Petrowatch Vol 18 Issue 22 02072015

PETROWATCH
Volume 18, Issue 22 02 july 2015
NEWS IN BRIEF: Dead GAIL manager found with slit wrists ...july 8 onland rig deadline
at ONGC ... Saurabh Chandra not interested in PNGRB ... ONGC wants KG drilling
consu ltant ... Canth is new IOC dir. mktg ... Sun wins DGH Interlink deal approvai ... AP
Sawhney Is new DGH boss ... Forest hurdles block GSPL plpellnes ... Telangana shuns
Pradhan olive branch... Poor response to ONGC airborne tender
People & Policy

1. ONGCs suspect $46m gift to sole bidder Deep
2. BC Tripathi wants to be next PNGRB chairman
3. Rupshikha Borah told she can•t head Oil India
4. Three fight to replace Nishi Vasudeva at HPCL
5. Is GSPC boss Chakraborty heading for Delh i?
6. ·use PNG or lose LPG subsidy! • says ministry
7. Looking for shale reserves beneath coalfields
Exploration & Production

8. Pradhan holds hungry late-night 98/2 review
9. L&T ignores Valdel JV for BCPA-3 engineering
10. Expect ONGC to extend 5-floater bid dead line
11. No luck for NTPC after drilling 4 Cambay wells
12. Sintex unhappy as Shiv Vani rig stops work
13. Eleven boats compete for ONGC MSV contract
14. Jindal breaks with Noble to offer Rowan rigs
Midstream & Downstream

15. At last- Shell prepares LNG term inal tender
16. Gas hungry lndianOil lines up more spot LNG
17. No one wants H-Energy gas pipeline to Orissa
18. Adani targets December for Dhamra tenders
19. Sabarmati Gas- here today gone tomorrow!
20. More tense •tie-breakers• for six CGD-V areas
21. Reliance pushes back J3 completion schedule
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Volume 18, Issue 22 02 July 2015
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News In Brief
CORRECTION: Complaints about Inaccuracies In all sections of PETROWATCH, including online, should be addressed to
edltor@petrowatch.com or The Editor, Petrowatch, Ashoka Estate (11th Fir). 24 Barakhamba Road, De/h/110 001
Dead GAIL manager found with slit wrists : A message written in blood at the home of
Brahmaputra Cracker and Polymer (BCPL) general manager Bimal Kumar, found dead with his
wrists slit on June 27, has led company officials to call for a CBI probe. Kumar, on secondment to
BCPL for the past three years, was working on the long-delayed Assam Gas Cracker project. A GAIL
source claims police found the words "KK Chatiwala deep liar rampant corruption" written at his
residence. Chatiwala is deputy GM at BCPL. "Kumar was honest and knowledgeable," says a GAIL
colleague. "I suspect he was tricked into signing some documents, got scared and took this
extreme step." One source beli eves Kumar accused company MD Prabhu Nath Prasad of
corruption, nepotism and negligence. "Because of his honesty Kumar was always shuffled from
one 'punishment posting' to another," says another source. His friends at GAIL worry BCPL
management will cover up his death and blame it on depression.
july 8 onland rig deadline at ONGC: John Energy, Quippo, Deep Industries and Essar are
among those likely to bid by July 8 in an ONGC tender to hire three 2000-hp rigs for three years to
drill in Tripura and one 1400-hp rig for 18 months at Rajahmundry. Industry sources expect day
rates to be $28,000-30 ,000 plus 14% service tax. Quippo will be mostly offering rigs from Shiv
Van i, which continues to be black-listed by ONGC. Meanwhile, ONGC is still evaluating bids
received on May 8 and 22 in separate tenders for a total four rigs. In a tender to hire a 1000-hp
mobile rig, John Energy, Deep Industries, Essar, Quippo and Arihant Cargo bid on May 8. A tender
for two HP/HT rigs needed for three years at the Assam asset saw Quippo bid two rigs, Essar one
rig, and Vision Projects Technologies with Atlantic Onshore Services offer two rigs on May 22. On
the same day john Energy, Simplex, Vision Projects and Qu ippo bid one rig each in a tender for a
2000-hp rig required in Assam for three years.
Saurabh Chandra not interested in PNGRB: All speculation that former oil sec retary Saurabh
Chandra will be the next PNGRB chairman can be laid to rest. "I have not applied," Chandra tells
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PETROWATCH, by phone, "and I won't be applying. People can say what they like." Despite
Chandra's denial, some believe the oil ministry appointed Search Committee set up to find a
successor to outgoing chairman S. Krishnan could yet spring a surprise. "Unlike the PESB the
Search Committee is not legally bound to take interviews," says a source. "If they think Chandra is
the best qualified they can call him and ask if he's interested. If he's interested they can appoint
him." Seven of 14 candidates to apply for the PNGRB chairman post are lAS officers, among them
Rajesh Kishore and HK Dash from Gujarat; Sudhir Kumar and Prem Narain from Uttar Pradesh;
Rajarshi Bhattacharya from Andhra Pradesh and DPS Nagai, who retired in February 2015 as
divisional commissioner from the Haryana Urban Development Authority (HUDA).
ONGC wants KG drilling consultant: Expect a tender soon from ONGC to hire a drilling
consultant to develop the Nagayalanka oil and gas discoveries at the KG-ONN-2003/1 onshore
block in Andhra Pradesh . The Management Committee of operator ONGC, partner and former block
operator Cairn India, the oil ministry and the DGH are planning a meeting on july 7 to discuss the
matter. "Nagayalanka is an important project," says an ONGC source. ONGC wants the consultant
to identify a rig to drill 20 planned wells. "All wells will have a horizontal section that wi ll be
hydrofracked," adds ONGC. "We'll need a 3000-hp electrical rig." All wells will be drilled vertically
to 4000 metres and horizontally to 1500 metres. "Hydrogen sulphide and helium in the wells will
make drilling challenging," we hear. ONGC expects to encounter pressures up to 9000-psi and
temperatures of up to 340-F. ONGC and Cairn will spend $1bn to develop the Nagayalanka
discoveries announced by Cairn in April 2012 and November 2011.
Canth is new IOC dlr. mktg: Balwinder Singh Canth has walked away with the post of lndianOil
director marketing as expected after interviews on june 24, even as IOC sources continue to
mourn the PMO' s mysterious decision to reject UV Mannur. "We all knew Canth would make it this
time," says an IOC source. "He's a good choice but what happened with Mannur was unfair."
Mannur was selected on May 26, 2014 but was inexplicably rejected by the PMO and the post was
re-advertised on April 23, 2015. "A Right to Information request was filed to understand Mannur's
rejection," says a company source. "But the PMO refused to disclose the appointments committee
proceedings." Canth, 57, is executive director consumer sales in Mumbai. He is likely to receive his
appointment letter in the next three months. Other IOC candidates interviewed were Rajiv Khanna,
Mannur, BS Giridhar, TS Khwaja, YK Gupta, Gurmeet Singh, PK Das, and GK Satish. GAIL ED AK
Singh and COO jS Saini were also interviewed.
Sun wins DGH Interlink deal approval: Sun Oil & Natural Gas is waiting for oil ministry
approval before it pumps in $500,000-$1.2m to begin production at BSE-Iisted Interlink
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Petroleum's Gujarat fields . On june 19, the DGH cleared a binding MoU signed between Sun Oil &
Natural Gas, a sister company of Mumbai headquartered pharma giant Sun Pharma, and Interlink
on March 30. "The DGH has cleared the MoU," confirms a senior Interlink source. "Oil ministry
approval is expected this month (July)." Once the clearance comes in, billionaire Dilip Shanghvi's
Sun Pharma is planning a field study of the 4-sq km Baola and 12. 7-sq km Mod hera fields. A Sun
team will visit Interlink's Delhi office to go through field data and understand the reservoirs. Under
the MoU, Interlink's PSCs will eventually be transferred to Sun, which will decide on taking a stake
in cash-strapped Interlink based on the pilot at Baola and Modhera. Contacted by this report, Sun
Oil & Natural Gas CEO Padam Singh declined to comment.
AP Sawhney is new DGH boss: Oil ministry additional secretary Ajay Prakash Sawhney has
taken additional charge of DGH director general, replacing BN Talukdar who retired on june 30.
DGH officials gave Talukdar a farewell party on his last day. "We're sad he's going," says a DGH
official. "Talukdar is energetic but humble." Sawhney joined the lAS In 1984 from Andhra Pradesh
and the oil ministry on March 23, 2015. He visited the DGH's Noida office on june 20 and met
department heads. "Sawhney is focused and to-the-point," adds a source who attended. Sawhney
is expected to stay acting DGH chief until the oil ministry selects a full-time boss. "Until now there
was talk of Talukdar getting a three-month extension so the PESB hasn't advertised the post," says
a ministry source. "It will take a month for the advertisement to come out." Some speculate
Sawhney might even later become full-time director general. Not for the first time will this
happen- earlier DGH boss RN Choubey too was an lAS officer.
Forest hurdles block GSPL pipel ines: Gujarat State Petronet is now blaming the delay in
opening price bids to lay three cross country gas pipelines on pending forest clearances. A GSPL
source says bidders in the last week of May extended till August 26 the validity of price bids for
the 670-km Mehsana to Bhatinda pipeline; the 740-km Bhatinda to jammu pipeline; and the
1881-km Mallavaram to Bhilwara pipeline. "Maharashtra and Telengana have yet to give forest
clearances wh ile Madhya Pradesh has given it," he says. "Nobody tells us the status of our
application. If we follow-up regularly they get offended." Worse officers handling the application
are frequently transferred. GSPL also blames the lack of commercial quantities of gas from GSPC's
Deen Dayal field, Reliance' s KG-D6 block and ONGC blocks . "We are certainly going ahead with the
pipelines," asserts GSPL. "Or else we would have wound them up long ago." L&T, Kalpataru, Essar
Projects, Punj Lloyd, KazStroy, and Fernas submitted bids in May 2014.
Telangana shuns Pradhan olive branch: Oil minister Dharmendra Pradhan's two and a half
day visit to Indi a's newly ca rved out states of Telangana and Seemandhra (Andhra Pradesh) in the
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last week of june wasn't successful politically. Telangana chief minister K. Chandrashekhar Rao of
the TRS party, who is sulking because the ruling BjP has thrown its support beh ind Seemandhra
chief minister Chandrababu Naidu of the TDP party, refused to meet Pradhan . "Pradhan had a
breakfast meeting with Naidu at Vishakhapatnam on june 25," says a Hyderabad source. Before
leaving for Delh i on june 26, he was scheduled to meet Rao for lunch. "But an angry Rao refused
to take Pradhan's calls and cancelled the meeting," we hear. Rao, hiding at his farmhouse on the
outskirts of Hyderabad, wasn't even enticed by Pradhan's promise at a press conference on june
26 that the ministry would Invest Rs1300cr ($203m) in Telengana. BjP president and chief
strategist Amit Shah wanted Pradhan to appease Rao.
Poor response to ONGC airborne tender: ONGC is expected to receive only two bids for its
first ever tender to carry out an airborne gravity gradiometry survey over its Assam PEL acreage .
Under the survey aircraft flying at low altitudes will take pictures of the subsurface to establish the
presence of oil, gas and mineral deposits. CGG and Bell Geospace attended a pre-bid on june 29 in
ONGC's office at jorhat in Assam. ARKeX is the third company in the world with the necessary
technology but hasn 't bought ONGC's tender. "We want to carry out the airborne survey in
inaccessible areas," says an ONGC source. "We have old seismic data ava ilable but want to
confirm it with fresh data." Bell raised technical queries on the tender terms and mobilisation
schedule. "ONGC refused to accept deviations from the tender," we hear. "CGG had comments on
the tender document which were also rejected." ONGC wants bids by july 28. Whoever wins will
get four months to mobilise equipment aircraft after securing all government clearances.
People & Policy

