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 invites foreign investment in India’s strategic petroleum reserves

Source: Business Standard, Nov 10, 2020

New Delhi: India has invited global firms to invest in its strategic petroleum reserves (SPRs) as the nation’s energy consumption growth would be fastest among large economies in coming decades, oil minister Dharmendra Pradhan told a conference on Monday.

India’s share in global energy consumption is set to rise from 7% to 12% in 2050, Pradhan told the ADIPEC conference.

The nation, the world’s third-biggest oil consumer and importer, earlier this year filled its three SPRs in southern India with 5.33 million tonnes of oil when prices were low. To attract private investment in its SPRs, India recently allowed Abu Dhabi National Oil Co (ADNOC) to re-export some of its oil stored in Mangalore SPR, mirroring a model adopted by South Korea and Japan.

The country is building two more commercial-cum-strategic petroleum storage with capacity of 6.5 million tonnes.

“I invite global energy players to come and invest in this project,” he said, adding India’s fuel demand has almost recovered to the pre-Covid levels.

Last month, local sales of key fuels – gasoline, gasoil and cooking gas – in India rose compared to last year.

“We anticipate that this recovery path in energy demand growth in India will sustain in the coming months,” he said.

India wants to cut its carbon emissions and raise the share of gas in its energy mix to 15% by 2030 from the current 6.2%. Companies are investing $60 billion in creating oil and gas infrastructure over five years through 2024, which includes building gas import terminals and expanding gas pipeline networks to provide last mile connectivity to households and industries. The South Asian nation is spending $20 billion to produce 15 million tonnes of compressed biogas by 2023, and has recently started supplying hydrogen compressed natural gas for 50 buses as a trial.

ONGC invites bids to boost production in ageing oil and gas fields

Source: Business Standard, Nov 08, 2020

New Delhi: State-owned ONGC has invited bids from global oil and gas companies for undertaking work to boost production from its ageing fields as it looks to reverse declining output.

The 15-year Production Enhancement Contract (PEC) will require firms to commit to investing in capital and operating expenditure to increase production, higher than the existing baseline output, according to the tender document.

A tariff will be paid in USD per barrel of oil and USD per million British thermal units for gas for any incremental hydrocarbon produced and saved over the baseline.

ONGC on October 27, issued the expression of interest (EoI) notice offering 15-year PECs to outside contractors for an unidentified number of “mature” fields.

The company made no mention of oil or gas field names in the EoI notice, but sources said the fields are largely in Assam and Gujarat, the country’s oldest producing basins.

“ONGC intends to undertake production enhancement from its onshore mature fields under ‘Production Enhancement Contract (PEC)’ with suitable oil and gas companies of global repute who have technical expertise, financial capability and resources to increase production by improving the recovery from such fields,” the tender said.

Companies, it said, will be required to commit investment in capital and operating expenditure “to increase production from the existing production by introduction of new technologies.”

They will have to do reservoir modelling, reserves assessment and execution of a development plan to enhance production.

All the oil and gas produced will belong to ONGC and anyone interested has until December 1, 2020 to respond.

This is the second attempt by ONGC to induct partners in its ‘mature’ or ageing fields.

On December 28, 2018, it had invited PEC bids for Geleki field in Assam and Kalol in Gujarat. But only Schlumberger responded for Geleki and no bid was received for Kalol.

Schlumberger sought deviations which ONGC turned down.

ONGC re-launched the PEC process for Kalol and Geleki with a request for information (RFI) notice on July 22, 2020.

The government has been pushing ONGC to hire international oil service companies to raise output from its mature oil fields as it saw the foreign companies as the answer to declining production from ageing fields.

ONGC is looking to raise domestic output quickly to meet Prime Minister Narendra Modi’s target of cutting import dependence by 10 per cent by 2022.

India currently imports about 85 per cent of its oil needs.

Originally, ONGC had on December 7, 2016, signed a Summary of Understanding (SoU) to give Kalol field to Halliburton and Geleki field to Schlumberger for raising production above the current baseline output.

Though the contracts were signed in presence of Oil Minister Dharmendra Pradhan, ONGC rescinded them in 2017, on fears of courting controversy for handing fields on nomination basis.

Thereafter, the company in June 2017, floated an expression of interest (EoI) from service providers for undertaking production enhancement.

Schlumberger Asia Services, Halliburton Offshore Services Inc and Baker Hughes Singapore PTE Ltd were shortlisted as the firms were meeting pre-qualification criteria. Bids were originally sought by May 25, 2018, but saw several extensions and final bids came in 2019. At the close of bids, only Schlumberger made a financial bid for Geleki field.

