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IndianOil top bidder for Reliance's KG gas for second auction in row
IOC, the nation's largest oil firm, has walked away with half of the natural gas that Reliance Industries Ltd and its partner bp of the UK offered in the latest auction of the fuel
Indian Oil Corporation (IOC), the nation's largest oil firm, has walked away with half of the natural gas that Reliance Industries Ltd and its partner bp of the UK offered in the latest auction of the fuel used to generate power, produce fertilizer, turned into CNG and used for cooking purposes.
IOC got 2.5 million standard cubic meters per day out of the 5 mmscmd of gas auctioned last month, sources with knowledge of the matter said.
The oil refining and marketing company, which was the top bidder even in the previous auction of gas from the eastern offshore KG-D6 block of Reliance-bp, bid the volumes on behalf of seven fertilizer plants.
City gas companies including GAIL Gas Ltd, Mahanagar Gas Ltd, Torrent Gas, Indian Oil Adani Gas Ltd, and Haryana City Gas secured a total of 0.5 mmscmd of gas for turning into CNG for sale to automobiles and piped to household kitchens for cooking purposes.
State gas utility GAIL and refiner Hindustan Petroleum Corporation Ltd (HPCL) got 0.6 mmscmd each while Gujarat State Petroleum Corp (GSPC) walked away with 0.5 mmscmd and Shell another 0.2 mmscmd, they said.
Reliance-bp, which two years back reversed the declining trend in domestic gas output by bringing to production their second wave of discoveries in the KG-D6 block lying in deepsea of the Bay of Bengal, are now ramping up supplies.
Natural gas, a cleaner-burning, efficient fuel, is being seen as a transition fuel for nations to move from polluting hydrocarbons to zero-emission fuels.
Reliance-bp in the latest tender offered 5 mmscmd of gas for a period of 3 years starting June 1. Bidders were asked to quote a variable 'v' over and above the JKM price, the spot market benchmark for liquefied natural gas (LNG) delivered to Japan and South Korea.
Sources said the e-auction started on May 19 and ended on May 23 - the longest duration of an auction since the time operators were allowed to sell fuel through open tender.
At the end of the e-auction, gas was sold to 16 buyers at a price of JKM + (plus) USD 0.75 per mmBtu for 3 years, they said adding at the current JKM price of USD 9.2 per mmBtu, the price for KG-D6 gas comes to around USD 10.
This rate compares with the capped price of USD 6.5 per mmBtu that Oil and Natural Gas Corporation (ONGC), the state-owned behemoth, gas for fuel produced from legacy or old fields.
Reliance-bp had in April sold 6 mmscmd of gas. IOC had walked away with almost half of the 6 mmscmd of gas sold in an e-auction on April 12 while GAIL bought 0.7 mmscmd, Adani-Total Gas Ltd 0.4 mmscmd, Shell 0.5 mmscmd, GSPC 0.25 mmscmd and IGS another 0.5 mmscmd.
In that auction too, the final bid price came at USD 0.75 per mmBtu premium over the JKM price (JKM + USD 0.75 per mmBtu), sources said.
But the bidders will only have to pay the ceiling or the cap price that the government fixes bi-annually for gas produced from difficult areas, such as deepsea and high-temperature, high-pressure (HTHP).
The ceiling price for April to September is USD 12.12 per mmBtu.
Gas produced from wells drilled below the seabed is used to produce electricity, make fertiliser, or turned into CNG for powering automobiles or piped to household kitchens for cooking as well as in industries.
In May last year, Reliance-bp had auctioned 5.5 mmscmd of incremental gas from the newer discoveries in the KG-D6 block, benchmarking it to the same JKM gas marker.
The price discovered in that e-auction came at a USD 0.06 discount to the JKM (Japan-Korea Marker) LNG price.
Prior to that, the duo had sold 7.5 mmscmd of gas at a discount of USD 0.18 per mmBtu to JKM.
Reliance has so far made 19 gas discoveries in the KG-D6 block. Of these, D-1 and D-3 -- the largest among the lot -- were brought into production in April 2009, and MA, the only oilfield in the block, was put into production in September 2008.
While the MA field stopped producing in September 2018, output from D-1 and D-3 ceased in February 2020.
