Energy News Monitor | Volume XIII: Issue 48

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    DYNAMIC PRICING OF PETROLEUM PRODUCTS: INDIA IN STEP WITH THE WORLD

    Oil News Commentary: April – May 2017

    India

    The proposed daily pricing of transport fuels in India would improve confidence in the sustainability of the market pricing regime as regular smaller changes in currency and crude oil prices should be easier to pass through to customers, US investment banker Jefferies said. The All India Petroleum Dealers’ Association said the oil marketers plan to roll out a dynamic fuel pricing pilot project from May 1 in five cities where transport fuel prices would be changed daily so as to better cope with volatility in global crude oil prices. Under the pilot project, the companies will change the price of transport fuels everyday based on crude price movements. Dynamic pricing is followed in many developed countries. The project is to be implemented in the cities of Puducherry and Vizag in southern India, Udaipur in the west, Jamshedpur in the east and Chandigarh in the north.

    Currently, state-run fuel retailers, IOC, BPCL and HPCL revise petrol and diesel prices on the 1st and 15th of every month based on average international price of the fuel in the preceding fortnight and the currency exchange rate. Although state-run fuel retailers have the capability to revise petrol and diesel prices on a daily basis, what needs to be monitored is how consumers react to price volatility. Besides, global fuel prices and currency exchange rate, central and state taxes account for a major part of the fuel prices. It accounts for half of retail petrol price and 46% of retail diesel price. The central government collected ₹645 billion from petrol as excise duty in FY17 up to end-February, 20% more than what was collected in the whole of FY16. Excise receipts from diesel jumped 36% in the same period to ₹1.37 trillion.

    India was reported to have toppled Japan as the world’s second-largest importer of LPG as Prime Minister seeks to win rural votes. Imports of LPG, mostly used as cooking fuel, soared 23 percent during the financial year that ended March 31 to 11 MT according to PPAC. Japan’s imports slipped 3.2 percent during the same period to 10.6 MT according to its finance ministry. The drive to provide free cooking gas connections to women from extremely poor households, aimed partly at winning rural votes led to a record distribution of 32.5 million new cooking gas connections during the year. Free gas connections coupled with at least two other government programs have taken India’s active LPG user count to about 200 million, about 60 percent more than Japan’s entire population. India aims to increase LPG usage to cover 80 percent of its households by March 2019, against 72.8 percent as on April 1. India’s consumption of LPG during the year to March 31 was 21.55 MT registering a 9.8 percent growth from the previous year. Demand for the fuel may touch 35 MT by 2031-32 due to an increase in the penetration of cooking gas connections in rural areas. According to estimates by the PPAC, India’s LPG consumption is expected to grow 9.7 percent in the current financial year that started April 1 to 23.7 MT. Overseas purchases are poised to become the dominant source of the fuel in FY18, as consumption surpasses local production, according to the oil ministry. India imports 40 percent of its LPG requirements, predominantly from the Middle East, and is discussing long-term import contracts with exporting nations. Rapid adoption of cooking gas in homes and increased supply of electricity have encouraged the central government to steeply cut subsidised kerosene supply to states. Consumption of kerosene, mostly used by rural poor for lighting and cooking, has dropped by a fifth in FY17.

    The centre had launched another campaign ‘GiveItUp’ in order to prompt people who could afford LPG connections at market prices to give up their subsidy voluntarily. The subsidy given up is being used to provide LPG connections to BPL families. Under the scheme, more than 10 million families gave up LPG subsidy which enabled the government to provide more than 6.3 million new LPG connections to BPL families. In the next phase of PMUY, the centre is going to increase focus on ramping up LPG penetration in the rural areas and north-eastern states. The LPG coverage in rural areas as on March 2017 stood at 46 percent against national coverage of 71.7 percent. North-Eastern states,  including Assam, Nagaland, Manipur, Tripura and Meghalaya, have LPG penetration less than 71.7 percent.

    The top five states in the list of beneficiaries of subsidised gas cylinders included Uttar Pradesh, West Bengal, Bihar, Madhya Pradesh and Rajasthan. Under the scheme, Uttar Pradesh received more than 5.1 million new subsidized LPG connections followed by West Bengal with 1.96 million connections, Bihar with 1.91 million connections, Madhya Pradesh with 1.88 million connections and Rajasthan with more than 1.53 million connections. India’s LPG penetration at the end of financial year FY17 increased to 71 percent from 56 percent in 2014. OMCs managed to release 32.5 million new LPG connections in FY17 the highest number of LPG connections released in a financial year in the country’s history.

    Prices of subsidised cooking gas and kerosene will continue to rise gradually and slowly reduce the subsidy burden on the fuels as the government has renewed its directive that allows state-run oil firms to raise prices by a fixed amount every month. The price of subsidised cooking gas has risen by ₹ 22/cylinder since June, or about 5%, while the price of subsidised kerosene increased by ₹ 4/litre, or about 27%, in the same period. In comparison, prices of petrol and diesel, which are no more controlled by the government, went up just about 1% and 3% respectively. Price of crude oil, increased 6% between June 1 and April 1.

    Last year, the government had directed IOC, BPCL and HPCL to raise prices of kerosene by 25 paise/litre every fortnight for 10 months that ended in February. It had also directed them to increase cooking gas prices by ₹ 2/month, without indicating how long the hikes can continue. The oil ministry has issued a fresh order, allowing state firms to raise prices of kerosene by 25 paise/litre/month for another four months beginning April 1. Similarly, companies have been allowed to increase cooking gas prices by ₹ 2/month until further orders. Cooking gas prices rose about ₹ 6/cylinder on April 1 to ₹ 440.90 in Delhi, a steep hike to compensate for keeping prices unchanged in the quarter to March, when elections to five state assemblies were underway. In Delhi, cooking gas price was ₹ 419.18 on June 1, after which state firms started monthly increases. Subsidised kerosene is not supplied in Delhi. But in Mumbai, the price of kerosene jumped from ₹ 15.02/litre in June to ₹ 19.03 now.

    India is expected to augment its refining capacity to 600 MT from the present 230 MT to meet the growing demand. India is considering a plan for home delivery of petroleum products to consumers if they make a pre-booking, to cut long queues at fuel stations. About 350 million people come to fuel stations every day. Annually, ₹ 25 billion ($387.00 million) worth of transactions takes place at fuel stations.

    India’s petroleum exports grew by more than 6 percent in the first 11 months of FY17 to 58.9 MT on the back of domestic surplus of petroleum products. Petroleum exports during the first 11 months of FY17 constituted 10.6 percent of India’s gross exports in value. India’s petroleum exports in value increased by 3.18 percent to $25.9 billion up to February 2017. According to ICRA report the compounded average growth rate in domestic consumption of petroleum products over the last five-year period has been high at 9 percent for petrol, 4.4 percent for diesel and 4.1 percent for aviation fuel.

    The credit outlook for India’s oil refining and marketing sector remains stable owing to high capacity utilization of domestic refining companies, low under-recoveries of OMCs and timely subsidy reimbursement by the centre, research and ratings agency ICRA has said. It said the demand for petroleum products in India is expected to revive going ahead on the back of improved economic activity even as it emerges from the impact of demonetisation. According to ICRA, the crack spreads of most of the petroleum products are expected to decline leading to weakening of GRMs in the near to medium term. But volatility in crude oil prices may lead to inventory gains or losses for the refiners. Despite the recent rise in crude oil prices, India’s OMCs are likely to continue to share nil or low burden in GURs on sensitive petroleum products, which are anticipated to be at moderate levels. Apart from brownfield expansion or debottlenecking projects, the new investments in the sector are still in the planning stages, ICRA said. The investment in auto-fuel retailing is the major area of interest for private companies in the near to medium term. According to ICRA, overall, notwithstanding moderation in GRMs, the credit outlook for companies in the refining and marketing sector remains stable owing to high capacity utilisations of domestic refiners, low GURs of OMCs and timely subsidy reimbursement from the centre.

    In contrast to the activity on the downstream side, there was little movement in the domestic upstream sector.  The only news item worth a mention was that O&G companies operating pre-NELP blocks and chosen for extension of their contracts by the Union Cabinet would be granted 10-year extension based on their past performance. The firms would have to furnish third party reserves audit report on the availability of balance recoverable reserves from their blocks while submitting the application for extension, an oil ministry’s notification showed. The Cabinet Committee on Economic Affairs approved a new policy for the grant of extension of PSCs to contractors who had been awarded O&G exploration rights during the pre-NELP regime. The government has identified 10 different blocks being operated by Cairn India, Gujarat State Petroleum Corp, Essar, Hindustan Oil Exploration Company, Oil and Natural Gas Corp and Focus Energy which would be eligible to avail and 10 year PSC extension if the conditions laid down by the new policy are met. According to the new policy, the government will only grant the extension if the past performance of the contractor is satisfactory. The grant of extension will be subject to the contractor drilling at least 70 percent of the development wells as proposed in the earlier field development report. As per the new policy governing PSC extension, contractors will have to submit an application approved by the Operating Committee for extension of Contract to the oil ministry at least two years in advance of the expiry date of the contract.

    Prime Ministers of India and Bangladesh flagged off a goodwill rail rake consignment carrying High Speed Diesel from NRL’s Siliguri Marketing Terminal to Parbatipur storage depot of BPC in Bangladesh. The goodwill rail rake consignment for supply of 2,284 MT High Speed Diesel is an outcome of the discussion between the two governments. According to NRL, the present consignment is a symbolic gesture of friendship and cooperation that exists between India and Bangladesh. It was agreed to jointly work towards implementation of this ‘Indo-Bangla Friendship Pipeline’, a 135 km pipeline project (5 km in India and 130 km in Bangladesh) with a capacity to carry 1 MTPA from Siliguri terminal to Parbatipur depot of BPC. The export of petroleum products from India to Bangladesh is also in line with the ‘Neighbourhood First Policy’ of Government of India to boost bilateral trade between the two countries and sub-regional cooperation within SAARC. Presently, Bangladesh meets its requirement of petroleum products through imports at Chittagong port. The products are subsequently transported to the rest of the country using river route. Once the NRL refinery expansion from present 3 MTPA to 9 MTPA is complete, India will be in a position to export petroleum products on a regular and long-term basis to Bangladesh.

