04 Jan 2012;business-standard.com:Kalpana Pathak:Mumbai: The company’s existing infrastructure in the state suits its expansion plan. State-run IndianOil Corpo-ration (IOC) may set up its next refinery, a 15 million tonnes per annum (mtpa) unit, on the western coast in Gujarat at an investment of Rs 30,000 crore. According to a senior IOC official, the country's biggest oil refining and marketing company, which also had Maharashtra in mind, favoured Gujarat, given its crude oil and product pipeline infrastructure. Raj Kumar Ghosh, director, refineries, IOC, had earlier said the proposed unit may also have a petrochemical plant along the lines of the Paradip refinery. "We plan to double our crude refining installed capacity from 61.7 to 123 mtpa in the next decade. And given our existing pipeline infrastructure in Gujarat, it seems a good location for the new refinery,” said a senior IOC official. The modes of financing the project are being worked out, he said. IOC' Koyali refinery in Gujarat has a capacity of 13.7 mtpa. The company operates a 1,870-km-long Salaya-Mathura pipeline from Salaya (near Vadinar) in Jamnagar district on the coast of Gujarat to bring crude oil to its refineries at Koyali, Mathura (Uttar Pradesh) and Panipat (Haryana). At Vadinar, it has a vast crude oil tank farm of 13 tanks with a total capacity of 0.773 mtpa. It also has crude oil storage tank farm at Viramgam with a total capacity of 0.331 mtpa. Another storage tank farm at Chaksu has six tanks with a total capacity of 0.219 mtpa. The 1,194-km long Mundra-Panipat pipeline transports crude oil from Mundra on the Gujarat coast to Haryana. It has a 74-km long pipeline from Mundra to Kandla, which was hooked up to the existing system of Kandla-Panipat section of Kandla-Bhatinda Pipeline near Gandhidham. IndianOil controls 10 of India’s 20 refineries with 34.8 per cent share of the national refining capacity. The company on its website lists out growth plan for its refineries with an outlay of Rs 55,000 crore for capacity augmentation, de-bottlenecking, bottom upgradation and quality upgradation. Major projects under implementation include a 15 mtpa grassroots refinery at Paradip, Orissa, Naphtha Cracker and Polymer Complex in Panipat. The Panipat refinery's capacity would be expanded from 12 mtpa to 15 mtpa. Gujarat is also home to Reliance Industries' 1.24 million barrels per day (mbpd) of crude processing capacity refinery at Jamnagar and Essar Energy's refinery at Vadinar with a capacity of 14-million tonnes. The refinery is being expanded to 20 mtpa by September 2012.
03 Jan 2012;deccanherald.com:Chennai: India's nuclear power plant operator, Nuclear Power Corporation of India Ltd (NPCIL), has shut down one of the two units at its Madras Atomic Power Station (MAPS) for maintenance and surveillance test purposes, an official said Tuesday. "We have shut down the second unit for maintenance activities as well as to carry out some surveillance tests. We plan to restart the reactor Jan 8 or 9," MAPS station director K. Ramamurthy told IANS. NPCIL has two units at MAPS, located at Kalpakkam around 80 km from Chennai, generating around 150 MW each. The rated capacity of the reactors is 220 MW. "Availability of uranium is the issue in increasing the generation," Ramamurthy added. Queried about the steps taken by MAPS to get 5-year operational licence than a limited period one from the Atomic Energy Regulatory Board (AERB), he said: "We are planning to augment the cooling water resources while the standby power systems has been augmented with two diesel gensets. We are planning to have seismic trips." He said both the units have licence to operate till March 2012. Every nuclear power plant in India has to renew its operational licence once in five years. With the accident in Fukushima reactors in Japan, additional safety measures have been suggested by AERB to NPCIL for its units. The NPCIl has also been asked for an implementation roadmap. "We are looking at the need for a seismic condition qualified building to house emergency equipments. The reactor and turbine buildings are seismic condition qualified buildings," Ramamurthy added.
