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Chemical Industry Digest – September 2024 Issue

CID Editorial Team
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Chemical Industry Digest – September 2024 Issue

Chemical Industry Digest September 2024Chemingineering – Certifying Hydrogen’s
Greenness

– K. Sahasranaman, Independent Consultant – Process engineering, Energy, Utilities and Safety

Green hydrogen, essential for decarbonizing industries, requires strict regulation to ensure it is produced using renewable energy. A certifying agency, preferably global, is needed to standardize and oversee green hydrogen production and cross-border trade.

Alternative Fuels in Energy Transition Landscape

– Lakshmana Rao Vadlamani, Nanda Kishore Desapande, TATA Consulting Engineers Limited

The article explores the potential of green hydrogen and ammonia as alternative fuels for gas turbines and pulverized coal-fired boilers, highlighting their benefits for energy storage and emissions reduction in the transition to a sustainable energy future.

Energy Transitions: From Fossil Fuels to Alternate Energy sources that are Greener and Cleaner, Renewables etc

– S. Sunil Kumar, Henkel India

The author discusses India’s transition from fossil fuels to renewable energy, emphasizing the chemical sector’s role, government initiatives, and innovations necessary for achieving sustainability goals, ultimately aiming for net-zero emissions by 2070 and increased reliance on renewable sources.

Hydrogen Hubs – Materializing Indian Aspirations

– MP Sukumaran Nair, Director, Centre for Green Technology & Management

The article discusses India’s potential as a global green hydrogen hub, focusing on hydrogen’s role as a sustainable energy source. It covers production methods, infrastructure needs, global initiatives, India’s policy framework, and the importance of building hydrogen ecosystems for decarbonization.

 Use of Sea Water in Cooling Tower Operation in Refinery Applications

– Sourav Kumar Chatterjee, Freelance Writer

The operation of seawater cooling towers in refineries relies on effective heat exchange and reliable practices. Maintaining optimal water quality and chemical treatments is crucial for preventing algae blooms and ensuring system efficiency and longevity.

Pipeline Impedance Heating Systems

– S. Raghava Chari, Freelance Writer

Impedance pipe heating systems use the pipe itself as a heating element by applying low-voltage AC, generating heat through electrical resistance. This efficient method ensures uniform heating, reduces maintenance, and eliminates the need for external equipment

Google Teams Up with Adani to Propel India’s Green Energy Ambitions

CID Editorial Team
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Google Teams Up with Adani to Propel India’s Green Energy Ambitions

The Adani Group and Google have unveiled a new partnership aimed at accelerating sustainability efforts and expanding clean energy usage in India.

As part of the collaboration, Adani will provide renewable energy from a solar-wind hybrid project located in Khavda, Gujarat, which is part of the world’s largest renewable energy park. The project is scheduled to commence commercial operations in the third quarter of 2025.

Leveraging its expertise in large-scale renewable energy developments, Adani will offer tailored clean energy solutions to commercial and industrial (C&I) clients, supporting them in lowering their carbon emissions. The initiative aligns with Adani’s broader objective of targeting the merchant and C&I sectors to help decarbonize industries.

For Google, the collaboration is a key step forward in its 24/7 carbon-free energy mission, ensuring its cloud services and operations in India are powered by sustainable energy. As reported by manufacturingtodayindia.com, the partnership underscores both companies’ dedication to promoting sustainability and advancing clean energy solutions in the region.

CONCEPTS OF SPECTROSCOPY

CID Editorial Team
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CONCEPTS OF SPECTROSCOPY

Author: Dr Damodar V Prabhu, Dr PrabodhChobe,Dr AjitDatar.
Prof Dr Irena Kostova and Dr Harichandra A Parbat
Publisher: Gaurang Publishing Globalize Pvt.Ltd.Mumbai
Number of pages: 337
Price: Rs. 800

Spectroscopy is an important component of Chemical, Biological and Environmental Science curricula all over the world. In conjunction with other analytical techniques, notably Chromatography,  Spectroscopy has made chemical analysis more accurate and precise, faster and more sensitive. Spectroscopic techniques are widely used in industry for accurate analysis of raw materials and products and hence have a large number of industrial applications.

This book on Concepts of Spectroscopy introduces the fundamental concepts of spectroscopy in a clear, lucid and easy to understand style. Starting with the fundamentals of Chemical analysis and Spectroscopy,the instrumentation required for spectroscopic analysis is discussed in detail. The 17 chapters discuss in detail the theoretical principles, instrumentation and applications of:

  • UV-VISIBLE spectroscopy,
  • Infrared (IR) spectroscopy
  • Fourier Transform IR (FTIR) spectroscopy,
  • Florescence spectroscopy,
  • Nuclear Magnetic Resonance (NMR) spectroscopy,
  • Electron spin resonance (ESR) spectroscopy,
  • Mass spectrometry (MS),
  • Atomic emission spectroscopy (AES),
  • Atomic absorption spectroscopy (AAS),
  • Turbidimetry and Nephelometry.

There are dedicated chapters written by industry experts onHyphenated techniques-Gas Chromatography-Mass Spectrometry (GC-MS) and Liquid Chromatography-Mass Spectrometry (LS-MS).

In all the chapters, the emphasis is on the industrial applications of spectroscopy. Several solved numerical problems and IR and NMR spectra have been included as also relevant questions and numerical problems. A bibliography of useful reference books has been included to motivate the readers to undertake further studies in the subject.

The book is written as per the syllabus of Indian universities and hence will be useful to BSc and MSc students and teachers as also students pursuing equivalent Chemistry courses in foreign universities. Research scholars and industry chemists will also find the book useful especially the industrial applications of Spectroscopy.

The book reflects the vast experience of the authors in academics and chemical industry and is based on their long years of teaching the subject and in industry.

