Energy News Monitor I Volume I, Issue 44

India’s Reforms in the Hydrocarbon Sector What Has Been Accomplished? What Remains to be done?

A Brief History

1900-1947: Discovery and Development

It was in 1889 that oil was first discovered in India in Digboi, Assam by the Assam Railways & Trading Company (AR&TC).  AR&TC set up Assam Oil Company (AOC) in 1889 with a capital of £ 310,000 to take over "the petroleum interests of the AR&T Co. Ltd.".

Though a small refinery was constructed close to Digboi around the same time, a full fledged refinery was commissioned in 1901 which produced kerosene, wax, fuel oil and grease.   In 1921, the UK based Burmah Oil Company (BOC) took over Assam Oil company.   In 1931 about 1.8 million barrels of (250,000 tonnes) of oil was produced from these fields which accounted for about 85 per cent of indigenous production. The rest came from the Attock oilfields, now in Pakistan.  Together this met only 12.5 per cent of total demand. Burma supplied nearly 7.3 million barrels of oil (about 1 million tonnes) a year which met roughly 33 per cent of India’s demand.  Imports met the rest.

Before the Second World War, and the decade following the war indigenous production remained at about 1.8 million barrels per annum. Consumption of petroleum products however increased from 14.6 million barrels (about 2 million tonnes) in the pre-war years to the war time peak of 36.65 million barrels (5 million tonnes).  Progressive dieselisation of road transport vehicles, growing use of tractors and diesel engines in agriculture, increasing use of kerosene in the wake of urbanisation and improved standards of living were driving demand.  Imports met increase in demand as the perception was that major sedimentary basins of India were unfit for development of oil & gas resources. 

1945-1960: Planning for Success

After independence, the Government realized the importance of oil and gas in industrial development and its strategic role in defence.  While framing the Industrial Policy Statement of 1948, development of petroleum industry in the country was considered to be of utmost importance.   Though the urgency for exploring new reserves was evident, progress in exploration was slow probably because of the huge risk involved in exploration. Estimated to cost about three million rupees, an exploratory well with probability of success as low as 1 in 50, was obviously not a priority in the first plan which was dominated by the fear of food shortage.    The first five year plan (1951-1956) dismissed coal and oil as ‘relatively meagre resources’ and went on to emphasise hydropower for irrigation which it estimates to be in the range of 22,000-30,000 MW. The ‘meagre resources’ identified in the Plan Document were in Tripura State, Patharia R.F. (Assam) and in Kangra district (Punjab). 

However exploration was carried out by private or joint venture companies until 1955.  Apart from AOC and BOC, the Indo-Stanvac Petroleum Project between the Government of India and the Standard Vacuum Oil Company set up in 1954 carried out exploration and production activities in West Bengal. In 1953, the first oil discovery of independent India was made at Nahorkatiya near Digboi and then at Moran in 1956. Oil India Private Ltd., was incorporated in 1959 for development of the discovered prospects of Nahorkatiya and Moran and to increase the pace of exploration in the Northeast India. It was registered as a Rupee Company with two-third shares owned by AOC / BOC and one-third by the Government of India (GOI). By a subsequent agreement in July, 1961, GOI and BOC transformed OIL to a Joint Venture Company (JVC) with equal partnership.

Though multinational companies such as Royal Dutch Shell, Standard Oil and Burmah Oil were invited to explore for oil they showed little interest as India was not considered an attractive prospect.  In 1955, the Government of India decided to develop hydrocarbon resources on its own in various regions of the country as part of Public Sector Development.  To that end, The Oil & Natural Gas Directorate was set up as a subordinate office in the Oil & Gas Division of the Ministry of Natural Resources & Scientific Research. 

A delegation under the leadership of K D Malviya, the then Minister of Natural Resources, visited several European countries to study the status of the oil industry and to facilitate training of Indian professionals for exploring potential oil & gas reserves.  Though teams from many countries including USA, West Germany, Romania and the Former Soviet Union (FSU) visited India offering their expertise it was the Soviet team that finally drew up a detailed plan for drilling operations which was to be carried out in the Second Plan Period (1956-1961). In April 1956, the Government of India adopted the Industrial Policy Resolution, which placed mineral oil industry among schedule ‘A’ industries, the future development of which was to be the sole and exclusive responsibility of the state. 

When it became evident that the Oil and Gas Directorate with its limited financial and administrative powers as subordinate office of the government could not function efficiently, it was converted into a statutory body by an act of the Parliament which enhanced the power of the commission in 1959.  The main functions of the Oil & Natural Gas Commission subject to the provisions of the Act were ‘to plan, promote, organise and implement programmes for development of Petroleum Resources and the production and sale of petroleum and petroleum products produced by it and to perform such other functions as the Central Government may, from time to time, assign to it. 

ONGC’s first discovery was in the Cambay Basin in 1958.  This was followed by the discovery in Ankleshwar in Gujarat in 1960.  Through the 1960’s ONGC made a string of discoveries in Assam.  The then Union Minister for Natural Resources, K D Malvia, who also headed the ONGC steered the government’s view in favour of indigenous upstream exploitation as opposed to the general view of the then active industry - Caltex, Burmah Shell and Standard Vaccum Oil Company - that investment in refining would be more attractive. 

There was a proposal to manufacture synthetic oil from coal as proven technology was available from developed countries. Since India had ample deposits of low grade coal but suffered from a shortage of hydrocarbons, this was thought to be a good solution. In 1954 an expert committee recommended the setting up of a plant to produce 300,000 tonnes of oil at a cost of Rs 550 million.  However this plan did not materialise as the cost of synthetic crude was very high oil while at the same time it was realised that new trends were evolving in oil production, consumption and trade. 

Consumption of Petroleum Products 1952-1960

‘000 tonnes

Source: Bhatia, R. Planning for the Petroleum & Fertilizer Industries

The downstream segment received sufficient attention right from the First Plan Period which recommended rapid expansion of refining capacity. Agreements were reached with three foreign oil companies, Standard Vacuum, the Anglo-Saxon and the Burmah Oil and the Caltex (India) for the construction of three refineries.  Only the Digboi refinery was based on indigenous crude.  In 1954 and 1955 two private sector refineries – ESSO and Burmah-Shell started production of crude from imported crude oil.   In 1957 another refinery was established by Caltex at Vishakapatnam whixh increased crude throughout capacity in the country to 4.9 million tonnes. 

 

BP CEO: Russia's Role in World Energy Hard To Overestimate

April 22, 2005. The role of Russia in the world energy sector cannot be underrated, BP CEO John Brown said at the meeting with President Vladimir Putin.   The BP leadership spoke of the key role of Russia in the world energy sphere, presidential aide Igor Shuvalov told journalists.   "John Brown said that nobody can ever underestimate Russia's role in the energy sector, its success in oil and gas development", Igor Shuvalov said after the meeting between the Russian president and the head of the British Petroleum company.   Shuvalov said that the theme was discussed in the context of Russia's G8 chairmanship in 2006.  

The BP supports discussion of energy when Russia is to chair the G8, Shuvalov said. He cited John Brown as saying that is useful for all the G8 members, interested in a stable energy partner.   Igor Shuvalov called the development of the Kovyktinski gas condensate field (Irkutsk region, south of East Siberia) a strategic project for Russia.   "This project is crucial for the Russian Federation.

The field is so big and composite that its development should begin proceeding from the available partner relations", Shuvalov said.   He noted the importance of the future participants' interest in the thorough development, production and transportation of gas to consumers.   "The final partner setup should intend understanding that the project is drawn-out and has a strategic importance for the Russian Federation', Suvalov said.  

Gazprom will have the export monopoly in this project, he said. "The supply infrastructure should, in the foreseeable future, remains in the hands of either Gazprom or the Russian Federation", the presidential aide said.   Kovyktinski is a major gas field in East Siberia. The license for its development is held by RUSSIA Petroleum. Its share-holders are TNK-BP.

 

Captive Power Generation To Narrow Demand-Supply Gap

(K K Roy Chowdhury-Consultant Energy, ORF)

1.0 Introduction:

We have enough fossil fuel reserve for some more years compared to several other countries, it doesn’t mean our wit should span circumcentering coal fields and oil fields only. Whatever one might talk of a globalised world, barrel of oil and not the gun is the real threat, posing energy supply insecurity before us. Our priority should therefore also be virtually less on energy imports and more on finding alternative routes of power generation to provide an effective solution to our power shortage problem and sustain the development process. Given the ever increasing oil prices that put pressure on most of  the economies, apart from the fact of  limited availability at a macro level, many developed and developing countries, are having a serious look at alternate forms of energy. Energy security has become very important issue.

India has got many other resources that may be easily exploited. Not that we fall short of capability and expertise, the predominant predicament arises out of want of will and lack of non-conventional thought and inspiration. The nation is running severely short of individual spirit, wherein the concept of ‘build your own power’ has been mostly neglected, discouraged or ridiculed since the very beginning. During recent years, although at the central level, the issue has been taken up rigorously. In many a state, a contradictory picture prevails yet. Why should our farmers think that they need to pay for power when politicians are prepared to provide them free power? Why should our countrymen stay away from stealing power while many electrical inspectors can easily be bribed and evil practices can continue easily? In the years of extremely unfavourable climatic conditions, farmers may be given special grants, however, that should not be a regular affair.

To be optimistic, there are people, there are isolated groups in the country who are struggling to generate their own power with their own effort. There are some exemplary projects too. It is true that some of them have got government subsidies. However, still there is a big gap. Captive power generation is always cheaper.  Wastage and misuse of power are drastically reduced under this scheme of energy generation. There is no question of power pilferage. It may be mentioned here that captive power refers to generation from a unit set up by industry for its exclusive consumption. The estimates on captive power capacity in the country vary with the Central Electrical Authority putting the figure at about 11600 MW while industry experts feel that it is much higher, close to 20000 MW. It is estimated that about 30 per cent of the total energy requirement of the Indian industry is currently met through in house power plants. Based on the fuel type used for captive power generation, about 45 per cent of power generated is from steam (includes coal, bagasse, cogeneration and other forms of steam), 40 per cent from diesel (includes diesel, LSHS, HFO, FO, HSD and similar fuels) and 15 per cent from gas / naphtha.

2. Demand – supply gap situation:

2.1 Some facts for India in respect of Energy:

·       Energy intensity (energy consumption per unit of GDP) is high, and it is 3.7 times of Japan, 1.55 times of USA, 1.47 times of Asia and 1.5 times world average.

