Energy news monitor Volume XV; Number 10



    ENM, Energy Monitor, LNG, IOC, CNG, HPCL

GAS FIBER ON THE HORIZON?

Gas News Comment: July – August 2018

India

The sharp increase of 70 percent of the global LNG price is unlikely to slow down domestic demand, but somewhat weaken CGD companies' margin as volume growth will support marketing margins, according to a report. In the past five to six months, LNG prices in Asia have increased by more than 70 percent, driven by rising Chinese imports. The spurt was also due to plant closures and healthy demand from Japan, Korea, India and Pakistan, CRISIL said. It also noted that for the remainder of this fiscal year, the prices are expected to be $ 8-8.5 / mmBtu for the non-peak months and reach $ 10-10.5 / mmBtu in the peak season, even if it supply is being restored from factory rounds and 25 meter incremental liquefaction capacity put into operation. Last tax, after stabilization at $ 8-8.5 / mmBtu during the meager months (between May-June and September-October), the Asian spot LNG prices peaked at $ 10-10.50 / mmBtu, said CRISIL. What increases the attractiveness of LNG as industrial fuel is the improved competitiveness compared to alternatives such as fuel oil and LPG. The regulatory pressure to expand CGD networks also stimulates demand. Although in the past higher prices dented the LNG demand in the country, it is now different, with an increase in consumption of 6-7 percent to 20mt in FY18. At an average crude price of $ 75 per barrel, the fuel costs and LPG costs are expected to be $ 14.3 / mmBtu and $ 19.2 / mmBtu respectively. In comparison, with LNG ruling at $ 9.5 / mmBtu, it is expected that industrial piped natural gas will decide by $ 14.8 / mmBtu, the report said. CRISIL expects LNG demand in the medium term will be supported by the development of gas infrastructure in the eastern region, largely untouched. The government is concentrating on increasing the share of gas in the total energy mix and the development of LNG terminals and pipelines, which is a good omen for demand in the medium to long term.

India is planning to set up an LNG import terminal in Myanmar to expand the energy diplomacy in its environment. The terminal for the import of supercooled natural gas will be complementary to the comparable facilities planned by Indian companies in Bangladesh and Sri Lanka as part of a larger energy connectivity plan in the South Asian district. Numaligarh Refinery Ltd in Assam examines the supply of diesel to Myanmar and looks at options for the construction of fuel storage and distribution in that country. Petronet is also building a 7.5 mtpa LNG import terminal in Bangladesh to feed the energy needs of that country with imported gas. In Sri Lanka, India is jointly developing the Trincomalee oil storage tank farm and is also working on setting up an LNG terminal and a 500 MW LNG-fired power plant near Colombo. Bangladesh and Myanmar have large gas reserves that can be investigated as alternative sources of gas supply. The national energy systems – gas and electricity networks – in the South Asian countries are largely isolated from each other. Currently only India, Bhutan and Nepal trade electricity.

IOC, the country's largest fuel retailer, expects its upcoming 5 mtpa Ennore LNG terminal to be operational in October. The company establishes the terminal at Ennore near Chennai in Tamil Nadu for an amount of ₹ 43 billion and has also created a facility to scale up the capacity to 10 mtpa, if necessary. IOC said the company has already signed purchase agreements for 1.5 million tons of gas with consumers. IOC plans to connect the terminal to its Chennai Petroleum Corp Ltd refinery, with the exception of the Madras Fertilizers, Tamil Nadu Petro Products, Manali Petrol Products and other customers in the area. The company is also working on a 1385 km long natural gas pipeline from the Ennore terminal to Nagapattinam in Tamil Nadu via Puducherry. The fuel retailer also provides pipelines to Madurai, Tuticorin and Bengaluru to meet the demand of multiple LNG customers in the region. The construction of the entire 1,385 km long pipeline will take place in phases. IOC is working on an investment plan of ₹ 228.62 billion, an increase of 21 percent compared to ₹ 188.48 billion in the previous financial year (2017-18). IOC plans to spend 43 percent of the current fiscal capex in the refineries segment, 11 percent on petrochemical projects, 12 percent on pipelines, 25 percent on marketing and the rest on exploration and production, gas projects and alternative energy.

Leading oil marketing companies such as Petronet LNG Ltd, IOC and BPCL have come together to set up nearly twenty LNG stations on different national highways to provide LNG-fueled truck transport movements, following government instructions. These registrations would be issued for this purpose in the next 15 days. This association of oil marketing companies has functioned on a pilot project basis to feed about 5000 lorries with LNG on the first five national motorways, starting in 2019. The necessary permission to place such LNG distribution centers on national motorways is already given since the government asked the oil marketing companies to set up such stations to address the twofold problems of fuel cost savings and to pay sufficient attention to the issue of increasing fuel pollution. In addition, the higher efficiency would also be achieved with a large number of trucks running on national highways with LNG because it is considered a cleaner fuel with virtually no pollution, Mishra pointed out. He also clarified that India is partly inspired by China for this initiative, where almost three lakh trucks operate on their highways with LNG fuel and the team of experts in the oil sector is currently visiting China to study this system. To start the exercise of trucks with LNG fuel to start wide and then passenger buses also on the same fuel on national highways, the oil companies have already asked truck manufacturers such as TATA & # 39; s and Mahendras to make corresponding trucks fed cheaper and cleaner fuel such as LNG and the like.

More industrial units are set up here to switch to LNG from conventional fuels or LPG. IOAGPL is approaching completion of the distribution network to CSEZ in Kakkanad, where 12 industrial units have been notified for securing LNG connections. According to the IOAGPL they have to lay pipes in two small pieces to complete the network with CSEZ. The IOAGPL has started registration and plumbing work at the municipalities of Aluva, Thrikkakara, Maradu and Eloor. IOAGPL has given 1,200 PNG connections in the municipality of Kalamassery. The company had permission to excavate roads in six departments in the Kalamassery and Thrikkakara municipalities. A total of 8,500 registrations have been completed in these municipalities.

Renegotiated resettlement of gas imports by Gazprom with Russia Gazprom will save between 20 and 95 billion dollars during the contract period ending in 2040. GAIL (India) Ltd had in January benefited from the Russian company's inability to supply LNG from the earlier agreed Schtokman project in the Barents Sea, to renegotiate the price agreed in 2012. The first cargo of Russian natural gas under the long-term contract between GAIL and Gazprom Marketing & Trading Singapore was received on 4 June. The gas price was negotiated, depending on many factors such as project location, contract duration and price formula. GAIL has renegotiated the terms of the 20-year agreement to import 2.5 mtpa LNG, including price and volume help. The contracted volume has been reduced from 2.5 m to 0.5 mt in the first year, 2018-19; 0.75 mt in 2019-20 and 1.5 mt in the third year 2020-21. The contract period was extended by three years to meet the deliveries that were not made in the first years and to receive an extra 2 m above 50 mt which he had agreed in 2012 during the 20-year contract period. India has benefited best from its position as one of the world's largest energy consumers to make better bargains for its businesses. Last year, India led the American energy company Exxon Mobil Corp to cut the 1.5 mtpa LNG price of the Gorgon project in Australia, saving £ 40 billion on import costs. India currently has four operational LNG import terminals in Dahej and Hazira in Gujarat, Dabhol in Maharashtra and Kochi in Kerala with a total LNG import capacity of 27.5 mtpa. After re-gasification, the imported LNG is distributed via existing pipeline networks to industries and household customers.

Adani's group emerged as the biggest winner of gas sales licenses and won rights to sell CNG in 11 cities, including Allahabad. Adani won the rights to CNG for retailing in automobiles and piped cooking gas to households in six separate cities and another five in joint ventures with IOC, based on the results of the 48 of the 86 cities that were offered in the largest CGD bidding round in the country. According to the PNGRB, the IOC has only acquired rights in four cities. Bharat Gas Resources Ltd, a unit of BPCL, won a license for six cities, the same number for which Torrent Gas Pvt Ltd. also made winning bids. State gas supply GAIL & # 39; s retailer, GAIL Gas, managed to acquire rights for three cities. When the bid round closed, IOC, BPCL and Adani Gas Ltd were the best bidders. Of the 86 cities that are offered for the sale of CNG to cars and to bring gas to households in the ninth CGD bid round, IOC has made an offer on 34 cities and another 20 in collaboration with Adani Gas Ltd. Adani Gas on own bid for 32 cities. Bharat Gas Resources Ltd offers up to 53 cities while GAIL Gas Ltd offers deals for 34 cities. Torrent Gas Pvt Ltd from Gujarat offered for 31 cities while Gujarat Gas Ltd offered 21 offers.

The Adani group now has 52 of the 86 geographical areas that have been put out to tender by the government. In total, 400 bids with an estimated investment potential of ₹ 700 billion were received by the PNGRB. Overall, geographic areas provide CNG and PNG services in 174 districts in 22 states. GAIL Gas Ltd, the city gas distribution department of GAIL, offers a bid for nearly 30 cities. Other GAIL subsidiaries, Mahanagar Gas Ltd and Gujarat State Petroleum Corp have also made bids. Adani Gas Ltd offers 32 cities and 20 more cities in joint venture with IOC. IGL, which CNG sells in the NCR, offers a bid for 13 cities. India Gas Solutions Pvt Ltd, the RIL-BP joint-venture for the sale of natural gas in India, licensed 15 cities but did not place a bid at the end of bidding.