Bajaj launches India's latest ultra-low-cost car RE60
Tuesday, 03 January 2012
03 Jan 2012;hindustantimes.com:New Delhi: Bajaj Auto unveiled India's latest ultra-low-cost car on Tuesday, a 200cc four-seater that looks set to compete with the Tata Nano for the title of the world's cheapest auto. The group gave no price for the low-emission vehicle which will have a top speed of 70 kilometres an hour (43 miles an hour), but the build quality indicated it was pitched firmly at the bottom of the market. The "RE60" is the first foray into the passenger car market by Bajaj, a motorbike and rickshaw specialist which entered into an ultimately aborted alliance with Nissan and Renault in 2009 to develop the vehicle. Group managing director Rajiv Bajaj said the core market for the RE60 would be owners of three-wheeled motorised rickshaws who wanted to upgrade to four wheels, but it was also for anyone who "wanted to take it home." One of the models on display was fitted with a taxi meter, an indication that Bajaj hopes the snub-nosed car with small wheels might replace India's iconic rickshaw as the commercial passenger vehicle of choice. Marketing material aired at the launch also showed the RE60 as a mass market product pitched at urban commuters, with the emphasis placed on its extremely high fuel efficiency and its low carbon dioxide emissions. "At Bajaj Auto, we believe the people of the planet deserve much better, much faster," Bajaj said of the car, which will be launched some time this year. The petrol engine will do 35 kilometres per litre (83 miles per US gallon) in normal driving conditions and emits just 60 grams of carbon dioxide per kilometre, the company said. It weighs just 400 kilograms (880 pounds). Bajaj said that emissions were "typically half of what the small cars currently emit in our market." India has become a centre of low-cost innovation exemplified by the Tata Nano, which was launched to great fanfare in 2009 as a means for poor families to get their hands on their first car. A no-frills model costs as little as Rs 140,880 ($2,770). Other innovations in India targeting the hundreds of millions at the bottom of the economic pyramid include a low-energy refrigerator, a low-cost water purifier and solar-powered ATM cash machines for rural areas. But the Nano has so far failed to take off as expected, with analysts blaming poor marketing by the company which sold it as a cheap product rather than an aspirational one for the burgeoning middle classes. There have also been a series of technical problems, as well as some highly publicised engine fires, meaning sales have been a fraction of the 25,000 a month the company once expected. Parent company Tata Motors reported this week it had sold 7,466 Nanos in December, a rise of 29 percent from the same month last year. Bajaj took several digs at the car during his presentation, saying "I am personally not sure what the Nano is." Bajaj, Renault and Nissan abandoned their joint low-cost car project in July last year amid differences over the direction of the project. Renault had voiced concern about the quality of the final product. Small, fuel efficient cars are set to take centre stage at the India Auto Show which kicks off Thursday in New Delhi, while luxury brands such as BMW will look to increase their presence in a market that is one of the few global hotspots. The Indian market is forecast to grow this financial year to March but at a slower rate than earlier forecast as the economy slows due to higher borrowing costs and global economic troubles. The Society of Indian Automobile Manufacturers has sharply cut its forecast for Indian car sales growth in the fiscal year to between two and four percent, down from an earlier projection of 10-12%.
Don't come back to Gulf, Iran warns US carrier; oil prices jump above $101
Tuesday, 03 January 2012
03 Jan 2012;timesofindia.indiatimes.com:TEHRAN: Iran's army chief on Tuesday warned an American aircraft carrier not to return to the Persian Gulf in Tehran's latest tough rhetoric over the strategic waterway, part of a feud with the United States over new sanctions that has sparked a jump in oil prices. Gen. Ataollah Salehi spoke as a 10-day Iranian naval exercise ended near the Strait of Hormuz at the mouth of the Gulf. Iranian officials have said the drill aimed to show that Iran could close the vital oil passage, as it has threatened to do if the United States enacts strong new sanctions over Iran's nuclear program. The strait, leading into the Gulf of Oman and Arabian Sea, is the only possible route for tankers transporting crude from the oil-rich states of the Persian Gulf to markets. A sixth of the world's oil exports passes through it every day. Oil prices rose to over $101 a barrel on Tuesday amid concerns that rising tensions between Western powers and Iran could lead to crude supply disruptions. By early afternoon in Europe, benchmark crude for February delivery was up $2.67 to $101.50 a barrel in electronic trading on the New York Mercantile Exchange. The jump came a day after Iran test-fired a surface-to-surface cruise missile as part of the maneuvers, prompting Iran's navy chief to boast that the strait is "completely under our control." Salehi's warning for the US aircraft carrier not to come back seemed aimed at further depicting the strait and the Gulf as under Iran's domination, though there was little way to enforce his warning without military action. The strait is divided between Iran and Oman's territorial waters, and international law requires them to allow free passage through it. "We recommend to the American warship that passed through the Strait of Hormuz and went to Gulf of Oman not to return to the Persian Gulf," Salehi was quoted as saying by the state news agency IRNA. He said Iran's enemies have understood the message of the naval