·       Per capita energy consumption is 4 per cent of USA and 20 per cent of world average.

·       8 crore houses are not electrified, and 40 crore people are not having access to electricity.

·       80,000 villages are to be electrified.

·       Despite significant increases in total installed capacity during the last decade, the gap between electricity supply and demand continuous to increase. The resulting shortfall has had a negative import on industrial output and economic growth.

·       Peak demand shortage is 14 per cent.

·       Energy deficit is 8.4 per cent.

·       To maintain a GDP growth of 8-10 per cent, a capacity addition of about 1,16,000 MW is required by 2012. That would call for an investment to the tune of Rs 4,00,000 crores in generation and another Rs 4,00,000 crores in transmission and distribution.

·       Nuclear generation target capacity addition upto 2020 is 20,000 MW.

The gap between demand and supply of power is ever increasing and if we take into consideration the past performance, it is very clear that the existing resources from government sector cannot achieve the targetted generation capacity. Capacity shortages have been noticed on several international sectors connecting India. There is an urgent need to mitigate the capacity constraints through appropriate measures. The government, therefore, has decided to encourage and facilitate private sector participation in the fields of generation, transmission and distribution of power supply.

2.2 Strategies for narrowing the demand-supply gap:

The basic aim of energy security for a nation is to reduce its dependency on the imported energy sources for its economic growth. However, the immediate-term strategy would be:

·       Rationalizing the tariff structure of various energy products.

·       An optimum utilization of existing assets.

·       Efficiency in production systems and reduction in distribution losses, including those in traditional energy sources.

·       Promoting R&D, transfer and use of technologies and practices.

·       Environmentally sound energy systems including new and renewable energy sources.

·       Improving energy efficiency in accordance with national socio-economic and environmental priorities.

The above essentially calls for:

·       Supply and demand side management.

·       Identifying optimum new generation, which takes into account most suitable mix of various types of fuel   for power plants.

·       Upgradation of existing transmission and distribution system to reduce losses.

·       Identifying new transmission and distribution systems to be set up.

·       To achieve cost reduction in generation and distribution of power, to make power available at cheaper rates.

·       Sourcing of funds.

For a successful implementation of a plan being effected in this direction, captive power generation is the most promising route towards narrowing down the demand-supply gap in a sustainable manner. This is essential in a vast country like ours with so much diversities, so much varying local and strategic issues involved, and a huge political divide.

3.0 Captive power generation:

The state recognises the need for captive generation of power by industries to augment the power supply. The state will therefore encourage it. Captive power generation will ease the burden on distribution system and also make surplus power available for the state grid. Private industries including EOUs will be permitted to go for captive generation up to 60 MW without any restriction. For higher captive capacity, decision will be taken by the state government on case-to-case basis.

Looking at the trends in generation capacity additions in the public and private sector, the role and significance of captive and cogeneration are expected to increase in the coming years. The state governments and the state electricity boards (SEBs), aware of their inability to meet the needs of the industry in the immediate future have also been taking various policy initiatives to promote captive power production and cogeneration. At the same time they are also concerned with the impact of a high growth of captive power production and cogeneration on the deteriorating finances of the SEBs, the environment and the optimal growth of the power sector in the long run. The policies adopted by different states, based on the prevailing situation and their perceptions on achieving a balance of interests, are, therefore, not uniform. The captive power producers and cogen promoters by and large do not appear to be happy with the present policy initiatives and have been asking for increased incentives. The state governments and the SEBs have been cautious in their response for reasons stated above. With independent state electricity regulatory commissions (SERCs) being set up in different states, the SERCs will now be concerned with the approval for setting up captive power plants and third party sales. A clear understanding of the concerns of both captive and cogen owners and state governments /SEBs and an open and objective discussion of the contentious issues assume importance in this context.

3.1 The various emerging captive power resources available and policy options for their exploitation and adoption are briefly discussed below. These new resources promise further power generation potential in a sustainable manner.

i. Co-generation:

The co-generation combines the process of recovering steam and power from the same single fuel source. After the power is generated, the waste heat from the exhaust is utilised to generate steam. As a result, the utilisation of energy improves from 30-35 per cent to 70 per cent. It also reduces the cost of energy as the cost of power is shared between power generation and process steam. The state will encourage the industries to generate steam through co-generation with no cap on the quantum of co-generation that can be done by industry. The State Electricity Boards will consider purchase of surplus power from captive units on mutually agreed terms covering price, timing, quantum and the period of purchase of power. For this the PPA (Power Purchase Agreement) is governed by the State Energy Regulatory Commissions.

ii. Non-conventional sources of energy:

The state realises the importance of renewable sources of energy. The state shall endeavour to get the maximum benefit out of the non-conventional and renewable sources of energy, which are clean and eco-friendly.

·       The state has identified new locations for harnessing wind power generation with a favourable wind speed of 19 to 25 KM/hr that would add to the existing capacity. It is intended to rationalise the incentive scheme for wind farms to attract more private investors and also simplifying procedure for allotting government wasteland for the above purpose.

·       Large areas of the state have solar insolation of 5.8-6.0 KWH/sq.m./day, where it is proposed to encourage setting up of suitable solar power stations.

·       The organic urban waste generate in the urban areas, ever increasing with the increasing population, will not only augment scarce energy resources but also go a long way in efficient disposal of the urban waste.

·       The state having coastline with tidal wave altitude reaching nearly 6 mts can go for tidal generation, for which the technologies for efficient use of tidal wave are at developmental stages. The state will encourage and provide adequate incentives for harnessing tidal energy.

·       The socially oriented programmes of new and renewable energy sources especially in the rural areas like biogas and improved chulhas should adopt an approach of taking the entire village instead of the present approach of providing energy systems on individual basis.

3.1.1 In order to absorb the electricity generated from renewable energy sources like wind, small hydro, bagasse co-generation and industrial urban wastes by the electricity utilities and also to extend the facilities like buyback, wheeling, banking and third party sale, it is necessary to have uniform guidelines for the SEBs in this regard. Special attention needs to be paid towards developing this sector of power generation including co-generation since the power generation processes are more environment-friendly and more promising for earning carbon credit through GHG (Green House Gases) emission reduction as per the Clean Development Mechanism under Kyoto Protocol, and above all, the energy input raw material cost is negligible.

4.0 Conclusion:

Electric power is necessary for all modern societies and to make it available to all pockets of the society, it has to be cheaper (without any government subsidies of course) with the passage of time. Each and every local authority should be aware of the possibilities of power generation within its jurisdiction by means of non-polluting renewable sources and also from waste. This will be a supportive action to reduce the burden on SEBs and overcome the power shortage-related problems. It is needless to say that energy conservation practices have to be followed since 1 unit saved is equivalent to 2 units generated.

Bush seeks to ease US oil needs

President George W Bush unveiled a five-part energy plan on Wednesday designed to reduce the US's dependence on fossil fuels, such as oil.  He was speaking to a Small Business Administration conference in Washington and outlined incentives for consumers to use green cars. Over 10 years $2.5bn (£1.3bn) in grants will be made available for citizens to buy hydrogen fuel cell cars, he said. He also mooted the idea of building new nuclear power stations. He suggested that new oil refineries could be located at closed military bases. Mr Bush said he would urge Congress to pass his four-year-old energy proposals. He wants it to streamline power-station approval processes. He also mentioned new technologies such as superconducting power lines. "It's time for America to build a modern electricity grid," he said.  He pointed out that the demand for energy is growing faster than the supply and backed increased ethanol use (a liquid form of energy that can come from sustainable sources), use of clean coal technology and faster reviews of natural gas projects.  The US would help developing nations make use of cleaner fuel technologies too, he promised.

NEWS BRIEF

OIL & GAS

Tapti gas field shut down as GAIL cuts purchases

April 22, 2004. The ONGC-Reliance-British Gas consortium has been forced to shut down wells at its Tapti gas field for the first time in eight years, after GAIL (India) - its largest gas buyer — cut purchases to one-third. The Tapti field, which supplies roughly one-fifth of the total 34 million metric standard cubic metres per day (mmscmpd) gas to customers along the Hazira-Bijaipur-Jagdishpur (HBJ) pipeline, has shut wells for the last 10 days. Production has come down from 10.8 mmscmpd to 6.8 mmscmpd after GAIL cut purchases to 1.5-2 mmscmpd instead of the contracted 6 mmscmpd.

Cairn to produce 150,000 bpd from Rajasthan field

April 20, 2005. Cairn estimated that Rajasthan oilfield can produce upto 150,000 barrels per day (bpd) by 2007-end, 50 per cent more than the previously estimated 100,000 barrels per day. The new forecast of how much oil can be extracted from the three key fields are double of previous assessment. The new production estimates are more than half of what India's largest fields, Mumbai High produces. The company now estimates recoverable reserves of 500 million barrels of oil at its Mangala, Bhagyam and Aishwariya fields in Rajasthan, based on using water flooding recovery methods. The company could yet add another 148 million barrels to the tally if enhanced recovery techniques are successful.

Refiners likely to feel heat as oil cos fix gate price

April 23, 2005. The honeymoon period for refining majors like Reliance and MRPL is finally over as the price freeze bug hits them too. Refiners who have been insulated from government intervention till now are going to feel the pinch with oil companies like IOC, HPCL, BPCL deciding to freeze the price at which fuel will be bought from refining companies for the time being. Refining companies like Reliance, MRPL, Kochi Refineries, Chennai Refineries and Numaligarh Refineries will now have to sell petroleum products at the March 31 price level. The decision to freeze the refinery gate prices is learnt to have the tacit support of the petroleum ministry.

Oil marketing companies have been taking major hits on their margins with the government disallowing price revisions at the retail level. Refining companies who have been completely insulated from government intervention, are now going to face the same music. Till recently, refining companies revised product prices every fortnight, in line with global prices. However, refining margins are now slated to be hit with oil marketing companies refusing to pay them global rates.

This move will offer some liquidity to the oil marketing companies who have been borrowing to meet their needs. Also, this may help bring down the losses suffered by oil companies for the time being. The freeze on refinery gate prices will apply to all refiners, including the ones owned by the marketing companies. Refinery transfer prices of diesel and petrol are revised every fortnight — on the 1st and the 16th of every month — while LPG and kerosene prices are revised on the 1st of every month. However, no such revision has happened since April 1.