According to PNGRB, a total of 400 bids were received for the 86 licenses offered. The government focuses on increasing the share of natural gas in the primary energy basket to 15 percent, from 6.2 percent at the moment, within a few years. The bidding round is also aimed at the goal of providing a pipeline gas connection to 10 million households in the course of 2020, roughly three times the current size. In the new guidelines, a maximum weight value of 50 percent is given to the number of proposed pipelines for gas pipelines. in eight years from the date of authorization, compared with 30 percent earlier.

IOC, the country's largest fuel retailer and one of the largest operators of pipelines for crude oil, natural gas and petroleum products, has opposed a proposal from the downstream regulator for oil and gas, PNGRB, to have a uniform tariff for interconnected gas pipelines from different countries. IOC voiced its opposition during an open house discussion held by PNGRB on Integrated license for united rate. The fuel retailer said that low-pressure pipelines are not part of the proposal and unbundling of companies and the creation of an ISO must be done before the unification of the tariff. IOC also said that it supports the implementation of zonal tariffs with entry-exit option, with unbundling and ISO. The open house discussion included the participation of 17 companies, including Shell Energy Marketing and Trading, GAIL, GMR Energy, Jindal Steel and Power, Hazira LNG, Kokata electricity company CESC, Gujarat State Petronet, Torrent Power, RIL, BP India and ONGC, among others. The current system of tariff determination by the regulator PNGRB leads to multiple pipeline tariffs for customers who have contracted gas that flows from several pipeline operators. A unified tariff could abolish the taxation of multiple tariffs for fair gas distribution and uniform gas-based economic development across the country, as PNGRB has done in its discussion paper on the proposal last year. According to the regulator, the introduction of a uniform tariff may increase the tariffs for some existing customers of natural gas pipelines. Also, GAIL's proposal to bring the pipeline tariffs together at the entity level only leads to a step-by-step impact on tariffs, as customers have to pay an additional fee for the use of a gas pipeline from two different entities. IOC, Shell Energy Marketing and Trading and BP India also believed that unification of the tariff should only take place after legal decoupling of the gas trading and transport activities has taken place and an ISO has been set up. GAIL said that unbundling is not related to unification of the tariff, which is a separate exercise and must be carried out on an independent basis. The gas company said that creating an ISO is also an independent exercise. India currently has a 16,771 km long natural gas pipeline network with a capacity to transport 369 mm of gas.

In the midst of the discussion of GAIL, Global Energy Majors, Royal Dutch Shell and BP plc searched for a separation of natural gas marketing and transport activities before they switched to a uniform tariff for pipelines. At an Open House called by the sector regulator PNGRB to discuss a uniform or pooling method for calculating gas transport tariffs instead of the current transport tariffs based on postal services or distances, GAIL was held hostage to a formidable combination of Shell and BP on the issue of unbundling. The petroleum ministry views GAIL in two companies to resolve the conflict of interest by being both the carrier and the natural gas vendor. GAIL had proposed a uniform or pooling method for calculating the pipeline tariff instead of having postal rates where customers pay less and pay the lowest in the near-gas source. The aggregate rate must be calculated by bundling investment expenditures and operating costs of all cross-border pipelines of a company and distributing these across the cumulative volumes in such a way that 12 percent return after tax is possible. Shell Energy Marketing & Trading India Pvt Ltd., on the Open Day, said it supported the idea of ​​the uniform tariff, because it will enable the market to develop and will consequently lead to a mature market. BP India supported a uniform tariff for all interconnected pipelines of all entities and not of a single entity, because otherwise a bias would arise in the transition from an entity-based uniform rate.

GEECL, a London based methane producer with coal deposits, plans to invest $ 20 billion to tap the remaining 144 wells in the flagship Raniganj (South), an area located in West Bengal. The production of the company from its license zone Raniganj (South) of the previous financial year at the end of March 2018 increased by 19.5 percent to 0.5 mmscmd compared to 0.4 mmscmd produced in the previous fiscal year. The company had already drilled 156 wells and the remaining could take about four years to drill from the start date of the work, keeping demand strong in the region. Sales of low-carbon methane gas in the first two months of the first quarter, ending in June 2018, increased by 43 percent to 0.3 mmscmd. The company had more than 30 customers and the increase in sales could be attributed to anchor customers who bought more gas and new customers who came into the store. GEECL cash gains increased by 331 percent to $ 11 million at the end of 2-17-18 years due to higher sales and better price realization. The average turnover of the company in the previous financial year increased by 23.4 percent to 0.3 mmscmd and the average delivered gas price rose to $ 10.90 / mmBtu compared to $ 10.07 / mmBtu realized in the previous financial year. The company smashes due to the stranded taxes resulting from the exclusion of natural gas from the GST, but adds that the company remains hopeful about the absorption of natural gas in the GST, as the Ministry of Oil has insisted in the GST Council. The company continues to monitor the unconventional hydrocarbon space in India and hoped that more data would soon be available on the shale resources in the country.

Rest of the world

Asian spot LNG prices rose as a heatwave grabbed Japan and swept high temperatures in South Korea and parts of China boosting demand for cooling although aid will be provided by new Russian supplies. Spot prices for September The delivery of LNG-AS in Asia was assessed at $ 9.75 / mmBtu, an increase of 25 cents compared to the previous week. LNG imports into South Korea reached record levels in the first half of the year, but such volumes will not be sustainable, as nuclear power stations are expected to leave only six reactors offline for the rest of the year. The second train at Novateks Arctic Russian activities in Yamal has started. Novatek said the second train would start in the third quarter of this year, the trader said. Papua New Guinea launched a tender with a freight for August 22-29 and the bids were bullish, although the result is not yet known. However, the Russian cargo Sakhalin II, offered in the first half of September, was sold to a shareholder of the plant for an estimated $ 9.70 / mmBtu. Potential transaction costs of $ 9.65- $ 9.70 / mmBtu are expected. Prices for September are expected to be around $ 9.75 / mmBtu. In addition to Yamal, traders were also waiting for new stocks from the Japanese Inpex, which expects that its plant in Ichthys in Australia will start in September.

The American production of dry natural gas should rise to a record high of 2.296 bcm / day in 2018 from 2.086 bcm / day in 2017, according to the Short Term Energy Outlook of the EIA. The most recent output forecast of August for 2018 was lower than the EIA forecast of 2,303 bcm / day in July, but would still easily top the current annual record of 2,099 bcm / day, which was produced on average in 2015. EIA predicted also that US gas consumption would rise. a record value of 2,253 bcm / day in 2018 from 2,101 bcm / day in 2017. In 2019, the output projected by EIA would increase to 2,381 bcm / day, while the use would decrease to 2.25 bcm / day. After the US became the net gas exporter for the first time in 60 years in 2017, EIA predicted that US net exports would rise to 56 mcm / day bcm / day in 2018 and 152,910 mcm / day in 2019, an increase of 11, 32 bcm / day in 2017.

The US energy department paved the way for faster approval of small-scale exports of natural gas, including LNG to Latin American countries, by issuing a rule that abolishes an assessment of the public interest of the shipments. Previously, companies that wanted to export natural gas to non-free trade agreements were subject to a DOE evaluation of the public interest. Under the last line, the DOE authorizes the export of natural gas and LNG to non-free trade agreements countries, provided they do not export more than 1,465 bcm / year of natural gas, and that the proposed export qualifies for a categorical exclusion under the DOE requirements under federal environmental legislation. Many Latin American countries have insufficient demand for natural gas to support LNG imports from large terminals and conventional LNG tankers. But American companies are trying other ways to get gas to the market. American LNG Marketing LLC has exported over 145 shipments of small-scale LNG shipments from its Florida plant to Barbados and Bermuda.

Shale gas developer Cuadrilla became the first operator in Great Britain to receive final approval from the government for an onshore horizontal exploration well frack frack, thus paving the way for commercial production. The government said it had approved the so-called hydraulic break to take place at Cuadrilla's Preston New Road site in North West England. In fracking, wells are perforated and stones are broken by injecting liquids, sand and chemicals to extract oil and gas. After fracking the first two horizontal wells, Cuadrilla will perform a first flow test of the produced gas from both for about six months, the company said. In May, the government announced plans to speed up planning requests to support the development of the shale gas industry in the country. The British Geological Survey estimates that shale gas sources in North England alone could contain 37,633 cubic meters of gas, of which 10 percent could have met the demand of the country for almost 40 years. However, it is impossible to know exactly how much shale gas is possible underground – and more importantly how much can be extracted – until fracking has really begun. A private company is planning to import LNG to South Australia from 2020, around the same time as two other proposed import projects, looking for a supply gap because domestic gas is sucked into the LNG export. Venice Energy plans to file a development request with the South Australian government next month to park an FSRU in Port Adelaide. If the regulatory approvals are in force in March, construction can start in June 2019, he said. The LNG import plan is part of a three-step project with an estimated budget of A $ 750 million to A $ 800 million ($ 556 million to $ 593 million). The Australian predictor of government articles said in a recent report that imports can help to reduce rising gas prices, but the economy may not work, because it might be difficult to find cheap LNG after 2022. Energy Advisors Wood Mackenzie predicted last week in a report that only one LNG import terminal would be needed until the 2030s.

