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Hydrocarbons Hydrocarbons

NET ZERO COMMITMENTS EASING RESTRICTIONS
Green transitioning of oil & gas companies to entail Government allows ADNOC to export oil from strategic

signifi cant capex storage

The net zero and sustainability companies. In the long term (beyond other hand, the carbon capture utilisa- The government has allowed Abu meet about 9 days of national
targets given by Indian oil & gas fi ve years), the potential risk of a fur- tion and storage (CCUS) mechanism Dhabi National Oil Company (ADNOC) demand.
(O&G) companies are aggressive as ther push on R&D and capex spend- remains expensive and presently does to export crude oil it has stored in
against those of international O&G ing, higher cost of borrowings and not provide an optimum adaptation underground strategic storages at ISPRL has leased half of
players, given the lower proportion of lower funding availability will necessi- tool for the sector. “Notwithstanding, Mangalore to give operational fl exibi- the 1.5-million tonne capa-
capex presently allocated to the transi- tate pro-active management of the some players have plans to install lity to the foreign fi rm, an order of city in Mangalore storage
tion and it being limited to address- transition journey, the ratings agency these and the Central Government has the Ministry of Commerce and Industry to ADNOC. The remaining
ing process emissions. Consequently, said. announced a grant to give it a fur- said. At present, crude oil is not allowed was retained by ISPRL.
progress against interim milestones ther push. Product-based transition, to be exported except through the state- The idea behind leasing
and availability of funding (equity “Although the net zero targets for i.e., shifting to production of alter- owned Indian Oil Corporation (IOC). the storage to foreign com-
and debt) will be key in assessing its Indian O&G players seem aggressive nate fuels such as hydrogen, biofuels panies was that they could
success. and are largely focused on reducing and bioethanol has been increasingly In an order, the ministry said the store oil for sale to domestic
the carbon footprint of the process stressed by global O&G players, but condition of export being allowed only Indian Strategic Petroleum Re- refi ners. But in case of an emergency,
According to ratings agency, India (Scope 1 and Scope 2), an eventual has shown limited traction with Indian through IOC will continue, but “AMI serve Ltd. (ISPRL) has built strategic India held the fi rst right on oil usage.
Ratings and Research (Ind-Ra), in the transition through a change in product O&G players,” he added. (ADNOC Marketing International storages at three locations to store up
next fi ve years, lower margins due to mix may be inevitable in the longer (India) RSC Limited India) is exempted to 5.33-million tonnes of oil as insurance ADNOC had sought permission for
higher R&D spend and incremental run to address Scope 3 emissions,” The analysis is based on a study from STE (State Trading Enterprise) against any supply disruption. The the export of its oil from the cavern in
capex to transition to green sources Mr. Rakesh Valecha, Senior Director of the Business Responsibility and conditions and is allowed to re-export storage at Visakhapatnam (1.33-million cases where it could not fi nd buyers in
could result in lower free cash fl ows, Core Analytical Group, Ind-Ra, said. Sustainability Reporting (BRSR) of crude oil from their commercial stock- tonnes) in Andhra Pradesh, Mangalore Indian refi ners. After the notifi cation,
necessitating an increase in leverage. the top 10 O&G companies for FY23. pile at Mangalore strategic petroleum (1.5-million tonnes), and Padur ADNOC can now export oil stored in
However, credit profi les are likely to Ind-Ra opines the transitioning to This includes companies operating in reserve, at their own cost”. (2.5-million tonnes) in Karnataka can the Mangalore storage.
remain resilient, given the cushion in renewable power as an energy source exploration & production (upstream)
the existing ratings and government shall be smooth, given the established and integrated companies, and mar- TRADE TRENDS
support in case of public sector O&G economics of these projects. On the keting (downstream). Venezuela became India’s fi fth largest crude oil

RISING DOMESTIC PRODUCTION supplier in February
Reliance on LNG imports to drop to 45% by FY26 Indian refi ners exploited the US Kpler, the world’s third largest im- gasoline, which are high-value pro-

sanctions waiver on Venezuela to porter secured more than 2,54,000-b/d ducts. Even though RIL took the lead
India’s reliance on imported lique- However, the COVID-19 pandemic “Signifi cant growth in domestic import more than 1,75,000 barrels per in January and over 1,91,000-b/d in in February, importing two very large
fi ed natural gas (LNG) is projected and a sharp increase in imported LNG gas output from FY22, along with day (b/d) crude oil from the South December 2023 from Venezuela. crude carriers (VLCCs), IOC and
to decrease to around 45% by FY26, prices due to geopolitical tensions have expected increases in FY24 and FY25, American country making it the fi fth Until 2019, India was Venezuela’s HPCL-Mittal Energy Ltd. (HMEL)
down from 53% in FY21, according led to a decline in consumption in signals a shift towards reduced import largest supplier in February. third largest purchaser, after the also participated sharing one VLCC
to a report by CareEdge Ratings. The FY21 and FY23,” said Mr. Hardik dependency. This is further supported US and China, importing roughly tanker worth of cargo. RIL bought
change is attributed to an increase in Shah, Director, CareEdge Ratings. by regulatory steps to adjust domestic After the US lifted sanctions on 3,00,000-b/d on an average. its fi rst cargo that was already loaded
domestic natural gas production, with gas pricing, stabilize imported gas Venezuela for six months – beginning in early December 2023.
nearly 30-mmscmd (million standard Despite these challenges, FY24 is prices, and expand LNG capacity and October 18, 2023 – India has been pro- Mr. Viktor Katona, Kpler’s Lead
cubic meters per day) of new produc- anticipated to mark the highest-ever gas pipeline infrastructure in India,” curing cargoes from December 2023, Crude Analyst said India’s refi ning However, the threat of reimposi-
tion added over the past three years. annual gas consumption in India. The Mr. Shah added. after a hiatus of over three years, system is one of the most sophistica- tion of sanctions by the US, after April
An additional 15-mmscmd is expected country aims to increase the share of emerging as the largest buyer of crude ted in the world, so the likes of Reli- 18, due to no visible progress between
to come on-stream in FY25. natural gas in its primary energy mix The report highlights an improve- oil in January 2024 from the country ance Industries Ltd. (RIL) or Indian Venezuela’s President Nicholas Maduro
from 6% to 15% by 2030, focusing ment in domestic gas production in the with the world’s largest proven oil Oil Corporation (IOC) would actually and Unitary Platform, particularly on
“The Government’s push towards on sectors like fertilisers, city gas dis- medium term, backed by recent disco- reserves. want to buy heavier grades, even with allowing all presidential candidates to
cleaner fuel has seen a steady rise in tribution, power, refi neries, and petro- veries and substantial new production higher levels of sulphur, because they compete in the election, could impact
natural gas consumption until FY20. chemicals. anticipated in FY25. As per energy intelligence fi rm can convert residue into diesel and trade in the future.

146 Chemical Weekly April 2, 2024 Chemical Weekly April 2, 2024 147

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