continuous healthy growth in MS.
8Then again, the declining prices of MS have resulted in general to greater usage of cars and two wheelers and consumer preference for petrol driven vehicles.
8The other side of the picture is that India's contribution to the carbon emissions will outpace those of others in the world and that's bad news as a whole. Apologists however can always turn around and claim India's teeming millions cannot be denied the luxury of motorized travel when others in thw world had enjoyed this privilege for several decades now.
8There is also the question of India's growing dependence on imported crude as a result of the sharp increase in consumption. Once prices rise, this is going to hurt more than before.
8MS consumption recorded growths of 8.8 percent in 2013-14 and 11.2 percent in 2014-15, clearly indicating that growth in petrol consumption is driven by healthy growth in automobile Industry.
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HSD (High Speed Diesel) which continued to register a double-digit growth during the previous two months settled to a modest growth of 1.6 percent during the month of November, 2015 as compared to November, 2014. Sales registered a cumulative growth of 6.3 percent for the period April to November, 2015.
8HSD consumption was largely affected due to lesser truck movement during Diwali festival and heavy rains in Tamil Nadu.
8The medium and heavy commercial vehicles sales continued to record an impressive 24.8 percent growth during November, 2015 which is mainly attributed to the positive sentiments in the economy and rising demand for logistics and transportation services.
8In addition to this, there has been a growth of 0.9 percent in the port traffic for the month of November, 2015.
8Concerns about the higher polluting effects of diesel and the narrowing of the differential between petrol and diesel prices is also slowing down the demand of diesel passenger cars, and this in turn can impact the sale of the item in the future
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8HSD consumption was largely affected due to lesser truck movement during Diwali festival and heavy rains in Tamil Nadu.
8The medium and heavy commercial vehicles sales continued to record an impressive 24.8 percent growth during November, 2015 which is mainly attributed to the positive sentiments in the economy and rising demand for logistics and transportation services.
8In addition to this, there has been a growth of 0.9 percent in the port traffic for the month of November, 2015.
8Concerns about the higher polluting effects of diesel and the narrowing of the differential between petrol and diesel prices is also slowing down the demand of diesel passenger cars, and this in turn can impact the sale of the item in the future
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LPG is another fuel that has shown a consistence upward increase in sales, recording positive grwoth in last 27 months. Sales were up 2.8 percent during November, 2015 while recording a cumulative growth of 7.7 percent for the period April-November, 2015.
8LPG-Packed non-domestic consumption for the eleventh month in a row registered a growth of 55.9 percent in November 2015 and cumulative growth of 44.4 percent during April to November 2015. High growth may be attributed to easy availability, lower prevailing prices for non-domestic LPG and a curb in diversion of subsidized domestic cylinders, pursuant to the implementation of DBTL.
8On the other hand, LPG-Packed Domestic consumption also registered a minor de-growth of 0.3 percent for the first time during November, 2015 after registering continuous growth for 26 months in a row.
8This is mainly due to the high base of the previous year when consumers started uplifting their quota of 12 cylinders before the launch of DBTL scheme and a growth of 17.6 percent registered during November 2014.
8Bulk LPG recorded a positive growth of 29.5 percent during November, 2015 and 2.6 percent during April to November 2015.
8Auto LPG for the eleventh month in a row registered a positive growth of 7.9 percent in November, 2015 and 7.4 percent during April to November 2015.
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8LPG-Packed non-domestic consumption for the eleventh month in a row registered a growth of 55.9 percent in November 2015 and cumulative growth of 44.4 percent during April to November 2015. High growth may be attributed to easy availability, lower prevailing prices for non-domestic LPG and a curb in diversion of subsidized domestic cylinders, pursuant to the implementation of DBTL.
8On the other hand, LPG-Packed Domestic consumption also registered a minor de-growth of 0.3 percent for the first time during November, 2015 after registering continuous growth for 26 months in a row.
8This is mainly due to the high base of the previous year when consumers started uplifting their quota of 12 cylinders before the launch of DBTL scheme and a growth of 17.6 percent registered during November 2014.
8Bulk LPG recorded a positive growth of 29.5 percent during November, 2015 and 2.6 percent during April to November 2015.
8Auto LPG for the eleventh month in a row registered a positive growth of 7.9 percent in November, 2015 and 7.4 percent during April to November 2015.
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Naptha consumption recorded a growth of a massive 39.7 percent during the month of November, 2015 and another 22.4 percent on cumulative basis for the period April to November, 2015. Growth is on account of higher use of Naphtha by Petrochemical and Fertilizer sectors.
8During November, 2015 the growth in ATF was 14.7 percent and on cumulative basis, it was 7.3 percent for the period April to November, 2015
8A growth of 26 percent in domestic air traffic has been reported by the Civil Aviation’s traffic report for the month of November, 2015, flying 7.3 million passengers as compared to 5.8 million passengers during the same period last year.
8Also major Indian Air Force exercise and refueling of Nepal bound airlines in India during the month contributed to high growth during the month.
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8During November, 2015 the growth in ATF was 14.7 percent and on cumulative basis, it was 7.3 percent for the period April to November, 2015
8A growth of 26 percent in domestic air traffic has been reported by the Civil Aviation’s traffic report for the month of November, 2015, flying 7.3 million passengers as compared to 5.8 million passengers during the same period last year.
