Reliance's D6 gas lights up idle capacity

With the Reliance Industries Ltd (RIL) operated KG-basin D6 block gas flowing in, the gas-based power generation across the country has registered a healthy turnaround. In October, a total of 15 gas-based stations recorded a plant load factor (PLF) of over 80 per cent due to improved fuel availability, as against around just 50 per cent last year.

The spurt in gas-based production has more or less compensated for a dip in hydro generation in the northern and eastern regions, where reservoir storage was 35 per cent and 33 per cent respectively below last year's levels.

Increased generation by gas stations, especially those in the south, have also come at a time when coal-based generation at a number of stations, including key NTPC ones, have faltered due to a botched-up coal tender. Domestic natural gas production in April-October period was up 31 per cent at 25.389 bcm (billion cubic metres). Reflecting the jump in gas production, generation in gas-based plants shot up 34 per cent during April-October. “Surplus is also available due to low offtake by other sectors. The utilisation of the surplus gas has resulted in better utilisation of idle capacity,” an official with the Central Electricity Authority said.

Source:http://www.thehindubusinessline.com/2009/11/30/stories/2009113051160100.htm

RIL refineries to get one-fifth of gas from KG-D6

RIL has been allocated 2.34 mmscmd of gas from its KG D-6 fields to meet just about one-fifth of the gas requirement at its twin refineries at Jamnagar in Gujarat.

RIL had sought 11.80 million standard cubic meters per day of KG D-6 gas to meet feedstock requirement at its twin refineries but it got only 2.34 mmscmd.

An Empowered Group of Ministers (EGoM) had on October 27 allocated one-fourth of the additional 20 mmscmd gas that RIL is ready to produce from KG-D6 to refineries.

"Refineries had projected a demand of 25.20 mmscmd but since the EGoM allocated only 5 mmscmd, the same has been allocated on pro-rata basis," an oil ministry official said.

State-run Indian Oil got 1.6 mmscmd while HPCL and BPCL have been allocated 0.26 and 0.20 mmscmd respectively. Private sector Essar Oil would get 0.60 mmscmd against a demand of 3 mmscmd for use at its Vadinar unit in Gujarat.

Reliance Group, which had so far not been allocated any gas from KG D-6, is currently buying imported liquefied natural gas at 60 per cent premium to the price of gas from its own block in the Krishna-Godavari Basin.

Of the 20 mmscmd, 12.9 mmscmd has gone to power plants, the official said, adding the new customers notified to Reliance include state-run NTPC who has been given 2.71 mmscmd.

The government had previously fixed users for the first 40 mmscmd output from KG-D6 fields which has transformed the electricity scenario and boosted growth. Of the initial output, 18 mmscmd had gone to power plants.

The official said out of the additional allocation made on firm basis, NTPC will get 2.71 mmscmd, Lanco's Kondapalli plant (1.46 mmscmd), GMR Energy's Tanir Bavi (0.88 mmscmd - both in Andhra Pradesh), Rithala (0.40 mmscmd), Bawana plants (0.93 mmscmd - both in Delhi) and Gujarat's Uran plant (1.40 mmscmd).

The government had previously fixed users for the first 40 mmscmd output from KG-D6 fields which has transformed the electricity scenario and boosted growth. Of the initial output, 18 mmscmd had gone to power plants.

Source:http://business.rediff.com/report/2009/nov/25/reliance-ril-refineries-to-get-one-fifth-of-gas-from-kg-d6.htm

Reliance reopens 900 oil stations, selling at PSU rates

According to Reliance’s refinery business head P Raghavendran, most of the oil stations are in the Western and Southern markets are selling fuels at the price being offered by state-run oilmarketers. The prices of governent firms are cheaper than market costs due to subsidy.

"We are selling where we can match PSU price," he said.

Raghavendran said we are the only nation that is so heavily dependent on imports to meet oil needs yet subsidies the fuel heavily.

IOC, BPCL and HPCL get bonds from the government and discounts from crude producer ONGC for selling petrol, diesel, domestic LPG and kerosene below cost.

Unlike sectors like fertilizers, the oil subsidy is limited only to public sector firms, he said, and pointed out that in the 2008-09 fiscal, the government issued oil bonds worth over Rs 103,000 crore to PSU fuel retailers for selling petrol, diesel, domestic cooking gas and kerosene below cost.
The same compensation is not given to private retailers like Reliance Industries, Essar and Royal Dutch Shell, he pointed out.

