Petrochemical industry: Know more

Find our more on the following topics:
Is India ready to embrace value added petrochemicals?
A case for development of benzene value chain in India – lessons from China
Maximizing refinery margins by Petrochemicals Integration
Coal to olefins – relative economics in low crude oil regime & status of projects in China
Logistics and supply chain dynamics for petrochemicals

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BP maintains a stiff upper lip in India: Onus falls on RIL to manage the relationship

BP is a huge global oil & gas conglomerate and it has a big presence in India through the RIL-BP collaboration which is trying to dig out more gas in the KG Basin
And yet, globally, its reputation among oil and gas professionals is much lower than its heft
A recent survey of global professionals shows that BP's credibility is significantly lower than many companies with a far lower footprint.
Shell and Exxon Mobil, and even companies like Statoil and Cairn score higher than BP
In India too, BP maintains a stiff upper lip and an inflexible demeanor, incommensurate with its prowess, thereby losing both credibility and power, not just with the government but with other stakeholders as well.
It is the failure of the local team to do the footwork that leaves BP's swashbuckling CEO Bob Dudley to do most of the liaisoning directly with key Indian stakeholders.
The abject failure of the BP team to make a mark in New Delhi's corridors of power has forced the responsibility entirely on RIL to be the big partner in the relationship.
It is time for a wholesale managerial change in BP. 

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World's largest diesel gen set operator in India uses energy saving devices to stay viable

The current price correction should be seen as a one-time correction and this will not be a precedent for any such action later for any other similar contacts Find our more on how the world's largest diesel operated power plant in India maintains its viability.
It has been able to fit in two-stage steam turbine induction generator to take full advantage of the extra steam that is produced.
The typical Energy Conservation Steam Turbine can generate incidental Clean, Green Electric Power.

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Our daily LNG price and vessel rates database

For reference purposes, the website has a daily Indian LNG projects carrier price database
We also have daily LNG prices data for key markets around the world
The daily prices are given in terms of
-- FOB rates
-- Transhipment rates, where relevant
-- Spot rates
Easy maneuverability and past price trends are the highlights of our pricing software

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New pricing norm for Basra crude: Indian refiners are unhappy

A new method of pricing Basra crude from Iraq using the monthly average of DME Oman futures two months before the oil loads has not gone down well with Indian refiners. Other Middle East producers like Saudi Arabia, Kuwait and Iran price their oils one month before loading.

This means Iraqi crude loading in October would be priced off DME’s futures contracts in August.
This poses a risk to Indian buyers, who would only be notified by mid-September whether they had successfully bid for a cargo, making it hard for them to hedge against price changes in advance.

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LNG plant in Bangladesh: Petronet LNG out of the race

Petronet LNG seems to be losing out on a deal to build an LNG plant in Bangladesh.
The company could not compete with a host of international competitors, including Chinese and international companies such as Shell.
The selected bidder would have 60 percent stakes in the proposed 3.5 MMTPA project while Bangladesh would have the remaining 40 percent which would be built under engineering, procurement and construction contract.
Read more on Indian LNG projects imports by Bangladesh, with deals not just with Oman but with Malaysia and Indonesia in the offing.

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Rs 12,000 crore coal-based ammonia urea units: LSTK contracts are coming up

Nearly 70% of China's urea capacity is based on ammonia produced from syn gas extracted out of coal
In India, two such projects are coming up, with price tags of around Rs 12,000 crore
In one, an international agency has been hired as consultant
In the other, process licensors have been selected.
Clearly promoters of both these urea-ammonia plants seem to be seriously going about trying to get their clearances and financial closures
For one, the RFQ for the LSTK contractor is expected in November 2017, for another in 2018

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Greka Drilling: Flying high

Greka Drilling is primarily focused on China but India too is a big market
In India, it has partnered with Essar Energy in CBM drilling work in its Ranigank block.
But Greka really came on its own in April when it was chosen ahead of 16 other contractors for a 73 well programme for state-owned energy group ONGC in the Bokaro CBM block.
Greka is now confident of bagging more CBM related work in the future.

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Khed SEZ: Good location for oil & gas equipment suppliers

The 4200 acre Khed SEZ near Pune is a big success story.
The industrial park is being built in a JV between the Kalyani Group and the MIDC
The first phase has been launched and more than 40 manufacturing units have settled in comfortably in the park.
The park is ideally located for manufacture of oil and gas equipment too, this website believes

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Fresh US sanctions on Russia: LNG lobby sees more than what meets the eye

There is much much talk in the LNG community that recent US sanctions on Russia were prompted to push US LNG cargoes to Europe and stall fresh pipeline imports
The idea may sound a little far fetched but the website carries here a cogent argument on why this may actually be so
The argument then goes on to reveal that Asian competition may deter Europe from accessing US cargoes

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Road shows by ONGC: Rs 850 crore of equipment purchase

Highly placed sources said that ONGC RIL tenders contracts is planning road shows abroad for some of its critical equipment requirements so as to be able to elicit more competition
One such road show will involve critical drilling related equipment worth around Rs 850 crore.
Find out more on what kind of equipment this is going to be and who can qualify
The qualification rules are also to be relaxed to ensure higher competition.

What kind of discount is ONGC looking for?

What is the extent of discounts that ONGC is currently seeking from suppliers of E&P equipment?
The discount sought is high.
Since the rapid decline of equipment and service prices, the traditional Last Purchase Rate model for determining the reserve price is no longer working.
A rough yardstick is followed, which is usually a deep discount to the Last Purchase Rate

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The rise of the second rung of oil & gas EPC contractors: Is a third rung likely?

The inexorable rise of the second rung of oil and gas EPC contractors is something to take note of
The likes of Kalpataru Power Transmission Ltd, with its cut rate quotes, are quickly pushing out more established competitors out.
Just as the first rung of indigenous players such as L&T and Punj Lloyd pushed out the multinationals, companies such as Kalpataru are pushing the first rung out.
They are eating up the EPC space not just in the high cost, low-end E&P segment but also in the midstream section.
As the second rung moves up the value chain, as L&T did, will a third rung emerge?

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Oil demand and supply: Battle still on

Saudi Arabia’s then Oil Minister Ali al-Naimi had once said that “whether it goes down to $20, $40, $50, $60, it is irrelevant,”. This was when Saudi Arabia had tried to run US shale producers to the ground by driving the price as low as possible
Ali al-Naimi's strategy did not work and he lost his job.
Saudi Arabia, in the face of quickly declining foreign exchange reserves, is trying to shore up the market by leading production cuts
The website carries here an interesting picture of declining crude prices in relationship with the decline in Saudi foreign exchange assets
But the battle is not over yet between US shale and Saudi oil

When will demand begin to fall?

The advent of electric cars is meant to cause demand to begin a downward slide
But when is that going to happen remains a moot point
While some say that the point of inflexion can happen sooner than later, there are a lot of others who say that this point is not coming anytime soon.

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Business development opportunities in fertilizers

New SSP plant: No response to a tender for contractor
New ammonia- urea fertilizer complex: Environment clearance granted
Technical pesticide unit: Tender for gas likely in October 2017
Find out when will Chambal's new ammonia-urea plant will go onstream: When will 2 mmscmd of gas demand will come up?
New 800 TPD SSP unit coming up

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Tug of war over rights to KG Basin gas: GAIL vs. GITPL

A tug of war is on between GAIL and GSPL India Transco Ltd (GITPL) over who should have the rights to transport gas from ONGC's Odalarevu terminal from where the Indian E&P projects gas major's KG Basin gas output is to come in.