US President Donald Trump relaxed his tone on a Russian natural gas pipeline to Germany after a one-on-one meeting with President Vladimir Putin, who shifted from the harsh criticism he had imposed in Europe. The Nord Stream 2 pipeline, which would displace Russia's current capacity to deliver natural gas directly to Germany under the Baltic Sea and oust Ukraine, an important supply route to the European Union, was a painful point between the US and its allies in the European Union. past months.

Russian natural gas producer Novatek once delivered the first LNG cargo to China via the NSR along the Arctic coast, which drastically reduces the delivery time for Asian consumers. The LNG transport from the Yamal LNG project via the NSR to China reduces transport time and costs compared to other routes such as the Suez Canal. China's National Energy Administration said China National Petroleum Corp will start lifting at least 3 meters of Yamal LNG from 2019 onwards. The transit is important for Yamal because it shortens the shipping times for its main customers in Asia by almost half – up to 15 days – and in this way we save time and costs for the Suez Canal on the western route. The Yamal LNG plant of $ 27 billion, developed by Novatek and Total in France, despite US sanctions, began exporting in December, but shipments shipped with ice-class LNG tankers have so far only sailed to Europe. The NSR, which is crucial for Yamal LNG, is usually open for navigation in the summer from June to November, but heavy ice conditions have delayed the start of deliveries this year. Novatek plans to develop another large-scale project for the production of the frozen gas: Arctic LNG 2, which will produce LNG in 2022-2023.

The European Commission has allocated € 278 million ($ 325 million) for four LNG import terminals that are on the stream between 2018 and 2020. The Polish LNG import terminal that came on stream in 2016 had already received € 332 million. The US and the EU have sworn to increase trade in LNG. EU funding programs will pay out € 50.8 million for an expansion of the LNG terminal in Greece, € 124 million for one on the island of Krk in Croatia and € 101.2 million for a Cyprus project.

The Chinese state planner issued new draft regulations to allow private companies access to the oil and gas infrastructure of the country, including crude oil pipelines, gas pipelines, LNG terminals and underground gas storage. The new draft rules followed requests from the country's energy companies, particularly in the field of natural gas, for equal access to the nation's gas pipeline network, according to the NDRC. The design is the first time the government has published a concrete plan to promote fair access to gas-related facilities, including LNG terminal and storage. It is Beijing's newest step in its ongoing reform of the oil and gas sector to prevent it from being monopolized by public companies. The NDRC proposed to use thermal units as a standard measure for gas instead of tonnes, because it is a simpler way to calculate the transport costs of gas.

Tanzania wants to build a pipeline to pump natural gas to neighboring Uganda, another step in the attempt of both countries to expand energy cooperation. Tanzania Petroleum Development Corp said the pipeline would start from the capital Dar es Salaam, then through the Tanga port on the Indian Ocean and to Mwanza, a port on Lake Victoria before the border with Uganda would be crossed. It said it was looking to hire a contractor to carry out a feasibility study to determine the current and future demand for natural gas "by identifying all potential customers". Tanzania has estimated recoverable natural gas reserves of more than 1,614 trillion cubic meters, mainly in offshore fields in the south of the country.

An Egyptian company plans to import gas from Israel for re-export in the first quarter of 2019, according to sources in the country's energy sector, under agreements signed in February for $ 10 billion of gas worth $ 15 billion to buy. Partners in the Israeli gas fields Tamar and Leviathan said that in February they would supply the private Egyptian company Dolphinus Holdings with about 64 bcm of gas over a decade. The deal fueled the controversy in Egypt, which exported gas to Israel a few years ago. Egypt hopes that imports will contribute to its efforts to become a regional energy hub.

The Malaysian oil company Petronas said it had delivered its first LNG cargo to the Japanese Hokkaido Electric Power Company Inc on 1 August. The delivery marks the start of delivery to Hokkaido Electric through a 10-year agreement signed on March 2, 2017, according to Petronas. Delivery was made via Malaysia LNG Sdn Bhd, a subsidiary of Petronas, and the cargo was delivered by the Petronas & Bintulu LNG complex in the East Malaysian state of Sarawak, according to Petronas. The Vietnamese oil company PetroVietnam said it has signed an agreement with two Japanese companies to sell gas from an oil block in the South China Sea close to waters disputed by Beijing. Vietnam is contending with the production of crude oil and gas, due to the declining production of important fields and the ongoing pressure from China that has affected the work on some projects. PetroVietnam said that maritime tensions with China will damage its offshore exploration and production activities this year. The agreement will pave the way for the start of commercial gas production from the third quarter of 2020, according to PetroVietnam.

Inpex Corp has announced that the Ichthys LNG project operated by it has started to produce gas from its sources. The development marks "the start of approximately 40 years of operations", says Inpex. Op volle capaciteit wordt verwacht dat de offshore faciliteiten van het Ichthys LNG-project 45,3 mcm gas per dag en 85.000 vaten condensaat per dag zullen produceren, volgens Total, een van de belanghebbenden in het project. Het Ichthys LNG-project omvat het vloeibaar maken van aardgas dat is getakeld uit het Ichthys-gascondensaatveld, voor de kust van West-Australië, bij een onshore-fabriek voor het vloeibaar maken van gas in Darwin, Northern Territory.

Het Italiaanse oliemaatschappij Eni zei dat de productiecapaciteit van het gigantische mediterrane Zohr-gasveld van Egypte 1,6 bcm / dag bedroeg en in september 2 bcm / dag zou bereiken. Eni haalde € 50 miljoen ($ 58 miljoen) op als voorschot op toekomstige gasleveranties aan Egyptische partners in staatseigendom om Zohr te financieren. Zohr, gelegen in het offshore Shorouk-blok ongeveer 190 km ten noorden van Port Said, werd ontdekt in 2015 en heeft een geschatte 849,5 m³ aan gas. Egypte heeft geprobeerd de productie van recent ontdekte velden te versnellen, met het oog op het stoppen van de invoer tegen 2019.

Oekraïne verlengde de bevriezing van de gasprijzen tot ten minste 1 september, waardoor het minder kans kreeg om meer geld van het IMF te krijgen om de door oorlog gehavende economie stabiel te houden. Oekraïne moet de gasprijzen naar het marktniveau verhogen om in aanmerking te komen voor meer hulp onder een IMF-programma van $ 17,5 miljard. Aanvankelijk stemde het in om de prijzen te verhogen volgens een gezamenlijk overeengekomen formule, maar heeft sindsdien een aantal keren de prijsstijgingen uitgesteld. De overheid kan mogelijke impopulaire maatregelen zoals gasprijsstijgingen afschaffen met presidents- en parlementsverkiezingen volgend jaar. Oekraïne heeft sinds april 2017 geen IMF-geld ontvangen als gevolg van een vertraging van de hervormingen, waardoor het land financieel kwetsbaarder wordt, omdat het in de komende twee jaar ongeveer $ 15 miljard schuld in buitenlandse valuta moet terugbetalen.

Woodside Petroleum Ltd, het grootste onafhankelijke olie- en aardgasbedrijf van Australië, heeft besloten om uit het exportproject van Port Arthur LNG van Sempra Energy in Texas te stappen, zei Sempra. Sempra en Woodside hebben afgesproken de kosten voor de ontwikkeling van Port Arthur in februari 2016 te delen. Het project, waarvan Sempra zei dat het $ 8 miljard tot $ 9 miljard zou kunnen kosten, omvat twee liquefactietreinen die in staat zijn ongeveer 11 mtpa LNG te produceren, maximaal drie opslagtanks en faciliteiten om LNG op schepen te laden.

Wereldwijd onafhankelijk tankopslagbedrijf Vopak zei dat het een overeenkomst getekend heeft met Engro Corp Ltd om een ​​belang van 29 procent te kopen in de eerste LNG-importfaciliteit van Pakistan. Vopak zal investeren in Elenergy Terminal Pakistan Ltd, waarvan de dochteronderneming EETPL eigenaar is van de LNG-faciliteit in Port Qasim, zei het. De faciliteit, die in 2015 is gestart, bestaat uit een LNG-steiger en een pijpleiding verbonden met een FSRU die 15 jaar lang door EETPL is gecharterd. De pijpleiding levert gas rechtstreeks aan het net van de enige klant van EETPL, Sui Southern Gas Company Ltd., in staatseigendom.