1. ONGC 's suspect $46m gift to sole bidder Deep
ONGC is keeping suspiciously quiet about why it has ignored its own rules of not hiring a sole
bidder, amid frenzied speculation that somebody either at ONGC or in government has a vested
interest in ensuring that Gujarat-based Deep Industries won the contract. Controlled by brothers
Paras and Rupesh Savla, Deep announced on june 29 it had won a Rs278.19cr ($46m) ONGC
contract to hire gas dehydration units for five production installations at the Rajahmundry asset for
three years . As ONGC's Rajahmundry asset manager D. Sanyal was unavailable, PETROWATCH
was directed to a senior manager in its materials management department. "These are high value
contracts," he confirms. "We are not empowered to disclose any information to the press." Pressed
further, he sa id eight companies, including Deep, bought tender docum ents but only Deep bid.
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"We don't know why the others didn't submit bids," he adds. "The contract to Deep was awarded
with Executive Purchase Committee approval. We don't know how or why it was approved. " ONGC
issued the tender on December 12, 2014 and the origina l bid deadline was january 16, 2015 but
extended "many times." ONGC is planning more tenders to hire gas dehydration units under
Phase -11. When contacted , a Deep source admits the company has no experience of the gas
dehydration business. "I don't remember when ONGC opened our bid," he said. "This is the first
time we will deploy these units."
Our source at Deep refused to confirm if the company has tied up with a foreign company with
expertise in gas dehydration, a process to strip out water from gas as vapour to ensure smooth
flow through pipelines and prevent corrosion. Dr. Akhilesh Ambasht, ONGC's chief vigilance officer
was unavailable for comment. Another vigilance officer suggested we contact the asset for details
regarding the tender. "How am I supposed to know the details of this tender?" he said. "Call the
asset." When asked if ONGC can award a contract valued more than Rs200cr ($33m) to a single
bidder, the officer said "I am not authorised to talk to the media" and disconnected. An industry
source says ONGC will always find ways to justify hiring a sole bidder if it wants to or if somebody
powerful enough tells it to.
2. BC Tripathi wants to be next PNGRB chairman

