INDIAN OIL CORPORATION CANCELS ACETIC ACID PROJECT; UNWISE AND PANICKY MOVE

In the last few years, India has emerged as one of the large importers of acetic acid in the world. Indian import of acetic acid has nearly doubled during the last five years. In 2014-2015 import of acetic acid is likely to be in the region of 0.7 million metric tonne.

 Import of acetic acid in India

Year

(From April to March)

Quantity in tonnes
2009-2010 389650
2010-2011 466096
2011-2012 570040
2012-2013 646737
2013-2014 664796

All ethyl alcohol based acetic acid plants were closed in the last few years due to non availability of ethyl alcohol, which is largely diverted for human drinking purpose. The price of ethyl alcohol has also gone up, making it uneconomical  for ethyl alcohol based acetic acid plants.

At present, GNFC is the only unit producing acetic acid in the country by methanol route.GNFC is operating the plant at high capacity utilization level.

Obviously, the above situation calls for immediate step to build acetic acid project based  on methanol route.

 Indian Oil cancels plan  for acetic acid  project

Indian Oil Corp. and BP have abandoned plans for an acetic acid joint venture in India, citing high capital costs.

The proposed 50-50 jv would have built a one million metric tonne per year acetic acid plant at Vadodara, Gujarat State, based on BP’s Cativa XL technology.

The project also would have included gasification facilities, consuming petroleum coke supplied by IOC, to produce synthesis gas. Start-up had been originally scheduled for 2015 but was postponed until 2017.

 Unwise and panicky move

Acetic acid project is highly relevant to India’s industrial and economic growth pattern. Strong case exists to build large capacity for acetic acid in India. Decision of Indian Oil Corporation to cancel the acetic acid project is surprising. Certainly the decision is not in India’s interest.

While India does not have enough methanol production , methanol can be imported to produce acetic acid, in view of the comfortable global supply scenario.

The project will have good economics under well thought out configuration. If the joint venture with BP would not be possible due to any reason such as the demand made by BP to be a joint venture partner, then the alternate options should have been examined.

In such circumstances, one tends to think that the decision of Indian Oil Corporation to cancel the acetic acid joint venture is unwise and a panicky move. It should reconsider it’s decision.

UNRELATED DIVERSIFICATION PLANS OF ONGC, INDIA

ONGC’s proposed unrelated diversification plans

It is reported that ONGC is looking for joint venture partners to set up 6000 MW of solar and wind energy projects  It is said that the joint venture would invest Rs.3750 crores and would target to set up atleast 2000 MW of capacity by 2020.  In this, 1500 MW would be wind power while 500 MW would be solar power capacity.

Unmet targets of ONGC

ONGC,  a Government of India undertaking,  has the task of working on gas exploration projects and increase the domestic production of natural gas.ONGC  has huge task before it, as India is highly deficient in natural gas production. Present import of natural gas in the country is around 13 billion cubic metre which is likely to go up substantially, if adequate gas exploration efforts would not be stepped up to increase the production of natural gas in India.

ONGC has still a long way to go to achieve its objectives and meet the needs and expectations of the country. It’s gas exploration efforts have to be increased to a very great extent.

A June 2013 report by Barclays Equity Research notes that ONGC has missed production targets for the last five years due to endemic project delays with its 40 large projects costing $14 billion running 22 months late on an average. The report adds that.  further delays are expected; for example, the 13 projects that ONGC expects to come on stream by end FY14.

Will ONGC bite more than what it can chew?

Under such circumstances, it is not clear as to why ONGC want to diversify  in setting up solar and wind power projects. While, no doubt, solar and wind power projects are of vital national importance, the question is whether ONGC should get into such areas, in which it has no particular specialization, particularly when its main task of stepping up natural gas production itself remains considerably incomplete.

While there is no logic for indulging in such unrelated activities, ONGC will bite more than what it can chew by taking up such projects and divert its management time and attention.

