India’s Oct crude imports mark biggest fall since July

Source: LiveMint.com, Nov 23, 2020

BENGALURU: India’s October crude oil imports posted their steepest fall since July and seventh consecutive monthly year-on-year decline as rising COVID-19 cases limited mobility and curbed consumption, government data showed on Monday.

Crude oil imports into the world’s third-biggest oil importer and consumer fell 21.6% from a year earlier to 15.14 million tonnes, or 3.58 million barrels per day (bpd), data from the Petroleum Planning and Analysis Cell (PPAC) of the Ministry of Petroleum & Natural Gas showed.

“Due to the surging coronavirus cases, travel is still being avoided in the tier two and tier three cities and that along with muted air travel is weighing on oil demand in India,” said Kunal Shah, head of research at Nirmal Bang Commodities in Mumbai, India.

“Also, when we come across such a huge fall (in imports), it generally points towards the fact that the existing demand is already being met by inventory from prior months.”

The import of oil products also slumped 53% to 1.65 million tonnes in October.

Meanwhile, exports of refined products fell 35.7% in October from a year ago to 3.84 million tonnes, and were down 20% from 4.80 million tonnes in September.

Diesel shipments continued to hold a major share of the total exports but were down 24% on year to 2.37 million tonnes and fell 11.2% on a month-on-month basis.

Exports of gasoline, or petrol, were down 19.8% to 797,000 tonnes versus a year ago.

India has the second-highest number of infections in the world after the United States with 9.14 million.

But looking ahead, factory activity is picking up and oil demand should rise in the next two to three months, Shah said. India’s factory activity in October expanded at its fastest pace in more than a decade.

Govt kicks off discom privatization for UTs

Source: LiveMint.com, Nov 11, 2020

India has begun the process of privatizing the electricity distribution companies (discoms) of its Union territories, with Chandigarh taking the first step.

The Chandigarh administration on Tuesday made available the request for proposals to sell 100% government stake in its discom, two people aware of the matter said. A pre-bid meeting will be held on 1 December. The last date to submit bids is 30 December.

“The Chandigarh discom is expected to be awarded by 15 January,” one of the two people cited above said on condition of anonymity.

The notice inviting tender (NIT) floated by the administration of the Union territory is for

“Selection of bidder for purchase of one hundred percent (100%) shares in distribution company responsible for distribution and retail supply of electricity and having distribution license in the union territory of Chandigarh.”

The next set of privatization bids will be shortly called for the discoms of Andaman and Nicobar Islands, Dadar and Nagar Haveli, and Daman and Diu. The discoms of Puducherry and Jammu and Kashmir and Ladakh are not immediately on offer because of issues such as political opposition and security respectively. With the electricity load for Lakshadweep Islands being low, it is also not being considered for privatization at present.

Mint reported on 1 July that the privatization of electricity distribution in Ladakh and Jammu and Kashmir may have to wait because of security and strategic concerns and the challenges of terrain and low power demand.

Deloitte has been mandated to help with the sale process to privatize discoms in the three Union territories of Chandigarh, Puducherry and Andaman and Nicobar Islands. SBI Capital Markets Ltd has received the mandate for Dadar and Nagar Haveli, Daman and Diu, Jammu and Kashmir and Ladakh.

“We are bound by confidentiality obligations and are unable to comment on client-specific matters,” a Deloitte spokesperson said in an emailed response.

Queries emailed to the spokespersons of Union power ministry and SBI Capital Markets Ltd on Tuesday remained unanswered.

All discoms to come under Energy Conservation Act: Power ministry

Source: The Economic Times, Nov 09, 2020

NEW DELHI: The power ministry on Monday said it has mandated all electricity distribution utilities or discoms to comply with the Energy Conservation (EC) Act, 2001, which would reduce energy losses and bring in more transparency in the sector. Earlier, only discoms with annual energy losses equal to or above 1,000 MU (million units), notified as designated consumers, used to come under the purview of the EC Act.

The ministry had issued a notification on September 28, 2020 to cover all electricity distribution companies (discoms) under the preview of the EC Act, it said in a statement.

As per the notification, which was formulated in consultation with the Bureau of Energy Efficiency (BEE), “All entities having issued distribution license by State/Joint Electricity Regulatory Commission under the Electricity Act, 2003…” are notified as designated consumers (DCs).

