Establishment of Tank Farms at PCPIR, Dahej Logistics Infrastructure and Industrial Area/Parks. Government of Gujarat

Transcription

1 Establishment of Tank Farms at PCPIR, Dahej Logistics Infrastructure and Industrial Area/Parks Government of Gujarat

2 Contents Project Concept 3 Market Potential 5 Growth Drivers 11 Gujarat Competitive Advantage 12 Project Information 14 - Location/ Size - Infrastructure Availability/ Connectivity - Raw Material/ Manpower - Key Players/ Machinery Suppliers - Potential Collaboration Opportunities - Key Considerations Project Financials 18 Approvals & Incentives 19 Key Department Contacts 20 Page 2

3 Project Concept The chemicals industry is a critical component of the Indian economy The Petroleum, Chemical and Petrochemical sector in India is a key constituents of Indian economy. The country is a significant exporter of dyes, pharmaceuticals and agrochemicals. India exports dyes to countries around the world, notably Germany, the UK, the US, Switzerland, Spain, Turkey, Singapore and Japan. The export of dyes is expected to increase from US$ 2.1 billion in to INR157.8 billion (US$2.6 billion) in 2020 India s oil industry Third Largest Chemical Producer in Asia Fourth largest Global producer of agro chemical Emerging as Asia s refining hub and becoming the net exporter of petrochemicals to Middle East, Korea, Japan & Singapore As per IEA s World Energy Outlook 2015 report, India contributes the single largest share of growth, around one-quarter, in the global energy demand. The country is the third largest (after the US and China) net importer of crude oil. However, it is a major (fourth largest after US china and Russia) producer and exporter (third largest after Russia and the US) exporter of refined oil products. India contributes 5.8% to the world s total of oil products output. The Indian Refining industry is undergoing expansion, with both greenfield and brownfield projects under way. By the end of the 12th Five Year Plan, the country s refining capacity is expected to expand to MMTPA. PCPIRs in India Sixth Largest Chemical Producer in World To promote & attract investment in the sector and make the country an important hub for both domestic and international markets, GoI has provided transparent and investment friendly policy and facilities regime, under which Petroleum, Chemicals & Petrochemical Investment Regions (PCPIRs) are set up Each PCPIR is a specifically delineated region having an area of about 250 sq. km. wherein 40% of the area has to be for processing activities. The infrastructure development in these projects includes road development, port development, rail links, desalination plants, setting up of LNG terminal 1 2 Andhra Pradesh Gujarat (Dahej) (Vishakhapatnam) 3 4 Tamil Nadu Odisha (Cuddalore and (Paradeep) Naghapattinam) Gujarat, Dahej Odisha, Paradip Andhra Pradesh, Vishakhapatnam- Kakinada Tamil Nadu, Cuddalore- Nagapattinam Page 3 *Source: Chemical and Petrochemical Industry in India Report 2015 by Corporate catalyst (India0 Pvt. Ltd) Make in India Basic chemical, cosmetics & Dyes Export promotion Council

4 Project Concept The liquid storage tank farm facilitates the storage of liquid bulk such as crude, petroleum products, chemical and edible oil. Tank farms facilitate a modal shift by providing intermediate storage facility for liquid bulk cargo before these are taken to processing plants. They enable cost-efficient logistics through larger shipping parcels to allow savings in ocean freight Facilitate trading Meet surges in seasonal demand due to the cyclicality associated with the commodity products handled Provide specialized storage requirements depending on the nature of the product. Page 4 A typical tank farm view

5 Market Potential National Scenario Liquid bulk cargo handled at ports has been growing at a CAGR of 5% 6% between FY10 and FY13. Crude accounted for ~32% of the total liquid traffic in India in FY13, and it has grown at CAGR of 4% between FY10 and FY13. POL, which accounted for 64% of the total liquid bulk cargo in FY13, has grown at 5% between FY10 and FY13. Chemicals accounted for 2% of the total liquid traffic in FY12, and its share has grown at a CAGR of 10% from FY10 to FY13. The share of edible oil imports, which accounted for about 2% of the total liquid bulk traffic in FY13, has grown at a 8-9% CAGR between FY10 and FY13. Around 80% of total POL traffic (crude and products) is stored in captive tanks farms of respective oil companies, whereas edible oil and chemicals are mostly stored in commercial tank farms. Demand for liquid storage space is increasing in India amid increasing traffic and limited existing capacities. Currently, the utilization of commercial tank farms in India is between 75% and 80% in FY13. During imports of petroleum products registered an increase of 22.16% POL (Petroleum, Oil & Lubricants) The POL (Petroleum, Oil & Lubricants) products category includes petrol/motor spirit, high-speed diesel, naphtha, bitumen and many other petro products. The demand for petroleum products is expected to grow at around 4.6% during to which will be primarily because of a 10% CAGR increase in naphtha demand due to the commissioning of petrochemical and polyester capacities. The major driver of naphtha demand is the petrochemicals sector with a consumption share of more than 80%. Edible Oil As per National Council of Applied Economic Research estimates, the total demand of edible oil in 2020 would be MMT The domestic supply would be able to cater to only 40% of the demand, leaving the remaining 60% to be catered through imports. Page 5 *(Source: EY Report on The Indian Warehousing Industry, 2013)