    Rest of the World

    The IEA trimmed its forecast for global oil demand growth in 2017 by 40,000 bpd to 1.32 million bpd. It warned this could prove optimistic given slowing consumption in the US and developed Asian economies such as Australia, Japan and South Korea. On the supply front, the agency said global production fell by 755,000 bpd in March to 95.98 million bpd as OPEC and its partners complied with their joint deal to cut output by 1.8 million bpd in the first half of this year. The OPEC stuck to its pledge in March, bringing compliance to a “robust” 99 percent, the IEA said. For 2017, the IEA said it expects non-OPEC supply to rise by 485,000 bpd, above its previous estimate of 400,000 bpd, led by increases in US production growth.

    Global demand for oil is finally close to outstripping supply after nearly three years of surplus production, despite growth in the overhang of unused crude, the IEA said. The agency said oil stocks across the OECD fell by 17.2 million barrels in March. Over the first three months of the year, stocks were up by 38.5 million barrels, or 425,000 bpd, after a large increase in January. Overall, OECD stocks fell by 8.1 million barrels in February to 3.055 billion barrels as demand outpaced supply to the tune of around 200,000 bpd between January and March, the IEA said. The IEA said Iranian offshore stocks fell to 4 million barrels in March from 28 million barrels when sanctions were lifted in early 2016. Globally, oil held offshore fell to 58.4 million barrels in March from 82.6 million barrels at the end of 2016, the IEA said.

    New figures published by the IEA show that global oil discoveries dropped to a record low of only 2.4 billion barrels in 2016, while sanctioned projects fell to their lowest levels in over 70 years. The trend in low oil projects has been attributed mainly to oil companies which have been cutting their spending on oil discoveries and projects. These two trend could continue this year as well, the report warned. The report stated that oil discoveries have fallen to 2.4 billion barrels last year, compared to an average of 9 billion barrels annually over the past 15 years. At the same time, conventional resources sanctioned for development last year also fell to 4.7 billion barrels, which was 30% lower than previous year. Final investment decisions have also dropped to the lowest level since the 1940s, the report noted. The slowdown in the activities of oil sector is claimed to be the result of reduced investment spending driven by low oil prices. It also adds concern to global energy security. Falling investments in oil sector also contrasts with the resilience of the US shale industry. In the US, there has been a rebound which increased investments sharply and the output increased and production costs also reduced by 50% since 2014. This growth has been a fundamental factor in balancing low activity in the oil industry.

    Leading Gulf oil producers Saudi Arabia and Kuwait gave the clearest signal yet that OPEC plans to extend into the second half of the year a deal with non-OPEC producers to curb oil supplies. Consensus is growing among oil producers that their supply restraint agreement should be extended after its initial six-month term, but there is as yet no agreement, Saudi Energy Minister said. Kuwait’s Oil Minister said he expected to see an extension of the agreement. If OPEC and non-OPEC oil producers decide to extend their six-month agreement, the cuts may become less deep as oil demand is expected to be stronger for seasonal reasons in the second half of 2017.

    OPEC Secretary-General said that all oil producers taking part in a supply-cut pact are committed to bringing global inventories down to the industry’s five year average and restoring stability to the market. Compliance data in March showed better conformity by the oil producers with the agreement than in February.

    Russian Energy Minister said the oil market was improving with production cuts by OPEC and non-OPEC members, including Russia, trimming surplus supply that had squeezed prices for years. OPEC and non-OPEC countries meet on May 25 to discuss extending curbs agreed last year that cut crude oil output by 1.8 million bpd two-thirds of that from OPEC. Russia’s decision on whether to extend a deal to curb oil output into the second half of the year would depend on how well the OPEC and other producers stick to their production cut pledges.

    Iran has sold all the oil it had stored for years at sea and Tehran is now struggling to keep exports growing as it grapples with production constraints. Since the easing of international sanctions in January 2016, Iran tried to make up for lost sales by releasing millions of barrels parked on tankers offshore. Iran had sold its last stocks from the floating storage in the past two weeks. Much of the oil stored was condensate, a very light grade of crude. The OPEC pledged to reduce output but Iran was allowed a small increase to compensate for years of isolation. Yet it has produced less in the past three months than it was allowed. Iranian Oil Minister said Tehran was prepared to produce 3.8 million bpd if OPEC agreed to extend cuts to the second half of 2016, effectively signalling there was little hope of a steep rise in Iranian output.

    The world’s top oil exporter Saudi Arabia has stepped up sales of light oil to Asia by offering buyers more cargoes on top of the full contract volumes it will provide for May. The offers will add to a glut of light oil supplies in Asia, increasing competition with fellow Gulf producer Abu Dhabi National Oil Co and Russia. Saudi Aramco plans to supply full volumes of crude to least six buyers in Asia in May, despite cutting production to comply with a deal between the OPEC and non-OPEC producers. OPEC and some non-OPEC producers pledged to cut output in the first half of 2017 to support oil prices. To comply with the deal, Saudi Arabia has cut production of medium-heavy oil to keep its overall output lower. But it has kept supplies to Asia steady so far this year as it defends its market share in the world’s fastest oil-demand growth region against other producers.

    Iraq may seek to be exempt from a deal between oil exporters to reduce global supply in order to support crude prices and ask to boost its own output. Baghdad could ask to be exempted from taking part in the supply curbs as the nation needed its oil income to fight Islamic State. Iraq is OPEC’s second-largest producer, after Saudi Arabia, with an output of 4.464 million bpd in March, a reduction of more than 300,000 bpd on levels before OPEC cuts were implemented from January 1. Baghdad reluctantly agreed to take part in the current agreement to restrain output Oil prices could fall again by the end of the year due to a rapid increase in US shale production. Crude has recovered from lows reached in January 2016 and has mostly hovered above $50 a barrel since the beginning of the year following an agreement by the OPEC to cut production. US shale oil producers are planning to expand production following the rebound in prices.

    China added 9.34 million barrels of crude oil to SPR, worth just over one day’s imports, during the first half of 2016, government data showed. Since 2015, China’s record amount of crude oil imports have been driven more by flows into the country’s independent refineries rather than government stockpiling. China boosted its SPR across nine bases by adding 1.28 MT of crude oil in the first half of 2016, the commerce ministry said. By mid-2016, the government had 33.25 MT of crude oil, equivalent to 243 million barrels, up from 31.97 MT at the start of 2016. That equates to an average fill rate of 52,000 bpd. Based on data provided from China’s National Bureau of Statistics, the country had marked 43 million barrels during the second half of 2015, suggesting a fill rate of around 240,000 bpd.

    Cut off from lucrative fuel export markets and seeing their margins squeezed by new taxes, China’s independent oil refiners are branching out into new sectors from clean energy and lumber as well as expanding their trading to overcome the challenges. These independents, known as “teapots” since they are smaller companies than their state-owned rivals, are scrambling to survive shifting government policies at the same time domestic oil demand growth is slowing, undermining their ability to expand by just serving their home market. In 2016, China’s annual fuel demand growth was at a three-year low. Late last year, Beijing suspended fuel export quotas for the independents, handing control of diesel and gasoline exports to the dominant state refiners. Other government moves may also squeeze the independent’s margins. Top state refiner Sinopec overhauled its fuel buying policy by centralizing all purchases at its Beijing headquarters and China plans to slap consumption taxes on refinery by-products such as light cycle oil, sold as diesel, and mixed aromatics, which are added to gasoline to improve fuel quality.

    Shandong Dongming Petrochemical Group, a 260,000 bpd refinery is looking to invest in small-scale onshore fields. It also aims to boost trading operations by combining physical O&G trading with financial services such as offering credit facilities for fellow teapots at better rates than banks. Shandong Hengyuan Petrochemical Co, a refiner backed by a local government and the first teapot to own a refinery abroad, wants to become a regional player, combining assets at its home base in Shandong with the refinery in Port Dickson, Malaysia, that it recently acquired from Shell. As part of the expansion, it will set up a trading desk in Kuala Lumpur to secure crude for the two plants with a combined capacity of 160,000 bpd and also supply 4 millions of tons of fuel annually to Shell under a 10-year pact.

    A Chinese firm, the Mingyuan Holdings Group Company Ltd, has said that it is keen to set up a huge oil refinery with an investment of two billion dollars in Pakistan’s Sindh province. The Sindh government said that the refinery will have an installed capacity to process 10 million tons of crude oil annually. Sindh Board of Investment chairperson said that the Chinese company has initially expressed an interest to acquire 400-500 acres of land in Sindh to set up the refinery. The Chinese firm is expected to establish the refinery around Port Qasim or in places such as Dhabeji, Gharo, Nooriabad, Thatta and Kotri. The firm may consider establishing the refinery in a special economic zone to acquire tax incentives. Pakistan is a net oil importing country. It meets 75 percent need for oil for transport, electricity production and industrial and commercial use through import of petroleum products. The balance is met through local oil exploration where refineries play a very important role in catering to the domestic markets’ needs.

    As the UN Security Council decides whether to tighten the sanctions screws on North Korea, the country’s increasingly isolated government could lose a lifeline provided by CNPC. According to Reuters the Chinese oil giant has sent small cargoes of jet fuel, diesel and gasoline from two large refineries in the northeastern city of Dalian and other nearby plants across the Yellow Sea to North Korea’s western port of Nampo. CNPC also controls the export of crude oil to North Korea, an aid program that began about 40 years ago. The crude is transported through an ageing pipeline that runs from the border town of Dandong to feed North Korea’s single operational oil refinery, the Ponghwa Chemical factory in Sinuiju on the other side of the Yalu river, which splits the two nations.

    President Donald Trump’s administration is focusing its North Korea strategy on tougher economic sanctions, possibly including an oil embargo, a global ban on its airline, intercepting cargo ships and punishing Chinese banks doing business with Pyongyang. North Korea imports all its oil needs, mostly from China and a much smaller amount from Russia. It bought about 270,000 tonnes of fuel, from gasoline to diesel, last year, according to China’s customs data. Crude oil exports from China to North Korea have not been disclosed by customs for several years, but the sources say it’s about 520,000 tonnes a year. In North Korea, diesel has been critical for farming, especially at this time of year, ahead of the planting season and also around October for harvesting. Gasoline is mainly used by the transport industry and the military, experts said.

    The US President signed an executive order to extend offshore oil and gas drilling to areas that have been off limits – a move meant to boost domestic production but which could fall flat due to weak industry demand for the acreage. The order could open up swathes of the Atlantic, Pacific and Arctic oceans, as well as the US Gulf of Mexico, that former President Barack Obama had sought to protect from development after a huge BP oil spill in 2010. The president of the API trade group welcomed the order, while API said the order could help the industry over the long term. The order directs the US Department of Interior to review and replace the Obama administration’s most recent five-year oil and gas development plan for the outer continental shelf, which includes federal waters off all US coasts. Obama had banned new oil and gas drilling in federal waters in the Atlantic and Arctic oceans, protecting 115 million acres (46.5 million hectares) of waters off Alaska and 3.8 million acres in the Atlantic from New England to the Chesapeake Bay.

