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Tata Steel begins operations at the Neelachal Ispat Nigam plant in Odisha

Odisha-based Neelachal Ispat Nigam Ltd (NINL) has started operations nearly 90 days after it was acquired by a Tata Steel subsidiary for Rs 12,000 crore in a bidding process, a statement said on Monday.

The plant with a 1.1 million tonnes steel-making capacity was closed for almost two years on account of various reasons.

Tata Steel Long Products (TSLP), a Tata Steel arm, in a statement, said that it achieved a milestone with the restarting of the blast furnace at its subsidiary Neelachal Ispat Nigam Ltd, just 90 days after the completion of its acquisition on July 4, 2022.

T V Narendran, Chairman of Tata Steel Long Products Ltd & Neelachal Ispat Nigam Ltd said, Given that the site was not in operation for two years, we wanted to restart the furnace quickly, deploying and demonstrating Tata Steel's strong execution capabilities.

Narendran, who is also the CEO & Managing Director of parent Tata Steel, said the focus is now on ramping up production gradually to rated capacity as per plan.

Tata Steel has plans to invest in the Neelachal Ispat Nigam Ltd site to build a dedicated 4.5 million tons per annum long products complex over the next few years.

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India makes a strong pitch to major US firms for investing in oil and gas production

Favorable geology, open data access, supporting policy regime, and ease of doing business were the major drivers of attracting potential US players to invest in India's energy and petroleum growth wave during a two-day investor meeting held here.

The investors meet from September 28-29, showcasing the lucrative fiscal policies and conducive environment of the energy and petroleum (E&P) sector, which has seen a paradigm shift in policies aimed at attracting investors for investment was organized by the Directorate General of Hydrocarbons (DGH) under the aegis of Ministry of Petroleum and Natural Gas and facilitated by Houston Consulate General of India.

Ministry of Petroleum and Natural Gas Secretary Pankaj Jain, in his keynote address to potential investors from over 50 companies; oil and gas majors, financial institutions, private equity firms, service providers, and academicians, made a strong pitch to investors interested in doing business with India.

He discussed India's strength and role in the global energy ecosystem and highlighted India as the destination of energy opportunities.

Jain spoke on the latest offering of discovered fields, and ease of doing business for bidding and assured an open-door policy to resolve any issue faced by the industry as he sought foreign and private investments to boost domestic oil and gas production.

“India is the world's 4th largest oil importer and the demand is expected to rise driven by an increase in India's per capita consumption of energy which currently stands at one-third of the global average. India wants to be the new destination for global energy players. Oil producers worldwide are eager to gain a foothold in India, where fuel demand is expected to keep rising as the country's economy grows," he said.

“India is exploring the multiple attractive opportunities in the energy sector as it seeks to ensure reliable, affordable, and sustainable energy to its growing population, 40 percent of the working age population is aged between 15-35 years. It is the large growing economy and will be the main driver of rising demand for energy over the next two decades, accounting for 25 percent of global growth”.

“Being the 2nd largest oil consumer, its oil consumption or demand is expected to rise to 450 MMT by 2040 from about 220MT in 2022. India, also being the 2nd largest refiner in Asia with 23 refineries, will increase its refining capacity to 400 MMTPA by 2030 from the current 251.2 MMTPA," he said.

He said the Indian government has put in place a liberal and transparent policy wherein most sectors are now open to FDI under the automatic route. In exploration activities of oil and natural gas fields as well 100 percent FDI is allowed under the automatic route. The measures by the Government of India have resulted in India attracting its highest ever FDI inflow of USD 83.57 billion during 2021-22, Jain said.

India's unique geology offers attractive opportunities, especially in unexplored offshore areas, he said, adding the country has several analogous basins where oil and gas discoveries are proven and operations have been undertaken.

"Andaman is similar to South-North Sumatra/ North - Mergui, KG is similar to the Gulf of Mexico, Saurashtra is and Kutch similar to East African rift. 2.36 Mn sq. Km offshore area across over 9 offshore basins; with 55 percent area already appraised via seismic or drilling," he said.

“We have 26 sedimentary basins and have streamlined processes to further drive sector attractiveness by giving freedom to carve out blocks, play-based exploration, pre-cleared blocks, and opportunity to partner with existing players," he said.

"The investors meet was an eye opener for us as well as the potential investors and gave an opportunity to understand the reasons behind their interest and what they are looking for to enter India and how to address it. New operators expected to bring innovative technology and capital to raise domestic production, which presently meets only 15 percent of domestic demand," Jain said at the meet.

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India’s state-owned firms plan four coal-to-chemicals projects

Four state-owned firms in India plan to build coal-to-chemical projects as part of the government's aim of utilizing 100m tonnes/year of coal for gasification by 2030.

Coal India Ltd (CIL), along with Indian Oil Corp (IOC), Gas Authority of India Ltd (GAIL), and Bharat Heavy Electricals Ltd (BHEL), will build the projects and will jointly set up the surface coal gasification projects as part of the plan, the Ministry of Coal said on 23 September.

The projects will "convert coal into syngas that can be subsequently processed for downstream production of value-added chemicals produced through imported natural gas or crude oil," it added.

The ministry said that the companies plan to produce dimethyl ether (DME), ammonium nitrate, and synthetic natural gas through these projects.

Details on the proposed projects' exact location, cost, and capacities were not disclosed in the recent announcement.

In 2020, the government had estimated that it would require an investment of more than the Indian rupee (Rs) 4tr ($40bn) to gasify 100m tonnes/year of coal by 2030.

The coal gasification project will happen in three phases, according to the Ministry of Coal's National Coal Gasification Mission report released in September 2021, which specified timelines for the start and completion of each stage.

In the project's first phase, which covers 2020-2024, a total of 4m tonnes/year of coal will be gasified and will involve an investment of around Rs200bn.

