Asian Age Edition Delhi 6.4.2017 Page 15Height 6.71cm Width 12.71 cm

TRACKING I TREN~ For past two fiscals, India has been giving discounts on sale of LNG

Removal of subsidy to hit LNG demand

Ch1ba, Japan, April 5: India' liquefied nalural ga (L 0) demand could ease as the gOY· el'llmenl ha crapped ubsi· die on gas sales to power com· pan! ,the chief executiv of the country's biggest gas importer said on Wednesday at a gas conference in Japan.

atul'al gas accounts for about 6.5 per cent of India's overall energy needs. far lower Ihan the global average.

Jndia plans to raise the share of gas in its energy mix to 15 percen lover t h neli I I h ree y ars. but a m<\jor challenge to that goalls the price sensitivl·

tyof Indian con umers. India has for the last two fis·

cal years been glv ing d! . counts on the sale of imported LNG to revive more than 14 gigawatt of tranded powcr generation capacity thai had been hit by dome lie gas shortages.

But a power ministry official confirmed that the L C sub­sidy has not been extended beyond March 31. and Prabhat

ingh. chief exccutl\'c of Petrone! L C, sa id these gas· based projects can not compete with plants u Ing cheaper coal. --If (the power subsidies

-in India) don't happen. then definitely around a million to 2 III IUton tonnes of LNG which wa going there will be 10 t." Mr ingh told reporters at Ga ' tech in Japan.

After thesubsiclies were frrst pul in place, India' · annual L G imports urg)(\ 15 per· cent to 16.08 million tonne in 2015/ 16. Then for the first 11 month of the 2016/ 2017 fiscal year - the April· February period - India import d ) 7 million tonnes. Data for March i not yet available.

Reuters

LACK OF INCENTIVES Natural gas 6.5% accounts for about 6.5% of

India's overall energy needs • India plans to raise the share of gas in its energy mix to 15 percent over the next three years, but a major chal­lenge to that goal is the price sensitivity of Indian con­sumers.

• A power ministry official confi rmed that the subsidy has not been extended. Petronet LNG CEO Prabhat Singh said LNG projects cannot compete with plants using coal

• After the subsidies were first put in place. India's annuallNG Imports surged 15% to 16.08 million tonnes in the 2015/16

Economic Times Edition Delhi 6.4.2017 Page 13Height 8.36cm Width 17.01 cm

India Plans Diesel Pipeline to Bangladesh DipanjanRoy.Chaudhury

@timesgroup.com

New Delhi: Ind.iapians to buildap ipel i­ne to carry high-speed diesel (HSD) to Bangladesh, sim iJar to a project itanno­unced last week tosuppJy fuel to Nepal.

A forma l proposal on the fr iendship projectcQu ld be announced when Bang­Ia Prime Minister Sheikh Has ina meets her Indian counlerpart Narendra Modi hereon April 8, people in the knowsaid. The cross-border p ipeline will run

from S U iguri in Wes t Bengallo Parbati ­pur in northern Bangladesh.

Until the project is completed, HSD \~.rUJ be transported [r om Assam 's Nu­mal i garh Refinery to Bangladesh v ia r a­tl and onesuch consignment will be flag-

ged orf by the two prime min ister s. Tn fac t, supplies to Bangladesh has al ·

readybegul1 fro m Numal igarh Re ri.nery. Recently, it dispatched the lirs t consign· ment or HSD to Banglades h - a r a ilway ra ke conta in ing 2,281 metric tonnes of the fuel chugged ofr from the refi ner's m arketing terminal a t Si liguri to the Parhitipurdepotof Banglades h Petrole­um Corp (BPC). Each such consignment will travel some 516 kms - 253 km in Tn­diaand 263 km in Bangladesh - on an ex­isting r ail line.

Numa ligarh Refin er y and BPC have s igned a sale-purchase agreement wh ich includes ajoint initia ti ve for the construction of a l31-km p ipel ine, with a capacity to car ry l miLlion metric ton­nes a year of fuel products, to Parbati­pur from Siliguri.

The neighbouring countries are a lso contemplating bu iJ ding a gas pipel ine. State-run Oil and Natural Gas Corpora­tion and BPCare in talks to buUd the6,900-km pipel ine tha t is proposed to I ink Ch it· tagong in Bangladesh and Sitwe in Myan­mar with India's northeastern sta tes. The pipeline project is par t of the go-

vernment's Hydrocar bon Vision-2030 for the northeastern region. Ajoint LPG p lant is planned a t Chittagong rrom where the gas will be piped to the norlh­eas tern region. The project had fi gured in the talks during Modi 's Dhaka tTip in 2015. Tnd ia last week announced that it will lay pipel ine to supply fuel to Nepal and jointly market it in the Himalayan na tion . Sta te-run Indian Oil Corpora­tion wUI help bu ild the p ipeline to supp­ly petrol, diesel and cooking gas.