    Norway’s Statoil played down concerns that drilling in the Arctic is risky, days before it kick-starts its drilling campaign in the Barents Sea, where the country believes around half of its remaining resources could be located. Despite opposition from environmentalists, the company plans to drill five wells in the Norwegian sector of the Barents Sea, including Korpfjell, which will be the world’s northernmost well and in a formerly disputed border area with Russia. Greenpeace, which is taking the Norwegian government to court over Arctic drilling plans, said any permanent oil platforms in the region would be particularly risky. Statoil said the statistical probability of a blowout, an uncontrolled oil spill from a well, was 0.014 percent – or one for every 7,100 exploration wells. Statoil said Norway and Russia had a joint contingency plan in case an oil spill from the Korpfjell well drifted to Russian waters some 37 kilometers away.

    BP Plc is considering the sale of its stakes in three Canadian oil sands projects, as part of the British oil company’s strategy of retreating from noncore businesses. BP’s 50 percent stake in the Sunrise project near Fort McMurray in Alberta, where Husky Energy Inc owns the rest and is the operator, is the most valuable of the three assets. If the sale proceeds, BP would deploy capital in more attractive regions, such as the Permian basin in the US, where the rate of return tends to be higher. BP’s planned move comes after other global energy majors, including ConocoPhillips and Royal Dutch Shell have cut their exposure to Canada’s oil sands operations, which are among the world’s most expensive oil plays to develop. BP is focusing its operations in Egypt, Azerbaijan, the Gulf of Mexico, the North Sea and Trinidad in the coming years. Husky said in February that current production at the Sunrise project is about 36,000 barrels of oil per day. It is in the process of ramping up the project to full capacity of 60,000 bpd but progress has been slower than expected and the company is drilling extra wells to try to speed up production. Husky lowered the 2017 production forecast to 40,000-44,000 bpd from 60,000 bpd.

    NATIONAL: OIL

    Daily fuel price revisions to boost OMCs’ profit

    May 9, 2017. Government decision to revise retail fuel prices daily is likely to result in improvement marketing margins for oil companies leading to better profitability, India Ratings and Research (Ind-Ra) said in a report. In a report, Ind-Ra said the move, effective May 1 in select cities, is another positive structural change in the downstream sector after petrol price deregulation in 2010, diesel de-regulation in 2014, direct benefit transfer for liquefied petroleum gas (LPG), give-it-up scheme for LPG, lowering PDS (public distribution system) kerosene allocation and gradual hike in its prices. Between fiscal years 2014 and 2016, gross borrowing of state-run oil marketing companies (OMCs) fell by 29 percent and interest cost has consequently declined by 37 percent, it said. A pilot for the daily price revision was launched in Puducherry, Vizag in Andhra, Udaipur in Rajasthan, Jamshedpur in Jharkhand and Chandigarh from May 1 and will be gradually extended to other parts of the country. Stating that the daily price revision is the best global practise, it said in the United States (US), where the prices are revised daily, the maximum upward price change was 60 paisa/litre, while the maximum cut was 50 paisa/litre with a median change of around 1 paisa/litre in fiscal 2017. Against this back here the maximum hike in the year was Rs 3.38/litre, and maximum cut Rs 2.25/litre for petrol.

    Source: NDTV

    Cairn invites bids for integrated development of MBA fields in Rajasthan to raise output

    May 8, 2017. Cairn India Ltd has sought bids from oilfield service providers for integrated development of its main Mangala, Bhagyam & Aishwariya (MBA) fields in the prolific Rajasthan block as it looks at outside help to raise output. MBA fields, the prime among over two dozen oil and gas discoveries in the Rajasthan block, have seen output stagnating at about 150,000 barrels of oil per day. MBA fields form the back bone of the prolific Rajasthan block with about 2.1 billion barrels of in place oil reserves. The fields were discovered in 2004 and brought into production in a staggered manner starting 2009. Major infrastructure is already in place in the area with a central oil processing terminal, 550 wells, intra-field pipelines, power and crude evacuation facilities. The field had touched a peak output of 175,000 barrels per day but has since been on the decline.

    Source: The Hindu Business Line

    IOC in early talks with Saudi Aramco for downstream project

    May 8, 2017. Indian Oil Corp (IOC) said it is in initial talks with Saudi Aramco on downstream investments, including a mega project on its west coast, that could help the OPEC (Organization of the Petroleum Exporting Countries) member lock-in customers amid an oil supply glut. Oil producers are targetting growing demand in Asia to boost market share after rising U.S. shale oil output has displaced some of their supplies. India, the world’s third biggest oil consumer, plans to build a 1.2 million barrels per day (bpd) refinery to petrochemical project in the country’s west coast to feed its growing fuel demand. The International Energy Agency estimates India’s refining capacity, the fourth biggest in the world, would lag local fuel demand going forward, requiring investment in more plants. Saudi Arabia’s Energy Minister Khalid al-Falih said that Aramco continues to explore a variety of promising collaboration opportunities across the ASEAN region and elsewhere in Asia, with India being a prime target. IOC plans to invest about $30 billion in five years with the bulk of that meant for fuel upgradation projects and petrochemicals. India plans a nation-wide use of Euro VI compliant fuels from April 2020. IOC and its partners are expected to make a final investment decision on the west coast project in end-2018 to early 2019. The project, which includes a 3 million tonnes/year ethylene unit, would then take five years to complete, IOC said. IOC aims to complete a 5 million tonne a year liquefied natural gas terminal at Ennore in the east coast in the third quarter of 2018. Indian refiners are raising the share of spot crude in their overall crude intake to benefit from changing market dynamics and quickly capture cheap distress and arbitrage barrels. This year IOC will buy 68 percent of its oil needs from term suppliers, down from 80 percent earlier.

    Source: Reuters

    Over 82 percent LPG coverage in 2017-18, 95 percent by 2018-19

    May 8, 2017. After increasing the LPG (liquefied petroleum gas) coverage by oil marketing companies (OMCs) to 72.84 percent in the last fiscal, the oil ministry plans to increase it to over 82 percent by the current fiscal’s end and over 95 percent by 2018-19. OMCs released 3.25 crore new LPG connections during in 2016-17 – the highest ever number of LPG connections released in a financial year so far. Of the total connections, around 2.2 crore LPG connections have been issued to BPL families under Pradhan Mantri Ujjwala Yojana (PMUY) during 2016-17 surpassing the target of 1.5 crore for the said fiscal, the official said, adding that 85 percent of the new consumers have cone back for a refill. The scheme was launched by Prime Minister Narendra Modi in May last year in Uttar Pradesh’s Ballia and the target under PMUY is to provide five crore LPG connections to BPL families in the next three years. Under the scheme, an adult woman member of a below poverty line family identified through the Socio-Economic Caste Census (SECC) has been given a deposit-free LPG (liquefied petroleum gas) connection with financial assistance of Rs 1,600 per connection by the Central government.

    Source: The Indian Express

    HPCL, Mittal ready $3 bn to set up Bhatinda petrochemical unit

    May 6, 2017. Hindustan Petroleum Corp Ltd (HPCL) and its partner Lakshmi N Mittal will invest about $3 billion in setting up a petrochemical complex at their Bhatinda refinery in Punjab. HPCL-Mittal Energy Ltd (HMEL), a joint venture between HPCL and Mittal Energy Investments Pvt Ltd, Singapore, plans to set up an up to 1.7 million tonnes (MT) naphtha cracker unit to produce basic raw material that goes into making of plastics. The $350 million expansion of Bhatinda refinery capacity to 11.25 MT per annum from the current 9 MT will be completed next month. HPCL is investing Rs 45,000 crore by 2020 for expansion of its Mumbai and Visakhapatnam refineries as well as augmenting its marketing infrastructure.

    Source: The Economic Times

    India to spend around Rs 250 bn in setting up LPG infrastructure

    May 5, 2017. The government plans to invest between Rs 20,000 crore and Rs 25,000 crore in setting up cooking gas infrastructure of the country, Oil Minister Dharmendra Pradhan said. He said that the oil ministry is planning to revise and increase the targets set by the government under Pradhan Mantri Ujjwala Yojna (PMUY) subject to approval from the finance ministry. He said the scheme, apart from facilitating use of cleaner fuel, has also helped in boosting the liquefied petroleum gas (LPG) infrastructure in the country.  The centre had rolled out PMUY scheme in May 2016 under which the government planned to release 50 million deposit-free new LPG connections to women of BPL (Below Poverty Line) households over three years from April 2016. The government aimed at releasing 15 million new LPG connections under PMUY in 2016-2017. However, with the scheme becoming a major hit, the centre released more than 20 million connections under PMUY last fiscal. Under the scheme, Uttar Pradesh received more than 5.6 million new subsidized LPG connections followed by West Bengal with 2.9 million connections, Bihar with 2.8 million connections, Madhya Pradesh with 2.2 million connections and Rajasthan with more than 1.7 million connections. According to data provided by the oil ministry the all-India LPG penetration of the country increased to 73 percent as on April 2017 as compared to 62 percent a year ago. Oil Marketing Companies managed to release 32.5 million new LPG connections in 2016-17 — the highest number of LPG connections released in a financial year in India. The total number of LPG connections in India increased by 20 percent to 200 million at the end of May 2017 as compared to 166.3 million connections a year ago. The ministry plans to release 30 million connections in 2017-18 and 40 million new connections in 2018-19.

    Source: The Economic Times

    After Lucknow crackdown, Uttar Pradesh government orders statewide inspection of petrol pumps

    May 4, 2017. Following the crackdown on petrol pumps in Lucknow where electronic chips were found to have been used to pilfer fuel and dupe customers, the government has now ordered a statewide inspection of 6,600 petrol pumps of all leading oil companies. The inspection has already begun in several districts including Bareilly, Moradabad and Rampur where teams comprising of district administration officials, oil company staff and local police have been conducting raids. In an inspection that was carried out in the entire Bareilly district, no untoward incident was reported at any of the filling stations. The inspection team, comprising of city magistrate and officials of weights and measurements department, claimed that without technical knowhow it is difficult to detect any technical tempering of dispensing machines. With no aberration reported in Bareilly, officials asserted that pump owners may have taken steps to rectify the situation after the raids in Lucknow. The development comes days after dozens of fuel pumps were sealed in the state capital after the STF busted a statewide racket of pump owners using remote-controlled electronic chip in their dispensing machines to dupe customers. Electronic chips were used at several petrol pumps to pilfer 5% fuel even as the customers paid for the complete amount.

