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Extracts from Nandini Chemical Journal, May 2014

BIOADIPIC ACID MARKET | TORREFIED WOOD MARKET| TAPTI GAS FIELD
Highlights of Some of the Articles

TALK OF THE MONTH : REJECT GOVERNMENT OF INDIA’S NOTIFICATION ON NATURAL GAS PRICE INCREASE
BIOADIPIC ACID -TECHNOLOGY DEVELOPMENT EFFORTS
TORREFIED WOOD - INVESTMENT OPPORTUNITY
RELIANCE WANTS FREE MARKET PRICE FOR NATURAL GAS
COUNTER PRODUCTIVE DISPUTE BETWEEN ONGC & RELIANCE
TAPTI GAS FIELD – FIRST OFF SHORE FIELD TO BE ABANDONED IN INDIA
SOME DETAILS ON KOCHI LNG PIPELINE PROJECT
WILL THE LNG PIPELINE PROJECT IN TAMIL NADU BE GIVEN UP ?
POWER PROJECTS REMAINING SHUT DUE TO WANT OF NATURAL GAS
CRUDE NATURAL GAS OUTPUT TREND OF OVL
USE OF HEAVIER CRUDE IN INDIAN REFINERIES RECENT TRENDS
DIFFICULT TIMES FOR FACT IN KERALA
F A C T IN KERALA -- NEED FOR SUPPORT
ETHANOL FUEL BLENDING PROGRAMME SHORT OF TARGET
POLYSILICON – GLOBAL SCENARIO
CONVERSION OF COAL TO HIGHER VALUE HYDROCARBONS - RECENT TRENDS

TALK OF THE MONTH

REJECT GOVERNMENT OF INDIA’S NOTIFICATION

ON NATURAL GAS PRICE INCREASE

Government of India issued notification for increasing the price of natural gas from 1st April 2014 , after accepting the recommendation of Rangarajan panel for revising the gas price. Fortunately, the Election Commission deferred the implementation of the notification until the completion of parliamentary election.

Implementation of recommendation of Rangarajan panel would result in almost doubling of the natural gas price in India immediately and will further push the price at periodical intervals.

Rangarajan Panel recommendation is illogical and flawed on several counts, including the basic parameters considered in the price revision formula. It will result in steep rise in the cost of production of urea and power and will cause additional subsidy burden for the government to the level of Rs.90,000 crores in five years and that would lead to severe cost push inflation.

Rangarajan Committee argues that such gas price increase is necessary to encourage the gas producers to increase the gas production. But, this may not happen , since there are several other technical issues involved in increasing the gas production.

There are many appropriate and alternative options to reduce the dependence on imported crude oil and natural gas, by promoting projects such as algae biofuel, off shore wind energy projects etc. which the UPA government has ignored.

This revision of gas price would considerably help Reliance Industries and other gas producing companies such as ONGC and other overseas companies involved. It causes suspicion that UPA issued the notification in such great hurry just before the election.

A well researched book on “Case for reconsidering recommendation of Rangarajan panel on gas price “ has been written and published by Mr. Swaminathan Venkataraman, a senior chemical engineer and MBA from Indian Institute of Management ,Ahmedabad. The book exposes clearly number of flaws in the decision to revise the gas price.

It is necessary to launch a strong country wide protest against such steep revision of the gas price and the next government should be forced to reconsider the notification.

BIOADIPIC ACID -TECHNOLOGY DEVELOPMENT EFFORTS

* Adipic acid is the key ingredient in the production of Nylon 6,6 polymers.

* It is also used in the manufacture of adipate plasticizers. Other sectors of application include polyurethanes,unsaturated polyester resins, chemical intermediates

Adipic acid has traditionally been produced from various petroleum based feedstocks (e.g., phenol, benzene and cyclohexane), but shifts in the hydrocarbon market have resulted in the virtual elimination of phenol as a feedstock. In recent years, cyclohexane based processes have accounted for about 93% of global production capacity.

Bio based process routes for bioadipic acid developed by Rennovia, Verdzyne and others,Comparison between process routes developed by Rennovia process & Verdezyne,etc are discussed in this article.

TORREFIED WOOD - INVESTMENT OPPORTUNITY

Torrefied wood is produced from biomass material that goes through a process called torrefaction and this process modifies the chemical properties of waste wood and biomass.

Torrefied biomass is produced by a thermo chemical treatment process, similar to roasting or mild pyrolysis.

In the process for the production of torrefied biomass, some water, VOCs and hemicelluloses in woody biomass are separated, leaving only cellulose and lignin to produce torrefied biomass, which is a charcoal-like carbonaceous residue .

Depending on process time, the torrefied wood yield varies between 66% and 75%.

Torrefied biomass is on the brink of becoming a viable feedstock for utility-scale electricity generators, potentially displacing coal as well as some conventional untreated biomass and wood pellets.

Following details are discussed in this article.

