Hike in petroleum product prices to wait till polls
With international crude oil prices hovering around $110 a barrel and the subsidy bill threatening to balloon, touching around Rs. 1,40,000 crore this fiscal, the oil marketing companies (OMCs) have been denied "political go-ahead" to raise the prices of petrol, diesel and domestic LPG due to Assembly polls in Punjab, Uttar Pradesh , Uttarakhand , Goa and Manipur.
The United Progressive Alliance-Il is wary of raising the prices of petroleum products as it feels that not only will this add to inflation, which has been cooling down for the last few weeks, but also upset the voters and work to the disadvantage of the Congress and its allies.
Courtesy: The Hindu, New Delhi, January 19, 2012
Hike in petroleum product prices to wait till polls
Hydrogen-powered three-wheeler ‘HyAlfa’ makes debut
The world’s first hydrogen-powered three-wheeler, ‘HyAlfa’, was showcased at the 11th Auto Expo here today. Part of a development project dubbed ‘DelHy 3w’, a fleet of 15 HyAlfa three-wheelers will run on an experimental basis at Pragati Maidan, where a hydrogen refuelling station has also been set up. The India Trade Organisation Promotion (ITPO) will use the vehicles on an experimental basis.
HyAlfa has been developed under a joint project by the United Nations Industrial Development Organisation (UNIDO) International Centre for Hydrogen Energy Technologies (ICHET), Mahindra & Mahindra and IIT-Delhi, with support from the Ministry of New and Renewable Energy.
“The aim of this project is to convert vehicles so that they can carry and use hydrogen — a carbon-free fuel — and thus remove all pollutants,” Mahindra & Mahindra President (Automotive and Farm Equipment Sectors), Mr Pawan Goenka, told reporters here. He said the vehicle is not yet ready for commercial production and further fine-tuning will be required before moving in that direction. “Moreover, we also have to look at the commercial viability of running a hydrogen-powered three-wheeler as the cost of hydrogen will be around Rs 250 per kg, which is not affordable at all,” he said.
Asked about the possible price of HyAlfa, he said: “When the product is on mass production, it will cost Rs 20,000 to Rs 25,000 more than a CNG three-wheeler.” On an average, a CNG three-wheeler costs close to Rs 2 lakh. Commenting on the development, UNIDO-ICHET Managing Director, Mr Mustafa Hatipoglu, said the DelHy 3W project aims to demonstrate hydrogen technologies developed by Indian partners for the Indian transport sector. Project coordinator, IIT-Delhi Professor L.M. Das, said HyAlfa marks a journey of 20 years from “laboratory to land’’. ITPO Chairperson-cum-Managing Director, Ms Rita Menon, said the hydrogen-powered three-wheeler could play a role in moving towards a newer, sustainable and eco-friendly mode of transportation. “We are happy to be a part of this project and are especially excited about the cargo version,” she said, adding that her organisation plans to submit a report within three months on the vehicle’s performance to the project organisers.
…from the pages of THE HINDU BUSINESS LINE newspaper.
Mahindra Solar commissions 5 MW unit
Mahindra Solar announced the commissioning of a 5-megawatt grid connected solar power plant using crystalline silicon modules in Jodhpur, Rajasthan. The cost per MW is in the range of Rs 9-10 crore.The plant has been set up under the Jawaharlal Nehru National Solar Mission (JNNSM) policy and had the distinction of generating the highest output per MW of any solar plant in India with cutting-edge tracker technology that maximises energy from the sun. The plant site is equipped to evacuate 55 MW and the company intends to scale up the capacity to match the evacuation capacity. Mr Anand Mahindra, Vice-Chairman and Managing Director, Mahindra & Mahindra, said, “We aim to be one of the top three companies in this industry.”
Essar Oil to hike Vadinar refinery capacity to 18 mtpa by March
Ahmedabad, Jan. 9::::::Essar Oil Ltd, a subsidiary of Essar Energy, on Monday announced the successful commissioning of the amine regeneration unit (ARU), a part of the Phase-I expansion at its Vadinar refinery in Gujarat, whose completion will increase the refinery's capacity from the existing 14 million tonnes per annum (300,000 barrels per day) to 18 mtpa (375,000 bpd).
The completion of expansion will also increase its complexity from 6.1 to 11.8. (The Refinery Complexity Index is a cost-based index. It provides insight into such things as refinery construction costs, replacement value, conversion capability and product slate.) The project is nearing completion and increased throughput of 18 mtpa will commence by March, the company said here.