Reviewer

Dr Damodar V Prabhu, MSc, PhD, FRSC(London, UK)Former Head and Adjunct Professor, Department of Chemistry, Wilson College (Affiliated to University of Mumbai), Mumbai Former Dean, Faculty of Science, University of Mumbai, Mumbai.

 

 

 

 

Oil and Gas Auction Attracts Bidders

CID Editorial Team
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Oil and Gas Auction Attracts Bidders

The largest oil and gas bidding round attracted bidders, including Oil and Natural Gas Corporation (ONGC) and Oil India Limited (OIL), as well as private sector participant Vedanta Ltd. The Directorate General of Hydrocarbons (DGH) reported that most blocks received only two bids.

The OALP-IX bid round offered 28 blocks, covering an area of 1,36,000 square kilometres for oil and gas exploration and production. Notably, the round marked the first time Reliance Industries Ltd (RIL) and its partner bp plc collaborated with ONGC to bid for a block in the Gujarat offshore region.

In the past eight oil and gas bidding rounds since 2017, the Reliance-bp partnership had only participated in two rounds, successfully winning the blocks they competed for previously. This is their inaugural collaboration with ONGC for a shallow water block in the Gujarat-Saurashtra basin.

In the previous OALP-VIII round, ONGC did not submit a bid for the ultra-deepwater block in the Krishna Godavari basin that the Reliance-bp consortium sought. On September 21, the DGH announced the bidders for the 28 blocks under OALP-IX.

ONGC bid for 14 blocks independently and partnered with companies like OIL and Indian Oil Corporation Limited (IOCL) for four additional blocks. In total, ONGC submitted bids for 19 of the 28 blocks available.

Vedanta Ltd submitted bids for all 28 blocks, while Sun Petrochemicals Ltd bid for seven. Out of the 28 blocks offered, four attracted three bids each, while the remaining blocks received two bids, with Vedanta participating in all.

Blocks are allocated based on the highest revenue share offered from oil and gas production and the work program commitments. The OALP-IX round includes nine onshore blocks, eight shallow-water blocks, and 11 ultra-deepwater blocks, spanning eight sedimentary basins.

Since the inception of OALP in 2017, a total of 144 exploration and production blocks covering 2,42,055 square kilometers have been awarded. In the previous OALP-VIII round, out of the ten blocks offered, ONGC secured seven, while a consortium of Reliance Industries, bp, OIL, and Sun Petrochemicals each won one block.

As reported by hindustantimes.com, the OALP was introduced by the government to attract oil and gas companies to enhance India’s upstream sector. It guarantees marketing and pricing freedom under a revenue-sharing model and offers reduced royalty rates.

Chemingineering – CO2 as Feedstock

K Sahasranaman
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Chemingineering – CO2 as Feedstock

CO2 as a feedstock for petrochemicals is the Holy Grail that is engaging and exciting the global scientific community. Many approaches are being attempted towards this extremely challenging goal. A breakthrough appears years away, but holds the promise of greening the petrochemical production.

CO2 as Feedstock

T

he petrochemical industry, a cornerstone of modern society, has traditionally relied on fossil fuels as its primary feedstock. The environmental implications of this reliance have prompted a global search for alternative, sustainable sources. Carbon dioxide, a major greenhouse gas, has emerged as a potential candidate, offering the intriguing prospect of a circular carbon economy. However, transforming this abundant yet recalcitrant molecule into valuable petrochemicals presents a formidable challenge.

Carbon Footprint
To understand the significance of this transition, it is essential to recognise the petrochemical industry’s gigantic carbon footprint. The production of ethylene and propylene, the foundational building blocks for plastics, fibres, and countless other products, is energy-intensive and heavily reliant on fossil fuels. Natural gas and naphtha, hydrocarbon-rich feedstocks, are subjected to high temperatures and pressures in processes like steam cracking to yield these olefins. 40-50% of the carbon embedded in these feedstocks is released into the atmosphere as carbon dioxide.
The concept of utilising carbon dioxide as a chemical feedstock is inherently appealing. It offers the prospect of converting a waste product into valuable commodities, thereby closing the carbon loop. Moreover, it aligns with the growing emphasis on carbon capture, utilisation, and storage (CCUS) technologies. By transforming carbon dioxide into products, we can potentially mitigate greenhouse gas emissions and create a more sustainable chemical industry.

Global Warming
Climate change, primarily driven by greenhouse gas emissions, is among the most pressing challenges humanity faces today. Atmospheric concentration of carbon dioxide has been rapidly increasing since measurements began in March 1958, averaging an annual rise of about 2 ppm over the past decade. In 2016, atmospheric carbon dioxide levels remained above the symbolic 400 ppm threshold throughout the year for the first time, representing a 30% increase from pre-industrial levels of 270 ppm. The Paris Agreement, adopted in 2015 under the United Nations Framework Convention on Climate Change, highlights global efforts to reduce greenhouse gas emissions to mitigate global warming. Achieving these goals will require a significant increase in public and private investments in research and development.

Mitigation Strategies
Strategies for reducing carbon dioxide emissions fall into four main categories: improving energy efficiency, using non- or low-carbon energy sources, Carbon Capture and Sequestration (CCS), and Carbon Capture and Utilisation (CCU). Improving energy efficiency offers the greatest return on investment and has already been successfully implemented in various industrial contexts. However, annual improvements of 1–2% are insufficient to meet climate targets. Using non- or low-carbon energy sources (e.g., solar, wind, geothermal) on a large scale is challenging due to the fluctuating nature of energy supply and the slow transition to renewable electricity production.

