Infrastructure and Energy Sector

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RIL, Essar Oil offer to buy BP's Africa assets: report

India Infoline News Service / 08:27 , Jul 29, 2010
BP intends to sell US$30bn of assets, mainly upstream oil and gas fields,over the next 18 months to help pay for the Gulf of Mexico oil spill clean-up and compensation
Reliance Industries Ltd (RIL) and Essar Oil have reportedly offered between US$400 to US$500 million for BP's assets in the East African nation.

BP is reportedly selling retail outlets, terminals and aviation fuel stations in Botswana, Tanzania, Namibia, Malawi and possibly also in Zambia, to cover costs related to the worst oil spill.

According to reports, BP intends to sell US$30bn of assets, mainly upstream oil and gas fields,over the next 18 months to help pay for the Gulf of Mexico oil spill clean-up and compensation, adds report.
 

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ONGC, PetroVietnam to jointly bid for BP assets

BS Reporter / New Delhi July 28, 2010, 1:53 IST
Oil and Natural Gas Corporation (ONGC) and PetroVietnam (PV), the state-owned exploration and production companies of the two countries, will jointly bid for BP's assets in Vietnam, Union petroleum secretary S Sundareshan told reporters here.

"We met with the prime minister of Vietnam and we had said we will work with PetroVietnam (to buy BP's stake). We are discussing with BP and PetroVietnam," Sundareshan said, adding that a formal bid was expected in a few weeks.

BP plans to sell assets worth up to $30 billion over the next 18 months, including those in Vietnam and Pakistan, primarily in the upstream business, to fund mounting costs from its massive oil spill in the Gulf of Mexico.
Its assets on the block in Vietnam include a producing gas field (Nam Con Son) where ONGC's overseas arm, ONGC Videsh Ltd (OVL), already has 45 per cent stake, while PV and BP hold 20 and 35 per cent, respectively. Other assets are a 370-km gas transportation pipeline and a 720-Mw power plant. Gas production from the field is estimated at around 12 million standard cubic metres a day.

A senior ONGC official said since OVL and PV were already partners in the consortium and both were keen on BP's stake, the two are working out possibilities of a joint bidding. "The existing partners have a first right of refusal," he noted.
 

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India Digs Under Top of the World to Match Rival


ROHTANG PASS, India — The name of this white-knuckle pass, one of the highest in the world, means "pile of corpses" in the Tibetan language. Every year a few dozen people die trying to cross these spiky Himalayan peaks.For six months the road is snowbound, putting at the mercy of the elements tens of thousands of Indian troops posted beyond it in this remote but strategically important region along India's long and disputed border with China.

In the past decade, as China has furiously built up its military and civilian infrastructure on its side of the border, the Rohtang Pass on the Indian side has stood as mute testimony to India's inability and unwillingness to master its far-flung and rugged outermost reaches.

But now, India is racing to match its rival for regional and global power, building and bolstering airstrips and army outposts, shoring up neglected roads and — finally, decades after it was first proposed — building a tunnel to bypass the deadly Rohtang Pass.

In June, work started on the ambitious project, which will take five years and require boring five miles through the Pir Panjal range. Several other tunnels, which would allow all-weather access to Ladakh, which abuts the Tibetan Plateau, are also in the works.

"What India is belatedly seeking to do is to improve its defenses by upgrading its logistics," said Brahma Chellaney, an analyst who tracks the India-China relationship at the Center for Policy Research in New Delhi, in an e-mail. "By building new railroads, airports and highways in Tibet, China is now in a position to rapidly move additional forces to the border to potentially strike at India at a time of its choosing."

As a result, he said, "The Sino-Indian border remains more unstable than the Pakistani-Indian frontier."

India and China are hardly enemies, but much of the 2,521-mile border they share is disputed or ill marked. The two countries fought a brief but bloody border war in 1962, and while these days they have, on the surface, a mostly cordial relationship, it is marked by tension over border disputes and the future of Tibet and its leader, the Dalai Lama, who lives in exile in India.

China's push to develop its infrastructure on its side of the border — including an all-weather railway to Tibet that includes the world's highest tunnel, at 16,000 feet — is viewed with considerable suspicion in India.

For much of its history, India has regarded the Himalayas as a form of protection, not a barrier to be overcome, said Rajeswari Rajagopalan, an expert in India-China relations at the Observer Research Foundation in New Delhi.

"The Indian side has been very slow to develop the border areas," Ms. Rajagopalan said. "They believed if you improved the infrastructure it would only allow the Chinese to walk into your territory. This was very foolish and naïve."

Three hundred miles of winding road lead from the town of Manali, through the verdant Kullu Valley, to Ladakh, an alpine desert that abuts the Tibetan plateau.