8Also major Indian Air Force exercise and refueling of Nepal bound airlines in India during the month contributed to high growth during the month.
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Petcoke consumption registered a good growth of 18 percent during November, 2015 and a cumulative growth of 22.9 percent was registered during the period April to November, 2015.
8FO and LSHS consumption registered a minor growth of 0.4 percent during November, 2015. While the consumption of LSHS has reduced due to shift to natural gas by major customers like power and fertilizer industries, it gained some volume in steel industry sector.
8On cumulative basis, there has been growth of 6.9 percent for the period April to November, 2015. The growth is mainly from the Fertilizer, Power and General Trade sectors.
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8FO and LSHS consumption registered a minor growth of 0.4 percent during November, 2015. While the consumption of LSHS has reduced due to shift to natural gas by major customers like power and fertilizer industries, it gained some volume in steel industry sector.
8On cumulative basis, there has been growth of 6.9 percent for the period April to November, 2015. The growth is mainly from the Fertilizer, Power and General Trade sectors.
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What is however surprising is that natural gas consumption fell short of target and saw a decline of 2.33 percent for November, 2015 as compared to same month last year.
8In terms of volumes, total consumption for November, 2015 was 3,138 MMSCM as compared to 3,213 MMSCM during November, 2014.
8Cumulatively also, for the period April to November, gas sales declined by 4.04 percent from 25,403 MMSCM in FY 2014-15 to 24,774 MMSCM in FY 2015-16.
8Natural gas consumption has shown decline predominantly due to reduction in domestic gas production and lower off-take of gas in core sectors.
8There was an increase in consumption in the power sector by 9.3 percent, primarily led by the “gas pooling policy” introduced to revive idling gas based power plants in the country.
8Moreover, consumption in fertilizer sector dropped by 2.2 percent from 1,218 MMSCM in November, 2014 to 1,191 MMSCM in November, 2015.
8CGD sector showed a growth of 8.5 percent in natural gas consumption from 333 MMSCM in November, 2014 to 361 MMSCM during November, 2015 due to increase in off-take by CGD companies in Western region, primarily in Gujarat.
8The decline in sales was primarily due to IOCL’s own sourcing of LNG for its Panipat and Mathura refineries in Northern region (shift from "Others" to Internal consumption) and lower off-take by IOCL customers in Western region.
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8In terms of volumes, total consumption for November, 2015 was 3,138 MMSCM as compared to 3,213 MMSCM during November, 2014.
8Cumulatively also, for the period April to November, gas sales declined by 4.04 percent from 25,403 MMSCM in FY 2014-15 to 24,774 MMSCM in FY 2015-16.
8Natural gas consumption has shown decline predominantly due to reduction in domestic gas production and lower off-take of gas in core sectors.
8There was an increase in consumption in the power sector by 9.3 percent, primarily led by the “gas pooling policy” introduced to revive idling gas based power plants in the country.
8Moreover, consumption in fertilizer sector dropped by 2.2 percent from 1,218 MMSCM in November, 2014 to 1,191 MMSCM in November, 2015.
8CGD sector showed a growth of 8.5 percent in natural gas consumption from 333 MMSCM in November, 2014 to 361 MMSCM during November, 2015 due to increase in off-take by CGD companies in Western region, primarily in Gujarat.
8The decline in sales was primarily due to IOCL’s own sourcing of LNG for its Panipat and Mathura refineries in Northern region (shift from "Others" to Internal consumption) and lower off-take by IOCL customers in Western region.
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Bitumen consumption registered a minor de-growth of 2.1 percent during the month of November, 2015 mainly due to Diwali and Chhatt festivals when workers involved in the building of roads go to their native places.
8This comes after four months of high positive growth.
8Cumulatively there is a growth of 9.8 percent for the period April to November 2015.
8LDO consumption recorded a growth of 11 percent in the month of November, 2015 and 13.7 percent on cumulative basis for the period April to November, 2015.
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8This comes after four months of high positive growth.
8Cumulatively there is a growth of 9.8 percent for the period April to November 2015.
8LDO consumption recorded a growth of 11 percent in the month of November, 2015 and 13.7 percent on cumulative basis for the period April to November, 2015.
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The consumption of all petroleum products registered a growth of 6.4 percent in November, 2015 as compared to that in November, 2014.
8The figure would have been higher still but for the heavy rains and widespread flooding in Tamil Nadu that subdued consumption of petroleum products during the month.
8Except for SKO, Bitumen and other products, all other products recorded a positive growth.
8On cumulative basis, a growth of 9.5 percent was registered for the period April to November, 2015.
8SKO and Lubes are the only products which have recorded a negative growth of -3.7 and -7.4 percent respectively during the period April to November, 2015.
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8The figure would have been higher still but for the heavy rains and widespread flooding in Tamil Nadu that subdued consumption of petroleum products during the month.
8Except for SKO, Bitumen and other products, all other products recorded a positive growth.
8On cumulative basis, a growth of 9.5 percent was registered for the period April to November, 2015.
8SKO and Lubes are the only products which have recorded a negative growth of -3.7 and -7.4 percent respectively during the period April to November, 2015.