GITPL is implementing the cross-country Mallavaram-Bhilwara-Vijaipur natural gas pipeline and it claims that one of the major reasons why it was set up was to ferry gas from ONGC RIL tenders contracts, offshore KG Basin fields, such as the S1 and VA deepwater fields, and eventually gas from the KG-DWN-98/2 in 2019.
GAIL has now laid a counter-claim to do what is called a tie-in with the Odalarevu terminal from its regional KG Basin network on the ground that it is the nearest pipeline network. GITPL's tap-off point is 13 km away from Odalarevu whereas GITPL's is 50 km away. The ball in now in the court of the PNGRB

What is causing "significant adverse changes in gas demand"?

A worrying point that needs highlighting is the GITPL's assertion that there are "significant adverse changes in market demand" that is threatening the viability of the Mallavaram-Bhilwara-Vijaipur natural gas pipeline. The 1800 km pipeline will traverse through 33 districts and six states. GITPL also claims that it will be able to cut down tariff drastically: gas from the KG basin can travel to NFL's Vijaipur plant at 25% of the current applicable tariff.
But the point is what is what has changed about gas demand in the heart of industrial India through which the pipeline winds it way?
Clearly, demand for gas has not been found to be as buoyant as was anticipated earlier.

The inability of cross-country pipelines in India to stay viable needs a further investigation. The market for gas is becoming more dynamic, with a plethora of competing fuels as crude prices continue to stay low. LPG, FO/LSHS and Pet Coke are competing with gas for the attention of dual feed furnace owners. Low cost renewable energy may also increasingly emerge as a competitor. 

Undoubtedly, India should ordinarily have an insatiable appetite for gas but when will demand emerge remains a moot point.  Will disruptive changes -- such as lower for ever crude prices or the advent of electric car or really low cost renewable energy --  kill this demand before it emerges?
The jury is still out on this subject.

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Energy efficiency and renewable energy use in MSME in India: Gas suppliers need to keep watch

An interesting government sponsored experiment is on way in 12 MSME clusters -- ranging from brass to ceramics and handtools -- in using new energy efficiency methodologies and renewable energy.

The idea seems to be to then scale up the model to the national level. It will also help provide inputs into policy making. Does a model like this have implications for the gas sector in India?

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Gujarat expansion refinery: Details

EIL has put together the configuration study for IOC's Gujarat refinery expansion from 13.7 MMTPA to 18.0 MMTPA. The estimated cost is Rs15000 crore.
The configuration has new units like Atmospheric Vacuum Unit, Indmax unit, Motor Spirit (MS) block units, Kerosene Hydro De-sulphurization unit and Sulphur recovery unit.
along with associated utilities and off sites.
For reference purposes, the website also carries here project-wise details of money spent by IOC so far this year

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Is GAIL exploiting its monopoly powers with its customers: The truth will be out soon

There have always been allegations that GAIL uses its monopoly powers to exploit its customers.
The source of this power emanates from the fact that it is both a monopoly pipeline owner as well as a marketer of gas.The allegations, however, have never been entirely proved but a comprehensive investigation by the Competition Commission will soon nail the truth once and for all.
GAIL's claim has always been that back to back obligations force an onward imposition of Take or Pay (ToP) conditionalities on customers and its conduct has never been one where it abuses its monopoly supplier status.

The Commission is now going to dig up all the relevant information needed to either prove or disprove GAIL's claim, by looking into:

The different sources of gas procurement by GAIL and the nature of arrangements with each supplier including price and ToP liability under each such arrangement. Whether the gas supplied to the customers is supplied from a commingled stream, in which case, what is the basis for price determination/ revision from time to time. Whether ToP liabilities are always imposed on GAIL by its upstream suppliers which are then passed on to customers

Whether GAIL suffers losses, as it claims it does, on account of non off-take or under-drawl of gas by its contracted customers. What were the total ToP liabilities levied by the GAIL on all its customers located across India in recent years. Whether GAIL has indeed adopted any discriminatory practice in the imposition of ToP liability across its customer base.

Whether GAIL imposed full ToP liability only in cases where the concerned buyer contested the legality of the ToP claim or resorted to litigation or arbitration proceedings Details of policy, if any, of GAIL regarding the imposition of different liability upon different classes of customers. 

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Former IOC chairman dismisses EV threat: But the future can come knocking sooner than he believes

In a recent interview, recently retired IOC chairman B. Ashok in an interview dismissed the EV threat as something way away in the future, but the future may come knocking sooner than he thinks. India is the first country to officially declare that it will move all electric vehicle supply (EV) system by 2030 and this is no doubt a very tall claim by any yardstick, but the oil and gas industry must take note of fresh . odeling exercises that seem to show that India can come quite close to target by 2030.
The exercise answers the following questions:
How does the total vehicle ownership cost of EVs compare with the cost of conventional vehicles in India?
What is the additional load due to BEV charging in India?
What is the impact on power-sector investments, costs, and utility revenue?
How can smart EV charging help RE grid integration?
What is the impact on crude oil imports?
What is the impact on GHG emissions?
Dramatic new insights are available and they may be a cause for alarm for those who are adherent for a sharp increase in refining capacity.

EVs will be cheaper than conventional cars: By 2030, the net electric owner’s benefit is more than Rs 9,200/yr as against a conventional car. When the difference of only the annual fuel costs of conventional vehicles and EVs is taken, it will work out to about Rs 20,000/yr. Between 2015 and 2030, the incremental capital cost of EVs over conventional vehicles is expected to drop by over 60%–70%, eventually making EV owners switch from conventional vehicles.

What is more, the load on the electricity grid will not be unmanageable at all, the exercise shows. By 2030, the all electric load will be only 3.3% of India’s total electricity load. The total peak BEV charging load is 23 GW, typically on weekends or holidays, which is about 6% of the total peak load by 2030 (402 GW). Smart charging and metering can take on the load with alacrity and will push renewable energy use, the projections show.

Find out more on what the projections are for crude imports and what kind of savings are possible on this front. Working backwards, how will refining capacities be hit by such a revolution or CNG supplies?
Analysts in oil companies will have their hands full figuring out how all these changes will impact the future of today's oil marketing companies.

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Deepwater costs continue to plummet: Under $ 40/bbl price now possible

Deepwater production costs are falling at a dramatic pace and it will have massive implications for around $ 15 billion in investments eventually lined up in the KG Basin.  Costs are already down 30% from 2014.
A period of aggressive cost compression has brought average breakeven costs for projects down from $70/bbl in 2014 to approximately $40-50/bbl in 1Q 2017. This breakeven analysis reflects full life-cycle economics that includes government take, development drilling, facilities, equipment, subsea, and operating expenditure with a 10% allowance for return on capital. 

While commercial gains primarily drove 2015 breakeven estimates to $55/bbl, engineering re-designs and efficiency improvements are driving the additional $10-15/bbl impact on breakeven projections for 2017 estimates. The focus is now shifting to get to successful execution of $40/bbl or lower breakeven costs. This will need step changes in efficiency and performance.
But not impossible.

Where have the cuts taken place?

Which are the major areas where deepwater costs are coming down?
Find out which components are contributing most to the cost decrease.
There is a direct cost reduction, there an overrun reduction, there are savings on shorter time cycles and standardizations. In direct cost reductions, component wise reductions are highlighted in the analysis. Standardization impact is measured as also faster completion time.
Additional benefits include:
-- Lower capex
-- Purchase rationalization
-- More effective engineering hours

Can ONGC ever join hands with RIL?