Sanjay jumaani claims on his website he can help childless couples become parents if they follow
his suggestions on the spelling of their names, lucky colours and gems. GAIL chairman BC Tripathi
is said to have fallen under jumaani's spell, hoping the numerologist can help him get an
endorsement from oil minister Dharmendra Pradhan to stay at GAIL for another four years beyond
july 31. But in case magic numbers and other hocus-pocus don't work, Tripathi has wisely applied
(on june 15) to become the next PNGRB chairman, replacing 5. Krishnan who retires on August 31.
"If Tripathi has applied for the PNGRB job it means he's worried he might be told to leave GAIL,"
says an insider. Tripathi' s first five-year stint as GAIL chairman ended on july 31, 2014 but he's
managed a five-year extension. However, this can only be confirmed if Pradhan reviews his
one-year probation in a positive light - unlikely following a string of negative reports from GAIL
chief vigilance officer Rajesh Ranjan about Tripathi's relationship with contractor Avinash Em .
"Tripath i has gone to the numerologist to 'manage' something," adds a source . He claims jumaani
told Tripathi to add an add itional 'a' in his surname and his wife's name. " I received a mail from
Mrs. Tripathi on june 24 around 5pm," says another GAIL source. "In that mail her name is clearly
spelt 'Chandraa Tripaathi' instead of 'Chandra Tripathi' ."
Still unclear is if Tripathi has followed his wife 's lead and changed the spelling of his name. Besides
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Tripathi, 13 other candidates have applied for the PNGRB chairman job including GAIL director
marketing Prabhat Singh and Oil India former chairman SK Srivastava. Singh was meant to step
down on February 28 this year but received an extension until August 7, 2016 . "Singh and
Srivastava have applied but they are unlikely to get it," confirms a PNGRB source. "Traditionally
the chairman post goes to a retired lAS officer." Then again, they could always try numerology!
3. Rupshikha Borah to ld she can•t head Oil India

It's official - Rupsikha Saikia Borah has been rejected by the PMO for the Oil India cha irman post,
leaving her justifiably disappointed and confused. "Now it is clear the PMO has scrapped the panel
selected by the PESB," says a government source. "The PMO did an independent enquiry, calling
some PESB members for feedback." Borah, wife of former Oil India chairman NM Borah, was
selected on February 10 to replace SK Srivastava who retired on june 30. But the ministry has
asked the PESB to re-advertise the vacancy by end-July and to fast-track selection so a new
candidate can be in place within three months. But if the vacancy date remains July 1 there will be
a poor response, speculate insiders. "Borah is the only company director eligible," confirms an Oil
India source. Director exploration Sudhakar Mahapatra can apply only if the vacancy date is
changed to August: he completes one yea r on August 9, 2015. Director (human resources &
business development) Biswajit Roy and director (operations) Pramod Kumar Sharma also have
not completed one year to be eligible under guidelines to discourage 'job-hopping'. Still unclear is
if Borah, who retires in March 2019, will re-apply - even though she is eligible. An Oil India sou rce
believes she would be well advised not to try again, considering she was rejected even after
securing anti-corruption clearance.
Borah was also rejected during the first round of interviews in November 2014 which may have led
the PMO to question her selection in the second round in February this year (2015) . "It was a big
blow for her," we hear. "It's obvious from her body language she's disappointed. If they rejected
her after the PESB recommendation and anti-corruption clearances it means they don't want her."
Outsiders thought to be interested in applying include GAIL executive directors Gajendra Singh
and AK Singh, who both tried last time; ONGC head of GEOP/C, Ani/ Sood; KDMIPE head ON Singh;
and Assam asset basin manager Chakradhar Mahapatra. OVL managing director NK Verma isn't
eligible as he has yet to complete one year. joint secretary UP Singh has taken additional charge
of Oil India in the interim, the first time a bureaucrat has been given charge of the company.
"Usually the most senior director is given a chance," we hear. "But Borah is the most senior
director! " Singh is already the government's director on the Board at Oil India. Outgoing chairman
Srivastava bid farewell to his company during a party at 4pm on june 30.
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4. Three fight to replace Nishi Vasudeva at HPCL

Nishi Vasudeva will be a hard act to follow at HPCL when she retire s on March 31 next year. Not
only is she the company's first female chief but on her watch HPCL achieved 57 .6% growth in net
profit to Rs2733cr ($430m) in 2014-15 . Three strong cand idates are competing to succeed her:
HPCL director human resources Pushp Joshi, Mangalore Refinery & Petrochemicals (MRPL)
managing director H. Kumar and GAIL director projects Ashutosh Karnata k. Their names were
sent to the PESB after they submitted CVs by May 27. Interviews are likely by September. "Joshi is
popular with employees, he 's an excellent HR person," says a company source. "Very polite and
approachable, he makes a great effort to help and has more friends than enemies." Joshi, a
Bachelor of Law and MBA from the prestigious XLRI University at jamshedpur, joined HPCL in 1986
becoming director HR on August 01, 2012 . He has designed and implemented key HR policies and
practices. But despite this he will have a hard time beating Kumar, who most believe is the best
ca ndidate to lead HPCL in the new deregulated climate of market-driven diesel prices and
challenges from the likes of Reliance, Shell and Essar. "Joshi has more Board experience," adds
another HPCL offi cial. " But Kumar has spent his whole life marketing and in refineries. This
gives him a clear advantage."
}oshi unsuccessfully applied for the chairman position and lost to Nishi Vasudeva in August
2013. Kumar joined MRPL as MD on August 7, 2014 but before that was HPCL executive director
corporate strategy. ''loshi and Kumar are the main contenders, " says another source. "Both are
strong candidates with different qualities. Joshi is a company candidate and understands day to
day affairs. " Kumar, a mechanical engineer from Calicut University with a degree in business
management from liM Kolkata, has also worked in the retail services and operations, projects and
pipelines and LPG projects divisions at HPCL. More, he did all the corporate planning and
co-ordination including land acquisition for the stalled Barmer refinery project. Astrology
enthusiast Karnatak has been director (projects) at GAIL since March 1, 2014. " He has wide
experience but none relevant to HPCL," we hear.
5. Is GSPC boss Chakraborty heading for Delhi?

Start co unt in g the days before GSPC managing director Atanu Chakraborty moves to Delhi.
Chakraborty is one of six lAS officers from Guj arat 'empanelled' or selected by the government's
appointments committee on june 23 for senior government posts in Delhi. Of these four who j oined
the lAS in 1985 were chosen for appointment to the post of additional secreta ry: Cha kraborty, Anil
Mukim, AM Tiwari and GC Mu rmu. When will Chakraborty go? A GSPC source says it is hard to tell.
"He has just been 'empanelled ', " he says. "It may take some ti me before he moves to Delhi. " Take
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Volume 18, Issue 22 02 Ju ly 2015
former GSPC managing director Tapan Ray, first selected to go to Delhi on July 27, 2012 . Ray was
appointed secretary in the panchayati raj ministry on july 2, 2013 but successfully convinced then
Gujarat chief minister Narendra Modi to delay his transfer. Ray finally went to Delhi only in
September 2014 after he was appointed additional secretary in the Department of Electronics and
Information Technology (DEilY). Ray incidentally was selected for a promotion to a secretary level
post on june 23, 2015 along with Amarjit Singh who also joined the lAS in 1982. Atanu Chakraborty
was promoted on june 20 from Gujarat principal secretary to additional chief secretary with three
other lAS officers who joined in 1985: Sujit Gulati, Anil Mukim and ON Pandey.
Chakraborty, 55, has little time to celebrate his twin promotions. He's very busy preparing for first
commercial gas production from Deen Dayal West where GSPC has spent more than $2.6bn.
Chakraborty visited GSPC's Kakinada base in Andhra Pradesh for three days in the first week of
june and then again for a week from june 23, a sign of his determination to move development
forward. He was given additional charge of GSPC along with his transfer from Gujarat State
Fertiliser & Chemicals to the role of principal secretary in the industries and mines department on
November 1, 2014. But with pressure on GSPC to perform at Deen Dayal, Chakraborty was
relieved of his post in the industries department on April 23, 2015 and given full charge of GSPC.
6. 'Use PNG or lose LPG subsidy! • says ministry