After this notification, all discoms will be governed under various provisions of the EC Act, such as appointment of energy manager, energy accounting and auditing, identification of energy losses category-wise, and implementation of energy conservation and efficiency measures.

With this, the number of discoms covered under the EC Act will increase from 44 to 102.

This decision will facilitate energy accounting and auditing as mandatory activity for all the discoms, leading to the actions towards reducing losses and increase their profitability, the ministry said.
The amendment is expected to help discoms to monitor their performance parameters and bring in transparency in the distribution sector through professional inputs, it added.

It will also assist in developing projects for reducing the electricity losses by discoms and implementing effective solutions.

The amendment is expected to improve the financial state of discoms. The quarterly data of these discoms will be collected and monitored by the government to suggest measures for increasing the efficiency and reduce the energy losses.

This move is expected to gradually become more effective if extended upto the level of end-consumers.

The Bureau of Energy Efficiency (BEE) is a statutory body under the Ministry of Power. It assists in developing policies and strategies with the primary objective of reducing the energy intensity of the Indian economy.

Italy’s Snam ties up with Adani Group and Greenko

Source: LiveMint.com, Nov 09, 2020

Greenko and Adani Group have separately tied up with Italy’s Snam S.p.A. for setting up a green hydrogen business. This comes in the backdrop of state-run Solar Energy Corp. of India looking to invite bids to build green hydrogen plants, which will use renewable energy sources.

While Greenko has tied up with Snam for setting up a 50-50 joint venture to develop a “green hydrogen” business in India, the Italian firm has collaborated with the Adani Group to “envisage exploration of the hydrogen value chain in India and global markets, as well as the development of biogas, biomethane, and low-carbon mobility”. A non-binding deal was also inked between Snam and Adani Gas to set up a CNG compressors manufacturing unit.

“Through the deal, the firms will collaborate on the study of hydrogen production methods from renewables, on the design of hydrogen-ready infrastructure and on final applications in both industry and transport,” Greenko said. Snam, earlier owned by Eni S.p.A., has the largest gas pipeline network in Europe and plans to invest €6.5 billion in new energy transition businesses like sustainable mobility.

India’s October LNG imports surge as demand rebounds to pre-Covid levels

Source: LiveMint.com, Nov 03, 2020

SINGAPORE: Indian imports of liquefied natural gas (LNG) surged in October, shipt-racking data from Refinitiv Eikon and data intelligence firm Kpler showed, as the country’s gas demand bounced back to pre-COVID levels.

LNG shipments to India in October rose to about 2.5 million tonnes, the highest monthly volumes on its record, Refiniv Eikon data showed.

Kpler pegged October arrivals at the second highest on record at 2.75 million tonnes, just under February’s imports of 2.79 million tonnes.

“City gas, gas-based power sector as well as revival from other sectors is boosting LNG imports into the country,” an India-based gas importer told Reuters.

“We are already back to pre-Covid levels with additional demand being seen from city gas and power sectors.”

Spot gas imports by the electricity generation sector, which account for over a fifth of India’s total consumption of the fuel, doubled in the June quarter to the highest in at least 14 quarters.

India’s natural gas prices fell to their lowest since 2014 for the October-March 2021 period which meant reduced costs for gas for fertilisers, automobiles and households.

Asian LNG spot prices had also until recently been near record lows, which boosted appetite for imports of the super-chilled fuel, traders said, adding that this could slow from December, however, with spot prices rebounding to a more than one-year high.

India has also been receiving at least one LNG cargo a month from Russia’s Yamal LNG plant since September, this year, after the last such flow was seen only in March, Refinitiv data showed. LNG shipments from Oman to India in October were also at a record high, the data showed. The South Asian country’s factory activity expanded at its fastest pace in over a decade in October as demand and output continued to recover strongly from coronavirus-related disruptions, in turn boosting gas demand.

India’s diesel consumption up first time in 8 months, rises 6.6% in Oct

Source: Business Standard, Nov 01, 2020

New Delhi: India’s gasoil consumption in October rose 6.6 per cent from a year earlier, the first such increase since Covid-19 restrictions were imposed in late March, preliminary data showed on Sunday, signalling a pick-up in industrial activity.