Tens of thousands of Indian Army troops are stationed among Ladakh's barren peaks, and the region borders several potential trouble spots, including Aksai Chin, a region that India claims as part of its territory but that China administers. North of Ladakh is the Siachen Glacier, a river of barren ice that India and Pakistan have fought over intermittently since the 1980s. Both countries maintain outposts on the glacier, which sits at an altitude of 20,000 feet.

During the summer, thousands of trucks, laden with supplies to last the harsh mountain winters, rumble up the two roads that lead to Ladakh, from Manali and Srinagar, the summer capital of Indian-administered Kashmir.

The road from Ladakh to Srinagar is also closed in the winter, and because of its proximity to the Line of Control that splits Kashmir between India and Pakistan, Indian officials worry that the road can easily be cut, as it was in 1999, when the two countries clashed at Kargil.

Gurmeet Kanwal, a retired brigadier who runs the Center for Land Warfare Studies, a New Delhi research institution, said India could not afford to be cut off from its most vulnerable reaches half of the year.

"As long as we have these territorial disputes you cannot rule out another border conflict," Brigadier Kanwal said. "We would like to make sure that we can deploy our forces in the right quantities in the right places."

The tunnel has been on the drawing board for decades, said P. K. Mahajan, the chief engineer on the $320 million project. He first became involved as a young engineer in 1988, when he helped carry out a feasibility study, five years after the project was first proposed by Indira Gandhi, then the prime minister.

"It is only now that these projects are seeing the light of day," Mr. Mahajan said.

The challenges of building a long tunnel in the rough environment of the Pir Panjal are enormous. The Himalayas are the world's youngest mountain range. They shift and grind, still moving, expanding and shrinking.That makes life tough for people like Thomas Riedel, a German contractor working at the north end of the tunnel. Because no one is sure what kind of rock will be found inside the mountain, the tunnel will be built using a painstaking method of blasting and digging, rather than the tunnel-boring machines that have revolutionized tunnel construction in recent years."Nobody can look inside the mountain," Mr. Riedel said. "That is where we will find problems."

Just weeks into what will be at least five years of digging, the workers encountered their first unexpected obstacle: a foot of snow. In June.

The tunnel will sit beneath more than a mile of snow-covered rock for much of its length. Ventilation will pose a huge problem.

People who live on the other side of the Rohtang Pass say the tunnel will transform their lives.

"For six months, we are prisoners," said Chetan Devi, a schoolteacher who lives in a town beyond the pass. "In the winter, you have to risk your life to go to Manali."

The tunnel will turn an ordeal of several hours, even in the summer, into a brisk 20-minute trip.

Virender Sharma, the chief government official in Kyelang, the main town of the Lahaul Valley, which sits between Manali and Ladakh, said that last winter 21 people died trying to cross the Rohtang Pass on foot. People were found frozen solid, he said, "sitting with rucksacks on their backs, water bottles at their sides, but they were dead."

Winters in the Lahaul Valley are a miserable affair, he said.

"During summer, it seems very pleasant," Mr. Sharma said. "In the winter, there is no light. No vegetables. No mail. Nothing to do in the evening. If there is an emergency, you are practically at the mercy of God."

For the engineers building the tunnel, it is not merely a matter of logistics, but also a matter of national pride.

"Once this tunnel is complete, it will be an engineering marvel for the whole nation," Mr. Mahajan said.
 

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http://timesofindia.indiatimes.com/...siders-Rs-50k-cr-fund/articleshow/6258830.cms

PowerMin considers Rs 50k cr fund
PTI, Aug 5, 2010, 01.15am IST

NEW DELHI: The power ministry is considering setting up of a Rs 50,000 crore fund for financing projects and may rope in Power Finance Corporation and Rural Electrification Corporation for the same. "The concept is being thought about to create a debt fund. It is shaping up. The corpus would be about Rs 50,000 crore," a top power ministry official said.

The proposal for setting up the debt fund is at a nascent stage and the ministry is yet to work out the final modalities. It is also in constant dialogue with the Planning Commission for working out a blueprint of the fund. "We are looking at where the money could be raised from, which project would be there ... we are in talks with the Planning Commission," the official said.
 

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India's first power project fuelled with Bangladesh gas to go on stream


Tripura, August 22 (ANI): India's first power project fuelled with gas from Bangladesh would go on stream from December. Chairman of India's Oil and Natural Gas Corporation Ltd (ONGC) announced this on Saturday.

The 726-mega watt plant is coming up at Palatana, in Tripura, bordering Bangladesh, which has proven gas reserves of 8.4 trillion cubic feet. The Palatana power project combined with transmission links and gas pipelines is slated to bring in investments of around Rupees 90 billion, the largest ever single investment in India's remote northeastern region.
 