This phase included building a 1.27m tonne/year urea plant based on coal gasification technology and will be operated by Talcher Fertilizer Ltd. The plant is expected to become operational in the fiscal year ending March 2025.

Coal India Ltd is also setting up a 676,000 tonne/year methanol plant at the Dankuni Coal Complex (DCC) in West Bengal state as part of the first phase.

Once operational, the plant is expected to help India provide 15% methanol-blended fuel by reducing crude imports by 2030.

The planned four coal-to-chemicals projects, for which pre-feasibility studies have been completed, represent the second phase of India's national coal gasification project, Coal India Ltd stated in its 2021-22 annual report.

The second phase (2020-2024) will involve gasification of 6m tonnes/year of coal which is expected to require an investment of Rs300bn.

These plants will be located near the mine heads of Eastern Coalfields Ltd (ECL), South Eastern Coalfields Ltd (SECL), Western Coalfields Ltd (WCL), Coal India Ltd and the coal ministry noted

"After successfully setting up technology in Phase II, more projects shall be identified," according to the ministry document, noting that in the third phase (2022-2030), 90m tonnes of coal will be gasified and require an investment of Rs3.6tr, it added.

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IOCL inks long-term crude oil deals with Petrobras, Ecopetrol

State-owned Indian Oil Corp. Ltd. has inked long-term oil supply contracts with Brazil's Petroleo Brasileiro SA (Petrobras) and Colombia's state-run Ecopetrol SA, boosting the country's energy security.

The contract with Petrobras for 1.7 million metric tonnes per annum was inked during India's petroleum and natural gas secretary Pankaj Jain's visit to Brazil last week, where he also met Petrobras CEO Caio Paes de Andrade. The long-term contract with Ecopetrol was inked in Singapore.

India is the world's third-largest oil importer, plans to sign these long-term contracts to diversify its energy basket by importing crude oil from non-Opec (Organisation Petroleum Exporting Countries) sources.

In a tweet, India's petroleum and natural gas ministry said Jain had productive discussions with CEO Petrobras, Caio Paes de Andrade, on mutually beneficial arrangements for crude oil export to India from Brazil and export of petroleum products to Brazil.

"He also discussed collaboration in the refining, bio-fuels & EP sectors," the tweet said and added, "Witnessed signing term contract of 1.7 million metric tonnes per annum between Indian Oil Corporation & #Petrobras.”

This is the first-ever contract between an Indian company and Petrobras and comes in the backdrop of state-run Bharat Petroleum Corporation Ltd (BPCL) subsidiary Bharat Petro Resources Limited's (BPRL) plans to invest $1.6 billion to develop the BM-SEAL-11 project in Brazil.

In July, India's Cabinet Committee on Economic Affairs (CCEA) approved this additional investment in the project, which is expected to see production from 2026-27, wherein BPRL has 40% participating interest and Petrobras, with 60% participating interest, is the operator.

"Indian Oil is committed to strengthening India's energy security! Keeping with that goal, we signed a Term Contract with the Colombian national oil company Ecopetrol in Singapore today as a part of our continued efforts to diversify our crude oil sourcing," Indian Oil Corp. said in a tweet.

Indian Oil Corp. is commissioning its 15 million tonnes per annum Paradip refinery, which has a complexity factor of 10.7 based on the Nelson Index and can process high-sulfur crude. India is a critical Asian refining hub, with an installed capacity of more than 249.36 million tonnes per annum through 23 refineries. It plans to grow its refining capacity to 400 million tonnes per annum by 2025. Large Indian refiners include IOC, BPCL, Hindustan Petroleum Corporation Ltd (HPCL), Nayara Energy Ltd (formerly Essar Oil), and Reliance Industries Ltd.

"MoU between BPC Limited & Petrobras for long-term cooperation was also signed," India's petroleum and the natural gas ministry said in a tweet.

BPCL has a refining capacity of 5.3 million metric tonnes per annum. These long-term crude oil supply contracts result from government-to-government negotiations on preferential pricing for India and supply stability. India has been trying to diversify its crude oil energy import basket, with its primary sources of crude oil imports being Iraq, Saudi Arabia, UAE, Nigeria, and the USA.

Andre Aranha Correa do Lago, Brazilian ambassador to India, had earlier said that Brazil was becoming a central player in the oil market, with it currently being the seventh largest global crude oil producer and exporter of oil and poised to quickly become the 5th largest global crude oil producer and exporter.

"Today, India is the third largest market for Colombian crude oil," Mariana Pacheco Montes, the Colombian ambassador to India, had earlier said.

Production cut by Opec has weighed heavy on India's energy market. The country has also been requesting Opec for a reduction in official selling price, an extension of the credit period from the existing 30 days to 90 days from bill of lading, freight discount, and open credit based on the credit worthiness of Indian state-run refineries. India has called for a global consensus on "responsible pricing". India has also consistently been pitching for a price and terms correction on the so-called Asian premium. With most Asian countries primarily dependent on West Asia to meet their energy needs, customers from the continent are seen paying the Asian premium compared to the US or EU prices.

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India proposes 15% retaliatory duties on 22 items imported from the UK against curbs on steel products

India has proposed additional customs duties of 15 per cent on importing 22 products, including whiskey, cheese and diesel engine parts, from the UK in retaliation to Britain's decision to impose restrictions on steel products. In a communication to the World Trade Organisation (WTO), India said it is estimated that the safeguard measures taken by the UK on steel products have resulted in the decline of exports to the tune of 2,19,000 tonnes, on which the duty collection would be USD 247.7 million.

Accordingly, it said India's proposed suspension of concessions would result in an equivalent amount of duty collected from products originating in the UK. "India hereby notifies the (WTO's) Council for Trade in Goods of its decision to suspend concessions or other obligations under the General Agreement on Tariffs and Trade 1994 and the Agreement on Safeguards that are substantially equivalent to the amount of trade affected by the measures of the UK," it added.

