Petronet LNG aims to lease out about two-thirds of the capacity at its Dahej import terminal in Gujarat over the next four years to boost revenue and prevent the facility falling into disuse. The company, which handles large volumes of liquefied natural gas (LNG) imported from Qatar for Indian companies, wants to lease space to other firms as domestic demand for its costly Qatari cargoes recedes. In April-June, Petronet operated its 10 million tonnes per annum (mtpa) Dahej terminal at 98.4 percent capacity despite lower demand for its oil-indexed, costly LNG sourced under a 25-year deal with Qatar's RasGas. Spot prices of LNG have collapsed by more than 60 percent over the past year, whereas oil-indexed LNG prices have remained more steady, reducing appetite for the expensive supply. Currently it buys 7.5 mtpa of LNG from RasGas under the long-term deal, and has leased 1.25 mtpa of capacity to state-run GSPC Group in Gujarat. It has also signed deals to lease out 6 mtpa of capacity to state-run firms by 2017, when the capacity of the plant will be raised to 15 mtpa. Petronet LNG is in talks with various companies to lease out 2.5 mtpa of capacity to be added in the next phase by 2019, its technical director Rajender Singh said, which if worked out will be about 63 percent of the expanded capacity. "Our risk is reduced through leasing ... we will get revenue through regasification charges and that's our strength," Singh said. Due to cheaper prices of Asian spot LNG, Petronet has been forced to import 68 percent less fuel than it is supposed to under the long-term deal with Qatar. Pricing of LNG under the long-term deal is linked to the 12-month rolling average of the Japan Crude Cocktail (JCC) price. While this formula reduces volatility, it does not reflect price falls as much as spot pricing. Petronet's head of finance, R.K. Garg, said the trend of lower offtake of gas under the long-term deal was continuing. Reuters on Thursday reported that Petronet has been forced to cut purchases under the long-term Qatar deal by 30 percent due to low domestic demand. Higher imports of spot cargoes helped Petronet improve operations at its Dahej plant, Garg said. (Reuters)
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To boost coal production , the government is working on a methodology for allocation of coal mines for commercial mining. "In order to augment production of coal to meet the demand in the country especially of the medium and small scale enterprises, the government is considering allocation of coal mines for commercial mining," Coal and Power Minister Piyush Goyal has said in a written reply to Rajya Sabha. "The methodology for allocation of coal mines for commercial mining is under deliberation," Goyal said. The minister further said Chhattisgarh Mineral Development Corp Ltd may apply for the allotment of coal mines for commercial mining as and when the notice inviting application is published by the Nominated Authority under the provisions of Coal Mines (Special Provisions) Act, 2015. In a separate reply, the minister said that a draft 'Model Contract Agreement' for mining of coal from auctioned/alloted coal mines in under finalisation. The government auctioned 29 coal blocks in two tranches early this year and had also alloted 38 coal blocks.(PTI)
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The state government will keep a 50% stake in the joint venture in exchange for the land that it will provide for the solar parks to be set up on, reports Simar SinghA proposal, clearing the path for investments worth Rs. 1.56 lakh crore in the Rajasthan’s solar energy sector was passed by the state’s cabinet on Tuesday (28 July) . These investments will be made through a joint venture with four private players- Adani Enterprises, Reliance Power, Essel Infra Projects and Infrastructure Leasing & Financial Services (IL&FS). ”We gave approval for investment proposals worth Rs.1,56,000 crore for solar power production of 26,000 MW in Rajasthan,” said Rajendra Singh Rathore, Parliamentary Affairs Minister, Rajasthan at a press conference. The state government will keep a 50 per cent stake in the joint venture in exchange for the land that it will provide for the solar parks to be set up on. The planned projects will aim at generating 26000 megawatts and the chief secretary will be the chairman of the company. The government has already signed a few MoUs for the same. Rajasthan recently, according to data released by the Ministry of New and Renewable Energy, overtook Gujarat as the leader in solar energy generation in India. The state receives the highest amount of radiation in the country and has enough barren space, which increases its suitability for this land intensive green energy programme. Adani is expected to install one park of 10000 MW, Reliance one of 6000 MW and IL&FS and Essel Infra are expected to set up parks with the capacity of 5000 MW each.