Source:http://business.rediff.com/report/2009/nov/24/reliance-reopens-900-oil-stations-selling-at-psu-rates.htm

Lyondell deal will up RIL's refining margins: Experts

Reliance Industries (RIL) is offering about $12 billion to buy a controlling interest in bankrupt chemical company LyondellBasell Industries to create one of the largest petrochemical firms in the world, two sources with direct knowledge of the deal said.

“The offer is in the vicinity of about $10 to $12 billion,” one source said, while another said it was around the upper end of the band. The two sources declined to be named as they are not authorised to speak to the media.

Both Reliance and LyondellBasell did not disclose the size of the offer in their statements.

Reliance Group, India’s largest conglomerate, has been looking to expand, taking advantage of low valuations to delve into international markets.

The company is aiming to attain global scale for its conventional energy platform — petrochemicals, refining and oil and gas exploration — and invest in its new businesses such as retailing and alternative energy, chairman Mukesh Ambani said this week at the company’s annual meeting of shareholders.
Vijay said there were some concerns when RIL promoters sold treasury stock and now the management was keeping its word when it had promised some global acquisitions.

“The RIL stock too has been doing well in the last two weeks compared to the battering it received since June. It is still not on our buy list yet because of the huge overhang of the Supreme Court case [relating to gas] but this is surely a positive development.”

‘How you read the deal is a function of the price RIL pays,” said Adrian Mowat of JPMorgan.
“We suspect they will be pretty cautious in the price that they are willing to pay.”

Mowat added that RIL’s refining margins, which were currently under pressure, would improve if the Lyondell acquisition went through.

Source:http://www.moneycontrol.com/news/business/lyondell-deal-willrils-refining-margins-experts_426528.html

RIL questions RNRL's demand for gas without plant

The Mukesh Ambani questioned in the Supreme Court the demand of brother Anil Ambani for the immediate supply of gas from the K-G basin, saying that it can not be done in the absence of the proposed power plant as per the agreement reached between them.

There was an assurance given for the supply of gas, but the other side (Anil Dhirubhai Ambani Group) failed to establish the power plant. Now they want to make money out of the gas which was never contemplated in the demerger scheme,” Senior Advocate Harish Salve, appearing for RIL, said before a Bench headed by Chief Justice K G Balakrishanan.

Continuing his arguments in the high-voltage gas row, Salve said the assured supply of gas was the vital ingredient of the agreement for the power plant to be established by the RNRL at Dadri, near Ghaziabad in Uttar Pradesh.

“Therefore, no court can modify the scheme which they (RNRL) sought,” Salve submitted before the Bench, also comprising Justices B Sudershan Reddy and P Sathasivam.

When the day’s hearing was about to conclude, RNRL’s Counsel Ram Jethmalani contended that seven of the affidavits filed in the apex court by RIL’s Directors relating to the family MoU of 2005 were not a part of the record when the dispute was heard in the Bombay High Court.

Jethmalani submitted that if RIL consents and the affidavits were allowed to be the part of the records then, under company court procedure, the seven directors were open to cross-examination in the court.

The Ambani brothers are locked in a bitter battle over the supply and price of the gas from the K-G basin. While RNRL is seeking gas at a committed price of $2.34 per million British thermal unit (mBtu), RIL says it cannot honour the commitment made in the family agreement due to government’s pricing and gas policies.

However, before the intervention by RNRL, Salve said the scheme of demerger provided that the gas has to be supplied up to the delivery point, after which it would be for the Anil Ambani-led Reliance Energy Ltd (REL) to transport the gas to its power plant.

“The suitable arrangement would be that RNRL take the gas from delivery point for REL. However, what they wanted is that, from the delivery point, RNRL would take the gas and market it,” he said, adding that “no court could grant such a relief to RNRL for taking the natural resource and making profit by marketing”.

Reliance said supply of gas to RNRL at $2.34 per mBtu was not possible as it would have to make up for the loss from its own pocket.

Reports of my quitting incorrect: ASG Parasaran Meanwhile, Mohan Parasaran, the government’s counsel in the Ambani brothers gas dispute, has said that he had never threatened to withdraw from the case on the issue of inclusion of more lawyers in the team.

Additional Solicitor General (ASG) Parasaran last week wrote to Petroleum Secretary R S Pandey saying he had never threatened to withdraw from the case or resign as ASG on talks on including more lawyers in the government team, official sources said.

Source:http://oilandgasindia.blogspot.com/2009/11/ril-questions-rnrls-demand-for-gas.html