The other products include processed cheese, scotch, blended whiskey, gin, animal feed, liquified propane, some essential oils, beauty preparations, cosmetic and toilet preparations, unsorted diamonds, silver, platinum, semi-diesel engine parts, unwrought gold, turbo jets, and certain electric conductors. India's average imports of semi-manufactured silver from the UK stood at USD 412.68 million. The figure stood at USD 275.22 million for certain silver goods and USD 51.03 million for blended whiskey. India's average imports of semi-manufactured silver from the UK stood at USD 412.68 million.

The communication also said that the proposed suspension of concessions would be in the form of an increase in duty on the selected products in the UK. "The suspension of concessions and other obligations will continue to apply until the safeguard measures of the UK are lifted," adding, "India wishes to clarify that suspension of concessions will be equivalent to the amount of trade affected by the UKs' measures".

The measures imposed by the UK consist of tariff-rate quotas set on 15 steel product categories with an out-of-quota duty of 25 per cent. Both the countries held consultations on August 5 virtually to discuss the extensions of the safeguard by the UK on certain steel products, initially applied by the European Union.

On September 1, India proposed to impose retaliatory customs duties under the WTO norms on about USD 250 million worth of goods imported from the UK if no agreement is reached on compensation in a case concerning the imposition of restrictions by Britain on steel products. India has raised concerns at the World Trade Organisation (WTO) over the UK's move.

New Delhi has stated that it has substantial trade interest in the sector. According to an earlier communication of the WTO, India had submitted its concerns to the UK regarding how safeguard measures have been extended, which is violative of the global trade provisions and the WTO's Agreement on Safeguards.

India had requested compensation under the agreement. Last year, New Delhi also proposed similar measures against the European Union (EU) under the aegis of the WTO against a move of the 28-nation bloc to impose safeguard duties on certain steel products.

In 2018, India imposed retaliatory customs duties on certain American goods against their move to impose high customs duties on particular steel and aluminium products. The WTO is a Geneva-based, 164-member global body which frames rules and norms for exports and imports and adjudicates trade disputes among member countries.

India is negotiating a free trade agreement with the UK, talks for which are expected to conclude anytime soon. The bilateral trade increased to USD 17.5 billion in 2021-22 compared to USD 13.2 billion in 2020-21. India's exports stood at USD 10.5 billion in 2021-22, while imports were USD 7 billion. The bilateral trade increased to USD 17.5 billion in 2021-22 compared to USD 13.2 billion in 2020-21.

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Coal crisis hits SAIL's Bhilai steel plant output in Chhattisgarh

Bhilai Steel Plant (BSP), an arm of the state-run Steel Authority of India (SAIL), has been reeling from a severe coking coal crisis that has reportedly affected the output of the company. The stock of imported coal in the BSP has been depleting fast for a fortnight.

A stranded ferry from the Visakhapatnam port is cited to be the reason for plunging into a deep crisis.

A top SAIL official said a considerable quantity of coking coal shipped from Australia is lying in the port while the railways are yet to provide the required rakes to transport the raw material to BSP.

The official added that the railways are reportedly not giving priority to SAIL's unit, further complicating the problem.

Railway officials could not be contacted, but the spokesperson said BSP is trying to resolve the issue at the earliest.

"The officials have held a high-level meeting with railway officials and are constantly monitoring the loading and dispatch from the port," the BSP spokesperson said.

Loading work has been increased in the port, and efforts are on to ferry a maximum number of rakes to the plant from the busiest Raipur-Visakhapatnam rail section, he added.

Besides bringing the raw material from the port, the rail section also transports coal extracted in Chhattisgarh to the ships for export. A significant portion of the section is a single line, making it the busiest rail route where maximum traffic is freight.

The BSP spokesperson said there had been some improvement in the stock, and hopefully, the company would overcome the crisis in the next few days.

Imported coke plays a vital role in steel production in the SAIL facility. The unit requires enormous quantities of indigenous and foreign coal to prepare coke in the ovens daily. It uses 80 percent foreign and only 20 percent indigenous coal.

Coking gas is produced from coal in a coke oven and sent to furnaces and mills. SAIL officials said that the supply of coke and gas to the furnaces had been disrupted.

Subsequently, production has been affected in four of the six mills of the BSP. The rail mill, wire rod mill, merchant mill, and bar and rod mill have been affected. Only the universal rail mill and plate mill are running partially.

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India ONGC gets a better price for oil under new rules: sources

India's Oil and Natural Gas Corp has sold oil through a three-month local tender for the first time, commanding $5-$8 per barrel more than existing rates under new rules that allow producers marketing freedom, industry sources said.

ONGC, the country's top oil explorer, accepted bids at that level through an auction of light sweet oil from its western offshore field, including supplies from the country's flagship Mumbai High fields.

In June, India abolished a rule that said oil from blocks awarded before 1999 must be sold to government-nominated customers, mostly state refiners. Producers such as ONGC and Oil India often sold oil from those blocks below market rates.

ONGC had offered 33 lots of 412,500 barrels each - 26 cargoes from Uran and seven cargoes from Mumbai offshore - for sale starting Nov. 1 at a minimum 50 percent premium over the average monthly price of Brent, according to a tender document.

Western offshore assets, including the Mumbai High fields, account for about 70% of ONGC's annual output of nearly 20 million tonnes, or roughly 400,000 BPD.

Sources said all the cargoes were sold to state refiners except one, which was awarded to Reliance Industries Ltd.

State refiner Hindustan Petroleum bought 15 cargoes; Mangalore Refinery and Petrochemicals bought five; and Bharat Petroleum Corp was the highest bidder for three, the sources said.

Indian Oil Corp, the country's top refiner, got one cargo while its subsidiary Chennai Petroleum Crop was awarded eight.

