India has agreed on a pricing formula for gas supply contracts with producers from April 1, 2014, when the current benchmark deal with Reliance Industries expires.The new formula will be valid for five years and applies only to new contracts or renewals when existing ones expire. It does not apply to contracts which contain a specific formula for natural gas price indexation or fixing.The government broadly agreed with terms suggested by a committee set up to look at production-sharing contracts for the oil and gas industry, known as the Rangarajan proposals after the name of the committee chairman.The main departure from the Rangarajan proposals was to review prices quarterly, rather than monthly, in an attempt to smooth volatility and allow better planning of investments.Here are the main points of the pricing formula:DurationFive years from April 1, 2014. The date is when the current agreement with Reliance Industries for its gas from the KG Basin off India's east coast expires. This contract had a clause linking it to global oil prices, with a maximum of $60 per barrel - well below current levels. It effectively capped domestic gas prices at $4.2 per mmBtu.The Rangarajan committee said that after five years, "the possibility of pricing based on direct gas-to-gas competition may be assessed".BenchmarksThere are two broad elements which are used for an average which will be used as an "unbiased arm's length price" the Rangarajan committee said.These are:A price obtained by taking the cost of liquefied natural gas (LNG) imports into India under long-term contracts and removing charges such as transportation to obtain a theoretical price at the point of production in exporting countries. This is known as the netback price. The government decided not to include spot import costs. It will be a weighted average.The weighted average of prices at three major gas trading points - the hub price at Henry Hub in the United States, the price at the National Balancing Point of the UK and the netback price at sources of supply for Japan.Review Date & TimelineThe prices will be reviewed every quarter, the government said, moving away from the monthly reviews suggested by the Rangarajan committee to reduce volatility and make it easier for investment decisions.For both pricing elements, the formula will take the average prices for the four quarters preceding the quarter before the review. So for the quarter starting April 1, 2014, the formula will be based on the four quarters ending December 31, 2012.Indicative PricingAt this stage, because the formula is based on spot prices which will change, only indicative prices are available.For the April to June 2013 quarter, the indicative price would be $6.83 per mmBtu, a government statement said.
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State oil marketing companies are expected to received a first tranche of about Rs 7000 crore as part of a cash subsidy payout for the January-March period, two officials at state-owned oil companies told Reuters.The cash payout will be in six tranches of an equivalent amount every Tuesday, the officials said. The subsidy will be paid by July-end.The Finance Ministry approved Rs 45,000 crore in subsidy payouts to oil retailers last month.(Reuters)
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Aditya Birla Group, Coal India Ltd and China's state-owned Shenhua Group Corp Ltd are among companies considering bids for some of Rio Tinto Ltd's Australian coal assets, valued at an estimated $3.2 billion, people familiar with the matter told Reuters.Rio Tinto, led by new chief executive Sam Walsh, is offloading a string of assets to help cut its $26 billion in debt and protect its single-A credit rating. It is also looking to cut its exposure to the coal industry, which has been squeezed by surging costs and a 30 per cent slump in prices since early 2012.This has given potential suitors the opportunity to bulk up on good quality coal assets and secure supply agreements.Rio Tinto is selling a 29 per cent stake in its Coal & Allied business and its majority stake in the Clermont mine in Queensland state, with preliminary bids due this week, one person with direct knowledge of the matter said.Rio Tinto, Aditya Birla Group and Coal India declined to comment, while Shenhua was not available for a comment. Sources declined to be identified as the sale process is confidential.Japanese trading house Mitsubishi Corp is Rio's 20 per cent co-owner in Coal & Allied and also a co-owner in the Clermont mine, along with Japan's Electric Power Development Co Ltd (J-Power) and a consortium of other Japanese utilities.Mitsubishi has pre-emptive rights to buy the stakes Rio has put on the block, but Mitsubishi