LIQUID/DRY COMMODITIES SCENARIO/PORT AND OTHER DEVELOPMENTS – INDIA DATED 12/03/2015

January 31, 2015 7:22 pm Published by

Date:  12/03/2015

                                   ATLANTIC REPORT NO 08/15

We give below our report on the subject for your kind info and record:

  1. A) LIQUID COMMODITIES SCENARIO

1) CHEMICAL INDUSTRY SCENARIO – INDIA

ETHYLENE CAPACITY, EXISTING AND PLANNED
(in thousands of m.t./year)
EXISTING EXISTING
PRODUCER LOCATION CAPACITY
Reliance Industries Hazira 900
Nagothane 440
Baroda 190
Gandhar (Dahej) 400
Indian Oil Panipat 800
Haldia Petrochemicals Haldia 670
Gail Pata 450
PLANNED
PRODUCER LOCATION CAPACITY ONSTREAM
Opal Dahej 1,100 2015
Reliance Jamnagar 1,500 2016
Gail Pata Expansion to 900 2015
BCPL Lepetkata 220 2015
1) Plant not operating Source : CW research

 

The government is trying to create common infrastructure to encourage growth in the industry. Under the current and preceding administrations, four petroleum, chemicals, and petrochemicals investment regions (PCPIRs) have been established to improve the petrochemicals landscape and provide synergies between upstream and downstream producers. The four PCPIRs, which are at different stages of development, are at Visakhapatnam, Andhra Pradesh State; Dahej, Gujarat state; Paradip, Orissa State; and Cuddalore, Tamil Nadu State. Gujarat is so far the only state where actual investment have surpassed the original plans. Reliance’s most important petrochemical investments are at the company’s massive refinery and petrochemicals complex at Jamnagar, Gujarat state.

 

 

1) CHEMICAL INDUSTRY SCENARIO – INDIA

They include constructing a 1.5 – million m.t. / year ethylene plant, expected on stream in 2016, which will crack refinery off-gases. Jamnagar will have doubled paraxylene (p-xylene) capacity, which will make Reliance the world’s second-largest supplier of this product. Reliance is adding 2.3 million m.t./ year of p-xylene capacity to its existing 1.8-million m.t./year p-xylene and 400,000 m.t./year ortho-xylene capacity at Jamnagar. It also operates a small, 150,000 m.t./year p-xylene plant at Patalganga, Maharashtra State. Reliance will on completion have capacity for 4.3 million m.t./year of p-xylene. Reliance announced last year that it plans to source 1.5 million m.t./ year of ethane from the United States to make several of the company’s ethylene plants in India more competitive. It has concluded agreements for the liquefaction, storage, and export of ethane from a North American terminal that is expected to begin operating in the second half of 2016. “Reliance’s investments in shale gas and its existing cracker portfolio in India are a natural fit for sourcing ethane from North America and shipping it to India to attain long term feedstock competitiveness”. Two of the company’s ethylene plants – a 440,000-m.t./year plant at Nagothane, Maharashtra State; and a 400,000 – m.t./year plant at Dahej – are gas crackers and will use shale ethane from United States. Reliance will also adapt its 900,000-m.t./ year ethylene plant at Hazira, originally designed to work on naphtha, to partly use gas. The new Jamnagar cracker will raise Reliance’s total ethylene capacity to 3.5 million m.t./ year. Reliance has placed orders for six very large vessels to transport liquefied ethane and is building storage facilities and pipelines in India to deliver ethane to the company’s crackers. Reliance has put on the back burner a project to build plants with capacity for 1.0 million m.t./ year of acetic acid and 300,000 m.t./ year of vinyl acetate monomer at Jamnagar. ONGC Petro additions Ltd. (OPaL), a jv among ONGC (New Delhi), Gail (New Delhi), and Gujarat State Petroleum Corporation is building grassroots petrochemical complex at the Dahej PCPIR. The complex’s ethylene plant will be a dual-feed cracker with capacity for 1.1 million m.t./year of ethylene and 400,000 m.t./year propylene. OPaL is also at an early stage evaluating whether it would make sense to import US shale gas to feed the cracker. A recent complication is that naphtha, which will come from parent ONGC, has fallen significantly in price. The gas portion of the feed, under the original agreement, will come mainly from Qatar. Discussions are at an advanced stage for Petrochemical Industries Co. (PIC; Kuwait City) to acquire a major stake in OPaL. Feedstock constraints in Kuwait have led PIC to seek investment opportunities abroad. ONGC currently owns 26% of OPaL, Gail 15% and Gujarat State Petroleum Corporation 0.5% “PIC would be an active partner because they already are in the business and could do part of the marketing of the products. ONGC Mangalore Petrochemicals Ltd. (OMPL; Mangalore), a jv between ONGC and its subsidiary Mangalore Refinery and Petrochemicals Ltd. (MRPL), is building an aromatics complex at the Mangalore SEZ in south western India. It will be designed to produce 900,000 m.t./year of p-xylene and 300,000 m.t./year of benzene, with completion schedule by the end of March. MRPL is building a 450,000-m.t./year PP plant at the site that is also expected on stream also by that time. In the far north east of the country, Brahmaputra Cracker and Polymer Ltd (BCPL), 70% owned by Gail, is building a complex based around a 220,000 m.t./year ethylene and 60,000-m.t./year propylene plant.