6 Market Potential POL (Petroleum, Oil & Lubricants) Gujarat Scenario The POL consumption in the state for FY 15 is 17.1 MMT registering a CAGR 0f 2% for a period between FY The State consumes about 15 lakh tonnes of edible oils per annum. Against the average per capita consumption of 13 kg of edible oil in other States, Gujaratis consume 26 kg. POL consumption in Gujarat (MMT) CAGR: 2.0% FY11 FY12 FY13 FY14 FY15 Naphtha and High-speed diesel oil (HSD) has the highest share amongst the POL products both in terms of production as well as consumption. Naphtha produced in Gujarat is majorly consumed within the state due to the presence of petrochemical units. India being majorly dependent on global supply of crude, the dip in global crude prices has led to spurt in demand 8.0 Consumption in Gujarat (MMT) FY11 FY12 FY13 FY14 FY15 Naphtha LPG Motor Spirit SKO ATF HSD FO Others Source: Indian Petroleum & Natural Gas Statistics, MoPNG Going forward, with the establishment of major petrochemical complexes under SIRs, it is expected that Gujarat-based naphtha consumption will further increase leading to possible imports of naphtha to cater to heavy demand. Gujarat produces around 90% soda ash and 50% caustic soda in the country.. Page 6 *(source: MoPNG) *(source: Business Line, May 24, 2013)

7 Market Potential GCPTCL fulfils the need of export/import of bulk liquid cargo and raw materials for petrochemical industries Cargo Type - Naphtha, Propene, Butadiene, Styrene Monomer, EDC, MEG, 2-E H, DEG, Methanol and Normal Propylene Cargo Traffic Handled (Lakh Tons) CAGR: 4.0% FY07 FY08 FY09 FY10 FY11 FY12 FY13 FY14 FY15 The existing traffic handled at GCPTCL port is 17.3 Lakh Tons scaling a CAGR of 4% between FY The existing storage capacity at GCPTCL is approx. 3,70,000 cubic metres whereas the planned expansion/addition is also in the tune of about 3,50,000 cubic metres. Existing Storage Tanks Product Safe Filling Volume (KL) Propane LPG Butadiene 4220 Ethylene die-chloride (EDC) Methanol Octene-1/NP 4400 Palm Fatty Acid Distillate (Veg Oil) 7200 Naphtha Styrene 6480 Propylene Oxide 2970 Acetic Acid 8000 MTBE 9215 Para xylene Total Expansion/ Addition of Tanks Product Propylene Oxide 5940 Acetic Acid 3240 Ethyl Acetate 3240 Toluene 4000 Benzene 4000 Ethanol 3570 Methanol Cyclohexanone 2700 MMA 1800 Ammonia Mono Ethylene Glycol Safe Filling Volume (KL) Ethane Total Page 7

8 Market Potential Leading Players Oklahoma Magellan Midstream Partners Texas J P Energy Netherlands Vopak Turkey Al Zamil Heavy Industries Ltd Turkey Tekfen Construction Russia Gazprom Japan Tokyo Gas Page 8

9 Market Potential Modern Technologies for Tank Farm Communications Terminal and tank farm communications system Portable repeaters or FM System with portable repeaters Mobile response communication centre (Flyaway Package) Trajectory analyses and forecasts Visual surveillance Tracking buoys Discharge source control Automatic detection and shutdown Patch kits Storage tank leak detection Automated detection Under-tank detection Liquid level determination (aboveground oil storage tanks) High-level alarms (VAREC 2500 automatic tank gauge) Radar level tank gauge (VAREC) Maintenance practices/corrosion control for buried facility Piping Periodically expose buried piping (computer based) Internal pipe surveys (computer based) Best practice examples around the world Vopak New Terminal Antwerp Eastbank, Belgium Saudi Aramco, Saudi Arabia TNG Tamanneftegas, Port of Taman, Russia Page 9 Source: Benchmarking by Siemens Terminals & Tank Farms by Donlin Gold Project