Modeling exercises have shown that a multi-operator approach, co-developments and partnerships can make a big difference. Performance driven commercial collaborations between suppliers and producers is the new norm. One example of the collaboration model is to build a cross-operator inventory of follow-on activities that provides opportunities for tiebacks to existing deepwater facilities.
This multi-operator approach could accelerate development activities at a reduced cost, significantly improving rates of return and supporting continued investment.
Other opportunities for operator collaboration include sharing logistics costs, such as helicopter flights, within a basin. Collaboration initiatives are already under way in the North Sea, where offshore operators announced in 2016 that they were in talks to merge substantial parts of their operations, including procurement, logistics, and finance departments
Gulf of Mexico has seven upstream operators collaborating to reduce costs
In India however, the best collaboration can be between ONGC RIL tenders contracts regime in the KG Basin
The economics of scale can be massive.
Nevertheless, political compulsions of the new government do not allow for such collaborations as of the moment but there is no harm in conducting a broader study on the benefits of multi-operator approach in the KG Basin, it will be a helpful first step.
If the economics can be established, selling it to all stakeholders can be a subsequent exercise

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BPCL's Kochi makeover: Pricing model for

BPCL is undertaking a massive expansion of its Kochi refinery complex. Like IOC did with the Paradip refinery, BPCL is trying out the "over the fence" gas utility supply model in Kochi.
The website carries here a detailed pricing mechanism for such a model, taking into consideration two model with gas as a feed and fuel, one involving power from a captive plant owned by the Build Own Operate entity or with power from provided by BPCL or procured from other sources.
The pricing of syngas, hydrogen and steam will depend on the operating efficiency at varying capacities. There will be a fixed and a monthly charge. The outsourced gas supply complex will cost Rs 2500 crore.

State of art features: The Kochi expansion to 15 MMTPA along with a petrochemical complex is a big one by any yardstick.
But BPCL claims that it has built in a lot of state of art features
And this includes:
Heat recovery belt
Power recovery expander
Electrostatic precipitators, among others

What is it going to do with its propylene output?

How is BPCL's Kochi refinery going to use the 500 TMT of polymer grade propylene that it will make out of its petrochemical complex?
A lot of it will go into specialty polymers and chemicals
Total project cost for manufacturing is $ 700 million

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Setting up an FRSU in India-: Advantage of time and cost

 After an Indian business group's plans to set up a 6 MMTPA Floating Storage Regasification Unit (FRSU) mainly as a captive gas supply source, there is a heightened interest in India about FRSU-based terminals.
The website carries here a very comprehensive template on how an FRSU concept can work in India.
The biggest advantage for an FRSU is that it can typically represent just 60% of an onshore terminal cost and can be delivered in a shorter time. An onshore 3 mtpa terminal with one 180,000 m3 storage tank is likely to cost Rs 3500 to Rs 4000 crore, compared to Rs 2000 to Rs 2500 crore for a similar capacity FSRU.
A component wise comparison of the cost differential is carried here.
What is more, an FRSU can be delivered quicker: an onshore terminal is driven by the construction of the tanks which is typically 36-40 months. New build FSRUs take 27-36 months to delivery but a conversion of an existing Indian LNG projects carrier to an FRSU would be less at typically 18-24 months.
However, the real schedule advantage is if an FSRU is readily available, either reassigned from another project or constructed on a speculative basis.
A recent example of this is the second FSRU for Ain Sokhna which commenced operation in just 5 months after the issue of tender documents. This was possible because the onshore handing infrastructure was already available.
At the buyer end, however, the setting up of onshore infrastructure will have to be taken into account while looking at shorter timelines.

OPEX breakup: For buyers of gas, a clear understanding of operating costs is also very important even though the eventual pricing or tolling model can be different.
The website carries here a component-wise breakdown of operating costs, including:
Provision of personnel – onboard and located on the onshore interface
Ongoing head office support to operations
Fuel gas and oil for power generation and steam generation
Maintenance and inspection
Spare parts
Chemicals and lubricants
Insurance
Harbour fees
Tugs for supply tanker manoeuvering
Service boats for offshore located FSRUs
Dredging
Financing costs
OPEX costs are normally at around Rs 15 lakh per day

The right business model:  Indian LNG projects  Import terminal business models usually take the form of Integrated, Merchant or Tolling arrangements. Full details of how these models work are carried here.
FSRUs are functionally identical to onshore terminals and can use any of these models.
The tolling model seems to be the most popular as it provides a simple arrangement directly with the buyer and the leasing option fits well with shorter term contracts.
The website carries here full details of possible contract structures.
As for the contract period, the first FSRUs were typically leased on a 10-15 year basis. This gave the owner some reassurance of recovering the capital cost of the vessel and finance charges over the lease period. Analysis of the early FSRUs would indicate that 10 years was the minimum lease period and the day rate was calculated on the basis of recovering the capital costs and finance costs over 8 years with the remaining 2 years as profit.
The range of lease periods now spans 5-20 years and is really driven by the gas market demand period.
Leasing charges are typically in the range $110-160,000/day and with an OPEX in the range of $20-45,000/day, the total cost can vary between $130-205,000/day.
 Industry standard FSRUs are essentially limited to 173,000 m3 storage and nominal 6 mtpa throughput. Storage of 263,000 m3 can be offered but this has to be a bespoke model
Capacities of up to 330,000 m3 FSRUs are also available.
Whilst FSRUs are normally leased there is an opportunity to purchase outright subject to Contract arrangements. 

Selection criteria: What are the key considerations which will have to be kept in mind to determine whether an import terminal is best suited for an FSRU or an onshore option?
Looking at the decision factors a FSRU is likely to be preferred over an onshore terminal if the following applies:
There is short term market need – leasing cheaper than sunk cost, FSRU reassigned
There is fast track need to supply gas – onshore terminals take 3-5 years to construct
Capacity is less than 6 mtpa or if it is greater it would need 2 FSRUs
Send out capacity not likely to increase – much easier to add extra vaporizers onshore
No need for strategic storage - largest vessel Qmax 266,000 m3
Major permitting issues for onshore terminal
No space available for an onshore terminal
Offshore FSRU if entrance to harbour too shallow requiring dredging (dredging is an ongoing maintenance cost too)

More data: The FSRU business has grown rapidly since the first vessel was installed in 2011 – just 16 years ago. There are now 27 vessels of which 23 are in operation as terminals and 4 currently assigned to LNG tanker service. A further 10 are currently under construction with options placed with the shipyards for 10 more.
The estimate is that there can as many as 50 vessels in operation by 2025 offering an FSRU-based regas capacity in excess of 200 mtpa, which is 60% of the world’s LNG production in 2016.
That the future is bright is endorsed by the fact that FSRU service providers are ordering new vessels at a cost of around $250m on a speculative basis and that established LNG tanker owners are now entering the market.
The website carries here a detailed list of information on 
-- Current FSRU fleet in operation or delivered and pending start up and operation, including photographs of the vessels
-- Ships ordered or likely to be ordered.

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OPEC production cut: Won't hold up?

OPEC's production compliance cuts are not holding up well, according to latest indications. OPEC oil production continued to rise in June 2017 for the second consecutive month. Compliance by the OPEC cartel declined to 78%.

Two exempt OPEC members -- Libya and Nigeria -- have been raising output at a furious pace and it is likely that cuts will now have to be extended to these countries as well. Moreover, with Iraq targeting a production rate of 5 mb/d and Iran adding new oilfields, it is also a possibility that the OPEC pack may just come apart.

Fear of losing market share as a result of the production cuts -- as the cartel looks with consternation as large buyers like India begin contracting for oil parcels from the US -- will be another factor weighing on OPEC in forthcoming discussions.

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Gas demand: Changing narrative is causing a credibility problem for the IEA

The narrative on where the demand for gas is going to come from seems to be changing rapidly. Even established research agencies like the IEA is giving up on the power sector as the main pillar of Gas demand and supply in India. The continued rise of renewables seems to be posing a problem.

The focus now is on industrial demand, from petrochemicals to fertilizers. The changing narrative is beginning to put pressure on the IEA's credibility as an independent research agency which is not just as a votary of the oil & gas lobby.
The moot question is how fast and how quickly will demand will go up in the non-power segments?
What is more, according to the IEA, China and India are meant to be largest drivers of gas demand in the coming decade.
How dependable are these markets?

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Mozambique LNG project: Is there hope for the Indian trio?

At the beginning of June 2017, a final investment decision (FID) was taken for the Coral Floating LNG in Mozambique underpinned by a portfolio player's commitment to offtake all production.