is unlikely to exercise those rights as it has said it is not looking to increase its natural resource investments.The stake in Coal & Allied, which operates thermal coal mines in New South Wales, could fetch around $1.7 billion while the Clermont stake could bring in $1.5 billion, analysts say.Unlisted Shenhua Group has shown interest in buying coal mines in Australia and was among the suitors for Whitehaven Coal Ltd, a deal that failed to materialise after parties could not agree to terms, people familiar with the matter said.India's Coal NeedsIndia's huge appetite for coal is driving the bids by Indian firms. While the country boasts the world's fifth-largest reserves of coal, it still suffers power cuts due to supply bottlenecks and the poor quality of coal delivered to power plants.The Aditya Birla Group, a telecoms-to-cement conglomerate, is in need of thermal coal for group companies Hindalco Industries Ltd, India's top aluminium producer, and UltraTech Cement Ltd, the nation's top cement maker.It has been actively looking at overseas coal mines and had previously evaluated bids for Australia's New Hope Corp, Bandanna Energy, and Whitehaven, people familiar with the matter said.Coal India produces about 80 per cent of India's total coal output, but growth has been stymied for years by delays in environmental and regulatory approvals for mining projects.As of December 2012, Rio valued its total Australian coal assets, which include the Clermont stake and its 80 per cent stake in Coal & Allied, at $5.63 billion.Coal & Allied's valuations are likely to be affected by uncertainty over the future of its Warkworth mine. Rio Tinto is appealing a court decision that blocked a planned expansion of the mine."In any case, we believe it is highly unlikely Warkworth will be sold until the issue is resolved," CIMB analyst Michael Evans said in a note last month.Rio's debt pile is partly due to its $38 billion purchase of aluminium producer Alcan at the height of global financial crisis. It revealed a $14 billion write down in January and sacked CEO Tom Albanese. Rio Tinto is being advised by Deutsche Bank. (Reuters)
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State-controlled oil companies — ONGC Videsh Ltd and Oil India Ltd — will buy Videocon Industries' 10 per cent stake in a giant Mozambique gas field for $2.475 billion. The acquisition of the stake in Mozambique's offshore Area 1, which may hold as much as 65 Trillion cubic feet (Tcf) of gas resources, will be done through a joint venture of OVL and OIL, a statement issued by ONGC said here on 10 June' 2013. OVL, the overseas arm of state-owned Oil and Natural Gas Corp (ONGC) will hold 60 per cent stake in the joint venture while OIL will have the remaining 40 per cent. "OVL and OIL have signed a definitive agreement with Videocon Mauritius Energy Ltd to acquire 100 per cent of (its) shares in Videocon Mozambique Rovuma 1 Ltd for $2475 million," the statement said. The company holds 10 per cent participating interest in the Rovuma Area 1 Offshore Block in Mozambique (Area 1). "The acquisition is expected to be implemented via a newly incorporated entity, in which OVL and OIL are expected to hold a 60 per cent stake and a 40 per cent stake respectively," it said. The deal is subject to the approvals of the governments of Mozambique and India, relevant regulatory approvals, pre-emption rights and other customary conditions. The transaction is expected to close in fourth quarter of 2013. Area 1 covers about 2.6 million acres in the deep-water Rovuma Basin offshore Mozambique and represents the largest gas discovery offshore East Africa with an estimated recoverable reserves of 35 to 65 Tcf. "Area 1 has the potential to become one of the world's largest LNG producing hubs by 2018," it said. Alongside Videocon, block operator Anadarko of US too was selling 10 per cent out of its 36.5 per cent interest in the Mozambique's offshore Area 1. Anadarko is the operator of the block with 36.5 per cent stake while Videocon and a unit of Bharat Petroleum Corp Ltd ( BPCL) hold 10 per cent stake each. Japan's Mitsui & Co Ltd is the second-biggest stakeholder with a 20 per cent interest. Thai state oil company PTT Exploration and Production PCL has an 8.5 per cent interest and Mozambique's state-owned ENH 15 per cent. The gas found in Offshore Area 1 is to be turned into liquefied natural gas (LNG) and shipped to markets like India. The plant in the Cabo Delgado province in northern Mozambique, is scheduled to start operating in 2018 with a capacity of 20 million tonnes of LNG per year. The capacity will be split evenly between operators of Offshore Area-1 and Italian giant Eni, which is developing gas found in the neighbouring