Indian refiners bid to pay a premium of $1.80-$1.85 per barrel for cargoes from Uran, where supplies come through a pipeline, $3.8-$6.5 per barrel for offshore cargoes, and about $1.55 per barrel for a parcel from Panna Mukta field, they said.

Uran cargoes fetch a lower premium as local levies make the crude costlier than offshore supplies.

Sources said ONGC hopes to get better participation in subsequent tenders.

None of the companies involved responded to requests for comments.

India, the world's third-biggest oil importer and consumer, imports more than 85% of its oil and bars crude exports.

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Iran offers Indian firms a 30 pc stake in the gas field

Iran has provided ONGC Videsh Ltd and its partners a 30 percent interest in the development of the Farzad-B gas field in the Persian Gulf discovered by the Indian consortium, officials said.

ONGC Videsh Ltd, the overseas arm of state-owned Oil and Natural Gas Corporation (ONGC), in 2008 had discovered a giant gas field in the 3,500 square kilometers Farsi offshore block.

In April 2011, it submitted a master development plan (MDP) to bring the discovery named Farzad-B for production. Still, negotiations got stalled as international sanctions were slapped on Iran over its nuclear programs.

Negotiations restarted in 2015, but in February 2020, the National Iranian Oil Company (NIOC) informed that the Iranian government had decided to award the contract to develop the field to a local firm.

The officials said the exploration contract under which OVL and its partners had discovered gas reserves in the Farsi block provided the discoverer to be part of the field development.

Citing the Exploration Service Contract, Iran asked the Indian consortium to exercise its rights to participate in the development contract up to a minimum 30 percent stake, they said, adding Tehran asked the Indian firms to exercise the right within 90 days, failing which it would be deemed as a rejection of the offer.

Officials said that for further discussion to participate in the development contract, communications and comments on the Confidentiality Agreement (CA) were sent to NIOC in March and a reminder in the following month.

However, NIOC has not responded to that, they said.

OVL holds a 40 percent stake in the 3,500 square kilometres Farsi offshore exploration block in the Persian Gulf of Iran. Indian Oil Corp (IOC) holds a 40 percent stake, and the remaining 20 percent is with Oil India Ltd (OIL).

The Exploration Service Contract (ESC) for the Block was signed on December 25, 2002, and OVL in 2008 made a giant discovery on the block, which was later rechristened as Farzad-B.

The field holds 23 trillion cubic feet of in-place gas reserves, of which about 60 percent is recoverable. It also holds gas condensates of about 5,000 barrels per billion cubic feet of gas.

The Indian consortium submitted a Master Development Plan (MDP) for the Farzad-B gas field in April 2011 to the Iranian Offshore Oil Company (IOOC), the then designated authority by NIOC to develop the Farzad-B gas field.

A Development Service Contract (DSC) of the Farzad-B gas field was negotiated till November 2012 but could not be finalized due to complex terms and international sanctions on Iran.

In April 2015, negotiations restarted with Iranian authorities to develop the Farzad-B gas field under a new Iran Petroleum Contract (IPC). This time, NIOC introduced Pars Oil and Gas Company (POGC) as its representative for negotiations.

From April 2016, both sides negotiated to develop the Farzad-B gas field under an integrated contract covering upstream and downstream, including monetization/marketing of the processed gas. However, negotiations remained inconclusive.

In 2016, Iran said it was examining the Indian proposal but that an agreement was unlikely because of the difference between Iran's demanded gas price and India's offer.

India offered a USD 6.2 billion development plan and a gas price of around USD 4 per million British thermal units for Farzad-B in 2018.

Meanwhile, based on new studies, a revised Provisional Master Development Plan (PMDP) was submitted to POGC in March 2017, officials said, adding that in April 2019, NIOC proposed the gas field development under the DSC and off take of raw gas by NIOC at landfall point.

However, due to the imposition of US sanctions on Iran in November 2018, technical studies could not be concluded, which is a precursor for commercial negotiations.

In February 2020, NIOC informed its intention to conclude the contract for Farzad-B development with an Iranian company. In March 2021, it notified the Indian consortium of the signing of the development contract with Petropars, a local Iranian company.

The Indian consortium has invested around USD 85 million in the block. The contract allows the Indian consortium to be paid back the expense with a fixed rate of return.

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India May Boost Coal Power Fleet 25% by 2030 Amid Rising Demand

India plans to expand its coal power fleet by about a quarter through the end of the decade as it continues to lean on the fuel to meet growing demand until energy storage costs fall.

The world’s third-biggest emitter of greenhouse gases will add nearly 56 gigawatts of coal power capacity unless there’s a substantial drop in the cost of storing electricity, Power Minister Raj Kumar Singh said in an interview this week in New Delhi. India is also planning major investments in renewable energy, but it has to prioritize providing reliable power to spur economic growth, he said.

The plan underscores how energy security concerns are vying with climate targets as countries map out energy transition paths. Coal is enjoying a revival in Europe after Russian gas supplies fell in the fall-out of the invasion of Ukraine. India, which saw power demand surge this summer as temperatures rose to a record, is also delaying shutting older coal plants and increasing mining output.

“My bottom line is I will not compromise with my growth,” Singh said, adding that India will not hesitate to import coal to meet any shortfalls in domestic supply. “Power needs to remain available.”

Singh said his ministry is pursuing a goal announced last year by Prime Minister Narendra Modi to have 500 gigawatts of clean power capacity by 2030 as the country seeks to reach net zero by 2070. Overall, India plans to nearly double its generation capacity from all sources to 820 gigawatts by 2030, he said.

To convert renewable energy into around-the-clock clean power, India will need access to cheaper energy storage solutions, Singh said, adding that his ministry will increasingly seek an investment that combines wind and solar power with storage.