The LNG project will tap into a super gas reservoir in Mozambique, the other end of which -- known as the  Rovuma Area 1 Offshore block -- is owned by Anadarko Petroleum, in which the Indian trio -- made up of ONGC RIL tenders contracts, Bharat Petro Resoures Ltd (BPRL) and Oil India Ltd  (OIL) -- are involved.

The reserves are estimated at a massive 50 to 70 TCF of gas just for Rovuma Area 1.
Does the go-ahead for the Coral Floating Indian LNG projects mean that a similar kick-up is expected for the Anandarko operated project?

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Gas in power generation: Flat data

Gas suppliers are watching with some trepidation the data coming out on the fate of investments in gas turbines to generate electricity. The electricity sector was projected to be the biggest buyer of gas as coal fired power plants are gradually retired.

In 2016, investments have been just steady and not rising, with bulk of it taking place in countries where gas is cheaper. In Europe, although 4 GW of new capacity came online based on investment decisions made years ago, retirements of gas-power plants exceeded the amount of new capacity that was given the green light for construction.

The incremental demand for gas worldwide therefore may not come from the electricity sector anymore as renewable energy gets cheaper, leaving demand to emanate from other sources, including emerging economies. The biggest uncertainty today is how and when gas demand is going to ramp up globally.

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Renewable power in India: Fossil fuel companies are stepping in

In India, renewable energy is being seen as a business opportunity now by large Indian corporates and more of them are throwing in their hat into the business. This is not to say that smaller players are being squeezed out, as the government targets both utility-scale projects, which are more suited to large industrial corporations, and distributed projects, which should make up 40 GW of the 100 GW capacity target.

The point to note is that the transition to a renewable power system is being seen as a business opportunity by major corporations, with traditional interests in the fossil fuel sector.  For reference purposes, the website carries here a reduction in investment cost of solar and wind energy in India over the last 8 years.

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3D printing will be the next disrupter

Advances make 3D printers a more potent option for industrial production and may have a dramatic impact on the Indian job market. Adidas intends to use the 3D-printed soles to make trainers at two new, highly automated factories in Germany and America, instead of producing them in the low-cost Asian countries to which most trainer production has been outsourced in recent years. 

The firm will thus be able to bring its shoes to market faster and keep up with fashion trends. At the moment, getting a design to the shops can take months. The new factories, each of which is intended to turn out up to 500,000 pairs of trainers a year, should cut that to a week or less. As this trend gains momentum in other segments of the industry, it will have serious implications for India. But from shows, it is now moving to industrial valves, and before long the oil and gas industry will feel its impact too.

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Pubic funding of fossil fuels: Why is India not in the frame?

India figures way down in a list of companies which provide public finance for promotion of fossil fuels.
This analysis shows that G20 governments are providing nearly 4 times more public finance to fossil fuels than to clean energy. Public finance is defined as financing that is controlled by governments and includes funding by multilateral and development agencies.
What is the reason why India is not on the radar here?
The reason could well be that bulk of the funding comes from internal accruals of public sector companies.

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GEEC's CBM foray: Profitable so far

Even as ONGC RIL tenders contracts struggles with its Bokaro CBM block on account of high overheads, there are others who are making money. One example is Great Eastern Energy Corporation Ltd (GEEC) in the Raniganj block.
Operations are small scale -- total revenues are at around $ 30 million -- but the gas price elicited is good enough to generate cash.
The company claims to have an OIGP of 2.62 TCF, 3P reserves of  595 BCF.
There are a total of 114 gas producing wells under operations as of now.

Saddled with litigation: While posting a positive cash flow, GEECL seems to have run into trouble, both with the DGH, the PNGRB as well as its contractors. A primary contractor of the company has taken it to court for unpaid dues, and there are now a bitter series of claims and counter claims. The PNGRB has slapped a penalty for an unauthorised gas pipeline.
The DGH too has claimed that dues have not been paid.
The allocation for another CBM block is currently under contest.
Most of these these issues are currently under litigation or arbitration.

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Qatar to to build 30 MMTPA of new capacity: Domestic gas producers will be under pressure

Qatar's decision to add an extra 30% to its existing LNG capacity by 2024, taking the total up to 100 MMTPA is likely to dramatically upset the projected demand-supply balance in the global LNG market. This will mean that the supply gap that was initially meant to emerge by 2021, later postponed to 2024, is likely to be put off by another few years.

Given that there will be excess supplies coming in from the US and Australia as well, Qatar is likely to fight hard to retain and deepen its market share in proximate markets like India where it has a comparative advantage in relation to other suppliers. In likelihood, Qatar is likely to under cut other suppliers to India.

The upshot of all of this is that the new gas to be produced by ONGC RIL-BP tenders contracts will have to stay competitive to the landed price of LNG set essentially by Qatar, essential for the life of these projects. Peak production from these fields will happen at a time when Indian LNG projects prices will be under pressure.
Qatar's new plans will work to hamstring Indian producers, curtailing their pricing power, keeping their margins under stress.

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City Gas Distribution companies: Cashing in on their monopolies

City gas distribution companies are enjoying a good run given their monopoly over their geographical areas. While they may sit on their monopolies and not do much, the going will remain good until their exclusive periods come to an end. An example is Green Gas Ltd, which enjoys PNG and CNG distribution rights in Lucknow for five years and exclusive city gas infrastructure development rights for 25 years in Agra and Lucknow.

GGL thus has a significant monopoly in the City Gas Distribution (CGD) business in its areas of operation.
Consequently, the company is unlikely to experience any competitive pressures over the near to medium term even though it has been modest in the development of its infrastructure and it can do much more than what it is doing now. Its CNG infrastructure is limited and as for PNG, it has been able to garner only 16,000 PNG customers as of now.

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The future is renewable says new study

Latest research shows that the levelized cost of electricity from solar PV, which is now almost a quarter of what it was just in 2009, is set to drop another 66% by 2040.  By then a dollar will buy 2.3 times as much solar energy than it does today. Solar is already at least as cheap as coal in Germany, Australia, the U.S., Spain and Italy.

By 2021, it will be cheaper than coal in China, India, Mexico, the U.K. and Brazil as well.
China and India are a $4 trillion opportunity for the energy sector.  China and India account for 28% and 11% of all investment in power generation by 2040.  Electric vehicles bolster electricity use and help balance the grid. In Europe and the U.S., EVs account for 13% and 12% respectively of electricity generation by 2040. Charging EVs flexibly, when renewables are generating and wholesale prices are low, will help the system adapt to intermittent solar and wind. The growth of EVs pushes the cost of lithium-ion batteries down 73% by 2030.

Coal-fired power collapses in Europe and the U.S., continues to grow in China, but peaks globally by 2026. One of the big questions for the future of electricity systems is how large amounts of variable wind and solar generation can be accommodated, and yet keep the lights on at all times.
Skeptics worry about ultra-cheap renewables depressing power prices and squeezing out base-load coal, gas and nuclear plants.

But smart charging by electric vehicles during day time, small-scale battery systems in business and households, plus utility-scale storage on the grid, playing a big part in smoothing out the peaks and troughs in supply caused by variable wind and solar generation.

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What is going wrong with ONGC's Daman field: Is first gas by March, 2018 a realistic target?

How late is ONGC's Daman development plan running?
ONGC believes that it can deliver 2-3 mmscmd of gas by May, 2018 and peak gas of 8 mmscmd possibly by 2020. But is that a realistic target given that the company has not finished awarding the contracts for the project after EPC contractor Swiber Offshore Construction, Singapore declared bankruptcy.

Could the company have acted faster?

It is true that the bankruptcy of Swiber Offshore Construction delayed the commissioning of the crucial Daman project. But could ONGC RIL tenders contracts have acted faster after the bankruptcy was declared?
The subcontracts were already awarded by Swiber before it went down. So what took so long to revive those contracts?