Offshore Area 4. Two major natural gas discoveries have so far been made in Offshore Area 1 of Mozambique's Rovuma Basin. The Prosperidade complex is estimated to hold between 17 and 30-plus Tcf of recoverable natural gas while separate and distinct Golfinho/Atum complex is estimated to hold 15-35 Tcf of recoverable natural gas resources. Evaluation of a third discovery on the block, Tubarao, is ongoing with an appraisal well that is expected to be drilled. "The Area 1 LNG project is strategically located to supply LNG to India at a competitive price. Participation of OVL and OIL in the project will facilitate access of LNG to the growing Indian gas market," the statement said. "OVL and OIL will also need to devote significant funding and technical resources to the development of the project, which will also enhance the strong business and cultural links between Mozambique and India," it added. (PTI)
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A series of setbacks have dealt a big blow to NTPC's renewable energy plans, threatening India's own renewable energy goals.The country’s largest power producer had targeted producing 28 per cent of its overall capacity (over 1,28,000 MW) by 2032 through clean power. But, first, the 660 MW hydro project at Loharinag Pala in Uttarakhand (expected to contribute 8 per cent) got stuck due to local agitations. And now, two other under-construction hydro projects are also facing issues.“We had completed 75 per cent of the work at the Loharinag Pala project but had to drop it due to local opposition,” says a company spokesperson. The other two hydro projects are expected to be commissioned by 2017 but are facing their own issues. “We expect 1340 MW of hydro capacity to come up by 2017 and the work is going on these two projects but the projects have their own issues,” informed the company spokesperson.This includes a 540 MW project at Tapovan Vishnugad in Uttarakhand and an 800 MW project at Koldam hydro project in Himachal Pradesh. Construction work has been going on since 2009 but geological surprises have resulted in delaying the projects which are now only expected to come up in 2017. The construction of a large hydro plant is expected to take 5 years or more according to a paper by the Central Electricity Authority.Adding more to the company’s troubles is the recent Uttarakhand disaster which raised questions about the entire hydro power agenda of the nation."Post Uttarakhand, nobody knows what will happen on the hydro front. We have to decide whether as a country we will take a recall on it,” said Arup Roy Choudhury, CMD of NTPC in an interaction with BW.Read Also: The Real PowerhouseRead Also: Clouded By Mega ConcernsNot just hydro, the company has also been facing problems with its nuclear power projects as well. Expected to add 11 per cent of the total capacity by 2032, NTPC has only one project in hand in a JV with NPCIL. The project expected to come up in Hisar district of Haryana has been moving at a snail’s pace and is stuck in land acquisition issues.India’s nuclear power agenda also suffered a blow post the Fukushima disaster. The Japan disaster intensified protests against nuclear projects in India resulting in numerous delays in commissioning of the Kudankulam nuclear project in Tamil Nadu. As a result, not even a single nuclear power project has been notified since the disaster.“We are pushing our hydro and want to get to our nuclear programme also. Post Fukushima, nuclear power went for a toss,” says Choudhury.email: chhavityagi.bw (at) gmail (dot) com
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Jakson Power Solutions, India’s leading power solutions company, has announced plans to double its revenue by March 2016 to Rs 2500 crore.The company will increase its market share in diesel-based power generation in India and have plans to manufacture 12,500 generating sets by the year 2016 compared with 8,000 units now.It has started manufacturing generating sets at its Kalsar plant in Gujarat apart from Daman and Jammu units. The range of diesel generators spans from 7.5 KVA to 3000 KVA. The plants at Kalsar and Daman would be manufacturing generating sets upto 250 KVA capacity and higher capacity would be produced at Jammu plants. Sameer Gupta, Managing Director, Jakson Power Solutions, “The generating set market in India would continue to grow at 10% to 12% per annum and as a leader in this segment, Jakson has proactively made investments in doubling up the manufacturing capacity. Jakson who has more than 3 decades old relationship with Cummins remains committed to providing technologically efficient, non-polluting generators to the consumer.”Audi Rolls Out Wireless Computer MouseAudi, the German