    Source: The Times of India

    NATIONAL: GAS

    PM Modi’s dream project ‘Urja Ganga’ gets underway in Varanasi

    May 7, 2017. Prime Minister (PM) Narendra Modi’s dream project- City Gas Distribution (CGD) Project as a part of Jamsehdpur-Haldia and Bokaro-Dharma Pipeline (JHBDPL) named Urja Ganga Project started taking shape in his parliamentary constituency Varanasi, with GAIL (India) Ltd starting the pipeline laying work. Digging of road on Diesel Locomotive Works (DLW) premises marked the launching of this project in the holy city. GAIL is investing Rs 570 crores for laying over 129 km pipelines in four district of Varanasi division under this project. As a Diwali gift for Varanasi, Modi had announced CGD for the city and surrounding region in October 2016. During his Varanasi visit Modi also announced launching JHBDPL Urja Ganga project for five eastern states- UP, Bihar, Jharkhand, West Bengal and Odisha. This project is aimed at fulfilling energy requirement for household, industries, hotels, cold storages, dairies and vehicles. It will also help in bringing natural gas based crematoriums at Manikarnika and Harishchandra ghats in Varanasi. Under the Project, a population of 36.5 lakh in 1535 sq km of Varanasi district will be benefited. 50,000 families will get piped natural gas (PNG) connection while five lakh cylinders will be given in rural area within five years. Besides, 20,000 vehicles will be converted compressed natural gas (CNG) in Varanasi, where 20 CNG stations will be coming up. According to GAIL, the ambitious 2540 km Urja Gnga project for five eastern states will fulfill energy requirement of 40 districts and 2600 villages. The total cost of project is Rs 12,940 crores of which the union government has sanctioned Rs 5,176 crores. CGD is also planned for seven major cities- Varanasi, Patna, Jamshedpur, Kolkata, Ranchi, Bhubaneshwar and Cuttack, all on the pipeline route.

    Source: The Times of India

    RIL becomes first customer for its own CBM

    May 4, 2017. Reliance Industries Ltd (RIL) has become the first buyer of coal-bed methane (CBM) produced from its own block in central India after agreeing to pay the highest price for the fuel, according to the company. The company bid $4.23 per million British thermal units (Btu), outbidding others such as urea maker Deepak Fertilisers & Petrochemicals Corp and GAIL (India) Ltd, according to the company. RIL will use the entire initial daily volume of 400,000 cubic meters of gas from coal seams at the Sohagpur block in Madhya Pradesh state at three of its petrochemical plants. RIL’s sale to itself is the first test of the marketing and pricing freedom India introduced in March for coal-bed methane producers to attract investments and boost production. The price, which is 71 percent higher than the $2.48 per million Btu price of natural gas from conventional fields in the country, will help boost RIL’s oil and gas margins. It will also partially replace the costlier imported gas used at the petrochemical plants in the western Indian states of Maharashtra and Gujarat. RIL’s price was higher than the $4.159 a unit bid by Deepak Fertilizers and $4.009 by GAIL. Electricity generators GMR Rajahmundry Energy Ltd and GMR Vemagiri Power Generation Ltd., which quoted a price of $2.48 each, were the remaining qualified bidders. RIL, which became the third producer of gas from coal seams after Great Eastern Energy Corp and Essar Oil Ltd, started commercial production in March from the block, known officially as SP(West)–CBM–2001/1. It plans to increase CBM output to 2.5 million cubic meters a day by March 2018. Production will increase in the next 15-18 months as the company plans to drill 600-800 more wells and expand infrastructure in the next phases of development, according to the RIL.

    Source: Bloomberg

    NATIONAL: COAL

    CIL hopes for export deal with Bangladesh this year

    May 9, 2017. Coal India Ltd (CIL) is planning to conclude an agreement with the government of Bangladesh this year to start export of coal to that country. Demand for thermal coal recently began picking up, but CIL still has a 69 million tonnes stock as carryover from the previous year’s production. Its officials are now eyeing the South Asian region, to clear the stock and for future contracts. Bangladesh is an immediate consideration, as thermal power giant NTPC, the largest client of CIL, has entered the country by setting up an Bangladesh-India Friendship Power Company (BIFPC). This is a 50:50 joint venture (JV) between NTPC and the Bangladesh Power Development Board (BPDB), to construct two 660 MW coal-based units at Khulna, for an estimated cost of $2 billion. To finance this JV, India’s Exim Bank will provide a $1.6 bn loan. Bharat Heavy Electricals Ltd (BHEL), another Indian government-owned company, was awarded the contract to construct these power plants. With these developments, CIL seems optimistic that BIFPC will prefer Indian coal over others. Last year, CIL had sent a team to Bangladesh to check the feasibility of export. According to BPDB, the installed power capacity of Bangladesh is 12,339 MW, of which coal-based plants comprise only 250 Mw or about two percent. By that country’s Power System Master Plan, 2010, the demand in 2030 will be about 30,000 MW and installed capacity is targeted to reach 40,000 MW. Of this, coal-based generation capacity is expected to be 15,000 MW.

    Source: Business Standard

    CIL mines re-graded to fix slippages: Coal Secretary

    May 8, 2017. All mines of Coal India Ltd (CIL) have been re-graded following complaints from consumers, including power sector players, about the slippages in fuel grade, Coal Secretary Susheel Kumar said. The re-grading of CIL mines was done this year by engaging four independent scientific bodies and the entire exercise was completed in two months, he said. Currently, third party sampling assessment is continuing, but hopefully it would lose its value very soon, he said. Power and Coal Minister Piyush Goyal had said a few days ago that government’s next target is to supply superior quality of coal to power producers to improve electricity generation and reduce pollution. CIL, which accounts for over 80 percent of domestic coal production, is targeting one billion tonne output by 2020.

    Source: The Economic Times

    CIL to engage tax consultant to get ready for GST

    May 7, 2017. Coal India Ltd (CIL), the largest coal producer in the world, is engaging a tax consultant to assist the miner and its subsidiaries in getting ready for the Goods and Services Tax (GST) and indirect taxes for the miner. It has floated a tender to appoint a tax consultant. According to the tender document, the miner will seek advice from the consultant on GST implications on the transactions. The document said the coal producer will seek “advice on monthly and annual GST compliances” to be undertaken by CIL and preparation of compliance manual.

    Source: The Economic Times

    Goa CM meets MLAs to discuss GST, coal

    May 6, 2017. Goa Chief Minister (CM) Manohar Parrikar held a meeting with BJP’s coalition partners in Goa to discuss various issues including the Goods and Services Tax (GST) bill and coal pollution in the port town. Parrikar is likely to decide on a strategy to counter the issue of coal pollution in Vasco. The meeting was attended by BJP MLAs, Goa Forward party’s ministers, MGP MLAs, and Revenue Minister Rohan Khaunte, besides other independent MLAs. The coal pollution issue was raised by Panchayat Minister Mauvin Godinho and Former Environment and Forest Minister and Cortalim MLA Alina Saldanha. Godinho said that the MLAs present at the meeting unanimously agreed that coal pollution should be controlled in Vasco. Godinho said that they have suggested that the coal handling companies should construct bigger shades to store the coal so that it doesn’t fly away. Parrikar briefed the MLAs present at the meeting about the implementations of GST in the state. The state government has called for a special assembly session on May 9 to pass the GST bill.

    Source: The Times of India

    Volatile coking coal prices to weigh on steel spreads: Ind-Ra

    May 5, 2017. India Ratings and Research (Ind-Ra) said that volatile coking coal prices may keep the steel sector spreads under pressure in the ongoing financial year. Spreads, in commodity parlance, is the difference between price and raw material cost. The price of coking coal, a key raw material in steel making — restarted its upward movement in last month after softening from the elevated levels of November last year. Ind-Ra said that it is of the view that the recent increase in coking coal prices is temporary and it may soften in the near-term, however, it’s unlikely to correct significantly in FY’18.

    Source: The Economic Times

    Meghalaya thinks of MMDC option to begin coal mining

    May 3, 2017. Meghalaya government said that coal mining could be legally carried out by Meghalaya Mineral Development Corp Ltd (MMDC) in the state where mining of coal was banned three years ago by the National Green Tribunal. Under provisions of the Mines and Minerals (Development & Regulation) Act 1957, MMDC was eligible to apply for coal mining lease under existing laws and with the consent of the people, Chief Minister Mukul Sangma said. Once the MMDC has taken the mining lease, the mines need not be routed through auction, the Chief Minister said.

    Source: The Times of India

    Government working on auction model for commercial coal mining

    May 3, 2017. The government is working on various auction models with regard to sale of coal blocks for commercial mining by private companies, Coal Joint Secretary Vivek Bharadwaj said. An inter-ministerial panel under the chairmanship of coal secretary and members from ministries like power and finance would consider the auction models for commercial mining. India is in the process of throwing open commercial coal mining to private firms for the first time in four decades, with the aim of shifting the world’s third-biggest coal importer towards energy self-sufficiency. The government had said that opening up of commercial coal mining to private companies will bring in competition in the coal sector and will reduce power tariff.  The government had said it wants to convey to potential investors that sustainable and efficient mining, not revenue maximisation, is the idea behind commercial coal auction.

    Source: The Economic Times

    With surplus coal, now focus turns to quality: Goyal

    May 3, 2017. The government’s next target is to supply superior quality of coal to power producers to improve electricity generation and reduce pollution, Coal and Power Minister Piyush Goyal said. Recently, fuel quality watchdog Coal Controller had downgraded 41 percent of samples from the mines of Coal India Ltd (CIL). He said that due to increased production the coal was available in abundance in the country. CIL had said that about 41 percent of coal samples from its mines had been downgraded by quality watchdog Coal Controller. In most cases, downgrading has been of one to two grades, CIL had said in its reply to bourses.

    Source: The Economic Times

    NATIONAL: POWER

    Rural electrification programme on track: Government

    May 9, 2017. With over 13,000 of the total 18,452 villages electrified, the rural electrification programme is on track for completion within the targeted time-frame, the government said. Over 22 lakh rural BPL (Below Poverty Line) households were electrified in 2016-17, and over 40 crore LED (light emitting diode) bulbs were distributed in the same period. The total inter-regional transmission capacity has been significantly enhanced with 41 GW transmission capacity being added from May 2014 to April 2017.