exercises, saying, "We have no plan to begin any irrational act but we are ready against any threat." The aircraft carrier USS John C. Stennis and another vessel exited the Gulf through the Hormuz Strait a week ago, after a visit to Dubai's Jebel Ali port, according to the US Navy's Bahrain-based 5th Fleet. The Fleet did not immediately respond to requests for comment on Salehi's warning. Iran's sabre-rattling over the strait and the Gulf has come in response to US preparations to impose tough new sanctions that would ban dealings with Iran's Central Bank. That would deeply hurt Iran's oil exports since most countries and companies use the bank to conduct purchases of Iranian crude. Iran relies on oil revenues for around 80 per cent of its budget, meaning a cut-off would be devastating to its already weakening economy. President Barack Obama has signed the sanctions into law but has not yet enacted them. The sanctions would be the strongest yet by the US, aimed at forcing Tehran to back of its nuclear program, which many in the West say is intended to produce a nuclear weapon. Iran denies the claim, saying its program is peaceful. French foreign minister Alain Juppe said on Tuesday that is country wants Europe to agree on similar sanctions against Iran by Jan 30 to show its determination to stop Iran from developing a nuclear weapon. He told the French television station i>TELE that there is "no doubt" that Iran is continuing with plans to build a bomb. Iran's naval maneuvers took place over a 1,250-mile (2,000-kilometer) stretch of water beyond the Strait of Hormuz at the mouth of the Persian Gulf, as well as parts of the Indian Ocean and the Gulf of Aden, according to Iranian officials. A leading Iranian lawmaker said on Sunday the maneuvers served as practice for closing the strait if the West enacts sanctions blocking Iranian oil sales. Top Iranian officials made the same threat last week.
03 Jan 2012;business-standard.com:Mumbai: Fuel-efficient cars and a slew of new SUV models will be unveiled at Delhi's Auto Expo later this week as global carmakers continue to rev up their activity in one of the world's few growth engines despite a recent slowdown in sales. Around 50 new models will be presented to hundreds of delegates and half a million visitors as carmakers look to move on from a year of sluggish sales due to high interest rates and rising costs and fuel prices in Asia's third-largest economy. The debut of South Korea's Ssangyong, owned by India's Mahindra & Mahindra , and product launches from Toyota Motor Corp and Renault SA will underline the country's importance to the world's biggest carmakers. "The overwhelming feeling is that this current sales slowdown is a temporary phenomenon and global carmakers are certainly betting on India to bounce back. There's no slackening of interest here," R.C. Bhargava, chairman of Maruti Suzuki , India's biggest carmaker, told Reuters. "Everybody is working on hybrid, fuel-efficient and green technology vehicles. There's an exciting race to find a small, cheap hybrid car for India, which will certainly be a winner." Jaguar Land Rover, owned by India's Tata Motors , will skip the overlapping North American International Auto Show in Detroit to focus on the India event, while Ford Motor Co said it will make a world-first announcement in New Delhi. Car sales in India grew 30% in the fiscal year to end-March 2011, cheering global carmakers as economic turmoil hit sales in developed markets. Since then, interest rate hikes by India's central bank and rising input costs that pushed up prices have dented demand as economic growth cools. India's small-car segment, made famous by Tata's ultra-cheap Nano and targeted by firms such as General Motors Co and Fiat SpA's Chrysler, has suffered most as first-time buyers balk at the increased cost of credit or stick with a motorcycle, considered a family vehicle in India. Still, the Indian economy is likely to grow at around 7% this fiscal year and rising salaries and a rapidly-growing middle class mean it remains one of the world's most exciting markets for automakers. Green vs gas-guzzlers: Led by the launch of Mahindra's first-ever electric cars following its 2010 acquisition of Reva and the first glimpse of a hybrid model of Maruti's popular Swift hatchback, the expo will see a slew of fuel-efficient and green technology launches. After crowds swamped the show two years ago, police have asked organisers to cap daily attendance at this year's six-day event at 100,000, local media reported. Carmakers are also set to muscle in on India's popular SUV segment, which fared better than smaller cars last year, with an offering from Maruti, a widely-anticipated four-wheel debut from motorcycle experts Bajaj Auto, and a multi-utility model launch from South Korea's Hyundai Motor Co. Luxury carmakers, riding 40% annual sales growth in India, will use the expo to increase their product lines, with Daimler AG's, Mercedes Benz and Volkswagen AG's, Audi rolling out new SUV and sports car models. BMW AG, market leader in the luxury segment, will unveil its Mini brands in India for the first time. The Society of Indian Automobile Manufacturers will also announce its new growth outlook for the industry at the expo, a month after it said sales would likely show no growth in the 12 months to end-March. Maruti, 54.2% owned by Japan's Suzuki Motor Corp , produced every other car sold in India last January. But labour strikes that cost $500 million in lost production and a pronounced slowdown in sales of small cars and petrol models -- its forte -- have hit the company hard. Tata, Mahindra and Hyundai sales have jumped as Maruti's factories slowly ground back into action, while diesel sales have soared in recent quarters thanks to government subsidies that make the fuel about $0.40 per litre cheaper than petrol.