luxury car manufacturer, has introduced its wireless computer mouse. With optimum comfort guaranteed, the computer mouse is in the shape of Audi vehicle and is available at all Audi authorised dealerships across India. “Now, Audi enthusiasts will not only drive their favourite luxury brand to work, they can have it on their work stations too and manoeuver their PC in style with a wireless computer mouse based on Audi cars. It has a sleek design and is luxurious from the first touch. Suitable for home or office, this delightful computer mouse lets you drive your computer or laptop by truly displaying the brand’s philosophy of “Vorsprung durch Technik”. Audi enthusiasts can bond with the brand on a more personal level and work on their computers with utmost precision and comfort with this computer mouse. Audi’s range of sporty merchandize is apt for Audi fans who want to go a step ahead in their association with the brand,” said Michael Perschke, Head, Audi India. Sculpted Audi car body from the Audi design studio, the Audi Computer Mouse features 2.4 Ghz technology with scroll wheel and high-resolution 2000 dpi sensor with a minimum range of 6 meter.The Audi computer mouse is compatible with PC or Mac and will be available in the Indian market for INR 5,599 in grey colour with USB interface (1.1 or 2.0). Other exclusive merchandize available in India across all dealer networks include high-end Classic Chronograph watches, sophisticated messenger bags, sports bags, travel bags, backpack, stylish garment bag and Audi R8 USB memory stick.Dell Announces A Range Of Innovative Cloud Client Computing TechnologiesAt Citrix Synergy, an industry conference on mobile work style solutions powered by cloud services, Dell announced a broad range of innovative cloud client computing technologies that deliver turnkey solutions purposefully built to complement and enhance corporate IT environments based on Citrix XenDesktop and XenApp.When organisations of all sizes are increasingly looking to empower their employees with access to corporate information across application platforms and devices, Dell and Citrix’s new cloud client computing solutions provide customers with powerful tools to work securely and productively. The combination of simplicity, flexibility, and power in Dell’s technology creates an unmatched end-to-end virtual computing experience and alleviates customer pain points from the data center to the endpoint devices, including: the Dell DVS Enterprise - Active System 800 for Citrix XenDesktop, Dell DVS Enterprise for Citrix XenDesktop, Dell Wyse Xenith Pro 2 zero client and the Dell Wyse D90Q7 and Z90Q7thin clients.Lava To Soon Launch A Phone That Understands Sign Language Lava Mobiles, one of the most respected and fastest growing Indian Mobile handset Companies, will soon launch a premium smartphone under the Iris series that can communicate with the user even in signs. This cool feature will allow a user to interact with the phone and use the camera with just a swipe of his hand in the air. Running on the latest Android OS, it will be a power packed yet elegant device, being the slimmest in its category. A superfast processor, intelligent flip cover, OGS display technology and crystal clear screen are just some of the pointers that have been released.Tata Comm Announces First LTE Roaming Peering With Telecom Italia SparkleTata Communications and Telecom Italia Sparkle, a global operator and the international services arm of Telecom Italia Group, has announced the implementation of the first LTE roaming peering between two IPX providers. This industry-first peering extends the global community of interconnected LTE enabled mobile network operators (MNOs) as 4G adoption continues to grow.With 4G LTE revenues projected to exceed $100bn globally in 2014, LTE roaming enablement is critical to maximising revenue growth. This peering will enable the exchange of LTE roaming traffic between Tata Communications and Telecom Italia Sparkle’s networks, creating an interconnected infrastructure that combines the quality and security of the respective IPX networks. The end-to-end managed solution leverages the company’s extensive experience as the largest mobile signalling inter-provider to streamline roaming interconnect arrangements between mobile operators, replacing the need for hundreds of bilateral peer associations with a single centralised robust interconnect point. This simplifies roaming interconnect to deliver a seamless user experience and assure service continuity as mobile operators migrate to 4G. ZengaTV Bags Non-Exclusive Rights For French Open For WebZenga TV, a mobile TV platform, has announced that besides cricket, tennis is probably the most widely watched sports