CCS
CCS involves capturing carbon dioxide from large point sources such as power plants, transporting it to a storage site, and sequestering it into a natural or artificial sink. Despite its potential, CCS is currently limited by technical and economic challenges. CCU, which converts carbon dioxide into high-value products, is a specialised form of CCS where the utilisation part acts as a non-natural sink. Converting carbon dioxide, a thermodynamically stable molecule, requires substantial energy input along with effective reaction conditions and active catalysts.
Carbon dioxide is often used directly for enhanced oil recovery and in food and carbonated beverages. It has been used for manufacture of salicylic acid in a process that goes back to the early 19th C and in the manufacture of urea since the 1920s. But now researchers are actively engaged in exploring routes for transforming carbon dioxide into a feedstock for manufacturing petrochemicals on a large scale.

Stable Molecule
CO2 is the end product of combustion and oxidation of carbon-containing compounds. As a result, it is thermodynamically very stable. CO2 consists of one carbon atom doubly bonded to two oxygen atoms (O=C=O). These carbon-oxygen double bonds are very strong and a significant amount of energy is required to break them. Processes for manufacturing petrochemicals rely on reactive carbon sources like hydrocarbons that are easier to transform than carbon dioxide. Conversion of carbon dioxide to useful petrochemicals requires substantial inputs of energy to drive the reactions up the thermodynamic hill. Catalysts are required to push reactions to proceed that would otherwise never take place. They function by lowering the energy barrier for the reaction – activation energy.

Catalytic Processes
A huge chunk of research is focused on the development of catalysts capable of directly converting carbon dioxide into hydrocarbons. Researchers have explored a variety of catalysts, including metal oxides, zeolites, and homogeneous catalysts. One notable example is the work of researchers at the University of Illinois at Chicago, who developed a copper-based catalyst that can convert carbon dioxide into methanol with high selectivity. While methanol is not a direct petrochemical building block, it can serve as a platform chemical for the production of ethylene and other hydrocarbons. Catalyst development remains a critical area of research. Catalysts with high activity, selectivity, and stability are essential for commercial-scale conversion of carbon dioxide. Additionally, scaling up laboratory-scale processes to industrial production levels presents engineering challenges.

Electrochemical Reduction
Reducing carbon dioxide in an electrochemical cell offers distinct advantages over thermal methods. Electrochemical reduction has the potential for a smaller carbon footprint since it can be powered by renewable electricity sources like wind and solar, which are rapidly expanding and becoming more cost-effective. Unlike thermal reactors, which typically require high temperatures and pressures to reduce carbon dioxide by reacting it with hydrogen, electrochemical cells usually operate at room temperature and atmospheric pressure. However, the challenge with electro reduction lies in its low energy efficiency and limited control over the chemical reactions, making large-scale industrial application still years away. For instance, the energy efficiency of electro reduction for producing ethylene is currently around 25%, but for commercial viability, it needs to reach 50–60%.

Biological Conversion
Nature offers inspiration for carbon dioxide conversion. Microorganisms have evolved sophisticated pathways to incorporate carbon into organic molecules. Scientists are harnessing this capability through metabolic engineering to create microorganisms capable of producing petrochemical precursors. Researchers have engineered cyanobacteria to produce isoprene, a key building block for synthetic rubber. While still in its early stages, this approach holds promise for developing biological platforms for CO2-based chemical production.

Epilogue
Despite these advances, significant challenges persist. The energy required to convert carbon dioxide into useful precursors is considerable, and developing efficient and renewable energy sources is crucial. Moreover, the low concentration of carbon dioxide in the atmosphere necessitates efficient capture and purification processes, adding to the overall cost and complexity. While the direct conversion of carbon dioxide into ethylene and propylene is currently not commercially viable, it represents a promising long-term goal. A successful transition to CO2-based petrochemical production can contribute to a low-carbon economy, create new economic opportunities, and reduce dependence on fossil fuels. Continued research and development, coupled with supportive policies, are essential to accelerate progress in this field.

Readers’ responses may be sent to: k.sahasranaman@gmail.com or chemindigest@gmail.com

Safety Expert and Author speaks on Chemical Plant Accidents

Rajendra Utturkar
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Safety Expert and Author speaks on Chemical Plant Accidents

Chemical Industry, as is well known produces and handles some of the most hazardous and toxic chemicals. Chemical production processses need to be continuously monitored and controlled so that no runaway reactions happen.  Plant and equipment health should be always in excellent operational condition and maintained optimally throughout its life cycle.  Even storage, handling and transporatation of chemicals have to be as per safe practices.  However, in recent times, many chemical plant fires, explosions and other accidents have taken place, despite well laid down safety protocols and storage regulations.

There are latest technologies today from processes to digital technologies that can ensure foolproof operation.

Then why do accidents happen? 

Chemical Industry Digest posed some fundamental questions on safety to a leading safety expert, Rajendra Utturkar who is the author of the well acclaimed, recently released book on safety ‘Earn or Burn Your Profits’.

His responses to Chemical Industry Digest questions are published here.

Chemical Industry Digest (CID): As you know, recently, quite a few very disturbing chemical plant accidents and disasters have taken place in India, mainly in Maharashtra. Despite latest technologies that give all kinds of prior warnings why are such accidents becoming frequent? Are these also due to outdated processes? To what extent do operational errors contribute to these accidents?

Rajendra Utturkar (RU) : In response to your question, I must make a bold and perhaps surprising statement: the belief that the latest technology is inherently the best for safety is a myth. What we truly lack is a deep understanding of the fundamental concepts of accidents and safety systems. Focusing solely on the latest technology or human error addresses only a part of the factors that influence safety, leaving other critical aspects unaddressed. As a result, accidents continue to occur, often repeating themselves.

True safety encompasses four interconnected dimensions: basic technology, plant facilities, human capital, and organization. Only when these four key assets of an organization work together in harmony and in an integrated manner we can see safety in action. To practically eliminate accidents, we must give equal attention to all four dimensions.

