Ministers, experts pitch for closer collaboration between Steel and Oil & Gas sectors: Atmanirbhar Bharat webinar
Dated : 17 June 2020 05:15:00 PM
The next few years may witness a closer collaboration of Steel and Oil & Gas sectors of the Indian economy. Chairing a webinar on “Atmanirbhar Bharat– Fostering domestic steel usage in oil & gas sector”, the Minister of Petroleum & Natural Gas and Steel Mr. Dharmendra Pradhan said that the growth profile of the Oil and Gas sector offers a huge opportunity to the domestic steel industry.
The webinar, organized by FICCI, was also attended to by Minister of State, Ministry of Steel Mr. Faggan Singh Kulaste, Secretary MoPNG Mr. Tarun Kapoor, Secretary Ministry of Steel Mr. Pradip Kumar Tripathi, Additional Secretary of Steel Ministry Ms Rasika Chaube, Joint Managing Director of Apollo Hospitals Enterprises and The President of Federation of Indian Chambers of Commerce & Industries Dr Sangita Reddy, IOCL Chairman Mr. Sanjiv Singh, GAIL CMD Mr. Manoj Jain, SAIL CMD Mr. A K Chaudhary, ONGC Director (T&FS) Mr. O P Singh, VP & CEO AM/NS India Mr. Dilip Oommen, Engineers India Limited Group General Manager Mr. Snigdho Majumdar, Tata Steel CEO Mr. T V Narendran, L&T Hydrocarbon Engineering CEO & MD Mr.. Subramanian Sarma, Welspun Corp Ltd MD & CEO Mr. Vipul Mathur, JSW Director Mr. Jayant Acharya, JSPL MD Mr. V R Sharma and other experts from both Steel and Oil & Gas sector.
Taking the cue from the Prime Minister’s call for Atmanirbhar Bharat, Mr. Pradhan noted that for India to cater to the global economic needs, it has to make a beginning by meeting its own needs. “The refinery capacity of the country will get enhanced from 250 MT now to 450 MT in ten years, mainly due to brown field refinery expansions. More pipelines, more CGD capacity, the current 2000 odd CNG stations will get augmented to around 10,000 stations, more compressed bio-gas factories are being set up. All these means more steel will be required for these projects,” the Minister said.
Minister of Petroleum & Natural Gas and Steel Dharmendra Pradhan speaking during the Webinar
Mr. Pradhan said that the Indian steel production is the world’s number 2; India is number 3 in world energy consumption. These facts give rise to the possibility of a big synergy. “Cost competitiveness may be a challenge, but it can be managed. Then investments will flow in. We need to ensure more domestic steel usage in Indian industries, as well as industries of neighbouring countries. Our government is committed to support Indian industries, especially the MSME sector and steel sector,” said Mr. Pradhan.
Earlier, backing the idea of collaboration of the two sectors, Minister of State, Steel Ministry Mr. Faggan Singh Kulaste said that from an economic point of view, a strategic alliance between Steel and oil & gas is a good direction to pursue to augment domestic resource usage, which is the target of Atmanirbhar Bharat by 2024-25. “All stakeholders need to work collectively towards this. Technology up-gradation is a vital element in this regard. I appeal all experts in this webinar to focus on the issues and come up with a concrete rod map,” said Mr. Kulaste.
Minister of State for Steel Faggan Singh Kulaste during the webinar
Director (Technology & Field Services) Mr. O P Singh analysed the impact of COVID-19 on market conditions worldwide. He said that while India has surpassed Japan to be the world’s second-highest producer of steel, increasing the consumption of domestically-produced steel in oil & gas sector will need to consider the challenging requirements of the High Pressure High Temperature environment. Analysing the structure of the upstream petroleum Industry, Mr. Singh said the three major upstream segments are: (1) Production facilities like GGS in onshore or Process Platforms in offshore, (2) Line pipes for transportation and (3) Oil Country Tubular Goods for Exploration and Development. “The projects in all these segments will rise in the next few years.”
