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Oil refiners in India give boost to natural gas

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Bloomberg are reporting that a push to use more natural gas by the world’s fastest-growing oil user is getting a boost from an unlikely source: the nation’s gasoline and diesel makers.

India’s top three state-owned oil refiners are planning to use their gasoline and diesel fuel outlets to sell compressed natural gas for vehicles, increase investments in city-gas distribution projects and expand use of the fuel in their oil refineries.

The three state oil refiners – Indian Oil, Bharat Petroleum Corp. and Hindustan Petroleum Corp. – own a network of pipelines to ship fuels and control more than 90% of the nation’s gasoline and diesel retail market through over 54 000 outlets. These companies will be key enablers in raising the country’s natural gas demand 50% by March 2022.

While global energy attention has been on India’s role as the world’s fastest-growing major oil consumer, Prime Minister Narendra Modi also aims to increase the share of gas in the country’s energy mix to 15% by 2020 from about 6.5% now to curb pollution and carbon emissions.

India’s gas goals rely on importing more of the fuel as LNG. The country plans to increase its annual LNG importing capacity to 55 million t over the next four years, while gas pipelines will expand almost 90% to 30 500 km by 2020. Indian Oil, BPCL and HPCL have started importing LNG and are setting up terminals either on their own or through joint ventures.

BPCL, India’s second-largest fuel retailer, sold 344 000 t of compressed natural gas in the year ended March, 7.3% more than the previous year, and handled 26% more gas overall, including volumes consumed at its refineries. The company imported its first LNG cargo in October last year.

Indian Oil is setting up a 5 million t LNG import terminal at Ennore in southern India, while HPCL is developing a similar-sized facility on the west coast through a joint venture. Indian Oil is also buying up to 50% in a 5 million t terminal at Mundra port in western India and has booked capacity at another terminal in Dhamra on the east coast.

The refiners are also shifting to natural gas from fuel oil to power their refineries. Indian Oil, which uses as much as 9% of its oil internally, plans to reduce this gradually through upgrades and natural gas substitution.

Read the article online at: https://www.lngindustry.com/liquefaction/03102017/oil-refiners-in-india-give-boost-to-natural-gas/

 

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