10 Market Potential Intelligent Tank Farm & Terminal Management systems Maximum performance in operations Secure your performance with intelligent field instruments System used Best practice examples around System the used world Tank farm management system and tanker truck loading station Terminal Automation System (TAS) for new tank pit NPK-Galychyna, Drogobych Refinery, Ukraine Safe and versatile loading operations Noord Natie Terminals, Belgium Better route control System used Terminal Automation System and unified control in a distributed tankfarm solution Best practice examples around the world System used Electrical and instrumentation turn key solution to build new tank terminals GPS CHEMOIL LLC, Fujairah / UAE Solution Partner: L & T Electrical & Automation FZE (Dubai / UAE) Sea-Tank Terminals Antwerp, Belgium Benefits of intelligent system: SAFETY AND ENVIRONMENTAL COMPLIANCE Avoiding overfill incidents Minimizing impact of tank leaks Avoiding personnel/equipment harm and operations errors from acting without important information Page 10 BUSINESS PERFORMANCE Avoiding product loss Eliminating loss control monitoring errors MAINTENANCE Improving pump maintenance efficiency Avoiding Downtime Source: Benchmarking by Siemens,2013

11 Growth Drivers Rapid growth in domestic chemicals demand: India is expected to become the secondlargest individual market (after China), accounting for 20% of the global chemical sales by 2050 as rapid urbanization and rising per capita disposable income drive strong growth for several key end-user industries. Foreign chemicals producers shifting production to India: India has emerged as one of the key low-cost manufacturing destinations worldwide, leading to global chemical producers shifting their manufacturing base to Indian states such as Gujarat and Andhra Pradesh. Rising demand for plastics: Growing trend of plasti-culture (use of plastics in agriculture under the micro-irrigation scheme) and increasing consumption of plastics seen in other sectors including packaging, automotive, health care and fast-moving consumer goods. FDI in Chemical Sector:100% FDI is permissible in the Indian chemicals sectors while manufacturing of most chemicals products is de-licensed. Diversified Industry: A diversified manufacturing base of Indian chemical industry produces world class product. Chemical industry has a substantial presence of downstream industries in all segments. Further, this large and expanding domestic chemicals markets also boast large pool of highly skilled manpower. Favorable government policies National Policy on Petrochemicals implemented by GoI includes three schemes: National awards for technology innovation in various fields of petrochemicals and downstream plastic processing industry, setting up of centres of excellence and setting up plastic parks to promote a cluster approach for the development of plastic applications and plastic recycling The government of India is also promoting the establishment of Petroleum, Chemical and Petrochemical Investment Regions (PCPIRs) to boost the domestic petrochemical industry as well as exports Page 11

12 Gujarat - Competitive Advantage 'Petro Capital' of India, contributing significantly to the country's production of Petrochemicals (62%), Chemicals (53%) and pharmaceuticals (45%). Gujarat has World s Largest grass root petroleum refinery at Jamnagar by Reliance Industries Limited with a crude processing capacity of 1.24 million Barrels Per Stream Day (BPSD) Gujarat credited with India s First LNG chemical port terminal at Hazira Located on the west coast of India, Gujarat is well connected to the major cities of the world by air and sea routes Well connected to the major cities of the world by air and sea routes. The state has 45 operational ports, 12 domestic airports and 1 International airport in addition to an extensive rail and road network. Salt Processing Diamond Processing Petrochemicals Chemicals Pharmaceuticals Engineering 18% 45% 51% 62% 70% 75% Gujarat is one of the leading Industrialized States in India and the State has attracted cumulative FDI worth US$ 12 billion from April 2000 to March 2015 Gujarat ranked first in ease of doing business as per DIPP report 2015 Ease of Doing Business: Only state which comply 100% with Environmental procedures. Gujarat fares highly when it comes to setting up a business, allotment of land and obtaining a construction permit Flourishing Economy: State contributes 7.2% of the Nation GDP and shows leadership in many areas of manufacturing and infrastructure sectors. Gujarat s SDP (State Domestic Product) at current price registered a growth of 11% during the year Key Industries: Gujarat is the leader in key industrial sectors such as chemical, petrochemical, auto and its allied sector, pharmaceuticals, engineering, textile, jewellery etc. Page 12 *Source: Socio Economic Review of Gujarat