I have explored this issue in detail in my latest book, ‘Earn or Burn Your Profits,’ where I discuss how a holistic approach to safety can lead to more sustainable and profitable operations.

CID: Is it that there is a laxity or inappropriate maintenance of plant and equipment in general in India or not giving due importance?

RU: Maintaining the plant facility is crucial for any chemical process plant. I trust that most plant owners and top management recognize this importance and dedicate appropriate attention to maintenance, aligning their efforts with their knowledge and expertise.

CID: How often should chemical plants conduct safety audits and risk assessments?

RU: Let’s consider this from a broader perspective. Ensuring safety in a chemical plant goes beyond a single audit or risk assessment. It requires a multi-layered approach with regular evaluations and meticulous record-keeping. As a best practice, conduct a comprehensive evaluation of your safety management system every three years, supplemented by an annual safety audit. Additionally, carry out safety inspections two to three times a year and maintain daily records of safety practices. This structured approach ensures that safety is continuously monitored and improved.

CID: What are the key components of an effective emergency response plan for chemical plants?

RU: There is a vast amount of literature available on emergency response plans for chemical plants, but any effective plan must integrate three essential components: process, system, and structure.

First, it’s important not to confuse the term “process” with the chemical processes within the plant. In this context, “process” refers to the sequencing of all activities and events within the emergency response plan. Representing this plan as a sequence chart or workflow diagram can significantly aid in understanding and execution.

Second, the “system” details how each activity in the process sequence will be carried out. This includes comprehensive procedural documentation such as risk assessments, hazard identification, and the maintenance of emergency equipment and facilities, both internal and external. The system also covers emergency response procedures, including internal communication for alerts and warnings, and external communication with neighboring communities, emergency response services, and regulatory bodies. Furthermore, it encompasses loss prevention operations, firefighting, spill containment, evacuation plans for both the operations team and nearby communities, first aid and hospitalization management, shelter-in-place strategies, assembly locations, and methodologies. Regular training and mock drills are crucial for preparing all involved, and post-accident procedures, such as site cleanup and managing the emotions of affected teams, authorities, communities, and media, are also part of this system.

Finally, the “structure” ensures that the process and system will function effectively when needed. This includes clearly defining roles and responsibilities, identifying and outlining the necessary competencies, and planning for competency development through training and drills. Additionally, fostering and executing a strong safety-oriented organizational culture is crucial. Regular quarterly training and mock drills are recommended to maintain and enhance this culture, ensuring preparedness and safety are ingrained in the organization.

CID: What technological advancements can help in preventing chemical plant accidents? How can chemical plants leverage data and analytics to predict and prevent potential accidents?

RU: Technological advancements can certainly help in reducing the risk of chemical plant accidents to a certain degree, but they alone cannot eliminate the possibility of such incidents. As previously mentioned, accidents tend to occur when one or more of an organization’s four key assets are compromised. Even when all assets are strong, a lack of synchronization among them can still lead to accidents. Companies with a solid organizational culture and strong human capital are better positioned to harness technological advancements effectively to prevent potential accidents.

CID:  Our safety regulations are considered to be quite stringent. So, are there any identified gaps in the enforcement of these regulations?

RU: While it may not be entirely accurate to describe the safety regulations as stringent, it is fair to say that they are quite reasonable. The real issue lies in our fundamental understanding of accidents and safety. Traditional knowledge has limitations that create gaps in how we perceive and manage these risks. To gain a deeper and more comprehensive understanding, I invite you to read my book, Earn or Burn Your Profits, where I explore these gaps and provide upgraded knowledge that can help bridge them.

CID: What preventive measures can be implemented to avoid future accidents in chemical plants?

RU: A clear understanding of an organization’s four key assets is essential for ensuring safety and efficiency. By identifying and addressing weaknesses in these assets, and by enhancing each one while ensuring they work in harmony, we can significantly reduce the likelihood of future accidents. To facilitate this, I’ve developed a comprehensive, step-by-step tool known as the SEPLO Process, designed to help organizations practically avoid potential accidents.

While the solution may appear simple at first glance, its implementation can be complex. My book, ‘Earn or Burn Your Profits,’ breaks down this complexity, offering a clear, actionable guide for executing safe and efficient plant operations.

CID: How important is transparency and communication with the public regarding chemical plant operations and safety measures?

RU: Transparent communication with the public about chemical plant operations and safety measures is essential, yet it remains a significant challenge. A key obstacle to this transparency is the tendency to place blame solely on plant owners and top management when accidents occur, often leading to scapegoating and penalties. True transparency can only be achieved when chemical companies, local communities, regulators, NGOs, and the media come together, working collaboratively towards a shared national objective.

 

Chemical Industry Digest – August 2024 Issue

CID Editorial Team
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Chemical Industry Digest July 2024Chemingineering – CO2 as Feedstock

– K. Sahasranaman, Independent Consultant – Process engineering, Energy, Utilities and Safety

The article explores the potential of using CO2 as a feedstock in petrochemical production, highlighting the challenges, advancements in catalytic processes, and the role of renewable energy in this emerging field.

Advances in Fluid Catalytic Cracking.  Its Emerging and Evolving Roles

– Dr. Marcio Wagner da Silva, Crude Oil Refining Industry, Brazil

The integration of refining and petrochemical processes is crucial for the economic sustainability of the downstream industry. Despite the higher operational complexity, this integration offers a path to better margins and reduced risks in a world increasingly moving away from fossil fuels. The focus should be on balancing the present need for transportation fuels with the future demand for petrochemicals.

Challenges in Processing of Sulfur Dioxide in the Claus Plan

– Debopam Chaudhuri, Michiel Baerend – Fluor Daniel

The article discusses the challenges of processing SO2 in Claus plants, highlighting its impact on furnace temperatures and exploring design modifications to maintain optimal performance

Digital Twins and AI-powered Tools Reshape the Future of Refinery Management

– Michelle Wicmandy, Soni Malik, KBC

Digital twins and AI-powered tools are revolutionizing refinery management by optimizing operations, reducing costs, and supporting India’s energy growth and decarbonization goals.