Economic Times Edition Delhi 6.4.2017 Page 18Height 20.53cm Width 17.94 cm

BS and the Futile Furore Over Emission Norms

Rather than fret over unsold inventory of BS-III stock, carmakers would do well to brace for BS-VI by 2020 Lijee Philip

On Mar ch 31. SIAM, the asso­ciation representing India'sau­tomakers, shotoff a letter loaded with woes ta the PrimeM ini ster.

How could the Supreme Cour t order them not to seJi a nd r eg is ter BS­III veh icles (Bharat Stage is the .lndian em issiollS stand ard) in the ne\v fiscal year , they bemoaned?'I'hey a isopointed to theirea gerness to move from BS- IV to BS-VI in three year s - a switch that no country in the world hasaccomplished. Countries in Europe and the US, sa id

the letter . have taken up to 10 year s for the same change. " Ther e is a need to set up a n a tion a i l'egula tor y body which

norms. the toughest emission standards in three years. The trans.ition requires auto fi r lns to ma ke signi ficant changes in engine technology, combustion a nd upgrade tomoreelectrolliccontrols. 1'h is cou ld mean lnvestm ent.sormor e than Rs 80.000croreand a su bstantia l increase in the price of ca rs. But environmental ists feel it's weI I worth it. as the new emission

0.06

0.05

0.04

0.03

0.02

0.01

o

Source: ARAI report, 2017

wou ld clear ly layout a r oadm ap for a ll policy and regul ator y changes. 'fhepol­icy shou ld then be fra med in a manner th at no one can la t.er overru Ie it. as has become the practice la tely."

Automa kers poin t out whenever there is a tran sit-ion ing of advanced em ission norms a nywher e in the world the las t date of l'e tiring - 31 Ma rch, 20 1.7 in this case -- is on ma nufacturin g; vehi cle ma ker s a re al lowed 10selJ the s tock in the rollowingyear. 'rhe SC has not given the industry this leeway. which by one estima te wil l call for liquidation of some 7 la khunitsoftwowheelers, three wheel­er s, trucks and passenger vehicles.

If Apri 120l 7may seem I ikea bad dream lor Ind ian au to. 2020may be theyearofthe biggestnightmare- complyingwith BSVr

1101111S ar e fuel-neu tra l. Environmenta li st Ri shi Aggar wa l or

the Mumba i Susta inabi lity Centre says a ny kind of a publ ic policy th at has a \videspread impact needs to be rolled out in phases and should take into account a predictability path . "What we need is a comprehensive a nd long- term growth vision of automobil es th at ca nnot on ly gu ide the industry but a lso ind icate to the consumer s the kjnd of technologies tha t al'e likely to be pushed given the en­vtronmental and safety concerns. Ra ther than debatingol1 what wentwrong in this ins ta nce (transition to BS l V). we need to get to the 1'00 1. cause of the pr oblem. which in my view is lackoflong-term sup­ply and dem and man agement policy for veh icu lar growth: ' says A kshima Ghate. Associate Direc t.or . 'T'ER L a n environ­mentthin k tank.

The BS-TV lransition .aver sG ha le. has brought forth a critica l issue which India

has been ignortng: the abi lity to foresee future growth in vehiclesand havea co­ordinated and long- term policydirectioll to deal with t.he negative ex ternal ities associated with vehk ular growth . be it. pol lut ion or road accidents. 1'0 reduce veh icu lar po llution. Ra kesh

Kum a r . director o f CSI R-Na ti on al Environ menta l Engineering Research Tns titute(NEER n, says all vehicles need to be ma inta ined and , those fitted with cata Jy t ic converter s_ checked regu la rly. Ind ia's la rgest carma ker Maruti Suzuki

was well prepared for the ban_ It intro­duced BS-IV in 2010and nevel' madea BS-111 cal'aftel'that. Says Mal'uti chairman He Bhar gava: "We standardised produc­tion to RS-IV. to avoid admin is trative and technical issues. The auto industry cou ld not have expected t he SC to a llow mor e pollu ting vehicles a n er March 31. 'fhe SC view is very clear and I see noam­biguity init."