If the import parity principle is to be followed, the refinery gate price of diesel and petrol should have increased by about Re 1/litre. In the case of kerosene, the increase should have been Rs 3.5-4/litre while LPG prices should have gone up by Rs 700/tonne. On April 16, another revision of Re 1/litre was required in diesel and petrol prices. As a result of the move, oil marketing companies are having to pay less to the refineries. However, a final decision on whether or not these companies can keep this money is yet to come.

Shell-Total combine commissions LNG terminal

April 22, 2005. Royal Dutch/Shell Group and Total Gaz Electricite Holdings France, two of the private liquefied natural gas (LNG) providers in the world, formally announced the inauguration of the Hazira LNG Terminal and Port at Hazira in Gujarat with the unloading of the first cargo of LNG from the ship Gemmata.

The terminal has been set up with an investment of over Rs 3,000 crore (Rs 30 billion). The company sold the first gas from the terminal to Gujarat State Petroleum Corporation (GSPC). Shell Gas B.V holds 74 per cent of equity in the Hazira companies, while Total Gaz holds 26 per cent. The first gas was sourced from Australia's North West Shelf project, in which Shell has a 22 per cent stake.

The LNG terminal's initial throughput capacity is of 2.5 million tonnes per annum (mtpa), which the company proposes to raise to 5 mtpa. The site has been laid out for increasing capacity up to 10 mtpa with two additional tanks. LNG for Hazira may be sourced from Shell-partnered plants in Oman, Australia, Brunei and Malaysia or Total's LNG production in Indonesia, Qatar, Oman and Abu Dhabi.

Shell to take on Petronet with LNG flexible spot pricing model 

April 21, 2005. Mulinational energy major Royal Dutch/Shell will adopt a flexible spot pricing model for LNG consumers to combat rival Petronet LNG’s comparatively lower prices. LNG contracts are usually for long terms of 20-25 years, with take-or-pay obligations. Shell is all set to try a unique model that allows the consumer to terminate contracts more freely. Inclusive the sales tax (12 per cent), Shell’s LNG will cost $4-4.5 per million BTU to the consumer. This, of course, is higher than the price at which Petronet sells LNG from its Dahej facilities under long term cotracts.

Delhiites raise queries on safety aspect of piped gas supply

April 20, 2005. Housing societies in Delhi have expressed apprehensions about the safety of the piped natural gas distribution lines coming into their premises. Residents of a number of societies have written to the service provider Indraprastha Gas Ltd (IGL), seeking clarifications regarding the safety aspects of the piped natural gas system. This is especially with regard to the quality of the material used in setting up the infrastructure and steps taken during construction of the network to prevent mishaps. They have also sought clarifications on the need to have a national code of safety for laying of such gas lines and getting approvals of design and construction standards. IGL, a joint venture between Delhi Government, GAIL (India) and Bharat Petroleum Corporation Ltd, has been supplying piped natural gas to domestic and commercial consumers for the last seven years.

The Delhi Government said that even as no major approvals were required for either design or construction of piped gas infrastructure, IGL was complying with the highest safety norms. A narrow inflammability range makes piped natural gas one of the safest fuels in the world. Also, piped gas installation inside the premises contains only a limited quantity of natural gas at low pressure, making it much safer than LPG cylinders. 

Petrol, Diesel prices to hike

April 26, 2005. The petroleum ministry is proposing that oil marketing companies be allowed to raise petrol prices by Rs 2.50 a litre and diesel prices by Rs 1.30 a litre following the finance ministry’s refusal to cut duties on petroleum products. The Budget had proposed lowering Customs duty on crude oil, cooking gas, kerosene, petrol and diesel but raised excise duty on petrol and diesel. At the same time, excise duty on cooking gas and kerosene was lowered. The increase in excise duty has necessitated an increase of Rs 2.52 per litre in petrol prices and Rs 1.65 a litre in diesel prices. To factor in the subsequent increase in international oil prices and the additional cess on highway construction, oil marketing companies want diesel prices raised by Rs 5.26 a litre and petrol prices by Rs 5.77 a litre. Without these raises, the companies said they would lose about Rs 2,400 crore (Rs 24 billion) a month. 

Oil diplomacy peaks 

April 24, 2005. India public sector (ONGC, IOC, OIL, GAIL) hydrocarbon presence has increased to 47 countries worldwide. India is currently examining specific expressions of interest from Ecuador, Columbia, Trinidad and Tobago and Surinam in South America, Chad, Niger, Sao Tome-Principie, Gabon, Congo-Kinshasa and Tanzania in Africa, Saudi Arabia, Qatar, Uzbekistan, Turkey and Kazakhstan in Asia. Attempts are also being made to add Turkmenistan and Azerbaijan. Proposals being pursued include 15 E&P projects in 14 countries, eight refinery and pipeline projects in six countries, five marketing projects in five countries besides four gas projects in three countries including transit through Pakistan and Bangladesh.

India plans next round of oil hunt 

April 24, 2005. To speed up the process of international acquisition of oil and gas assets, the petroleum ministry has prepared a Cabinet note to substantially enhance the financial and decision-making powers of Indian Oil Corporation (IOC) and Oil India Limited (OIL). IOC and OIL have recently entered into a memorandum of understanding for jointly acquiring exploration and production (E&P) opportunities overseas, by leveraging each other’s technical and financial strengths. However, without the government’s prior approval, the two companies do not have the powers to authorise their representatives in the management committee to take a decision on investments exceeding Rs 100-200 crore (Rs 1-2 billion).

As this may act as a constraint in making major investment decisions, the petroleum ministry’s Cabinet note calls for extending the existing mechanism of empowered committee of secretaries (ECS), for approval of overseas acquisitions, to OIL and IOC. At present, ECS mechanism is available to only ONGC Videsh Limited (OVL). Cabinet approval has also been sought to authorise both OIL and IOC to float subsidiaries or joint venture companies abroad, as and when required, for their operations or investment decisions relating to direct acquisitions. Since several countries require the winning bidder to incorporate a company under their domestic law to carry out operations in the area of exploration and production of oil and natural gas, the note says that both OIL and IOC must have the freedom to float such companies abroad.

India warns Dhaka on gas pipeline project

April 20, 2005. India would be forced to look at other options of bringing natural gas from Myanmar if Bangladesh does not cooperate in working out a trilateral agreement on the Indo-Myanmar gas pipeline.  Gail and Oil and Natural Gas Corporation have participation in two gas blocks in Myanmar. India wants to bring gas reserves from Shwe field in block A-1 in offshore Myanmar. The companies are also expecting discoveries in the adjacent block A-3. India had half a dozen options but was keen to involve Bangladesh since it would be good for the geo-political climate of the country. Pipeline through Bangladesh would be cheaper and would also help in monetising Tripura gas. Bangladesh was keen that the memorandum of understanding for the pipeline should be signed in Dhaka which showed that it was keen on the project. 

Enumerating the other options, he said gas could come as compressed natural gas or liquified natural gas. 'A pipeline could also be laid in the shallow waters. It could also be outside the shallow waters though there were technical problems in it.' Onland pipeline could also directly come from Tripura or Mizoram. 

Talks on pipeline transiting from Myanmar has got stuck with Bangladesh insisting on an assurance from India on trade, transit and power supply from Nepal and Bhutan to be included in the trilateral memorandum of understanding. The three bilateral issues were identified by a committee of nine secretaries set up by the Bangladesh government for examining the India-Bangladesh-Myanmar pipeline. The Indian government also cannot do much about the favourable trade balance it enjoys with Bangladesh since it was not willing to sell natural gas to India. 

BPCL signs MoU with petroleum ministry

April 20, 2005. Bharat Petroleum Corporation (BPCL) has signed a memorandum of understanding (MoU) with the union petroleum & natural gas ministry for 2005-06, which includes achieving a crude throughput of 10.3 million metric tonne per annum (MMTPA) at its Mumbai refinery. The MoU for the year 2005-06 has been enlarged to encompass key parameters on quality assurance, customer service and efforts towards R&D. As an efficiency parameter, new parameters on average refining cost per tonne and average marketing cost per tonne have been incorporated in the MoU. In view of the impending merger of Kochi Refineries with BPCL, a synergy parameter has been incorporated in the MoU and financial parameters continue to have a major 50 per cent share in overall weightage.

M.P. seeks more kerosene

April 20, 2005. Madhya Pradesh sought increase in its allocation of kerosene (SKO) for the first quarter of the current year, asking to  consider allocating SKO to the State on the same levels as that of January-March 2005 (last quarter of 2004-05). The Central Government allocates SKO to the States and Union Territories for distribution under the public distribution system (PDS). During 2004-05, Madhya Pradesh was allocated 4,76,691 litres of SKO.

Crude oil imports rise 5 per cent in ’04-05 

April 19, 2005. India’s crude oil imports have risen 5 per cent to 95.315 million tonne in 2004-05 fiscal even as domestic production rose marginally to 34.04 MT. Total domestic production of crude oil during 2004-05 was 34.05 mt as against 33.37MTin the previous financial year. Crude oil imports rose from just over 90 MT in 2003-04 to 95.314 MT in 2004-05. The petroleum product import rose 5 per cent to 7.701 MT in April-February when compared with 7.363 MT products imported in the same period the previous fiscal. While 12.927 MT of petroleum products were exported during the first 11 months of 2003-04, the export during the same period of 2004-05 amounted to 16.139 MT.

Free hand likely to oil firms on auto fuel prices 

April 19, 2005. The government is likely to give state-run oil firms freedom to adjust auto fuel prices within a narrow price band once international prices stabilise. It is hoped that when international prices stabilise, or government so decides, the price band mechanism might be resorted. Although, with effect from August 1, 2004, the government had worked out a price band mechanism, allowing oil marketing companies freedom to revise the prices of petrol and diesel within the prescribed price band, the steep and volatile increase in the international prices of crude oil resulted in the ceiling of the price band being breached within weeks of its being made operational resulting in the mechanism being placed in abeyance, he said. The Indian basket of crude oil touched an all-time high of $52.83 per barrel on April 4, compared to an average price of $27.96 per barrel in 2003-04 and $39.21 per barrel in 2004-05.  There has since been some softening, the Indian basket having declined to around $47 per barrel in the week ending April 16.