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BPCL has commissioned a new 6 MMTPA state of art integrated Crude & Vacuum Distillation unit at a cost of Rs. 1419 crores as a replacement of old Crude and Vacuum units.
8The commissioning of this new CDU would ensure cleaner environment and efficient use of energy with lower emissions and reduction in energy consumption. The Sulphurdioxide emission from this
new unit would be less than 10.5 mt/d – the lowest in the country amongst all the Refineries.
8Tightly heat integrated with furnaces of higher efficiency, the reduction in energy consumption in terms of Liquid Fuel Equivalent (LFE) is expected to be about 30 % which results into estimated savings of Rs.
128 Crores per annum on fuel consumption.
8The integral part of this new CDU is its superior design and safety features. This has resulted in significantly lesser number of equipments as compared to older units and facilitates better
turnaround management during shutdown and routine maintenance.
8The unit is designed with the latest safety features like blast proof control room and closed drainage system thus making it an efficient, intrinsically safe and sustainable unit with higher distillate yield of 3 % and thus
contributing to higher Refining margins.
8Looking ahead, the stabilization of this unit would help in dismantling the old 1955 CDU units thereby creating space for refinery modernization to meet future auto fuel norms and other
profitability enhancing projects.
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8The commissioning of this new CDU would ensure cleaner environment and efficient use of energy with lower emissions and reduction in energy consumption. The Sulphurdioxide emission from this
new unit would be less than 10.5 mt/d – the lowest in the country amongst all the Refineries.
8Tightly heat integrated with furnaces of higher efficiency, the reduction in energy consumption in terms of Liquid Fuel Equivalent (LFE) is expected to be about 30 % which results into estimated savings of Rs.
128 Crores per annum on fuel consumption.
8The integral part of this new CDU is its superior design and safety features. This has resulted in significantly lesser number of equipments as compared to older units and facilitates better
turnaround management during shutdown and routine maintenance.
8The unit is designed with the latest safety features like blast proof control room and closed drainage system thus making it an efficient, intrinsically safe and sustainable unit with higher distillate yield of 3 % and thus
contributing to higher Refining margins.
8Looking ahead, the stabilization of this unit would help in dismantling the old 1955 CDU units thereby creating space for refinery modernization to meet future auto fuel norms and other
profitability enhancing projects.
Click on Reports for more Details
For a refinery, the state government's patronage is of great importance, for an adversarial role can cause a lot of problems.
8While BPCL's role is not adversarial with the Maharashtra, yet the refiner has a long list of complaints.
Here are a few of them:
8Removal of BMC octroi on Crude
8Use of Ethanol Blended petrol in Maharashtra
8Removal of Double Taxation on blending of biodiesel
8Problems over renewal of lease for Retail Outlets
8Issues pertaining to Uran, ONGC
8Encroachment of a BPCL pipeline corridor by a Municipal dump yard
8Encroachment on the Uran Bokadvira pipeline corridor
8ROU and other associated problems with th eHPCL-Uran- Chakan/Shikrapur LPG pipeline project
8Allotment of land for BPCL's Mumbai Refinery, HPCL Vashi terminal and HPCL's depot at Shendra
Click on Details for more Details
8While BPCL's role is not adversarial with the Maharashtra, yet the refiner has a long list of complaints.
Here are a few of them:
8Removal of BMC octroi on Crude
8Use of Ethanol Blended petrol in Maharashtra
8Removal of Double Taxation on blending of biodiesel
8Problems over renewal of lease for Retail Outlets
8Issues pertaining to Uran, ONGC
8Encroachment of a BPCL pipeline corridor by a Municipal dump yard
8Encroachment on the Uran Bokadvira pipeline corridor
8ROU and other associated problems with th eHPCL-Uran- Chakan/Shikrapur LPG pipeline project
8Allotment of land for BPCL's Mumbai Refinery, HPCL Vashi terminal and HPCL's depot at Shendra
Click on Details for more Details
This website has reported sometime ago that a different policy paradigm is needed for offtake of gas from small and marginal fields in remote areas of the North East.
8The petroleum ministry seems to have acted on the suggestion.
8The guidelines stipulate that buyers have to offtake gas within 90 days from the readiness expressed by the National Oil Companies to supply gas.
8The demand for liberalization of this norm was made by industries based out of the North East. A longer lead time was desired.
8Accordingly, the government has now allowed North East based buyers to offtake gas within one year from the date of readiness assigned by the NOCs.
8For the oil companies though, the liberalization of policy should not be a problem. It just needs to be sure when it will ready to supply gas and issue an auction notice accordingly instead of at the nick of time as is the case at present.
8But care has to be taken to ensure that the gas is indeed supplied on the stipulated date and take or pay arrangements must be in place for either parties.
Click on Reports for more Details
8The petroleum ministry seems to have acted on the suggestion.
8The guidelines stipulate that buyers have to offtake gas within 90 days from the readiness expressed by the National Oil Companies to supply gas.
8The demand for liberalization of this norm was made by industries based out of the North East. A longer lead time was desired.
8Accordingly, the government has now allowed North East based buyers to offtake gas within one year from the date of readiness assigned by the NOCs.