Desperate to achieve Narendra Modi's target to connect 10m households with piped gas by 2019,
the oil ministry is taking drastic measures. At a meeting on june 22, oil minister Dharmendra
Pradhan directed GAIL and subsidiaries GAIL Gas, Mahanagar Gas and lndraprastha Gas to connect
4.6m households in the next four years. GAIL chairman BC Tripathi, director marketing Prabhat
Singh, lndraprastha Gas manag ing director Narendra Kumar and GAIL Gas chief PK Pal hea rd an
ang ry Pradhan complain that MPs and lAS bureaucrats are ca lling him up to compla in they haven't
received piped gas connections. In addition to criticising gas retailers, the oil ministry is evaluating
a host of radical solutions to force households to convert to piped gas from LPG . Among them is an
extreme solution to strip people of their LPG subsidy once the area they live in is connected to a
gas network with a written warning to homes, giving them three month s t o switch. " If the
consumer doesn't shift to piped gas," says an oil ministry source, "the LPG dist ributor will stop the
subsidy and bill them at t he market rate." In Delh i subsidised LPG costs Rs417 ($6) for a 14-kg
cyli nder. In the free market the same cylinder costs Rs605 ($9.50) or 45% more. "Once piped gas
is cheaper, customers will switch," adds a source, "and t he government will save subsidies."
Other options include compensating gas retailers to set up pipeline infrastructure to connect
homes. In India gas retailers hesitate to connect homes outside their es tablished networks.
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Connecting each household costs around Rs15,000 ($236) but under government rules a gas
retailer can only charge the customer Rs5000 ($479), which is also refundable. Installing each gas
meter costs another Rs6000 ($94). Add the cost of laying steel pipelines, manpower and RoU
compensation and piped gas to homes effectively becomes a loss-making proposition. So the
ministry has asked gas retailers to suggest how it should compensate them? "We only need to pay
compensation once for each connection," says a government source. "But once a customer
switches to piped gas we save on the subsidy every month." One novel solution under review is to
add RslO,OOO ($157) on house tax bills or levy a 1% green gas tax on petrol and diesel sales to
generate revenue to help retailers supply more piped gas to consumers.
7. Looking for shale reserves beneath coalfields

India has not lost hope it can emulate the US shale gas revolution by tapping its vast reserves,
estimated by ONGC to be 187.5-tcf. PETROWATCH learns the Geological Survey of India (GSI) will
soon begin exploring the jharia coalfield in jharkhand to assess its shale gas potential.
Kolkata-based Maheshwari Mining is mobilising a 240-hp land rig to drill two boreholes at the 42-sq
km Mohuda sub basin. "The rig will reach its first location in early july," says a Maheshwari source.
"Drilling will begin soon after." GSI, set up in 1851 and attached to the ministry of mines, awarded
a LoA on june 5 to Maheshwari to drill two 1300 metre boreholes for Rs1.85cr ($291,00) .
Maheshwari beat South West Pinnacle to win the job. "GSI's mandate is to assess the country's
resource potential," says a source at the body's Kolkata office. "We want to collect as much
subsurface data as possible to understand the resource base." Maheshwari is free to drill each
borehole up to 300 metres at its desired speed but after that must drill at a prescribed speed . "Our
zone of interest begins only after 300 metres," we hear. "We want to collect core samples for
analysis from various zones and formations in the remaining 1000 metres." Maheshwari can drill a
maximum 20 metres/day from 301 metres to 450 metres and only 10 metres/day from 451 metres.
"It may take three-four days to analyse each core sample," adds GSI. "That is why we want drilling
to slow down after 300 metres." GSI wants Maheshwari to drill through sandstone, siltstone, shale,
carbonaceous shale, mudstone and coal in the Raniganj and Barakar formations. GSI has no
immediate plans to hire an external agency to analyse core samples. GSI issued the tender to drill
boreholes to assess shale potential on September 5, 2014 and received bids on October 15, 2014.
"Bid evaluation took a lot of time," we hear. GSI's primary objective is to conduct surveys and
studies to gather basic earth science for the government, businesses and general public. The
Geological Survey of India traces its roots to 1836 when the Coal Committee, followed by more
such committees, was formed by the British East India Company to study and explore the
availability of coal in eastern parts of India.
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Exploration & Production

8. Pradhan holds hungry late-night 98/2 review
Dharmendra Pradhan is so determined to push forward development of ONGC's prospective
KG-DWN-98/2 block he's willing to go hungry for it! Pradhan led a ministry team to Vizag on June
24 for a review meeting on the block. "His flight reached around 9pm and he reached the hotel
around 9:30pm," says a source. "At lOpm we began our presentation . Pradhan reviewed our work
till lam and only then did he have his dinner! " Pradhan promised to grant approval for the $6bn
Field Development Plan (FOP) for the 3800-sq km Northern Development Area (NDA) by
October so long as ONGC's Board approves and forwards it to the ministry in good time. ONGC
wants to drill 45 development wells including 10 for water injection and has issued tenders to hire
five floaters with a target to begin development after the monsoon in 2016. "Pradhan wants us to
begi n early production," adds an ONGC source . "He asked us intell igent questions related to
production. Earlier ministers showed no genuine interest." Pradhan came fully prepared and asked
ONGC how it would make development cost effective by us ing the best technology. Accompanying
Pradhan was oil secretary KD Tripathi , add itional secretary AK Sawhney, joint secretary
(exploration) UP Singh, joint secretary (refineries) S. Poundrik and former DGH director general BN
Talukdar. In attenda nce from ONGC was cha irman DK Sarraf, director onshore Ashok Varma ,
director offshore TK Sengupta and director exploration AK Dwivedi.
Pradhan also visited the 1.33m tonne Strategic Crude Oil storage facility in Visakhapatnam on june
25 built by Indian Strategic Petroleum Reserves Ltd (ISPRL) and which is expected to commission
this underground storage facility in the next few months. Later in the day, Pradhan
visited japanese vessel Chikyu, hired by the government for a gas hydrate exploration campaign
off the Vizag coast. "International surveys have established India has huge gas hydrate reserves, "
says a ministry source. ''This could lead to a gas revolution." Pradhan also visited GSPC's offshore
facilities and met managing director Atanu Chakraborty and other senior GSPC officials to
review progress at the company's nine assets.
9. L&T ignores Valdel JV for BCPA-3 engineering

Eng ineering consultants pay attention: L&T is likely to subcontract work from its $419m EPC
contract for ONGC's offshore Mumbai BCPA-3 platforms project at the Bassein field, announced on
june 24. ONGC wants subsea pipelines , bridges and three platforms: one process platform , one
living quarters platform and an unm anned well-h ead pl atform. You wou ld th ink L& T would
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appoint its affiliate L&T Valdel. But L&T Valdel has only independently carried out engineering for
livi ng quarters platforms and unmanned well-head platforms not process platforms. "L&T Valdel
carried out engineering for (ONGC's offshore Mumbai) MNW process platform but Aker Malaysia
checked the details," says a source. " So L&T Valdel has no independent experience." Most th ink
L&T will hire Aker Malaysia as it has worked with Aker in the past. ONGC opened price bids for the
BCPA-3 tender on june 19. McDermott came second with $437.834m, Technip India and Kencana
came third quoting $552 .93m and AFCONS and Swiber was last at $674 .98m . All prices
exclude 14% service tax. Analysts wonder where L&Twill manufacture the BCPA-3 units: at its two
Indian yards, Kattupalli in Chennai and Hazira in Gujarat, or at its Sohar yard in Oman? "If L&T
chooses Sohar how can it justify trumpeting the Make in India policy?" says a source. L&T, he
reminds us, unsuccessfully complained to ONGC's Independent External Monitors in May against
Malaysia's Kencana winning an unrelated tender for the offshore Mumbai MHSRD-111 project.
All the indications are that L&T will construct the BCPA-3 topsides at its Hazira yard, wh ich
is manufacturing five topsides for ONGC's MHNRD-111 project, two topsides for ONGC's Vasai East
Development and two topsides for ONGC's conversion of jack-up Sagar Pragati to a Mobile
Offshore Production Unit. Some say the BCPA-3 assignment has come just in time for L&T as its
Hazira yard will complete all ONGC orders by March 2016. "After VEDP and MHNRD-111 there have
been no orders for L&T's offshore EPC division," we hear. "Hazira would have been without any
work. They were desperate to get this job." Still unclear is where the jackets will be constructed.
Kattupalli is manufacturing two jackets for VEDP and Sohar is busy on jobs for local companies and
some ONGC work. As Kattupalli is on the east coast it will be expensive for L&T to transport
BCPA-3 units to offshore Mumbai. " Transporting the jackets from Sohar to Mumbai will be
cheaper, " says a source. When contacted, L&T says it is too early to decide on the distribution of
work between the Indian and Oman yards.
10. Expect ONGC to extend 5-floater bid deadline