    Source: Business Standard

    GE bags order to upgrade Hindalco’s captive power plant in Uttar Pradesh

    May 9, 2017. Power solutions provider GE said it has signed an agreement with Hindalco Industries to upgrade aluminium rolling company’s generation equipment at its Renusagar captive power plant in Uttar Pradesh. GE will modernise two steam turbines at the captive power plant targeting turbine output increase of up to 4 MW each—improving the efficiency of the plant and extending the life of the units by around 20 years, the company said. The modernisations will help increase the plant’s efficiency by up to six percent and reduce the cost of power generation by around $15 million over five years, it said. GE will use its Powering Efficiency Center of Excellence for this upgradation.

    Source: The Financial Express

    India’s ‘smart’ power system up for cyber security audit

    May 8, 2017. India is set to see a countrywide cyber security audit of its power distribution and generation system to prevent hacking as state grids and plants increasingly become smarter with large-scale deployment of digital technology. At State Energy Ministers’ conference piloted by Union Power Minister Piyush Goyal, all participants agreed to get their power system — down to the plant level — regularly audited by agencies empanelled by the Computer Emergency Response Team (CERT-In) of the department of information technology. The states agreed to conduct mock drills simulating disasters and hackings to test preparedness for reviving downed systems. The vulnerability of India’s transmission network to hacking in an ‘intelligent’ environment in which machines ‘talk’ to each other on a common platform. Indian power equipment manufacturers have repeatedly been raising alarm over the issue as city grids are being smartened up with SCADA (supervisory control and data acquisition) systems.

    Source: The Economic Times

    Farmers suffer major power cuts in Maharashtra as state faces electricity deficit

    May 6, 2017. As the state is facing a major power deficit of 4,000 MW, the agricultural consumers complain of major load shedding hampering the power needs of residential, commercial and agricultural consumers in the district. Lack of maintenance of power generation turbines is the major cause of the power deficit. In order to balance the power supply across the district, Maharashtra State Electricity Distribution Company Ltd (MSEDCL) has started two hours load shedding of agricultural consumers. The Kolhapur zone of MSEDCL comprises of Kolhapur and Sangli district. The sugarcane farmers there require continuous power to irrigate cane. These farmers will now have to face load shedding of two hours during the night time starting from May 5.

    Source: The Economic Times

    Manipur Power Minister promises total electrification by December 2018

    May 6, 2017. Manipur Power Minister Thongam Biswajit Singh said all unelectrified villages in Manipur would be electrified by December 2018. Biswajit said that of the total 4,141 unelectrified villages in the country, Manipur has 85. Biswajit said the Centre agreed to open a mega solar park in Manipur.

    Source: The Times of India

    After Gujarat and Andhra, Kerala enters club of fully electrified states

    May 6, 2017. After Gujarat and Andhra Pradesh, Kerala is readying to enter the select club of fully electrified states. Each and every household in Kerala will have electricity by the end of May, State Electricity Minister M M Mani said. As much as Rs 700 crore has been pumped in for the electrification drive. The Minister said that a special facility has been created under the umbrella of the Kerala State Electricity Board (KSEB), for the promotion and popularisation of solar energy. Till now, out of the 29 states, only two — Gujarat and Andhra Pradesh — enjoy the status of fully-electrified states in India. Kerala Governor P Sathasivam had announced that Kerala was moving toward becoming a fully electrified state. The feat required the electrification of around 2.5 lakh households that were yet to have a power connection.

    Source: The Financial Express

    EESL to launch India’s affordable LED scheme in UK

    May 5, 2017. After changing the landscape of India’s energy efficiency scenario, Energy Efficiency Services Ltd (EESL) is now all set to expand and deliver its expertise overseas. Among other geographies, EESL is looking to make a significant investment in UK (United Kingdom) and launch its operations on affordable LED (light emitting diode). The company aims to expand its operations in other parts of Europe, Canada, Bhutan, Nepal, Sri Lanka, Thailand, Vietnam and Bangladesh and has already signed close to 10 Memorandums of Understanding with different countries. The major focus so far has been on lighting, as it represents 10-15 percent of national electricity consumption and can be reduced by at least half once old inefficient light bulbs have been replaced by LEDs.

    Source: The Economic Times

    Andhra Pradesh to provide 24×7 power to industrial feeders

    May 4, 2017. Andhra Pradesh, which claims to have attained self sufficiency in power sector is now gearing up to provide 24×7 three phase power supply to all industrial feeders even in rural areas. The state is contemplating to take up this huge task by segregating agriculture feeders at an approximate cost of ₹ 4,000 crores sought the support of the union government, to help in promotion of micro & cottage industries and huge employment generation in the mandal headquarters, major gram panchayats and villages. During the National Power Minister’s Conference in New Delhi Kala Venkata Rao, Power Minister of Andhra Pradesh has requested Power and Coal Minister Piyush Goyal, to sanction funds to carry out the feeder segregation in rural areas under Deen Dayal Upadhyaya Gram Jyoti Yojana project which facilitates rural empowerment. The Andhra Pradesh Capital Region Development Authority principal secretary Ajay Jain informed that, the utilities are fully geared up to meet any hike in power demand. Andhra Pradesh Capital Region Development Authority informed that the utilities are fully geared up to meet any hike in power demand.

    Source: The Hindu

    Goyal endorses Aadhaar linked electricity bill payment

    May 4, 2017. Endorsing the linking of the Aadhaar card with payment of electricity bills, Power and Coal Minister Piyush Goyal said it was an initiative to help people. He was briefing the media on the outcome of the State Power Ministers’ Conference. During the conference, the Power Ministers discussed seamless power to the industries, rationalisation of power tariff structure through better fuel linkages, transparent price discovery and promised to come up with a plan to benefit consumers soon.

    Source: Business Standard

    Government asks states to accept power tariff in digital transaction mode

    May 3, 2017. The government has asked states to stop accepting electricity bill payments in cash and move to digital mode, a move that can be a giant leap towards a cashless economy as power worth lakhs of crore is consumed every year. The Union power ministry has told state distribution companies to introduce and strengthen online and digital payment mechanism, to begin with in urban areas and gradually to all electricity consumers, Power Secretary PK Pujari said. Data available with the Central Electricity Authority (CEA) showed that 1,134,631 million units of electricity was supplied across states during April 2016 and March this year. Shifting to an efficient digital payment mechanism could generate Rs 340,389 crore, going by a conservative estimate of Rs 3 per unit tariff. The power ministry will deliberate on ways to promote cashless electricity bills payment in a meeting this week. Pujari said the move was in the interest of a cashless economy as well as for efficient electricity bill collection. The power ministry’s Urja portal showed that in urban areas mapped by the Integrated Power Development Scheme for IT enablement, 12.4 percent of electricity consumers made digital payments for electricity bills. This was a quantum jump from 8.6 percent digital payments made in October 2016.

    Source: The Economic Times

    Centre, states to consider simpler power tariff system

    May 3, 2017. Union Power Minister Piyush Goyal and State Ministers will consider the possibility of sharply reducing the number of power tariff slabs to make them uniform across the country and examine ways of re-engineering of power plants to use domestic coal in place of imported fuel at a meeting. The annual meeting of Power Ministers will also explore ways of enforcing clean energy purchase obligations of power distribution companies and review challenges in achieving 100% rural electrification in difficult terrain and in left wing extremism affected areas. The agenda of the meeting released here by the Union power ministry said a rationalization of power tariff slabs across the country will improve transparency and may enhance energy consumption as well as bill collection efficiency. It will also make administration easier. The idea is to have about 15 uniform slabs across the country in place of the highly complex system prevalent in states, where slabs vary significantly. In Tamil Nadu, for example, there are 36 slabs, while Andhra Pradesh has 93. The proposed 15 slabs will have five major classes of consumers-domestic, commercial, agricultural, industrial and institutional—and subclasses based on voltage and consumption. This system will enable providing benefits for “low/efficient consumption and discourage high/wasteful consumption” besides protecting the interests of certain consumers having low paying capacity, said the agenda.

    Source: Livemint

    NATIONAL: NON-FOSSIL FUELS/ CLIMATE CHANGE TRENDS

    West Bengal to take solar-hydro route for green power project

    May 9, 2017. West Bengal is going solar this time to run generators that will pump water to a reservoir uphill in Purulia’s Ayodhya Hills during off peak hours, 10 years after the successful installation of Purulia Pumped Storage Project. The state power department will set up a 1,000 MW solar-hydro power project when the existing project is a thermal-hydro mix. The proposal was cleared in the state cabinet meeting. The purpose of this multifunction power plant is to pave the way for energy generation without fossil carriers — a first of its kind in the country — when Bengal has a lopsided 96:4 thermal-hydro ratio in power generation. The objective is to use the afternoon sunlight to run turbines to lift stored water from a reservoir at a lower altitude in Ayodhya Hills to a reservoir on the upper side during off-peak hours that can help meeting the peak demand. Planned to be installed within 81 months, the second project is being funded by the Japan Bank of International Cooperation (JICA). The generated energy will be wheeled to the power grid to meet the peak demand.

    Source: The Economic Times

    PM Modi lauds India’s solar power performance

    May 9, 2017. Prime Minister (PM) Narendra Modi lauded India’s performance on renewable energy front announcing the country’s solar energy generation capacity rose at a record pace of 81 percent last financial year. Modi assured the country’s solar equipment manufacturing will be boosted in the coming years and called for greater emphasis on ethanol blending programme. India’s total solar power capacity currently stands at 12,288 MW as against 6,762 MW at the end of March 2016. The ministry of new and renewable energy in April announced that the country’s solar capacity expanded by a record 5,526 MW in 2016-2017.

    Source: The Economic Times

    India to overtake Japan to become third biggest solar market in 2017

    May 8, 2017. With 8.8 GW of projected capacity addition (growth of 76 percent over 2016) in 2017, India is set to become the third largest solar photovoltaic (PV) market, overtaking Japan, according to a report by solar energy consulting firm Bridge to India. By the end of 2017, India’s solar power capacity is expected to touch 18.7 GW, which will be about five percent of global solar capacity, growing by 89 percent over last year. As of March 2017, India had installed 12.2 GW of utility scale solar capacity.