8For the oil companies though, the liberalization of policy should not be a problem. It just needs to be sure when it will ready to supply gas and issue an auction notice accordingly instead of at the nick of time as is the case at present.
8But care has to be taken to ensure that the gas is indeed supplied on the stipulated date and take or pay arrangements must be in place for either parties.
Click on Reports for more Details
Background work is going on for setting up a shipyard-cum-captive jetty-cum LNG terminal by the Gujarat Integrated Maritime Complex in Kutch, Gujarat.
8The shipyard will repair and build new ships while one of the captive jetties will have a 5 MMTPA LNG terminal.
8The captive jetties will help in the import 17 MMTPA of coal to service a 4000 MW power plant.
8The LNG unit will help fire up a 2000 MW gas fired plant.
8Initially, the plans were to build a 2.5 MMTPA LNG unit but the bar was raised to 5 MMTPA after the Gujarat government requisitioned an additional requisition from the plant.
8Clearly, the whole complex is being built to ambitious scale. The shipyard, for example, will handle 300 vessels year, repairing 100 small vessels and 200 Handy and Panamax vessels.
8The shipbuilding activity will involve the construction of 10 small vessels and 10 Handymax vessels.
8That work on the project is progressing is evident from the fact that the EIA document has been prepared after a public hearing was conducted.
8Additional additional studies are being carried out under instruction from the Gujarat Coastal Zone Management Authority.
Click on Reports for more Details
8The shipyard will repair and build new ships while one of the captive jetties will have a 5 MMTPA LNG terminal.
8The captive jetties will help in the import 17 MMTPA of coal to service a 4000 MW power plant.
8The LNG unit will help fire up a 2000 MW gas fired plant.
8Initially, the plans were to build a 2.5 MMTPA LNG unit but the bar was raised to 5 MMTPA after the Gujarat government requisitioned an additional requisition from the plant.
8Clearly, the whole complex is being built to ambitious scale. The shipyard, for example, will handle 300 vessels year, repairing 100 small vessels and 200 Handy and Panamax vessels.
8The shipbuilding activity will involve the construction of 10 small vessels and 10 Handymax vessels.
8That work on the project is progressing is evident from the fact that the EIA document has been prepared after a public hearing was conducted.
8Additional additional studies are being carried out under instruction from the Gujarat Coastal Zone Management Authority.
Click on Reports for more Details
The construction arm of L&T won business worth Rs 1178 crore in December, 2015.
8But an analysis will show that while it bagged orders in the Metallurgical and Material Handling, Power Transmission & Distribution segments, it drew a blank in the oil & gas space last month.
8Overall, orders from the oil and gas business in India has slowed down considerably but the reasons why there is a slowdown in India seems to be different from stagnation noticed in this sector in the world as a whole.
8The main bottleneck on the E&P side seems to be the stalemate over pricing of domestic gas. This has held up big ticket investments by ONGC and RIL, among others.
8Between them the investment planned is close to Rs 80,000 crore over a three year period, going up to Rs 100,000 crore if the wind blows in the right direction.
8On the downstream side, new fuel quality norms will witness an investment of around Rs 80,000 crore by Indian refineries over the next few years, giving this segment a fresh impetus.
8The midstream sector too will need investments as the pipeline laying business is expected to build momentum once capital approvals come through for new LNG terminals and City Gas Distribution projects.
8There is no doubt that low oil prices have a bearish impact on investments but except for Cairn India which is holding back investments waiting for prices to firm up, the public sector duo of OIL and ONGC or not holding back any plans for the time being.
8The main investment in the E&P sector is in gas assets and here, it is the tangle over government policies that seems to be the main constraining factor as of now.
Click on Reports for more Details
8But an analysis will show that while it bagged orders in the Metallurgical and Material Handling, Power Transmission & Distribution segments, it drew a blank in the oil & gas space last month.
8Overall, orders from the oil and gas business in India has slowed down considerably but the reasons why there is a slowdown in India seems to be different from stagnation noticed in this sector in the world as a whole.
8The main bottleneck on the E&P side seems to be the stalemate over pricing of domestic gas. This has held up big ticket investments by ONGC and RIL, among others.
8Between them the investment planned is close to Rs 80,000 crore over a three year period, going up to Rs 100,000 crore if the wind blows in the right direction.
8On the downstream side, new fuel quality norms will witness an investment of around Rs 80,000 crore by Indian refineries over the next few years, giving this segment a fresh impetus.
8The midstream sector too will need investments as the pipeline laying business is expected to build momentum once capital approvals come through for new LNG terminals and City Gas Distribution projects.
8There is no doubt that low oil prices have a bearish impact on investments but except for Cairn India which is holding back investments waiting for prices to firm up, the public sector duo of OIL and ONGC or not holding back any plans for the time being.
8The main investment in the E&P sector is in gas assets and here, it is the tangle over government policies that seems to be the main constraining factor as of now.
Click on Reports for more Details
The target depth of the wells will range from as low as 420 meters to as high as 2260 meters.
8On an average, it will take around 45 to 60 days to complete drilling of one well depending upon its depth.
8Drilling in deep waters will be done by using a drill ship which is a self propelled, dynamically Positioned (DP) vessel with on board integrated drilling facilities.