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Bringing Light to India's Rural Areas


BANGALORE, INDIA — As dusk falls, the sound of children singing fills the air at the SOS Tibetan Children's Village in Bylakuppe, five hours' drive from Bangalore in southern India. Night descends on the tidy, stone-paved school campus carved out of the lush jungle.But darkness is dispelled when 20 solar-powered street lights on the campus begin to glow with a steady white light. Thirty dormitories set among groves of coconut palm trees are also equipped with solar lights — as is a nearby Buddhist monastery. They allow 1,000 children to study, eat and play during evening power cuts that frequently disrupt the refugee-village school's electricity supply.

Selco, a solar energy company, installed the lights in 2003. Since its founding in 1995, Selco, based in Bangalore, India's technology hub, has provided 100,000 homes with solar lighting systems, mostly in the surrounding state of Karnataka.

In the nearby village of Doddhosur, about 30 minutes' drive from the Tibetan school, D.S. Shivanna, a farmer, has light bulbs in five rooms of his home that are powered by a rooftop solar panel set up by Selco last year.

Doddhosur, reached by a dirt road that runs between fields of tall corn, has electricity — but power failures are common here too.

"There was no current at night," said Varshitha Shivanna, 15, who lives in the house with her grandparents. During evening power cuts, she used to rely on candles. But now, with solar light, "we can write till how much time we want. We are writing homeworks till 11."

About 70 percent of Selco's customers live in remote areas that, unlike Bylakuppe and Doddhosur, have no electricity at all. Without power, they depend on candles and kerosene lamps for lighting. About 400 million Indians lack reliable electricity, living in a world apart from the bright offices and air-conditioned shopping malls of India's cities.

A two-light Selco home system typically costs 8,500 to 11,000 rupees, or $180 to $235 — no small sum when 60 percent of the company's customers earn 3,500 to 4,000 rupees a month. But Selco works with a variety of local rural banks to help 85 percent of its customers get financing. The on-time repayment rate for its solar loans is 90 percent, said Harish Hande, its co-founder and managing director.

Selco's efforts are one example of India's broader push for solar energy. Alternative energy, like wind, biomass and solar, accounts for less than 8 percent of India's power generation. Yet the need for more clean energy in India is urgent.

India imports more than 70 percent of its oil and natural gas and relies on coal for more than half of its electricity generation. With economic growth forecast to exceed 8 percent this year, India's energy consumption is expected to double between 2005 and 2030. Such growth comes with a price. India was among the world's largest producers of greenhouse gas emissions in 2007, according to an Indian government report this year.

As part of a climate change plan unveiled two years ago, the Indian government laid out an ambitious National Solar Mission this summer. The mission document called for India to increase solar energy capacity to 1,000 megawatts by 2013 and 20,000 megawatts by 2022.

Those are lofty aspirations, considering that India's current grid-connected solar capacity is no more than 15 megawatts, according to Amit Kumar, director of renewable technologies at the Energy and Resources Institute, a private research organization in New Delhi.

"This is only the beginning of a long process," Farooq Abdullah, India's minister of new and renewable resources, said after the document's publication. "The mission is an ambitious leap of faith at an unprecedented scale."

Still, although the targets "look challenging," Mr. Kumar said, "they are really very conservative. We can go beyond that."

Mr. Hande of Selco, commenting on the government's blueprint, said, "Sometimes it's good to be ambitious." But, he added, "the important question is how it can get away from being a Delhi-centric policy. It needs to get out of Delhi into the hands of people."With an average of 250 to 300 sunny days each year, according to the government, India seems well suited to solar power. Yet the sector has not taken off, for reasons that include its high cost compared with conventional energy. Coal-powered electricity costs 3.5 to 4 rupees per kilowatt-hour, compared with 17 rupees for power produced by photovoltaic cells.Other hurdles include fragmented financing plans, a lack of strong government policies and incentives, uneven service after sales, and technical weaknesses in batteries and solar lamps for India's rugged conditions.

For solar energy to develop on a significant scale, Mr. Kumar said, India would need to bring down costs by producing indigenous technologies, devote resources to research and development and create a dedicated body independent of the central government to act as an advocate for the sector.

Plans exist to develop more large solar farms to connect to the power grid. Still, given India's diverse geography and income levels, solar farms are not the whole answer. Other options are also needed, including solar lanterns for individuals and rooftop solar panels like the ones at the Tibetan Children's Village in Bylakuppe.

Mr. Kumar's research institute brought new solar LED lanterns to market this summer, priced at 800 to 1,000 rupees, as part of its own solar initiative, which has reached 30,000 households since 2008.