  • Process for torrefaction
  • Benefits of torrefaction
  • Torrefied wood pellets compared to coal
  • Global scenario
  • Global demand potential
  • Prognosis
RELIANCE WANTS FREE MARKET PRICE FOR NATURAL GAS

The Mukesh Ambani led Reliance Industries (RIL) told the Supreme Court that it would raise the gas pricing issue in its arbitration with the government, over alleged under production at the KG-D6 field and "fight for a free market price.

Till now, RIL has been wanting to resolve the dispute with the government through arbitration relating to penalties to the tune of $1.8 billion (in the form of disallowing cost recovery), for not meeting the committed production targets.

The above subject is further discussed in this article.

COUNTER PRODUCTIVE DISPUTE BETWEEN ONGC & RELIANCE

ONGC's discovered gas fields are bordering the Reliance operated D6 block in the Krishna-Godavari basin.

Reliance Industries wants to transport gas from a new field in the KG-D6 block with a pipeline through ONGC's adjoining block, but ONGC is reluctant to allow this, giving another twist to their relationship a year after they agreed to look at prospects of sharing infrastructure in the deep sea region.

The above subject is further discussed in this article.

TAPTI GAS FIELD – FIRST OFF SHORE FIELD TO BE ABANDONED IN INDIA

The Tapti field of the Panna-Mukta-Tapti consortium will be abandoned in a year’s time by the consortium partners because of the well’s poor output. It will be the first offshore field to be abandoned in India. The field consortium partners are ONGC with 40% stake and British Gas India and Reliance Industries Ltd., (RIL) with 30%stake each, respectively.

The JV partners witnessed poor performance from the newly drilled wells. Re evaluation of the field showed a significant drop in reserves. The field is moving towards early abandonment.

The jv partners have submitted their proposal to the Ministry of Petroleum and Natural Gas for early abandonment of the field.

The above subject is further discussed in this article.

SOME DETAILS ON KOCHI LNG PIPELINE PROJECT

Kochi LNG terminal

Kochi LNG terminal project was realised after 12 years of its conception and it is the first of its kind in south India. The terminal has already received its LNG cargo. This Rs.4200 crore project is now utilising only 8% of its total capacity, as the Kochi-Bangalore and Kochi – Mangalore pipelines are yet to be laid.

Following details are discussed in this article.

  • LNG pipeline project
  • Kochi-Mangalore pipeline : (Pipeline in Karnataka)
  • Customers for LNG
WILL THE LNG PIPELINE PROJECTIN TAMIL NADU BE GIVEN UP?

The disturbing news has come that GAIL India Ltd. has decided to cancel contract worth Rs. 200 crore for laying the 310 kilometre Tamil Nadu stretch of the Kochi – Kottanad – Mangalore – Bangalore gas pipeline, after GAIL has spent around Rs. 650 crore on contracts , which included pipe procurement and laying the pipes for the Tamil Nadu stretch.

Probably, GAIL has decided to give up this project once for all , though it says that its final decision will depend on the outcome of the Supreme Court case, which is a long drawn affair.

Obviously, this vital and important project has not been handled properly both by GAIL India Ltd. as well as the Tamil Nadu government.

Following details are discussed in this article.

  • Views of the agriculturists
  • Lack of understanding of GAIL
  • Role of Tamil Nadu Government
  • Plight of Kochi LNG project
  • Loss to Tamil Nadu Government
CRUDE NATURAL GAS OUTPUT TREND OF OVL

Crude oil production

ONGC Videsh (OVL), the overseas arm of state owned Oil and Natural Gas Corp (ONGC), has reported a 26% jump in crude oil production for 2013-14, as recent acquisitions offset a natural decline in older fields.

OVL produced 5.491 million metric tonne of crude from assets in over 16 countries in 2013-14, against 4.341 million metric tonne in the previous year.

While its fields in South Sudan and Syria were shut for geopolitical reasons, the acquisition of 3% interest in an Azerbaijan oil field and an additional 12% stake in a Brazilian field led to the rise in production.

OVL's South Sudan properties, which produced 45,000 barrels per day, has been shut since December while its 70,000-80,000 bpd Syrian oil fields have not produced any oil for two years due to the geopolitical situation, including EU sanctions against that country.

Following details are discussed in this article.

  • Natural gas production
  • Recent acquisitions
USE OF HEAVIER CRUDE IN INDIAN REFINERIES RECENT TRENDS

India’s refinery capacity

At present, India has 22 refineries with total capacity of 215 million metric tonne in FY15.

IOC is likely to commission a 9-million metric tonne per annum greenfield refinery at Paradip in Odisha, while two other state run refiners, BPCL and HPCL, recently opened greenfield refineries of 6 million metric tonne per annum in Bina and 9 million metric tonne per annaum in Bathinda, respectively (HPCLs is a joint venture with Mittal Energy).

In 2008, Essar Oil commissioned a 10.5- million metric tonne per annum refinery in Vadinar, which was increased to 18 million metric tonne per annum in 2012 and further to 20 million metric tonne per annum capacity now.