    Source: The Hindu Business Line

    Himachal’s mega hydro project to be commissioned this month

    May 8, 2017. The 100 MW Sainj Hydroelectric Project being constructed by Himachal Pradesh Power Corp Ltd (HPPCL) in Kullu district would be commissioned partially this month. The Rs 800 crore hydro project, funded by the Asian Development Bank, will generate 322 million units per annum. The state is expected to earn revenue of Rs 100 crore by selling electricity from it, HPPCL said. The first unit of the project will start generation by May 20 and the second unit by next month, HPPCL said. The mechanical spinning of the first unit of the project was done on April 25, HPPCL said. It has installed capacity of 100 MW with two generating units of 50 MW each. The run-of-the-river project is located on the Sainj river, a tributary of the Beas. The project comprises a diversion barrage on the river near Niharni village, and an underground powerhouse on the right bank of the river near Suind village. The project has a 6.36-km-long headrace tunnel of 3.85-metre diameter with two Pelton turbines coupled with generating units of 50 MW each. After commissioning the project, the HPPCL said, each family affected by the project will be provided 100 units of electricity per month for a period of 10 years. State’s hydroelectricity generation potential is 27,436 MW — about 25 percent of India’s total potential in the sector. However, only 10,351 MW has been harnessed till December 2016, which is 37.73 percent of the total potential, the state’s Economic Survey 2016-17 said.

    Source: Business Standard

    Merger of Orient and IL&FS wind power businesses hits tax hurdle

    May 8, 2017. The merger of Orient Green Power Co. Ltd’s (OGPL) wind power business with IL&FS Wind Energy may come unstuck because of a new provision that mandates payment of long-term capital gains tax on share sales where securities transaction tax (STT) has not been paid. While the merger announcement for 1.2 GW of operating assets was made in January, the tax implications arose due to changes announced in the budget pertaining to STT on 1 February. The provision has upset the tax planning of the firms that are going for mergers and acquisitions as several such deals are undertaken off-market to avoid influencing share prices among other reasons. The government issued a draft notification clarifying that long-term capital gains tax will be applicable only in three cases—one of them being sale of listed equity shares in a firm done outside a recognized stock exchange. The last large deal in clean energy was last year when Tata Power Co. Ltd bought Welspun Energy Ltd’s entire 1.1 GW renewable energy portfolio for $1.4 billion.

    Source: Livemint

    Government to conduct study on city’s pollution level

    May 7, 2017. Bihar State Disaster Management Authority (BSDMA) will soon conduct a study on air, soil, water and noise pollution in Patna in order to find solutions for improving the overall environment in the state capital. The BSDMA will assess climate change and its impact in the region, recent changes in the land use pattern and its impact on current pollution level in the city. The study will be conducted by dividing the city into various zones based on their pollution levels and the proposed field survey will be conducted using modern and accurate techniques. The study will also include preparation of pollution-based mapping of different areas. The inception report on the study is targeted to be readied by June-end. BSDMA said Patna has been adjudged as third most polluted state capital in India. Pollution from the known sources includes road transport, industries, diesel generator sets, open waste burning, dust, construction activities and aviation. Patna was declared the sixth most polluted city in the world in terms of level of PM2.5 (levels of ultra-fine particles of less than 2.5 microns which invade human lungs and causes cancer) by WHO in its report released in May last year. Water pollution too is a grave issue in the city. According to recent estimates, Patna generates 290 million litres of waste water on daily basis. Of the total sewage generated by the city, approximately two-third, or about 140 million litres per day, flows directly into the Ganga, polluting the river. The rest seeps underground, polluting the ground sources.

    Source: Press Trust of India

    Kudankulam second unit shut down due to water, steam leakage

    May 6, 2017. The second unit of the Kudankulam Nuclear Power Project (KNPP) has been shut down due to water and steam leakage. The plant’s operator, Nuclear Power Corp of India Ltd (NPCIL) said the Unit-II is likely to restart on May 11. The NPCIL has two 1,000 MW nuclear power plants at KNPP built with Russian equipment. The first unit was shut down on April 13, for annual maintenance and refuelling, a process that would take around two months.

    Source: Business Standard

    India assists Mauritania with $65.6 mn electrification project

    May 6, 2017. Despite very low trade between India and Mauritania, New Delhi has approved letters of credit worth $65.68 million for a solar-diesel hybrid rural electrification project in the north African country, the Embassy of Mali, which is also accredited to the country, has said. The aid, which is in line with India’s policy of assisting African countries, has also another two lines of credit — $15 million for developing agro-industries and $6.8 million to support a drinking water project.

    Source: Business Standard

    Soon, windmill energy for Noida and Greater Noida

    May 6, 2017. Noida and Greater Noida will soon get a share of windmill energy generated in the state following an agreement signed by Paschimanchal Vidyut Vitaran Nigam Ltd (PVVNL) and the central government in the presence of Union Power Minister Piyush Goyal. Under the agreement, Uttar Pradesh has been allocated 450 MW of windmill energy for 25 years at the rate of Rs 3.46 per unit through an agreement signed by Abhishek Prakash, MD, PVVNL on behalf of UPPCL, at the Energy Ministers’ meeting in New Delhi. While Noida stands to benefit from the agreement and will be given a share of the 450 MW windmill energy, an additional 10 MW windmill energy will be given to Greater Noida under the pact through Noida Power Company Ltd (NPCL), which provides power to Greater Noida. According to Goyal, the wind power generated has been allocated to various states by the central government to fulfil targets of renewable energy procurement at rates lower than commercial power.

    Source: The Times of India

    Solar energy portfolio of BHEL crosses 370 MW mark

    May 5, 2017. Bharat Heavy Electricals Ltd (BHEL) said its solar energy portfolio crossed the 370 MW mark in 2016-17. BHEL ended 2016-17 with a significant solar photovoltaic (PV) portfolio of 370 MW, comprising 360 MW ground-mounted power plants and 10 MW rooftop power plants, the company said. According to the company, out of 370 MW, 170 MW of BHEL-supplied ground-mounted and 2,290 KW of rooftop power plants are already under operation at various locations. During the year, BHEL secured orders for 131 MW of ground-mounted and about 8 MW of rooftop solar PV plants. In addition, it secured its first order for 240 solar PV based pumping stations. BHEL is exploring deployment of single axis solar trackers and battery-based energy storage for solar power plants, it said. BHEL has prototyped floating solar power plant and solar PV based charging stations for charging electric vehicles. It has also enhanced its EPC capacity to address large sized PV plants, it said.

    Source: The Economic Times

    PTC India ties up pacts for 1 GW wind power supply

    May 5, 2017. Power trading solution provider PTC India has announced execution of agreements with seven state utilities for sale of wind energy for a total 1049.9 MW. The distribution utilities of Uttar Pradesh, Bihar, Jharkhand, Assam, Odisha, Delhi and Noida have signed up. Uttar Pradesh is the largest beneficiary of the scheme and has signed the memorandum of agreement for 440 MW. Earlier this year, the tariff for wind energy was discovered transparently through competitive bidding at a historic low of 3.46 per unit. The Ministry of New and Renewable Energy (MNRE) had formulated the scheme for tying up of 1,000 MW Intra- state Transmission System connected wind power in India. The government successfully completed the first ever auction of wind power and associated infrastructure for 1,000 MW in the last week of February with a provision to increase in up to 1,050 MW.

    Source: The Economic Times

    Goyal announces 1 GW wind energy auction scheme

    May 4, 2017. In a major step to enhance India’s renewable energy capacity, Power, Coal, Renewable Energy and Mines Minister Piyush Goyal announced a scheme for auction of wind power projects of 1,000 MW capacity that will kick off soon. The announcement came following the conference of State Power Ministers. The ministry said the scheme is open for all obligated entities purchasing wind power for compliance of their non-solar Renewable Purchase Obligation (RPO). Solar Energy Corp of India (SECI) will sign Power Purchase Agreements with selected wind developers and back-to-back Power Sale Agreements with buying utilities. According to the memorandum of agreement, the distribution utilities of Uttar Pradesh will buy 449.9 MW electricity, Bihar 200 MW, Jharkhand 200 MW, Delhi 100 MW, Assam 50 MW and Odisha will buy 50 MW of wind power for meeting their non-solar RPO.

    Source: The Economic Times

    INTERNATIONAL: OIL

    Thailand’s PTTEP suspends Indonesia investment over oil spill case

    May 9, 2017. PTT Exploration and Production Public Company Ltd PCL (PTTEP) said it was suspending investment in Indonesia after the Indonesian government filed a $2 billion lawsuit against the Thai state-owned energy firm for alleged damage from an oil spill eight years ago. PTTEP said Indonesia remained a strategic priority as it seeks to invest up to $4 billion in expanding its energy field holdings with a focus on Southeast Asia. Hundreds of thousands of liters of oil leaked off the northern coast of western Australia after a fire at a wellhead operated by PTTEP Australasia in 2009. Indonesia alleges that the oil spill also fouled its waters and coast. PTTEP Australasia has said no oil reached Indonesia’s shore and no long-term damage was done in the Timor Sea.

    Source: Reuters

    Eni to build crude oil refinery in Nigeria: Oil Minister

    May 9, 2017. Italian oil company Eni plans to build a crude refinery in Nigeria through its Agip subsidiary, Nigerian Oil Minister Emmanuel Ibe Kachikwu said. Agreement has been reached and a memorandum of understanding is being prepared, Kachikwu said.

    Source: Reuters

    US EIA lifts 2017 world oil demand growth forecast

    May 9, 2017. The United States (US) Energy Information Administration (EIA) raised its 2017 world oil demand growth forecast by 70,000 barrels per day (bpd) to 1.56 million bpd. In its monthly forecast, the agency left its oil demand growth estimate unchanged for 2018.

    Source: Reuters

    Petronas sets May crude price factor at $3.2 per barrel

    May 9, 2017. State oil firm Petronas has set the price factor for Malaysian Crude Oil (MCO) for May at $3.20 per barrel, down $0.30 from $3.50 per barrel in the previous month, the company said. The monthly price factor is added to the average of Platts’ dated Brent prices published in the month to derive the Malaysian crude official selling price (OSP). Petronas changed its OSP mechanism effective January 2017, basing its benchmark price on a basket of four Malaysian crude grades Labuan, Miri Light, Kikeh and Kimanis.