03 Jan 2012;business-standard.com:Ajay Modi:New Delhi: Gets US supply deal at substantially lower benchmark than traditional one. GAIL, the natural gas major, has contracted an import deal from a US-based company for deliveries from 2016-17 at a price far more competitive than the usual benchmark for such deals. The country’s biggest gas marketer has contracted import of 3.5 million tonnes annually at what is known as the Henry Hub-benchmarked price. Henry Hub is the pricing point for natural gas futures contracts traded on the New York Mercantile Exchange. It is a point on the natural gas pipeline system in Louisiana and spot and future prices set at Henry Hub are generally seen to be the primary one for the North American gas market. The big change for India is that all import deals signed by Indian companies till now were at a price calculated as a certain percentage of what is termed the Japanese Crude Cocktail (JCC). This is the nickname for Japan Customs-cleared Crude, the average price of customs-cleared crude oil imports into Japan. It is a commonly used index in long-term liquefied natural gas (LNG) contracts in Japan, Korea and Taiwan. Traditionally, the JCC-linked price has remained substantially costlier than the Henry hub price. A K Balyan, managing director and chief executive officer of Petronet LNG, the biggest importer, said it was a good move to look at the US gas market, as it was favourably priced. “It is a good effort by GAIL. It enlarges the source portfolio and impacts traditional gas suppliers, ushering in a more competitive environment. We will also look to source gas from the US,” he said. The increasing shale gas production in the US has lead to a surplus, likely to increase in the coming years. The US is, therefore, eyeing export to countries like China, Japan, Korea and India. The increasing gas supply from the US is expected to exert pressure on global prices. In the past, the US has been an importer of gas. “With an increase in US gas production, the gas receiving terminals need to be converted to exporting terminals,” Balyan said. Timely The new gas price contract has been entered at a time when output from the biggest domestic gas field, the Reliance Industries’ operated KG-D6, has fallen 30 per cent since March 2010 and is still declining, with a reversal unlikely before 2013-14. No major discovery by government-owned Oil and Natural Gas Corporation or Gujarat State Petroleum Corporation are expected to start production anytime soon. Domestic natural gas production is currently about 115 million standard cubic metres per day (mscmd) and another 46 mscmd is imported in the form of LNG. Current demand is 189 mscmd. The new pricing will help companies into expansion. Indian Oil is setting up a new LNG terminal and Petronet LNG is expanding capacity. Shell is also expanding its Hazira terminal capacity. All these companies are trying to contract import at competitive prices. “It is good to see that GAIL is diversifying the LNG supply source. It is expected that the landed cost of Henry Hub-price based LNG in India is expected to be cheaper by $5-7 per million British thermal units, based on the prevailing price, as compared to Australian Gorgon LNG (a big project in Western Australia) supply. In terms of energy cost in the power sector, there would be a difference of Rs 1.75-2 per unit,” said Rakesh Jain, associate director (energy) at Feedback Ventures. He said GAIL’s deal would encourage other LNG sourcing companies to try for similar contracts with US suppliers. Industry experts anticipate a pressure on the pricing of new gas contracts sourced from traditional suppliers. “Pricing will have an impact after 2012-13, with the new Henry Hub benchmark pricing that GAIL has negotiated. This will lead to a trend of pricing shift from JCC. Everybody is looking for cheap gas. It will happen,” said M Ravindran, managing director, Indraprastha Gas, the monopoly supplier in and around Delhi.
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