REPORT NO 18/13

January 31, 2015 7:21 pm Published by

                                               

                                               ATLANTIC REPORT NO 18/13

 

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

 

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

 

  1. A) LIQUID COMMODITIES SCENARIO

 

1) GAIL PLANS FORAY INTO LNG SHIPPING

 

GAIL (India) Ltd on Tuesday said it targets to foray into liquefied natural gas (LNG) shipping business post 2017. In July, the public sector company plans to invite expressions of interest (EoI). Seven-eight LNG carriers would be available with the company in the next three-four years on a long term charter or ownership basis. However, till 2017, GAIL would depend on spots cargoes on delivery basis. GAIL has signed long term agreements for 3.5 million tonnes per annum with US based Sabine Pass Liquefaction Company that would start in 2017-18. The company has also signed long term deal with Gazprom for 2.5 million tonnes a year from 2018-19. the company would import 34 cargoes in 2013-14 against 12 in the previous year.  The 34 cargoes would bring in nearly 7.4 million standard cubic metres per day (mmscd) of gas, or nearly 2 million tonnes of gas a year. (GAIL recorded gas transmissions of 104.90 mmscmd in 2012-13). Of this, 18 cargoes have already been tied up, while the rest would be sourced from the spot market. The supplies would be split between the terminals at Dahej and Dabhol.

2) ONGC TO SET UP GAS PROCESSING PLANT IN MAHARASHTRA

ONGC is setting up an integrated gas processing plant in Maharashtra. The plant will have processing capacity of 10 mmscmd and a 30 megawatt captive power plant as part of the project. A site near Kelwa- Mahim has been selected based on study of 4 alternate sites. In case non-availability of fresh water from surface water for the project, the oil and gas major may also think of setting up desalination plant with an output of 14000 m3/day. ONGC currently has two gas processing plants at Hazira in Gujarat and Uran near Mumbai. While the Gas processing complex Hazira plant at Surat processes only gas, Uran plant can handle both gas and oil, the official explained adding that it will take nearly one year to get all the necessary permissions.

3) GAS IMPORTS TO MORE THAN DOUBLE TO $17.8 BILLION BY 2016-17

The estimated financial outgo on account of import of Natural gas is likely to increase to $17.825 billion in 2016-17 from $8.79 billion in 2012-13. The demand for natural gas is projected to increase to 466 MMSCMD in 2016-17 from 286 MMSCMD in 2012-13, growing at almost 13%. The domestic supply of gas is projected to increase to 231.7 MMSCMD in 2016-17 from 143 MMSCDM in 2012-13. The domestic supply is expected to satisfy only about 50% of the demand over this period. The natural gas deficit will grow from 143 MMSCMD in 2012-13 to over 234 MMSCMD in 2016-17 according to the forecasts. However, LNG re-gasification facility available in the country will be a bottleneck for importing higher amounts of LNG. The LNG terminal capacity in the country is projected to increase to 30 MMTPA (114 MMSCMD) by 2016-17 from 14.8 MMTPA (56.24 MMSCMD) currently, which is less than half of the natural gas deficit forecast for 2016-17. Assuming gas price of $12/MMBTU, the financial impact of importing LNG will increase from $8.79 billion in 2012-13 to over $17.825 billion in 2016-17. If the LNG terminal capacity in the country is ramped up quickly in sync with the increasing deficit, the import bill would be much higher.

  1. B) DRY COMMODITIES SCENARIO

1) IRON ORE TRAFFIC AT PARADIP COULD RISE

The iron ore export through Paradip port, which dropped significantly in the past couple of years, appears set to rise again, though slowly. Iron ore is an important component of the port’s traffic. In April, the iron ore throughput was 4.63 lakh tonnes against 1.27 lakh tonnes in the same period a year ago. In April Paradip port posted total traffic growth of 42.74 per cent at 5.82 million tonnes, the highest among all major ports during the month. No wonder, the port authorities have started alloting plots to iron ore exporters for storage purpose. It might be noted that the court cases involving 48 other iron ore plots alloted earlier are creating problems because unless these plots are vacated the work on two build operate – transfer berths, one for iron ore and the other for coal, can not be started. The mechanisation of three berths, EQ 1, EQ 2 and EQ 3 through public – private – partnership, is receiving top priority. The acquisition of two mobile harbour cranes too is high on the agenda.

 

2) STERLITE COPPER HOPES TO ACHIEVE FULL CAPACITY A WEEK AFTER   

     RESTART

Sterlite Copper, Tuticorin, will ramp up to full capacity a week after it starts production. With nearly half the country’s copper smelting capacity out of production for two months supplies had been tight. The unit was closed by an order of the Tamil Nadu Pollution Control Board on March 29, after complaints of severe eye and throat irritation from the public and allegations of excessive emissions.

  1. C)  CONTAINER SERVICE - NIL

 

  1. D) PORT DEVELOPMENTS

 

1) GOPALPUR PORTS STARTS TRIAL OPERATIONS

Gopalpur Port in Ganjam district of Odisha has started its commercial operations as an all-weather port on a trial basis. A consignment of around 7,500 metric tonnes of ilmenite, a sand mineral product of Indian Rare Earths Ltd (IREL), was shipped through a small vessel yesterday to South Korea. The empty ship had anchored at the dockyard on May 23. More vessels are expected to arrive at the port for shipment of iron ore, IREL products, other minerals and food grains. The port had got the clearance for its operations from the Odisha State Pollution Control Board (OSPCB) and the Customs Department on May 14. The shipments were stopped in 2010 for the construction of the all-weather port. Prior to that, a port at Arjeepalli, about 30 km from here, was functioning as a seasonal one. Port have constructed a multi-purpose berth with a cargo handling capacity of 3.50 million tonne. Another two berths would soon be constructed. Besides the port, work on other supporting infrastructure like power distribution system, railway and road connectivity is in progress.