 

1) CHEMICAL INDUSTRY SCENARIO – INDIA

Completion is scheduled for July. Gail is also doubling ethylene capacity at the company’s gas-based petrochemicals complex at Pata, Uttar Pradesh State to 900,000 m.t./year. Indian Oil and Eastman Chemical have signed a nondisclosure agreement for Indian Oil to license Eastman’s acetic acid technology for a plant at Baroda, Gujarat State. Of a capacity of 1.0- million m.t./year. Several other projects based around the Paradip refinery are possible, The refinery off-gas produced at Paradip will give ethane and IOC are going ahead with a new ethylene glycol (EG) unit with similar capacity to that at Panipat. EG project would add 350,000 m.t./year of capacity by 2018. It would gasify petroleum coke to produce ethanol for blending with gasoline. The proposed, 1.0-million m.t./year project would be established as a jv between Indian Oil and Celanese. BPCL board earlier this year approved a program to produce niche petrochemicals at the company’s Kochi refinery, in the southern state of Kerala. The company is expanding the refinery and building a fluid catalytic cracker that will produce 500,000 m.t./year of propylene. BPCL plans to use the propylene to produce acrylic acid, superabsorbent polymers (SAP), acrylates, and oxo alcohols. BPCL would be the first company to produce SAP in India. The complex is expected onstream in fiscal 2018/19. The only major producer of petrochemicals on the east coast of India, was preparing to restart operations after a seven-month shutdown. The Haldia complex has capacity for 670,000 m.t./year of ethylene; 320,000 m.t./year of propylene; 97,000 m.t./year of butadiene; 132,000 m.t./year of benzene; 350,000 m.t./year of PP; 510,000 m.t. year of HDPF; and 190,000 m.t./year of LLDPE.

 

B) DRY COMMODITIES SCENARIO

1) UREA IMPORTS UP BY 13%

Urea imports have increased by 13 per cent to 78.43 lakh tonnes (LT) in the April-February period of 2014-15. Urea imports stood at 69.27 LT in the corresponding period of 2013-14. Imports in the entire previous fiscal were 70.88 LT, according to official data. Urea is imported by three STEs (state trading enterprises) Indian Potash Ltd (IPL), MMTC and STC on behalf of the government to meet domestic shortfall. The country produces about 22 million tonnes of urea (MT) against annual domestic demand of 30 MT.

2) COAL IMPORTS TO TOP 265 MT IN 2016-17

In the 12th Plan projections, the gap between demand and domestic supply in 2016-17 is estimated to be in the range of 185-265 million tonne. Imports touched 168.4 MT last fiscal from 29 MT a few years back. In order to minimise import , the focus of the government is on facilitating environment and forest clearances expeditiously, pursuing with state government for assistance in land acquisition and coordinated efforts with railway for movement of coal

 

3) WHEAT OUTPUT MAY FALL 15%

Wheat output in the grain-bowl states of Punjab and Haryana may fall up to 15% as unseasonal rains have inundated fields, flattened crops and damaged vegetable production, But the Government says the gains from cool weather outweigh the losses and will result in a good harvest. The weather office has forecast more rain in the week ahead. Thunderstorms and a few hailstorms are forecast in parts of northern, central and western India from Thursday and in parts of Madhya Pradesh and Maharashtra over the next two days. The weather would in fact boost the harvest as the cool temperatures that accompany cloudy weather would increase production. Losses from heavy rain are limited to a few areas, The two states make significant contribution to the country’s stock of grain and have been the major source of wheat and rice procurement by government agencies.

C) CONTAINER SERVICE-NIL

D) PORT DEVELOPMENTS

1) TUTICORIN PORT

  1. Jetty No NCB-1 is ready in all respects mechanised, for handling of Thermal coal. Draught is 12.8 M. Presently there is only one shore gantry crane / grab/ conveyor. 2nd gantry crane / grab fixing under process.