POWER

CESC Ltd plans 1,000 mw unit in the Maharashtra

April 21, 2005. In a parallel development the company has decided to raise $50 million through issue of securities to either existing shareholders or new investors.  The amount would be used to fund the company’s 250MW power project at Budge which would require a total investment of Rs 1,000 crore (Rs 10 billion).  CESC was looking at the possibility of setting up a 1,000 MW power plant, which would require an investment of Rs 4,500 crore (Rs 45 billion) if the thumb rule of Rs 4.5 crore (Rs 45 million) per MW is considered.  The Maharashtra government, which is struggling to tackle the ever-increasing peaking shortfall in the state had planned to add 5,000 MW capacity in the next five years and had invited private players to set up plants in the state.  The state was suffering from a shortfall of 2500MW. Three other companies along with CESC also have shown interest in setting up a base in Maharashtra. These are Jindal Thermal Power Company, Tata Power Company (TPC) and Essar Power.  This comes in the wake of the Maharashtra government’s new policy, which was recently announced by state energy minister Dilip Valse Patil, to encourage the private sector’s participation in power generation. In 2000, the state government had signed a number of MoUs to set up power projects in the state. However, none of them materialised. 

Bhoruka Power commissions small hydro project in Mandya 

April 20, 2005. Bhoruka Power Corporation Ltd has successfully commissioned the 3.5 MW (2 x 1.75 MW) small hydro project, in Mandya district and commissioned a 2 MW (4 x 500 KW) wind electric generators recently in Chitradurga district of Karnataka. The 3.5-MW project in Mandya district, which was set up at a cost of Rs 20 crore (Rs 200 million), can generate million units per annum. The main turbine generator equipment has been supplied by Alstom. With this, the company owns and operates 10 small hydro stations with a total capacity of 40 MW. Bhoruka has also successfully commissioned 2 MW (4 x 500 KW) wind electric generators recently. The generators supplied by RRB Vestas is located in Chitradurga District of Karnataka. The station can generate 60 lakh units per annum and was set up at a cost of Rs 11 crore (Rs 1100 million). Infrastructure Development Finance Company (IDFC) funded this project. The company has so far installed 42 MW of wind energy plants.  Given the ever increasing oil prices that put pressure on most of the economies, apart from the fact of limited availability at a macro level, many developed and developing countries, are having a serious look at alternate forms of energy. Energy security has become a very important issue.

CESC has to look for power outside Bengal

April 26, 2005. CESC Ltd have to look for new power suppliers to service customers in its command areas of Kolkata and Howrah as existing West Bengal-government owned suppliers cannot meet its demand. The state’s power-surplus days are over; the state is facing a shortfall of 400MW of power daily. It is looking at the possibility of drawing power from North Eastern Power Electric Power Co Ltd (Neepco) and Tripura and Assam-based hydroelectric power plants. The state government has asked Kolkata-based power utility CESC to draw less power from West Bengal State Electricity Board (WBSEB), facing a huge power deficit. Damodar Valley Corporation, which generaly supply 200 MW power from April, failed this year. Central government agencies also cut down supply by 300-800 MW. Vidyut Vyapar Nigam had failed to supply its promised 100 MW in full. This led to a shortfall of 350-400MW per day. Evacuation problem at the Kolaghat plant has forced a cut-back in supply, from 1,200 MW to 970MW.Overall, most power stations in West Bengal were thermal plants and these were facing problems of inadequate coal supply for their boilers for some time now like other thermal power stations elsewhere in the country. 

Tata to set up coal-based power plant

April 25, 2005. Tata Group confirmed that it wanted to set up a coal-based power plant at Fulbari or Barapukuria having coal resources. According to their proposed US$ 2.5 billion investment package, Tata will set up a 1,000 MW power plant, a one-million ton capacity urea fertiliser factory in Chittagong, a 1,000 MW power plant and a 2.4 million ton steel mill in Ishwardi.

MSEB asked to maintain grid discipline

April 22, 2005. The state-run PowerGrid Corporation of India, which works as western regional load dispatch centre (WRLDC), has warned the Maharashtra State Electricity Board (MSEB) not to overdraw power from the grid in order to avoid collapse. MSEB, whose load-shedding has crossed 3,500 MW in the last couple of days, has been drawing extensively from the western grid as well as from the Central sector to tackle the burgeoning power shortfall. PowerGrid Corporation has sent out communication to MSEB asking it to strictly adhere to grid discipline norms and shed load accordingly. It has clearely stated that the overdrawal may lead to damage to the grid which is currently under the stress in view of ever-increasing demand.

Siemens gets US$34 m order from PowerGrid

April 21, 2005. Siemens has been awarded an order worth Rs 147.50 crore (Rs 1.48 billion) by PowerGrid Corporation of India (PGCIL). The order is for providing turnkey sub-stations for PGCIL's transmission project at Seoni in Madhya Pradesh. The order is to be completed within 22 months.

Tata Power plans to tap South Africa

April 20, 2005. Tata Power is looking at investing in South Africa after the country opened up its power sector for independent power producers to own and run power stations. Since the plan is at a preliminary stage, group sources refused to divulge the investment figures. It is reliably learnt that the power plant - expected to be between 500 MW and 1000 MW will be gas-based.  The company is also exploring options of investing in Sri Lanka but nothing has been finalised yet. Tata Power has been one of the last of the group companies to make a global foray. The utility outfit recently raised $200 million worth of foreign currency convertible bonds to fund its expansion. 

 Group companies — Tata Steel, Tata Chemicals and Tata Power, respectively — recently announced plans to invest $2 billion to set up steel, fertiliser, and coal-based power plants in Bangladesh. 

M.P. Govt. to buy power to tide over crisis

April 26, 2005.  The State Government has decided to buy power worth Rs 5 crore per day from the private sector. Agreements to this effect have been inked with Tata, Birla and Ambani groups. The government had budgeted Rs 10 crore for buying electricity every day to meet the situation but could finalise such purchase for Rs 5 crore only. The present arrangements with private companies is costing the government Rs 3.25 per unit, which is much higher than the price of Rs 1.5 per unit from power plants in public sector.

U.P. likely to hike power tariff by 16 per cent

April 26, 2005. Amid efforts to privatise the power sector in Uttar Pradesh, the electricity tariff is likely to rise at least by 16 per cent after June 9 if the Centre does not extend the deadline on the implementation of the Central Electricity Act, 2003. The Centre has already given a deadline of June 9 to seperate all the transmission companies from trading of power under its new Electricity Act, 2003. Over 10 states have already demanded extension of the deadline by another one year while over 1.2 million engineers and employees of the power department in the country will go on a two-day strike on May 31 and June 1, demanding extension of the deadline. If the deadline was not extended then the proposed centralised purchase by the UP Power Corporation Limited (UPPCL) for all the discoms would also be in doldrums.

Power supply in Punalur, Vilakudi to improve

April 24, 2005. The Accelerated Power Development and Reforms (APDR) programme will be commissioned in the Punalur and Vilakudi sections coming under the Kottarakara Circle of the Kerala State Electricity Board (KSEB). The programme will go a long way in improving the quality of power supply in these sections.  Implemented at a cost of Rs. 5.63 crores, the programme will bring many advantages to consumers. It will include total computerisation of the Vilakudi and Punalur sections, installation of quality electronic meters and opening of a call centre system for dealing with complaints.  Under the APDR programme, 28 km of 11 kV line in the Vilakudi section and 22 km in the Punalur section will be replaced. Thirty-two new transformers will be installed in the Punalur section, and 29 in the Vilakudi section.

 

Commercial use of fly ash to reduce pollution threat

April 24, 2005. The increased generation of power from thermal power stations may pose a serious environmental threat unless adequate initiatives are taken by the utilities to popularise commercial usages of fly ash generated by them.  The coal-fired power plants at present produce about 100 million tonnes (mt) of fly ash. The figure is likely to exceed 170 mt by 2010 as another 70,000 MW of thermal power generation capacity is slated to be added. Though power plants use various collection devices to prevent fly ash from entering the atmosphere, the measures are not foolproof. The Coal Ash Institute of India (CCII) feels the only solution to the problem lies in the encouragement of small-scale industries to commercially use fly ash as industrial raw materials.

In association with the New Wave Display Services Pvt Ltd, the institute had organised a three-day seminar on fly ash as an emerging industrial material. Experts at the seminar said fly ash has certain trace elements, which typically include arsenic, boron, cadmium, copper, lead, selenium and zinc, which can adversely affect human health if inhaled or ingested in sufficient quantities.  They suggested that power plants be cautious in selecting their modern ash landfill sites. The selection ideally should involve topographic mapping, site reconnaissance, an environmental inventory and surface water and groundwater studies. According to them, the best bet would be to produce fly ash cement concrete blocks/ bricks with the help of manually operated machines in the rural areas. It appears that the existing production of clay burnt brick throughout West Bengal comes to about 300 crore pieces which require about 21 crore cft of good earth every year.

Shift all hydel projects to MNES, says house panel

April 24, 2005. The Parliamentary Standing Committee on Energy has recommended a complete shift of all hydroelectric power projects from the jurisdiction of the Ministry of Power to the Ministry of Non-conventional Energy Sources (MNES). The committee's recommendations stem from the fact that the MNES has now got the requisite skill, strength and capabilities to install, operate and maintain even mega hydel power projects. In its sixth report on demands for grants (2005-06) pertaining to MNES, the committee, chaired by Gurudas Kamat, has noted that small hydel power projects up to three megawatts were transferred to MNES during 1989. Ten years later, with effect from November 29, 1999, hydel projects of the size of three to 25 MW were also brought under this Ministry's purview. Within a short time, MNES, the committee said, had been able to achieve a capacity of 1,693.94 MW out of the total hydel power potential of 15,000 MW.  The Ministry has now set a target of 600 MW to be achieved by the end of the Tenth Plan and 2,000 MW by the end of 2012. During the first three years of the current Plan period, the Ministry achieved a capacity of 254 MW with an expenditure of Rs. 69.53 crores, thus achieving hundred per cent utilisation.

Jharkhand to hike power capacity

April 23, 2005. The power utility has approved a budget of Rs 1,063 crore (Rs 10.63 billion) for renovation and modernisation of PTPS.  JSEB has been struggling for more than a year to cope with the rising demand for power in the state, which has reached around 1,100 MW a day.  The PTPS unit was at present generating only 40MW to 100MW daily. The coal-rich Jharkhand state government and its power utilities have failed to set up any new power plant in the state since its inception, although the state has been facing an acute shortage of electricity both in urban and rural areas and across domestic and industrial segments. 