2) COAL HANDLING FACILITY AT VIZAG PORT TO BE FULLY MECHANISED

By end of this fiscal year coal dust will cease to be a problem for the residents of the Port City, especially those living in the old town area, with the coal handling facility being totally mechanised.In the first stage the General Cargo Berth has been mechanised by the Vedanta Group under the Build Own Operate and Transfer (BOOT) concession and it has started working from April. The totally mechanised facility lifts the ore from the berthed ship and transfers it to a hopper where water spray ensures that there is no coal dust raised in the operation. The wet coal is then transferred to a conveyor which carries it for a distance of two km to the coal stackyard. The completely covered conveyor has water sprays which ensure there is no dust raised during its conveyance. A system of water sprays ensures that the coal in the stackyard does not raise dust. From the stackyard coal is lifted and carried to silos from where it is transferred to rail wagons. The facility has the capacity to fill a rail wagon in one minute which translates into one rake of 59 wagons in an hour.

3) CUSTOMS TRADE FACILITY CIRCULAR ON BUNKERING

We are attaching herewith Circular No F.No. S.31/171/2012- Prev Cus on Trade Facility No .17/2013, dated 23/05/2013 issued by Cochin Port Trust.

  1. E) OTHER DEVELOPMENTS- NIL

 

  1. F) WEATHER/STRIKE – NIL

 

  1. G) INTERNATIONAL HIGHLIGHTS

 

1) HIGHER US STOCKS COOL BRENT CRUDE

Brent crude oil dropped, heading for a second monthly decline, as OPEC kept its output target unchanged for a third consecutive time and US inventories climbed to the highest level in 82 years. Brent oil for July settlement dropped 72 cents to $ 101.47 a barrel on the London based ICE Futures Europe exchange. WTI crude for July delivery declined 72 cents to $92.89 a barrel at 9:43 a.m. on the New York Mercantile Exchange. Futures fell as much as 1.3 per cent after the Organisation of Petroleum Exporting Countries maintained its target of 30 million barrels a day at a meeting in Vienna today. US crude supplies increased 3 million barrels to 397.6 million last week, the most since 1931, a government report showed yesterday.

2) CONCOPHILLIPS EXTENDS ESSAR RIG CONTRACT

Oil and gas explorer ConocoPhillips has extended the contract for deploying Essar’s semi-submersible rig, Wildcat, for drilling off Indonesia till June 2014.  Essar Oilfields Services, a wholly owned subsidiary of Essar Shipping, will now continue to deploy the rig off Indonesia at daily charter rates higher than the average market rates. It had bagged the initial contract for drilling 11 offshore wells for $121 million in September 2011.

3) PIRATES KIDNAP OIL TANKER CREW OFF NIGERIA

Armed pirates attacked an oil products tanker off the coast of Nigeria in West Africa and abducted an unknown number of crew. Increasing piracy in the Gulf of Guinea region, which includes Africa’s No. 1 oil producer Nigeria and is a significant source of cocoa and metals for the world markets, is jacking up costs for shipping firms operating there. The Nigerian-flagged MT Matrix was boarded by gunmen in the early hours of Saturday around 40 nautical miles off the coast of oil-producing Bayelsa state. There were 12 Pakistani and five Nigerian crew aboard the vessel when it was attacked.

4) PAKISTAN’S GWADAR PORT

China has successfully taken over the operational control of Pakistan’s Gwadar Port. After a pull out by Port of Singapore Authority ( PSA) of a 40- year port management and development contract signed in 2007, China will operate the port, which is strategically located close to the Pakistan- Iran border and the Strait of Hormuz in South- Western Balochistan province. The contract of operation of Gwadar Port has been given to China Overseas Ports Holding Company Ltd. It will offer an energy and trade corridor that will connect China to the Arabian Sea and Strait of Hormuz, a gateway for a third of the world’s traded oil, overland through an expanded Karakoram Highway. It would cut thousands of kilometres off the distance which oil and gas imports from Africa and West Asia have to travel to reach China. The port has the potential to serve as a secure outlet as well as storage and trans- shipment hub for West Asia and Central Asia oil and gas supplies through a well- defined corridor passing through Pakistan. China has contributed about $ 198 million of the initial investment for the port project.

5) OPEC HOLDS OIL OUTPUT CEILING

OPEC held its output ceiling steady at a meeting in Vienna on Friday, saying it was worried about the effect of weak global and euro zone growth on demand for oil. OPEC which pumps about 35 per cent of global oil supplies, said it would leave the output ceiling at 30 million barrels per day (mbpd) where it has stood since late 2011, despite actual output exceeding the target. World oil demand was expected to rise from 88.9 million barrels in 2012, to 89.7 mbpd in 2013.

6) VIETNAM MAY STOCKPILE 1 MT RICE

Vietnam may stockpile one million tonnes of milled rice, about a fifth of the current Mekong Delta harvest, in a bid to support prices that have dropped to their lowest in nearly 26 months.

Thanks and Regards

Kenneth Rodrigues

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