Since then, Reliance-bp is investing USD 5 billion in bringing to production three deepwater gas projects in block KG-D6 -- R-Cluster, Satellites Cluster, and MJ -- which together are expected to meet about 15 per cent of India's gas demand by 2023.
Reliance climbs eight spots to 45th rank on Forbes' Global 2000 list
Billionaire Mukesh Ambani's Reliance Industries Ltd. climbed eight spots to the 45th rank, the highest for an Indian company on Forbes' latest Global 2000 list of public companies worldwide..
Billionaire Mukesh Ambani's Reliance Industries Ltd. climbed eight spots to the 45th rank, the highest for an Indian company on Forbes' latest Global 2000 list of public companies worldwide.The Global 2000 ranks the largest companies in the world using four metrics: sales, profits, assets, and market value, Forbes said while releasing the 2023 ranking of the world's top 2,000 companies. JPMorgan, America's biggest bank with $3.7 trillion in assets, is at the top of the list for the first time since 2011 and has emerged stronger from this spring's regional banking crisis, with more deposits and opportunistic acquisition of the failed First Republic Bank, it said.
Warren Buffett's Berkshire Hathaway which topped the list last year, fell to the 338th position in the latest list due to unrealised losses in its investment portfolio. Saudi oil behemoth Aramco is in 2nd position followed by three giant-sized state-owned Chinese banks. Technology giants Alphabet and Apple are at 7th and 10th place, respectively.
Oil-to-telecom conglomerate Reliance, with sales of $109.43 billion and a profit of $8.3 billion, is the top-most-ranked Indian firm at the 45th spot, climbing from the 53rd position it had held in last year's ranking. Reliance has ranked ahead of well-known names like Germany's BMW Group, Switzerland's Nestle, China's Alibaba Group, US-based Procter & Gamble and Japan's Sony.
State Bank of India climbed to the 77th spot from 105th in the 2022 ranking. HDFC Bank is at 128th position (153 in 2022) and ICICI Bank is at 163 (204 in 2022). Other Indian firms on the list include state-owned Oil and Natural Gas Corporation (ONGC) at 226 and HDFC at 232. Life Insurance Corporation (LIC) made its maiden entry at 363 while Tata Consultancy Services (TCS) slipped to 387th rank from 384 last year.
Axis Bank (423), NTPC (433), Larsen & Toubro (449), Bharti Airtel (478), Kotak Mahindra Bank (502), Indian Oil Corporation (540), Infosys (554), Bank of Baroda (586), Coal India (591), Tata Steel (592), Hindalco (660) and Vedanta (687) are other notable Indian firms on the list. In all, 55 Indian firms figured on the list.
Three firms of the conglomerate helmed by billionaire Gautam Adani, whose group faced a scathing attack from a U.S. short-seller earlier this year that lead to him losing the world's third richest tag, figured in the list. they were: Adani Enterprises at 1062, Adani Power at 1488, and Adani Ports & Special Economic Zones at 1598.
Adani Group revives Mundra PVC project, gets credit line worth Rs 14,000 cr
After a four-month suspension, Adani Group has revived its investment plan for India's largest polyvinyl chloride (PVC) plant, Mundra Petrochem Ltd, Mint reported on Wednesday. For this, it has received in-principle approval for a credit line of up to Rs 14,000 crore from several banks. The project's total cost is expected to be around Rs 35,000 crore.
A person aware of the matter was cited in the report as saying that at least half a dozen local banks are part of the consortium that has approved lending money to the group. Most of the funds may come from state-run lenders, and private lenders will lend at least Rs 4,500 crore. The group will seek an additional $2 billion for the Mundra project after fully utilizing the initial $2 billion sanctioned.
Earlier this year, Adani Group announced that it was putting major equipment procurement and site construction activities for the Rs 34,900 crore petrochemical project at Mundra on hold as the project had "not yet tied up finances".
MRPL shelves refinery growth to focus on chemicals bet
India’s Mangalore Refinery and Petrochemicals Ltd. shelved a planned refinery expansion to focus on boosting its petrochemical production capacity, which may cost as much as Rs. 47,000 crores ($5.7 billion). "A shifting energy landscape primarily driven by the uptake of electric vehicles has prompted MRPL to focus its efforts on increasing output of chemicals that can be used for plastics and paints," Sanjay Varma, managing director, said in an interview.