8Synthetic Oil Base (SOBM) mud will be used as a drilling mud.
8The quantity of drilling fuel to be used will be between 700-900 M3 while the quantity of cuttings will be of the order of 300-500 M3
8The power requirement for the drilling operations will be met by using Diesel Generator sets of 4X1430 kVA capacity with a diesel consumption of about 8-12 Kl / day.
Also given here are the details of each exploratory well in terms of:
--Location
--Bathymetry
--Target depth
--Nearest distance from the coast
--Well cost estimate
The cost estimate of each well varies from Rs 248 crore to a massive Rs 860 crore. This is a lot of money by any yardstick
Click on our Reports section for more. Details
8On an average, it will take around 45 to 60 days to complete drilling of one well depending upon its depth.
8Drilling in deep waters will be done by using a drill ship which is a self propelled, dynamically Positioned (DP) vessel with on board integrated drilling facilities.
8Synthetic Oil Base (SOBM) mud will be used as a drilling mud.
8The quantity of drilling fuel to be used will be between 700-900 M3 while the quantity of cuttings will be of the order of 300-500 M3
8The power requirement for the drilling operations will be met by using Diesel Generator sets of 4X1430 kVA capacity with a diesel consumption of about 8-12 Kl / day.
Also given here are the details of each exploratory well in terms of:
--Location
--Bathymetry
--Target depth
--Nearest distance from the coast
--Well cost estimate
The cost estimate of each well varies from Rs 248 crore to a massive Rs 860 crore. This is a lot of money by any yardstick
Click on our Reports section for more. Details
Bharat Petroleum Corporation Limited (BPCL) is planning to conduct a reconnaissance survey of the various pipeline routes connecting its Kochi refinery with the oil jetty at the Cochin Oil Terminal (COT) so as to be able to find the right route to build a new pipeline infrastructure..
8The existing pipelines are around 50 years old and not piggable. There is another set of lines which are 25 years old.
8These lines pose a major risk, since they pass through the city and the health of these lines cannot be monitored either directly or through pigging.
8Further, after the Integrated Refinery Expansion Project (IREP), tanker movement of products from Kochi is bound to increase. Any leak in the line will be difficult to contain.
8Moreover maintenance of the lines will also be difficult as they pass through the city area and any shutting down of lines will affect the refinery thruput and supply of products.
8BPCL Is now thinking of laying two piggable product lines through a separate route from the refinery to the COT jetty and a multi user liquid terminal (MULT)
8The survey will provide the right route as well the size of the pipelines to be used
Click on the Reports section for more. Details
8The existing pipelines are around 50 years old and not piggable. There is another set of lines which are 25 years old.
8These lines pose a major risk, since they pass through the city and the health of these lines cannot be monitored either directly or through pigging.
8Further, after the Integrated Refinery Expansion Project (IREP), tanker movement of products from Kochi is bound to increase. Any leak in the line will be difficult to contain.
8Moreover maintenance of the lines will also be difficult as they pass through the city area and any shutting down of lines will affect the refinery thruput and supply of products.
8BPCL Is now thinking of laying two piggable product lines through a separate route from the refinery to the COT jetty and a multi user liquid terminal (MULT)
8The survey will provide the right route as well the size of the pipelines to be used
Click on the Reports section for more. Details
For reference purposes, the website carries here the following data on petroleum reserves in the country:
8State-wise prognosticated conventional reserves in India, divided in terms of onshore and offshore assets
8State-wise, basin-wise in-place conventional oil and gas reserves established independently by ONGC, OIL, Other PSUs, Private & JV Companies in the country as on 01.04.2015
8State-wise, block-wise, operator-wise in-place reserves of unconventional gas (CBM) established in the country as on 01.04.2015.
Click on Reports for more Details
8State-wise prognosticated conventional reserves in India, divided in terms of onshore and offshore assets
8State-wise, basin-wise in-place conventional oil and gas reserves established independently by ONGC, OIL, Other PSUs, Private & JV Companies in the country as on 01.04.2015
8State-wise, block-wise, operator-wise in-place reserves of unconventional gas (CBM) established in the country as on 01.04.2015.
Click on Reports for more Details
Similar year-wise crude and petroleum products import data is also carried here.
The year-wise data is given in the following manner:
8Crude quantity imported
8Petroleum products imported by name
8Quantity
8Value
8Country-wise crude import data is also carried here
Click on Reports for more Details
The year-wise data is given in the following manner:
8Crude quantity imported
8Petroleum products imported by name
8Quantity
8Value
8Country-wise crude import data is also carried here
Click on Reports for more Details
ONGC has chalked out a plan to drill an additional 15 exploratory wells in its KG-DWN-98/2 block at a whopping cost of Rs. 5750 crore.
8This is over an above the Rs 53,000 crore development plan that it had already chalked out in the block.
8Overall, it is a very big investment package and can come as a shot-in-the-arm for the besieged oil field equipment and service industry.
8The locations of the proposed appraisal wells of the Rs 5750 crore programme are based on the leads provided by the latest geological and geophysical studies.
8These exploratory inputs will further enhance the commerciality of the block and will help in cost effective implementation of the development project with an upward revision of hydrocarbon production figures.