He blamed the developed world for not investing enough in storage technology and other decarbonization solutions and said that China controlling the bulk of the world’s lithium supplies is a concern.

“It worries us,” Singh said, commenting on China’s dominance over the critical battery metal. “But the silver lining is there are other technologies that have emerged which are promising, especially for grid-scale storage. If that happens, the requirement for fossil fuels will disappear faster.”

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India plans strategic gas reserves after Russian supply disruption

India is expediting a plan to set up a strategic gas reserve on the lines of its strategic petroleum reserve (SPR) amid a global energy crisis triggered by the Russia-Ukraine conflict that has sent fuel prices soaring.

Existing liquefied natural gas (LNG) tunnels and exhausted oil wells are likely to be utilized for the gas reserve, along with the construction of new underground infrastructure such as large salt caverns, an official familiar with the development said, and requesting anonymity. The storage facilities may be chosen close to the pipeline infrastructure so the fuel can be easily transported in times of need.

The plan for a strategic gas reserve was first considered last year but was shelved for the time being as India had assured supplies. However, the government has revived the plan, with the world staring at an energy crisis.

"There was a study. Officials had gone to see such infrastructure in Italy," an official said, seeking anonymity. The official, however, said that the plan was put on hold as it felt that India had the adequate domestic capacity to meet demand from the priority sectors such as city gas distribution network, fertilizers, and cooking gas.

"It will make sense as the consumption increases and considering this volatility," the official added.

The country's gas demand is expected to be driven by the fertilizer industry, power, city gas distribution, and steel sectors. Imports and local natural gas production in FY22 resulted in supplies of 64.8 billion cu. m in the country. India produced 34,024 million standard cu. m (mscm) of gas in FY22 and is also expanding its national gas grid to 35,000km from the current 20,000km.

India is the fourth-largest LNG importer in the world, and local firms have long-term LNG contracts amounting to 22 million tonnes per annum.

However, the recent development of GAIL failing to secure its contracted product from Russia's Gazprom and having had to buy at exorbitant prices in spot markets has expedited the plans for the strategic reserve.

Supplies from Gazprom have been stalled since May. In 2012, Gazprom signed a contract with GAIL (India) Ltd to supply 2.5 million tonnes of liquefied natural gas annually for 20 years. Under the agreement, two LNG cargoes are to be provided monthly.

Following the disruption of supplies from Gazprom, state-run GAIL recently bought a few LNG shipments at over $40 per metric million British thermal units (mmBtu) and is likely to go for more purchases at such high prices. Suppliers are quoting prices as high as $60 in the international spot markets. The current spot prices are way higher than those earlier contracted, ranging from $15-17 per mmBtu.

The strategic reserve will be in line with the strategic petroleum reserves. India has 5.33 million tonnes of underground strategic oil reserve facilities at Visakhapatnam, Mangalore, and Padur. Earlier this year, India said it could release stock from the emergency reserves if required in the wake of the Ukraine crisis.

Several countries have built storage systems to ensure supply security. The US has nearly a third of global gas storage while Russia, Ukraine, Canada, and Germany account for another significant portion. China also has gas storage facilities.

Queries sent to the ministry of petroleum and natural gas remained unanswered till press time.

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Coal India sells around 90 million tonnes of coal through the e-auction route

Coal India Ltd expects to sell close to 80-90 million tonnes (million tonnes) of coal through the e-auction platform this year at an average premium of around 300 percent over the notified price, backed by higher demand and a surge in international coal prices. While in volume terms, it may be marginally lower than the total sales through e-auction registered last year, the realizations are expected to be much higher due to the enormous premium over notified price.

The state-owned miner has been earning close to ₹4,400-4,500 a tonne on sale through the e-auction route this year compared to the average realization of around ₹1,400-1,500 a tonne through the FSA (fuel supply agreement) route. It had earned a premium of approximately 30 percent over the notified price (or close to ₹1,570 a tonne) during the same period last year.

It is to be noted that a higher sale through the auction route would help the company garner better profitability as the average price realization on e-auction is usually better than the sale through the FSA route.

 According to Pramod Agarwal, Chairman and Managing Director, CIL, sales through the e-auction route might get curtailed if the demand for power increases substantially. However, as production starts picking up in the coming months, the anticipated drop in demand from the power sector would help push up e-auction volumes.

"E-auction price in the first quarter was around ₹4,340, and we sold close to 20 million tonnes. I don't have a figure right now for what quantity we have auctioned in Q2, but I presume that this trend of about 20 to 25 million tonnes will continue throughout the year. We will end the year with about 80 to 90 million tonnes of e-auction coal. But this depends on how the demand for the power comes up. If the demand for power increases substantially, our ability to do the e-auction reduces. Price as of now is still very high, and in certain cases, we are getting about 4,500 or even 300 percent of the premium. So, this range will be maintained if it does not increase further. But at least this range will be maintained for e-auction price as well," Agarwal said in the latest analyst transcript.

CIL is allowed to auction up to 20 percent of its coal production through e-auction, and it typically sells close to 16-18 percent of the volume as it prioritizes the power sector. Whenever demand from the power sector increases, its sale through the e-auction platform reduces.

However, Agarwal was hopeful that the e-auction volume would increase in the coming months with the energy sector's demand going down, as has been the trend. The need for power goes down in October, November, and December, and the coal requirement also goes down. The average stock at powerhouses had also improved to close to 28-29 million tonnes compared to the same period last year when it was around 10-12 million.

"These extra 16 million tonnes will give them a lot of leverage, and this will help us in giving coal to non-power sector also, and this is not likely for next few days, perhaps the stock may go down. But after that, from October onwards or after the 20th of September, the stocks of the powerhouses are unlikely to go down. That's whatever trend we have seen, but nobody can say or confirm it because it depends greatly on the monsoon condition and the temperature. So, that is the situation. So, e- auction volume should increase in the coming months," he said.