Diesel sales by the country’s three state fuel retailers totalled 6.17 million tonnes in October, according to provisional data compiled by Indian Oil Corp (IOC), the country’s biggest refiner and fuel retailer.

Sales of gasoil, which account for about two-fifths of India’s fuel demand, rose 27.5 per centfrom September.

Rising diesel sales in the world’s third-biggest oil consumer and importer should help refiners, who had to cut crude-processing runs during the coronavirus crisis.

IOC hopes to operate refineries at full capacity in a couple of months, up from 95 per centnow, as local fuel demand is rising, company chairman S.M. Vaidya said on Friday.

Rising gasoline and gasoil demand in India should also aid other markets hit by slow demand recovery.

Local gasoline sales in October rose above pre-pandemic levels for a second month in a row.

Gasoline sales rose 4 per centfrom a year earlier to about 2.4 million tonnes, about 8.6 per centhigher than September, the data showed.

State companies IOC, Hindustan Petroleum Corp and Bharat Petroleum own about 90 per centof India’s retail fuel outlets. State retailers sold 3.8 per centmore cooking gas in October than a year ago, at about 2.44 million tonnes, while jet fuel sales halved to 328,000 tonnes.

India may see $206 bn investment in oil and gas in next 8-10 years

Source: Business Standard, Oct 26, 2020

New Delhi: The country’s oil and natural gas sector is likely to see investment to the tune of $206 billion during the next eight to ten years.

With Prime Minister Narendra Modi addressing the top global executives at the India Energy Forum by CERA Week on Monday, it is expected he would further entice companies to promote an cor a self-reliant India. This when the domestic fuel market is recovering from the pandemic-driven decline.

The three-day forum will see participation from Dan Brouillette (US Secretary of Energy), Prince Abdulaziz (Minister of Energy of Saudi Arabia) and Sultan Ahmed Al Jaber (CEO of Abu Dhabi National Oil Company).

“The importance of such a global meet comes when you realise that the country is set to see such large investment this decade. This includes investments to the tune of $67 billion in gas infrastructure — LNG capacity increase, pipelines and CGD networks. Global players like Total, Exxon Mobil and Shell have shown their interests in this field” said a government official. He indicated that put together Reliance-BP, ONGC and Oil India, exploration and production scenario would see investment of around $59 billlion. On the other hand, downstream segment, including marketing, refinery expansions and new refinery plans like Vizag, Barmer, Paradip and Ratnagiri may see another $80 billlion investments too in the sector.

The virtual event will also see participation from industry bigwigs like Igor Sechin (Chairman, Rosneft, Russia); Bernard Looney (CEO BP Plc, UK); Patrick Pouyanne (Chairman & CEO, Total S.A., France); Olivier Le Peuch (CEO, Schlumberger, USA); Mukesh Ambani (Chairman & MD, Reliance Industries) and Mohammad Sanusi Barkindo (Secretary General, Opec).

This is at a time when the country’s fuel sales is on a recovery track coming out of the demand contraction that happened due to the outbreak of pandemic and consequent lockdowns. During the first fortnight of October 2020, the Petrol demand was up by 1.5 per cent; Diesel by 8.79 per cent and LPG by 6.93 per cent compared to October 1-15 period of 2019. The ATF demand is 57 per cent short of last year which means there is a recovery of 43 per cent. According to estimates, the world total primary energy demand would increase at less than 1 per cent per annum till 2040 and this growth would be mainly supported by India and other Asia. Out of this, India’s Energy demand would grow at about three per cent a year till 2040. India has also seen increased focus on clean energy in recent years. “The share of renewable in electricity capacity has significantly gone up now to 22 per cent from around 10 per cent in 2014-15. The ethanol blending percentage has risen from 0.67 per cent in 2012-13 to now close to 6 per cent. In addition, we have launched schemes like Ujjwala giving access to clean energy for common man, BS VI fuel was launched and also Hydrogen-CNG also became a part of our fuel basket,” he said

India set to lose Farzad-B gas field; Iran to prefer domestic companies over foreign firms

Source: The Economic Times, Oct 18, 2020

New Delhi: India has all but lost the ONGC Videsh Ltd-discovered Farzad-B gas field in the Persian Gulf after Iran decided to prefer domestic companies over foreign firms for development of the field, sources said.