JERA beheert een LNG-leveringsportfolio van 35 miljoen ton per jaar, voornamelijk via langetermijncontracten met producenten, maar zogenaamde bestemmingsbeperkingen voorkomen dat het bedrijf ongewenste volumes doorverkoopt aan derden. Gesteund door de Japanse Fair Trade Commission, wil JERA deze beperkingen beëindigen en een regionale leverancier worden. Het beoogt ook de afhankelijkheid van langetermijncontracten voor LNG als aandeel in de totale portefeuille terug te brengen tot de helft van 2030, nu voor 80 procent. Andere grote LNG-kopers stimuleren ook hun handelsactiviteiten. PetroChina set up its own LNG trading desk to gather market intelligence and trade cargoes, while Azerbaijan’s state-run oil company Socar hired two LNG traders last year.


LNG: liquefied natural gas, CGD: city gas distribution, mmBtu: million metric British thermal units, mt: million tonnes, LPG: liquefied petroleum gas, mtpa: million tonnes per annum, MW: megawatt, IOC: Indian Oil Corp, km: kilometre, BPCL: Bharat Petroleum Corp Ltd, IOAGPL: Indian Oil Adani Gas Private Ltd, CSEZ: Cochin Special Economic Zone, PNG: piped natural gas, CNG: compressed natural gas, PNGRB: Petroleum and Natural Gas Regulatory Board, IGL: Indraprastha Gas Ltd, ISO: Independent System Operator, ONGC: Oil and Natural Gas Corp, RIL: Reliance Industries Ltd, mmscmd: million metric standard cubic meter per day, GEECL: Great Eastern Energy Corp Ltd, GST: Goods and Services Tax, US: United States, EIA: Energy Information Administration, bcm: billion cubic meters,  DOE: Department of Energy, FSRU: Floating Storage and Regasification Unit, NSR: Northern Sea Route, EU: European Union, Petronas: Petroliam Nasional Bhd, NDRC: National Development and Reform Commission, IMF: International Monetary Fund, EETPL: Engro Elenergy Terminal Pte Ltd


NATIONAL: OIL

Iran keen to invest Rs 300 bn in CPCL expansion: IOC Chairman

13 August. Iran is keen to invest in the Rs 300 billion expansion of Chennai refinery but the fate of banking channels to route such investment is uncertain in view of US (United States) sanctions against the Persian Gulf nation, Indian Oil Corp (IOC) Chairman Sanjiv Singh said. IOC plans to pull down the 1 million tonnes per year (mtpa) Nagapattinam refinery of its subsidiary, Chennai Petroleum Corp Ltd (CPCL) and build a brand new 9 mtpa unit in next 5-6 years. National Iranian Oil Company (NIOC), which holds 15.4 percent stake in CPCL, is keen to participate in the expansion project, Singh said. Singh said the expansion was to originally cost Rs 27,460 crore but is now estimated to cost anything between Rs 25,000 crore and Rs 30,000 crore. The government later disinvested 16.92 percent of the paid-up capital. The company was listed in 1994. IOC acquired the government stake in 2000-01 and holds 51.89 percent stake in CPCL while NIOC has 15.40 percent. Asked about US sanctions against Iran impacting oil supplies, Singh said the company has "adequate alternate supplies" ready to meet any shortfall that may arise from Iran.

Source: Business Standard

Heavy oils from 570 mn year old rock beds discovered: Rajasthan

13 August. Monetisation of heavy oil discovered from the oldest sedimentary rock of Rajasthan now seems a reality with trials for producing heavy oil from 570 million year old rock beds being started by Oil India Ltd (OIL). OIL has claimed a major breakthrough for extraction of heavy crude oil from Jaisalmer fields after almost 26 years of its discovery. Highly viscous heavy oil was discovered by OIL in infra-Cambrian rock (570 million years old) in the Baghewala area of the district in 1991. However, in case of Baghewala heavy oil scientists opine that it originates from algae/fungi types of plant as only these plants were available during that time of earth’s evolution. In the last 25 years, several attempts have been made to get sustainable production. However, due to high viscous nature of the crude, these efforts have failed. Recent experiment by steam injection using mobile steam generator has given encouraging result. Based on the recent production from steam injection, the sale of heavy crude oil has become a reality through ONGC (Oil and Natural Gas Corp)’s pipeline at Mehsana to IOC (Indian Oil Corp)’s refinery at Koyali (Gujarat).

Source: The Economic Times

India launches second auction of small discovered O&G blocks

9 August. India launched its second auction of small discovered oil and gas (O&G) blocks, as the south Asian nation looks to quickly monetise its hydrocarbon resources. The bidding for 59 fields will begin in the first week of September and will close on 18 December. The contracts will be awarded in January, Oil Minister Dharmendra Pradhan said. The blocks offered under the latest round has reserves of about 1.4 billion barrels, he said.

Source: Reuters

Over 40 injured as fire breaks out at BPCL refinery in Mumbai

8 August. At least 43 workers were injured after a fire broke out following a boiler blast in the refinery of Bharat Petroleum Corp Ltd (BPCL). The incident took place at the public sector oil firm's plant on the Mahul Road in Chembur area of East Mumbai. Forty-three workers were injured in the incident, Shahaji Umap, Deputy Commissioner of Police (Zone-VI), said. After preliminary treatment at BPCL's first aid centre, 22 of them were allowed to go home, whereas 21 were shifted to nearby hospital in Chembur, he said.

Source: Business Standard

HPCL winds down Iran oil supply as US-led sanctions inch closer

8 August. Hindustan Petroleum Corp Ltd (HPCL) does not have any more oil purchases from Iran at least till November as the trigger date for the US (United States)-led sanctions inches closer. The US has imposed the sanctions from November 4, threatening companies to fully wind down activities with Iran or risk exclusion from the American financial system. This has led to insurers refusing to extend their services to crude oil tankers directed from Iran. HPCL had to cancel a consignment last month.

Source: The Hindu Business Line

IOC buys US crude to part replace Iran cargoes

8 August. Indian Oil Corp (IOC) has bought 6 million barrels of US (United States) crude for delivery in November to January, as the nation’s top refiner scouts for alternatives to Iranian oil ahead of impending US sanctions. IOC will buy 2 million barrels of Mars oil in November, a combination cargo containing 1 million barrels each of Eagle Ford and Mars in

December and 2 million barrels of Louisiana Light Sweet (LLS) in January, IOC Finance Director A K Sharma said. India has asked refiners to prepare for a drastic cut or even zero imports from Iran after the US withdrew from the 2015 nuclear deal and announced a renewal of sanctions on Tehran. While some sanctions started from 6 August, others, most notably in the petroleum sector, will be applied from 4 November. Lower purchases by Chinese buyers is also aiding the flow of US oil to India.

Source: Reuters

NATIONAL: GAS

RIL will produce 10 percent of India's total gas demand from KG basin by 2022: BP

14 August. BP Plc and its partner Reliance Industries Ltd (RIL) will produce at least 10 percent of India's total gas demand from the Krishna-Godavari (KG) basin by 2022, Sashi Mukundan, the company’s region president and India head, said. Experts highlight that this has the potential to revive the ailing fertiliser segment in the country by competing with the re-gasified liquid natural gas (RLNG), as the difference between RLNG and domestic deepwater gas would be at least 25-30 percent by then. The three projects in the Block KG D6 integrated development plan include R-Series, satellite cluster and MJ (D55), which the companies expect will revive the fortunes of the block. The three projects put together have around 3 trillion cubic feet of discovered gas resources, where the companies are investing around Rs 400 billion. The firms have already placed contracts to the tune of around $2 billion. At present, fertiliser sector consumes about 40 million metric standard cubic meter per day (mmscmd), of which around 50 percent is met through the allocation of Administered Pricing Mechanism (APM) gas supplies, while the remaining is met through RLNG. By 2022, industry expects the fertiliser demands to zoom to 60 mmscmd. If KG-basin gas gets successful in replacing RLNG, it may save at least $3.42 per million metric British thermal unit based on the current pricing. Domestic natural gas in India is priced around $3.06 per million metric British thermal units (mmBtu), while for deepwater gas, it has a ceiling of $6.78 per mmBtu. If KG-gas can replace LNG by then, it may lead to a savings of around $1 billion per annum for the sector. In KG-D6 Block, RIL has a participating interest of 60 percent, BP has around 30 percent, while the remaining 10 percent is owned by Niko Resources. BP took over 30 percent stake in multiple oil and gas blocks in India operated by RIL way back in 2011. Since then, the two companies have invested around Rs 130 billion ($2 billion) in deep-water exploration and production to date.