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Govt actively studying duties levied on steel exports: Jyotiraditya Scindia

The government is actively studying the issue of the export duty imposed on specific grades of steel in May this year.

The matter is being discussed at the highest level, Union steel minister Jyotiraditya Scindia told reporters at the National Management Convention organized by the All India Management Association (AIMA).

"This is under active study by my department and the government. We are certainly discussing this at the highest level. When a decision is taken on this, you shall be informed," he said in reply to a question about whether the government is considering removing export duty on iron ore and steel intermediaries.

On May 21, the government hiked the duty on iron ore exports by up to 50 percent and for a few steel intermediaries to 15 percent. It also waived customs duty on importing some raw materials, including coking coal and ferronickel, used by the steel industry. The move aimed to increase the availability of these raw materials for domestic manufacturers.

When asked if he had written a letter to the finance minister seeking removal of the duties, the minister replied: "I have written to the finance ministry on several issues facing the steel industry. Based on the discussions, I will be in discussions with the finance ministry, and the government will take a considered view on all those issues."

Expressing concern over the duty levied on overseas metal shipments, the Indian Steel Association (ISA), which represents the domestic steel companies, had said India might lose export opportunities. The decision may also impact the overall economic activity in the country.

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After Russian flows dry up, India pays up to double the price for gas

After vital Russian deliveries were canceled, India purchased some of the nation’s most expensive liquefied natural gas shipments.

GAIL India Ltd. bought several LNG cargoes for delivery between October and November at more than double the price it paid last year. The New Delhi-based company is struggling to replace supply from the former trading arm of Gazprom PJSC, which was nationalized by Germany earlier this year and is paying contractual fines rather than delivering fuel.

 The global surge in natural gas prices after Russia’s invasion of Ukraine has hit price-sensitive emerging countries hard, forcing them to pay the high spot market rates or face blackouts and industrial shutdowns. India’s retail inflation surged in August due to higher fuel costs.

GAIL didn’t immediately respond to an email seeking comment.

GAIL bought three LNG shipments for October to November delivery above $40 per million British thermal units, among the most expensive cargoes ever for delivery to India, according to traders with knowledge of the matter.

The company had won a price and volume concessions just before the 20-year contract with Gazprom’s marketing division in Singapore started in 2018. That unit was technically part of Gazprom Germania GmbH, seized by Germany’s regulator in April and renamed Securing Energy for Europe GmbH.

The new company can no longer source the fuel from Russia’s Yamal peninsula and has said it doesn’t have a supply to send to India. It is paying GAIL contractual penalties for non-delivery, which are likely to be a fraction of current spot prices.

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Govt may cut duty on exports of steel and iron ore as prices cool

According to two officials, the government may reduce duties on iron ore exports and steel intermediates as higher levies have adversely impacted the country's overall mercantile exports. High duties on these inputs are no longer required because their prices have sobered now, and supplies have outstripped demand, they added.

As global demand for these items slumps, concerns for their domestic availability have eased. Data is being analyzed, and a decision on reducing export duties on these items is under process along with calibrations in duties on other products, the officials said, asking not to be named. The finance ministry on May 22 imposed export duties ranging from 15 percent to 45 percent on inputs for iron and steel to increase their availability for domestic manufacturers.

"Calibration of customs duties is one of the instruments to ensure supplies of essential commodities, raw materials, intermediaries and inputs to domestic consumers, particularly MSMEs [micro, small and medium enterprises] at reasonable rates, and also to keep inflationary pressures under check. The government is constantly revising duties based on inputs it gets from the ground," one of the officials said.

Union ministries for finance and commerce did not respond to an email query on this matter.

Commenting on a marginal increase in consumer price index-based inflation on September 12, the finance ministry said in a tweet: "Prices of major inputs like iron ore and steel have sobered in the global markets." According to the ministry, the headline inflation recorded "a moderate increase" to 7 percent in August from 6.71 percent in July this year, which is "attributable both to an adverse base effect and an increase in food and fuel prices, the transient components" of the CPI inflation.

A second official with direct knowledge of the matter said there is a sequential dip in India's export growth, and some items, such as iron ore and steel, have faced problems due to high export duties. "The government will item-wise assess reasons for the fall in exports and take appropriate measures at the right time," he said.

According to provisional official data, there has been a year-on-year drop in export growth for the last two consecutive months – July and August 2022. Data released on August 12 showed India's mercantile exports posted 2.14 percent year-on-year growth at $36.27 billion, which was substantially lower than the previous month, when exports saw over 23.5 percent y-o-y growth at $40,13 billion (in June 2022). The growth further dipped to 1.62 percent in August 2022 at $33.92 billion, the latest official data released on September 14 said.

The latest available data shows that iron ore exports fell by 69.14 percent to $642.56 million in April-July 2022 compared to $2,082.12 million ($2.08 billion) in the same period the previous year. Similarly, base exports of iron and steel also fell by 21.33 percent to about $6.1 billion in the first five months of the current financial year compared to over $7.7 billion in the same period last year. On the other hand, imports of iron and steel have surged by around 37.8 percent to $4.84 billion in April-July 2022 compared to $3.51 billion in April-July 2021.

"While exports have gone down, there is a rapid growth in imports of iron and steel (commodity group), which is a matter of concern and needs remedial action," an industry expert said, citing the latest data. According to the official data released on September 14, the commodity group – iron and steel – showed over 32 percent import growth at $1.76 billion.

Ajay Sahai, director general and chief executive of the Federation of Indian Export Organisations (FIEO), said: "There is a need to review duty structures of commodities like iron ore and steel intermediaries. High export duties were imposed to ensure their domestic availability. Global demands have slumped due to geopolitical reasons; hence, a review is needed to boost Indian exports."