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GAIL to pay more for LNG vessel hire: Global demand for vessels going up

The latest reassessment shows that a total of  over 110 MMTPA of new supply will be coming online between 2017 - 2020. For reference purposes, the website carries here an estimate of new LNG supply by project start date spread over the next three years. Projects are expected to use both new built and existing vessels to utilize the extra capacity coming on stream.

So far, increased demand seems to be absorbing supplies. There has been demand de-growth in some countries but made up by growth elsewhere. There are new supply flows being created now by buyers of US LNG. US volumes are expanding both vessel tonne miles and tonne time. Cheniere reported over 100 cargoes shipped to 20 countries (Q1 2017 results). Sabine Pass trains have been running consistently, save for maintenance outages. Applying the 1.77x multiplier to yet-to-deliver US FID exports (50+mtpa) would require around additional 90 LNG ships.

New projects are coming online: Despite the massive additions to LNG supply between 2017 - 2020, there are now signs of more projects coming on stream beyond 2020.

The website carries here an assessment of fresh long term supplies coming in beyond 2020.
Clearly therefore, supplies will be built well beyond the next three years
This could mean LNG prices are likely to stay down for longer than what was earlier projected.

Demand-supply gap emerging in LNG vessels: GAIL seems to have missed the bus when it comes to contracting for LNG vessels to ship its US LNG commitments to India at reasonable charter hire rates.

The website carries here a projection of how future LNG vessel demand exceeds the current order book
The website also carries here a vessel-wise delivery schedule against vessel requirement
Average sailing distances are now growing rapidly. Detailed vessel utilization and shipping rates are carried here.

Spot fixtures over the last few months are carried here in relation to the same period over the last three years, and they show a rising trend. There are now indications that vessel rates are going to tighten and this will raise the delivery cost of GAIL's Indian LNG projects. This website also has its own daily LNG vessel charter hire rate data collected from global sources and contacts.

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Shipping Corporation of India: Scripting a different story

The Shipping Corporation of India has not added any ship in the last one year primarily due to weak shipping markets. Many vessels are currently placed in the spot market and are competing with other shipping companies for the same business. These vessels are working at less than 50% utilization. Long term contracts are limited under the current environment.

But a shrinking global shipping order book, bottoming asset prices, lower crude prices (lower bunker) and stable shipping freight rates bode well for shipping companies including the SCI. The current focus seems to be on a strategic sale by the government of the company. Under a new ownership, the company is likely to fare much better.

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Low oil prices for a long time to come: The world has changed in the last two years

A new argument claims that oil prices are going to stay low for a long time to come because the world has recalibrated the cost of production of oil in the last two years.

This trend first became evident in the U.S. The collapse in revenues, along with heavy debt burdens, led to multiple bankruptcies and the expectation that prices would be “lower for longer.” Shale producers had no choice but to slash costs if they wanted to survive. In the process, they became more efficient, focused and innovative. A new well that might have cost $14 million in 2014 now costs $7 million. The gain in efficiency is so great that a dollar invested in U.S. shale today will produce about 2.5 times as much oil as a dollar invested in 2014 .

n 2014, many thought a drop in price to $70 a barrel from $100 would shut down U.S. production. It didn’t. Today, new shale oil wells can be profitable at $40 to $50 a barrel, and some companies claim even lower. That makes possible a new surge in U.S. production—as much as 900,000 additional barrels a day over the course of this year. By next year, the U.S. is likely to hit the highest level of oil production in its entire history.

This cost recalibration is happening everywhere. Canada’s oil sands have always been among the highest-cost, yet some new projects can produce near $50 a barrel. In Russia, costs have come down more than 50%. Even deep waters offshore can now produce at less than $50. In March the CEO of the Norwegian company Statoil said that owing to a wholesale redesign, a project in the North Sea that had originally required $75 a barrel to be economical now needs just $27 a barrel.
This recalibration will push up supply more than had been anticipated, at least in the next few years. And if price of oil goes up, more output will kick in at much lower prices than before.

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RIL-BP's KG Basin gamble: Output will continue to decline till 2020

Gas production from the RIL-BP's D-6 block continues to slow down. In 2016-17, the average production was just 8.4 mmscmd, down from 11.61 mmscmd in 2015-16. Efforts to keep production up by sidetracking activities is showing minimal results so far. Two sidetrack wells in the MA field brought on-stream in October 2016 and January 2017, respectively, contributed only marginally to production, with the decline in production continuing.

Average output in the fourth quarter was 8.2 mmscmd. Since fresh gas from the recently announced new investments are likely in 2020, the decline in output from the RIL-BP combine's block is likely to continue till then. Meanwhile the duo has been burning cash on development drilling for sometime now, albeit quietly. Of the total capex of $ 119 million in 2016-17, bulk of it is elated to the development drilling programme in the D-6 block. Expect a sharp spike in capex from now on, as the $ 6 billion investment plan in the R-series gas fields beings to roll off the ground.

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Qatar crisis: Spot LNG spot rates to go down as European cargoes get diverted

The diplomatic split between Qatar and other major middle eastern countries continues to simmer and uncertainty still lingers in the market regarding Qatar’s Indian LNG projects volumes.  Since last week other changes have been afoot. Mauritius, Mauritania and the Maldives have now joined the list of countries severing diplomatic ties with Qatar. 

The UAE has upped tensions by banning any airline destined to Qatar using its airspace, plus enforcing rules that it will jail anyone who sympathises with Qatar. Late last week however two Qatari gas ships appear to have diverted their original path through the Suez Canal, to now going the long way around the Cape of Good Hope to get into Europe, fuelling speculation they may have received deterrence from the Egyptian-controlled Suez Canal.

This can well mean more Qatari spot cargoes into Asia and India, putting pressure on prices
The other main question that remains unanswered is what effect the LNG shipping market will see on Fujairah, an UAE port, prohibiting Qatari ships; Qatari flagged ships; and/or ships coming to or from Qatar from bunkering and anchoring there. Will other Arab ports adopt a similar approach?

Blockade beginning to bite: The effects of the diplomatic crisis in the Middle East are still being assessed.  Now, with the UAE blocking all vessels which have previously called at Qatar from docking at its own ports, freight rates for those vessels calling at Qatar are now expected to rise, while buyers are splitting cargoes on Suezmaxes, rather than VLCCs, in order to load separately at both Qatar and the UAE. Qatar currently produces around 619,000 bpd of crude oil

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Naphtha-spot LNG differential: Suppliers can push more gas to industrial clients

LNG spot price and naphtha price differentials have widened in India ever since January on accounting of increasing oil prices and falling prices LNG projects in India. According to data carried here by this website, the differential was non-existent in January but has widened in April and there is still a reasonable gap of late even though oil prices are on the decline.

Spot LNG prices were above the $9/mmbtu level in January but has fallen rapidly since, thereby ensuring that the differential between the two competing fuels remain high. This is a good time for suppliers to push through gas supplies to industrial users with dual-use furnaces.

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Shipping: After four years, new orders flood in

The list of new building shipping orders surfacing in ship building yards across the world during the past days has been overwhelming and is reminiscent of busier periods the industry was enjoying about four years ago. 

Yet the price levels are not seeing a big increase as competition among shipbuilders remains fierce, thus not allowing newbuilding values to move accordingly.

In terms of recently reported deals, Estonian owner, Platano Eesti, placed an order for two firm and one optional mini-Capes (108,000 dwt) at Shanghai Shipyard, in China for a price in the region of $35 million each.

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Poor Indian E&P performance in 2016-17: No respite in sight either

The 2016-17 oil and gas production data shows crude output is lower by 2.53%. All major segments -- ONGC, OIL and the private sector -- under performed. Clearly new developments have not been able to stem the natural decline from ageing fields.