Source: Business Standard

IOC bets big on city gas projects, plans to invest Rs 200 bn in 5-8 yrs

13 August. Indian Oil Corp (IOC) plans to invest Rs 200 billion in city gas distribution projects in next 5-8 years as it bets big on gas business to complement its traditional oil refining and marketing business, its Chairman Sanjiv Singh said. The firm, which owns a third of India's oil refining capacity and has 44 percent market share of fuel business, sees compressed natural gas (CNG) replacing some of the petrol and diesel consumed in vehicles and LPG (liquefied petroleum gas) getting replaced by piped cooking gas in households. It wants to be in these businesses to maintain its market leadership position. IOC, which among all PSUs (Public Sector Undertakings) bid most aggressively in the latest city gas distribution (CGD) licences, is hoping to net licences to retail CNG to automobiles and piped natural gas to households and industries in about 20 cities, he said. IOC, which has 80.7 million tonnes per annum of refining capacity (33 percent of the total in India), is looking to commission a 5 million tonnes a year liquefied natural gas (LNG) import terminal at Ennore in Tamil Nadu before the year-end and has booked capacity on similar planned terminals on both east and west coast. IOC currently operates city gas distribution (CGD) networks in Agra and Lucknow through Green Gas Ltd, its joint venture with GAIL (India) Ltd. It is also implementing CGD projects in Chandigarh, Allahabad, Panipat, Ernakulam, Daman, Udhamsingh Nagar and Dharwad through a joint veture

with Adani Gas Ltd (IndianOil-Adani Gas Pvt Ltd).

Source: Business Standard

Essar signs 15 year gas sale deal with GAIL

9 August. Essar Oil and Gas Exploration and Production (EOGEPL) announced that it has signed a 15-year gas sale and purchase agreement with GAIL (India) Ltd. The Essar Group subsidiary said that GAIL had won the bid for the contract which will help EOGEPL monetise its entire coal-bed methane (CBM) production of 2.3 million metric standard cubic meter per day (mmscmd) from the Raniganj East block. Of the 500 wells to be dug at the Raniganj East CBM block, EOGEPL has already completed drilling of 346 CBM wells.

Source: Business Standard

MNGL finds no takers for 2 lakh piped gas connections

8 August. Maharashtra Natural Gas Ltd (MNGL) is facing a unique problem — the company has infrastructure ready to provide over two lakh new PNG (piped natural gas) connections in Pune and Pimpri Chinchwad, but there are no takers. According to MNGL, the pendency has piled up over the last two to three years. MNGL said one of the main reasons for people unwilling to get piped gas is that the pipeline may affect the aesthetics of the house.  According to MNGL, another one lakh connections are pending due to absence or delay in digging permission from the civic bodies. MNGL said that ready-to-fit connections are available in and around areas including Bibvewadi, Model Colony, Kothrud, Baner-Balewadi, Kharadi, Hadapsar, Kondhwa, Wanowrie, Hinjewadi, New Sangvi, Chinchwad, Moshi, Rahatni, Thergaon and Wakad.

Source: The Economic Times

NATIONAL: COAL

CIL pushes back production target worth 1 bt by 2 yrs

12 August. Coal India Ltd (CIL), the world's biggest miner, has pushed back its ambitious 1 billion tonne production target by at least two years owing to the existing ground realities. The government had earlier set a target of 1 billion tonnes (bt) coal output by FY'2019-20. Although CIL has been investing towards establishing railway connectivity with its mines and procuring rakes in order to evacuate more coal, a sharp rise in renewable energy sources is compelling the miner of the dry fuel to review its earlier production goals, the company has said. CIL subsidiary Northern Coalfields and the railways are jointly investing around Rs 6,000 crore in Madhya Pradesh to lay new tracks and converting the existing ones into double gauge enabling it an additional 15 million tonnes (mt) of the fuel capacity. CIL has said that there was an urgent need to revisit its one billion tonne output programme following changes in the environmental paradigm and coal demand. The company had produced 567 mt coal in FY'18 and targets to produce 630 mt in the current fiscal.

Source: Business Standard

Tamil Nadu power utility paid Rs 8 bn extra for lower grade coal: CAG

12 August. Tamil Nadu’s power utility imported poor quality coal during 2012-16, resulting in excess payment of Rs 813.68 crore, the Comptroller and Auditor General (CAG) has found, recommending an investigation. The audit also found that the Tamil Nadu Generation and Distribution Corp (TANGEDCO) released Rs 5,767.13 crore to supplier of 60% of the coal consignments without obtaining a mandatory Certificate of Country of Origin (COO), a violation of its own tender conditions. The consignments which CAG said were without COO were from Indonesia, country of origin of coal imports in the DRI (Directorate of Revenue Intelligence)  letter. As per tender conditions, CAG said, the Gross Calorific Value (GCV) of imported coal was to be 6,000 kilo calorie per kilogram. Price was to be adjusted according to a formula if GCV went below 6,000.

Source: The Economic Times

Government considering views of sub-group on revision of royalty rates on coal

8 August. The government is considering the recommendations of a sub-group with regard to revision of present royalty rates on coal. The Centre had earlier set up a sub-group under the Chairmanship of Coal Additional Secretary for examining the issue of revision of royalty rates on coal and lignite, Coal Minister Piyush Goyal said. Goyal said in the last three financial years and in 2018-19 (till July 31), two mines — Marki Mangli-I and Majra in Maharashtra — have been auctioned to Topworth Urja and Metals and Jaypee Cement Corp, respectively.

Source: Business Standard

NATIONAL: POWER

Chandigarh residents to pay more for power on higher fuel cost

14 August. Chandigarh residents will have to pay more for using electricity for next three months. The UT (Union Territories) electricity department will charge 14 paisa per unit for domestic consumers using between 0 and150 units. Additional charge of 24 paisa per units has been imposed in 151 to 400 slab, while consumers using more than 400 units will have to pay 26 paisa per unit. In the commercial category having single phase, 24 paisa per unit for using 0-150 units will be charged, while there no charge imposed in the slab of 151-400 units and above 400 units. Commercial users having three phase will be charged 26 paisa per unit and 61 paisa per unit in the slab of 151 to 400 and above 400, respectively. Consumers having large supply connections will have to shell out of 26 paisa per unit more. Those using small and medium supply connections will be charged 25 paisa and 29 paisa per unit, respectively. UT superintending engineer M P Singh said the change will come into effect in the billing cycle of August 1. FPPCA (fuel and power purchase cost adjustment) charges are not levied in the agriculture category. The charge is the difference between per unit actual cost of power purchase and per unit approved cost of power purchase. The electricity department generates bills for domestic customers bi-monthly. Domestic consumers have been divided into four groups of 50,000 each. They pay bills in six cycles a year. Bills of commercial consumers are generated every month. According to official records, there are 2.16 lakh electricity consumers, out of which, 1.75 lakh fall in the domestic category. The department has regular billing of around 94% of consumers.

Source: The Economic Times

In Goa only 7 percent pay power bills online, below national average

13 August. More consumers are taking to paying their electricity bills online, as the electricity department’s revenue from online payments has increased by more than Rs 20 crore from last year. The department received Rs 53.9 crore from online payments for July this year. The figure for last July stood at Rs 33 crore. Electricity department said that around 40,000 consumers pay their bills online. However, the percentage of consumers opting for this method is still low – around 7% – and far below the national average of 20%. The Union power ministry has ranked Goa as 24th in e-payments. In this, the state even lags behind Bihar, Uttar Pradesh and Jammu and Kashmir. Meanwhile, the department said it isn’t responsible for problems consumers face while making payments, and stress that these are issues with the bank’s gateway. The electricity department has ‘anytime payment’ machines manned by helpers at the department offices at Mapusa, Panaji, Vasco, Margao and Ponda. These, however, are only available to consumers during the day. In July, around 12,000 consumers (or 2%) used this machines, accounting for an income of Rs 6 crore for the month.

Source: The Economic Times

Bihar CM flags off power projects worth over Rs 75 bn

10 August. Bihar Chief Minister (CM) Nitish Kumar flagged off power projects worth over Rs 7,500 crore and expressed confidence that each household in the state would be electrified by the end of this year. He expressed confidence that his government would meet its target of electrifying each household in the state by the end of this year. He said that three power units in the state – Kanti, Navinagar and Barauni – have been handed over to the NTPC which was likely to "ensure better power generation and availability of electricity to consumers in Bihar at cheaper rates". He said his government was providing subsidy to domestic consumers besides developing special "agriculture feeders" to cater to the electricity requirements of those involved in farming.

Source: Business Standard

MERC allows Adani Power to recover GST expenses

9 August. The Maharashtra Electricity Regulatory Commission (MERC) has allowed Adani Power to recover additional expenses incurred by its subsidiary Adani Power Maharashtra Ltd (APML) due to introduction of the Goods and Service Tax (GST). The company put the total impact of the GST to be Rs 0.35 per unit, which amounts to about Rs 402.5 crore till February 2018. APML had filed a petition with the MERC in April to adjust tariffs of electricity sold to the state from its 3,300 MW Tiroda power plant. The company sought the electricity regulator’s approval to offset financial consequences of GST and evacuation facility charge by Coal India Ltd (CIL).

