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Crude Oil Storage: Does India Need More?
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Time For Indian Firms To Step On The Gas In Bangladesh?
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ONGC’s Capex Utilization In Seismic, Drilling Short Of Target
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Predictions About Petro Products Consumption Wide Of The Mark
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Alternative Energy / Fuel
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India Makes Progress In Tapping Non-Conventional Energy Sources
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New Projects
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ONGC To Set Up Gas Dehydration Units In Andhra Pradesh
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CPCL To Invest Rs 14.95 Bn On Expansion Project
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New Crude Oil Pipeline From Chennai Port Trust-Manali Refinery
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IOC To Complete Paradip-Durgapur LPG Pipeline By Mar 2018
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Market Watch
GP Petroleum Aims At 5 % Share Of Automotive Lubricants Market
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Companies
Nynas AB
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Oil India Becomes A 5 MMT Company
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Swan Energy Ties-Up With Hyundai Heavy Industries
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Aegis Logistics Reports Healthy Rise In Profits
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Press Release [FREE Access]
Petro Intelligence » Ennore Terminal: Ego Battle Looms

by R. Sasankan

Prabhat SinghMy previous piece in this column, PLL to Operate IOC’s LNG Terminal?, provoked a firestorm of reactions from quite a few gas veterans, prompting me to write another piece on the same subject. Before I begin, let me clarify that this column does not deal with the obvious but focuses on the developments behind the scene, and that is precisely why it is called Petro Intelligence. By its very nature, such subjects will carry an element of speculation, which is permissible in professional journalism.

Though I have been reporting on India’s petroleum scene for many years, I do check and cross-check facts before I venture to write on them. What could be the provocation for Petronet LNG Ltd’s offer to invest in Indian Oil Corporation’s 5 million tonne per annum LNG regasification terminal at Ennore near Chennai? That is a legitimate query from an informed journalist. When I discovered that PLL was keen to become its operator, I sought comments from friends in IOC to gauge what the top management’s reaction to such an overture would be.

There is absolutely nothing wrong with PLL trying to become the operator of the Ennore facility. It has been successfully operating the country’s first and the biggest regasification terminal. A gas veteran, who was director of GAIL during its initial years, strongly justified PLL’s attempts to become IOC terminal’s operator. “Who was the operator of PLL’s first terminal at Dahej?” I asked. “Good question,” he admitted, and replied that PLL had Gas de France as one of its promoters and would have naturally helped it. I checked this claim with a founder-director of PLL to learn that the French company was only a strategic investor and had absolutely nothing to do with the operation of the terminal.

Sanjiv SinghA former CMD of GAIL said a Singapore-based company was the operator of PLL’s Dahej terminal, adding that there was nothing wrong in giving the job to PLL which, he claimed, was virtually a public sector unit. I checked up this claim as well, only to find that PLL had neither a foreign nor an Indian operator for its Dahej terminal. Another gas expert associated with NGS India, the powerful think-tank on gas industry, pointed out that PLL had experts like Shyam Sunder who was its technical director. Shyam Sunder was from GAIL and had no previous experience in operating a regasification terminal. True, he was a competent technical hand who had already been hired by IOC as its consultant for the Ennore terminal.

There is nothing wrong in IOC accommodating PLL as the operator if it so desires. But when the insiders feel that there is absolutely no need for an outside operator, a journalistic enquiry should be able to predict the likely outcome. Personal equations between top executives and friendship among board members can definitely influence a decision. But outsiders may find it hard to work within IOC since the company will be loath to acknowledge that it cannot operate the terminal.

PLL had quite a few technical experts under Shyam Sunder who were all hired from other oil and gas PSUs and later absorbed. A number of such experts are available now. Shyam Sunder must have already identified such people for IOC’s terminal. IOC has basically operated as a refining and marketing company since inception. Later, it established petrochemical complexes which are operated without the help of outsiders.

“Does the operation of a regasification terminal require such a sophisticated technology that IOC will have to look for outside operators,” I asked an expert who had worked with GAIL and later with PLL. “If PLL could operate the country’s first ever LNG regasification terminal without outside help, why should IOC go for an outside operator,” he responded.