Business Standard Edition Delhi 6.4.2017 Page 4Height 11.52cm Width 17.04 cm

India to get first oil from small field round in four months SHINE JACOB New Delhi, 5 Ap ril

In the recen tly concluded auc-tionsfor small oilfield discover­ies, a key investor attraction was a block in the Cam bay basin. It gO[ 19 bids. The winner here, Dubai-basect Soud1 Asia Consu­ltancy FZE. only foreign entity to have player to get a block in this round. e1l.'})ecrs to start pro­duction within fOlIT months.

It believes that from a m ini­mal invesunenr of tWO crore for fi ve to six wells, it could unearth oil reserves worth at least ts,OOO crore from the con· tract area - CB/ONDSF/SoUtil Patan/2016.

;'We have got a very lucra· tive area for exploration. By gpv· ernment estimates. the block has 3.2 million barrels of oil , wonh {I,200 crore. BlIt~ our

DISCOVERED SMALL FIELDS BID ROUND fie lds (DSF) would happen in 2017-18. The company is look­ing forward to th is, saying it would have an advantage in being the firstsmali field player from abroad to have already entered. "It is believed that in DSF·JL rhe Directorate General of llydrocarbons m igh t seek prior experience of at least one yea r in the sector: ' explained Rajput. Interestingly. of the 22 companies that gave winning bids, 15 were nevv to the sector. Ofdle 46 blocks on o lfer, 31 got s uccessful bids, with investors showing more keenness on onshore ones. 'J11 e nSF round was launched in May last year, The government expects a cumulative peak production of 15,000 barrels of oil per day and two million standard cubic

Total no. of contract areas

,Onshore

23

geologist found the pote ntial to be fOllr (Q five times higher, in rhe range of tS,OOO crore," saki its managing direcrof, D S RajpuL The col11p.:.'lflY spe­cialises in offshore and onshore drilling and workoversecroTsas a setvice provider; it is present in Iran. '111e block has rwo exist-

Total no. of companies

Foreign ......, r PSUs playelS 1

iog wells. "We expect to be the first player to start production from this rouncL '111is round was very invesmr·friendIy, widl no prior experience needed in the sector." Petroleum Mjniste r Dharmenclra Praclhan had said a second rou nd ofaucrions for m erres a day of gas over theeco­d iscovered small and marginal nomic lifeofrhe fields awarded.

Business Line Edition Delhi 6.4.2017 Page 3Height 17.04cm Width 11.06 cm

Delay in laying gas pipelines prompts PLL~ BPCLto move LNG by road V SAJEEV KUMAR Kochl, April 5

The inordinate delay in completion of gas pipelines in Kerala might have prompted Petronet LNG Ltd (PH) to depend on trucks to move gas to its customers. BPCL has also adopted a similar initiative to de­liver LNG to an industrial customer In Chennai from the PH facility in Koehi. . ,

A senior official in BPCL told Busi­nessLine that the company dis· patched its first truck-load of LNG supplies "from the. Pll terminal In the second week 'c'f March, to Turbo Energy located at Payyanmir near Kanchipuram.

Tlie agreement with the Chennai· based company to deliver gas at its

,'premises was signed on" September _28; 2016, after undertaking several studies like HAZOP (hazard and op­erability study),a robust LNG distri­bu tion, etc.

The company has also set up a storage and fe-gasification syste"m after incorporating standard operat· ing procedure and high·degree of safety features, the official said, adding that ' GUjarat-baseil Inox In­dia has bagged the contract for gas distribution to customers.

BPCL, according to the offiCial, has a success st0O' of 'LNG by Road Initi­ative' from its Dahej plant, wherein the company has already.completed

delivery of more ·than 5,000 "truck­loads of gas.

"The initiative in Kerala will be a new beginning of BPCL ill the South­ern region. and another 3·4 compan­ies have already approached' us for gas supply in a similar way," he said.

Industry sources here pointed out that BPCL has brought around 400 MMbru of LNG sourced from Aus­tralia by spot purchase and· un­J.qaded the consignment arthe. stor~ age facility offered by PlL in Kochi .

A part of the gas will be used by BPCL for its own use and the remain­big will be for'sale to various 1ndus­trial customers.

The spot purchase of the gas will benefit the public-sector petroleum company from avoiding various tax payments IIk~ , VAT. Following' the success of delivering gas to HLL in Thiruvananthapuram by road, PLL has been receiving good customer enquiries both from Kerala and out-side. " , '., \ .

More compa-nies have evinced 'in­terest in taking gas by trucks, and discussions are already on to finalise the tendering '''process with these companies, including a State-owned p'ublic se,ctof, PLL officials said.