Newer Specialty Chemicals and Advances in Process Automation Driving Efficiency in Oil and Gas Industries

– Sajiv Ravindran Nath, Yokogawa India
Advancements in process automation and specialty chemicals are boosting efficiency, sustainability, and innovation in India’s oil and gas industry.

Safety in Storage of Petrochemicals

– V. Raju, i3PL India Pvt. Ltd

The article emphasizes the importance of safe storage practices for petrochemicals, highlighting the benefits of underground storage and the need for well-designed, secure warehouses to prevent environmental and safety hazards.

Challenges for the Indian Hydrocarbon Sector

Prashant Vasisht
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Abstract
As Demand Increases exponentially, the Hydrocarbon Sector Struggles to keep the Fire Burning

Introduction

The role of the hydrocarbon sector is vital in keeping India’s economic growth engine running. The domestic crude oil consumption has increased from 174.5 million metric tonne (MMT) in FY2013 to 262.5MMT in FY2024, growing at a CAGR of 3.8%, while the domestic production of crude oil has declined from 37.9 MMT to 29.4 MMT during the same period. Currently, only 12% of the country’s needs are met domestically, while 88% of the domestic crude requirement is met through imports, entailing a huge import bill.

The demand for crude oil is expected to increase by 3-4% in FY2025 and will continue to increase over the next several years. However, with limited domestic crude oil production the dependence on import is likely to remain high. The domestic gas consumption has increased from 147.7 million standard cubic meter per day (mmscmd) in FY 2013 to 187.9 mmscmd in FY2024 whereas the domestic production has declined from 111.4 mmscmd to 99.6mmscmd over the same period. Production is expected to increase to 106-107mmscmd in FY2025 and 113 mmscmd in FY2028,with most of the incremental gas production coming from the Krishna Godavari Basin fields of Reliance Industries and Oil and Natural Gas Corporation.

Gas consumption in the country is expected to grow 6-8% YoY in FY2025 driven by a strong uptick in the offtake by the refineries and other allied sectors. The offtake by the power sector will also witness healthy growth over a lower base and is expected to remain at similar levels in the forthcoming years as well. The fertiliser sector will continue to remain the anchor, consuming nearly 31% of the total gas in the country in FY2024. The CGD sector is expected to witness healthy growth of around 8-10% YoY in FY2025 supported by favourable gas allocation policies, growing CNG vehicle sales, and rising network penetration. The gas consumption by other sectors, including refineries and petrochemicals is expected to grow by about 7-9% YoY in FY2025.

Pricing and Oil and Gas

Historically, thegovernment of India has controlled the prices of domestically-produced natural gas. From April 2023 the GoI revised the pricing formula for the administered price mechanism (APM) gas, which is now determined on a monthly basis at ~10% slope to the monthly average price of the Indian crude oil basket. For current gas production from the APM nomination fields of ONGC and OIL, a floor price ($4/mmbtu) and a ceiling price (initially $6.5/mmbtu) have been prescribed with an annual $0.25/mmbtu increase in ceiling price from FY2026 onwards. As crude oil prices are expected to stay at about $65/bbl due to the active management of supplies by OPEC+, APM gas prices are expected to stay at the ceiling for the medium term.

As per the schedule stipulated in the HELP/OALP, eight bidding rounds have so far been finalised. The OALP Bid Round-IX, offering 28 blockscovering an area of approximately 1.4lakh sq. km., was opened for bidding on January 3, 2024.

Since November 2016 OPEC+[1] has been actively managing crude production and supplies leading to elevated international prices. As of now, OPEC+ has agreed to production cuts of 3.66 million barrels per day (mbd) until the end of 2025 and an additional 2.2 million bpd until the end of September 2024. While elevated prices have aided US shale producers to ramp up production levels, however, Chinese demand has been less than anticipated. Nevertheless, ICRA expects the crude oil price to average between $75-90/barrel in FY2025. Additionally, the Government imposed a windfall gains tax on the upstream crude producers, which has kept the crude realisations for Indian upstream companies in the range of $72-75/bbl. However, even at these prices, profitability remains healthy, and capex lucrative.

To attract capital investments in the field of oil exploration and production, 100% foreign direct investment (FDI) has been allowed under the automatic route. While FDI and the big oil companies in oil E&P is the need, given the high risks, very few global companies are likely to participate since compared to some countries, India has poor data on geological prospects. Additionally, some of the key issues hindering the development of the upstream sector include – a high cess of 20% ad-valorem currently, slow pace of approvals, stalled progress in several blocks because of the absence of requisite approvals from the Ministry of Defence and/or the Ministry of Environment, Forest and Climate Change, delays in decision-making by the DGH, increasing arbitration cases involving the administration of production-sharing contracts, etc.

On July 1, 2022, the Government levied a cess/windfall tax on the production of crude oil by upstream oil and gas producers and on exports of ATF, HSD, and MS, which was revised many times subsequently. Currently, the special additional excise duty (SAED) on crude oil stands at Rs. 7000/T (~USD 11/barrel), which translates into an annual contribution of around Rs. 18,000 – 20,000 crore to the Government for FY2025 towards SAED on crude.

Refinery Capacity and Petrochemicals Manufacturing

The domestic refining capacity is expected to increase from 256.8 million tonne as on March 31, 2024 to 306.0 million tonne over the next four years. Some of the key projects being set up are as follows:

  • Hindustan Petroleum Corporation, in a 74:26 joint venture with the Rajasthan Government, is setting up a 9 MMTPA greenfield refinery-cum-petrochemical complex at Barmer, Rajasthan, which is expected to be commissioned by FY2025-end.
  • Chennai Petroleum Corporation and Indian Oil Corporation have formed a joint venture for setting up a 9 MMTPA greenfield refinery at Nagapattinam, Tamil Nadu, whose operations are likely to commence in 2026.
  • Additionally, BPCL is also considering setting up a greenfield refinery at Machilipatnam in Andhra Pradesh.