Yet, despite the need and demand for solar energy, even well-established companies like Selco face their share of challenges.

Selco broke even in 2001, and profit reached 3.15 million rupees in 2005. But large German subsidies for solar installations caused a sharp spike in the price of panels from 2006 to 2008 as supply tightened. The surge in prices "almost killed us," Mr. Hande said.

The company had a loss of 7.5 million rupees in 2008-9 but returned to profit in the 2009-10 financial year, earning 3.8 million rupees on revenue of 150 million rupees.

Selco now has 150 employees, and Mr. Hande acknowledged that finding skilled employees was the company's biggest challenge and the main constraint on its growth.

India's top graduates want lucrative, prestigious jobs in technology or business, not in villages, and midlevel managers at Selco could make five times as much elsewhere, he said. But "the higher you pay, the less they will go into rural areas. Our education system is not geared toward social consciousness."

That seems not to apply to Mr. Hande himself, now 41. A graduate of the prestigious Indian Institute of Technology in Kharagpur with a degree in energy engineering and the holder of a doctorate from the University of Massachusetts, he began to conceive Selco while a graduate student after seeing people using solar lights in the Dominican Republic.

Although 5 percent of Selco's business now comes from outside Karnataka, Mr. Hande is not seeking growth in a wider market.

Instead, he wants to focus on lower-income Indians, the urban poor and ways to use renewable energy to raise incomes. For example, could a motor running on alternative energy be developed to power a customer's sewing machine or rice mill?

"Where else could we make a sustainable energy intervention?" Mr. Hande asked. "It could be in lighting or it could be in cooking. If a 1,000-rupee intervention for a cook stove would make a difference, we should do it. This will throw up surprises, as well as for the future of Selco itself."

"We want to go deeper into the strata," he added. "Geographical expansion is low-hanging fruit. Let someone else do it."
 

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Reliance discovers natural gas with Dhirubhai-52 in the deepwaters offshore India's East Coast



August 31, 2010
By Phaedra Friend Troy

Reliance Industries has made another natural gas discovery with Dhirubhai-52 at Block KG-DWN-2003/1 (D3) in the deepwaters offshore India.

The fourth successful exploration well on the block, the KGV-D3-W1 discovery well was drilled to a total measured depth of 10,010 feet (3,051 meters) in waters measuring 5,423 feet (1,653 meters) deep. The Dhirubhai-52 discovery well transected a gross natural gas pay zone of 123 feet (37.5 meters) in Piocene-aged sands.

Drilling on the well was delayed due to problems with the drilling rig's blowout preventer. Transocean's Deepwater Expedition was replaced with the Deepwater Expedition drilling rig.

Located about 28 miles (45 kilometers) from the East Coast of India, Block D3 was awarded in August 2005 through NELP V. Operated by Indian producer Reliance Industries with 90 percent interest, the D3 license is located in the Krishna Godavari Basin. Hardy Oil & Gas (LON:HDY) holds the remaining 10 percent participating interest in the license, which spans about 812,482 acres (3,288 square kilometers).

"Four successive discoveries highlight the significant prospectivity of this extensive exploration block," said Yogeshwar Sharma, Hardy CEO. "The Krishna Godavari Basin is an emerging world class basin for India."

The Government of India and Directorate General of Hydrocarbons has been notified of the Dhirubhai-52 natural gas discovery. Wireline operations and sample testing has taken place, and commerciality of the discovery is being evaluated.

"Further exploration drilling is planned in this area and we look forward to continuing to participate in unlocking of the basin's exceptional energy potential," Sharma revealed.
 

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India emerges as shale gas hub


India could soon turn into a potential shale gas destination. Even though the work has just begun in India, initial studies by state-owned Oil and Natural Gas Corporation of India (ONGC) on reserve estimation of shale gas in some of the country's sedimentary basins such as Damodar and Cambay basin


have revealed a resource potential of about 35 and 90 trillion cubic feet of gas.
This when compared with the existing gas resources in India such as the one from the country's largest gas field of Reliance Industries in the KG basin —estimated to hold some 10 tcf of gas — is indeed a massive reserve of gas.

ONGC, which took the initiative some five years back to explore shale gas, said shale sequences in well explored basins are found to be promising in Damodar, Cambay, Krishna Godavari and Cauvery basins.

"There are number of shale formations in each basin, the cumulative thickness of which are comparable or more than global best shale plays," said a senior ONGC official. "The resource estimation of all these plays together has not been carried out except the preliminary one for Damodar and Cambay Basin where it comes to 35 and 90 tcf, respectively."

ONGC said it has now hired the services of experts like Schlumberger for reserve estimation. It has also discussed the prospectivity of different basins with Ben E. Law, an international specialist on shale gas.