 

  1. Jetty No NCB -2 construction about to be completed and dredging in progress. Jetty features as follows:
  • Dredged depth of 14.1 meters
  • Designed to berth 95,000 DWT vessels
  • 3 ship un-loaders connected to conveyor belts
  • Daily output of up to 75,000 MT
  • Stacking capacity of 600,000 MT
  • Fully automated stacking, reclaiming and truck loading
  • Comprehensive Dust suppression system in place
  • Upcoming railway connection
  • Annual capacity of 14 million tons
  • Commissioning : Q4 2015
  • Exclusivity to handle non-captive coal in the port of Tuticorin.

 

2) ENNORE PORT

Ennore Port has planned to construct one more coal jetty named CB3. Marine Liquid Terminal (MLT) has planned to erect two loading arms (each 12”) by 12 to 13 Mar 2015 for clean petroleum products.

3) NEW MANGALORE PORT

Draft at port Mangalore for berth No. 10 and 11 are increased to 14 mtrs.

E) WEATHER/STRIKE- NIL

 F) INTERNATIONAL HIGHLIGHTS – NIL

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

   LIQUID/DRY COMMODITIES SCENARIO/PORT AND OTHER DEVELOPMENTS   –INDIA   

  1. A) LIQUID COMMODITIES SCENARIO

  1) LATIN AMERICAN CRUDE Hauling charge for crude oil from Latin America to India is nearly seven times than shipping it from West Asia. But, despite higher transportation costs, Indian refiners are increasingly going in for the heavier crude from Latin America , as they see more economic gains through this route. While private sectors refiners Essar and Reliance source crude from Latin America regularly as they operate complex refineries that can crack the sourer crude, State-owned companies such as Indian Oil Corporation are injecting technologies to process this crude and thus enlarge their oil sources. While it takes between 30-35 days to ship crude from Latin America to India, the same can be brought from West Asia in just four to five days. Given that the spot market prices touched between $8,000 and $9,000 a day for a very large crude carrier towards the end of May, the difference in shipping costs from the two sources can be significant. What makes import of such crude attractive is that they are priced at a discount to the benchmark crude. Essar set the trend for higher imports from Latin America when it it signed a one-year contract last year to buy 12 million barrels from Ecopetrol of Colombia — it has also been getting oil supplies from Venezuela, Mexico and Brazil. Reliance has also signed similar contracts with Venezuela, Colombia and Ecuador. IOC also plans to add at least three Latin American countries to its annual oil purchase deals this fiscal. The refiner is negotiating with State-owned companies of Colombia, Venezuela and Brazil. 2) GAIL, SHIPPING CORP JOIN HANDS TO MOVE LNG GAIL (India) Ltd and the Shipping of Corporation India Ltd (SCI) have signed a memorandum of understanding (MoU) to co –operate for transportation of liquefied natural gas (LNG) sourced by GAIL from the US. Under the MoU, GAIL and SCI shall co-operate for transportation of 5.8 million tonnes a year of LNG. The gas will be sourced by GAIL from Sabine pass and Cove Point terminals in the US. The co-operation would include SCI assisting GAIL in the charter hiring of LNG Ships. GAIL has signed a LNG sales and purchase agreement with Cheniere Energy Partners, LP (Cheniere) to buy 3.5 mt a year of LNG from the latter’s Sabine Pass Terminal in Louisiana, US, for 20 years. GAIL has also signed a terminal service agreement with Dominion through GAIL Global (USA), LNG LLC for booking 2.3 mt a year liquefaction capacity in the Cove Point LNG liquefaction terminal project located at Lusby, Maryland. The transportation of LNG is expected to begin from mid – 2017.

