REGULATORY & JUDICIAL DEVELOPMENT – INDIA
Sabarmati Gas Limited v. Bharat Petroleum Corporation Limited & Anr.
June 23, 2015
Sabarmati Gas Limited filed a petition before the Petroleum and Natural Gas Regulatory Board (PNGRB) alleging restrictive trade practices and violations relating to the supply of re-gasified LNG from the Dahej LNG Terminal by BPCL and GAIL.
The matter involved determination of tariff applicability for a 500-metre connectivity pipeline associated with the Dahej-Vijaipur Pipeline network.
The Board examined:
- Whether the 500-metre pipeline formed part of the Dahej-Vijaipur Pipeline.
- Whether the tariff applicable to the Dahej-Vijaipur Pipeline should also apply to the connectivity pipeline.
PNGRB concluded that the 500-metre pipeline was an independent facility constructed under a separate Gas Sales Agreement and therefore required a separate tariff structure.
The petition was held to be premature and was dismissed.
Pricing of Gas Produced from Small and Isolated Fields
April 1, 2015
The Ministry of Petroleum and Natural Gas revised its pricing guidelines for gas produced from small and isolated fields.
Under the revised framework, prices for new gas supplies are to be determined through open competitive bidding conducted by National Oil Companies.
Guidelines for Pooling of Gas in Fertiliser (Urea) Sector
May 20, 2015
The Government of India notified guidelines for pooling domestic gas with Re-gasified Liquefied Natural Gas (RLNG) to provide a uniform delivered gas price to grid-connected urea manufacturing plants.
The guidelines became effective from July 1, 2015.
FEATURE
Carry Forward Gas Under Gas Sales Agreement (GSA)
Carry Forward Gas provisions under a Gas Sales Agreement allow buyers to manage take-or-pay obligations by carrying excess purchased gas into subsequent contract years.
Where a buyer takes and pays for quantities exceeding the Annual Take-Or-Pay Quantity (ATOPQ), such excess quantity may be classified as Carry Forward Gas and credited against future obligations.
Key aspects include:
- Adjustment against future Annual Contract Quantities (ACQ).
- Limitations based on a percentage of annual contract quantities.
- Reduction of future take-or-pay commitments.
- Flexibility for buyer gas management.
- Protection against overlap with make-up gas rights.
Sellers generally seek restrictions on carry forward rights to maintain revenue stability and predictability.
Gas Sales Agreements should clearly establish priority rules between carry forward gas and make-up gas entitlements to prevent double counting and contractual disputes.
Carry Forward Gas operates as an important flexibility mechanism that allows buyers to moderate future take-or-pay obligations under long-term Gas Sales Agreements.
NEXT ISSUE
December 2015
IN-HOUSE CONTRIBUTORS
- Sakshi Bawa – Oil & Gas Team (Downstream)
- Neha – Oil & Gas Team (Upstream)
SOURCES
- Norwegian Petroleum Directorate
- U.S. Energy Information Administration
- The International Energy Agency
- Organisation of the Petroleum Exporting Countries
- The Oil and Gas Journal
- Official Websites of Various Oil & Gas Companies
- Peter Roberts, Gas Sales and Transportation Agreements – Principles and Practice
MARKET DEVELOPMENTS – GLOBAL
ONGC Energy Centre Receives U.S. Patent for Hydrogen Generation Process
April 1, 2015
ONGC Energy Centre and the Institute of Chemical Technology, Mumbai received a United States patent for a hydrogen production method based on a multi-step copper-chlorine thermochemical cycle.
Reliance Commissions 650 KTA PET Resin Plant
April 10, 2015
Reliance Industries commissioned a PET Resin manufacturing facility at Dahej, Gujarat with a combined annual production capacity of 650 KTA.
Kenli 10-1 Oilfield Commences Production
April 23, 2015
CNOOC announced commencement of production from the Kenli 10-1 oilfield in Bohai, China, with expected peak production of approximately 36,000 barrels per day.
Indian Oil’s Paradip Refinery Begins Crude Processing
April 27, 2015
Indian Oil Corporation commenced crude processing operations at its state-of-the-art Paradip Refinery in Odisha.
ONGC Announces Four New Hydrocarbon Discoveries
April 29, 2015
ONGC reported four additional hydrocarbon discoveries in Gujarat, Andhra Pradesh and Assam, bringing total discoveries for FY 2014-15 to twenty-two.
BP Launches West of Shetland Drilling Programme
April 29, 2015
BP commenced a seven-year drilling campaign west of Shetland using the Deepsea Aberdeen semi-submersible drilling rig.
Production Begins at Kizomba Satellites Phase 2 Offshore Angola
April 30, 2015
BP confirmed production start-up from the Kizomba Satellites Phase 2 development offshore Angola with expected peak production of approximately 70,000 barrels per day.
Chevron Settlement in Ecuador Litigation
May 4, 2015
Chevron reached a settlement with litigation funder Woodsford, resulting in withdrawal of financial support for Ecuador-related litigation and assignment of interests to Chevron.
Sinopec and BP Form Marine Fuels Joint Venture
May 19, 2015
Sinopec and BP established BP Sinopec Marine Fuels Pte Limited to expand global marine fuel supply operations.
ExxonMobil Discovers Significant Oil Offshore Guyana
May 20, 2015
ExxonMobil announced a major oil discovery on the Stabroek Block offshore Guyana, encountering substantial oil-bearing sandstone reservoirs.
GAIL Signs Natural Gas Supply Agreement with Rajasthan State Gas Limited
May 28, 2015
GAIL signed a Heads of Agreement with Rajasthan State Gas Limited to support CNG infrastructure and natural gas distribution projects across Rajasthan.
Alaska LNG Export Authorization Expanded
June 1, 2015
ExxonMobil’s Alaska LNG Project received conditional authorization to export LNG to countries without free trade agreements with the United States.
Reliance Sells Eagle Ford Midstream Interest
June 1, 2015
Reliance Holding USA signed agreements to sell its 49.9% interest in EFS Midstream LLC to Enterprise Products Partners for approximately USD 1.07 billion.
Schlumberger Launches Depth Domain Inversion Services
June 23, 2015
Schlumberger introduced advanced depth-domain inversion services to improve seismic interpretation and reservoir characterization in complex geological environments.
South Pars Phase 13 Drilling Accelerated
June 28, 2015
National Iranian Oil Company announced plans to significantly increase drilling speed at Phase 13 of the South Pars Gas Field through deployment of additional drilling rigs.
DISCLAIMER
The information contained in this private circulation is not legal advice and should not be relied upon as such.
The information is sourced from publicly available information and is intended solely for private and non-commercial purposes.
No representation is made regarding the accuracy, completeness or reliability of the information provided.
This disclaimer shall be governed by and construed in accordance with the laws of India and any disputes shall be subject to the exclusive jurisdiction of Indian courts.
Doc ID: 3O&G15