"Damodar Basin, where ONGC has its presence for coal bed methane, has been prioritised as the most suitable for detailed investigation and testing," the official said.

In the US, shale gas contributes nearly 14 per cent of the total gas production.
 

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Oilex strikes huge gas reserves in Gujarat


Australia's Oilex on Monday said it has made huge natural gas discovery in Gujarat that may hold over 1.5 Trillion cubic feet of recoverable reserves. Industry estimates put the total resource base or inplace reserves in the Cambay basin discoveries near the town of Khambat, 160-km south of Ahmedabad [ Images ], at between 20-30 Trillion cubic feet, almost equivalent to inplace reserves of Reliance Industries' [ Get Quote ] eastern offshore KG-D6 fields.

However, KG-D6 fields have a higher recovery factor with almost 12 Tcf of gas likely to be produced over life of the field while in Oilex's case only 1.5 Tcf can be produced as the reservior is 'tight' with low permeability.


Oilex had drilled many wells on the Cambay Field and it announced "a significant upgrade to its Reserves and Contingent Resources" based on evaluation by North American consultants NuTech Energy Alliance and Morning Star LLC.

In a press statement, Oilex said the Cambay Field may hold 853 billion cubic feet of Reserves Justified for Development plus another 720 bcf of Contingent Resources, totaling the recoverable reserves at 1.5 Tcf.

Oilex holds 45 per cent interest in the Cambay Field while Gujarat State Petroleum Corp holds the rest 55 per cent. The field was awarded to GSPC and Canada's [ Images ] Niko Resources in pre-New Exploration Licensing Policy rounds in the 1990s and Oilex steped-in upon exit of Niko.

"This (reserve estimation) follows a nine month program of extensive technical studies on the Cambay Field 'tight' reservoirs using proprietary low permeability reservoir technologies derived from similar 'tight/shale gas' projects in North America," Oilex said.

Besides gas, the field also holds 31 million barrels of condensate.

"The estimates have not been endorsed by the Government of India [ Images ] or the (oil regulator) Directorate General of Hydrocarbons," it said.

Oilex said it will submit data next month for independent reserves certification in early 2011.

"In its evaluation of the reserves and resources Oilex was advised by two North American companies - NuTech Energy Alliance, a leader in advanced petrophysical, geological and fracture stimulation solutions for 'tight' and shale gas reservoirs, and Morning Star LLC, a worldwide petroleum consulting group with expertise in reserve certification of 'tight' reservoir projects," the statement said.

"The company has renewed its focus on India and has made significant progress in unlocking the potential of the Cambay 'tight' Eocene reservoirs that extend over the 40,000 acre contract area," Oilex Managing Director Bruce McCarthy said.
 

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Reliance Strikes Gas Offshore India

By NewsDesk

Reliance Industries has made its fourth natural gas discovery off the eastern coast of India.

The KGV-D3-W1 discovery well, which is located at block KG-DWN-2003 / 1 in the Krishna Godavari Basin, encountered a gross gas pay zone of 37.5m in Pliocene aged sands.



The well was drilled to a total measured depth of 3,051m in waters 1,653m deep.

The D3 licence, which spans 3,288km² and is situated 28 miles from the Indian east coast, is operated by Reliance with a 90% interest while the rest is owned by Hardy Oil and Gas.
 

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India Weighs Sale of Oil-Firm Stakes


NEW DELHI—India's federal government is considering whether to sell 10% of its stake in Indian Oil Corp. and 5% of its stake in Oil & Natural Gas Corp. by March.

The cabinet still needs to approve the oil ministry's sale recommendations, Oil Secretary S. Sundareshan said Monday.

Indian Oil, India's largest-listed company by sales, also plans to sell a 10% stake via the issue of fresh shares, Mr. Sundareshan said.

The government holds a 78.92% stake in Indian Oil and a 74.14% stake in ONGC, India's flagship oil and gas explorer.

India is looking to raise 400 billion rupees ($8.6 billion) this financial year by selling a small part of its holdings in several state-run companies to fund social and infrastructure projects and reduce its fiscal deficit. It is set to launch an initial share sale of Coal India Ltd., the world's largest-listed mining company by production in October.

The government on June 25 raised prices of cooking fuels and diesel. It also lifted state controls on gasoline prices to cut losses of state-run oil marketing and refining companies such as Indian Oil, which sell oil products at state-set prices.

The government also doubled prices of natural gas—which ONGC and Oil India Ltd. sell from blocks allotted to them—on June 1. The moves have strengthened the share prices of state-run oil explorers as well as those of refining and marketing companies.
 

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Gail Gas ties-up Rs 4 bn funding from OIDB


GAIL Gas, a wholly-owned subsidiary of GAIL (India) has tied-up Rs 4 billion from OIDB for expanding its network of natural gas distribution in more cities, a top company official said, reports agency source.