The laying 'of pipelines by GAll in the Kochi-Mengaluru stretch is fast progressing, and officials expressed hope that the pipelines will be ready by December 2018.

Business Line Edition Delhi 6.4.2017 Page 11Height 2.84cm Width 21.99 cm

LNG producers tum to trading, risk-taking to retain market share Market changing rapidly; large volume long-term cont racts ~ard to come

Chiba, Japan, AprilS

Producers ofliquefied natural gas (LNG) have shot them­selves in the foot with over­supply, and face calls for flex­ibUity and greater competition from other fuels that may force them to take more risks and start trading just like other commodity dealers. Tha~s a big change for a

market long dominated bY large producers sucb as Royal Dutch Shell and BP who provide major Importers with fixed volumes under multi· decade contracts linked to the price of all

Qatar, Russia and elsewhere went on an investment spree that left them with a huge sup­ply overhang when demand in China and India developed more slowly than expected.

Crash In prices That, together with rising fuel competition from cna\ and re­newables, contributed to a more than 70 per cent crash in spot Asian LNG prices to un· der 56 per milUon British thermal units (mmBtu), In· creasing the pressure to grant more flexible contracts and better pricing options.

the industry are today much more difficult 10 obtain," said Steve Hill, executive Vice-pres­Ident of Shell Eastern Trading, during a gas conference In Ja­pan on We~nesday.

'LNG projects ... peed to take more market risks," he said.

JERA deal wtth Total In a sign ' of what might be ahead, Japan's JERA - the biggest single importer of LNG - and France's Total SA are set to strike its first deal soon with flexible volumes that are based on Asia LNG spot prices.

JERA's chief fuel transac­.dons officer, Hiroki Sato, con­firmed the imminent deal to Reuters on Wednesday tn an interview at the Gastech conference. ,

ture that answers the varying buyer needs," he said. Total did not respond to queries for comment on the deal.

Trading specialists Another thing about to change is that trading special­Ists - who buy commodities from producers to sell on to importers at a profit and who have so far played a smaller

role in LNG than they do in oil or coal - are jumping Into the game.

'People need to sit In the middle of the chain (to) provide the flexibility and meet the different customer needs," said Mike Utsler, chief operations officer for Aus­tralia's Woodside Petroleum.

Preparing to do just that, commodity merchant

Under the protection of these lucrative locked-in deals; producers In Australia,

"lbe LNG market is chan· glng rapidly, (and) the large volum.! long-term contracts that traditionally under­pinned the developmen,t of

'""There is no price war, but there is dearly competition under way [0 create a struc-

A membrane-fYpe LNG tanker is moored at a thermal power station in FUItSU, east ofTolcyo (nle photo) "UTE"

Trafigura th is week launched a standard master sales and purchase agreement (MSPA) for LNG trade, something already well established In other commodities.

'1'he industry is movingtoa situation where you can't just be a seller or a marketer or a trader," said Kerry Anne Shanks, head of gas and LNG Research in Asia at energy can­sultaney Wood Mackenzie. "You need to have middlemen positions."

Shanks also noted as an ex­ample of changes In the In­dustry how buyers such as JERA are starting to trade gas.

Unlocking new markets Woodside, which operates sev­erallarge LNG export facilities and is developing more, said producers also bad to create new markets amid oversupply.

"There's a big opportunity for much smaller scale ' de­mand ... Big, long-term con­tracts are not necessary in or­der 10 supply (such projects~" Utslersaid.

The thinking is similar at Shell. 'We are oying to unlock new gas markets ... by ioltiat­ing new small-scale LNG im­port terminals," Hill said.

New sectors, importers Smaller scale demand could come from new importers like Pakistan, which only started using LNG In the last two y~ars, or from new sectors like transportation.

Singapore's Pavilion Energy this week signed a memor· andum of understandjng with Total to supply the French energy major with LNG used as a ship fuel.

But LNG producers need to keep a watch on competition.

Oil still pomlnates transporta· tion, and cheap coal - seen by many as outdated due to high pollution levels - is stUl the biggest fuel source for electri­city, especially in fast-growing Asia.'

Wind and solar energy are also becoming competitive.

' Coal won't completely dis­appeat it will continue to be a competitor and a provider of energy solUtions, as will .... newables," said David Knipe, head of international gas at BP's integrated supply and trading unit

Still, the market should not expect producers and suppli· ~rs to subject themselves to market whlms. competition and geopolitics on large-scale ' projects, said Elizabeth Spomer, executive Vice-Presid­ent at TorontO-listed Veresen Inc and head of its Jordan Cove LNG project in Oregon.