A finance ministry report issued on Saturday said exports play an essential role in India's economic growth. "Indian economy becomes a global one as the share of exports in GDP [gross domestic product] increased by more than three times since independence, from 6.4 percent in 1950-51 to 21.5 percent in 2021-22," it said in the latest edition of Monthly Economic Review for August.

"The impact of geopolitical tensions on India's trade volumes manifests in sequential decline in exports arising from a slowdown in advanced economies. However, on the import side, trade flows continue to be robust following the country's unabated level of economic activity. However, a still-elevated level of commodity prices has increased India's merchandise trade deficit to USD 27.9 billion in August 2022," it added.

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Ministry wants a 15 percent export duty on steel to stay till December

The 15 percent export duty imposed in May on a range of items covering around 95 percent of the finished steel export basket is likely to remain till December as the steel ministry feels that any rollback of the duty at this stage may suppress domestic prices.

"Duty rollback may also give unintended signals to the market to prefer exports over domestic demand," the ministry said in a note.

The ministry is confident domestic demand will go up after the monsoon, mainly because of the government's thrust to build infrastructure across the country, which will put upward pressure on prices.

At the same time, the cost of production for domestic steel makers will rise as prices of primary inputs such as coal and iron ore are expected to increase.

"Given this, reduction in duty may be considered after stabilization of the present volatile market condition, cooling of inflationary pressures and the steel price trends in the next quarter," the ministry said.

In FY 22, India's steel exports at 18.37 million tonnes, comprising both finished and semi-finished steel, were the highest in absolute terms. The proportion of production was 11.9 percent in the case of finished steel and 15.3 percent in the case of crude steel.

"Higher exports may have, in part, helped sustain high prices of steel during FY22," the ministry believes. Export duty was imposed on eleven items, including hot-rolled coil (HRC) and cold-rolled coil (CRC), on May 21 to contain the domestic prices of steel.

Within 20 days of the duty imposition, prices declined by 9-14 percent by June 10, but the pace of decline moderated since then. The fall was 5-17 percent by August 19 compared with the May 21 price. But the decline in domestic prices was lower than the price reduction in the range of 20-39 percent in the EU and US over the same period.

During the June-July period of the current fiscal year, India's finished steel exports were 1.02 million tonnes, which is 65 percent lower than the 2.88 million tonnes exported in the previous fiscal period.

The steel ministry's study finds that only stainless-steel products saw some rise in exports during the period.

In a recent report, rating agency ICRA said the imposition of export duty on finished steel products and the slowdown in demand in international markets have made exports unattractive. Going by the trend for the first four months of the current fiscal, it said exports might decline by 40-45 percent in the current fiscal over FY22.

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Make in Odisha: Vedanta pumps in another 25,000 crore investment

Vedanta Resources announced its plans to invest another ₹25,000 crores for the expansion of its aluminium, ferrochrome, and mining business in Odisha. Vedanta already has the single largest investment of ₹80,000 crore in the state and its quantum of investment contributes to nearly four percent of the state's Gross Domestic Product (GDP).

The development comes after a meeting between Odisha Chief Minister Naveen Patnaik and Vedanta Resources Chairman Anil Agarwal on Wednesday on the sidelines of the 'Make in Odisha-2022' roadshow. Patnaik is on a three-day visit to Mumbai to woo more investors to invest in the state months ahead of the Make-in-Odisha Conclave scheduled from November 30 to December 4.

 After the decision, a statement by the Vedantaquoting Agarwal said, the company has created over five lakh livelihood opportunities and fostered hundreds of MSMEs in the state.

While praising the state government Agarwal said, "We (Vedanta) stand testimony to what is possible if you make in Odisha. It is amongst the most favorable investment destinations in India, ably led by the stable governance, leadership, and vision of Shri. Naveen Patnaik Ji, which is reflected in the state’s Ease of Doing Business rankings.", as quoted by the news agency.

"New investments of more than ₹25,000 crores in line with the expansion of its aluminium, ferrochrome, and mining businesses, which will create more job opportunities and revenue for the state", Agarwal added

While commenting on Odisha's rich culture, skilled manpower and natural resource sector has contributed significantly to boosting the GDP of the nation, Agarwal said, “We are also setting up one of the largest aluminium parks in the country near our Jharsuguda smelter to boost the domestic aluminium downstream ecosystem,"

Vedanta and Foxconn inked a Memorandum of Understanding (MoUs) with the Gujarat government for setting up a semiconductor & display fab manufacturing unit in the state with an investment of ₹1.54 lakh crore.

The announcement led to a war of words between the ruling Eknath Shinde Led government in Maharashtra and members of the erstwhile Maha Vikas Aghadi (MVA) government with Shiv Sena leader and former minister Aditya Thackeray slamming the current government for abandoning the deal after the MVA government had practically completed the agreement with his own efforts.

He said along with Industries Minister Subhash Desai, he had held meetings for bringing this semiconductor project to Maharashtra and the agreement was in its final stage but blamed the current dispensation in Maharashtra for sending the deal out of the State.

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JSW Steel signs agreement with German group for carbon reduction projects

JSW Steel signed a memorandum of understanding (MoU) with SMS group, a German engineering and technology company, to explore decarbonization projects at the Indian firm’s plants.

A statement said that the collaboration would enable the companies to explore opportunities to reduce carbon emissions and produce green steel. The SMS group would provide its experts for design, engineering consultancy, and commissioning of projects. JSW Steel, the flagship company of the $22 billion JSW Group, would provide support at its plants for the SMS group to explore solutions for decarbonization projects.

“While the steel industry accounts for 0.7 percent of the world’s economic output, the industry also contributes 7 percent towards global emissions. We need a new transformative approach focused on the green steel vision. With our technology partner SMS group, we are on our way to turning metals green in the world,” said Sajjan Jindal, chairman and managing director of JSW Steel, in a statement.