The company currently distributes in six cities such as Dewas, Sonepat, Kota and Meerut, among others, and is in the fray to win the bids for eight more.

``The company will be bidding for eight more cities. The bidding process will start by mid-November. We have also secured around Rs 4 billion from OIDB to fuel our expansion plan,`` GAIL (Q,N,C,F)* GAS CFO Anil Sahni told reporters here today.

The company has set aside Rs 8 billion as capital expenditure (capex) for the next 15 years.

He, however, did not divulge details of the cities it is bidding for.

Shares of the company declined Rs 13.35, or 2.76%, to settle at Rs 469.95. The total volume of shares traded was 294,046 at the BSE (Thursday).
 

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India infrastructure boom to boost world growth: Adviser


India can showcase its massive infrastructure spending and a wider current account deficit at the next G20 summit as its contribution to reviving global economic demand, a senior adviser to the government said on Thursday.
Montek Singh Ahluwalia, the deputy head of the Planning Commission, said India's current account deficit could reach 3 percent in the fiscal year ending March 2011 but the higher figure could be financed by increased capital flows.

Asia's third-largest economy is looking overseas to import equipment to help build infrastructure projects worth a planned USD 1.5 trillion in the ten years to 2017.
Imports will likely increase in the coming years especially for higher end projects such as airports and power plants, Ahluwalia said.
"It is important for each country to say what it is going to do to stimulate demand," Ahluwalia told reporters, when asked what India could bring to the table at the November summit of the Group of 20 leading countries in Seoul.
"As far as India is concerned, we are doing exactly what is necessary to stimulate global domand because our internal strategy is based on accelerating domestic investment in infrastructure," he added.
India is planning to spend USD 1.5 trillion on infrastructure in the ten years to 2017 to overhaul its creaking road, railway and power sectors, long seen as a drag on growth in Asia's third-largest economy.
The country's August trade deficit widened to a 23-month high, putting pressure on the current account deficit and prompting a top trade official to raise his forecast for the full year trade deficit figure.
"Investment in infrastructure is more import intensive. So it is our expectation that if we follow that approach, even though exports will be a little depressed compared to what they would have been in a booming situation, the current account deficit may widen," Ahluwalia said.
"We are willing to live with that. We think we'll be able to finance it, so it's not actually a big problem, but the key to financing it is that there should be stability and an element of certainty in the global financial system, especially as far as flows to emerging market countries are concerned."
 

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Coal aplenty, but power companies prefer foreign assets


MUMBAI: Despite India's abundant coal resources, many power producers are investing in coal assets outside India to buy the commodity to fuel their proposed power projects in the country. Major private players like Tata Power, Reliance Power, Adani, JSW Energy, Jindal Steel & Power, GMR and Essar Energy have invested more than Rs 35,000 crore for coal assets abroad and seek further investment opportunities in countries with conducive regulatory norms, say people connected with the development.

India has the world's third-largest reserves of coal at 267 billion tonnes, and the country's biggest coal company, Coal India, has scheduled a public offer to raise funds for expansion to improve the quality of coal and also release funds to develop mining.

Tata Power, India's largest private utility, has a 30% stake in the Kaltim Prima Coal and Arutmin coal mines of Bumi Resources in Indonesia and is exploring further overseas opportunities. "We continue to look at overseas coal mines including in Indonesia, Australia and South Africa to secure coal supply to our forthcoming power projects," S Padmanabhan, executive director Tata Power told ET.

Availability of domestic coal is a challenge for local companies due to capacity constraints at Coal India, delays in coal block allocation, tribal land acquisition and environmental and forest clearance. Tata Power aims to scale up the generation capacity eight-fold from the current 3,000 mw. A majority of the addition will be of coal-fired power plants including a 4,000-mw ultra mega power project, in Gujarat.

JSW Energy, from the stable of the JSW Group, says its requirement for coal will treble in the next eighteen months, to 9 million tonnes. "Most of our existing power plants are fuelled by imported coal and this will continue further if domestic coal is not available," said Pramod Menon, chief financial officer, JSW Energy. The company currently has about 1,000 mw generation capacity and targets to scale it to 11,000 mw in five years.

Another private major Reliance Power, which has plans to develop a capacity of 35,000 mw in seven years, is also looking for overseas coal assets. "The shortage of coal is so acute that most of the power generation companies are looking at imported coal as a viable alternative to domestic coal," said R-Power in its 2009-10 annual report.

Lack of sufficient rail freight capacity is another significant hurdle to the use of domestic resources in new power plants. Ironically, most coal reserves are in the country's less developed eastern states, that are struggling with lack of infrastructure development in the backdrop of security issues.