    Source: Reuters

    Saudi to cut June oil supply to Asia as local demand rises

    May 9, 2017. Saudi Aramco will reduce oil supplies to Asia by about 7 million barrels in June, as the oil giant cuts output as part of global supply pact and trims exports to meet rising domestic demand for power during hot summer months. An OPEC (Organization of the Petroleum Exporting Countries)-led agreement to cut global oil supplies is currently due to end in June, although Saudi Arabia and other producers in the group of OPEC and non-OPEC states have indicated curbs could be extended to the end of 2017 or beyond. OPEC and other producers are expected to discuss an extension at a meeting on May 25. When OPEC announced the cuts, Saudi Arabia was quick to tell its customers in Europe and the United States that they would receive lower volumes but shielded most of Asia from the cuts. As a result, Asia will now also face heavier cuts from the world’s top oil exporter in June. According to the June nomination plans, Aramco will cut supplies by 1 million barrels each to Southeast Asia, China and South Korea, a source, who has knowledge of the nominations but did not wish to be identified. The kingdom will cut supplies by a little more than 3 million barrels for India and slightly less than 1 million barrels for Japan. In total, the cuts should be equivalent to about 233,000-234,000 barrels per day (bpd). Under the global supply pact, OPEC states, Russia and other major producers agreed to cut output by about 1.8 million bpd from January 1 until June 30. Saudi Arabia accounts for about 40 percent of the cuts pledged by OPEC. It has reduced output by more than 500,000 bpd so its total production now runs slightly below 10 million bpd, mostly involving cuts in output of medium and heavy oil grades.

    Source: Reuters

    Suncor to apply to build new oil sands project in northern Alberta

    May 8, 2017. Suncor Energy Inc, Canada’s largest oil and gas producer, said it plans to submit an application to regulators for a new thermal oil sands project later this year, which could eventually produce up 160,000 barrels per day. Suncor said it has not yet formally sanctioned the project, but if it goes ahead, construction could begin in 2024, with first steam being pumped into the reservoir to liquefy and extract tarry bitumen in 2027. Canada’s oil sands are home to the world’s third-largest crude reserves but also carry some of the world’s highest operating costs globally due to their remote location and energy-intensive production methods. The region was hard hit by the global oil price crash that started in mid-2014, with a number of producers deferring or cancelling around 20 oil sands projects.

    Source: Reuters

    Russian Energy Minister backs extending oil output curbs

    May 8, 2017. Russian Energy Minister Alexander Novak backed extending oil output curbs by leading producers, saying it would help speed up a return to a healthier market. Novak did not mention for how long he thought curbs should be extended in comments sent by the Russian energy ministry. The ministry said one option being discussed by Russia was extending the cuts beyond the end of the year. Saudi Energy Minister Khalid al-Falih said he was confident that OPEC (Organization of the Petroleum Exporting Countries) and non-OPEC producers would extend cuts into the second half of the year and “possibly beyond”. The OPEC and other producers including Russia pledged to cut output by 1.8 million barrels per day during the first half of this year to prop up the oil market. Novak said he thought rising oil demand would make the output cuts more effective in coming months and that he saw compliance with the OPEC/non-OPEC output pact at 100 percent.

    Source: Reuters

    China’s crude oil imports ease in April from record level

    May 8, 2017. China’s crude oil imports eased in April from a record high set the previous month as refiners processed less oil during a heavy maintenance season, according to data from China’s General Administration of Customs. China brought in 34.39 million tonnes of crude oil last month, or about 8.37 million barrels per day (bpd), down nearly 9 percent from March’s 9.17 million bpd, customs data showed. April’s level was still up 5.5 percent from a year ago. In the first four months of the year, China imported 139.12 million tonnes of crude, up 12.5 percent from the same period a year ago, customs data showed. April’s arrivals eased from March when China’s intake topped the United States for the first time in 2017. The slower imports came as major refineries kicked off their annual maintenance periods, but lower crude oil prices still supported robust demand from some processors. April imports of oil products fell 7.8 percent to 2.49 million tonnes while exports of oil products fell 25.1 percent to 3.50 million tonnes.

    Source: Reuters

    $55 oil price suitable, sees supply cut extension: Iran

    May 6, 2017. Iran sees $55 per barrel as a suitable price for crude oil, and believes that OPEC (Organization of the Petroleum Exporting Countries) and non-OPEC producers are likely to extend output curbs to support prices, Iranian Oil Minister Bijan Zanganeh said. Oil prices closed higher, rebounding from five-month lows, following positive US jobs data and assurances by Saudi Arabia that Russia is ready to join OPEC in extending supply cuts to reduce a persistent glut. Brent futures gained 72 cents, or 1.5 percent, to settle at $49.10 a barrel. Zanganeh said members of the OPEC have signaled that they are leaning towards extending the supply cuts.

    Source: Reuters

    BHP Billiton under pressure to sell shale, even as oil prices fall

    May 5, 2017. BHP Billiton is facing pressure from two activist shareholders over its $20 billion splurge on US (United States) shale oil and gas fields, but may resist calls to dump the business just as oil prices are sliding. Investors grumble that while BHP Billiton is a good operator in deepwater oil and gas, its shale business, first acquired in 2011, has been a capital drain and shareholders would be better off with a sale. BHP says it sees petroleum as a core business, including most of the shale operations.

    Source: Reuters

    Iraq’s fuel oil exports soar despite OPEC supply cut

    May 3, 2017. Iraqi fuel oil exports have soared since January despite a reduction in the country’s crude production in line with OPEC (Organization of the Petroleum Exporting Countries) supply cuts, in what could be a way to boost output of refined products and maintain oil revenues. Iraq on average exported between 80,000 and 160,000 tonnes of fuel oil per month in 2016, data showed. But volumes sold to Asia have jumped this year, with Iraq’s global exports of fuel oil reaching more than 500,000 tonnes in March alone, according to data. The soaring exports of high-quality straight-run fuel oil are an attempt to support revenues amid the OPEC cuts in which Iraq reluctantly agreed to participate, saying it would reduce crude output by 210,000 barrels per day. Iraq has processed more crude through its refineries, turning it into fuel oil for export. Traders said some of the high-grade fuel oil had also been shipped to the United States.

    Source: Reuters

    INTERNATIONAL: GAS

    No risk to Russian gas transit via Poland: Regulator

    May 9, 2017. There will be no disruption to Russian natural gas supply to Germany via the Yamal-Europe Pipeline after Poland ends its own purchases from Russia’s Gazprom, the Polish energy market regulator URE said. The 4,200 km pipeline delivers around 33 billion cubic meters (bcm) of natural gas to Europe. A transit deal with Poland expires in 2019 while Poland’s contract to buy up to 10.2 bcm of gas from Gazprom per year expires in 2022 and Warsaw has said it will not be renewed. Poland’s ruling Law and Justice party aims to switch from Russian gas after 2022 to deliveries from Norway via a new pipeline and to more liquefied natural gas (LNG) supplies. Russia plans changes as it looks to double the capacity of the 55 bcm Nord Stream pipeline which crosses the Baltic Sea to Germany.

    Source: Reuters

    Gazprom export to add major new gas reserves, eyes more auctions: CEO

    May 9, 2017. Gazprom may hold more auctions to sell gas into Europe’s hub markets this year and could lift gas exports above record levels hit in 2016 as it plans to add major new reserves, Gazprom Export Chief Executive Officer (CEO) Elena Burmistrova said. Burmistrova said Gazprom plans to increase reserves by 470 billion cubic meters of gas this year on the back of developments in east Siberia, the Yamal Peninsula and around Sakhalin island, she said. Gazprom held a trial gas auction in late 2015, selling more than 1 billion cubic meters (bcm) for delivery to north-western Europe from 3.2 bcm on offer. Gazprom exports met around 34 percent of European gas demand in 2016, a record high.

    Source: Reuters

    BP, Kosmos make major gas find off coast of Senegal

    May 8, 2017. BP and joint venture partner Kosmos Energy revealed a major gas discovery off Senegal, adding to other recent finds off the West African coast. Oil majors including BP and Total are investing in the waters of Senegal and Mauritania in the hope of repeating the recent exploration success of smaller players. New York-listed Kosmos in 2015 discovered a gas pool in the Tortue 1 exploration well, part of the Greater Tortue Complex spanning Senegal and Mauritania, which contained more than 15 trillion cubic feet of gas. Gas from the Tortue field is due to begin flowing in 2021 and is set to be exported from a liquefied natural gas (LNG) facility. The two firms said that the Yakaar-1 find contained sufficient reserves to warrant another LNG project.

    Source: Reuters

    Ophir to borrow $1.2 bn from Chinese banks for Fortuna floating LNG

    May 8, 2017. British oil and gas explorer Ophir Energy plans to borrow $1.2 billion from Chinese banks to back the development of its Fortuna floating liquefied natural gas (FLNG) export project in Equatorial Guinea. The project is set to be cleared at the end of June, while the buyer of the LNG and the financial structure underpinning the scheme should be announced by the end of this month, Ophir Energy Chief Executive Officer (CEO) Nick Cooper said. The choice of Chinese banks reflected the unwillingness of Western institutions to back African oil and gas projects, Cooper said. Fortuna FLNG will be Africa’s first deepwater floating liquefaction facility, with production capacity of 2.2 million tonnes per year and an estimated start-up in 2020. Italian oil and gas group Eni is advancing its own FLNG project, Coral, in waters off Mozambique. Cooper said Fortuna FLNG was highly competitive against rival producers, which have heavier capital investments, allowing it to deliver supply to Europe more cheaply than even new projects in the United States. While Ophir has not announced the identity of the buyer of output from its facility, industry sources have said the majority of interest has come from European players, including utilities.

    Source: Reuters

    Malaysia’s Petronas targets new markets for LNG

    May 8, 2017. Malaysian oil company Petroliam Nasional Berhad (Petronas) is looking to tap new markets to sell liquefied natural gas (LNG), including as fuel for ships, its upstream Chief Executive Officer (CEO) Mohd Anuar Taib said. Petronas also sees significant growth potential for LNG in India, Pakistan, Bangladesh and some parts of Southeast Asia, Anuar said. Asian spot LNG prices have dropped by more than 70 percent since 2014, with production growing faster than demand. Spot prices for June delivery stood at about $5.70 per million British thermal units, compared with $20-plus in 2014. Malaysia is the world’s third-biggest LNG exporter behind Qatar and Australia. The top destinations for its LNG are Japan, South Korea and China, but Petronas is broadening its horizons and the first cargo from its floating LNG facility was shipped to India. Petronas is also in preliminary talks with partners over the sale of LNG as shipping fuel. Anuar said that Petronas is working on an oil price assumption of $45 to $55 a barrel for the next three to four years. Brent crude was trading at about $48. Like other oil majors, Petronas has taken a hit from lower crude prices. Benchmark Brent crude prices have more than halved since mid-2014. Malaysia relies on its only Fortune 500 company for nearly a third of its oil and gas-related revenue. Though reduced operating expenses helped Petronas to post a 12 percent rise in full-year net profit in March, the company gave a cautious outlook for 2017.