Crude output will continue to stagnate or decline over the foreseeable future.  Cumulative gas production is lower too for the year.  The Daman development of ONGC -- that was meant to bring in 8 mmscmd of peak gas -- now stands put off by about two years because of the company's inability to get new contractors to quickly plug the gap after the primary contractor declared bankruptcy. The output from here would have countered the natural decline from the Bassein, ONGC RIL tenders contracts and largest gas field.

With RIL's D-6 output in permanent decline, subsequent to the closure of two wells due to water and sand ingress and lackluster results from side tracking activities, it does not look like India's gas output will see a significant upswing in 2017-18 or 2018-19.

The real effect of the incremental output from Daman and KG-DWN-98/2 will only be felt by the end of 2019 and 2020. The country therefore has not option but to fall back on expensive Indian LNG projects to plug the demand-supply gap. Given the price sensitivity of the Indian market, gas demand, but of the uptake in the CGD sector, may remain tepid too in the intervening years if LNG prices continue to stay high.

Source: Indian PetroPlus

LNG in India: Is there arbitrage potential?

The website also carries here answers to the following queries:
Will the high Asian spot prices of winter 2016–2017 be sustained?
Will there be more liquefaction FIDs despite loose market conditions?
What trends could emerge for new LNG contracts?
Will there be more LNG-related asset ownership changes?
How will existing LNG contracts come under pressure in 2017?
Can LNG in shipping bunkers be transformative for LNG demand?
How will individual country (regional) dynamics impact the LNG balance?
Will price relationship shifts slow India’s spot import momentum? 
For the last two years, India has provided an important destination for spot cargoes and it is expected that this will continue into 2017 and 2018. Additional regasification capacity is coming up during the year. A key factor in India’s current  procurement will be the oil price and arbitrage potential between oil-indexed LNG contracts and spot volumes. If spot prices increase relative to oil, this could yield a much milder appetite for spot LNG. 

Source: Indian PetroPlus

Is Saudi Arabia sabotaging the OPEC price deal?

Crude prices are going down as OPEC finds it increasingly difficult to keeps its rebellious members from violating the output cut deal. Saudi Arabia’s February production actually rose by over 250,000 bpd.  

There are concerns now that OPEC’s more rebellious members may abandon the cut deal and return to pumping as much oil as possible for the purposes of market share. Such a move by the likes of Iraq, the UAE, or even Saudi Arabia would be disastrous. 

Saudi’s apparent move to up output last month was supposedly to fire a warning shot at its rivals, to make them aware that, should they fail to comply with the cuts, Saudi can do the same. The US has emerged as the key swing producer in the oil market and a wave of positive production data is predominantly responsible for the sudden slump in prices. Looks like oil prices are going to stay low for now.

Source: Indian PetroPlus

LPG storage and distribution: Big business opportunity

There is business opportunity avaiable for providing LPG storage and distribution infrastucture in India.
The website carries here data to show that there is a big LNG import terminal capacity shortage going up to th year 2025.

The LPG demand supply gap is highlighted as well
Details of how the gas logistics business work is documented
A case study of how an existing private gas logistics provider is riding high on this business opportunity is also highlighted.

Source: Indian PetroPlus

Find out how ONGC saved $ 25 million each in 265 production and drilling platforms

Oil & Natural Gas Corp. Ltd. (ONGC) produces oil from the Western Offshore fields off the coast of Mumbai, India. Rather than decommission its fixed, jacket-type platforms dating back to the 1970s, ONGC opted to requalify the structures as fit for extended use.

The $150-million project involved the structural assessment of more than 265 platforms, the majority of which had exceeded their 25-year design life. A foremost priority included the identification and delivery of strengthening and mitigation measures for 90% of these platforms, as well as the subsequent recertification necessary to meet industry safety requirements.

The aim was to add 10-15 years to the structures’ lifespan. Studies conducted during the analyses included dent modeling, member-joint component strengthening, and additional pile modeling.

Each requalification not only ensured uninterrupted oil production, but also avoided installation of a replacement platform at a net cost of $25 million. Find out more on what was done.

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Carbon footprint in India: Oil & gas companies need to look at the data more deeply

Increasingly, policy planners will need to look at India’s carbon footprint and how much emission is being attributed to different sources. The website carries here full details of emissions category wise in India. Emission trends are also denoted.

Latest data shows that the primary source of emission is coal, which contributed 65% of all CO2 emissions. Petroleum products contributed 31% and natural gas contributed 4% of the total.

Source: Indian PetroPlus

Ammonia cost curve: India has a big disadvantage

 For reference purposes, the website carries here a reference cost curve of  ammonia (used largely to make urea) by using either gas or coal (in China). India’s cost curve is getting flatter on lower global LNG prices, but it continues to remain much higher than those of major ammonia producers in the world.
In a cost plus subsidy driven industry, this is a sensitive subject as the government may switch to imports by shutting down domestic production if the differentials are wide.

The indicative curve shows India is well above key producers in the Gulf, Russia, US and China.
The advantage however that India seems to be  gaining is from lower cost of imported fertilizers.
Urea prices have been falling for the last five years, and netbacks have been going now proportionately.
How long this trend can continue remains a moot point and, when it ends, will prices remain flat or will we see a turnaround soon? 

There are signs that the downward slope is slowly coming to an end as volatility has tightened considerably in the past year. However, it is not clear if a quick turnaround will ensue. Another interesting trend is the falling dominance of Middle East producers in India’s urea imports and the rising dominance of the China and FSU. 

Source: Indian Petroplus

Global energy ranking: India is placed 87th among 127 countries

A highly regarded global study of 127 countries that takes into account economic growth, environment sustainability and energy access as well as security have put India pretty low down in the rankings. India is ranked 87th.

The good part is that it has inched up three places over the last one year. While this is not much progress, enthusiasts will say that the movement is upwards. The US and China much higher up on this table.

Source: Indian PetroPlus

Gas usage can go up if a revolutionary new technology gains a foothold

New technologies that may lead to a bigger usage of gas is now around the horizon.
Power-to-gas is a storage solution that can help address grid-stability problems that arise when an increasing share of power is generated from sources that have a highly variable output, such as solar and wind.

The technology is undergoing advanced study and approaching commercial application. A power-to-gas system converts electricity generated during periods of high output and low demand (such as strong wind during off-peak hours) by splitting water molecules into hydrogen and oxygen through electrolysis.
The hydrogen is stored for future use as fuel and the oxygen may be sold for industrial use or released into the atmosphere.

Source: Indian PetroPlus

IMO’s new sulphur guidelines: LNG use cannot be guaranteed

The International Maritime Organization is calling for a sharp cut in sulphur emissions in marine fuels in 2020. But this does not mean a natural transition to LNG. More attractive and cheaper options have already started to come up. And given the explosive technological changes in the anvil, the answer to how the future is going to unveil still cannot be fully answered as of now.

Source: Indian PetroPlus

GST will cost oil companies Rs 25,000 crore

The rise in input costs for oil firms due to GST paid on the procurement of plant, machinery and services will not be creditable against the excise duty and value added tax on crude oil, petrol and diesel. 

This would imply collective absorption of tax close to Rs 25000 crore by upstream and downstream oil companies, thus, increasing the compliance burden.
Post the implementation of GST from July 1, 2017, all oil firms may have to comply with the old and new tax regime as majority of the products like crude oil, natural gas, petrol, diesel and jet fuel are excluded from GST whereas input cost components will come under GST.

Source: Indian Petroplus

India's POL demand falls for the second month in February: Demonetization at work?

India’s demand for fuel consecutively for the second month in a row, dropped by -2.8% in February this year. The demand for all oil products dropped to 15.8 MMT from 16.3 MMT a year ago. On cumulative basis, a growth of 6.0% was registered for the period April 2016 - February 2017. Except for LPG, Naphtha, MS, LDO, ATF and ‘other’ products which recorded a positive growth all other products recorded a negative growth. 