With large projected shortfalls in domestic supply, imports are set to increase sharply, according to Fitch Ratings. The import of coal is set to treble to 150 million tonnes by 2013, from the current 50 million tonnes. "Procedural hurdles facing private sector coal development is a significant reason why power generators are looking offshore for coal supplies," said the international rating agency in its latest report. Coal blocks can only be allocated to private parties through the mechanism of an inter-ministerial screening committee, which includes state-owned CIL.

Allocations are decided by the government on the recommendation of the committee, taking into account various qualification standards including techno-economic viability of the end user project and the track record of the applicant company.

India being power starved, needs significant new power capacities to reduce current deficits and meet future demand driven by economic development and electrification.

The government plans to add 78,700 mw capacity under the Eleventh Five Year Plan that will end in 2012, and another 100,000 mw by 2017, of which more than 80% will be coal-fired.
 

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Solar rickshaw finds no takers


BANGALORE: A solar electric rickshaw launched with great fanfare by India's Council of Scientific and Industrial Research (CSIR) two years ago is yet to find any takers. While this is causing concern, a Pune engineer has claimed the CSIR copied his design.

The three-wheeled "soleckshaw" can in principle use solar panels to convert sunlight into electricity to drive its motor.

It was developed by the Central Mechanical Engineering Research Institute (CMERI) in Durgapur, West Bengal, a unit of the CSIR, and promoted as a green rickshaw because it emits no gases that can contribute to global warming.

Despite high-voltage publicity, the soleckshaw has not caught on. "Till now no soleckshaws have been sold in the market on a commercial basis by (our) licensees," Amit Banerjee, head of the manufacturing technology group at CMERI, said.

Around 30 soleckshaws fabricated at CMERI for demonstration were initially deployed in Delhi (at Chandni Chowk), Kolkata, Durgapur, Chandigarh, Jaipur, Dhanbad and Ahmedabad, said Himadri Maiti, senior adviser in the CSIR.

"However, currently they are not in operation due to various local administrative and management problems," he admitted.

Operations within the jurisdiction of the Municipal Corporation of Delhi (MCD) could not be resumed as the civic agency "has refused to grant a fresh licence" for any rickshaw, he added.

The charging stations set up at a few places by the Central Electronics Limited for charging the soleckshaws' batteries "are not being used at this point of time as the vehicles are not in operation at those locations", Maiti said.

He said the CSIR's plans to deploy at least 1,000 soleckshaws in the Commonwealth Games village in Delhi was abandoned as the Games Organising Committee, after initially agreeing to our proposal, "backed out on the plea of security issues".

And the CSIR's proposal to operate at least 10 soleckshaws for postal delivery under a pilot project in Rajashtan's Ajmer district is still pending with the postal department, he said.

To add to the CSIR's embarrassment, a Pune engineer has claimed that except for some slight changes, the CSIR's soleckshaw is a copy of the electric cycle rickshaw his non-profit research and development institute built some 10 years ago.

"Our electric cycle rickshaws were inaugurated in Pune University campus in 2002 (see photo) and technical details were published in the Indian journal Current Science in its Sep 25, 2002, issue," Anil Rajvanshi, an Indian Institute of Technology graduate and director of the Nimbkar Agricultural Research Institute (NARI) near Pune, said.
 

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Companies Plan 100 MW of Solar for India


Gujrat, India, October 4 - The European power-electronics company AEG Power Solutions and the Indian solar developer Electrotherm have partnered to deploy 100 MW of solar PV projects around India in the next three years.

The first installations are targeted for the last quarter of 2010 (15 MW) and for the beginning of 2011 (30 MW) in the states of Gujrat and Rajastan.

Electrotherm will give AEG access to the Indian market through its existing presence in the country. The company will act as an EPC contractor (Engineering, Procurement and Construction). In addition, Electrotherm will provide MV transformers and other basic components such as structures and complete wiring which are parts of the company's portfolio.

AEG will provide engineering services and will deliver key components such solar inverters, metering, monitoring and controlling equipment and intelligent combiner boxes, part of the total solar power solutions of the group.

Both companies expect to develop together a minimum of 100MW of business activity in India over a period of 36 months.
 