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There is a serious crisis looming over the power sector in the country. It is a crisis of tariff, of bankrupt state owned distribution companies being unable to pay for power or even to sign new power purchase agreements. In turn, this threatens the financial viability of new power projects with a combined capacity of 46,000 MW. Tied up in these power projects is debt in excess of Rs 75,000 crores that might become stressed unless power generation companies get a viable return on their investments. To add to this is the mess in power generation companies that depend on gas supplies because of a continuous and steep decline in gas supplies from the Krishna Godavari basin. All this and much more was revealed in a report on the power sector released by the ratings outfit Crisil today. Some weeks ago, there was a controversy when the Union Power and Coal minister had claimed that the real problem in India was not shortage of power but the willingness and ability of distribution companies-both state owned and private-to buy the power. Many states where power cuts have been crippling during this summer reacted strongly against this. But in reality, the facts do suggest the same. For instance, the latest statistics released by the Union Ministry reveals that peak hour power shortage during 2014-15 had come down to all time low of a little more than 3.7 per cent. So actually, the days of crippling power shortages overall have gone; like the one in 2012 when the entire power grid in North India had collapsed. The root problem is the financial mess of discoms. Take the state of Rajasthan for example. The state owned electricity board there simply doesn't have the resources to repay Rs 90,000 crores in dues and debt. Total outstanding debts to discoms have reached Rs 4.4 lakh crores as of March 31, 2015. According to the Crisil report, the only way of staving off this looming crisis is to allow an increase in tariffs and reduce transmission and distribution losses. But then, both are politically sensitive subjects and industry insiders are waiting with bated breath to see how this pans out.
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Oil prices fell to their lowest in nearly six months on Tuesday (28 July), as a rout in the Chinese stock market cast further doubt over the outlook for crude demand in the world's top commodities consumer. China's already-volatile benchmark stock index, with a combined market capitalisation of $4.6 trillion, has lost 10% in the last two days of trade. Most household debt is linked to real estate rather than the stock market, but with Chinese economic growth struggling to stick at 7%, analysts say demand for crude may not be enough to help mop up a global supply glut. "Typically, equity markets do have a high correlation to quarterly GDP growth," Deutsche Bank strategist Michael Lewis said. "Naturally, there is some risk that this could spill into the real economy. The more these things go down on a day-by-day basis, that is starting to affect the potential of Chinese demand growth being weaker." Brent was down 72 cents at $52.75 a barrel by 1054 GMT, having hit a session low of $52.28, its lowest since early February, bringing the losses for July to nearly 18%. Brent crude is on track for its longest stretch of daily losses since March, when the price hovered just dollars away from six-year lows. US crude was last down 33 cents at $47.06 a barrel after ending the previous session down 75 cents. Adding to the uncertainty over the health of the Chinese economy is concern about rising global oil production in a market already oversupplied by some 2 million barrels a day. Investors are watching for weekly data on US inventory levels to gauge the strength of demand. US commercial crude oil stocks likely slipped last week after crossing the five-year seasonal average build in the previous week, a preliminary Reuters poll of analysts showed ahead of industry and official weekly reports. Crude stocks fell about 300,000 barrels to 463.6 million barrels in the week ended July 24, analysts estimated. "We're not seeing the level of demand in the US one usually expects related to the summer drive-time," said Jonathan Barratt, chief investment officer at Sydney's Ayers Alliance. "The world is awash with oil."(Reuters)
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Hemant Joshi on how Indian railways has helped develop Indian economyTransportation and communications have been the stepping stones for the economic growth of any civilization. These are two key elements which help in integrating the domestic market efficiently and also responsible for global competitiveness. They together play a significant role in integrating remote regions of a country to economic mainstream, connecting buyers and sellers and human resources to employers. Indian Railways:Indian railway network is the fourth longest network in the world with an operating route length of more than 65,000 km followed by the US, Russia and China. With 1.4 million employees, it is world’s 8th largest and India’s biggest employer. It is the backbone of country’s physical network with its connectivity to rural and remote parts of the country. Almost 13 million passengers