ONGC looks in no hurry to award tenders for five floaters for three years. Still under preparation is
a Field Development Plan (FDP) for blocks KG-DWN-98/2 and G4 where the rigs are to be deployed .
"ONGC is behind schedule, " says a driller. "Development drilling can beg in only after the FDP is
approved. I think ONGC will need the rigs only in mid-2016." ONGC, he adds, can expect bids of
around $300,000/day to drill 45 development wells. But drillers expect it to push back its July 1 bid
deadline as it has yet to respond to queries raised at two separate pre-bids on june 2. "Every time
we call ONGC it says it will reply soon," said a driller on june 23 . "No date has been fixed . I don't
expect replies before early july. " ON GC must give drillers 21 days to submit bids from the dat e it
repli es to queries. A seni or ONGC source when cont acted on june 23, didn't rule out a deadline
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extension. "We received many queries," he said. "We might extend the deadline." Twenty
companies bought papers in ONGC's tender to hire two dynamically positioned floaters which can
drill in water depths of 1500 metres (4921 feet). Fifteen bought documents in ONGC's tender to
hire three anchor-moored semis which can drill in water depths of 762 metres (2500 feet). ONGC
wants rigs mobilised between December 1, 2015 and January 1, 2016 .
Companies who attended the pre-bid for the dynamically positioned floaters tender were Aban
Offshore, China Oilfield Services, Deepwater Drilling and Services, Dolphin Drilling, Ensco Maritime,
lntraday International Subsea Projects, joint Stock Company Zarubezhneft, Odfjell Drilling, Seadri/1,
Vantage International, Ventura Petroleo SA and Transocean . Curiously, Transocean bought tender
documents under three different names - Transocean Offshore International Ventures, Transocean
Offshore Deepwater Drilling and Transocean Drilling (India). "This has been done to save tax, "
says a source. "Transocean will submit bids from the most tax efficient entity. " Atwood Oceanics,
Greatship (India), jasper Explorer, Odisha Marine Services, Royalline Resources and Unitrade
Gesellschaft also bought tender documents but did not attend the pre-bid. Companies who
attended the pre-bid for the anchor-moored dril/ships were China Oilfield Services, Deepwater
Drilling and Services, Diamond Offshore, jet Drilling, Norscot Offshore, Queiroz Galvao Oleo e Gas,
Ratnamani Metals and Tubes, Seadri/1, and Transocean. Diamond Offshore, Greatship India, Odisha
Marine, and Unitrade Gesellschaft also bought documents.
11. No luck for NTPC after drilling 4 Cambay wells

First-time operator NTPC isn't having much luck drilling at onland Gujarat block CB-ONN-2009/5 .
About to complete the fourth of seven back-to-back Phase-1 exploration wells, NTPC has yet to
identify any well worth even testing . Well NTPC-A2, its latest, was spud in May using 1000-hp john
Energy rig john 27 hired at $16,000/day. "It will be drilled to 2500 metres," confirms NTPC on june
29. "So far we' ve drilled to 2300 metres. Drilling should be completed next week." NTPC is
targeting the Olpad, Cambay and Kalol geological formations with its drilling programme. In April it
drilled a third well NTPC-G to 2200 metres; in March it drilled the second well NTPC-Al to 2000
metres and in February, it completed drilling NTPC-E, its first exploration well. Another NTPC
source expla ins it wants to follow an 'integrated' approach to testing but is first carrying out
logging. "Only if the results call for testing will we begin testing," adds our source. "That way we
can keep costs under control. There is no point paying idling charges to a (testing) contractor for
their equipment. " An industry source adds NTPC is likely to ask its Project Management Consultant
ONGC to test the wells. NTPC committed $37 .62m at this block in Phase-I to shoot, process and
interpret 255-lkm 20, 165-sq km 3D and drill seven wells.
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Seismic contractor Alpha Geo shot 165-sq km 'blanket' 30 at the block in August 2011 for $3.5m,
which NTPC used to identify seven drilling locations: Sadra, Sangpara, Detroj, Sadatpura,
Dekavada, Ughoroj and Odhav. In August 2014, NTPC hired EnQuest Petro Solutions to supervise
the drilling campaign along with ONGC. NTPC won this block in NELP-V/11 against competition from
Essar and ONGC. It also holds 10% at 4007-sq km Andaman deepwater block AA-DWN-2009/13,
where it partners ONGC, GSPC and GAIL.
12. Sintex unhappy as Shiv Vani rig stops work

By now Sintex must be wishing it had stuck to its core business of making plastic water tanks
faced with one problem after another with its drilling programme at CB-ONN-2009/7 . Drilling
contractor Shiv Vani has admitted to a rig breakdown at this block where Sintex is drilling the first
of eight planned wells. Well Sarovar-1 was spud at 10.50am on june 21 at Bavlu village in Mehsana
district amid much fanfare. But the joy was short-lived as the pumps deployed with Shiv Vani's
1000-hp rig ZJ 40 rig began malfunctioning. "Shiv Vani brought in defective pumps," Sintex tells us.
"Over two days the pumps failed more than five times. Every two hours the pumps got stuck. The
rig is hardly three years old but it appears the accessories and spare parts are old and worn out."
Shiv Vani confirms problems with the pumps and that it stopped drilling in the evening of june 25 .
"We're trying to repair the pumps as quickly as possible," confirms a Shiv Vani source. He adds
the rig clutch too failed completely before being repaired . Sintex awarded a Letter of Intent (Lol)
to a Rasson-led consortium on April 17 for the four-well contract at an Effective Day Rate (EDR) of
Rsll lakh/day ($17,298) including mobilisation and demobilisation charges. This was followed on
june 20, just a day before drilling began, with a formal Letter of Award (LoA).
Rasson is using the Shiv Vani rig to drill the well up to 2500 metres. Barring further problems,
each well should take around a month to drill at a cost of Rs15cr ($2.35m). Sintex hired Rasson
after cancelling an earlier contract with Quippo in March and has also struggled to secure
approvals from the DGH, environmental, local pollution control board and forest department.
Sintex believes the block holds 26.4m tonnes of oil in place of which 4.2m tonnes is recoverable
from the Olpad, lower Cam bay Shale, upper Cambay Shale, Kalol, Tarapur Shale and Babaguru
geological formations. Phase-/ ended in january but Sintex received an 'excusable delay' extension
of six months and has also applied for a further three-year extension. At its second 68-sq km block
CB-ONN-2009/2 Sintex organised a public hearing at Pratapgadh village in Mehsana district on
june 17. For the Ahmedabad part of the same block a public hearing is scheduled for july 10.
13. Eleven boats compete for ONGC MSV contract