In the brownfield segment, IOC, which had commissioned its 3- million metric tonne per annum refinery at Koyali in Gujarat in 1965, has upgraded it to 13.7 million metric tonne per annum.

As for projects in the pipeline, BPCL is planning to expand the capacity of its Bina refinery to 8.85 million metric tonne per annum and that of Numaligarh refinery to about 9 million metric tonne per annum from 3 million metric tonne per annum now.

IOC too plans to take the capacity at its Koyali refinery to 18 million metric tonne per annum and that in Panipat to 21 million metric tonne per annum.

Essar Oil is reported to have plans to ramp up the Vadinar refinery capacity to 40 million metric tonne per annum.

IOC is also planning a new refinery on the West Coast.

Following details are discussed in this article.

  • Shift towards heavier crude oil
  • Complexity of refineries
  • Supply source of crude oil
  • Discount trade
  • Need for diversified crude sourcing
DIFFICULT TIMES FOR FACT IN KERALA

Fertilizers and Chemicals Travancore (FACT) is facing a serious crisis due to shortage of working capital.

The company is facing serious cash flow problem with most of the plants not operational.

If the revival package approved by the Board for Reconstruction of Public Sector Enterprises (BRPSE) is not cleared immediately, the company would be in serious trouble with the net worth of the company having eroded.

The above subject is further discussed in this article.

FACT IN KERALA - NEED FOR SUPPORT

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 1 st May,2014) that the operations of FACT would come to a standstill, 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 above subject is further discussed in this article.

ETHANOL FUEL BLENDING PROGRAMME SHORT OF TARGET

The government's plan to blend petrol with 5% ethanol has fallen far short of target, creating problems for sugarmills, which supply the ethyl alcohol.

The Indian sugar industry has the capacity to produce 2500 million litre of alcohol annually. Its major buyers are chemical industry, whose demand is 600 million litre, potable alcohol industry which sources 1100 million litre and oil companies need around 1000 million litre annually.

Against the requirement of 1000 million litre of ethanol for mandatory 5% blending with petrol, oil companies have contracted just 620 million litre, half of which is yet to be lifted from depots.

The above subject is further discussed in this article.

POLYSILICON – GLOBAL SCENARIO

Recent shakeout in the photovoltaic industry has reduced the number of polysilicon producers.

The global polysilicon market is expected to grow at 12% per year through 2017 and prices are expected to rise to reinvestment levels..

Global polysilicon shipments are expected to reach 370,000 metric tonne by 2017, with the vast majority being used by the solar industry.

Following details are discussed in this article.

  • Production of polysilicon by Wacker Chemie
  • Wacker Chemie’s deal in China
  • Price of polysilicon
CONVERSION OF COAL TO HIGHER VALUE HYDROCARBONS RECENT TREND

Coal conversion to higher value hydrocarbons is driven by energy security concerns and logistics gains.

Following details are discussed in this article

  • Scenario in South Africa
  • Scenario in China
  • Coal to SNG (synthetic natural gas )
  • Production of chemicals from coal
  • Coal to liquid (CTL) devoted catalyst facility
  • Environmental issues
  • Economics of the projects
OTHER FEATURES

PLANT CLOSURES

The following articles discuss about the closure of plants

  • Nufarm will close production facilities in Australia
  • Rike Chemical terminates construction of ASA colour extrusion masterbatch project

ANTI DUMPING PAGE

The antidumping measures introduced in the last few weeks on the following products are discussed

  • Stainless steel
  • Perchloroethylene
  • China’s rare earth restrictions
  • Solar equipment

NEWS ROUND UP – INTERNATIONAL

The recent developments on the following products/events are discussed

  • Aniline plant
  • PBT plant
  • Acrylic fibers manufacturing facility in Malaysia
  • NdPBR project in Brazil
  • Chlor alkali joint venture in USA
  • Acrylic Acid and SAP Plants in Nanjing,China
  • Plastic bags usage in EU
  • Dispute over acrylonitrile technology
  • Reverse osmosis membranes

TECHNOLOGY DEVELOPMENT

The recent technology developments on the following products are discussed

  • Xenon – a noble gas
  • Bulk metallic glass
  • Glow in the dark road markings
  • Energy savings for China's PET packaging converters
  • Bioethylene technology
  • Making water from thin air

AGRO CHEMICAL PAGE

The recent developments on the following agro products are updated

  • Insecticides (India) gets patent
  • Certification norms for fruits, veggies to pacify EU
  • Jackfruit as substitute for staple crops
  • Butter from rice bran oil

PHARMA PAGE

The recent developments on the following pharmaceuticals are updated

  • Control of diabetes without insulin shots
  • Sale of mature drug portfolio

ENVIRONMENTAL PAGE

The recent development against F gas emission problems in EU is discussed.

  • Move for F gas emission cuts in EU
OTHER ARTICLES
  • Price details - Natural rubber
  • Ex factory price of Chemicals in China in March 2014
  • Tenders
  • Chemicals imported at the Chennai port during month of February 2014
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