"The company’s major investment will be in a new production plant in Karnataka," he said. Indian and Chinese refiners along with majors such as Exxon Mobil Corp. are betting on petrochemicals to underpin future oil demand as the transition to electric vehicles chips away at consumption of transport fuels. The new MRPL plant is likely to be operational in the next three to five years," said Varma. "India is a net-importer of petrochemicals and the country is facing a “make-or-buy” decision," said Larry Tan, vice president of chemical consulting in Asia at S&P Global Commodity Insights in Singapore. “There is better value to capture production locally.”
MRPL — majority owned by
state-controlled Oil and Natural Gas Corp. — plans to spend around 300-400 billion rupees on
the new plant, and a further 60-70 billion rupees on smaller petrochemical units, Varma said.
"The investment will help “de-risk MRPL’s future” during the energy transition," he added.
"The investment will contribute to ONGC’s overall spend of 1 trillion rupees to expand its
petrochemical capacity to 8 million tons a year by 2030, from 3.4 million tons," according to a
spokesman for ONGC.
While MRPL shelved plans to boost the capacity of its refinery on the west coast to 18 million
tons a year from 15 million tons, the plant is still running above operational levels, said Varma.
The refinery operated at a record average of 17.1 million tons a year over the 12 months ended.
GAIL infuses Rs 2,100 crore in JBF Petrochemicals
India's
largest gas firm GAIL has infused Rs 2,100 crore in insolvent
private-sector chemical company JBF Petrochemicals Ltd that it had
acquired in bankruptcy proceedings. The firm had in March won bankruptcy court
approval for taking over JBF.
In a stock
exchange filing, GAIL (India) Ltd said it has "infused Rs 2,101 crore
(equity - Rs 625 crore and debt - Rs 1,476 crore)" in the committed
bankruptcy resolution plan.
"Accordingly,
JBF has become a wholly-owned subsidiary of GAIL with effect from June 1,
2023," it said.
GAIL had
outbid a consortium of Indian Oil Corporation (IOC) and Oil and Natural Gas
Corporation (ONGC) in the insolvency process run by IDBI Bank to
recover Rs 5,628 crore of dues to financial and operational creditors.
JBF
Petrochemicals was incorporated in 2008 to set up a 1.25 million tonne per
annum capacity purified terephthalic acid plant at Mangalore Special Economic
Zone.
IDBI and
other banks had lent JBF money to build the PTA plant for USD 603.81 million
with technology support from BP and 50,000 tonnes per month of the feedstock of
paraxylene from state-controlled chemical producer OMPL.
The plant,
which is a backward integration project for JBF Industries' polyester plants,
was commissioned in 2017 but stopped operations after the company defaulted on
its loans in the same year.
The default led to the lenders dragging it to
corporate insolvency and bankruptcy (IBC).
Lenders and
operational creditors, including employees, claimed Rs 7,918 crore in dues but
only Rs 5,628 crore in dues, including Rs 712 crore towards operational
creditors were admitted.
Initially,
three parties - a consortium of IOC-ONGC, MPCI Pvt Ltd and GAIL - submitted
bids in August 2022 to acquire JBF.
They were
asked to improve their financial proposals and cure defects. At the last date
on September 22, 2022, revised resolution plans were received only from the
IOC-ONGC consortium and GAIL, the NCLT order said.
GAIL has an
existing petrochemical plant at Pata, Uttar Pradesh, with a polymers production
capacity of 8,10,000 tonnes per annum. It is aiming to build a propane
dehydrogenation plant in Usar, Maharashtra, by next year, which will have a
nameplate capacity of 5,00,000 tonnes a year of polypropylene.
BPCL unveils Rs 49,000 cr petrochemical, capacity expansion project at MP’s Bina refinery
Bharat Petroleum on Wednesday announced Rs 49,000 crore petrochemical and capacity expansion project at its Bina Refinery. One of the main components of the expansion projects is the Ethylene Cracker Project which will drive the production of essential petrochemicals. The project includes establishment of an Ethylene Cracker complex, downstream petrochemical plants as well as expansion from 7.8 MMTPA to 11 MMTPA.