Source: The Financial Express

PM Modi household reviews household electrification scheme

8 August. Prime Minister (PM) Narendra Modi has reviewed the progress of household electrification under the 'Saubhagya' scheme, focusing on last mile connectivity and distribution of power in urban and rural areas, the PMO (Prime Minister’s Office) said. Progress in household electrification under the 'Saubhagya' initiative was reviewed. In September 2017, the PM had launched the 'Pradhan Mantri Sahaj Bijli Har Ghar Yojana Saubhagya' to ensure electrification of all willing households in the country in rural as well as urban areas. Under the scheme, states and Union Territories are required to complete the works of household electrification by December 31, 2018. The beneficiaries for free electricity connections would be identified using Socio Economic and Caste Census (SECC) 2011 data. However, un-electrified households not covered under SECC data would also be provided electricity connections under the scheme on payment of Rs 500 which will be recovered by distribution companies in 10 instalments through electricity bills.

Source: Business Standard

NATIONAL: NON-FOSSIL FUELS/ CLIMATE CHANGE TRENDS

Government's plan to revive hydropower projects in limbo due to lack of funds

14 August. The government’s plan to revive stalled hydropower projects through a bailout package of Rs 160 billion is lying in a limbo for a year now. Lack of funds through budgetary support is a major reason for the delay, as the finance ministry asked the ministry of power to rework the scheme. Last year, the Centre drafted Rs 160 billion package to revive projects with a capacity of nearly 11,000 MW. This includes 4 percent interest subvention to projects totalling 11,639 MW, creating a Hydro Power Development Fund (HPDF). The installed capacity of hydropower projects has remained at around 40,000 MW for the past three years, while that of the renewable energy sector has increased about 20 percent in the same period. In the past decade, renewable energy (solar and wind power) has grown by 89 percent while hydro has grown only 28 percent.

Source: Business Standard

Tender for solar power project of 300 MW has been annulled by SECI: AGEL

14 August. Adani Green Energy Ltd (AGEL) said that Solar Energy Corp of India (SECI) has annulled the tender won by its arm Mahoba Solar (UP) Private Ltd. The SECI had reportedly cancelled the tenders for 2,400 MW capacities out of 3,000 MW went under the hammer in July 2018.

Source: Business Standard

Finance ministry defers safeguard duty on solar cells in view of court order

13 August. The finance ministry said that safeguard duty will not be insisted upon on import of solar cells for the "time being" in deference to interim directions passed by the High Court of Orissa. India had imposed safeguard duty on solar cells imports from China and Malaysia for two years to protect domestic players from steep rise in inbound shipments. The duty was imposed following recommendations by the Directorate General of Trade Remedies (DGTR) under the commerce ministry. It further said that till further direction from the revenue department, solar cells whether or not assembled in modules or panels "would, in respect of safeguard duty, be assessed provisionally" on furnishing of simple letter of undertaking/bond by the concerned person.

Source: Business Standard

Jharkhand to soon have a new policy for rooftop solar power plant

11 August. The Jharkhand Renewable Energy Development Authority (JREDA) said it has prepared a framework for the state rooftop solar power policy 2018 with an objective to produce 500 MW power through grid-connected rooftop solar plants by 2022. JREDA said the new policy will facilitate rooftop solar power projects in the state's urban settlements. The policy, which was revised last year, aims to push Jharkhand's total solar power production capacity to 2,650 MW by the year 2020, including large scale and rooftop solar plants.

Source: The Economic Times

Solar rooftop project for Nashik Municipal Corp to begin soon

10 August. The work of installing solar panels for all buildings of Nashik Municipal Corp (NMC) under the Smart City Scheme will begin in few days. Tender for solar panels have been approved. The letter of award has been issued to the contractor. In a few days, the work order will be issued. The rooftop solar equipment will be installed in 16 NMC buildings on a pilot basis by a private agency.

Source: The Economic Times

India to step up use of biofuels to cut oil import bill

10 August. India aims to increase the use of biofuels to cut its oil import bill by Rs 120 billion ($1.7 billion) by 2022 and reduce carbon emissions, Prime Minister Narendra Modi said. India is the world’s third-biggest oil importer and consumer and ships in about 80 percent of its crude needs, but is gradually building capacity to increase its output of biofuels. The South Asian nation plans to build 12 bio-refineries costing 100 billion rupees to produce fuel from items including crop stubble, plant waste and municipal solid waste, Modi said. Modi said building the bio-fuel refineries would create 150,000 new jobs, but did not give a timeframe for when they would all be up and running. India, a signatory to the Paris Climate deal, plans to reduce its carbon footprint by increasing ethanol content, a sugar byproduct, in its gasoline to 10 percent by 2022 and to 20 percent by 2030, Modi said.

Source: Reuters

Government to bid out 25 GW solar capacities in Ladakh

8 August. The government will come out with a single bid for setting up 25 GW of solar capacity in Ladakh, Power and Renewable Energy Minister R K Singh said, and asserted that renewable energy is a must for sustainable development. He said that India will achieve the target of having 175 GW of renewable energy before 2022. He said that the government will come out with renewable bids with storage component.

Source: Business Standard

CNG set to help reduce pollution level in holy city: Amritsar

8 August. CNG (compressed natural gas), the clean burning fuel, is all set to fix air pollution problem in the holy city with as many as four retail outlets of CNG likely to supply the fuel in next couple of months even as the CNG-kit installation facility is yet to begin. Gujarat Gas Ltd would open four retail outlets in the city, out of which permission to three outlets had been granted, Amritsar Deputy Commissioner Kamaldeep Singh Sangha said. He said the administration had always been encouraging to use clean fuel to bring down the pollution levels in the city. Sangha said that CNG was not only economical, but was one of the preferred alternative fuel sources for vehicles. The administration had earlier taken several measures to bring down the air pollution level from the city but to no avail. Diesel-driven auto-rickshaws contribute maximum to the air pollution especially in the vicinity of the Golden Temple.

Source: The Economic Times

PM Modi asks officials to ensure solar energy benefits reach farmers

8 August. Prime Minister (PM) Narendra Modi reviewed the progress of key infrastructure sectors of power, renewable energy, petroleum and natural gas, coal, and mining. The installed power generation capacity in India has risen to 344 GW. India's energy deficit, which stood at over four percent in 2014, has shrunk to less than one percent in 2018. Significant capacity additions have been made in transmission lines, transformer capacity, and inter-regional transmission. Modi urged the officials to work towards ensuring that the benefits from an increase in solar energy capacity reach the farmers through appropriate interventions such as solar pumps and user-friendly solar cooking solutions.

Source: The Economic Times

Luminous Power aims to double revenue from solar products in 5 yrs

8 August. Luminous Power Technologies is looking at doubling revenue to 20 percent in next four-years from solar appliances and residential roof top products. Luminous Power said that rural area is a high potential market for solar appliances and rooftop solar products. In the last 10 years alone, Luminous has invested close to Rs 1,000 crores in North India alone and it plans to significantly ramp up investments in the next three to five years in R&D to develop innovative home electrical solutions for the India market.

Source: The Economic Times

INTERNATIONAL: OIL

Venezuela gasoline prices should rise to international levels: President

14 August. Venezuela’s heavily subsidized domestic gasoline prices should rise to international levels to avoid billions of dollars in annual losses due to fuel smuggling, President Nicolas Maduro said. Venezuela, like most oil producing countries, has for decades subsidized fuel as a benefit to consumers. But its fuel prices have remained nearly flat for years despite hyperinflation that the International Monetary Fund has projected would reach 1,000,000 percent this year.

Source: Reuters

Workers at Total North Sea oil platforms start 12-hour strike

13 August. Workers at three of Total’s North Sea oil and gas platforms began a 12-hour strike, as planned, after talks with the company failed, the Unite union said. The affected platforms are Alwyn, Elgin and Dunbar. More discussions could be held although nothing had been fixed, the union said. The workers are striking over proposed changes to their working rotas and pay. The next, and last, planned strike by the rig workers will be on 20 August and will last 24 hours. About 45 out of 60 Total workers were set to strike at the three platforms. Outside contractors also work at the fields but they are not involved. The strike means that production at the fields will be shut down for that period. The three fields’ oil production contributes about 45,000 to 50,000 barrels per day (bpd) to the Forties and Brent Blend crude streams.

Source: Reuters

Iraq and Petrofac sign $369 mn deal to build Majnoon crude-processing plant

13 August. Iraq signed a $369 million contract with Petrofac to build a new crude-processing facility in the giant Majnoon oilfield. Under the deal terms, work to build the new facility which has a capacity to produce 200,000 barrels per day (bpd), should be completed in 34 months, Basra Oil (BOC) said. Once the new oil facility is operational, Majnoon’s production will rise to around 450,000 bpd. The field iS now producing around 230,000 bpd, BOC said. Iraq plans to invite service companies soon to compete for a tender to drill new 80 oil wells in Majnoon as part of a development plan to boos output from the field, BOC said. In June, Royal Dutch Shell exited the Majnoon oilfield in southern Iraq and handed over its operations to the BOC.