13 Gujarat - Competitive Advantage 38% (564 km) of the 1500 km length of DFC will pass through Gujarat which includes 62% of total area of Gujarat (18 out of 33 districts within the influence area) Investment potential for Gujarat is US$ 50 bn (60% of total investment potential in DMIC) Presence of over 1100 manufacturing unit comprising of small and large industries in PCPIR including chemical, petrochemical, engineering, plastic, dyes & pigments, textile etc. PCPIR The State has received acknowledgments of 2,466 Industrial Entrepreneurs Memorandum (IEM) filed by entrepreneurs between 2010 and October 2015 with an estimated investment of Rs. 6,01,766 Crores Gujarat, with 42.6 % of its population residing in the urban areas, is among the top three urbanized states in the country Gujarat contributes around 17.2 % to the country s industrial output whereas the value of output registered is about 18.5%. Gujarat is the one of the power surplus states in the country as a result it helping in bringing huge amount of investment from the industries and tagged as preferred investment destination in the country Gujarat contributes around 19.1 per cent to India s total exports of goods in Page 13 *Source: Socio Economic Review of Gujarat *Source: DIPP report

14 Project Information The liquid storage tank farm facilitates the storage of liquid bulk such as crude, petroleum products, chemical and edible oil. They enable cost-efficient logistics through larger shipping parcels to allow savings in ocean freight, facilitate trading, meet surges in seasonal demand due to the cyclicality associated with the commodity products handled and provide specialized storage requirements depending on the nature of the product. Value Chain The wide variety of liquid bulk products that can be stored include: Oil products (such as crude oil, gasoline, naphtha, diesel and fuel oil) Chemical products (such as methanol, xylene, MEG and styrene). Biofuels and vegetable oils LNG & LPG Location Connectivity Location Distance International Airport Domestic Airport Ahmedabad Surat/Vadodara 210 Km (NH-8 Connectivity & NE-1) Km Connectivity (NH-8) Nearest Port Dahej Within Connectivity PCPIR Railway Jn. Bharuch Connectivity 12 Km Nearest City Bharuch Connectivity 12 Km Page 14

15 Project Information PCPIR snapshot s Location Dahej, Bharuch Area 453 Sq Kms PCPIR Focus Sector Anchor Tenant Chemical & Petrochemical ONGC Petro additions Ltd Investment Made till date (at historial cost) Over 100 Functional Units INR 63, 651 crores (USD 9.5 billion)* Investment Committed INR 1,05,989 crores (USD 15.8 billion)* Investment on Infrastructure Development INR 15,660 crores (USD 2.3 billion)* Chemical port and storage terminal, Dahej PCPIR (one of existing units in PCPIR, Dahej) The terminal port is operated by GCPTCL Storage terminal total project cost is INR 830 crore (US$ 186 million) The terminal has a facility to store over 3.5 lakhs cubic meters of liquid chemicals Port has the annual handling capacity of about 2.5 MMTPA Existing Tank: 35 Nos. Type of storage: Fixed roof/floating roof/fixed cum Internal floating roof/double walled storage tank Page 15 *1 USD = INR 67

16 Project Information Infrastructure Availability Existing Connected to Delhi-Mumbai Broad Gauge railway line at Bharuch Bharuch Dahej rail line (62 km) Proposed Delhi-Mumbai Dedicated Freight Corridor (DFC) will touch the PCPIR on the eastern side Bharuch Dahej broad gauge line to be connected to the DFC at Dayadra Jn. (~50 kms) Existing 50 Km of six lane Dahej-Bharuch State Highway connecting six lane Delhi- Mumbai National Highway and National Expressway Proposed Ahmedabad Vadodara National Expressway to be extended to Mumbai Existing 250 km from International Airport at Ahmedabad 90 km from Domestic Airport at Vadodara 85 km from Domestic Airport at Surat Proposed Greenfield Airport for PCPIR Existing Adani Port (Dahej) MMTPA GCPTCL Liquid Chemical Terminal MMTPA LNG Petronet (Gas Terminal) MMTPA Reliance liquid fuel jetty MMTPA Birla Copper bulk cargo jetty MMTPA Proposed Ro-Ro Ferry Service Terminal by GMB (construction work started) Development of jetty for handling ODC (Over Dimensional cargo) in Joint Venture with Dahej SEZ Ltd Page 16

