Hindustan Petroleum Corp Ltd. (HPCL) and gas utility GAIL India Ltd. signed a pact with Andhra Government for setting up a Rs 400 billion petrochemical plant in the state. The 50:50 joint venture will set up a 1.5 million tons Ethylene Derivatives plant, which will produce a wide range of petrochemical raw materials for the manufacture of detergents, paints and coatings, cosmetics, textiles and adhesives. “What we have signed is an MoU expressing intent for setting up the petrochemical plant,” GAIL Chairman and Managing Director B C Tripathi told PTI.
Andhra Pradesh government will support the project by providing infrastructure, power, roads and other clearances. The plant will be set up at the Petroleum, Chemical and Petrochemicals Investment Region (PCPIR) sites identified by the state government at Kakinada. The MoU was signed by Tripathi, HPCL Chairman and Managing Director Mukesh K Surana and Kartikeya Misra, Director, Industries in Government of Andhra Pradesh. GAIL-HPCL combine may divest half of the project stake in favour of a strategic partner at a later date. Some global petrochem companies have shown interest in the project but talks are at preliminary stages currently, Tripathi said without disclosing details.
The project is a truncated version of the earlier proposed refinery-cum-petrochemicals complex in Andhra Pradesh. HPCL has for the time being shelved plans to build a new refinery and is only pursuing petrochemical project. HPCL and GAIL decided to do the petrochem plan together after their plans to team up with France’s Total, Lakshmi N Mittal Group and Oil India Ltd. (OIL) for a 15 million tonnes a year refinery-cum-petrochemical plant at Visakhapatnam in Andhra Pradesh fell through. Tripathi said currently detailed feasibility report (DFR) is being prepared and details will work out following that.
HPCL had in 2007-08 planned an only—for—exports refinery to target demand in South East Asia and the Middle East. The five-way alliance of HPCL, explorer OIL, gas utility GAIL India, Mittal Investment Sarl and Total had in October 2007 signed a memorandum of understanding to look at the feasibility of setting up the Vizag project. In 2009, the Rs 500 billion project was put on hold as petrochemical demand then was seen as too weak to justify the investment. Total did pre-feasibility for the refinery project and demand studies, while GAIL was in charge of the study of the petrochemical unit.
But the project was in 2010 put on back burner before equity structure could be decided
Oil slides as strong U.S. drilling activity weakens deal to cut output
Oil prices fell on Monday as news of another increase in U.S. drilling activity spread concern over rising oil output just as many of the world’s oil producers are trying to comply with a deal to pump less in an attempt to prop up prices. The number of active U.S. oil rigs rose to the highest since November 2015 last week, according to Baker Hughes data, showing that drillers are taking advantage of oil prices above $50 a barrel. Global benchmark Brent crude oil prices were down 25 cents at $55.26 a barrel at 1010 GMT, while U.S. crude futures slipped 8 cents to $53.09.
“Oil prices are down because of the rise in the U.S. rig count,” said Tamas Varga, analyst at PVM Oil Associates in London. He also added that Petro-Logistics’ report that OPEC members had cut production by 900,000 barrels per day (bpd) in January was “not very encouraging” because it implied that only 75 percent of the OPEC production cut target was being met. The Organization of the Petroleum Exporting Countries and other producers including Russia agreed to cut output by almost 1.8 million barrels per day (bpd) in the first half of 2017 to relieve a two-year supply overhang.
Oil prices have remained above $50 a barrel since producers agreed the deal in December, incentivising drillers in low-cost U.S. shale producing regions to ramp up activity. “In our view the strong rise in U.S. shale oil rigs is a good thing because it will be needed over the next three years as non-OPEC, non-U.S. crude production continues to be hurt by the deep capex cuts both past and present in that segment,” said Bjarne Schieldrop, chief commodities analyst at SEB Markets in Oslo. He estimates the U.S. rig count will continue rising at a rate of seven rigs per week over the first half of the year. Golden Tate III Authentic JerseyShare This