  1. B) DRY COMMODITIES SCENARIO

1) OILMEAL EXPORTS Oilmeal exports fell 16 per cent in May following lower demand, especially from South Korea, Iran and Vietnam. Exports fell to 3,02,837 tonnes against 3,59,855 tonnes in the same period a year ago, according to data released by the Solvent Extractors’ Association. Oilmeal exports in the first two months of the financial year have been dropping. In April, exports plunged by 51 per cent to 1,99,168 tonnes. Overall exports in last two months dipped 34 per cent to 5,02,005 tonnes compared with 7,62,945 tonnes. Soyameal exports in April and May dropped 57 per cent to 1,95,943 tonnes (4,56,420 tonnes). Soyabean meal prices were up marginally at $618 a tonne against $616 in April, while rapeseed meal prices were up by $1 at $272. Oilmeal import by South Korea was down seven per cent at 1,98,367 tonnes (2,12,388 tonnes), which consisted of 68,158 tonnes of rapeseed meal and 1,30,209 tonnes of castormeal. Iran imported 1,48,234 tonnes (1,50,974 tonnes) consisting 1,48,158 tonnes of soyabean meal and a small quantity of rapeseed meal. India’s shipments to Thailand were lower at 48,047 tonnes (67,026 tonnes), consisting 9,166 tonnes of soyabean meal and 38,881 tonnes of rapeseed meal. Vietnam imported of 26,545 tonnes compared to 88,825 tonnes last year, while that of Japan fell to 10,141 tonnes (84,989 tonnes). Europe and other countries have imported 12,237 tonnes compared to 28,844 tonnes last year. 2) GVK HANCOCK SIGNS UP THIESS FOR ALPHA COAL PROJECT GVK Hancock Coal has signed up with Thiess as a preferred mine operations contractor for its $10 billion Alpha thermal coal project in the Galilee basin in Australia. The agreement paves way for GVK Hancock, part of the diversified GVK Group based in Hyderabad, to work exclusively with Thiess to develop a 10-year mine plan and budget. Thiess’s technical, engineering and plant expertise will be applied to develop the operational strategy and management plan for the thermal coal mine project. They expect to finalise the plan by the end of the year. The GVK management expects to extract first coal from the Alpha Coal mine project by 2016. When fully completed, the mine will produce 32 million tonnes of coal per annum for export in Asia.

  1. C)  CONTAINER SERVICE

1) LARGE CONTAINER SHIP CALLS AT MUNDRA PORT MSC Valeria,’ one of the largest container ships in the world, with a capacity to carry 14,000 containers, called at Mundra port in Gujarat on Tuesday. This is the largest and longest container ship ever to call at an Indian port. MSC Valeria measures an overall length of 365.5 meters (1,199.2 feet), and was commissioned into service last year.

  1. D) PORT DEVELOPMENTS

  1) VOLUME OF GRANITE EXPORTS FROM CHPT DROPS BY HALF The volume of granite block exports from Chennai Port came down by nearly half during fiscal 2012-13. Three reasons are given by the authorities for the drop: restricted movement of granite blocks during day time, traffic congestion and denial of direct entry to granite-laden trucks through the port’s main gate.Irked by delays and the archaic means of getting Customs formalities cleared for their consignments at the Madhavaram Container Freight Station, granite block exporters have switched their loyalty to Krishnapatnam, Visakhapatnam and Kakinada Ports.Last year, ChPT handled 6.03 lakh tonnes against the 11.98 lakh tonnes handled in the corresponding period of 2011-12, while Krishnapatnam Port handled 9.9 lakh tonnes against 6.7 lakh tonnes in the previous year. 2) INDIAN COASTAL WATERS / PORTS We are attaching herewith the copy of letter Ref no 5- NT (6) /99 – Pt. v dated 23/05/13 received from Deputy Nautical Advisor, DG Shipping Mumbai.   3) HARBOUR NOTICE – GOA   We are attaching herewith Ref No DC/S (21)/2013/40 Harbour Notice No. 53 (TEMP) 2013 dated 06/06/2013 issued by Harbour Master Mormugao Port

  1. E) OTHER DEVELOPMENTS

1) FIRE AT MRPL UNIT NO CASUALTIES Mangalore Refinery and Petrochemicals Ltd (MRPL) has said in a statement that there was a fire in the phase 2 unit of the refinery on Monday night. No casualties were reported. A line leading to the crude column of the unit caught fire due to an oil leak during its start up. “The situation was contained immediately and the fire put out in a while. There were no casualties or injuries, and the committee that inspected the unit has ruled out any serious damage. As a result of this the startup has been extended by another four to five days. Refinery operations are normal and the supplies are continuing uninterrupted  

  1. F) WEATHER/STRIKE – NIL

 

  1. G) INTERNATIONAL HIGHLIGHTS

1) BRENT CRUDE REBOUNDS Brent crude advanced for the fourth time in five days, rebounding from an earlier decline of 1.1 per cent. Brent for July settlement gained 47 cents, or 0.5 per cent, at $ 104.08 a barrel on the London – based ICE Futures Europe exchange. Brent premium to WTI narrowed by 13 cents to $ 8.72. WTI for July delivery rose 60 cents, or 0.6 per cent, to $ 95.36 a barrel on the New York Mercantile Exchange. The volume of all futures traded was 18 percent above the 100- day average.   Thanks and Regards Kenneth Rodrigues

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