Source: Reuters

Saudi cuts oil output as OPEC points to 2019 surplus

13 August. OPEC (Organization of the Petroleum Exporting Countries) forecast lower demand for its crude next year as rivals pump more and said top oil exporter Saudi Arabia, eager to avoid a return of oversupply, had cut production. OPEC said the world will need 32.05 million barrels per day (bpd) of crude from its 15 members in 2019, down 130,000 bpd from last month’s forecast. The drop in demand for OPEC crude means there will be less strain on other producers in making up for supply losses in Venezuela and Libya, and potentially in Iran as renewed US (United States) sanctions kick in. OPEC said its oil output in July rose to 32.32 million bpd. Although higher than the 2019 demand forecast, this is up a mere 41,000 bpd from June as the Saudi cut offset increases elsewhere. Rapid oil demand that helped OPEC balance the market is expected to moderate next year. OPEC expects world oil demand to grow by 1.43 million bpd, 20,000 bpd less than forecast last month, and a slowdown from 1.64 million bpd in 2018.

Source: Reuters

UAE plans oil pipeline from Ethiopia to Eritrea in latest Horn of Africa move

10 August. The United Arab Emirates (UAE) plans to build an oil pipeline connecting Eritrea and Ethiopia, the latest sign of the Gulf state’s increasing involvement in the Horn of Africa. The pipeline will run from Eritrea’s port city of Assab to Ethiopia’s capital Addis Ababa. Landlocked Ethiopia began extracting crude oil on a test basis from reserves in the country’s southeast in June and will need access through Eritrea in order to export it.

Source: Reuters

China move to drop crude off tariff list a relief for Sinopec

10 August. China’s decision to remove crude oil from its latest tariff list in an escalating trade war with the United States (US) was a relief to state oil firms prompted by a strong lobbying effort by main importer the Sinopec Group. Dropping crude oil from the final tariff list on $16 billion in US goods announced late underscores the growing importance of the US as a key global producer and critical alternative supply source for top importer China, which is seeking to diversify its oil purchases. Removing crude imports, worth roughly $8 billion annually based on Sinopec’s earlier forecast of 300,000 barrels per day (bpd) for 2018, also gives Beijing room to maneuver in future negotiations with Washington, especially as it may soon lose some Iranian oil shipments due to reimposed US sanctions. The revision came after Sinopec – Asia’s largest refiner and biggest buyer of US oil – suspended new bookings until at least October over worries that a 25 percent tariff would prohibit it from finding buyers in China.

Source: Reuters

Calm in oil markets could be short-lived: IEA

10 August. Oil markets have entered a brief period of calm but a storm might be looming later this year when new US (United States) sanctions are poised to slash supplies of Iranian oil, the International Energy Agency (IEA) said. Oil prices have rallied close to $80 per barrel, their highest since 2014, on concerns about supply shortages but cooled in recent weeks as Libya regained some lost production and Washington signaled it could give Asian buyers of Iranian oil some exemptions from sanctions for next year. However, the US said it was still seeking to force Iran’s oil customers to stop purchases completely in the long run. Saudi Arabia is producing around 10.4 million barrels per day (bpd) and could in theory raise output to above 12 million bpd. But such a move would leave the world with virtually no spare capacity to cushion against possible supply disruptions in producer countries like Libya, Venezuela or Nigeria. Besides supply fears, oil prices are being supported by healthy demand growth that has repeatedly surprised on the upside in recent years despite a recovery in prices. The IEA kept its 2018 oil demand growth forecast unchanged at 1.4 million bpd but raised its 2019 forecast by around 110,000 bpd to 1.49 million bpd.

Source: Reuters

US oil reserve release will not guarantee lower pump prices

10 August. American drivers are unlikely to see prices at the pump fall if the Trump administration releases crude from the Strategic Petroleum Reserve (SPR) because US (United States) oil production already is sky high, analysts said. The potential release, ahead of the US midterm elections in November, would aim to bring relief to customers who have seen gasoline jump 50 cents a gallon in the past year. Even if the release temporarily sends futures contracts lower, there is no guarantee that pump prices would follow and remain down, according to analysts and market participants. The reserve, which contains about 660 million barrels of crude, can be tapped in event of an emergency disruption to domestic supply and has been used to avoid price spikes in case of past disruptions. Any distribution would be a non-emergency sale, analysts said, with refiners, trading houses and others able to bid on barrels stored underground at four Gulf Coast locations. If the reserve is tapped, much of the crude oil and refined products that would be produced could go overseas, say energy experts. The US does not lack for crude. Gulf Coast exports of crude oil and products hit an all-time record in April 2018, when the region exported nearly 6.3 million barrels per day, according to US Energy Information Administration data.

Source: Reuters

Mozambique finalizes block 5 oil deals with multinational firms

8 August. Mozambique’s government approved contracts giving exclusive rights to energy companies to act on concessions awarded to them to explore for oil following four years of negotiations and delays that threatened to derail the projects. The companies could now go ahead with mining operations to tap offshore oil reserves that experts say are enough to supply energy to Britain, France, Germany and Italy for over 20 years. Norwegian company Statoil, Italy’s Eni, Exxon Mobil, Delonex Energy, South Africa’s Sasol and Mozambique’s national oil and gas company ENH were awarded the exploration rights in the area of Mozambique’s Northern Zambezi basin, known as block 5, in 2015.

Source: Reuters

INTERNATIONAL: GAS

PetroChina mulls suspending US LNG purchases

13 August. PetroChina Company may temporarily halt purchases of US (United States) liquefied natural gas (LNG) spot cargoes through the winter to avoid potential tariffs amid a trade conflict between the US and China. Under the plan, PetroChina would boost buying of spot cargoes from other countries or swap US shipments with other nations in East Asia to avoid paying additional tariffs. China said this month it was considering a 25 percent tariff on US LNG, which had been missing from previously targeted goods, in a direct hit to American gas exporters. PetroChina in February signed a 25-year deal to buy US LNG from Cheniere Energy Inc., with a portion of that supply expected to start this year. While China is currently the third-largest buyer of US LNG, American cargoes only made up about 5.7 percent of its imports over the last year, according to Sanford C. Bernstein & Co.

Source: Bloomberg

Indonesia opens bids for six O&G blocks

13 August. Indonesia’s energy ministry opens bids for six oil and gas (O&G) blocks, the second round in 2018. Half the blocks are for exploration, and the other half for production, director general for oil and gas, Djoko Siswanto said. One of the production blocks on offer, in the Makassar Strait, was previously operated by Chevron.

Source: Reuters

Cheniere signs 25-year LNG sales deal with Taiwan's CPC

11 August. US (United States) liquefied natural gas (LNG) company Cheniere Energy Inc said it had signed a 25-year deal to supply Taiwan’s CPC Corp, which CPC valued at roughly $25 billion. Cheniere said it will sell 2 million tonnes of LNG per year on a delivered basis to the oil and gas company, starting in 2021. It said the purchase price will be pegged to the Henry Hub monthly average, plus a fee. The United States has become a major LNG exporter in the last two years, mostly due to the ramp up of Cheniere’s Sabine Pass terminal in Louisiana. The Houston-based company is also building the Corpus Christi terminal in Texas.

Source: Reuters

Russia loses bulk of WTO challenge to EU gas pipeline rules

10 August. Russia largely failed in its bid to overturn the European Union (EU)’s gas market rules in a World Trade Organization (WTO) ruling published. Russia launched the dispute in 2014, claiming that the EU’s “Third Energy Package” and the EU’s energy policy overall unfairly restricted and discriminated against Russia’s gas export monopoly Gazprom. The 50 percent cap could only be exceeded if 3 billion cubic meters of gas was released annually at a fixed price to competing suppliers on the Czech market. The WTO panel also agreed that Croatia, Hungary and Lithuania had discriminated against Russia by requiring a security of energy supply assessment for foreign, but not domestic, pipeline operators. Gazprom said it had always said that European energy policy should take gas suppliers’ interests into account, and therefore it was satisfied with the points where Russia had won.

Source: Reuters

Europe getting serious about buying US LNG

9 August. European nations are far behind Mexico and China when it comes to receiving liquefied natural gas (LNG) from the US (United States), but the region is making its biggest effort to date to change that. Europe pledged to import more LNG in a bid to diversify imports, while America is seeking new markets for its expanding production of the fuel. Russia is currently Europe’s biggest supplier. Europe received about 10 percent of total US exports last year, up from 5 percent in 2016 after the American shale gas revolution went global with the opening of the Sabine Pass export facility on the country’s Gulf of Mexico coast. Russian gas supplies to Europe are also linked to crude, and moves in the commodity affect gas prices at the region’s hubs. US supplies, in contrast, are tied to low-cost shale gas at the benchmark Henry Hub in Louisiana. Europe has also pledged to reduce its increasing dependency on the Russian fuel by supporting the development of new LNG terminals.