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RIL's K-G gas play may get bigger with D4 block

SOUND PROSPECTS

# Niko holds 15% in the block, with RIL holding 85%

# Recoverable reserves in the gas field could be 50-70%

# Drilling to start by March 2011

# Development to have a strong impact on RIL and Niko valuations
At 100 tcf, partner Niko says reserves may be twice D6 block's

The Krishna-Godavari (K-G) basin may prove to be a much bigger play for Reliance Industries Ltd (RIL). This follows the announcement that its D4 block could hold twice the reserves of the in-production D6 block to the north.Canada's Niko Resources, which holds 15 per cent stake in the block with RIL holding the balance, has said prospective gas reserves in D4 could be significantly higher than previously estimated. In a recent presentation to analysts in Canada, Niko Resources CEO Edward S Sampson said, "I feel it's twice the size of D6. We feel we have got prospectivity potential for up to 100 trillion cubic feet (Tcf) of gas. It would change India."
RIL's estimated 40 tcf of gas in place at K-G D6 has recoverable reserves of 11.5 tcf, the largest deep-water find in India so far. RIL is the operator of both the D6 and D4 blocks.

The drilling in D4 is expected to start by the end of this financial year, which is when a much better evaluation of the actual prospect for the block can be carried out.

Analysts said reserves are classified as proved, possible and probable. "Considering Sampson has not mentioned any of that, it's too early to ascertain what he is hinting at," said one analyst. The possibility of recovering gas from any field depends on the permeability of the reservoir and how porous it is. There is no relationship between the prospectivity and the actual commercial production for a block, he explained.

But industry experts say that at a most optimistic estimate, actual recoverable reserves in a gas field could be as high as 50-70 per cent of the in-place reserves.

Both RIL and Niko officials in India downplayed the development, saying they are yet to begin drilling in the block. According to some analysts, two preliminary wells have been drilled and work on a third has just begun. But analysts said the development would certainly have a strong impact on RIL and Niko valuations and, thereby, their stocks. "With 100 tcf of in-place reserves, this could approach in size some of the largest natural gas blocks in Qatar or Iran. This is a possible indication, but it's early days yet. Drilling will only confirm whether it does have that kind of potential," said Jal Irani, an oil analyst at Macquire.

Officials from the Directorate General of Hydrocarbons, the downstream regulator, could not be contacted for a view on the development. But in a similar case in March, DGH did not certify the contingent resources of Cairn India when it raised estimates of in-place reserves at its Rajasthan field to 4 billion barrels of oil equivalent from 3.7 billion. Director-General of Hydrocarbons S K Srivastava had said, "The DGH does not certify contingent resources."

RIL's shares ended Wednesday at Rs 1,044.60, up 2.09 per cent, on the Bombay Stock Exchange.
 

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NTPC to commission first unit of Stage-II at Simhadri by March

NTPC will commission the first unit of Stage-II expansion project of Simhadri Super Thermal Power Station by March 2011.Regional Executive Director (South) Ambarish Nath Dave told reporters here on Thursday that the expansion work taken up to double the capacity of the project to 2,000 MW would be completed by the end of 2011-12.Two units of 500 MW each in the first phase were synchronised in 2002. Simhadri, the first shore-based power plant, is adding two more units each with 500 MW by investing around Rs.5,000 crore.

Mr. Dave said the power generated from the second phase would be supplied to Andhra Pradesh, Karnataka, Tamil Nadu, Kerala and Puducherry. As per the memorandum of understanding signed with the Ministry of Power, Andhra Pradesh will get 35 per cent of the power.

To a question, he said acquisition of land near the Simhadri project for Hinduja National Power Corporation's power plant would not in any way hit the former's expansion plans in future.

Stating that NTPC had adopted super critical boilers for the upcoming greenfield projects during the XII Plan, he said it was carrying out various programmes in the neighbourhood of the Simhadri project as part of corporate social responsibility.

Mr. Dave said the company was taking all steps to prevent pollution and pointed out that a study conducted by it had ruled out groundwater pollution due to the ash pond. In consultation with the Andhra Pradesh Pollution Control Board, another agency would also be engaged to study the issue. He said a health risk assessment study would be conducted in the adjoining villages.

He said NTPC, with an installed capacity of 32,694 MW through 15 coal, seven gas and five joint venture power stations, was on an expansion-spree. The company is gradually diversifying its present fuel mix.Nearly 17,000 MW is now being added through new and existing plants. He said NTPC was making efforts to increase its capacity to 75,000 MW by 2017 and 1.28 lakh MW by 2032.General Manager in-charge of Simhadri D. K. Sood and NTPC Additional Manager (HR) U. Lal were present.



http://www.thehindu.com/business/article880291.ece
 

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BHEL, Spain's Abengoa to develop concentrated solar power projects in India


Public sector Bharat Heavy Electricals Limited (BHEL) and Spain's Abengoa, the European leader in the solar energy segment, have joined hands to develop state-of-the-art concentrated solar power (CSP) projects in India.

An agreement in this regard was signed in Seville, Spain by BHEL Chairman and Managing Director B P Rao and Abengoa Solar Chairman and CEO Santiago Seage.
 

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