The Bina refinery expansion from 7.8 MMTPA to 11 MMTPA will help BPCL meet the growing demand of petroleum products in central and northern India. The expansion will also help provide necessary feedstock to EC complex. The petrochemical plant, on the other hand, will cater to the growing domestic demand, according to a company release.
Besides this, BPCL is also investing around Rs 2,753 crore in petroleum oil lubricants (POL) and lube oil base stock (LOBS) installations in Maharashtra’s Rasayani. The project aims to bolster storage capacity, and smoothen supply chain and streamline distribution of essential petroleum products.
The oil and gas company will also set up two 50 MW wind power plants in Madhya Pradesh and Maharashtra for captive consumption at Bina and Mumbai refineries respectively at a cost outlay of around Rs 978 crore. The wind power plants will contribute to eco-friendly operations.
The release read: “These investments will not only strengthen the company's position in the petrochemical industry but also contribute to the economic growth and development of the regions where the projects are based”.
Commenting on BPCL’s expansion plans, CMD G Krishnakumar said the ONGC’s foray into petrochemicals and other expansion plans are in sync with the central government’s Aatmanirbhar Bharat mission. He added these projects will generate employment opportunities apart from boosting sustainable capabilities and creating a net zero future.
Krishnakumar said: “Wind Energy and new age Petroleum Oil Lubricants installations built for sustainable processes, this is a watershed moment in our strategic endeavor to be at the forefront in meeting the rapidly growing demand for energy and Petrochemical products in India”.
Chemplast Sanmar signs deal with a global firm to supply an advanced intermediate
Chemplast Sanmar Ltd. has announced that its custom-manufactured chemicals division has signed a letter of intent (LOI) with a global agrochemical innovator to manufacture an advanced intermediate.
The name of the company has not been disclosed. The LOI covers a period of 5 years.
“We anticipate commercial supplies to start from the Q4 of FY24. This new product will be manufactured at our new multi-purpose production block which is on track for commissioning during the second quarter of FY24,” Krishna Kumar Rangachari, Deputy Managing Director, Chemplast Sanmar Ltd said in a statement.
This development is in continuation of its earlier announcement concerning another LOI (signed in November 2022 with a global innovator company for supplying an advanced intermediate for a new active ingredient), and its announcement in February 2023 to kick-start the next phase of expansion of the multi-purpose facility.
The custom-manufactured chemicals division produces what customers demand. It produces advanced intermediates for agrochemical, pharmaceutical, and fine chemical innovators. The division has invested in state-of-the-art production blocks, pilot plants, and R&D facilities to handle a wide range of chemistries and processes.
GAIL to build $4.89-bn ethane cracker near LNG import plant in West India
GAIL (India) Ltd, the country's top gas supplier, plans to build a 400-billion-rupee ($4.89 billion)
ethane cracker near its liquefied natural gas (LNG) import plant in Western India, two sources
with direct knowledge of the matter said, as it seeks to meet an expected surge in demand.
Indian companies are boosting their petrochemical production capacity as the expanding
economy boosts the need for goods ranging from plastics to paints and adhesives. A cracker
produces ethylene, required for products such as plastics. Demand for petrochemicals could
nearly triple by 2040, according to estimates by top refiner Indian Oil, forcing companies to make
big investments to set up new facilities across the country.
GAIL is looking for land in the coastal region of Dabhol in Maharashtra state for the 1.5 million
tonnes a year (mtpa) cracker project, one of the sources told Reuters. GAIL operates a 5 mtpa
LNG plant at Dabhol. The company plans to import ethane from the United States for the project,
the source said.
GAIL is also exploring the possibility to acquire land in Madhya Pradesh, which neighbours
Maharashtra, if a deal in Dabhol doesn't materialise, the person said. The proposed dual-feed
cracker will also have capability to crack up to 40% liquefied petroleum gas (LPG), enabling the
option to switch to less expensive feedstock to maximise margins.
India's per capita petrochemical consumption is about one-third of the global average. Asia's
third-largest economy annually consumes 25 million to 30 million tonnes of petrochemicals.