An optimisation project is also under execution at the refinery to further increase the capacity to 20 mtpa (405,000 bpd) by September. The capacity expansion, complexity enhancement and subsequent optimisation will give the Vadinar Refinery the capability to process nearly 87 per cent ultra-heavy crudes, which are lower cost than light crudes.In terms of product yield, the expanded Vadinar Refinery will have the flexibility to produce higher value products, including pet coke, Mr Lalit Gupta, Managing Director and CEO, Essar Oil, said.
The ARU, with 8 mtpa design capacity, is one of the largest such units in the world. Essar Oil is the first refinery in India that will use in the ARU a specially-formulated amine UCARSOL, from Dow Chemicals, that helps achieve better efficiency in gas treating and reduces energy consumption in the ARU.
02 Jan 2012
GUWAHATI: Guwahati Refinery, India's first public sector refinery, celebrated its golden jubilee on Sunday. The day was marked by an inaugural function in the early hours of New Year's Day with a tribute at the Sahid Bedi (Martyr's column) of the Refinery Workers' Union office complex, which was attended by refinery employees, senior officials and the public.
With an initial capacity of 0.75 million metric tonne per year, the Guwahati refinery was inaugurated by the first Prime Minister of India, Jawaharlal Nehru on January 1, 1962 and was dedicated to the nation as a New Year's gift. The refining capacity was subsequently enhanced to 1.0 MMTPA and with INDMAX, the pilot plant for first in-house technology of Indian Oil, the ISOSIV and Hydrotreater the Refinery has been able produce eco-friendly fuels.
The Refinery produces various products and supplies them to the entire northeast and beyond. The Refinery has planned a month-long celebration including a mural on the history and growth of refinery, a herbal park, CSR initiatives in the health sector, skill development programmes for youth and women and release of an audio album.
On Sunday, a reunion of the pioneers and retired employees was organized. They were felicitated by the chief guest, Sudhir Bhalla, Director(HR), IndianOil for their efforts and dedication in transforming a dream into reality. Guwahati Refinery general manager said that the refinery came into existence because of the contribution of the pioneers. Courtesy: TOI
NZ Co LanzaTech to help IOC, JSPL set up bio jet fuel plant
MUMBAI: The New Zealand-based renewable energy company LanzaTech is in talks with its partners here - IndianOil and Jindal Steel & Power - to help them set up plant to produce commercial bio jet fuel from ethanol, a top company official has said. As a first step, LanzaTech will open an office in the country in the first half of 2012 as part of its plan to expand its operations here, LanzaTech vice-president for business development for Asia Pacific Prabhakar Nair said.
IndianOil and Jindal Steel & Power (JSPL) are already in discussions for collaborating to accelerate deployment of LanzaTech's technology to produce fuel ethanol from industrial off-gases , he said. "We have done our best to bring these partners (Jindal and IOC) together . While Jindal Steel & Power has the off-gases , IndianOil has facilities to make, store and supply aviation fuel. We expect them to take a decision in a year and a half to set up a demonstration scale plant," Nair said.
However, he said, the proposed plan only includes technology sharing and not any investment in the plant and machinery . Nair also noted that British airline Virgin Atlantic has already committed that it will begin trials using renewable bio jet fuel on its Shanghai- New Delhi-London Heathrow route within two to three years. It may be recalled that Virgin Atlantic had announced a partnership with LanzaTech to conduct such trials last October and its chairman Richard Branson had even visited the New Zealand facilities, where the technology was demonstrated to him.
Besides, the European Union will begin allocating carbon emission quotas to airlines operating flights to and from the Union from today and Virgin Atlantic believes this development will take it well beyond its pledge of a 30 percent carbon cut per passenger km by 2020. "Globally , the aviation industry's current daily demand is around 5 million barrels of aviation fuel. Even if 10% of this is substituted with LanzaTech's aviation bio jet fuel, it will be a big market for us," Nair said.
LanzaTech has the technology to convert carbon monoxide, syngas as well as steel mill off-gases into ethanol and is in talks with all major steel producers in India, including JSPL, Posco and SAIL, he said. "China's demo scale plant at Bao Steel Shanghai is scheduled for the first quarter of 2012, which will produce 1 lakh gallons of ethanol annually. We expect JSPL and most likely IOC to begin working on a similar plant here. We hope Virgin's commitment to use bio jet fuel for trials is likely to encourage our partners," he said.
As recently as last December 5, the US awarded $7.7 million in Federal Aviation Administration contracts to eight biofuel-related companies to develop 'dropin' jet fuels that can be used without changing engine systems or airport fueling infrastructure, out of which deals worth $3 million were bagged by Lanza-Tech alone. This amount is over-and-above the funds allotted last June by the US Defence Advanced Research Projects Agency for research on eco-friendly and low cost jet fuel from sources like rich carbon monoxide, Nair said.