To meet demand, JSEB was drawing over 200MW from the central pool through the eastern grid. JSEB was also having to purchase about 300MW from the Damodar Valley Corporation (DVC).  Power demand in the state was expected to rise sharply following the introduction of the sponsored central scheme under the ‘Rajiv Gandhi Grameen Vidyutikkaran Yojana’ as it was expected to lead to a quantum jump in the number of connections provided in the rural areas of Jharkhand. Around 90 per cent of the villages in the state do not have access to electricity at present.  The new central scheme, applicable to 12 states, has set a target of providing electricity connections to 1.25 lakh villages and 7.8 crore rural households located in these population clusters within the next five years.

TN `lags in commercial viability' in power sector

April 22, 2005. Tamil Nadu, which has been ranked fifth in a performance rating of the power sector in all the States, fares poorly when it comes to progress in attaining commercial viability of the sector. The rating exercise carried out by ICRA and Crisil for the Union Power Ministry considered six parameters — State Government related parameters, SERC (State electricity regulatory commission) related parameters, business risk analysis consisting of generation and transmission and distribution, financial risk analysis, others and progress in attaining commercial viability — and gave each of them a maximum score possible, all adding up to 100. Tamil Nadu, which scored 50.94, has done reasonably well in all parameters except the one related to "progress in attaining commercial viability," an analysis of the performance rating exercise shows. Against a possible maximum score of 16 under this head, it has been assigned 4.20. Overall, Andhra Pradesh stands first with a score of 57.03, followed by Gujarat with 53.61, Delhi 51.91 and Karnataka 51.46. Andhra Pradesh has been assigned a score of 3.20 for commercial viability, Gujarat 4.20, Karnataka 4.60 and Delhi no score at all.

Power shortage hits UP, Gujarat most 

April 22, 2005. Uttar Pradesh remained the most power starved state in the country accounting for a deficit of more than 20 per cent. Gujarat, which is the second largest power consuming state, suffered most on account of peak time shortages.  Among the larger states, Rajasthan faced little power shortage and no peak time shortages. Although citizens of Bihar may have become used to power cuts, the state faced no peak time power shortage during April-December 2004, revealed the official figures on power demand-supply position in the country. The region-wise power supply position indicates that western region suffered badly on account of regular power shortage and as well as peak time shortages. Interestingly, power shortage in Bihar was less than what was witnessed in some better states like Maharashtra and Punjab.

The shortage in Bihar during April-December 2004 was 7.5 per cent as compared to 10.5 per cent in Maharashtra and 8.8 per cent in Punjab. Among the states which did not face major power shortages were Rajasthan and Himachal Pradesh. Also there was no power shortage in Goa. The deficit in Delhi during the period worked out to be less than 1 per cent. The demand supply gap, it may be mentioned, was quite wide in the western region because of high demand of power from states like Maharashtra and Gujarat. Maharashtra, it may be mentioned, consumes maximum power among the states followed by Gujarat and Andhra Pradesh.

40-mt coal shortage worries PM

April 22, 2005. Prime Minister Manmohan Singh reviewed the performance of the infrastructure sectors at a ministerial meeting and expressed concern over the 40 million-tonne coal shortage facing the country. Singh called for speedy implementation of new projects and technological improvements for increasing coal production. A decision was taken to set up a taskforce within the coal ministry to work out ways for improving coal supply.   The mid-term appraisal by the Planning Commission has projected a shortfall of 55 million tonnes (mt), which is expected to decrease to 42.5 mt during 2006-07, the last year of the Tenth Plan. 

Coal India has undertaken 99 projects during the Tenth Plan period. It has initiated a drive to modernise existing mines and allotted 46 captive coal blocks to various end-users.  The coal ministry plans to supply about 257 mt to the power sector. CIL supplied about 234 mt of coal to National Thermal Power Corporation (NTPC) and other power utilities in 2003-04, while in 2004-05, it supplied 249 mt.  The government has advised the power sector to import about 10 mt coal during the current year to meet the increasing demand. Seventy per cent of coal production by public sector companies is being supplied to the power sector. Power generation has been steadily increasing and the plant load factor has gone up from 69 per cent in 2000-01 to 75.20 per cent in 2004-05. About 66 per cent of power generation in the country is coal based.  Some power plants, however, continue to work at critical supply levels according to data compiled by the Central Electricity Authority.

BHEL sets achieve record PLF

April 21, 2005. Thermal power generating sets made by the public sector Bharat Heavy Electricals Limited (BHEL) have achieved an all time high plant load factor (PLF) of 75.7 per cent in the beginning of this fiscal giving a boost to power generation. This is higher than the national average by 1.4 per cent. Operating availability (OA) of these sets has also been recorded the highest ever at 84.3 per cent, says a BHEL release. The BHEL thermal sets generated a record 331.2 billion units of power during 2004-05.

14 Central sector projects report additional delays

April 21, 2005. Central sector projects costing over Rs 100 crore each have reported additional delays in completion, ranging from one to six months.  Seven projects in the road transport sector, six in power and one in petroleum reported slippages between the two months, while 219 projects were on track, according to the Flash Report for February 2005 issued by the project monitoring division of the ministry of statistics and programme implementation.  These delays are over and above the delays reported in January 2005. 

The report, which keeps track of 333 Central sector projects, also said that five new projects - three from telecom and two from coal - have been taken up for monitoring, while four from power and one from road transport taken off the monitor in February, following completion. In the power sector, three hydro electric projects and three transmission-line projects slipped between one to six months. The Dhauliganga Hydro Electric Project, the Dhauliganga-Bareily Transmission Line and Madurai-Thiruvananthapuram 400 KV DC Line, are nearing completion.  The anticipated dates of commissioning of the Tehri Hydro Electric Project, the Dhauliganga Hydro Power Project and the Dulhasti Hydro Project have since been shifted to July, April and September, this year.

The Dahej-Hazira-Uran Pipeline project in the petroleum sector has also been delayed by two more months and now expected to be ready by October 2006, the report added.

Machkund hydel pact may be revised

April 20, 2005. An amicable agreement on the sharing of power generated from the 120 mega watt interstate Machkund hydel project between Andhra Pradesh and Orissa is likely to be signed in the next couple of months. The Orissa government has been asking its counterpart in Andhra to restore the ratio of 50:50 sharing of power from the project in place of the current 70:30 ratio which is favourable to Andhra Pradesh.  An early settlement of the issue related to sharing of power generation is also necessitated on account of the renovation work to be undertaken at the project, the life of which has already expired. 

The erstwhile government in Orissa had signed an agreement with the then composite Madras state in 1945 on the sharing of Machkund water with 20 per cent from its share acceding to Madras in return to a payment of royalty for a period of 99 years.  The agreement also says that the royalty amount should be reviewed after 30 years. This review is yet to take place since the 30-year period ended in 1985.  But a subsequent agreement signed by the then chief ministers of both the states in 1976 has replaced the royalty clause with compensation payment of 8 paise per unit to Orissa government on the 20 per cent of total power.  Even though the demand of Orissa government appears to be quite normal and justified, the Andhra Pradesh government has been pointing at the original agreement period of 99 years which still has around 40-year validity. 

NTPC suspends purchase preference policy

April 20, 2005. With the lapse of purchase preference policy of the government on March 31, 2005, National Thermal Power Corporation (NTPC), the country’s largest generator of power, has decided to do away with the preference given to public sector units and to joint ventures with government-owned companies.  The board took a decision to the effect and it has been implemented for all contracts which are to be awarded. NTPC has already altered its tender advertisements to specify that no preference will be given to public sector units or to joint ventures with PSUs. 

The move is expected to affect other PSUs like Bharat Heavy Electricals Ltd, which are large equipment suppliers for power plants.  The department of public enterprises is in favour of an extension, as it will assist sick PSUs. However, the commerce and petroleum ministries are reportedly against such a move.  The finance ministry had earlier said it wanted the price preference to be either scrapped completely, or the purchase preference reduced to 5 per cent. It had also indicated that Navratna PSUs might not be justified in using the purchase preference policy. 

Mounting AT&C losses worry power ministry 

April 19, 2005. The power ministry has expressed serious concern over the high rate of aggregate transmission and commercial losses (AT&C) which ranged from 23.6 per cent to 75 per cent in various parts of the country in 2003-04. Manipur tops the list with a record AT&C of 75 per cent followed by J&K 67.6 per cent, Nagaland 65 per cent, Sikkim 55 per cent, Mizoram over 50 per cent, Delhi 49.33 per cent, Rajasthan 47 per cent, Madhya Pradesh 46 per cent, Uttaranchal 44 per cent, Haryana 41 per cent, Bihar, Assam and Uttar Pradesh 40 per cent each, Maharashtra 34.9 per cent and Kerala 33 per cent. Reforming states like Tamil Nadu have AT&C of 23.6 per cent, Andhra Pradesh 24 per cent and Punjab with 26.6 per cent. Power ministry sources told that it has asked states to vigorously carry out distribution reforms and implement anti-theft Acts to contain the burgeoning AT&C losses. Despite private sector involvement, Delhi has AT&C losses of 49.33 per cent.

OIL & GAS

Abu Dhabi to boost crude supply in June

April 26, 2005. Abu Dhabi, the main oil producer in Opec-member the United Arab Emirates, will boost crude supplies by over 60,000 barrels per day in June. State Abu Dhabi National Oil Company (ADNOC) will supply full contracted volumes of its Murban crude oil for June loading to Asia, compared with a 5 per cent cut in May. That translates to an estimated 60,000 bpd more crude. The rising production accompanies an increase from Saudi Arabia, the world's biggest exporter, which told Asian refiners and oil majors they would receive as much as 500,000 bpd more crude in May than the month before. Middle East Gulf producers are eager to boost consumer nations' oil inventories during the seasonally weak second quarter to create a buffer against stronger demand at the end of the year. The Murban field underwent maintenance in May and June to raise output by 200,000 bpd to 1.4 million bpd by the end of this year. Maintenance was also scheduled at the offshore Umm Shaif and Lower Zakum fields. When fields are producing at full capacity, the UAE's total crude output can exceed 2.4 million bpd and rise as high as 2.5 million bpd, as was the case last year when it was supplying up to 100,000 bpd of extra volumes to Asian customers.

