Archive for August, 2014

RJIL Signs Deal to Lease 4,000 Mobile Towers from BSNL

August 28, 2014

Reliance Jio Infocomm (RJIL) recently signed a deal with state-owned telecom major BSNL to lease about 4,000 mobile towers. According to this deal, rentals are being fixed at a base rate of ₹38,000 per month for ground-based towers (GBT) and ₹ 24,900 per month for rooftop-based towers (RBT).

Should RJIL lease a minimum of 1,500 towers in the first year, these will be provided by BSNL at a rate of ₹ 35,000 per month for GBTs and ₹ 21,000 per month for RBTs. Besides, an added 5% discount will be applicable should RJIL commit to leasing a minimum of 1,000 towers within three months. RJIL is yet to announce its final decision regarding the number and timeline of the lease.

Strengthening its Digital Infrastructure

RJIL is the first telecom operatorto receive a unified licence for all 22 service areas in India. Secured in October 2013, this license will allow RJIL to provide the entire range of telecom services, including voice telephony.

Working towards strengthening its digital infrastructural backbone, RJIL is negotiating a series of agreements relating to procurement of collaborative equipment and costing for servicesand infrastructure. All of these collaborations are aimed at facilitating economies of scale and reducing the end price of the service providedto the customer.

Bridging the Gap in Broadband Penetration

Today, RJIL holds a pan-India broadband wireless access spectrum that may be used for 4G services. It also has radiowaves in the 1800 Mhz band or the 2G spectrum, which are used for 4G services worldwide.

RJIL has also struck infrastructure-sharing deals with Reliance Communications, American Tower Corporation, Tower Vision India, Ascend Telecom, Viom Networks and Bharti Infratel. The objective of such collaborations is to improve digital experiences pan-India.

RJIL signed tower-sharing deals with Tower Vision for 8,400 towers in May; with Ascend Telecom Infrastructure for 4,500 towers in June; and with Videocom Telecom, which operates in UP, Bihar and Jharkhand, for 500 towers in July. Also in July, RJIL signed a collaborative partnership with Bharti Airtel that allows both companies to share the capacity of a submarine cable.

RJIL has now become the 7th core member of India’s largest telecom operators’ association, COAI. As a result, it is now licensed by the Government of India (GoI) to provide unified communication services.

Considering its proactive measures, RJIL is expected to have well-developed infrastructure to ensure seamless connectivity and high-speed access when it launches its 4G services in 2015.

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Reliance Industries to Import 1.5 million tons of Ethane from USA

August 21, 2014

Reliance Industries Limited(RIL) recently announced plans of investing $2 billion in its shale-gas assets in the United States of America. Furthermore, on 20th August, representatives from the company announced that it will also be sourcing ethane for its petrochemicals complex at Jamnagar from the next fiscal year.

Enhancing Long-term Competitiveness

The official press note went on to say that RIL is implementing a project to source 1.5 million tons per annum of ethane to feed their crackers in India. Ithas signed storage and capacity agreements for liquefaction and export of ethane with a North American terminal. These operations are expected to commence in the second half of 2016. In addition, RIL has ordered 6 state-of-the-art Very large Ethane Carriers (VLECs) that are believed to be the largest vessels to have ever been built in the world. These, too, are expected to be delivered in the last quarter of 2016, syncing with the readiness of the terminal. Further, the note affirmed, “The project will significantly improve the long-term competitiveness of our cracker portfolio through dedicated feedstock, enhanced margins, higher capacity and end-to-end integration.”

Ongoing Expansions at RIL’s Jamnagar Refinery Complex

The existing refinery complex at Jamnagar consists of over 50 processing units. These are designed to process basic feedstock and crude oil. They are used to obtain a variety of finished products deploying major refining processes such as atmospheric and vacuum distillation of crude oil, catalytic cracking and reforming as well as delayed coking.

The project, known as J3, has been designed to increase production capacity for ethylene and other petroleum products. Currently in its third phase of expansion, RIL’s announcement of importing ethane comes closely at the heels of their $37.3 million contract with Siemens for designing, manufacturing and commissioning of 4 steam turbines

Gaining Global Leadership through Capacity Expansion

RIL is now working on expanding the collective capacity of its portfolio of about 20 petrochemical products by 66%. These expansions will be driven primarily by products such as polyethylene/polythene (PE), ethylene, purified terephthalic acid (PTA) and paraxylene(PX). These products are foundation materials for a number of industrial products such as coatings, adhesives, textiles, inks, paints and plastics. Ethane is the second-largest component of natural gas after methane and has replaced liquids as the dominant feedstock for crackers over the last 5 years.

An investment of $8 billion has been made towards this plan. This move will contribute to the company’s aim to increase ethylene capacities to 3.248 million tons per year. This phase-wise expansiontill fiscal year 2017 will boost RIL’s position to the top 5 in the world for most of these products.

The import of ethane from the United States will help ensure a steady flow of raw materials at a rate decided beforehand. This will help bring down costs further and make RIL’s cracker portfolio a highly competitive one.