IOC is a giant and it is proud of its strength. IOC-ians will find it difficult to co-exist with people from outside.

Look at the way IOC has gone about setting up the LNG regasification terminal. The project is being financed from its balance sheet which could eliminate the delay on account of financial closure requirements. It is not clear to the outside world whether IOC had already struck upstream and downstream tie-ups without which a regasification terminal cannot survive. It is logical to conclude that the IOC board would not have cleared the investment without satisfying itself that the management had tied up all these requirements.

The pipelines to transport gas from the terminal had already been approved by the downstream regulator, PNGRB. IOC, like ONGC or PLL, could face resistance from the public while laying the pipelines. In the past, the political leadership has also supported such resistance. IOC has a greater presence in Tamil Nadu than other oil companies. Tamil Nadu’s biggest refinery, Chennai Petroleum Corporation, is a subsidiary of IOC and its retail outlets are in every nook and corner of the state. IOC had three CMDs hailing from the state including the just retired B. Ashok. IOC’s leadership is in a better position to deal with any resistance over the RoW issue than other PSUs.



To download the latest issue 'Volume 24 Issue 11 - September 10th 2017', click here
Petro Intelligence [FREE Access]
Ennore Terminal: Ego Battle Looms
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PLL To Be IOC’s LNG Operator?
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Will Rosneft-Trafigura Succeed Where RIL Failed?
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Asian Premium: Will It Crack As Supply Basket Widens?
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Foreign Investment
UK-Based Firms To Invest In Waste-To-Energy Projects
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Overseas Investment
PLL To Form JV With Japanese Co To Set Up LNG Terminal In Sri Lanka
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Essar Oil UK To Upgrade Stanlow Refinery
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Gas Scene
Gas Pipeline Under Execution / Construction as on 31st March, 2017
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LNG Imports In July 2017
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Domestic natural gas price and gas price ceiling
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Domestic Gas Scene: July 2017
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SAGE-EIL Presentation: Middle East to India Deepwater Pipeline
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ONGC Gas Flaring for FY 2016-17
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Petronet LNG Ltd looks set to expand its wings
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Update: CGD Factsheet as of June 2017
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Source-Wise Imports of LNG In June 2017
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Sector-wise utilisiation of domestic gas and RLNG
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The GST Double Whammy For Gas Sector
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ONGC, OIL step up drilling shale wells in the fourth quarter FY 2016-17
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Update: Gas Production / Consumption / Imports
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Gas pipeline network update as on 31st March, 2017
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Assessment & Status: Shale Gas / Oil Resource
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In search of areas to increase share of natural gas in energy mix
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Gas for Power- No inclusion in Policy
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Recoverable Coal Bed Methane Reserves as on 1st April, 2016
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Estimated Potential Gas Demand - Diesel & Petrol Replacement
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Data Section
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ONGC Rigs position as on April 1, 2017
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Petrochemical Import by India -2015-16
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ONGC: Drilling Cost
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ONGC’s Finding Cost
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High Sulphur (HS) & Low Sulphur (LS) crude oil processing
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LPG Coverage As On 1st July, 2017
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Power Situation In July 2017
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Petcoke Global Data: Imports & Exports
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Global Pet Coke statistics for key countries
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Break-up of consumption of products from PSU and Private refineries
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Applications of petroleum coke / using industries
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A 40 % Increase In Petroleum Coke Import “Alarming”, “Disturbing”
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India’s Story of Petroleum Products Surplus
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Petroleum products demand & Gross Domestic Product (GDP)
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Distillate yield of PSU refineries
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No Significant Variations In Import Of Crude & Products in June 2017
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Weightage of petroleum products in Wholesale Price Index (WPI)
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Update: Crude Price - Indian Basket
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Contribution of petroleum sector to exchequer
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Revised Hydrocarbon Reserves in India
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Status of blocks under NELP as on March 31, 2017
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Retail Selling Price (RSP) of major products in India & neighbouring countries
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Ethanol Demand Projection For Asian Countries
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Petroleum Coke Continues Relentless Surge In Indian Market
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