Thursday, May 29, 2008
Fertiliser units to get highest gas allocation
The empowered group of ministers (EGoM) is understood to have finalised gas allocations for 2008-09, giving top priority to the fertiliser sector. Existing gas-based power plants have been given the second priority followed by city gas distribution (CGD) projects. The ad-hoc prioritisation for one year has been set up to decide the fate of Reliance Industries’ KG basin gas. The company is expected to pump 40 million standard cubic meter per day (mmscmd) of gas from the third quarter this year. It is learnt from government sources that a final gas utilisation policy is still being debated. “An interim arrangement for the year 2008-09 has been made so that RIL would be able to sell its KG basin gas, which is expected in this year. A long-term policy on gas utilisation would be determined later,” a source present in the eGoM said. An eGoM is the final authority on the subject assigned and its decision does not require the Cabinet’s ratification. It is learnt that for 2008-09 those fertiliser units that are stranded would get priority with a total allocation close to 50 mmscmd. This is higher than last year’s allocation when fertiliser units got just about 30 mmscmd of gas. Similarly, only existing gas-based power plant (read no new power plant) would get priority in gas allocation with expected 30 mmscmd allocation. The decision has, however, left the power ministry sulking as it was expecting much higher allocation to run gas-based power projects to full capacity. The power sector is also last in the priority order for gas allocation for greenfield projects. Power ministry had earlier sought allocation of 77 mmscmd of gas for existing and upcoming projects . The power sector requires 60 mmscmd of gas to run 13,334 mw of existing gas-based projects at 90% plant load factor (PLF). It requires additional gas for running 1,285 mw of gas-based capacity that is ready but is not being commissioned due to shortage of fuel, and another 1,002 mw is running on high-cost liquid fuel that needs to shift to gas to become economical. “The proposed allocation of 30 mmscmd for 2008-09 is even lower than last year’s allocation of about 36 mmscmd allocation. The PLF of gas-based power plants is already low at about 50%, this could further get affected this year,” an official source said. The allocation formula has, however, finalised 5 mmscmd gas allocation for CGD projects that would help to keep cities pollution free as per the direction of the Supreme Court. Surprisingly, industry and other sectors, including LPG, petrochemicals, refineries, sponge iron units etc, would also get a lion’s share of gas allocation this year with release of close to 50 mmscmd of gas. Against a demand of about 180 mmscmd of gas during 2007-08, the actual supplies were to the tune of just 102 mmscmd (88 mmscmd domestic production and 26 mmscmd imports). The total allocation of gas is expected to the tune of 140 mmscmd this year, leaving a huge demand-supply mismatch.
India GSPC plans 5 mln T/yr LNG terminal
India's Gujarat State Petroleum Corp Ltd (GSPC) plans to build a five million tonne a year liquefied natural gas (LNG) terminal at the Mundra port in western India by 2013, a top company official said on Wednesday.
"To begin with it will have a capacity of five million tonnes, and will go up to 20 million tonnes," Managing Director D.J. Pandian told Reuters in a telephone interview from Gujarat.
India, Asia's third-largest oil consumer, is encouraging use of natural gas to control its oil import bill and rein in inflation but there is not enough supply to satisfy rising demand.
State-owned GSPC has hired an international consultant to prepare detailed feasibility report of the project, Pandian said.
"The report will be ready in four to six months from now, then only we can work out the costing and finalise the capacity," he said.
GSPC would hold a 50 percent stake in the project while India's Adani group has agreed to buy 25 percent, he said.
"We are talking to Essar for remaining stake. HPCL has also approached us for buying 25 percent. Let's see, if Essar, HPCL don't join us then we will go for IPO," Pandian said.
HPCL (HPCL.BO: Quote, Profile, Research) is a state-run refining and retailing firm.
Gas demand in India, currently around 179 million standard cubic metres a day (mmscmd), is far short of the supply of about 95 mmscmd. Supply is expected to double by 2009 after new gas fields, including those of Reliance Industries (RELI.BO: Quote, Profile, Research), start production.
India's Petronet LNG (PLNG.BO: Quote, Profile, Research) plans to double its capacity to 10 million tonnes of LNG, while Britain's BG Group Plc (BG.L: Quote, Profile, Research) plans to import LNG in India this year, adding to domestic supplies, but Pandian said the demand was rising.
Analysts say there is enormous potential for using compressed natural gas in vehicles once availability increases, while power and fertiliser units would also switch to natural gas.
Goldman Sachs estimates the share of natural gas in India's coal-dominated energy basket will double to 18 percent by 2015 and stabilise at 20 percent by 2025.