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IMG-Reliance Confirms Bojan Djordjic for the Indian Super League

August 14, 2014

It is official: the former Manchester United Player, Bojan Djordjic, will be playing in the inaugural season of Hero Indian Super League. This professional Indian football league is the result of a 700-crore deal between Reliance Industries and US-based International Management Group (IMG). The season will run between October and December this year and will consist of a final series that will determine the champion.

Introducing some Swedish Flavor

32-year-old Djordjic joined Manchester United at the age of 17 in the year 1999. Within a year, Djordjic was named Manchester United’s Young Player of the Year. The left-footed Swede joined Manchester United from Brommapojkarna, a second division club near his home in Stockholm. After being spotted in an Under-17 European Championships match between England and Sweden, there has been no looking back. By 2001, he was regularlyincluded amongst the first team squad for Manchester United.

Over his 15-year old football career, Djordjic has acquired significant international experience by playing competitive football in Serbia, Scotland, Denmark, Sweden, Hungary and England. He is known for his creativity as a midfielder and as a set-piece specialist. Another feather in his hat is his role in winning titles in four countries for his respective teams. He has also played a significant role in making the Plymouth Argyle FC a strong championship side during his stint in England.

The winger-cum-attacking midfielder will be among the 49 other players in the central international player draft that is scheduled on 21st August, 2014 in Mumbai. “Playing in the Indian Super League will be a great adventure, a chance to meet new people and help them to become stronger in a sport that has been my passion for my whole life,” says Djordjic.

The Other Players

Among other leading players named for the inaugural season are Colombian defenders, Jairo Suarez and Andres Gonzales. Sources suggest that IMG-Reliance is very close to completing its quota of foreign players that come from leading football countries and the best leagues around the world. In addition to the 14 domestic players, every franchise within the Hero Indian Super League must also sign 7 international players minimum and a single-marquee foreign player for its squad.

Speculators believe that the next few names on the list may consist of young Brazilian players. The organizers have also released a list of 13 international players among which the most impressive names come from France. Football giants, Olympique Lyon and Cedric Hengbart, along with French defender, Sylvain Mosoreau, are on the list. Each one of these players comes with significant experience either with the French club, Auxerre, or the UEFA Champions League.

The first list of players also includes Omar Rodriguez (Columbia), Erwin Spitzner (Brazil), Gustavo Marmentini (Brazil), Guilherme Felipe de Castro (Brazil), Bruno Augusto Pelissari de Lima (Brazil), Pedro Gusmao (Brazil), Luis Yanes (Colombia) and Youness Bengelloun (France).

The 8 franchisees will battle for the 49 international players in the pool on August 21st.

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RIL records Impressive Growth amidst Industry-wide Regulatory Changes

August 10, 2014

One of the biggest news coming out in the Oil & Gas sector in recent times has been the huge number of regulatory changes proposed by many bodies and government alike. As such, the tighter emission norms that aim to reduce the petroleum industry’s carbon footprint has also made big news and has also resulted in many refineries, mostly in the Russian Federation closing. As a result, analysts in this sector have been predicting that the big players will be the most severely hit by these penalties. Surprisingly though, Mukesh Ambani’s Reliance Industries Limited (RIL) has recorded impressive growth during this period.
Regulatory changes first played out in June wherein the proposal to increase the export duty on fuel oil export from 66 per cent to 76 per cent of the crude oil level has a profound impact on refineries in Russia. Over the course of time, many industry analysts expect this to result in a total closure of refineries in Russia.
In the last few years, the spreads between light and heavy crude oils have been narrowing, which has also impacted RIL’s GRMs, which have declined from peak levels. According to Axis Capital’s analysis, weakening fuel oil fundamentals would reduce the demand for heavier crude oil, further widening the light-heavy differential, beneficial for complex refiners like RIL.
Refining margins continue to be highly volatile and sadly, the status quo doesn’t look likely to change any time soon. Vandana Hari, Asia editorial director of Platts, a leading provider of information on the energy sector, says: “Regardless of the uncertainty round the export duty reform, observers and analysts believe Russia’s large-scale refinery modernisation plan would continue. That means simple refineries have to invest in fuel oil upgrading units, or shut, though now the deadline has shifted down the road by a couple of years. The shift, under way in Russia, would increase the country’s supply of ultra low sulphur diesel (ULSD) and other clean products to the European markets.”
As a result, the collapse in fuel oil demand would accelerate from 2015. State-owned corporations like ONGC in India would suffer, while private ones like RIL would gain substantially. For many reasons, refineries are expected to process expensive light crude oil to produce gas, oil and diesel, which would increase the differential between light and heavy crude oils. RIL has been shoring up its margins by processing the cheaper heavy crude. Over two years, it has moved towards processing heavier crude oil grades. According to Axis Capital, RIL’s average American Petroleum Institute gravity through 2007-2011 was 29 (light crude), which has reduced to 26 (heavy crude) in first nine months of 2013. Analysts say RIL’s crude oil sourcing has helped the margins and the company may have saved $2 a bbl in its crude sourcing costs.