Coal India’s unrelated ambition

A few weeks back, we heard about Coal India , which is involved in mining of coal, planning to enter into business of fertilizers and chemicals using coal gas. Similar to ONGC, Coal India is also planning for unrelated diversification, while its objectives of stepping up production of coal in the country remains considerably unfulfilled  causing huge import of coal, inspite of the availability of large reserves  of coal in the country.

India imported over 80 million metric tonne of coal last fiscal. Nearly 50 million metric tonne of the imports went to meet shortfall in supplies from state run monopoly Coal India, which produced less than the target.

Need for focus on core areas of activities

Diversification of activities by large public sector companies involved in vital fields should be stopped forthwith and they should be told firmly by Government of India to focus on core areas of activities for which they have been set up.

Government of India should immediately ask ONGC  and Coal India not to venture into new and uncharted areas, which would  make them pay divided attention to the much needed efforts in the  core areas of their functions.

Avoidable gas pipeline explosion in Andhra Pradesh , India

The  natural gas pipeline explosion  in Andhra Pradesh on 27th June ,2014  is an unfortunate occurrence . Many other accidents that have happened in India  in recent times including the repeated accidents in the match / fire works factories in Virudhunagar, Sivakasi region in Tamil Nadu are all avoidable . Certainly , such accidents indicate that the top administration in the establishments have  not  been adequately alert and have  not enforced  efficiency in adequate measure to ensure that proper safety measures would be adhered to and implemented.

While it is a fact that this is not the first time that explosion in natural gas pipelines have taken place in the world , every enquiry after the incident across the world have pointed out to deficiency in management of maintenance practices and lack of care on the part of the persons at the shop floor who handle the equipment immediately.

In the case of the gas pipeline,  there are well established procedures to ensure safety in the pipeline such as periodical hydro static  testing of the piping system, use of smart pigs technology (equipped with rhobotic cameras and sensors to check pipe thickness and welds).  If such  testing procedures and safety practices are scrupulously followed , such accidents would  become very rare.

Obviously,  GAIL management must accept responsibility for the accident which resulted in death of several innocent persons and it should accept blame ,  without pointing fingers  at  some other target. Such explanations  given by some quarters  , as per the press report,  that fire was caused by some one lighting a stove are ridiculous.

While , no doubt the government has ordered an enquiry , many enquiries conducted in the past have not resulted in any improvement. The fact is that those who have failed to perform duties  at adequate standards at various levels have not been taken to task.

In the wake of  this natural gas pipeline explosion , some  NGOs  have now started saying that gas pipeline project in Tamil Nadu should be given up. It is necessary to understand clearly  that such accidents occur not due to engineering and technology issues but only due to lack of care in enforcing the safety guidelines.

The public should not get confused with an impression that natural gas is harmful and gas transportation should be given up , which would amount to counter productive reaction.

ALL INDIA ESSAY COMPETITION FOR COLLEGE STUDENTS ON “NATURAL GAS PRICE REVISION BY GOVERNMENT OF INDIA – IS IT NECESSARY OR AVOIDABLE?”

Nandini Chemical Journal , a renowned  online monthly journal dedicated to the cause of chemical and allied industries  and published from Chennai by a team of chemical engineers, announces  All India Essay Competition for  college students on “Natural gas price revision by Government of India – Is it necessary or avoidable?”.

Objective

Government of India notified price revision of  natural gas with effect from  1st May 2014, based on the recommendation of  the Rangarajan Panel. There are divergent  views in the country, as to whether it would be appropriate to increase the price of natural gas or whether it would be a counter productive move.

This essay competition is organized by Nandini Chemical Journal, to provide an opportunity to the college students all over India to introspect on this subject of great national importance and provide their views.   The views of the students would be forwarded to the Prime Minister of India.

The essay should consist of maximum of 2000 words and should be written in English.

Eligibility:-

All students studying   in Indian universities  at under graduate, post graduate and doctoral level  can participate in the essay competition.

Prize :  Five prizes would be awarded  to the best of entries.