UAE to increase oil output to 3.2m bpd

April 24, 2005.  The country which has a current production of 2.5 million barrel per day (bpd) is working on different projects to upgrade infrastructure to increase its oil output to 3.2.million barrel per day, by the end of next year. The UAE's current OPEC production quota, effective March 16, 2005, is 2.40 million bpd, and its current crude oil production as of April 2005 is 2.50 million bpd. The UAE's total production capacity is 2.50 million bpd, so it does not have any spare capacity at the current level of production. The Abu Dhabi National Oil Company (ADNOC) brought in ExxonMobil in June 2004 as a strategic partner in the development of the Upper Zakhum field, with a 28 percent ownership stake, after a competitive bidding process. ExxonMobil is set to undertake a program of upgrades to the Upper Zakum field to raise its capacity from the current 550,000 bpd to 750,000 bpd by 2008, and to 1.2 million bpd by 2010.

Several projects to upgrade infrastructure at existing oilfields are planned or underway. A project to increase the capacity of the onshore Bu Hasa field is underway, including construction of natural gas separation units, drilling of natural gas re-injection wells, and water injection. The goal is to increase sustainable production capacity to 730,000 bpd from the present 550,000 bpd by the end of 2006.  A natural gas re-injection project also is planned for the onshore Bab field, which is expected to increase capacity to 300,000 bpd from the current 200,000 bpd. Upgrades planned for the onshore Asab field are set to raise capacity from the current 280,000 bpd to 310,000 bpd by then end of 2006.

Great Lakes dilemma

April 21, 2005.  A House committee killed a plan to permanently ban oil and gas drilling on the Great Lakes, the source of one-fifth of the world's fresh surface water. The House Rules Committee refused to let the full House vote to put the drilling ban into an energy bill that would boost U.S. oil and gas supplies. The United States has a moratorium on oil and gas drilling in the Great Lakes that expires in 2007. Canada allows drilling on its side of the lakes. U.S. lawmakers warn that increased drilling raises the risk of oil spills and hazardous gas leaks that would endanger lakeside residents and further wreck the lakes' fragile ecology. The Great Lakes cover 94,000 square miles, according to the Great Lakes Information Network, and supply drinking water to 30 million people. Canada has drilled more than 2,000 wells on its side of the lakes and has not had one spill or leak that has caused "environmental Armageddon”.

Amerada to spend US$500 mln on Indonesia gas field

April 20, 2005. U.S. oil producer and marketer Amerada Hess will spend US$500 million to develop the Pangkah natural gas field in Indonesia, a company executive said. In December, Amerada signed a gas sales agreement with state electricity firm PT Perusahaan Listrik Negara to supply 100 million cubic feet per day of gas to a power plant in East Java from early 2007. The gas will come from Ujung Pangkah field in offshore East Java. The Pangkah development itself would be US$500 million. The production from that should be in a range of 25,000 barrels of oil equivalent per day.  Hess said his company was evaluating new exploration areas being offered by the Indonesian government. Indonesia has said it will open 43 new areas for oil and gas exploration this year in a bid to shore up declining oil reserves and output.

Oil discovery by Diaz on production

April 19, 2005. A new oil pool discovery located in the Harmattan field, central Alberta, came on continuous production from April 15, 2005. The well was shut-in to evaluate the reservoir and to construct a pipeline to conserve the solution gas. The well is currently flowing 600 Bopd with 960 Mcfd gas but will be restricted to its initial allowable rate of 126 Bopd, however, Good Production Practice, applied, would allow it to be produced at increased rates. Three more wells will be drilled in this area in the next 90 days.

Kvaerner Powergas bags Norway project

April 22, 2005. Kvaerner Powergas India Pvt Ltd, the Indian arm of the Norwegian transnational giant Aker Kvaerner, has bagged an engineering design contract for the onshore gas processing facility at Ormen Lange, the largest gas field being developed on the Norwegian continental shelf.  The Rs 25 crore engineering design contract is expected to be completed by October 2005. Around 150 engineers are working on the designs for the processing plants in Mumbai.  Gas from the Ormen Lange will be carried through the world’s largest sub-sea export pipelines to the United Kingdom and will cater to 20 per cent of the UK’s energy demand from 2008.  Kvaerner Powergas is also in the designing Shell’s two refineries in Australia, which will specifically concentrate on reducing the benzene content in gasoline.

Kuwait plans new 600,000 bpd refinery

April 25, 2005. Kuwait has decided to build a new 600,000 barrels per day refinery to boost capacity to about 1.5 million bpd. Work on the new refinery, the fourth in the Emirate, is scheduled to start in 2007 and production will begin in early 2010. State-run Kuwait National Petroleum Co (KNPC), which owns all refineries, initially planned to establish the new refinery at a production capacity of 450,000 bpd at a cost of between three to four billion dollars. The refinery will produce 225,000 bpd of fuel oil needed for domestic consumption to operate power plants, and 375,000 bpd of oil products intended for export. It will produce only oil products after Kuwait starts importing natural gas from neighbouring countries to operate its power plants. Kuwait has three refineries at Al Ahmadi, Shuaiba and Mina Abdullah, all in the emirate’s oil-rich southern region, which have a combined refining capacity of 915,000 bpd.

Exxon Mobil eyes new Singapore petchem plant

April 25, 2005. Exxon Mobil Corp. is conducting a study for a second ethylene plant in Singapore to enhance its position in the global chemicals sector in a race to capture China's surging demand. The new world-scale facility would be fully integrated with the global oil giant's 605,000 barrel-per-day (bpd) refinery in Singapore and would include derivative units. World-scale plants produce roughly 800,000 -900,000 tonnes of ethylene a year, which could mean that the oil major wants to build a plant on the same scale as its existing facility in Singapore. Exxon Mobil had already said it would expand capacity at its existing Singapore plant to about 900,000 tpy by the end of 2006. Ethylene and propylene, processed from naphtha or natural gas at steam crackers, are the basic building blocks for the chemicals sector, which are used to make a range of products such as plastics, rubber and fibre.

Gas terminal

April 21, 2005. Anglo-Dutch oil giant Royal Dutch / Shell and French energy group Total launched a liquefied natural gas terminal as part of India’s efforts to shift factories and consumers away from high-priced oil. India’s oil minister opened the US$698 million plant as part of the country’s goal to meet 20 per cent of its energy needs with gas by 2025.

Sempra, Gazprom sign LNG import, marketing pact

April 25, 2005. Sempra Energy has signed a nonbinding agreement with Gazprom to import and market Russian liquefied natural gas in North America. The San Diego-based company said the memorandum of understanding envisages shipments of Russian LNG into Sempra receiving terminals in North America and sale of the natural gas through trading arm Sempra Commodities.  Sempra is currently developing LNG terminals in Louisiana, Texas and the Mexican province of Baja California. Gazprom, the world's largest natural gas producer, plans to begin exports of natural gas to the United States this year. The company also will begin drilling in Shtokman gas field in the Barents Sea, one of the world's biggest offshore gas fields with almost 3 trillion cubic meters of reserves, and begin exports from it in 2010-11.

China makes bid for more Australian gas fields

April 23, 2005. Chinese oil giants are in talks with Australian partners to import more liquefied natural gas (LNG) and equity options in major Australian gas fields. Chinese oil companies, including China National Offshore Oil Corp (CNOOC) and Sinopec, may also buy equity in some of Australia's largest gas projects, such as Gorgon, Browse and Sunrise. The deal would make Australia, China's largest supplier of LNG. The country has already clinched a record-breaking US$19 billion deal to ship the super-cool, condensed fuel to a CNOOC terminal in South China's Guangdong Province for 25 years from 2006. The Gorgon project, located off the northwest coast of Australia, is estimated to have gas reserves of 40 trillion cubic feet, nearly one-third of Australia's proven total. The Browse Gas Project is estimated to have gas reserves of more than 20 trillion cubic feet. Sunrise in the Timor Sea has a reserve of more than nine trillion cubic feet.

Kazakhstan targets 3.7 bn barrels of oil in Caspian 

April 22, 2005. Kazakhstan's government will invite bids to drill in an area of the Caspian Sea that may contain 3.7 billion barrels of oil, enough to supply Russia for four years. The government is concluding exploration terms for the so-called N Blocks in the Caspian Sea, Amantai Kemelovich Suesinov. The blocks may hold 500 million metric tonnes of recoverable reserves. Kazakhstan is seeking more investment in the Caspian Sea after an ENI SpA-led group agreed to spend US$29 billion developing Kashagan, the world's second largest field after Saudi Arabia's Ghawar. Producers in land-locked Kazakhstan need to secure export routes to transport the oil, adding to development costs.

State-owned oil company ZAO NK KazMunaiGaz will offer a production sharing agreement to a foreign company once the government approves the terms. The contract will allow foreign partners to take a share of the oil produced, which may act as a hedge against crude oil prices that rose to a record earlier this month. Oil from the N Blocks may be transported to export markets.

Qatar to invest $15 bn to build world’s largest LNG fleet 

April 22, 2005. Qatar, home to the world’s third-largest natural-gas reserves, plans to invest about US$15 billion to build the world’s largest liquefied natural gas tankers fleet as the country seeks leadership in the globe’s expanding LNG market.  Qatar has commissioned Hyundai Heavy Industries Co, Samsung Heavy Industries Co and Daewoo Shipbuilding & Marine Engineering Co, the world’s three-largest shipyards, to build 69 gas tankers by 2010.

Japan urges Russia on pipeline

April 21, 2005. Japan is willing to help in every way possible if Moscow gives priority to building a 2,550-mile crude oil pipeline from Siberia to Russia's Pacific Coast, from where oil could be shipped to energy-hungry consumers in Japan. Russia is also planning a branch line that would carry crude to China's northeast. The pipeline would have a capacity of 1.6 million barrels per day. Japan is expected to provide low-interest loans to pay for much of the construction of the pipeline, now estimated to cost more than US$10 billion and be in commercial use in 2010. Over the past two years, the two nations have held a series of expert-level talks on the pipeline and discussed three major issues, a feasibility study of its construction and environmental impact, financing, and oil exploration in eastern Siberian fields.