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

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 »

Italian energy utility Snam plans to enter India gas market

Source: Financial Express, Aug 19, 2020

Italian energy utility Snam plans to set its foot in India’s gas infrastructure space as the country intends to raise the share of gas in its energy basket.

The company’s CEO recently had a discussion with petroleum Dharmendra Pradhan regarding collaborations in the areas of liquefied natural gas (LNG), gas storage and hydrogen fuel.

Responding to FE’s queries, Snam said “the significant push towards cleaner energy shift and in particular towards gas is what makes India an interesting market,” adding that “we look forward to opening soon our office in India to enhance the dialogue and cooperation with Indian partners that we have developed over the past couple of years”. Read the rest of this entry »

Petronet to set up 1,350 LNG dispensing stations across major highways

Source: The Hindu Business Line, Jul 06, 2020

Mumbai: Petronet LNG Ltd, the country’s biggest liquefied natural gas infrastructure company, will adopt a three-pronged strategy to expand its business in the country after the government last month allowed marketing and distribution of LNG by any entity. As part of this strategy, the company will set up 1,350 LNG dispensing stations across major national highways.

Petronet seeks to boost LNG infrastructure on highways where LNG is largely unavailable for heavy vehicles. “There is a level playing field now for setting up of LNG dispensing station.

So we have planned in three phases our LNG corridor development,” Vinod K Mishra, director finance, Petronet LNG told analysts.

In the first phase, the company would put up 50 stations on five major highways, which include Western Corridor and Southern Corridor, by 2021. In the second phase, it plans to set up around 300 LNG dispensing stations on all highways and in the third phase it will set up 1,000 stations.

India has a total of 87 national highways which interconnect the country’s capital and state capitals through important cities. The total length of national highways are 1,31,000 km.

Petronet LNG expects that considering 25% of highways will have major medium and heavy commercial vehicles playing on them, traffic from various ports, mines, petrochemical complexes, FMCG industries and logistics hubs, 35,000 km of highways will be covered.

“In most cases, we shall be tying up either with city gas distribution companies, oil market companies and other players because our intention is not to go too much in retail but enhance the usage of LNG in the automotive sector, especially in the long-haul trucks and interstate buses,” added Mishra.

On 7 June, the Petroleum and Natural Gas Regulatory Board (PNGRB) said any eligible entity can set up an LNG station anywhere in the country. This was done to not only promote LNG as an alternative fuel for heavy vehicles but also help reduce the country’s dependence on oil, over 80% of which is imported in the country. The government also recently announced that it would help set up LNG stations across the length of the golden quadrilateral, which connects the top metros of the country.

LNG in its liquid form,has higher density as compared to compressed natural gas and gives a better mileage as well as better range (up to 900 kms between refills). It is also cheaper than diesel, the predominant fuel for medium and heavy commercial vehicles.

However, unlike other fuel, LNG requires specialized cryogenic storage tanks, making it cost-effective for only medium and heavy commercial vehicles with large runs, rather than smaller ones such as cars.

“We have already told the oil marketing companies that whosoever want they can put it up. If they are doing it’s fine. If they are not able to do it, then we are ready to partner with anybody and we will help them put up the stations,” said Mishra. The company has also signed an agreement with Gujarat Gas under which it is putting up five stations in Gujarat.

Public sector oil companies working on 859 projects worth ₹3.57 lakh crore

Source: The Hindu Business Line, Jul 06, 2020

New Delhi: Public sector undertaking oil companies are working on 859 projects worth approximately ₹3,57,000 crore. An official statement said these projects are involving in refinery, exploration and production, marketing infrastructure, pipelines, City Gas Distribution network and in the entire value chain of oil and gas.

Of the total anticipated cost of these projects, more than ₹60,000 crore will be spent in fiscal 2020-21, the statement said.

These oil and gas projects will further enhance energy accessibility, create new employment opportunities and give stimulus to economic growth, the statement added.

Minister of Petroleum and Natural Gas and Steel Dharmendra Pradhan has reviewed the ongoing oil and gas projects started by public sector undertakings since the resumption of economic activities from April 20. The resumption was after Covid-led lockdowns had halted most construction activities in the country.

The statement also said that employment of more than 48.96 lakh man-days have been generated in the execution of these oil and gas projects. Further, ₹1,395 crore has been disbursed to workers as payout during this period. A total of more than 9.74 crore man-days of employment is expected to be generated towards the completion of these projects out of which more than 3.5 crore man-days of employment is expected to be generated in financial year 2020-21 itself, the statement added.