Click on our Reports section of more Details
8This is over an above the Rs 53,000 crore development plan that it had already chalked out in the block.
8Overall, it is a very big investment package and can come as a shot-in-the-arm for the besieged oil field equipment and service industry.
8The locations of the proposed appraisal wells of the Rs 5750 crore programme are based on the leads provided by the latest geological and geophysical studies.
8These exploratory inputs will further enhance the commerciality of the block and will help in cost effective implementation of the development project with an upward revision of hydrocarbon production figures.
Click on our Reports section of more Details
For reference purposes, the website carries here the following details of the Rs 5750 crore exploratory drilling programme:
8The kind of drill ship to be hired
8The kind of drilling programme to be undertaken
8Water requirements and usage
8Drill cuttings and waste residual muds
8Testing requirements
8The kind of chemicals to be used
8Details of the water based drilling fluids
8Ingredients of the synthetic oil based mud to be used
8Details of special additives to be used in water based mud
Click on Details for more Details
8The kind of drill ship to be hired
8The kind of drilling programme to be undertaken
8Water requirements and usage
8Drill cuttings and waste residual muds
8Testing requirements
8The kind of chemicals to be used
8Details of the water based drilling fluids
8Ingredients of the synthetic oil based mud to be used
8Details of special additives to be used in water based mud
Click on Details for more Details
ONGC’s KG-DWN-98/2 block is located in the east coast of the Godavari delta and covers an area of 7294.6 sq.km..
8Efforts carried out in the last 15 years of exploration drilling have resulted in significant oil and gas discoveries in the northern and southern parts of the block.
8The northern part of the block, covering 3800 sq.km, was declared as the ‘Northern Discovery Area’ (NDA) with prominent discoveries such as Annapurna, Kanakadurga, Padmavati, DWN-N-1, A-1, D-1/KT-1, E-1, U-1, W-1, A-2, M-3, M-4 and F-1 with their extensions.
8The southern part of the block, covering an area of 3494 sq.km was declared as the “Southern Discovery Area” (SDA) with significant gas discoveries in UD-1, UD-4 and UD-5 wells.
8Presently, the thick tertiary passive margin system of the block is the primary focus for exploration activity
8The offshore portion of the Tertiary basin includes depositional systems ranging from shore-face through to deep-water submarine fan sandstones.
8The primary targets are Miocene to Pliocene submarine sands.
Click on our Reports for a full understanding of the geological underpinnings of the block Details
8Efforts carried out in the last 15 years of exploration drilling have resulted in significant oil and gas discoveries in the northern and southern parts of the block.
8The northern part of the block, covering 3800 sq.km, was declared as the ‘Northern Discovery Area’ (NDA) with prominent discoveries such as Annapurna, Kanakadurga, Padmavati, DWN-N-1, A-1, D-1/KT-1, E-1, U-1, W-1, A-2, M-3, M-4 and F-1 with their extensions.
8The southern part of the block, covering an area of 3494 sq.km was declared as the “Southern Discovery Area” (SDA) with significant gas discoveries in UD-1, UD-4 and UD-5 wells.
8Presently, the thick tertiary passive margin system of the block is the primary focus for exploration activity
8The offshore portion of the Tertiary basin includes depositional systems ranging from shore-face through to deep-water submarine fan sandstones.
8The primary targets are Miocene to Pliocene submarine sands.
Click on our Reports for a full understanding of the geological underpinnings of the block Details
The go ahead from ONGC's Board still hasn't come in yet for the Rs 53,000 crore development programme in the block.
8ONGC is expecting a steep cut in offshore exploration and development work in the field.
8The expectation is that the Rs 53,000 crore price tag will go down quite a bit
8A cost reduction of anywhere between 15 to 50% across various categories of work is expected.
8Orders have been put on hold pending approval from the Board of ONGC. There is currently an apprehension that the price of gas is too low to make the investment viable. The company is now waiting for an assurance of a more remunerative price for gas before going ahead with contracts worth Rs 53,000 crore.
8But since exploratory activity is not directly related to the current market price of gas, will the ONGC board wait for a gas price to be sanctioned before kicking off the expoloratory programme, like it did with its development plan for hte block, or a decision on it will be independent of the gas price?
8ONGC is currently in the process of inviting offshore OEM manufacturers and packagers for short listing.
8The contracts can be negotiated and finalized only after the Board approval comes through.
8Nevertheless, given that cost of equipment and services has come down, the company is likely to negotiate hard for the best price that the vendors can provide
Click on Repots for more Details
8ONGC is expecting a steep cut in offshore exploration and development work in the field.
8The expectation is that the Rs 53,000 crore price tag will go down quite a bit
8A cost reduction of anywhere between 15 to 50% across various categories of work is expected.
8Orders have been put on hold pending approval from the Board of ONGC. There is currently an apprehension that the price of gas is too low to make the investment viable. The company is now waiting for an assurance of a more remunerative price for gas before going ahead with contracts worth Rs 53,000 crore.
8But since exploratory activity is not directly related to the current market price of gas, will the ONGC board wait for a gas price to be sanctioned before kicking off the expoloratory programme, like it did with its development plan for hte block, or a decision on it will be independent of the gas price?
8ONGC is currently in the process of inviting offshore OEM manufacturers and packagers for short listing.