Despite widespread speculation that Mumbai-based HAL Offshore will win, ONGC's tender to hire a
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Multipurpose Support Vessel (MSV) for three years nonetheless received an excellent response by
the extended june 18 bid deadline with eight vessel owners offering 11 MSVs. This tender is meant
to replace the three-year contract held by HAL's vessel Seamec-11, which ONGC released on june 5.
HAL naturally has an edge over any competition as it will not have to pay any additional costs
mobilising the vessel, already in Indian waters . Hire rates offered are l ikely to be around
$88,000/day plus the new service tax rate of 14% introduced on june 1. "Seamec-11 was working at
around $92,000/day (plus service tax, then at 12.36%)," explains a source. "She was hired when
crude oil prices were high. Logically, the new rate should be marginally lower." However the rate is
unlikely to be sharply lower as ONGC wants a 100-tonne crane and other specialised equipment on
the MSV: "But you never know what rate newcomers will bid to break into the ONGC market now,"
we hear. Kreuz Subsea (Singapore) offered Kreuz Installer; IES Engineering Malaysia offered an
under construction MSV; Dubai's Marine Engineering & Diving Services offered Altus Optimus and
Altus Exertus; Hind Offshore offered Seven Discovery, Armada Hawk and Armada Condor; GOL
Offshore bid an under-construction vessel; Dubai's Dulam Offshore offered Oceanic Installer; and
Orissa Marine offered Sea Falcon .
Originally, the bid submission deadline was May 22 which ONGC extended to june 4 and then to
june 18. ONGC wants the MSV mobilised within 300 days of the LoA. When Seamec-11
originally won the ONGC contract, she was owned by Seamec, in turn owned by Coflexip Stena
Offshore - a division of France's Technip. HAL, owned by the MM Agrawal group, agreed to buy
75% in Seamec in April 2014 after Technip said it wanted to focus on building subsea systems in
deep waters.
14. Jindal breaks with Noble to offer Rowan rigs

Here's evidence of how desperate drillers are for con tracts. In ONGC's tender to hire five jack-ups
when bids were submitted on june 22, Jindal Drilling offered two Rowan Drilli ng rigs which are
halfway around the world in the Gulf of Mexico. Yet everybody knows ONGC will most likely hire a
rig already in Indian waters to save on mobilisation costs. ONGC wants two independent leg
cantilever jack-ups in Category-! and received six offers: Deepwater Drilling offered Paragon
L-1111 (earlier called Noble Gus Androes); Hallworthy offered Foresight Driller-9; jagson Drilling
offered Deepsea Treasure; Jindal offered Cecil Provine which is in the Gulf of Mexico; and Shelf
Drilling offered CE Thornton and FG McClintock, still with ONGC but which came off contract on
May 1, 2015 . In Category-11 ONGC wants three slot/cantilever rigs and received eight offers: Aban
Offshore offered Aban V, off Iran; China Oilfield Services offered Bohai-IV and Hysy-931; Jindal
offered Rowan Louisiana whi ch is in the Gulf of Mexico; GOL Offshore offered Kedarnath, which
comes off its ONGC contract on Novem ber 28, 2015; and Shelf offered Param eswara, Randolph
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Yost. off Indonesia, and Trident-11 which came off its ONGC contract on March 29, 2015. Analysts
say Category-! rates will be around $62,000-65,000/day, or 20% lower than t he $82,000 Operating
Day Rate ONGC paid after its 2014 tender.
In Category-11, ONGC last hired slot-type rigs at $66,000/day, likely to fall to $58,000-62,000/day in
this tender. Mystery surrounds Jagson's offer of Deepsea Treasure, disqualified from ONGC rig
tenders because she's idle for more than three years. ''lagson will argue it is entitled to special
treatment as an Indian company under the government's Make in India policy," says a source.
Jagson 's Pradeep Gupta replies: "We've bid Deepsea Treasure. It is up to ONGC to take a
decision." Gupta also declined to comment on market rumours Jag son has taken ONGC to court
over its disqualification. De/hi-based Jindal's partnership with Houston-based Rowan marks the end
of its alliance with Noble Drilling. Jindal and Noble argued over the release of jack-up Noble Ed Holt,
renamed Paragon L1112 owned by Noble spin-off Paragon Offshore. All Paragon rigs in India will in
future be offered in ONGC tenders by Naresh Kumar owned Deepwater Drilling. Jindal declines to
confirm or deny that the company has agreed to buy both Rowan rigs, Cecil Provine and Ro wan
Louisiana for about $20m each.
Midstream & Downstream

15. At last - Shell prepares LNG terminal tender
Shell and Total are expected to release a long-awaited tender this month Uuly) to expand their 5m
t/y Hazira LNG terminal to 7m t/y with the addition of one 200,000-cubic metre LNG storage tank
and regasification facilities . Contractors pre-qualified for the combined package after submitting
Eols were invited in April and included Punj Lloyd with Mitsubishi Heavy Industries; Sener with
Afcons; Cobra lnstalaciones y Servicios with Tecnimont; Toyo Engineering with IHI and Engin eers
India with Vijay Tanks and Vessels (VTV). "Shell and Total will not issue separate tenders to build
the LNG tank and regasification facil ities," we hear. "It will be a package. This exp lains why
companies like Toyo, Punj and Afcons will bid in partnership with st orage tan k construction
specialists." Of the total Rs800cr ($130m) expansion budget $125m has been earmarked for the
LNG storage tank. Expanding the regasific ation facilities will be mainly a civil construction j ob
costing a few hundred thousand dollars with no procurement involved as Shell and Total plan to
source vapourise rs and other equipment themselves. Whoever wins need only ca rry out design
and engineering of the regasifica tion facilities. Expect Shel l and Total to issue a tender, evaluate
bids and awa rd the contract within six months, say contractors. "Constructing an LNG tank takes
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36 months," we hear. "Only by 2018 will the expansion be complete."
A source close to the project stresses there is enough demand to justify the Hazira terminal
expansion. Today, he says, there are only two LNG terminals in India operating 365 days a year-
Dahej and Hazira. With no breakwater the 5m t/y Dabhol LNG terminal operated by Ratnagiri Gas
and Power in Maharashtra shuts during monsoon rains. "LNG prices are also low," he adds. "There
is lots of demand from industries other than power and fertiliser companies. What's more we (the
Hazira LNG terminal) are well connected to the pipeline grid and can supply gas to customers in
western and northern India."
16. Gas hungry lndianOillines up more spot LNG