Gulf Oil forays into China

April 21, 2005. Gulf Oil Corporation, a Hinduja Group company, has entered Chinese market with its lubricants. The board approved the acquisition of 51 per cent of Gulf Oil Yantai (Co) Ltd. This is the company's third overseas venture. It has presence in Bangladesh and Indonesia. Gulf Oil Yantai has manufacturing and marketing operations in the Yantai city, Shandong Province of China. The company intends to set up a new manufacturing facility, in an economic zone, with an installed capacity of 30,000 tonne per annum. The proposed new plant will not only cater to the Chinese market, but also supply lubricants to Taiwan, South Korea, Vietnam and Japan. The company is also planning to set up large base oil storage capacity in China and will trade in base oils. China, with a lubricant market potential of 4.3 million tonne per annum, is amongst the largest lubricant markets globally. It is expected to grow at the rate of five per cent to 5.5 million tonne in 2010 and to 6.3 million tonne in 2013.  The company is also looking at the possibility of further forays into the regional markets to consolidate the position of Gulf brand in the Asia Pacific region, with India as the hub.

Chevron may resume Batumi use for Tengiz oil in 2006

April 20, 2005.U.S. ChevronTexaco may resume using Georgia's Black Sea port of Batumi for exports of its Kazakh Tengiz crude from late 2006 as Russia has not allowed it to expand a major pipeline via its territory. Tengiz's oil output will rise to 26 million tonnes (520,000 bpd) by the end of 2006-beginning of 2007 from the current 12-13 million. If they fail to solve the issue of the Caspian Pipeline Consortium (CPC) expansion, they plan to ship part of their growing output via other routes. This may include shipments of up to five million tonnes by tankers (via the Caspian Sea to the Azeri port of) Baku and then by rail to Batumi. In 2001, it diverted all volumes to the newly built CPC, which runs via Kazakhstan and Russia to the Black Sea port of Novorossiisk. The CPC pipeline currently ships around 650,000 bpd of crude from Tengiz and other Kazakh producers, but Russia is blocking the doubling of its capacity as it is unhappy with shipping tariffs and dividends it receives from the project.

Rosneft to partner ONGC

April 20, 2005. Russia's Rosneft state oil company would consider ONGC's bid for a stake in the Vankor oil field in Eastern Siberia, but the Indian company will face stiff competition from other foreign bidders. Rosneft, which holds the licence to develop the Vankor oil field in the north of Krasnoyarsk Region, is planning to offer a minority stake in Vankor to foreign bidders next year after it carries out additional prospecting to boost the market value of the asset. Last month Rosneft announced doubling its estimate of extractable reserves at Vankor to 250 million tonnes of crude, which makes it the biggest new oil deposit in Russia. The company would also put up for sale a 20 to 25 per cent stake in Yuganskneftegaz, the main production unit of the nationalised Yukos oil major. The share might be given to one bidder or divided among two or more companies.

Canada-US oil pipeline expansion complete

April 19, 2005. Terasen Inc. has finished a US$100 million expansion of the major pipeline that ships Canadian crude to the U.S. Rocky Mountain states. The expansion of the Express Pipeline boosted capacity by 108,000 barrels a day to 280,000 barrels a day. The project boosted market opportunities for energy companies pumping growing volumes of Canadian crude, especially supplies from northeastern Alberta's oil sands. Express moves crude to refineries in Montana, Wyoming, Utah and Colorado from the pipeline hub of Hardisty, Alberta. The Platte pipeline, which is connected to express, moves supplies to southern Illinois. The project, which cost 10 percent less than expected, consisted of adding nine pumping stations in Canada and the United States and building tanks in Hardisty and Casper, Wyoming, adding storage capacity of 600,000 barrels.

Sinopec to start up southwest China pipeline

April 19, 2005. Sinopec Corp. will start filling oil into the 1,060-mile (1,700 km) pipeline by next week to feed China's landlocked southwest, the first of five pipelines due for operation this year. China's top refiner, which is also Asia's largest, will start pumping diesel into the Maoming-Kunming line, and is expected to fill up the entire line with a designed annual capacity of 10 million tonnes (200,000 barrels per day) in the third quarter. "Around 5,000 tonnes (37,250 barrels) of diesel will flow in first, followed by gasoline," a Sinopec official said, adding that it is a single pipeline and takes in diesel and gasoline at intervals. The pipeline starts at China's No.2 oil refinery, the 270,000 -barrel-per-day (bpd) Maoming plant, and ends in the city of Kunming, capital of Yunnan province. The estimated 4 million barrels that will fill up these lines are described as China's "hidden oil demand", or oil kept continually in storage outside its normal consumption, analysts say. China's southwest region, including the provinces of Yunnan, Sichuan and Guizhou has a total population of around 170 million, and does not have a major refinery. It relies on oil supply from outside the area that is transported by rail, trucks and the three-year-old, 770-mile Lanzhou-Chengdu pipeline.

Black Sea nations to build oil pipelines

April 24, 2005. Energy officials from 12 Black Sea and Caucasus countries have pledged with the EU to development major energy networks, including new pipelines to Caspian Sea oilfields. Oil companies and regional governments are keen to find alternatives to shipping Caspian oil through Turkey's busy Bosporus Strait, already used to transport more than 50 million tons of oil a year. Energy via pipelines will be faster and cheaper, and will pose a smaller environmental risk.

IEA prunes oil demand forecast

April 24, 2005. International Energy Agency (IEA), which reports on the global oil demand/supply and inventories, has revised its daily demand forecast slightly downward by 50,000 barrels to 1.77 million barrels a day.  This is the first downward revision in IEA's demand forecast for many months. The forecast was revised because IEA believes that the factors that drove world crude oil prices to all-time highs since the beginning of this year seem to be dissipating. NYMEX WTI crude oil futures hit a high of over US$58 a barrel in April.  IEA's reasons for a downward revision include a slowdown in Chinese demand growth to 5.4 per cent in the first two months of 2005 from the breakneck 21 per cent growth recorded in the year-ago period.

World oil supplies, which had fallen in January, have risen by 3,65,000 barrels per day (bpd) to 84.2 million bpd in March 2005. Of this, 3,15,000 bpd increase came from the cartel of Organisation of Petroleum Exporting Countries (OPEC). The IEA report, oil produced by non-OPEC oil producers or the OECD countries including US, Canada, etc. is expected to jump in the second half of 2005. Also, OECD stocks fell by 39 million barrels in February. But stocks are 96 million barrels above last year levels.  Among the OPEC countries, Saudi Arabia and the United Arab Emirates increased output by 2,90,000 bpd to 29.1 million bpd. Iraqi supply was flat at 1.8 million bpd. OPEC capacity is targeted for 32 million bpd in the fourth quarter, according to IEA. If OPEC and non-OPEC growth capacities are combined, long-term projections estimate an aggregate increase of 1.75 million bpd on an average through to 2010. This is slightly higher than average increase in long-term demand so far, at 1.5 million bpd or a growth of 1.7 per cent.

US House backs drilling in Alaska 

April 22, 2005. The US House of Representatives defeated measures to block oil and gas drilling in Alaska's Arctic National Wildlife Refuge and raise vehicle fuel economy standards as the chamber began debate on a national energy policy bill.  Republicans said the legislation would increase energy supplies, reduce fuel prices, encourage conservation and decrease the nation's dependence on foreign oil. It also would offer liability protection to manufacturers of methyl tertiary butyl ether, or MTBE, a gasoline additive that has been the subject of lawsuits after it leaked into ground water. 

Japan may tap gas fields with China

April 21, 2005. The Japan government is set to agree to talks proposed by China on the joint development of natural gas fields in the East China Sea. The government will accept the proposal on the condition that the waters subject to the joint development cover the entire East China Sea. Beijing is moving ahead with the development of natural gas fields in waters on China's side near the Japan-China median line in the East China Sea, though it proposed the joint development of natural gas fields in the area to Japan in June last year.

POWER

Pakistan to set up US$5 bn power plant

April 21, 2005. Pakistan has decided to set up a 5000MW coal fired power generation power plant at a cost of US$5 billion to meet the growing power shortages in the country. Official sources said that negotiations were currently being held with the American and German companies to set up this plant preferably during 2005. The government was looking for new foreign investment in coal fired power generation with a view to remove the shortage of electricity. Initial negotiations have been held with American Education Services (AES) of the United States and Hambic Company of Germany to get 5000MW of coal fired power project set up as early as possible. The Pak government needed one 5000MW coal fired power plant and whosoever was ready to give a better tariff will be invited to set up this project. The official said that both the companies had offered to set up 1000MW of each coal fired power plant but the government was asking them to go for 5000MW of plant. It required a huge investment and the government would provide all necessary incentives and concessions to any foreign company, interested in a coal fired power plant.

Pak Govt. invited bids for three power projects

April 19, 2005. The Private Power and Infrastructure Board (PPIB) has invited bids from local and foreign firms and consortium to set up three private thermal power plants of 1200-1350MW capacity at an estimated cost of about $1 billion. The last date for submission of proposals for three dual-fired and combined cycle independent power plants has been fixed as June 20, 2005. This is for the first time that independent power projects (IPPs) would be set up through international competitive bidding in Pakistan to meet around 5,500MW power shortage estimated for the year 2010.  The competitive bidding and evaluation of the bids would be carried out by the PPIB under the supervision of the National Electric Power Regulatory Authority (Nepra). The lowest evaluated levelized tariff would be the main criteria for selection of successful bidder. The first project, 400-500 MW gas-based power project at Uch, will be located near Wapda's existing power station at Guddu, Sindh. Using low BTU (British Thermal Units) from Uch gas field, available for 25 years, the project will be based on combined cycle technology. The project will comprise two gas and one steam turbines.

The required gas quality for the project is 160-180 mmcfd (metric million cubic feet per day) and the cooling water requirement is 270-300 cusec, which is available. National Transmission and Despatch Company (NTDC) will be the power purchaser while Oil and Gas Development Company Limited (OGDCL) will be the gas supplier. The second project, 450MW power plant at Faisalabad, will be located very close to the Wapda's own power station, exactly at the load centre. It will also be a dual fuel based i.e. pipeline quality natural gas and oil. The project will use combined cycle technology and its gas requirement will be 90mcfd.The third project, 350-400 MW project would be located at Chichoki Malian near Lahore. It will be dual fuel (gas/oil) and will be based on combined cycle technology. The gas requirement of the project will be 70mcfd.

SCE offers long-term deals to aid new power plants

April 22, 2005. Utility Southern California Edison is seeking offers to supply power under long-term deals in a bid to encourage the construction of new power plants. The Request for Offers (RFO) covers contracts of up to 10 years for new power plants that could be online between June 1, 2006 and August 1, 2008. The utility, a unit of Rosemead, Calif.-based Edison International anticipates limiting the maximum volume contracted under this RFO to 1,500 megawatts.