17 Project Information Utilities in PCPIR Water Power Existing GIDC supplies 50 MGD raw water drawn from Narmada river at Nand and Angareshwar ( 25 MGD each) New Developments Water supply scheme for 50 MGD water from Miyagam Branch Canal (130 km) Effluent Disposal Existing Currently 90 MLD disposal pipeline of 40 km is laid within PCPIR to dispose the effluent into deep sea (4.5 Km inside the sea). New Development Setting up of a CETP with capacity of 40 MLD by GIDC in Dahej. Existing Three 220 KV sub-stations located at Dahej & Vilayat & Six 66 KV substations located at Dahej, Luna, Bhensali & Vilayat New Development (in progress) One 440KV, one 220KV & nine 66KV substations proposed within PCPIR area Gujarat Energy Transmission Corporation Limited (GETCO) of 220 KV substation at Suva Dahej, 1600 MW gas based power plant by Torrent Power Ltd. in Dahej SEZ. Operational MW (1 st Phase) 2640 MW coal based power plant - Adani Power Gas Supply Gujarat Gas Company Limited (GGCL) currently owns and operates distribution pipelines in Bharuch district. Other Facilities in PCPIR Telecom: Networks of BSNL and major private companies such as Airtel, Vodafone and Idea, WLL-BTS are available at Dahej and Vagra Skills improvement:: 7 ITIs in PCPIR and within 30 km radius; 3 Skill up-gradation centres (SUCs) set up by GIDC and private companies such as Essar, ABG Shipyard, L&T etc. Operations 2 Persons min per tank Page 17 Monitoring 1 Persons min per 2 tank Manpower requirement Maintenance 3 Persons min per 3 tank Hazard 1 Person per 10 persons Security 6 Persons per exit *estimates: internal **It is mandatory to have medical dispensary within the premises equipped with primary treatment facilities with min 1 doctor and 2 trained support staff plus 1 driver with ambulance and 2 ward boys and fire station with wagon with trained staff min 6 person

18 Project Financials Project structure & implementation models Tank Farm projects are usually funded through a PPP model, in which private players can charge operating charges per litre of liquid volume handled. Revenue Stream The revenue stream of the companies engaged in storage services are: Storage Service Fees Fees paid for reserving storage space in tanks and to compensate for handling upto a fixed amount of product volume, or throughput, at the terminals. Throughput Fees Fees paid by the non-storage customers to receive or deliver volumes of products to designated pipelines, third-party storage facilities or warehouse transportation. Ancillary Service Fees Ancillary service fees includes fee for services such as heating, mixing and blending their products stored in tanks. Project cost The cost estimate outlined for a m3 of storage for crude oil and petroleum products is in the range of US$ 280 to US$ 350, below is a detailed break down of the equipment to be procured. Tank Farm Block Cost Benchmarking (US$ million, 2014) 4,80,000 m3 storage of crude oil 5,00,000 m3 storage POL (40% petrol, 60% diesel) % of Cost Tanks % Mechanical % Fire Protection % Tank Foundation % Tank Compound % Other Civil Works % Electrical & Control % Engineering, Clearances and Project Management % Contingency (10%) % Total % Cost per m3 storage (US$ / m3) Page 18 *1 USD = INR 67

19 Approvals/ Clearances The Petroleum Oil Depots and Terminals & their various facilities are covered under many regulations and require specific approval / licence from concerned statutory authorities. These statutory NOC/Clearances include the following: Coastal Regulation Zone (CRZ), NOC/Clearance Ministry of Environment and Forests, NOC/Clearance Gujarat Pollution Control Board, NOC/Clearance District Industries Centre, NOC/Clearance Chief Controller of Explosives/ Petroleum & Explosives Safety Organisation (PESO), NOC/Clearance Other NOC/Clearance shall be obtained from Fire Department Civil Aviation Department Forest Conservation Act, 1980 Wildlife (Protection) Act, 1972 Agencies Involved Ministry of Petroleum & Natural Gas Oil Industry Development Board Directorate General of Hydrocarbons Petroleum & Natural Gas Regulatory Board Oil Industry Safety Directorate Petroleum Conservation Research Association Petroleum Planning & Analysis Cell Centre For High Technology Page 19

20 Ministry of Environment, Forest and Climate Change (MoEF), Government of India Department of Industrial Policy & Promotion (DIPP), Government of India Department of Chemicals & Petrochemicals, Government of India www. chemicals.nic.in Gujarat Pollution Control Board (GPCB) Gujarat Industrial Development Corporation Industries & Mines Department Office of Industries Commissioner Industrial Extension Bureau This project profile is based on preliminary study to facilitate prospective entrepreneurs to assess a prima facie scope. It is, however, advisable to get a detailed feasibility study prepared before taking a final investment decision. Gujarat Industrial Development Corporation Address: Udyog Bhavan Block No.4, 2nd Floor, Sector 11 Gandhinagar Gujarat,India Phone Number : (79) ; Website :