8The contracts can be negotiated and finalized only after the Board approval comes through.
8Nevertheless, given that cost of equipment and services has come down, the company is likely to negotiate hard for the best price that the vendors can provide
Click on Repots for more Details
For ONGC, the current government controlled gas price of $4.2/mmbtu (on NCV basis) is just not viable.
8There is also a question mark on whether the KG-DWN-98/2 discoveries are entitled to a "premium" under the gas pricing regime as their DOCs date back to a point beyond the cut off date at which the premium is to be elicited.
8But now that gas prices are low, and the landed price of LNG is currently at around $ 7-8/mmbtu in India, the paradigm under which these Indian deepwater discoveries will be viable has undergone a dramatic shift.
8It is now established that these discoveries will require a free market pricing regime to stay viable or a "premium" equivalent to market pricing of gas.
8The ceiling benchmark price at which E&P operators will have to do their math will be pegged to the landed price of LNG in Indian ports.
8Given the cost economics, and in the context of the fact that the cost of equipment and services has fallen sharply, ONGC's KG-DWN-98/2 block should be viable at a price much lower than $7/mmbtu.
8A price of between $5-$6/mmbtu can be a competitive price for ONGC at their current hurdle rate.
8This price is below the landed price of LNG.
8Since gas prices worldwide are already low, it is safe to assume that landed LNG price will not go very down much more from here on.
Click on Reports for more Details
8There is also a question mark on whether the KG-DWN-98/2 discoveries are entitled to a "premium" under the gas pricing regime as their DOCs date back to a point beyond the cut off date at which the premium is to be elicited.
8But now that gas prices are low, and the landed price of LNG is currently at around $ 7-8/mmbtu in India, the paradigm under which these Indian deepwater discoveries will be viable has undergone a dramatic shift.
8It is now established that these discoveries will require a free market pricing regime to stay viable or a "premium" equivalent to market pricing of gas.
8The ceiling benchmark price at which E&P operators will have to do their math will be pegged to the landed price of LNG in Indian ports.
8Given the cost economics, and in the context of the fact that the cost of equipment and services has fallen sharply, ONGC's KG-DWN-98/2 block should be viable at a price much lower than $7/mmbtu.
8A price of between $5-$6/mmbtu can be a competitive price for ONGC at their current hurdle rate.
8This price is below the landed price of LNG.
8Since gas prices worldwide are already low, it is safe to assume that landed LNG price will not go very down much more from here on.
Click on Reports for more Details
The proposed product pipeline sizes will be such as to be able to handle 2900 KL/ hr of capacity, based on filling target of 70,000KL in 24 hrs.
8The pipeline length will be approximately 42 km, if the Kalamassery terminal route is opted for.
8It is estimated that 3 MMTPA of HSD and 1.0 MMTPA of MS tanker loading will be required post IREP, and this will go up to 4.5 MMTPA of HSD and 1.4 MMTPA for MS tanker loading when crude processing increases to 20 MMTPA
8It is also assumed that 7-8 parcels of HSD and 2-3 parcels of MS loading is required every month, once crude processing increases to 20 MMTPA.
8Considering the increase in crude processing capacity in the future, a higher sized crude line may also be required to meet crude availability at the refinery. The existing 30-inch piggable crude line can also be converted to a product pipeline if required.
8BPCL is now conducting an arial reconnaissance and a marine study to check the preliminary feasibility of laying two pipe lines, 40-inch and 30-inch piggable lines from the refinery to the Jetty-COT and a multi user liquid terminal.
Click on our Reports section for more. Details
8The pipeline length will be approximately 42 km, if the Kalamassery terminal route is opted for.
8It is estimated that 3 MMTPA of HSD and 1.0 MMTPA of MS tanker loading will be required post IREP, and this will go up to 4.5 MMTPA of HSD and 1.4 MMTPA for MS tanker loading when crude processing increases to 20 MMTPA
8It is also assumed that 7-8 parcels of HSD and 2-3 parcels of MS loading is required every month, once crude processing increases to 20 MMTPA.
8Considering the increase in crude processing capacity in the future, a higher sized crude line may also be required to meet crude availability at the refinery. The existing 30-inch piggable crude line can also be converted to a product pipeline if required.
8BPCL is now conducting an arial reconnaissance and a marine study to check the preliminary feasibility of laying two pipe lines, 40-inch and 30-inch piggable lines from the refinery to the Jetty-COT and a multi user liquid terminal.
Click on our Reports section for more. Details
India exports petroleum products to as many as 72 countries across the world.
For reference purposes, the website carries here the following export related data:
8Export of petroleum products by Indian public and private sector companies.
The yearly data is given in following terms:
8Name of the product
8Quantity exported in million tonnes
8Exported by public sector companies
8Exported by private sector companies
8Data is also given in terms of destination country to which petroleum products have been exported
8In all, there are 72 countries to which products are exported by Indian companies.
Click on Reports for more Details
For reference purposes, the website carries here the following export related data:
8Export of petroleum products by Indian public and private sector companies.
The yearly data is given in following terms:
8Name of the product
8Quantity exported in million tonnes
8Exported by public sector companies
8Exported by private sector companies
8Data is also given in terms of destination country to which petroleum products have been exported
8In all, there are 72 countries to which products are exported by Indian companies.