lndianOil is planning a total 12 spot LNG cargoes from now until March 31 next year as it
accelerates imports to feed its refineries and growing CGD business. On june 11, the first of these
landed at Dahej - a 142,500 cubic metre cargo aboard tanker Seri Angkasa, from Nigeria LNG
through Gas Natural Fenosa, Petronas and Trafigura at $7.50/mmbtu ex-ship. Over the next few
days lndianOil is expecting a second spot LNG cargo sourced from Vitol, most likely priced the
same. On july 1, lndianOil released a tender for a spot delivery in August. lnd ianOil is fast
becoming one of India's major spot LNG importers. In addition to five spot LNG cargoes imported
on its own, it's planning another two spot cargoes through Petronet-LNG and five from GSPC.
Credit the surge in spot LNG imports to a one-year 800,000 tonne Petronet-LNG contract for gas
from RasGas that ended in March 2015 . Much of the gas will be used to feed lndianOil's refineries,
located across India at Koyali in Gujarat; Panipat in Haryana; Mathura in Uttar Pradesh; Haldia in
West Bengal; Chennai in Tamil Nadu; Barauni in Bihar; Digboi, Bongaigaon and Guwahati in Assam.
Also urgently needed is R-LNG for its gas joint venture with Adani Gas, which operates in Agra and
Lucknow in Uttar Pradesh with networks planned at Allahabad in Uttar Pradesh, Chandiga rh in
Punjab, Panipat in Haryana and elsewhere.
Contrast the low $7.50/mmbtu lndianOil paid for its june cargo with what it paid last year to see
how far spot prices have fallen. In 2013-14, it sourced cargoes from Petronet-LNG through the
Kochi terminal at $14.68 and $16.57 and at Dahej for $18.40, $18.67, $18.83 and $18.99/mmbtu.
IOC also sourced short term gas from Petronet-LNG at $15.50/ mmbtu. From GAIL it paid
$16.30-19.10/mmbtu for spot gas for short term gas a high $19.44/mmbtu. But IOC got the best
deals from GSPC paying $15.10/mmbtu for deliveries at Hazira and $15.40/ mmbtu at Dahej. In
total, IOC sourced 1053.65m cubic metres of R-LNG worth Rs7993cr ($1.3bn) in 2013-14. IOC also
has two other long-term contracts lined up. On May 29, 2015 chairman B. Ashok announced a
20-year sales contract with Mitsubishi for 700,000 t/y of LNG starting 2018 for 20 years from the
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US. In March 2014 IOC bought 10% in the Petronas-promoted Progress Energy and Pacific North
West LNG projects in Canada that will supply 1.2m t/y for 20 years.
17. No one wants H-Energy gas pipeline to Orissa

Adani Energy, lndlanOil and GAIL have forced the PNGRB to call an urgent review meeting on july
13 in Delhi to discuss their objections to a proposal by Mumbai-based H-Energy to lay a 14.4m
cm/d capacity 705-km gas pipeline from West Bengal to Orissa. "If there is no consensus at the
meeting," says a well-placed source, "then the PNGRB can put together its own pipeline route and
invite bids." The PNGRB invited comments within a month from April 20 on H-Energy's planned
pipeline to evacuate R-LNG from its proposed 4m t/y FSRU off Kolkata. Quick to respond, Adani,
GAIL and IOC said H-Energy hasn't done its homework, will duplicate infrastructure and waste
money. Adani for instance is proposing a 10m t/y LNG terminal at Dhamra in neighbouring Orissa
in direct competition with H-Energy's FSRU; GAIL says areas H-Energy is targeting for gas supplies
at Paradip, Bhubaneswar, Cuttack, Haldia, and Kolkata are already adequately serviced by its own
proposed and authorised pipelines : jagdishpur to Haldia and Surat to Paradip. GAIL argues that
even the spur lines proposed by H-Energy come within the tariff corridors of its two above
proposed pipelines. GAIL wants the entire H-Energy proposal scrapped and wants H-Energy to
consider a 230-km pipeline from Contai to Dhamra that would feed R-LNG from Dhamra into its
own proposed pipeline near Contai.
lndianOil wants the PNGRB to "modify" the H-Energy proposal and invite bids to lay a 920-km
trunk pipeline with a minimum 24m cm/d capacity from Srikakulam in Andhra Pradesh to Durgapur
and Howrah in West Bengal and Bhubaneswar in Orissa with an additional 539-km in spur lines to
different locations in these states. IOC says this network will evacuate gas from the proposed
H-Energy and Adani LNG projects, from the Kakinada to Srikakulam gas pipeline which APGDC is
laying, and from the Raniganj and Asansol CBM fields. IOC argues that after this pipeline is
authorised, no other pipeline is needed to connect the proposed H-Energy and Adani LNG projects.
H-Energy plans to bring R-LNG to shore at Petua in West Bengal from its FSRU through a 115-km
subsea ·pipeline. From there it wants to transport the gas to Paradip, Cuttack and Bhubaneshwar in
Orissa, Kolkata, Haldia and Uluberia in West Bengal and Dattapulia on the border with Bangladesh.
18. Adani targets December for Dhamra tenders

Adani Energy's proposed 5m t/y Dhamra LNG project in Orissa looks like it might happen, despite
competition from other sim ilar projects on the east coast. But only if you believe the
company's ambitious claim it wants to release EPC tenders by December 2015 . "We want to begin
construction by March next year and complete the project within 36-40 months," stresses an Adani
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Volume 18, Issue 22 02 ju ly 2015
source. Dhamra joins several proposed LNG import projects on the east coast, some of them pure
fantasy. Take your pick: lndianOil at Ennore, KEI-RSOS at Krishnapatnam, Shell, GAIL and GdF at
Kakinada, Petronet-LNG at Gangavaram project, not to mention H-Energy's project at Haldia. No
one can predict how many will materialise. Yet Adani is confident of Dhamra's prospects,
encouraged by IOC and GAIL's decision in May to sign MoUs to join the Rs5000cr ($800m) project.
Adani adds GAIL has booked 2m t/y and IOC has taken 3m t/y of regasification capacity. "Our
Phase-1 capacity is booked," he says. "Discussions will now begin to convert the MoUs into 15-year
agreements." IOC confirms it has booked capacity at Dhamra but not how much. "We need at
least 3m t/y for our refineries at Paradip and Haldia," says a source, "more if we add some
petrochemical units (at Paradip)." GAIL declined to comment. Adani is preparing a Deta iled
Feasibility Report (DFR) in-house for Dhamra and says it will appoint a PMC within two months.
Without money nothing will materialise and Adani has yet to take the all-important Final
Investment Decision. "But we expect that to happen very soon," adds a company source. "A lot of
government approvals were in place when we bought the project from Tata Steel and L&T." Adani
is planning two 180,000-cubic metre onshore LNG storage tanks with a third planned later.
"Eventually Dhamra will have 10m t/y capacity," we hear. As Dhamra is a 100% Adani project,
work is expected to progress quickly - in sharp contrast to the Mundra LNG project, which Adani is
co-promoting with GSPC in Gujarat. Adani will set up Dhamra from the beginning with
regasification facilities which can handle 10m t/y, so ramping up the terminal's capacity from 5m
t/y to 10m t/y will only need a third LNG storage tank. Dhamra is an all-weather deep water private
port and began commercial operations in 2011 .
19. Sabarmati Gas- here today gone tomorrow!