Oil is still indispensable
Year 2011 was been a year of records for the oil business. It was a year when despite the sovereign debt tumult in Europe, the consumer “balance sheet”, recession in the US and the general economic slowdown in the BRIC countries, the price, demand, revenues and expenditures related to petroleum have all touched historic highs. The year has reaffirmed the indispensability of oil and the vulnerability of countries that, either for reasons of geology or policy, are stuck in the groove of import dependence. It has provided a touchstone for the Ministry of Petroleum to set its policy priorities for 2012.
Over the past 12 months, the price of the benchmark light Brent crude oil has averaged $110/barrel. This is the highest average price in real and nominal terms since Colonel Drake first struck oil in 1859 in the small timber town of Titusville in North Pennsylvania. Global demand has, during this period, hovered just below 90 million barrels. Here too, the figure has touched a historic high. OPEC has, in consequence, earned over a trillion dollars. Only once before in 2008 has their revenue crossed this mark. On the flip side, oil importing countries and in particular, China and India, have seen a record outflow of foreign exchange on their crude oil account. The general consumer too has spent a record proportion of his income on energy for lighting, heating and transportation. Caught between the pincer of squeezed earnings and high prices, thousands have been pushed into “fuel poverty”, especially in countries that do not subsidise energy.
These records throw into sharp relief the pivotal and enduring significance of petroleum. Sure, the price of oil may slip back into double digits in 2012. For demand is declining and production from countries like Libya and Iraq, which had been convulsed by geopolitics, is now re-entering the market. But such a slip, if it did occur, must not be grounds for complacency — at least not in economies like India that are moving into their next, more energy-intensive, phase of development and where their emergent, urbanising middle class is looking to trade up from a cycle to a two-wheeler to a Nano equivalent. For there are few, if any, immediately available commercial alternatives to oil, especially as a transport fuel. CNG (compressed natural gas) for example which has been mandated by the Supreme Court as the fuel for our buses, taxis and 2-wheelers in major cities has a low energy density and cannot therefore be a substitute for the diesel used by the heavy duty long haul transporters. LNG (liquefied natural gas) on the other hand, which has a higher energy density and could, therefore, be the substitute, cannot be used without the development of expensive infrastructure and the redesign and retrofitting of existing engines. The fundamentals of demand and supply do not in short provide a solid base for assuming a prolonged downward shift in prices.
It is with this backdrop of 2011 that the petroleum ministry should review its policy towards exploration and production (EP) of hydrocarbons. It should do so also because of the worsening imbalance between demand and supply. Today India imports more than 80 per cent of its crude oil requirements. EP has long been a policy priority for the ministry. To reiterate that it should occupy pole position in its agenda is not therefore an original thought. But in recent months the signals emanating from the ministry have suggested that there is a gap between rhetoric and practice.
The rhetoric encourages the involvement of private capital. It accepts that EP is an inherently risky and uncertain activity involving not just the challenge of locating hydrocarbons but also, once located, the challenge of developing and producing the hydrocarbons on a commercially sustainable basis. It also accepts that to harness its hydrocarbon potential, India must bring to bear the optimum combination of capital, technology and operational expertise into EP and create a policy framework that attracts the broadest spectrum of petroleum companies from both the public and private sector.
Unfortunately, in practice, things are different. The industry is concerned at the reinterpretation of the contractual clauses related to tax, marketing and prices. They are questioning the rationale behind the continual debate over operating practices. Their foreheads are creased with worry about what they regard as rigidity and lassitude in decision making. Whether warranted or not, this perception has cast a somewhat ambivalent pallor on the EP environment. It is a situation that the country can ill afford. For with the end of the “era of easy oil” and the reality that new discoveries will most likely be found in harsh terrain and geologically complex structures, the private sector is a necessary factor for EP success. This is not to dilute the role of the public sector. In fact, some of the major EP breakthroughs in recent years have been spearheaded by state-owned companies. The unlocking of billions of barrels by PetroBras — the Brazilian PSU — in the presalt reservoirs of the Santos basin in Brazil is a case in point. It is merely to emphasise that private companies must not be deterred. Their contribution to the production of hydrocarbons in India is already material. In 2010-11, for instance, they produced 10.67 mt and 25.5 bcm of oil and gas respectively up from 5.07 mt and 7.72 bcm in 2006-07.
Those of us who have followed the corruption scandals that have bedevilled governance can appreciate the pressures imposed on officials by the sword of Damocles wielded by the CBI, CVC and CAG. We can understand why, under such circumstances, “acts of omission” are deemed safer than “acts of commission”. But this cannot justify ignoring the underlying message of 2011. EP policy must be reinvigorated and if not done the country will pay a huge and enduring price in terms of energy security and economic growth. The writer is chairman of the Shell Group in India.
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