Source: Bloomberg

ENN receives LNG cargo at China's first major private import terminal

8 August. Chinese gas distributor ENN has received its maiden cargo for the country’s first major privately-owned liquefied natural gas (LNG) import terminal, ship tracking data showed. The LNG tanker ‘Stena Blue Sky’ arrived at Zhoushan port after loading the cargo at Qatar’s Ras Laffan LNG terminal on July 22, the data showed. ENN has signed long-term deals including sales and purchase agreements with Chevron Corp and Australia’s Origin Energy and also has an agreement to buy LNG from Total. The deals total about 1.5 million tonnes per year of LNG. China overtook South Korea as the world’s second-largest LNG importer in 2017 with imports of 38 million tonnes, 46 percent higher than the year before. The imports soared after the government ordered millions of homes to switch to natural gas and electric heating from coal to counter rising air pollution. To meet the higher demand and to reduce their dependence on supply from state-owned companies, Chinese companies are building their own LNG terminals to import the fuel directly.

Source: Reuters

Tellurian plans to start building Louisiana LNG export plant in 2019

8 August. US (United States) liquefied natural gas (LNG) company Tellurian Inc said it remains on track to begin construction of its Driftwood LNG export terminal in Louisiana in the first half of 2019 and begin operations in 2023. Driftwood is one of more than two dozen LNG export projects under development in the US and seeking customers so they can start construction and enter service in the next decade. US LNG exports have almost quadrupled from 183.9 billion cubic feet (bcf) of natural gas in 2016 to 706.4 bcf in 2017, worth about $3.3 billion, and are on track to rise to over 1,000 bcf in 2018, making the country one of the world’s biggest exporters of the super-cooled form of natural gas. One billion cubic feet of gas is enough to fuel about five million US homes for a day.

Source: Reuters

INTERNATIONAL: COAL

Japan utilities, Glencore set annual coal contract at $110 a tonne

14 August. Japanese utilities and global mining giant Glencore have settled an Australian thermal coal import contract for April 2018-March 2019 at $110 a tonne. The deals were struck between Glencore and Japanese utilities such as Shikoku Electric, Chugoku Electric and Kansai Electric after bilateral talks. The deal marks a breakthrough after Japan’s Tohoku Electric and Glencore, the world’s biggest exporter of seaborne thermal coal, failed earlier this year to agree an annual supply deal which had in the past been used as an industry benchmark. At $110 per tonne, the contractual price came in nearly 30 percent higher than an annual supply price a year earlier, and is 16 percent above a deal for October 2017-September 2018, reflecting a tighter global market for the world’s dominant power generation fuel. Australian spot thermal coal cargo prices have hit several six-year highs in the past months, and at $120 per tonne remain a third above this year’s lows from April, pushed up by a heatwave across the northern hemisphere this summer as well as output cuts in China, the world’s biggest consumer of coal. The deals between Japanese utilities and Glencore give coal markets welcome clarity after Tohoku and Glencore abandoned their talks on an annual contract which traditionally set prices for the region. With annual imports of around 115 million tonnes, Japan is one of the world’s biggest importers of thermal coal. Its utilities buy around 40 percent of all Australian thermal coal exports.

Source: Reuters

South Korea firms caught importing coal, iron from North: Seoul

10 August. Three South Korean firms were caught importing coal and iron from the North last year, Seoul said. More than 35,000 tonnes of North Korean coal and iron worth 6.6 billion won ($5.8 million) were imported into the South between April and October last year, the Korea Customs Service said. News of the apparent breach comes after a UN (United Nations) report accused the North of evading sanctions by continuing to export coal, iron and other commodities as well as carrying out illegal ship-to-ship transfers of oil products at sea.

Source: Business Standard

US coal cargoes heading for China as Beijing takes aim with new tariffs

9 August. At least four cargoes of US (United States) coal worth $30 million are headed to China as Beijing prepares to hit imports with hefty 25-percent tariffs, threatening a niche supply of the fuel even as China’s appetite for foreign coal shows no sign of abating. The vessels, carrying a combined 335,000 tonnes of coal, are the only confirmed cargoes in transit from the US to China, and are scheduled to land in time to avoid the new duties. The penalties will come into effect on 23 August after Washington plans to start collecting duties on Chinese products of the same value. Coal was also in the draft list issued in June. The US shipped 3.2 million tonnes of coal to China last year, up from less than 700 tonnes in 2016, making it China’s seventh largest supplier, although well behind top supplier Australia with nearly 80 million tonnes.

Source: Reuters

INTERNATIONAL: POWER

Consumers pay 8 percent below global average for electricity

8 August. The good news is that residential consumers are paying 18 percent lower since 2012 and 8 percent below their global counterparts. According to a survey done by Australian-based consulting firm International Energy Consultants (IEC), Meralco’s tariffs have decreased to P 7.77 per kilowatt hour (kWh) in January 2018 from January 2012’s price point of P 9.57 per kWh. The bad news is we’re still the third highest electricity rates in Asia behind Japan and Singapore. Japan and Singapore were reported to be among the top Asian countries with the highest    electricity rates, placing Meralco’s average tariff 24th highest out of 46 markets surveyed. The study identified markets such as Thailand, Indonesia, Malaysia, Korea and Taiwan as having the lowest electricity rates due to annual subsidies amounting to $ 800 billion from their respective governments. These subsidies are in the form of cash grants, subsidized fuel or deferred expenditure. To reduce energy costs for the consumer, IEC recommended a focus in adding retail competition on top of more power generation facilities.

Source: Power Philippines

INTERNATIONAL: NON-FOSSIL FUELS/ CLIMATE CHANGE TRENDS

Quercus pulls plug on $570 mn Iran solar plant as sanctions bite

14 August. British renewable energy investor Quercus said it will halt the construction of a €500 million ($570 million) solar power plant in Iran due to recently imposed US (United States) sanctions on Tehran. The solar plant in Iran would have been the first renewable energy investment outside Europe by Quercus and the world’s sixth largest, with a 600 MW capacity. Iran has been trying to increase the share of renewable-produced electricity in its energy mix, partly due to air pollution and to meet international commitments, hoping to have about 5 GW in renewables installed by 2022. In June, before the US-imposed sanctions, more than 250 companies had signed agreements to add and sell power from about 4 GW of new renewables in the country, which has only 602 MW installed, Iranian energy ministry data showed. Quercus has a portfolio of around 28 renewable energy plants and 235 MW of installed capacity. The 600 MW plant it aimed to construct in Iran would be the firm’s largest investment.

Source: Reuters

China promoting own technical standards to aid nuclear push overseas

10 August. China’s State Council said it would promote the use of China’s nuclear industry’s independent technological standards worldwide, aiming to play “a leading role” in the global standardization process by 2027. Its two major nuclear project developers, China National Nuclear Corp (CNNC) and the China General Nuclear Project Corp (CGN), are jointly promoting an advanced third-generation reactor known as the Hualong One to overseas clients, with CGN aiming to deploy the technology at a proposed nuclear project at Bradwell in England. China aims to raise its total nuclear capacity to 58 GW by the end of the decade, up from 37 GW at the end of June. Capacity could reach as high as 200 GW by 2030, and China also has ambitions to dominate the global nuclear industry via its homegrown technologies.

Source: Reuters

Australian states delay approving new energy policy

9 August. Australia’s states held off approving a plan to end more than a decade of climate and energy wars and spur investment in new power supply, disappointing industry seeking certainty on energy policy. Prime Minister Malcolm Turnbull is pushing a National Energy Guarantee (NEG) in a bid to bring down electricity prices, which have more than doubled over the past decade, and ensure supplies following a string of blackouts in 2016 and 2017. Energy Minister Josh Frydenberg said after a meeting with state governments that it had been “an important step forward” for the plan, which has been under negotiation for nearly a year. The policy needs unanimous approval from Australian states to go ahead and requires federal legislation, but Victoria, Queensland and the Australian Capital Territory pushed for more ambitious emissions targets. Victoria, where the government faces an election in November and stands to lose seats to the Greens, want emissions reduction targets that can only be strengthened over time, with targets to be reviewed every three years, and future targets to be set by regulation rather than legislation. Under the plan, power retailers, led by Origin Energy, AGL Energy and Energy Australia, would be required to meet reliability and emissions targets. The aim is to ensure there is enough “dispatchable” energy, power to back up intermittent wind and solar power, and cut carbon emissions from the sector by 26 percent from 2005 levels, in line with Australia’s Paris Climate Accord target. Modeling showed the NEG would bring down wholesale power prices by more than 20 percent from where they would be without the policy and the share of renewable energy generation sent out in the national market would more than double by 2030.

Source: Reuters

DATA INSIGHT

Gas Imports by India in 2017-18

US$ Million

Fuel Type 2016-17 2017-18

% change FY18

w.r.to FY17

Gas (LNG) 6004.74 8121.29 35.2

India's Total Imports (ITI)

(of All Commodities)

3,84,355.56 4,65,578.29 21.1

Gas  imports

as % of ITI

1.56 1.74

Direction of India’s Gas Imports (in Value terms) for 2017-18

Source: Compiled from Ministry of Commerce & Industry

This is a weekly publication of the Observer Research Foundation (ORF). It covers current national and international information on energy categorised systematically to add value. The year 2018 is the fifteenth continuous year of publication of the newsletter. The newsletter is registered with the Registrar of News Paper for India under No. DELENG / 2004 / 13485.


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