Last date  & address details :

Last date for submission of essay is  5th June, 2014.  Essay should be sent either by post or email to the following address:

Nandini Chemical Journal, M 60/1, 4th Cross Street, Besant Nagar, Chennai-600090.         Email:- nsvenkatchennai@gmail.com     Tel.:  91-44-43540719 / 43511945,/24916037

DISTRESS CONDITIONS FACING F A C T IN KERALA (INDIA)

It is extremely disturbing to read  the statement of the Chairman of  FACT in Kerala  during  his interaction with media persons  at the Regional Committee Meeting of the Fertilisers Association of India   (media  report dated 1st May, 2014)  that the operations of   FACT  would come to a stand-still, if the Government  of India would  fail  to come out with the revival package immediately.

Several fertiliser units in South India, such as, SPIC and Madras Fertilisers in Tamil Nadu and FACT in Kerala, are facing critical financial conditions threatening their survival, due to their dependence on Naphtha as feed stock instead of natural gas, which is available  to several other fertiliser units in Northern and Western India but not to the fertiliser units in South India.

The cost of production of Ammonia based fertiliser from Naphtha  is not competitive with that of the natural gas based units and Government of India should recognise this fact while  taking steps to revive the three important fertiliser units in South India, viz. FACT, Madras Fertilisers and SPIC.   It is well known  that the problems faced by these units in South India  are not due to any  technological inadequacies  or inefficient operating parameters but only due to the feedstock issues (their dependence on Naphtha as feed stock) ,  which are beyond the control of these units. These companies over the last several years have accumulated huge losses, as the Government of India has failed to provide adequate and appropriate subsidy and other form of support for these companies earlier.

It takes at least three to four years to set up large urea and di-ammonium phosphate fertilizer plants involving thousands of crores of rupees of investment.  While the existing fertiliser plants in south India are withering away, new natural gas fertiliser projects are being planned   and the existing plants are sought to be expanded in other parts of the country. Any unfortunate closure of these fertiliser units in south India namely, Madras Fertiliser, SPIC and FACT would result in huge loss of production capacity in the country.

 

Thousands of crores of rupees are being spent every year in importing Urea and di-ammonium phosphate fertiliser and due to the fluctuating inter-national market price and rupee devaluation, the money spent in such imports are steadily increasing at alarming level.  Allowing the existing operating units to be closed and resorting to imports at huge cost or setting up new projects with huge investment is not a wise policy.

Careful calculations reveal that sustaining the operations of the existing fertiliser units in South India by providing them necessary fiscal support is a necessary decision  that would be pragmatic, considering the several obvious  long term and short   term benefits  for the region and the country as a whole .

Allowing the closure of these fertiliser units in South India would amount to an economic and social tragedy   for   the region and the country and that should be avoided.

It is hoped  that the next  Government of India would deal with these issues with foresight and vision by framing appropriate policies and programmes, to stabilise  the operations of  these fertiliser projects in South India.

INVESTIGATIVE BOOK ON “CASE FOR RECONSIDERING RECOMMENDATION OF RANGARAJAN PANEL ON GAS PRICE”

Nandini Consultancy Centre, a firm of chemical business consultants  based in Chennai and Singapore  has now published well researched book on  “Case for reconsidering recommendation of Rangarajan Panel on gas price”

Background

Rangarajan panel was appointed by Government of India to recommend appropriate policies for determining the price of natural gas in India. Subsequent to the submission of recommendation, Government of India issued notification accepting the recommendation of Rangarajan panel and for implementing it from
1st April 2014.

However, the Election Commission deffered the implementation until the completion of parliamentary election.

Implementation of recommendation of Rangarajan panel would result in almost doubling of the natural gas price  in India. The panel suggested new formula that would be applicable till March 31st, 2019. The rates would change every quarter based on twelve months average of global rates and LNG imported prices with a lag of one quarter. This recommendation is causing  considerable concern amongst the natural gas consumers such as urea fertilizer units  and power projects.

This well researched investigative  book discusses the implications of the recommendation of Rangarajan panel on natural gas price and concludes that the recommendation should be reconsidered.