in the country. With this initiative, over 6 million users of Zenga TV can watch ball by ball live tennis action on their computer screens and listen to live commentary as well. Under these rights, Zenga will also power the Live Youtube streaming of French Open. This event is licensed by Zenga Media Pvt Ltd from Seven3Sports who has licensed it from Neo Sports. However, they have taken the non-exclusive rights for French open for web in India.Abhishek Joshi, CEO, Zenga TV, said, “This is indeed a proud moment for all of us. This initiative adds up to the many milestones Zenga TV has achieved in a short span of time. Our constant endeavor to fulfill viewer’s requirements has helped us to emerge as a pioneer and a market leader. At this point of time, I am delighted to announce that there are hordes of surprises in store for our viewers in the coming months”.Shabir Momiin, MD & CTO, ZengaTV said, “We always keep looking for ways to bring more and more content for our users in all possible different verticals. This is one such effort which will let users enjoy live streaming of the French open on ZengaTV.com”.Ingersoll Rand India Launches Unique Platform For InnovatorsIngersoll Rand, a world leader in creating and sustaining safe, comfortable and efficient environments in partnership with CII, has announced the Sustainable Habitat Challenge, as part of the CII Industrial Innovation Grand Challenge. The competition that provides an open innovation platform for participants including designers, architects, students and professionals, invites entries for Sustainable Technologies for Model Habitats in Emerging Economies.Given the pressure on natural resources today, affordable housing that takes into account factors such as low energy usage, comfort, safety and security of occupants is a critical need for emerging economies today. Creating ‘Sustainable Habitats’ will take into account factors such as low energy usage, conserving natural resources yet provide comfort, safety and security to communities.The Sustainable Habitat program is an initiative of Ingersoll Rand by which it is collaborating with the larger community to help design a solution that will innovatively address the housing needs of emerging economies while optimizing both natural and financial resources. By virtue of this challenge, the company will integrate and implement creative ideas and innovative concepts to build a set of low cost dwellings at their campus in Bangalore that will utilize sustainable materials, solar technologies, water conservation, sanitation, security, remote health services, data management and other eco-friendly interventions.Ingersoll Rand is partnering with Emergent Institute in Bangalore in implementation of this project. Speaking about this initiative, Dr. Stuart L. Hart, Co-Founder of Emergent Institute, says, “We are excited to be partnering with Ingersoll Rand to catalyze leapfrog, sustainable innovation in the affordable housing space. Our goals are completely aligned here since we are focused entirely on commercializing tomorrows distributed, sustainable technologies starting with the underserved at the base of the income pyramid.” Global Navigation Solution Provider NNG Announces Outstanding Financial Results NNG LLC, a navigation solution provider for the Automotive, Personal and Wireless navigation systems has closed a successful 2012 fiscal year, thanks to its well-established business in the automotive OEM market for Line Fit Navigation.The increase in demand for the iGO Navigation software has opened new doors for the navigation solution provider worldwide, including the Indian and Japanese markets.NNG has thus entered the Indian market through a partnership with local solution provider Ayana Navigation Solutions (ANS).NNG continues its steady growth as navigation solution provider to the automotive industry’s biggest OEM and Tier1 players with notable 42% year on year increase in net revenue. The gross margin shows a well-marked growth of 63 per cent compared to 2011, which underlines the company’s commitment towards its most important business segment, the automotive industry.Working together with its Tier 1 Partners and their OEM customers as well as strengthening the company’s regional presence, has lead to deep localization, which has become the key to NNG’s widespread success in such markets as India, Japan, China, and South Korea. As a result, in just over one year, NNG’s export has expanded by nearly 50 per cent. The company boosted its number of employees by 35 per cent in order to fulfill partner requirements, and plans a similar increase by the end of 2013. NNG has also recently set up its new headquarters to accommodate the increased staffing demand.