Click on Reports for more Details
The downstream petroleum industry is rife with reports of excesses by dealers of retail outlets or LPG distributors.
8The oil companies go to great lengths to showcase the monitoring system they have in place to nab dealers indulging in all kinds of malpractices.
8But out of tens of thousands of retail outlets in place, only a handful of dealerships have been terminated for breaking the law over the last five years.
8The data shows that IOC has terminated only 69 dealers, BPCL 15 and HPCL only 11.
8So, either all this talk about wrong doing is incorrect or the monitoring system not tight enough, given the small number of terminations
8It is difficult to know which side the truth lies.
8The website carries here company-wise, state-wise data on dealerships that have been cancelled in the last five years.
Click on Reports for more Details
8The oil companies go to great lengths to showcase the monitoring system they have in place to nab dealers indulging in all kinds of malpractices.
8But out of tens of thousands of retail outlets in place, only a handful of dealerships have been terminated for breaking the law over the last five years.
8The data shows that IOC has terminated only 69 dealers, BPCL 15 and HPCL only 11.
8So, either all this talk about wrong doing is incorrect or the monitoring system not tight enough, given the small number of terminations
8It is difficult to know which side the truth lies.
8The website carries here company-wise, state-wise data on dealerships that have been cancelled in the last five years.
Click on Reports for more Details
Not much progress seems to have been made in setting up the 9 MMTPA refinery-cum-petrochemical complex in Rajasthan by HPCL.
8The central government had accorded approval in September, 2013 to HPCL to set up the refinery in collaboration with the Government of Rajasthan (GoR).
8According to the petroleum ministry, HPCL has completed various Pre-project activities such as soil investigation, environment studies, Public Hearing for Environmental Clearances etc.
8But it looks like the government of Rajsthan continues to remain skeptical of the massive amount of concessions sought from the state government to build the refinery.
8The latest position is that a committee consisting of representatives of HPCL and the Government of Rajasthan has been constituted to address the various issues raised by the state government
Click on Reports for more Details
8The central government had accorded approval in September, 2013 to HPCL to set up the refinery in collaboration with the Government of Rajasthan (GoR).
8According to the petroleum ministry, HPCL has completed various Pre-project activities such as soil investigation, environment studies, Public Hearing for Environmental Clearances etc.
8But it looks like the government of Rajsthan continues to remain skeptical of the massive amount of concessions sought from the state government to build the refinery.
8The latest position is that a committee consisting of representatives of HPCL and the Government of Rajasthan has been constituted to address the various issues raised by the state government
Click on Reports for more Details
For reference purposes, the website carries here the following LPG related data:
8Total number of households in India as per Census 2011
8Total households estimated at present in India
8Estimated of rural households in the total number of households
8Approximate active domestic LPG customers in India as on November 2015.
Click on Reports for more Details
8Total number of households in India as per Census 2011
8Total households estimated at present in India
8Estimated of rural households in the total number of households
8Approximate active domestic LPG customers in India as on November 2015.
Click on Reports for more Details
It is not just Cairn India but all other E&P companies should come clean on the reporting of methane emissions.
Following questions need answers
8Does Cairn or any other oil and gas company report the percentage of wells, both gas wells and other types, for which it used green completions or explain why it does not?
8Does the company use any of the following -- natural gas, low emission diesel engines, or other reduced-emission methods -- to power well pad operations?
8Is Cairn disclosing data or estimates for NOx and VOCs emitted from well drilling, completions and production operation and reductions achieved?
8Does the company report when pipelines have been used to replace trucks in transporting water used for fracturing operations?
8Does Cairnb disclose the percentage emissions rate for methane from its drilling, completion, and production operations?
8Does the company report the percentage or number of high-bleed controllers replaced with low-emission alternatives, or a policy for their replacement?
8Does Cairn describe its program of leak detection and repair for fugitive emissions, including the technologies used for leak detection and the scope of monitoring conducted
8Does the company report with what frequency it conducts monitoring for fugitive emissions
8Does the company have an active methane emissions reduction target in place?
8Does Cairn disclose an active greenhouse gas emissions reduction target in place?
Click on Reports for more Details
Following questions need answers
8Does Cairn or any other oil and gas company report the percentage of wells, both gas wells and other types, for which it used green completions or explain why it does not?
8Does the company use any of the following -- natural gas, low emission diesel engines, or other reduced-emission methods -- to power well pad operations?
8Is Cairn disclosing data or estimates for NOx and VOCs emitted from well drilling, completions and production operation and reductions achieved?
8Does the company report when pipelines have been used to replace trucks in transporting water used for fracturing operations?
8Does Cairnb disclose the percentage emissions rate for methane from its drilling, completion, and production operations?
8Does the company report the percentage or number of high-bleed controllers replaced with low-emission alternatives, or a policy for their replacement?
8Does Cairn describe its program of leak detection and repair for fugitive emissions, including the technologies used for leak detection and the scope of monitoring conducted
8Does the company report with what frequency it conducts monitoring for fugitive emissions
8Does the company have an active methane emissions reduction target in place?
8Does Cairn disclose an active greenhouse gas emissions reduction target in place?
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