ONGC Videsh Ltd (OVL), the overseas investment arm of state-owned Oil and Natural Gas Corp (ONGC), had in 2008 discovered a giant gas field in the Farsi offshore exploration block.

OVL and its partners had offered to invest up to USD 11 billion for development of the discovery, which was later named Farzad-B.

After sitting over OVL’s proposal for years, the National Iranian Oil Co (NIOC) informed the firm in February this year about its intention to conclude the contract for Farzad-B development with an Iranian company, sources with direct knowledge of the development said.

OVL, however, continued its engagements with NIOC over the development of the field and sought terms and conditions of the proposed contract for its evaluation, they said, adding that Iran has so far not responded to the Indian firm’s request.

Farzad-B holds total reserves of around 21.7 trillion cubic feet of which around 60 per cent is recoverable, and production is slated to be around 1.1 billion cubic feet per day.
Sources said unconfirmed information suggests that Iran has identified a local firm for the development of the field, but OVL has not yet given up hopes and continues to chase Iranian authorities for the contract.

The 3,500 square kilometre Farsi block sits in water depth of 20-90 metres on the Iranian side of the Persian Gulf.

OVL, with 40 per cent operatorship interest, signed the Exploration Service Contract (ESC) for the block on December 25, 2002. Other partners included Indian Oil Corp (IOC) with 40 per cent stake and Oil India Ltd (OIL) holding the remaining 20 per cent stake.

OVL discovered gas in the block, which was declared commercially viable by NIOC, on August 18, 2008. The exploration phase of the ESC expired on June 24, 2009.

The firm submitted a Master Development Plan (MDP) of Farzad-B gas field in April 2011 to Iranian Offshore Oil Company (IOOC), the then designated authority by NIOC for development of Farzad-B gas field.

A Development Service Contract (DSC) of Farzad-B gas field was negotiated till November 2012, but could not be finalized due to difficult terms and international sanctions on Iran.

In April 2015, negotiations restarted with Iranian authorities to develop Farzad-B gas field under a new Iran Petroleum Contract (IPC). This time, NIOC introduced Pars Oil and Gas Company (POGC) as its representative for negotiations.

From April 2016, both sides negotiated to develop Farzad-B gas field under an integrated contract covering upstream and downstream, including monetization/marketing of the processed gas. However, negotiations remained inconclusive.

Meanwhile, on the basis of new studies, a revised Provisional Master Development Plan (PMDP) was submitted to POGC in March 2017, sources said, adding that in April 2019, NIOC proposed development of the gas field under the DSC and offtake of raw gas by NIOC at landfall point.

However, due to imposition of US sanctions on Iran in November 2018, technical studies could not be concluded which is a precursor for commercial negotiations.

The Indian consortium has so far invested around USD 400 million in the block.

Government allows complete marketing freedom for natural gas

Source: The Economic Times, Oct 07, 2020

New Delhi: The government on Wednesday allowed complete marketing freedom for natural gas produced from non-regulated fields, including sale to affiliate companies. The Union Cabinet, headed by Prime Minister Narendra Modi, approved a standard e-bidding procedure to discover price of gas.

While producers will continue to be barred from participating in such auctions, affiliates would be allowed to bid, Oil Minister Dharmendra Pradhan told reporters here.

However, the existing pricing mechanism for gas produced by state-owned ONGC and Oil India Ltd from fields given to them on a nomination basis would continue.

The marketing reform would help add 40 metric million standard cubic metres per day (mmscmd) of production to the existing output of 84 mmscmd, he said.

Diesel demand drop forcing India refiners to import gasoline

Source: LiveMint.com, Sept 29, 2020

Indian refiners, designed to maximize diesel output, are being forced to import gasoline to cover demand as plants continue to run below capacity.

The companies are facing a peculiar situation. For years, they have been pumping out diesel used by trucks and industries to keep the pace of economic growth. Now, the onslaught of the coronavirus has turned the tables, and the lack of demand is forcing refiners to operate their plants below capacity, and in the process cut output of other essential fuels. Read the rest of this entry »