Author

The book has been written by  Mr.Swaminathan Venkataraman, Chemical Engineer and MBA (Indian Institute of Management, Ahmedabad), who has long experience in industrial management functions in multi national companies.

Mr.Swaminathan Venkataraman is Director of Nandini Consultancy (S) Pte Ltd.,  Singapore.

 

Foreword

Foreword for the book is written by Dr.R.P.Kaushik, Former Indian Ambassador of Turkmenistan

Contents of the book

Section  I              Back ground and time line

Section  II             India’s projected gap in supply for natural gas

Section  III           India’s track record in gas exploration

Section  IV            India’s increasing dependence on LNG import

Section  V              Price scenario for natural gas  and cost of production

Section  VI            Basis for Rangarajan panel recommendations  and the claimed benefits

Section  VII           Likely impact of gas price increase  on Indian urea industry

Section  VIII          Likely impact of gas price increase  on power sector

Section  IX            Observations on the impact

Section  X           Why Rangarajan panel recommendation can not be  accepted?

Section  XI            Hold on to present arrangement

Price & delivery

Price is Rs.300/- (Rupees three hundred only)

 

 

For details, please send enquiry to    info@nandinichemical.com

PUBLICATION ON OVERVIEW OF GLOBAL ALGAE TECHNOLOGY EFFORTS

Nandini Consultancy Centre has released an investigative and updated publication on “Overview of Global Algae Technology efforts”.

Importance of algae

Microalgae, a large and diverse group of unicellular photo and heterotrophic organisms, have attracted much global attention in recent years for the valuable natural products they produce, their ability to remediate effluents and for their potential as energy crops.

The modest agricultural and resource requirements of microalgae make it an attractive low-cost alternative feedstock.

Algae can be used as source for biofuel, bioethanol and biobutanol. Apart from this, algae can also be used for the production of hydrogen (for use in fuel cells) and for the production of methane gas, which can be used as biogas for use as fuel and feedstock. In addition, algae is carbon neutral and co products can be obtained from it including high protein biomass for use as animal feed.

The U.S. Department of Energy’s (DOE) National Algal Biofuels Technology Roadmap, envisages an important role for algae in the energy management in the coming years all over the world.

Research efforts

More than one hundred firms across the world are working on cultivation and harvesting of algae biomass and production of algae biofuel and other derivative products such as ethanol.

Researchers are trying to figure out how to grow enough of the right strains of algae and how to extract the oil most efficiently.

Large scale production for algae based biofuel and derivative products are expected to start between now and 2020 in several countries.

Highlights of contents of the book

  • Technology development efforts of 62 research and development organisations
  • Broad details of pilot plants, semi commercial plants, commercial plants being operated or under implementation by 20 organisations
  • Broad details of technologies offered by 15 organisations
  • 33 patent details relating to various aspects of algae processing in recent years
  • Activities of important 8 promotional bodies and funding agencies
  • Address details of the above organizations

 

Methodology of study

This book has been prepared on the basis of extensive desk research and quick survey, traces the significant research and development efforts now taking place across the world on algae relating to cultivation practices, harvesting, extraction of oil, production of methane gas, ethanol, butanol, hydrogen, transesterification process for algae biofuel from algae bio oil etc.

Why should you study this book?

This book gives a bird’s eye view of the overall algae technology development efforts across the world.

This book would be of great asset to organizations and individuals desiring to have broad understanding of the developments relating to algae technology, that would enable them to work out their preliminary strategies to exploit the opportunities.

Authors

The book has been edited by a  team of chemical engineers and technologists, with decades of hands on experience in process management functions and chemical business related activities.

Price

The price of the book  is US$ 200  (US Dollars Two Hundred Only)

The payment can be made via wire transfer or credit card.

Delivery

The book would be sent to you by email in pdf format on receipt of order along with the payment.

info@nandinichemical.com

BIOFUEL FROM AGRICULTURAL WASTE

Biobased fuels and chemicals are today produced largely using sugar from corn in the U.S. or sugarcane in Brazil.