ONGC Director (Technology & Field Services) OP Singh at the webinar
The ONGC Director shared that the steel requirements for onshore works are 100 per cent domestically sourced, whereas the steel requirements for the offshore are mostly imported. “The foreign sourcing has come down from around 50 per cent to current 19 per cent and may reach a low of 10 per cent in the next few years.”
Mr. Singh opined that the Prime Minister’s Atmanirbhar Bharat vision will require technology up-gradation in domestic industry. “Development of SEZs, Fabrication yards are required. By developing domestic EPC contractors, there will be an increase in domestic consumptions. ONGC is already in the process of developing such domestic resources and assets.”
Apart from leaders of Oil & Gas and Steel industry, experts and senior officers also participated in the webinar
Delivering the introductory note, Additional Secretary of Steel Ministry Ms. Rasika Chaube said that per capita steel consumption of India is very low compared to global average. “The Ministry of Steel has adopted a multi-pronged approach and a number of sectoral workshops have been held with different industries to enhance the use of steel. For the Oil and gas industry, the current consumption of around 3.03 million tonnes of steel is expected to go up to over 6 million tonnes in the next few years. This webinar is expected to gear up all the stakeholders for that change.”
Addressing the webinar, IOCL Chairman Mr. Sanjiv Singh said that IOC has taken steps to enhance usage of domestic steel in its projects, though, per capita is low and HR coils, alloys, etc. are mostly imported. Stating that India is a major refining hub globally, Mr. Singh asserted that increase in Pipelines, LNG capacity enhancements to 40 MMTPA by 2030, will also lead to enhanced domestic demand of steel.
GAIL CMD Mr. Manoj Jain said that steel is the backbone of oil & gas industry, especially mid-stream, which witnessed up to 70% steel use in the last couple of years. “Synergy between steel and oil & gas has enabled us to manage major challenges. This will lead us to the objective of Atmanirbhar Bharat,” he said.
CEO & Managing Director of Larsen & Toubro Hydrocarbon Engineering Mr. S N Subrahmanian Sarma said that while 6% of steel production in India is consumed by oil and gas sector, 35% is the average contribution of steel to oil & gas project costs. He further added that 45% of oil & gas steel requirement is imported, especially for offshore needs.
Welspun Corp Ltd MD & CEO Mr. Vipul Mathur discussed key challenges in steel product exports. He said that quality and price competitiveness are key to Atmanirbhar Bharat. “More investments are required in Research and Development.
Tata Steel CEO Mr. T V Narendran said that India has a strategic advantage of a growing market. “We need to benchmark the success principles of the Indian automobile industry. India and Russia are the low-cost steel producers in the world. We are exporting to China recently, along with other private steel producers. Spirit of partnership and collaboration is vital for Atmanirbhar Bharat.”
SAIL CMD Mr. A K Chaudhary said that webinar has witnessed a participation of over 1000 persons, which is very encouraging. “Steel demand in the Oil & Gas industry is doubling from 3 to 6 million tonnes. The main driver is the increase in refining capacity. We need to move to API specs in Steel industry.”
The Minister Mr. Dharmendra Pradhan asked the Secretaries in the two Ministeries to have detailed discussion with all stakeholders and come up with a concrete road map within a month to move ahead.
Secretary, Petroleum & Natural Gas Tarun Kapoor
In his concluding remarks, MoPNG Secretary Mr. Tarun Kapoor exhorted stakeholders to work closely. “As the Minister has said we will work out a plan to move forward from this. Oil and Gas sector is a huge steel consumer. The government is committed to extend all support required for the two sectors to work together. We will try to see that the steel imports are reduced to zero in the coming years.”
Secretary, Steel Pradip Kumar Tripathi
Secretary Ministry of Steel Mr. Pradip Kumar Tripathi mentioned that this was the fifth of such seminar in the last one year, for stakeholders to talk to each other – which has resulted in positive changes to boost steel usage in oil & gas sector, expected to enhance from 3 to 6 MT in the next decade. “Deliberations have been brought at challenges which need to be resolved. This will also help our domestic steel producer to improve their all-round capabilities.”
Mr. Dilip Chenoy of FICCI proposed the vote of thanks.