rely on the railways everyday while 1.3 million tonnes of freight is being carried by them daily. Since its inception in the year 1844, Indian Railway has seen many ups and downs in the last 160 years. The Indian railway has been criticized for its inadequate service offerings, inefficiency, lack of modernization, untimely delivery of services and uncleanness. There are many challenges which need significant technology presence for efficient and user friendly operations. Ticket booking, passenger grievance, payment gateways, and availability of trains need massive improvements for better service delivery. Digital facelift of railways:The Indian government has taken critical steps that helped in transforming the Indian railways and giving it a digital facelift. Railway Budget 2015-16 focuses on transforming the Indian Railways in the next four years by using information and communications technology (ICT). For transformation, Indian Railways is planning to invest INR 856,020 crore by 2019 for network decongestion, network expansion, national projects, safety, information technology, rolling stock, passenger amenities, high speed rail and station redevelopment. Out of this allocation, INR 5000 crore will be used for development of ICT infrastructure for grievance redressal, ticketing, passenger convenience, passenger safety and internal working of Indian Railways. Online Portal & Ticketing: Almost 54% of railway tickets in the country are booked by using the IRCTC online ticketing portal. The average daily sale of train tickets through the portal, which is the world’s second busiest with 3 crore registered users, is around 5.5 to 6 lakh. Recently IRCTC has upgraded its website by introducing two high-capacity servers that have doubled peak-time efficiency. The booking capacity per minute has doubled from the existing 7200 tickets per minute to almost 14,800 tickets per minute. IRCTC is also planning to increase its network bandwidth from the existing 1.4 GB to 1.7 GB in order to enhance the performance of e-ticketing operations. Paperless Ticket: Indian Railways is also planning to install automatic ticket vending machines where ticket can be booked using smart cards and currency options. The Traveling Ticket Examiners (TTEs) will be provided with hand-held terminals, which can be used for verification of passengers and downloading charts. As per the plans, Passenger Reservation System (PRS) tickets which are purchased on the counters will go paperless and SMS on mobiles will be a valid proof of ticket for PRS passengers. Focus is on moving towards paperless ticketing and charting and expediting finalization of refund claims. Grievance Redressal: Passengers can now call all India number 138, which is a 24*7 helpline number for grievances even while travelling. The problems of the passengers will be attended on a real-time basis. A mobile application to redress railway-related complaints is being developed addressing real-time problems of passengers and recording feedback on customer experience. Wi-Fi for Passengers: As part of the Digital India project, Indian Railways is already providing Wi-Fi connectivity at A1 and A category stations and will be extended to B category stations soon. In the last railway budget 400 stations get the approval of Wi-Fi. Passenger Convenience & Safety: The proposed integrated customer portal will be a single interface for the customers to access various services such as booking retiring rooms, wheelchairs, etc. SMS alert facility will inform passengers about the changes in train schedule and arrival/ departure time in advance. The toll-free number 182 is dedicated to receive security related complaints from women. Surveillance cameras will be provided on a pilot basis in some mainline coaches and in ladies compartment of suburban coaches without compromising on the privacy. Digital Billboards: The centrally managed Railway Display Network will be introduced in over 2,000 stations in next two years. This will aid in providing information on train arrival/departure, reservations, general and emergency messages and also any other information of interest to citizens. These digital displays will facilitate advertising and promote various governance campaigns. Freight Management: Customer friendly freight movement initiatives will be undertaken. They are mainly: • Introduction of bar coded/RFID tracking of parcels and freight wagons• Automated warehouses• Customer relationship management system• Integration of train control and asset management applications The way ahead:Although a lot is being done to modernise the railways, still India is far behind other nations in providing a compelling travelling experience and using green technologies. Bullet Trains: Japan and Germany are using the Bullet Train technology efficiently. Europe is considering a continent-wide High Speed Railway (HSR) freight network to alleviate airport congestion, the rising price of fuel, and environmental concerns. Japan has also made its HSR services more efficient by introducing double-decker carriages to carry freight. Computerised control of train switches and speed has allowed Japan to maximise the number of trains running at any given time on a track, thereby also lowering costs. India has started the