Worthwhile efforts have been made in the field of production of bio fuel from agricultural waste.

The important organizations involved in the field are given below:

 

Beta Renewables, Italy

Gruppo Mossi & Ghisolfi subsidiary Chemtex,USA

BP , USA / Brazil

Shell, Canada

DuPont, USA

Ineos, USA

Ceres, USA

Enerkem Inc.,Canada

Edeniq, USA

Gevo / Beta Renewables, Malaysia

BASF,USA

Danisco and DuPont,USA

GCB Bioenergy journal

HPCL, India

BIO TECH ROUTES FOR HITHERTO PETROCHEMICALS – A FORTHCOMING PUBLICATION

Internationally, research efforts are now underway with frantic speed to develop  bio technology routes for the products, which have until recently been produced from petrochemical feedstock.

Such bio technology oriented R&D efforts have been necessitated, not only to make the process more eco friendly and avoid environmental issues,  but also due to the need to tackle the problem of increasing petrochemical feedstock prices. Many of  such efforts have already borne fruit with the setting up of semi commercial / commercial stage operations.

Some of the products for which the bio technology routes have been developed successfully in recent time include the following.

 

*        Bio 1,3 propanediol

*        Bio 1,4 butanediol

*        Bio acetic acid

*        Bio acrylic acid

*        Bio adipic acid

*        Bio butadiene

*        Bio caprolactum

*        Bio dicarboxylic acid

*        Bio epichlorohydrin

*        Bio ethylene

*        Bio formic acid

*        Bio glycolic acid

*        Bio metha methyacrylate

*        Bio methanol

*        Bio monoethylene glycol & Bio polyethylene terephthalate

*        Bio n butanol

*        Bio n propanol

*        Bio p xylene

*        Bio PHA

*        Bio polybutylene terephthalate (PBT)

*        Bio polylactic acid

*        Bio propylene

*        Bio propylene glycol

*        Bio succinic acid

*        Bio syngas

*        Bio thermoplastics

Nandini Consultancy Centre has now brought out a publication describing global technology development efforts for the above bio chemicals.

What strategies for Indian chemical industries in 2014 ?

It is necessary that the Indian chemical industry should not copy the pattern of growth in China or middle east countries and other developed countries, for working out its future growth strategies. It has to evolve ideas and vision that would be in tune with India’s strength and resources as well as the issues and its needs.

The constraints in the availability  of petro based  feedstock and petro based energy source is a grim reality facing Indian chemical industries that has to be duly recognised and strategies should be worked out accordingly.

Obviously, appropriate  project opportunities for Indian chemical industries  exist in the areas of agro and mineral based chemicals as well as  biotech and specialty chemicals. One or two projects can be mentioned as  immediate examples. India has emerged as one of the large importers of acetic acid and methanol in recent years and the import demand for these vital basic chemicals are bound to increase in the coming years. It appears that it  would be extremely difficult for India to set up large sized projects for petro based methanol and acetic acid that would be globally competitive and that would make such Indian projects face the competitive threat from imported product.

Nevertheless, it is important that India has to create capacities for such important building blocks like methanol and acetic acid . In these compelling conditions, India has to look for bio based routes for the production of bio methanol and bio acetic acid.  Globally, important technologies have been developed for the production of bio  acetic acid from cellulosic raw material such as bagasse  and bio based route for  methanol have also been developed. Semi commercial plants have been set up in developed countries  already. Indian chemical industries should immediately look for and seize such project opportunities by initiating R&D efforts and acquiring technology from abroad. Similarly, there are many other opportunities  in appropriate areas for India such as setting up large algae farms and production of ethanol, butanol etc. from algae biomass by process of fermentation, apart from producing algae bio fuel and methane gas for use as fuel in power projects.

The strategies for Indian chemical industries in 2014 should revolve around such appropriate projects for investment in India, which would sustain the growth and enable India to win a unique slot for itself in the global market. The capability of Indian project promoters to rise up to the challenge remain to be seen.

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