However, SKO registered a major de-growth of -33.8 % during the month and -20.4% on cumulative basis, mainly because of reduced allocation to states and voluntary surrender of PDS SKO quota by some states. February 2016 was a leap year and hence this year the current month has one day less resulting in lower consumption. Interestingly enough, an official government report blamed demonetization for the slowdown in demand.

Source: Indian Petroplus

Use of gas in India: It will not be all that easy to push out coal

Coal is still an affordable fuel for a developing country like India and even if it seems to currently be in a happy position with an increase in domestic supply and stagnant demand, projections show India as the largest contributor to incremental sea borne coal import demand up to the year 2030.
Sea borne thermal coal demand will continue to rise even as the Chinese appetite for coal slows down dramatically.

Everyone speaks of a cut in E&P spending but global capital spending for coal declined 13% in 2015. In 2016, capital expenditure declined by 9% to $27 billion due to further projects push back.
Coal prices have made a surprising recovery from around $40 in 2015 to over $100 pre tonne now.
What is going on with the market?

Source: Indian PetroPlus

Cambay block: GSPC reneges on cash calls

Oilex, the JV partner with GSPC, is running into a bit of a spot as the latter is unable to honour cash calls on account of financial problems. The two are partners in the Cambay and Bhandut projects, where Oilex feels there still a lot of reserves leftl to be tapped. It is learnt that Oilex is now preparing ground for acquiring GSPC's stake or else to go the other extreme, which is sell out and leave. It is also possible for Oilex to do a part sale. There is already an offer to buy Oilex's stake in Bhandut.

Oilex looking for a deal: Oilex claims it is stilling on a goldmine in the Cambay block. The block is spread over 40,000 acres. It says that it has nearly 1 tcf of fully recoverable reserves and around 4.4 tcf of Gas in Place. What is more, it is well connected to the national pipeline network. So is anyone interested to farm in?

Source: Indian PetroPlus

Deepwater cost curve shows a dramatic downward slide

The fall in cost of equipment and services as well as cost optimizations by E&P companies have translated into a steep lowering of the project breakeven points in deepwater plays
It is noticed that in 2014, only around 7 billion boe of reserves were viable at $ 60/bbl but this figure has now gone up to 15 billion boe
The US tight oil curve continues to be significantly below the deepwater curve and this explains the uptick in investments in the US subsequent to the recent oil price rally
Assuming, a 20% capex cut on the current deepwater cost curve, deepwater production is below the US tight oil cost curve for about 15 billion boe of of crude.

Source: Indian PetroPlus

Electric cars may not bring about a lower carbon footprint

It is not necessary that electric cars will always lead to a lower carbon footprint. There will be a huge increase in the demand for metals -- up to 50% -- once batteries take over. Then again, electric vehicles will not reduce greenhouse emissions if coal fired electricity is used to charge the batteries. Aggressive electrification while underlying electricity generation still relies on coal and oil may lead to an increase rather than a decrease in environment impacts and natural resource pressures.Further, even if efficient technologies do come in, if there is an increase in demand for such services as a result, there will be a "rebound effect", with a larger environmental footprint even if there is an overall decline in energy consumption.

Source: Indian PetroPlus

Building a first rate project monitoring software is not so easy in India

Even as we build our project monitoring software, we are trying bring to our readers sample project information that our analysts are throwing up. The information is valuable as it is forward looking. It projects a future RFQ requirement along with all other project parameters. The problem area is in finding phone validated key contacts for each project component even if the RFQ information is specifically available and that's where all our efforts are concentrated at this moment.

Our internal goal is to ensure that we capture up to 90% of the overall oil & gas sector investment in our software. In effect therefore we are talking of over 1,500 projects -- including maintenance projects -- with an investment of Rs one crore. We have detailed facilities and unit level information. A big oil and gas company will have dozens of industrial facilities and hundreds of units, each with its own unique set of technical information. We will also provide equipment level information on boilers, turbine, pumps, compressors and others. The software weaves all of this together into an easy to read format. 

A basic CRM is also included in the package, which we hope to improve upon as we go along, wherein specific projects and contacts can be assigned to team members and tracked subsequently.
A comprehensive turnaround alert system -- be it planned or unplanned -- has been put in place with an avalanche of information so that all the reader has to do is to pick up the phone and call the contact. This alert will provide details of the units where the turnaround has occurred, capacity that has gone offline, reasons for the shutdown (economic, mechanical or environmental) and the timelines involved. An archive of previous shutdown and start up dates will be preserved. More importantly the equipment that would require repair and maintenance will be highlighted. Mechanical engineers within our team will identify the exact nature of the boiler tube failure, for example, so that the reader can get the right perspective in the quickest possible time.

Every client will have a dedicated analyst, and he can be contacted for clarifications or for chasing up more information. An internal alert system challenges out analysts to ensure timely updatation of a project. The Rs 34,000 crore KG-DWN-98/2 project will have scores of updates through the life of the project. The minimum project updation timeline has been set at one month. Our biggest challenge now is to ensure that that we bring this software to our clients as quickly as possible. Internal quality control checks are currently on.

Source: Indian PetroPlus

Dismantling of offshore infrastructure: Business Development opportunity

A big business development opportunity is coming up in the decommissioning of an entire offshore production system in offshore India
The post cessation of production scenario involves dismantling of multiple wellhead platforms and numerous wells
The dismantling is being conducted through the Oilfields Act, 1948, and the Petroleum and Natural Gas Rules, 1959 and the Tapti PSC.
Heavy lift vessels will be in demand as the dismantling will involve:

• Topsides
• Jackets
• Pipelines
• Waste Management

Source: Indian PetroPlus

Methane emissions: No-cost, low-cost opportunities exist

Policy planners in India will have to look at significant no-cost and low-cost opportunities exist to reduce methane emissions.
Operational benefits of reducing methane emissions from oil and gas operations and assets include improved gas recovery, leading to increased volumes available for sale.
Regulation combined with economic incentives can drive innovation and reduce emissions.
Regulation combined with economic incentives can drive innovation and reduce emissions.
Norway, for example, prohibits flaring of natural gas at oil wells except for security reasons, so oil companies cannot sell the oil until they find a use for the associated gas – either by re-injecting it for pressure support or by arranging for pipeline transport to customers.
This regulation, in addition to a carbon tax introduced in 1991, became a driving force for development of new technologies such as the "closed flare system”.
If India were to stick to its commitments to diminish its carbon footprint, policy planners will have to look at methane leaks in India sooner than later

Source: Indian PetroPlus

2G ethanol plants: All you wanted to know about them

2G ethanol plants are now coming up and the website carries here a full template on what setting up such a plant involve, including details on:
Different waste feedstocks used
The manufacturing process
Input-output matrices and plant performance parameters
Demand for chemicals, such as nitric acid and different kind of enzymes
The water requirement is high and waste management will need to be a focus area too

Source: Indian Petroplus

Environment ministry ease norms for seismic surveys

In what has been seen as a major relaxation, the environment ministry has eased the norms for exemption in seeking permission from the Forest (Conservation) Act, 1980 for seismic surveys.

This easing has happened after intense lobbying by the petroleum ministry.
The government has embarked on a massive seismic survey spree to identify fresh deposits of hydrocarbons in unexplored sedimentary basins around India
Both OIL and ONGC had sought relief from the stringent guidelines inscribed under the Forest Act in order to conduct these surveys on behalf of the government in a time bound manner.

Source: Indian PetroPlus

Global oil and gas equipment market: India ranks poorly

 Even though both ONGC and RIL-BP have drawn up large investments plans in the E&P sector, a recently ranking has placed India at a poor 30th, in terms of potential buyer of oil and gas equipment.

For reference purposes, the website carries here a country-wise analysis of equipment and service requirements for oil and gas equipment
Among the top five oil and gas equipment exporting countries, South Korea ranks No.1 while the other four, China, the US, Germany and Japan jostle for space for the second rank.
US has specialized equipment and service suppliers but its share in the world oil and gas equipment market is shrinking and is likely to touch around 12% by 2020.