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CNG price in national capital was on 24 June, hiked by Rs 2 per kg, the second increase in rates since January, due to Indian rupee depreciation.Also, piped cooking gas (called PNG or piped natural gas) rates were also increased by Rs 1 with effect from 24 June midnight.CNG sold to automobiles in Delhi will cost Rs 41.90 per kg from midnight as compared to Rs 39.90 currently. The rates of CNG in neighbouring North Indian cities of Noida, Greater Noida and Ghaziabad have been hiked by Rs 2.25 to Rs 47.35 per kg."The consumer price of PNG to the households in Delhi is also being revised from Rs 23.50 per standard cubic metre to Rs 24.50 per scm for consumption of up to 30 scm in two months," Indraprastha Gas Ltd (IGL) said in a statement.For consumption of more than 30 scm in two months, the applicable rate in Delhi would be Rs 40.50 per scm.Due to higher taxes in Uttar Pradesh, PNG in Noida, Greater Noida and Ghaziabad would cost Rs 26 per scm, up from Rs 25 per scm for consumption of up to 30 scm in two months.Price for consumption beyond that level will be Rs 43.CNG price was last hiked on January 5 when rates went up by Rs 1.55 per kg.PNG price was last hiked on February 10 by Rs 1.50 per scm."The recent steep appreciation of the dollar vis-a-vis rupee as well as the increased dependence on imported LNG has resulted in major increase in our input cost of gas, which has necessitated the increase in retail prices of CNG and PNG," IGL said.IGL said there has been a sharp depreciation of the rupee vis-vis dollar in the last one month.The base price of natural gas being procured by IGL from all its sources - domestically produced as well as imported liquid gas (LNG or liquefied natural gas) - are dollar linked thereby making the entire input price totally dependent on price of dollar vis-a-vis rupee."However, this increase would have minor impact on the per km running cost of vehicles," it said.For autos, the increase would be 6 paisa per km, for taxi it would be 10 paisa per km and in case of buses, the increase would be 57 paisa per km, which translates to around one paisa per passenger-km.(PTI)
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The unavailability of gas in the country has forced Essar Energy to shift from gas to coal. Essar Energy, on 24 June, announced that it is in the process of converting two of its gas-fired power plants into coal-fired units.Essar has decided to convert its Hazira plant (515MW) in Hazira, Gujarat and Bhander Power (500 MW) located in Hazira, Gujarat into coal-fuelled units. The two plants have been running on imported LNG for the past 2-3 years in the absence of domestic gas. The plants were initially expected to run on domestic APM (administered pricing mechanism) gas but did not receive allocation from the government in the light of declining gas production in the KG Basin. The plant runs on imported LNG for which the company pays anywhere between $12-18 mmbtu (million metric British thermal units) on a month-to-month basis to keep the plant running in a market where domestic gas is priced at $4.20.“The LNG availability is at a very high price and considering this, we have decided to convert our two gas-fired plants into coal fired units,” informed Naresh Nayyar, CEO of Essar Energy. Read: Essar Energy Expects Growing Indian Demand To Boost SalesIt will take a minimum of three years for the company to complete the conversion procedure and it expects to be done by 2016. The projects are port-based and therefore, would depend on the imported coal which the company plans to source from Indonesia. The government’s recent decision to allow producers to pass through the cost of imported coal to the consumers could also work in its favour. Read: New Promises To The Coal Sector, But Little ActionThe annual coal requirement of the two plants after the conversion is estimated to be around 1.5 to 1,7 million tonnes (mt). Nayyar admits that the company will reduce its variable fuel cost by 60 per cent.Even though the gas-fired plants are environmentally much more cleaner, the lack of domestic availability and expensive import of LNG has forced the management to turn towards “economically more robust” option of using coal as fuel.The power produced from these units is supplied to the company’s own steel plants and 300 MW of the Hazira plant capacity is reserved by GUVNL, Gujarat state power utility. When asked how the company expects to service its PPA with the utility when the plant will be going through conversion process, the management said they have worked it all out. However, speaking to a top official of the Gujarat utility had a different story. The official informs that the utility has not received any information from the company in this regard. However, the discom has not been drawing much power under the PPA since it was based on imported LNG and therefore, more expensive. “The offtake from the plant at present is zero,” says the official.Essar has one more gas-based power plant at Vadinar, however the company has no plans to covert this into a coal-fired unit. Some part of the plant’s capacity runs on refinery fuel, gas and coal and Nayyar says the mix is important for the company’s energy security.chhavi(dot)tyagi(at)abp(dot)in
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