Bank of America enters physical power market

April 20, 2005.Bank of America Corp. the second biggest U.S. bank in terms of assets, entered the physical power market last week, complementing its existing trading in  natural gas, power and oil products. Physical power trading allows traders to schedule the actual flow of electricity on the nation's power grid, compared with financial trading, which does not entail physical transfers, but instead involves a wide range of hedging instruments from futures and options to derivatives. Bank of America, with operations in New York, Charlotte, Chicago and London, helps clients manage risk in the natural gas, crude oil, refined products and power markets.

MoU signed to set up coal-based power plant

April 20, 2005. A tripartite memorandum of understanding (MoU) has been signed between a Ukrainian firm Ukrinterenergo, Hyderabad-based Fateh Group and the Sindh Coal Authority to develop the Lakhra coal mine field , explore coal mining at Sonda-Jherruck and set up a coal-based electric power generating station of 300 MW at Dadu. The coal washing plant would provide contamination-free coal to the expanding cement sector and would be an important import substitution.

The group is also interested in exploring coal in Sonda-Jherruck, developing the Lakhra coalmine field and setting up a coal-based power plant. The coal-based power plant is being set up on 'built, own, operate and transfer basis'. The Fateh Group would eventually take over the plant. The construction of two coal-based power plants of 300 MW each was being set up by the Chinese Shenhua Group Corporation at Thar coalfield, and another 450 MW at Lakhra, and coal mining at Sonda-Jherruck was being done for setting up of a 300 MW plant.

Energy sector investors worry about power play

April 20, 2005. International utility companies sounded a warning bell as regulatory uncertainty holds back investment needed in the sector to secure power supply. The annual PwC global utilities survey, regulatory worries top the list of investor concerns about funding the industry. While 55 per cent of investors believe that deregulation is helping investor climate, more than a 39 per cent said market reforms are damaging confidence, highlighting the dangers of inconsistent regulation, energy, tax and environmental policies. This anxiety means that despite its growth prospects, it is failing to attract the investment it needs. Meeting projected supply needs will require US$12.7 trillion till ’30 in the power generation, T&D and gas-supply infrastructure. Utility leaders feel without regulatory certainty and investment, blackouts could become a frequent occurrence. In fact, 66 per cent of respondents believe the likelihood of blackouts will rise. 

Biomass power for Karnataka villages

April 26, 2005. Work on the country's first gasifier plant in Koratagere is in progress and five villages will get power in the next two months. A gasifier plant of 500 KV capacity will supply power to 500 households in the five villages surrounding Kabbigere of Koratagere cluster. The cost of power will be Rs. 3 per unit, which is cheaper than the power supplied by Karnataka Power Transmission Corporation Ltd. (KPTCL). A cluster-level electricity distribution society for Koratagere will take over the distribution franchise from the Bangalore Electricity Supply Company (BESCOM). The estimated cost of the project is Rs. 40 crores (Rs 400 million). The gasifier plants will generate power by burning wood in a controlled manner.

Govt fuels environment-friendly steps

April 23, 2005. It was only towards the end of December that the government released the funds, which was efficiently utilised by the Non-Conventional Energy Development Corporation of Andhra Pradesh (Nedcap). So far, Nedcap has constructed 950 biogas plants and 2,500 smokeless fixed chulhas at a cost of Rs 61.28 lakh and Rs 4 lakh respectively in Krishna and Guntur districts during the last three months of 2004-05.  The rural folk of the two districts have evinced interest to acquire solar cookers, gadgets, dryers, lanterns, street lighting, home lighting, solar pumpsets and solar geysers.  In Krishna district, Nedcap has constructed 800 biogas plants as against the target of 400 plants. It also reached the target of constructing 1,500 improved smokeless fixed chulhas. 

Even private entrepreneurs have set up biomass power generation projects at Kankipadu, Movva, Penamalur, rural parts of Vijayawada and Pamarru and at two other places, these projects generate a total of 30 megawatts (MW) of power. For setting up these projects, the Centre provided a subsidy of Rs 2.1 crore each.  The Vijayawada Municipal Corporation too has made it mandatory for builders and multi-storeyed hospitals to install solar geysers, each with a capacity of 36,000 litres. The step is expected to save about 5.4 lakh power units. In Guntur district, Nedcap constructed 150 biogas plants each at a cost of Rs 6,450. This included a central subsidy component of Rs 2,800 for SC and ST beneficiaries, a subsidy of Rs 2,100 for others, and a zilla parishad subsidy of Rs 1,000 for all. 

Plan to make Gandhinagar the first 'solar city'

April 20, 2005. The state has envisaged a plan to make the state capital Gandhinagar the first ‘solar city’ of the country. A blueprint for the Rs 325 crore project has also been presented to the state government. Vadodara-based agency for promotion of non-conventional energy, Gujarat Energy Development Agency (GEDA) has designed the blue print to reduce the power consumption in Gandhinagar. The proposed ambitious plan would create the state capital as a first ‘solar city’ in India where the major necessities of power will be fulfilled through non-conventional sources of energy. At present, Gandhinagar, the base of major state government establishments, is consuming over four megawatt power every day. With implementation of proposed plan the dependency of the state capital from the electricity power would be reduced to the negligible levels. The blue print has been forwarded to the department of energy and petrochemicals, State of Gujarat for further actions. 

Solar energy empowers police stations

April 20, 2005. After realising the benefits of rainwater harvesting, the Karnataka police seem to have recognised the immense potential of solar power. Solar cells (photovoltaic cells) have been installed in a few police stations and all control rooms. These cells not only light up police stations but also supply power to computers and charge wireless sets. Most of the devices have been installed in police stations in rural areas and in other remote places and they have brought down electricity bills. While Bharat Heavy Electrical Limited has installed solar cells in 310 police stations, Bharat Electronics has installed them in control rooms.

The solar project has been taken up at a cost of Rs. 3.4 crores, 10 or 12 police stations were selected in each district. They were in rural areas and in other remote places. Their functioning was hampered by erratic power supply and policemen were not able to communicate with their counterparts in other stations or work on computers because of poor quality of power supply. The police then hit upon the idea of installing solar cells to get over the problem. They identified 310 (of 815) police stations and installed solar cells. A solar cell, powered by a solar panel and installed atop a police station, can light up four bulbs besides charging wireless sets and providing power to computers. Karnataka is the first State in the country to install solar-powered devices in police stations. Ssolar-powered traffic lights and signs have been installed at several places on national and State highways. This is not the first time that the police have realised the benefits of renewable resources. The Karnataka State Police Housing Corporation has installed equipment to harvest rainwater in all buildings that it has constructed.

China eyes turbines at Sea to boost wind power

April 25, 2005. Wind turbines stationed up to 30 miles offshore and in waters up to 120 feet deep could be a key part of China's renewable energy program in two or three decades. The sea-based farms would be ideally situated to supply clean power to the populous and booming east coast area, without competing for space wanted for farming or urban development.

Coal accounted for about 67 percent of energy consumption and 76 percent of energy production in the world's fastest-growing major economy. Sea winds could be harnessed to generate an estimated 750 gigawatts, although few projects were under way now. China aimed to have 20 gigawatts of wind-generating capacity installed by 2020, equivalent to around 1.0 percent of annual electricity consumption at that time. At present the industry is limited by its high costs, with the price of power generated by a 100 megawatt wind project over two times higher than the equivalent from a coal generator.

The majority of equipment around four-fifths is imported and few Chinese firms make larger turbines. The government has set up wind power concessions to lure investment and know-how, guaranteeing a fixed price for power, as well as help with infrastructure like access roads. The cost of wind-generated power is to move closer to that from coal-burning plants when there is around 3000 MW of market demand, and the country has set a generating target of 4000 MW by 2010.

A spanner in the wheel 

April 23, 2005. Mercury emissions can be cut nearly in half within 15 years without direct pollution controls, almost entirely through the Bush administration’s market trading plan, Congressional researchers have found. But reducing current emissions by 70 per cent would be unlikely until 2030, a dozen years after the administration’s target date, because of an emphasis on allowing companies to swap so-called pollution rights rather than install state-of-the-art pollution technology, said the Congressional Research Service, an arm of the Library of Congress.

The Environmental Protection Agency does not initially require utilities to do anything more than what they must do under separate rules for reducing two other pollutants from power plants, sulfur dioxide and nitrogen oxides, the research service said. Its analysis said the mercury regulations that the environmental agency issued last month minimised costs for electric utilities by having them achieve mercury reductions as a byproduct of those regulations. The report was requested by Senator Patrick J. Leahy, Democrat of Vermont.

In 2010, power plants would have to begin using a “cap-and-trade” programme in which they could further reduce mercury or buy “credits” from other companies that make deeper cuts than what is required. All but about 4 per cent of the plants could meet the agency’s expectation for mercury emissions to be cut by half in 2020 through the trading programme and avoid having to buy special technology to filter and discard mercury particles, according to the analysis. The agency has estimated that the 48 tonne a year of mercury pollution from the nation’s 600 coal-burning power plants will decrease to 31.3 tonne in 2010 and 24.3 tonne in 2020.

Intrepid second large biogas plant

April 21, 2005. Intrepid Technology and Resources, Inc. (ITR) a renewable energy company has to start building the Westpoint dairy biogas plant located near Wendell, Idaho. The biogas plant will cost 3.5 million to 3.7 million dollars. Production from Westpoint will begin within the first calendar quarter of 2006 with production rates that should exceed 140 million cubic feet of gas per year.

Santee Cooper opens green-power station

April 20, 2005. Santee Cooper has opened its second power plant generated by decaying trash. The state-owned utility dedicated the green-power generating station in Lee County. In a partnership with Allied Waste, which operates the Lee County Landfill, Santee Cooper will use methane gas produced under the mountains of garbage at the landfill to produce electricity. The new power station uses pipes that run below the landfill to capture the methane, which is produced as trash decomposes. In the past, that gas has been burned at the end of pipes sticking out of the landfill, the utility said. The Lee County station uses three 1.8 MW engines that burn the methane. The Horry County generation station produces 3.3 MW, according to the company.

Total to produce solar energy in Iran

April 20, 2005. French giant Total is likely to produce solar energy in Iran, the company said. Total is targeting cooperation with Iran in the field of modern energies. Total launched its cooperation with Iran in 1995 and has been present in Iran’s annual oil shows.

LADWP approves EIR for wind turbine project

 

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