Set up in june 2006, GSPC and Bharat Petroleum joint venture Sabarmati Gas will disappear in
October 2015, swallowed by Gujarat Gas Ltd. PETROWATCH learns investment banker SBI Caps is
working on a deal wh ich would see GSPC (25%) acquire up to 20% of BPCL's 25% stake and
assume full management control at Sabarmati which will merge into former BG-controlled Gujarat
Gas. GSPC, which owns Gujarat Gas, will also acquire the stakes of three institutional investors
looking to exit Sabarmati: IFCI Venture Capital Fund (16.62%), IDFC Project Equity Company
(16.62%) and the Unit Trust of India (16.62%) . "SBI Caps is doing the valuation," says an industry
source . "Based on that further action will be taken." He explains GSPC is not happy with the
way BPCL is managing Sabarmati. Acquiring Sabarmati, he adds, will allow GSPC to expand quickly.
Sabarmati is the only gas retail JV between a central government company (Bharat Petroleum) and
a state government undertaking (GSPC) and supplies 950,000 cm/d to 82 ,500 homes, and 600
factories and businesses in north Gujarat 's Gandhinagar, Mehsan a and Sabarkantha districts.
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Sabarmati also operates 36 CNG stations and plans to set up 20 more by end-2016. Gujarat Gas is
India's largest gas retailer, created on May 16 after the formal merger of former BG gas retailer
Gujarat Gas Company with GSPC Gas.
On june 27 last year Gujarat energy minister Saurabh Patel was highly critical of soft-spoken BPCL
chairman and managing director 5. Varadarajan over Sabarmati's poor performance and its failure
to grow or cover new areas. Patel instructed BPCL to exit Sabarmati without a fuss. In the same
month then GSPC managing director Tapan Ray wrote to Varadarajan directing BPCL to hand over
its stake at a 'mutually agreed price.' Besides its stake in Sabarmati, BPCL partners GAIL in three
other gas retailers - lndraprastha Gas in Delhi, Central UP Gas in Kanpur and Bareil/y and
Maharashtra Natural Gas (MNGL) in Pune.
20. More tense 'tie-breakers ' for six CGD-V areas

Once again the PNGRB will hold tie-breaker sessions on july 2 and 3 to decide winners for gas
retail licences, this time under the fifth bidding round (CGD-V). At East Godavari, West Godavari
and Krishna in Andhra Pradesh, Megha Engineering 'tied' with a consortium of Hindustan
Petroleum, APGDC and KEI-RSOS Petroleum. Each quoted Rs0.01/mmbtu network tariff and
Rs0.01/kg compression charges so the tie-breaker is scheduled for july 2 around 11:30am at the
PNGRB's Delhi office. Both bidders must submit bank guarantees and whoever offers the highest
will win. likewise for Karnataka cities Tumkur, Dharwad and Belgaum where a tie-breaker will be
held on july 3 between three bidders: Ad ani with lnd ianOil; Megha Engineering; and GAIL Gas with
Bharat Petroleum . Here too each has quoted Rs0 .01/mmbtu network tariff and Rs0.01/kg
compression charges. During a tie-breaker on june 24, GAIL Gas with BPCL won Haridwar in
Uttarakhand with a Rsl. 7cr ($266,000) bank guarantee. A rival consortium of Ad ani with IOC
offered no bank guarantee. But on the same day in a tie-breaker for Udham Singh Nagar in
Uttarakhand, Adan i with IOC won with a Rs2cr ($313,000) bank guarantee against GAIL Gas with
BPCL. By the PNGRB's extended june 22 deadline, GSPC Gas was sole bidder for Banaskantha and
Dahod in Gujarat and GAIL Gas with BPCL was unchallenged for Muzaffarnagar in Uttar Pradesh.
Unclear is who is the sole bidder for Ahmednagar in Maharashtra. The PNGRB now has no option
but to offer Banaskantha, Dahod, Muzaffarnagar and Ahmednagar to their sole bidders as nobody
else bid despite a 30-day extension. Also no bids were received for the eight cities of Bulandshahr,
Badaun and Aligarh in Uttar Pradesh; Latur and Osmanabad in Maharashtra; Dhar and Shivpuri in
Madhya Pradesh; and Bidar in Karnataka. Bids were originally due on May 22 for 20 cities/regions
but the PNGRB extended the deadline to june 22 for cities/regions which received a single bid or
no bids. Industry sources say the PNGRB might include in CGD-VI the eight cities/regions which got
Tel: +9111 2341 25211 www.petrowatch.com 1 jofo@petrowatch.com
20
PETROWATCH
no response in this round or might not offer them at all. A PNGRB source declined to comment.
21. Reliance pushes back J3 completion schedu le

For a company that prides itself on doing this ahead of time, Reliance is uncharacteristically
behind schedule setting up the world 's largest ethylene cracker under its Jamnagar refi nery
expansion programme. Instead of commission ing the $5bn cracker by July-September 2016,
Reliance has pushed back its schedule by 90 days to third quarter 2016-17 or October-December
2016. "Overall the project is on track," stresses a company source. "Only the commissioning
schedule is delayed. With such a complicated project delays are inevitable." Reliance awarded the
contract to setup the cracker to France's Tech nip in July 2012. When ready the cracker will use
refinery off-gas, a by-product of the refining process, as feedstock to produce l.Sm t/y of ethylene.
This will see Jamnagar's overall capacity to produce ethylene rising to 3.248m t/y. J3 or the
Jamnagar-111 expansion will also see propylene production rise from 759,000 t/y to 913,000 t/y;
monoethylene glycol production from 733,000 t/y to 1.46m t/y; low-density polyethy len e
production increase from 190,000 t/y to 590,000 t/y; high-density and linear low-dens ity
polyethylene production go up from 928,000 t/y to 1.47m t/y; and paraxylene production ju mp
from 1.85m t/y to 3.65m t/y. Rel iance also produces 900,000 t/y of ethylene at its Hazira
petrochemical complex; 400,000 t/y at Nagothane; 190,000 t/y at Baroda and 400,000 t/y at Dahej .
To feed the crackers Reliance plans to source 1.Sm t/y of ethane from the US.
Last july (2014) Reliance ordered six very large ethane carriers from South Korea 's Samsung
Heavy Industries for around $730m to import 1.4m t/y of ethane. Reliance then hired L& T
Hydrocarbons in September 2014 to set up a 120,000 t/y ethane storage facility for Rs580cr
($91m) . "Reliance wants to capitalise on the US shale gas revolution by importing liquefied ethane
cheap for use as feedstock," we hear. It will invest Rs1428cr ($229m) to lay a 486-km ethane
pipeline from Dahej to Surat in Gujarat and on to Nagothane in Maharashtra. Last month Oune) the
Gujarat stretch of the pipeline was cleared after public hearings.
Petrowatch Information (India) Pvt. Ltd 1 Ashoka Estate 1 24 Barakhamba Road 1 Delhi. 110 001
Tel: +91 11 2341 2521 1www.petrowatch.com 1info@petrowatch com
Copyright © 2015 PETROWATCH. All ri ghts reserved
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PETROWATCH

Volume 18, Issue 22 02 july 2015

People & Policy

Exploration & Production

Midstream & Downstream

People & Policy

2. BC Tripathi wants to be next PNGRB chairman

3. Rupshikha Borah to ld she can•t head Oil India

4. Three fight to replace Nishi Vasudeva at HPCL

5. Is GSPC boss Chakraborty heading for Delhi?

6. 'Use PNG or lose LPG subsidy! • says ministry

7. Looking for shale reserves beneath coalfields

Exploration & Production

9. L&T ignores Valdel JV for BCPA-3 engineering

10. Expect ONGC to extend 5-floater bid deadline

11. No luck for NTPC after drilling 4 Cambay wells

12. Sintex unhappy as Shiv Vani rig stops work

13. Eleven boats compete for ONGC MSV contract

14. Jindal breaks with Noble to offer Rowan rigs

Midstream & Downstream

36 months," we hear. "Only by 2018 will the expansion be complete."

16. Gas hungry lndianOillines up more spot LNG

17. No one wants H-Energy gas pipeline to Orissa

18. Adani targets December for Dhamra tenders

19. Sabarmati Gas- here today gone tomorrow!

20. More tense 'tie-breakers ' for six CGD-V areas

21. Reliance pushes back J3 completion schedu le

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