bullet train project in the Mumbai-Ahmedabad corridor which will cost around Rs 100,000 crore and it will reduce the current 8 hours journey of 534 kms to just 2 hours. The interim report estimates that around 40,000 people will use this corridor daily in 2023. Though people can pay a premium price to enjoy air travel but with such large population, bullet trains can reduce Airport Congestion in India. Each train would be able to carry the load of seven Boeing 737 planes. Apart from high speed travel it will help in freight transportation like courier mail services, perishables, or other items. It will also generate massive employment opportunity in the country. Green Energy: Indian Railway is estimated to spend around Rs 35,000 crore on fuel (INR 11,000 crore on electricity and INR 24,000 crore on diesel) this year. Dutch electric trains are transforming their energy sources to alternative green energy. 50% of the trains already run on wind power while the target is to move to 100% by 2018. India has started experiments on solar powered trains. Currently, railways is harnessing wind and solar energy from its 10.5 MW capacity wind mill plant and solar Photo Voltaic (PV) modules of about 7 MW capacity at about 500 railway stations, about 4000 level crossing gates and solar-based water heating systems at training institutes, retiring rooms. The railways need to be modernised by leveraging on the success of telecom in a vast country like India. Using the power of technology and telecom, railways can serve the common man by making train travel a better experience than other means. It is heartening to know that the former president of NASSCOM will assist in the drafting of the IT Vision for the Indian Railways. The author, Hemant Joshi, is Partner, Deloitte Haskins & Sells LLP.
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Oil prices fell towards four-month lows on Tuesday (28 July), dropping for a fifth straight session on persistent worries about a global supply glut, while stock market sell-offs on both sides of the Pacific also rattled investor sentiment.Asian stocks fell to three-week lows, with a deepening rout in Chinese stocks heightening fears about the financial stability of the world's second biggest economy and top energy consumer.Uncertainty over the health of the Chinese economy, reflected in the sell-off in the stocks, lacklustre US oil demand and increasing oil supplies all added to investors' negativity about oil prices, said Jonathan Barratt, chief investment officer at Sydney's Ayers Alliance"Technical levels continue to break. It's a trend which says investors are selling," Barratt said. "It's all about sentiment - it's a one-way traffic."Brent dropped 36 cents to $53.11 as of 0430 GMT after 2 per cent drop in the previous session. It dipped to $52.89 earlier, hovering close to a four-month low of $52.83 reached on Monday.US crude dropped 20 cents to $47.19 a barrel after ending the previous session down 75 cents. It fell below $47 post-settlement, the lowest since March 24.The bearish sentiment will continue, testing technical support levels, although oil prices are expected to end 2015 higher than at current levels, according to a note from Phillip Futures on Tuesday."For today, we believe the next support for WTI and Brent to be at $46.73 and $52.40. Provided the bearish trend continues, lower supports of $45.90 and $50 could be tested," it added.Investors are now eyeing weekly data on US inventory levels for further trading cues.US commercial crude oil stocks likely slipped last week after crossing the five-year seasonal average build in the previous week, a preliminary Reuters poll of analysts showed ahead of industry and official weekly reports.Crude stocks fell about 300,000 barrels to 463.6 million barrels in the week ended July 24, analysts estimated."We're not seeing the level of demand in the US one usually expects related to the summer drive-time," Barratt said."The world is awash with oil," he added.(Reuters)
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India is set to raise about $260 million from a sale of 5 per cent stake in Power Finance Corp Ltd, after the share auction received bids for more than twice the number on offer. New Delhi was selling about 66 million shares in Power Finance as part of a target to raise as much as $11 billion from divestment of its stakes in state-run companies this fiscal year. The sale was subscribed more than 2.3 times, according to stock exchange data. At the indicative price of Rs 254.30 per share, the sale would fetch the government Rs 1,678 crore ($261.24 million). Retail investors will get a 5 per cent discount to the cut-off price. Aradhana Johri, secretary at the government's disinvestment department, told reporters they had received bids worth Rs 3,747 crore for the sale. She said the actual revenue the government will raise from the sale was still being calculated. The proceeds from the asset sale programme are critical for Finance Minister Arun Jaitley's plan to narrow the fiscal deficit to 3.9 per cent of gross domestic product in the 2015/16 fiscal year that began in April. The government has missed its divestment target for the last five years in a row.(Reuters)
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