Indian: Indian PetroPlus

Repair jobs for Process Gas Compressors: Steep price tag for manpower

Repair jobs for Process Gas Compressors particularly for ONGC's offshore platforms are complicated machines and repaid jobs are expensive.

ONGC recently found that material costs are as expensive as manpower costs to replace items such as control systems
The OEMs, knowing well that ONGC does not have a choice, end up extracting a high service charge.
Sometimes manpower costs are as high as 50% of the cost of engineered spares.

Source : Indian PetroPlus

A case for carbon tax in India: But gas sector will not gain from it

 There is a seductive argument for a carbon tax in India. But what should be the optimal tax rate?
A full blown analysis of emission mitigation opportunities are investigated taking into account a tax that increases in equal yearly increments of Rs 165 per tonne to reach Rs 2301 per tonne by 2030.

The carbon tax has been found to be the most suitable way of bring down emissions in comparison to host of other measures, ranging from a road fuel tax to encouraging higher efficiency, power sector feebate, renewal subsidy, excise on electricity to a coal excise tax.
The impact of the carbon tax on the pricing matrices of various industrial segments in India is thoroughly investigated in the report and it has been found to be marginal.

The carbon tax will reduce energy-related CO2 emissions by about 8 percent and 22 percent below BAU levels in 2020 and 2030 respectively. These results are driven almost entirely by reductions in coal use, which account for 98% of the CO2 reduction and 2 per cent coming from the oil and gas sector
Does a carbon tax therefore necessarily lead to a higher usage of gas?

Source: Indian PetroPlus

What keeps global energy experts awake at night: Find out more

A very interesting study assesses the various risks that the oil & gas industry faces as of now, from the point of view of energy experts around the world
A large range of factors have been identified according to their impacts
Interesting developments in India, China and Russia are among the factors that add the basket of risks
Coal and nuclear power has moved down on the risk ladder as their importance is waning though strong regional differences remain
What is keeping world energy leaders awake at night are a whole set of different factors and they include electric storage and market design
The move to a hydrogen economy is also an increasingly risky factor.
For energy experts this is a must-read document

Source: Indian PetroPlus

Multi-client 2D seismic studies: The proposals sent for clearance

Three proposals have come in for multi-client 2D seismic surveys in the eastern offshore to the DGH
One involves a 8000 km survey in Andaman islands, while the other is a bigger study covering offshore KG Basin. The third proposal pertains to a 10000 km study in the west coast
The proposals are in the process of approval at this point
Meanwhile, the website also carries here the targets and achievements under the National Seismic programme, involving 26 sedimentary basins. So far progress on this front has been slow
For those looking for opportunities, including marine services, we carry here the names of companies involved.

Source: Indian PetroPlus

Gas now competes with wind and solar power

Gas is not longer only competing with coal but also with wind and solar power
Government subsidies have helped wind and solar get a foothold in global power markets, but economies of scale are the true driver of falling prices.
Unsubsidized wind and solar are beginning to outcompete coal and natural gas in an ever-widening circle of countries.
Clean energy installations broke new records worldwide in 2016, and wind and solar are seeing twice as much funding as fossil fuels.

Source : Indian PetroPlus

Getting out of stagnation: ONGC says it has done it

Even though this website remains a little skeptical of the claims made by ONGC, the company itself seems to say that its gas production will grow at an annual rate of 10-15% over the next three years.
ONGC expects Daman/C26 fields to add 4.5 mmscmd to production in FY18.
S1 and Vashishta gas fields would add 1.5 mmscmd while WO16 would add 1.2mmscmd in FY18.
IOR at the Bassein field is expected to add 3.9 mmscmd in FY19. In the longer run, Cluster-2 at KG DWN-98/2 would add a peak production of ~16 mmscmd.
ONGC has also guided that oil production from nominated fields would increase. The WO16 field would add 3,800 bopd in FY18 while Vasai East is likely to add another 4,800 bopd.
Ratna & R-series would add 3,000 bopd in FY19 along with 8,000 bopd from B127 and 5,000 bopd from Assam.
Ratna & R-series would peak at 14,700 bopd in FY20. Production from Cluster-2 would commence in FY21, with peak expected at 77,000 bopd.
The incremental oil output will counter the decline from its ageing oil fields

Source: Indian Petroplus

BS-III vehicles ban: Two-wheeler industry took Rs 600 crore hit

TOKYO - Oil prices edged down on Tuesday, as a recovery in Libyan output and rising U.S. supplies raised worries that OPEC-led production cuts may not significantly tighten a bloated market.

Oil has been weighed down by the market's impatience with the slow pace of inventory drawdown globally, even after major oil producers agreed to cut production by 1.8 million barrels per day for the first half of 2017.

London Brent crude for July delivery was down 7 cents, or 0.1 percent, at $51.45 by 0021 GMT, after settling down 53 cents on Monday. Brent crude has risen only around $1 from a one-month low of $50.45 hit on Thursday that came after the restart of two key Libyan oilfields.

NYMEX crude for June delivery was down 10 cents, or 0.2 percent, at $48.74.

Libya's National Oil Company said production has risen above 760,000 bpd to its highest since December 2014, with plans to keep boosting production.

The Organization of the Petroleum Exporting Countries and participating non-OPEC countries meet on May 25 to discuss whether to extend that reduction.

U.S. drillers added nine oil rigs last week, bringing the count to the most since April 2015, energy services company Baker Hughes said on Friday. Crude output in the United States is at its highest since August 2015. [RIG/U]

U.S. Interior Secretary Ryan Zinke on Monday signed an order directing the government to issue a new five-year plan for development on the U.S. Outer Continental Shelf to implement President Donald Trump's directive to review drilling bans in parts of the Atlantic, Arctic and Pacific Oceans.

U.S. crude inventories likely fell for a fourth straight week, while refined product stockpiles were seen up last week, a preliminary Reuters poll on Monday showed. [EIA/S]

Industry group, the American Petroleum Institute (API), is scheduled to release inventory data for the week to April 28 at 4:30 p.m. EDT (2030 GMT) on Tuesday.

SOURCTOKYO - Oil prices edged down on Tuesday, as a recovery in Libyan output and rising U.S. supplies raised worries that OPEC-led production cuts may not significantly tighten a bloated market.

Oil has been weighed down by the market's impatience with the slow pace of inventory drawdown globally, even after major oil producers agreed to cut production by 1.8 million barrels per day for the first half of 2017.

London Brent crude for July delivery was down 7 cents, or 0.1 percent, at $51.45 by 0021 GMT, after settling down 53 cents on Monday. Brent crude has risen only around $1 from a one-month low of $50.45 hit on Thursday that came after the restart of two key Libyan oilfields.

NYMEX crude for June delivery was down 10 cents, or 0.2 percent, at $48.74.

Libya's National Oil Company said production has risen above 760,000 bpd to its highest since December 2014, with plans to keep boosting production.

The Organization of the Petroleum Exporting Countries and participating non-OPEC countries meet on May 25 to discuss whether to extend that reduction.

U.S. drillers added nine oil rigs last week, bringing the count to the most since April 2015, energy services company Baker Hughes said on Friday. Crude output in the United States is at its highest since August 2015. [RIG/U]

U.S. Interior Secretary Ryan Zinke on Monday signed an order directing the government to issue a new five-year plan for development on the U.S. Outer Continental Shelf to implement President Donald Trump's directive to review drilling bans in parts of the Atlantic, Arctic and Pacific Oceans.

U.S. crude inventories likely fell for a fourth straight week, while refined product stockpiles were seen up last week, a preliminary Reuters poll on Monday showed. [EIA/S]

Industry group, the American Petroleum Institute (API), is scheduled to release inventory data for the week to April 28 at 4:30 p.m. EDT (2030 GMT) on Tuesday.

Source; Indian Petroplus