Besides increasing the refining capacity, the downstream industry is also setting up petrochemical projects to diversify their revenues and de-risk from lower fuel sales over the long term. Some of the key projects are as follows:

  • HMEL commissioned its 1.2 MMTPA dual feed ethylene cracker in March 2023
  • HPCL Rajasthan Refinery will also be adding around 416 KTPA capacity.
  • BPCL is setting up a 1.2-MMTPA ethylene cracker plant while increasing the capacity of its Bina refinery from 7.8 MMTPA to 12 MMTPA.
  • Reliance Industries is adding around 1.5 MMTPA capacity for polyvinyl chloride
  • Mundra Petrochem Limited is also setting up a 2.0 MMTPApolyvinyl plant.

On a global level, ethylene and propylene capacity is expected to increase by about 47 MMTPA and 44 MMTPA respectively, over the next five years. Accordingly, global ethylene operating rates which were at an annual average of 88% in 1990-2023 are expected to remain below 80% till 2030 due to large supply additions and weak demand as a result of high inflation and lower consumer spending amid weak economic growth in many regions of the world. The first wave of ethylene capacity addition is cooling off, but a second wave is expected to start in 2026. As a result of the excess capacity ethylene and propylene margins are expected to remain weak.

Due to the closure of about 4 million barrels per day refining capacity globally during CY2020 and CY2021, the refining sector enjoyed strong margins during FY2022-FY2024. However, with the commissioning of new refining capacities, the margins have been moderating. ICRA estimates Singapore GRMs for FY2025 at $4-5/bbl. Additionally, Indian refiners have also been procuring Russian crude oil at discounted rates since the mid of CY2022, which has buoyed the GRMs of domestic refiners. About 37% of the crude imports by India in FY2024 were Russian. However, with discounts on Russian crude moderating off late, the GRMs of Indian refiners would also be impacted.

Challenges on the Gas Front

With regard to the gas sector, the GoI has pushed for the setting up of trunk pipelines connecting the East and the Northeast through budgetary support in the form of viability gap funding for the Urja Ganga and Indradhanush pipelines. Apart from this, the Petroleum and Natural Gas Regulatory Board has concluded the 12th bidding round for CGD licences, which has essentially covered nearly the entire country, barring Mizoram.

Globally, gas prices had increased sharply from August 2021, owing to a number of factors such as increased demand, low inventory levels, weak renewable production, and Russia- Ukraine conflict, however, prices have since moderated. The upside to the LNG prices remains limited driven by healthy natural gas inventory levels in most of the key consuming industries, thereby ruling out the sharp uptick in demand and subdued macro-economic outlook, particularly in the EU region, keeping demand under check. Additionally, Japan and South Korea’s shift to use of nuclear energy for power in pursuit of reducing dependence on LNG will weigh on prices in CY2024. Going forward significant new liquefaction capacities are expected to come online from 2026 onwards,l eading to a supply glut, which should keep prices of LNG under check.

The Government of India has announced the mandatory blending of compressed biogas (CBG) in natural gas for the CGD sector. While CBG production has lagged owing to various issues so far, the GoI expects mandatory blending to support investments in the sector, going forward. Within the CGD sector, CNG drives around 50-55% of the CGD volumes and the same is expected to remain the major driver of CGD sales with its network growing almost 2x over the last two and a half years, driven by strong Total Cost of Ownership (ToC) advantage and rising CNG vehicle sales.

There are several LNG terminals that are being set up including at Jaigarh, Charra, etc. along with the recently commissioned terminals at Dhamra and Mundra, which would increase competition in the market and allow greater choices to consumers. The LNG terminal capacity would increase from 45.6MMTPA currently to 66.5MMTPA in the next 3-4 years.

Indian companies have been scouting for long-term gas agreements for the past couple of years to ensure the energy safety of the country. Petronet recently renewed its contract with RasGas in Qatar while GAIL and IOC have also signed a couple of contracts recently. As a part of the demand remains uncontracted and exposed to the vagaries of the spot LNG market, Indian players will look to commit to long-term supply purchase agreements with reliable suppliers with proven LNG project execution track record.

Some of the key issues hindering the development of the gas sector in the country include lack of pipeline connectivity across the country, especially in the eastern and southern parts, regulated realisations/product prices of natural gas-consuming industries, absence of uniform taxation with various states having different VAT rates, separation of pipeline ownership and marketing, slow pace of approvals, etc. Additionally, competition from electric vehicles, especially for the state transport bus segment and hydrogen, would also increase going forward.

Natural gas, crude oil and other petroleum products (MS, HSD, and ATF) are currently outside the GST purview. These products are subject to excise duty levied by the Central Government and VAT levied by the state governments.  There has been a long-standing demand from the industry to include these under the GST regime to enable the free flow of input tax credits and avoid stranded taxes.

Currently, two-wheelers and buses are prime targets for electrification. Wider penetration of electric vehicles (EVs) remains contingent upon battery cost, availability of charging infrastructure, range anxiety, and resale value being addressed. There are some technical challenges that need to be overcome and costs that need to be lowered for meaningful penetration of alternative fuels/electric cars in developing countries including India. These technologies are likely to impact substantially towards the end of this decade. Many fuels could co-exist – viz., gas, LNG, hydrogen, and liquid fuels besides EVs; however, growth patterns would be disrupted for traditional fuels.