He said the LNG was not easily available currently, but by the time the firm's terminal is set up, enough gas would be there in the market.
A GSPC group firm Gujarat State Petronet Ltd (GSPT.BO: Quote, Profile, Research) is laying a pipeline network of 2,500 kilometres in the state, which can be used by GSPC to transport the re-gassified LNG to the demand centres. (Editing by Ranjit Gangadharan)
"To begin with it will have a capacity of five million tonnes, and will go up to 20 million tonnes," Managing Director D.J. Pandian told Reuters in a telephone interview from Gujarat.
India, Asia's third-largest oil consumer, is encouraging use of natural gas to control its oil import bill and rein in inflation but there is not enough supply to satisfy rising demand.
State-owned GSPC has hired an international consultant to prepare detailed feasibility report of the project, Pandian said.
"The report will be ready in four to six months from now, then only we can work out the costing and finalise the capacity," he said.
GSPC would hold a 50 percent stake in the project while India's Adani group has agreed to buy 25 percent, he said.
"We are talking to Essar for remaining stake. HPCL has also approached us for buying 25 percent. Let's see, if Essar, HPCL don't join us then we will go for IPO," Pandian said.
HPCL (HPCL.BO: Quote, Profile, Research) is a state-run refining and retailing firm.
Gas demand in India, currently around 179 million standard cubic metres a day (mmscmd), is far short of the supply of about 95 mmscmd. Supply is expected to double by 2009 after new gas fields, including those of Reliance Industries (RELI.BO: Quote, Profile, Research), start production.
India's Petronet LNG (PLNG.BO: Quote, Profile, Research) plans to double its capacity to 10 million tonnes of LNG, while Britain's BG Group Plc (BG.L: Quote, Profile, Research) plans to import LNG in India this year, adding to domestic supplies, but Pandian said the demand was rising.
Analysts say there is enormous potential for using compressed natural gas in vehicles once availability increases, while power and fertiliser units would also switch to natural gas.
Goldman Sachs estimates the share of natural gas in India's coal-dominated energy basket will double to 18 percent by 2015 and stabilise at 20 percent by 2025.
He said the LNG was not easily available currently, but by the time the firm's terminal is set up, enough gas would be there in the market.
A GSPC group firm Gujarat State Petronet Ltd (GSPT.BO: Quote, Profile, Research) is laying a pipeline network of 2,500 kilometres in the state, which can be used by GSPC to transport the re-gassified LNG to the demand centres. (Editing by Ranjit Gangadharan)
MARKET PREDICTION
GLOBAL MARKET IS OPEN POSITIVE AFTER EASING OF CRUDE TO $130.
BUT STILL PAIN LEFT IN US BECAUSE OF HOUSING DATA AND CONSUMER SPENDING IS SUPPORTING ECONOMY,RS VS $ 42.73 ALMOST AT THE SAME LEVEL OF YEASTERDAY,TODAY IS CLEARING DAY NIFTY TUNES INTO PREMIUM FROM DINCOUNT FOR SHORT CLOSER, TOTAL MARKET O I IS 89 K CR OUT O I PREVEIL 46 K CR IN JUNE AND 43 K CR IN MAY SERISE LAST.
PUT CALL RATIO INCHED UP A BIT TO 1.29%.LEVEL OF NIFTY 4930-4980-5020 GO LONG FROM 4930 WITH S L OF 4900 AND GO SHORT FROM 5020 LEVEL WITH S L OF 5030.
BFSI AND IT AND FMCG LOOKS POSITIVE.
HAVE A NICE TRADING DAY
BUT STILL PAIN LEFT IN US BECAUSE OF HOUSING DATA AND CONSUMER SPENDING IS SUPPORTING ECONOMY,RS VS $ 42.73 ALMOST AT THE SAME LEVEL OF YEASTERDAY,TODAY IS CLEARING DAY NIFTY TUNES INTO PREMIUM FROM DINCOUNT FOR SHORT CLOSER, TOTAL MARKET O I IS 89 K CR OUT O I PREVEIL 46 K CR IN JUNE AND 43 K CR IN MAY SERISE LAST.
PUT CALL RATIO INCHED UP A BIT TO 1.29%.LEVEL OF NIFTY 4930-4980-5020 GO LONG FROM 4930 WITH S L OF 4900 AND GO SHORT FROM 5020 LEVEL WITH S L OF 5030.
BFSI AND IT AND FMCG LOOKS POSITIVE.
HAVE A NICE TRADING DAY
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