He said that achieving net zero in the industry would require significant upgrades and capital investments at mills.

JSW Steel is investing Rs 10,000 crore to reduce carbon emissions from steel manufacturing and has set a target to bring down greenhouse gas emissions by 42 percent (from the base year 2005 levels) to less than 1.95 tonnes of CO2 per tonne of crude steel by 2030.

“Our know-how and experience in metallurgy combined with our digital expertise and plant technology consultancy enable SMS group and JSW Steel to create a greener metals industry,” said Burkhard Dahmen, chairman of the Managing Board and CEO, SMS Group.

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Govt plans Rs 20000 crore aid to oil firms hit by soaring costs: Report

India plans to pay about Rs 20,000 crore ($2.5 billion) to the state-run fuel retailers, such as Indian Oil Corp., to partly compensate them for losses and keep a check on cooking gas prices, according to people familiar with the matter.

The oil ministry has sought compensation of Rs 28,000 crore. Still, the finance ministry is agreeing to only about a Rs 20,000-crore cash payout, the people said, asking not to be identified as the discussions are private. The people said that the talks are at an advanced stage, but a final decision is yet to be taken.

The three biggest state-run retailers, which supply more than 90% of India’s petroleum fuels, have suffered the worst quarterly losses in years by absorbing record international crude prices. While the handout could ease their pain, it would add pressure to the government’s coffers, which are already strained by fuel tax cuts and a higher fertilizer subsidy to tackle mounting inflationary pressures.

The government had earmarked oil subsidy at Rs 5,800 crore for the fiscal year ending March, while fertilizer subsidy was pegged at Rs 1.05 trillion.

BPCL Says India May Have to Compensate if Fuel Losses Stay High

These refining-cum-fuel retailing companies, which use more than 85% of imported oil, benchmarked the fuels they produce to international prices. Those shot up after a global recovery in demand coincided with reduced fuel-making capacity in the US and fewer exports from Russia.

State oil companies must buy crude at international prices and sell locally in a price-sensitive market. At the same time, private players such as Reliance Industries Ltd. have the flexibility to tap into more robust fuel export markets.

India imports about half of its liquefied petroleum gas, generally used as cooking fuel. The Saudi contract price, the import benchmark for LPG in India, has increased 303% in the past two years, while the retail price in Delhi was increased by 28%, India’s Oil Minister Hardeep Singh Puri said on Sept. 9.

Representatives for India’s finance ministry and oil ministry declined to comment.

Bharat Petroleum Corp. and Hindustan Petroleum Corp. have also been holding down gasoline and diesel pump prices since early April to curb accelerating inflation.

The oil companies will require some intervention through price increases or government compensation to cover sustained losses, Bharat Petroleum Chairman Arun Kumar Singh said last month.

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Government signs contracts for 31 small fields, 4 coal bed methane blocks

The government has signed contracts for 31 discovered small fields (DSF) under the third round of bidding as well as for four coal bed methane (CBM) blocks under the fifth round of bidding with 14 domestic companies, which have been awarded these blocks.

Among these blocks, the Oil and Natural Gas Corporation (ONGC) has signed six contracts for DSF, with 3 each for fields in the Arabian Sea and Bay of Bengal. These include four contract areas as a sole bidder and two contract areas in partnership with the Indian Oil Corporation Limited.

The ONGC has also signed two contracts for CBM fields situated in Jharkhand and Madhya Pradesh. Cairn Oil & Gas has also signed pacts for eight fields.

The contracts were exchanged in the presence of Petroleum and Natural Gas Minister Hardeep Singh Puri, Petroleum Secretary Pankaj Kumar, and ONGC Chairman Rajesh Kumar on Friday.

The third round for DSF was launched by the government on June 10, 2021, where 75 fields were clubbed under 31 contract areas. The CBM bidding round was launched on September 22, 2021, and concluded on May 31 with 15 blocks under offer.

Puri said that the government has taken various measures to mitigate the volatility of global crude oil and gas prices.

Adding that India has shown great resilience in the face of a global energy crisis, the Petroleum Minister said that fuel price rise in India has been contained in comparison to an exponential rise in developed countries.

Most of the developed nations have witnessed a significant inflation rise in gasoline price by almost 40 percent between July 2021 and August 2022, while in India, gasoline price has reduced by 2.12 percent, he said.

The minister highlighted that the gas price of all the major trading hubs has seen a massive increase between July 2021 and August 2022 as US's Henry Hub rose by 140 percent and United Kingdom's NBP shot up by 281 percent. Compared to this in India, compressed natural gas and piped natural gas prices have risen by only 71 percent, he said.

On LPG or cooking gas prices, the minister said that in the last two years, Saudi CP price (India's import benchmark) has increased by 303 percent, while the price in India rose by less than a tenth of that figure, i.e. 28 percent.

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Coal India hopes to reach close to its production target of 306 million tonnes in the first half of FY23

State-owned CIL on Wednesday said it would reach close to its production target of 306 million tonnes in the first half of FY23, provided its mining areas are not highly affected by heavy rains this month.

Coal India Ltd (CIL) accounts for over 80 percent of domestic coal output.

“At the current pace of production…the company is hopeful of reaching close to the apportioned H1 target of 306 million tonnes,” Coal India Limited said.

The company said that of the total production target of 700 million tonnes for FY23, the output split is around 44 percent in the first half and 56 percent in the second half.

Coal India’s production increased by 44.6 million tonnes in just five months and four days of the ongoing fiscal (as of September 4).

The statement said that CIL’s progressive production touched 259.6 million tonnes as of September 4, compared to 215 million tonnes during the same period date last year.

The public sector unit began to chase the production output with a growth rate of 12.4 percent, which, on the back of solid output performance, fell to 8 percent at present.

Coal India Limited usually produces a higher volume of coal during the second half of the financial year than in the first half.

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