Global efforts towards transitioning to low-carbon energy will gradually lower the demand for petroleum products in the coming decades. Accordingly, the carbon transition risk for the domestic oil and gas industry will play out over the distant future.

[1]The Organization of the Petroleum Exporting Countries (OPEC) and allies including Russia are known collectively as OPEC+

Conserve Freshwater with Zero Liquid Discharge

Jay Kumar Singh
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Abstract

To address the growing challenges of water scarcity and environmental regulations, industries are increasingly adopting Zero Liquid Discharge (ZLD) technology. ZLD systems, particularly those utilizing Mechanical Vapor Recompression (MVR), offer a cutting-edge solution by treating nearly all industrial effluent and converting it into reusable water and solid waste. The MVR-based ZLD system excels in energy efficiency, reducing operational costs by up to 45% through heat recovery, and features a compact, modular design that simplifies installation. This system is particularly effective for water-intensive sectors like textiles, where it can recycle 90-98% of effluent and recover valuable by-products. By integrating ZLD technology, industries can significantly cut freshwater consumption, achieve water positivity, and contribute to environmental sustainability. Jay Kumar Singh, with extensive experience in wastewater treatment technologies, highlights the transformative potential of ZLD systems in fostering a greener industrial future.

Going Green: How ZLD Technology is Revolutionizing Industrial Wastewater Treatment

Stricter environmental regulations, water scarcity and mounting pollution concerns are pushing industries to adopt sustain able effluenttreatment methods. This has opened doors for innovative and sustainable solutions like Zero Liquid Discharge (ZLD) to tackle the growing burden of industrial effluent and enhanced the reuse and recycling of effluent.

Traditionally, industries have struggled to manage effluent effectively. But ZLD offers a game-changing approach. It treats almost every single drop of effluent and helps to keep waterways free from pollution. This system eliminates liquid discharge altogether by concentrating the effluent into solid crystal waste, which can then be safely disposed of effluent treated through ZLD can be used for industrial processes, gardening, irrigation, etc. These are the biggest bonus points we get after using ZLD system which treats effluent and converts it into 90-98% reusable water going back to Industry as process makeup water of RO/Soft Quality Water, hence heavily reducing the consumption of freshwater. This conscious effort of incorporating ZLD systems is the need of the hour to help industries achieve water positivity and water valorisation.

ZLD Applications

ZLD technology is particularly suitable for industries with high water consumption and stringent effluent discharge regulations. Common applications include:

  • Power plants: Cooling water, boiler blowdown, and wastewater treatment
  • Chemical and petrochemical industries: Process wastewater and wastewater from manufacturing processes
  • Pulp and paper industry: Wastewater from pulp washing, bleaching, and paper machine operations
  • Food and beverage industry: Wastewater from processing, cleaning, and sanitation
  • Pharmaceutical industry: Wastewater from manufacturing processes and laboratory operations

There are the two prominent technologies under ZLD namely, Multi Effect Evaporator (MEE) and Mechanical Vapor Recompression (MVR). Multi-effect evaporators require steam and electricity for operation, while mechanical vapor recompression relies only on electricity.

About Mechanical Vapour Recompression Based Zero Liquid Discharge

ZLD is highly efficient, modular, and compact Mechanical Vapour Recompression (MVR) based ZLD system. This system stands out for its ability to utilize the heat released from vapours, significantly reducing energy consumption during the evaporation process.

Features of Mechanical Vapour Recompression (MVR)

  • Reduced Energy Consumption: MVR technology captures and reuses heat energy from vapours and lowers opex substantially up to 45%.
  • Compact Footprint and Modular Design: This space-saving in-house designed system is easy and faster to install. Its prefabricated, plug-and-play design ensures a smooth setup and minimizes installation time at site.
  • Patented Two-phase Closed loop system Technology: This innovative technology guarantees reliable performance and zero steam requirement eliminating the requirement of boilers and auxiliaries.
  • MVR ZLD System, an Innovative Evaporation Process Using Mechanical Vapour Recompression
  • Preheating and Flashing: Effluent is preheated before entering a flash vessel. Inside the vessel, a portion of the water transforms into vapour due to the sudden pressure drop.
  • Vapour Compression and Heat Exchange: The generated vapours are compressed to increase their pressure and temperature, then used as a heat source in a heat exchanger to establish evaporation of effluent. The vapours are then condensed to form condensate which can be used as clean water for various industrial applications.
  • Drying and Crystallization: The concentrated effluent is further fed to a special dryer unit (ATFD) equipped with two phase closed-loop technology. This innovative system ensures even heat distribution, making it ideal for treating heat-sensitive materials. Here, the concentrated effluent is transformed into Powderformsolids.
  • Automated Control: The entire process, from preheating to drying, is controlled by a PLC (Programmable Logic Controller) for seamless operation and safety.

MVR system can be marked as exemplary solution to sectors like automobile, food and beverage, pharmaceutical, petrochemical, packaging and paper, chemical, textile, polymer and polyester, tannery, agrochemical, metals and minerals, distilleries, cement, sugar, etc.

Zero Liquid Discharge Systems: A Boon for Tough to Treat effluents

The textile industry is a leading consumer of water, and it ranks among top ten water consuming industries. Almost all dyes, specialty chemicals, and finishing chemicals are applied to textile substrates from water baths. In addition, most fabric preparation steps, including desizing, scouring, bleaching, dyeing and mercerizing, use aqueous systems.

With the extensive water consumption throughout the textile processing operations, on average 90-95% of the water used by the factory ends up as effluent. In this scenario of severe water usage and creation of effluents, zero liquid discharge features as the boon. 90-98% of effluent gets recycled through the overall Zero Liquid Discharge System. Recovered salts(NaSO4, NaCl, etc) from the process can be reutilized in the textile processes as resource recovery.

MVR ZLD system is a revolutionary solution that not only tackles effluent management effectively, but also prioritizes energy savings, operational efficiency and helps industries to achieve water positivity and water valorization. By choosing ZLD technology, industries can embrace a sustainable future while contribute to a cleaner and greener environment.

Advancements and Future Trends

To address these challenges and improve ZLD performance, researchers and engineers are actively exploring:

  • Energy-Efficient Technologies: Developing new technologies and optimizing existing ones to reduce energy consumption.
  • Advanced Membrane Materials: Developing membranes with improved selectivity, fouling resistance, and durability.
  • Integrated Systems: Integrating ZLD with other wastewater treatment processes to enhance overall efficiency and cost-effectiveness.
  • Digitalization and Automation: Leveraging digital technologies to optimize ZLD operations and improve process control.

Evolving Logistics: The Rise of Grade A Warehouses in India

Naresh Sharma
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Evolving Logistics: The Rise of Grade A Warehouses in India

Abstract

Grade A warehouses are transforming logistics with advanced technologies, driven by e-commerce growth, government initiatives, and rising investment, offering sustainable, efficient solutions for businesses.

Introduction

Grade A warehouses, known for their advanced technologies and adherence to industry standards, are experiencing rapid evolution. This transformation is impelled by several industry trends, including the rise of multi-client warehouses, the expanding presence of 3PL and 4PL service providers, the demand for customized storage solutions, and government initiatives like incentive schemes (PIL) and supply chain standardization efforts. Beyond their efficiency and regulatory compliance, Grade A warehouses offer intelligent and efficient storage options tailored to meet the diverse needs of businesses across various sectors.

Modern warehouses (Grade A) are in high demand, but many Indian facilities are still older-style (Grade B & C). Here’s why:

  • Infrastructure Gaps: Limited investment in rural areas hinders development of modern facilities.
  • Cost Considerations: Businesses prioritize lower upfront costs of older warehouses
  • Awareness Factor: Some are unaware of the long-term benefits (efficiency, cost savings, reduced damage) of Grade A facilities.

What defines a Grade A warehouse?

  • Spacious: High ceilings (12+ meters) maximize storage capacity.
  • Optimized Construction: Pre-engineered buildings for efficient space and equipment movement.
  • Durable Infrastructure: Strong foundations for heavy loads, with FM2 compliant floors.
  • Advanced Environment: Modern ventilation systems and focus on safety, health, and compliance.
  • Sustainable Practices: Water management, energy efficiency, and waste reduction initiatives.

Benefits of Upgrading

  • Enhanced Storage: Maximize vertical space with high ceilings and advanced racking.
  • Durable Construction: Less maintenance downtime due to high-quality floors.
  • Streamlined Logistics: Efficient dock & road designs for faster movement of goods.
  • Improved Work Environment: Promotes worker well-being and productivity.
  • Tech-Ready: Integration of automation and other technologies for further efficiency.

The Rise of E-commerce is a Key Driver

The e-commerce revolution has been a major catalyst for the rise of Grade A warehouses. Online retailers require efficient storage solutions to manage vast inventories and fulfill orders swiftly. Grade A warehouses are built for this! They have high ceilings to fit more stuff in and wide spaces for forklifts and trucks to move around easily.

Technology for Efficiency and Accuracy

Furthermore, Grade A warehouses embrace automation and advanced technologies. Warehouse Management Systems (WMS) streamline inventory tracking and order picking, while Radio Frequency Identification (RFID) tags ensure real-time product location and visibility. Automation, including robotic arms and conveyor belts, not only enhances productivity but also minimizes errors and optimizes space utilization.

Improved Infrastructure Benefits All

The Indian government’s push for infrastructure development is another key factor propelling the Grade A warehousing boom. Initiatives like the PM Gati Shakti National Master Plan aim to improve connectivity through dedicated freight corridors and industrial parks. This enhanced infrastructure network reduces transportation time and costs, creating a win-win situation for businesses and consumers.

Grade A Warehouses: A Boon for Businesses

The benefits of Grade A warehouses are far-reaching for businesses. Studies suggest that effective warehousing can lead to a 20% reduction in costs, a 30% improvement in order accuracy, and a 25% increase in customer satisfaction. Faster turnaround times translate to happier customers and a competitive edge in the marketplace.

Investment Opportunities

The demand for Grade A warehousing currently outstrips supply, creating a lucrative space for investors. The logistics sector’s recent infrastructure status and initiatives like the National Logistics Policy have further boosted investor confidence. This surge in investment is fuelling the construction of new Grade A facilities across the country, particularly near major production hubs and consumption centres.

Challenges and Opportunities

Despite their potential benefits, the adoption of Grade A warehouses in India faces challenges such as land acquisition issues, regulatory complexities, and infrastructure bottlenecks. Addressing these challenges requires collaborative efforts between the government, private sector, and regulatory authorities to create a conducive environment for investment and development.

Moreover, the rise of Grade A warehouses presents opportunities for sustainable development. Many developers are integrating eco-friendly practices such as solar panels, rainwater harvesting systems, and energy-efficient lighting to reduce environmental impact. This shift towards sustainability not only aligns with global environmental goals but also enhances the long-term viability of logistics operations.

The Future of Warehousing in India

Looking ahead, the future of Indian warehousing is undoubtedly bright. As the economy continues to grow and the e-commerce sector flourishes, the demand for Grade A facilities is only set to rise. By embracing automation, fostering a skilled workforce, and attracting continued investment, India’s warehousing sector can transform logistics and propel the nation’s economic growth to even greater heights.

In conclusion, the rise of Grade A warehouses represents a transformative trend in India’s logistics landscape. By integrating advanced infrastructure, strategic planning, and sustainable practices, these facilities are poised to drive economic growth, enhance supply chain resilience, and position India as a global hub for logistics excellence in the years to come.

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