    Source: Reuters

    Iran buys gear to shield gas output from any new US sanctions

    May 7, 2017. Iran is buying equipment to avert a possible disruption in output at its share of the world’s biggest natural gas field, in the event the United States (US) decides to impose additional sanctions on its economy, the state-run operator Pars Oil & Gas Co. said. The company is buying “essential equipment” it would need to avert a halt in operations at the offshore South Pars deposit, in case the U.S. imposes new curbs on Iran. Under new sanctions, the company’s purchase of a simple valve for the field would become “a most challenging task”. Iran signed a preliminary $4.8 billion deal with Total SA and China National Petroleum Corp in November for the 11th phase of South Pars. It was the country’s first joint venture with international partners since sanctions were eased in January 2016. Total will approve the project if sanctions aren’t modified. The 24 development phases at South Pars have a combined production capacity of 570 million cubic meters a day of gas, and they currently produce about 500 million.

    Source: Bloomberg

    Mozambique’s gas boom dream under threat from low gas prices, government debt scandal

    May 7, 2017. The small, palm-fringed fishing town of Palma was meant to become a symbol of Mozambique’s glittering future, transformed by one of the world’s largest liquefied natural gas (LNG) projects. But construction has fallen far behind schedule and the town’s fate is uncertain after gas prices fell and the government became engulfed in a $2 billion debt scandal. The discovery of gas reserves in 2010, estimated at 180 trillion cubic feet in the surrounding Rovuma Basin, was the biggest natural gas find in recent decades. Experts have predicted that Mozambique could become the world’s third-largest exporter of LNG — and an African version of wealthy Qatar. Initial estimates were that the first LNG would come on stream in 2016 but now it is expected in 2023 — or later. The plunge in global gas prices has led energy companies to slow down capital expenditure.

    Source: The Economic Times

    Turkmenistan discovers potentially large gas field near Caspian

    May 6, 2017. Turkmenistan has discovered a potentially large natural gas field close to its Caspian coast. Gas exports are the main source of hard currency for the former Soviet republic which is in talks with the European Union about building a pipeline across the Caspian to link its fields to European markets. The new discovery was made onshore in the Uzunada area, at the depth of about 7 kilometers. The test well produced 500,000 cubic meters of gas and 150 tonnes of condensate per day. Turkmenistan, whose reserves include the world’s second-largest gas field, Galkynysh, has faced foreign currency shortages after Russia, one of the biggest customers, stopped buying Turkmen gas last year, leaving China as the main buyer. The Ashgabat government is trying to diversify exports by discussing the Trans-Caspian link to Europe as well as investing in a pipeline through Afghanistan to Pakistan and India.

    Source: Reuters

    TransCanada to sell interests in two gas pipelines for $765 mn

    May 4, 2017. TransCanada Corp said it would sell its remaining 49.3 percent interest in Iroquois Gas Transmission System LP and an 11.8 percent stake in Portland Natural Gas Transmission System (PNGTS) for $765 million. The Canadian pipeline operator said it would sell the stakes in the two gas pipelines to TC PipeLines LP, its master limited partnership that has investments in seven pipelines capable of moving 9.1 billion cubic feet per day of natural gas. The deal value comprises $597 million in cash and the assumption of $168 million in proportionate debt at Iroquois and PNGTS, TransCanada said. PNGTS, an interstate natural gas pipeline, starts near Pittsburg, New Hampshire and ends near Dracut, Massachusetts.

    Source: Reuters

    INTERNATIONAL: COAL

    China Poly Group transfers coal assets to ChinaCoal

    May 9, 2017. China Poly Group, a real estate developer, said it has transferred its main energy unit to China Coal Group as required by the state asset supervisor. The transfer was in response to a government order to some state-owned companies to spin off their coal asset if their main business is not coal, the company said. Poly Energies Holding has total coal reserves of 2.6 billion tonnes in Shanxi province and Xinjiang region. It has a planned output of 24.85 million tonnes per year.

    Source: Reuters

    Australia’s cyclone-hit coal exporters face long port queues

    May 9, 2017. Vessels loading coal from Australia’s cyclone-hit Bowen Basin will face “significantly longer” port queues when the key Goonyella rail line returns to full capacity in the second half of May. The delays mark a slow return to normality since shipments from the world’s largest coking coal export region were disrupted by Cyclone Debbie in March and prices spiked as steelmakers turned to the spot market for supplies. Data shows 42 ships waiting outside Hay Point, the terminus of the Goonyella line, mostly waiting to load coal. More than 25 mostly coal-carrying vessels are lined up at Gladstone port further south, data shows, though that is down from a traffic jam of more than 40 vessels, the agent said. Stanmore Coal said that speed restrictions on the Goonyella line are expected to be lifted in the second half of May. Spot coking coal prices surged by more than $100 to above $300 a tonne after cyclone Debbie, but have since receded to just under $200 a tonne.

    Source: Reuters

    China January-April coal imports up 33.2 percent

    May 8, 2017. China’s coal imports in the first four months of the year jumped 33.2 percent to 89.49 million tonnes, General Administration of Customs data showed as utilities and steel mills continued to buy cheaper foreign fuel as Beijing ramped up efforts to phase out overcapacity. The data did not include an April number, but it would equate to about 24.8 million tonnes, based on calculations. That would be up from 22.09 million in March and 18.80 million in April last year.

    Source: Reuters

    Glencore agrees $84.9 a ton thermal coal price with Japan utilities

    May 8, 2017. Glencore and Japanese power utilities have settled annual thermal coal contract prices at $84.97 a ton, down from $94.75 set in October. Glencore reached the settlement with Japan’s Tohoku Electric after negotiations restarted when an initial round of talks failed to reach agreement. Australian Newcastle spot cargo prices last traded at $77.70. Thermal coal is used to generate electricity. Glencore is the world’s biggest supplier of sea-traded thermal coal and usually sets pricing for the sector.

    Source: Reuters

    Myanmar coal plant growth could kill 280k

    May 5, 2017. Myanmar’s plans to grow the country’s desperately needed but polluting coal-fired power plants could kill more than a quarter of a million people in the coming decades, environmentalists said. The country’s air is among the dirtiest in the world and pollution is only expected to worsen as the economy opens up after decades of isolation under the former junta. A new study by Harvard University and Greenpeace warned that the government’s plans to expand its current network of two coal-fired plants to 10 could have a major human toll.  Six of its cities already have higher counts of dangerous microscopic particles known as PM10 than China’s famously smog-filled capital Beijing, according to 2016 data from the World Health Organization. The extra pollution would likely cause more than 7,000 premature deaths a year, totalling 280,000 over the 40-year operating life of the eight new planned plants and the two operating ones, it predicted. Myanmar has made coal-fired plants a cornerstone of a government plan to provide electricity to its entire population of more than 50 million people by 2030. Less than a third of people have regular access to electricity through the country’s dilapidated power grid, which frequently breaks down, and a lack of power is a major issue for attracting foreign investors.

    Source: The Economic Times

    INTERNATIONAL: POWER

    Zimbabwe risks power cuts from South Africa’s Eskom over arrears

    May 8, 2017. South Africa’s power utility Eskom could cut supplies to neighbouring Zimbabwe by the end of this month if Harare fails to clear arrears. Such a move could trigger widespread power cuts in an economy already battling with a liquidity crunch but which hopes for faster growth this year after rains boosted crop production. Zimbabwe imports 300 MW per day from Eskom, but owes the utility 603 million rand ($44.5 million), of which 119 million rand is outstanding arrears. Acute shortages of foreign currency have seen the southern African nation struggle to pay for imports. Zimbabwe was producing 1,051 MW of power, with another 350 MW coming from imports, against demand of 1,500 MW.

    Source: Reuters

    Japan to provide $24 mn for power transmission line

    May 5, 2017. The government of Japan announced to provide a concessional loan of 2.665 billion yen ($24 million) to the government of Pakistan for Islamabad and Burhan Transmission Line Reinforcement project. The transmission line stabilisation project would be completed in the capital territory by 2020. The financing of the project is Japanese ODA (Official Development Assistance) loan, which is long-term low interest rate loan advanced to the developing countries and have the liability of being paid back. Minister of state for foreign affairs of Japan, Nobuo Kishi said that Khawaja Asif has been making serious efforts towards the power sector reforms, which are of crucial importance as a foundation for the overall development of Pakistan. So far, the government of Japan has been providing assistance to Pakistan in the power sector through the Energy Sector Reform programme and the National Transmission Lines and Grid Stations Strengthening project. The objective of this loan is to reinforce existing 220 kilovolt transmission lines between Tarbela hydropower plant and the Burhan substation, which will enable it to supply over three times more electricity as compared to its existing capacity. The ODA loan project would not only help stabilise the power supply to the capital territory and surrounding areas, but would also help decrease the transmission losses through introduction of low loss conductor for the first time in Pakistan.

    Source: The News International

    Sixth year of decrease in Japanese power utilities’ electricity sales

    May 3, 2017. The electricity sales by the ten regional power utilities in Japan contracted by 1.7% in the April 2016 – March 2017 year, posting a new decline for the sixth year in a row. The electricity consumption in Japan has been hit by supply restrictions since the 2011 Fukushima disaster and contracted by 4% between 2011 and 2015. In April 2016, the electricity market was opened up, removing regional barriers and cross-ownership barriers and allowing new suppliers to enter the retail market. Consequently, the ten former regional monopolies lost more than 3.4 million customers, that switched to other suppliers.

    Source: Enerdata

    INTERNATIONAL: NON-FOSSIL FUELS/ CLIMATE CHANGE TRENDS

    Belgian researchers develop air purifier that also generates power

    May 9, 2017. Researchers in Belgium’s Leuven University have developed a device which, when exposed to light, can purify air and at the same time generate power. The researchers said their goal is to be able to use sunlight more efficiently, as the processes underlying the technology are similar to those found in solar panels.

    Source: The Economic Times

    EU pollutant limits threaten large coal power plants

    May 7, 2017. Stricter European Union (EU) pollutant limits could lead to costly upgrades or the closure of one third of Europe’s large-scale coal power plant capacity, a report by the Institute for Energy Economics and Financial Analysis (IEEFA) showed. EU member states approved stricter limits on pollutants such as sulfur oxides (SOx) and nitrogen oxides (NOx) from large combustion plants in Europe which can cause air pollution and respiratory diseases. To comply with the new rules by 2021, utilities will either have to invest in new technology to retrofit coal plants, restrict operating hours to under 1,500 a year or close the facilities, the IEEFA said. To meet EU emissions targets under a global climate pact, the Paris Agreement, a quarter of current EU coal capacity needs to shut by 2020 and all of it by 2030, the Climate Analytics think-tank said this year.

    Source: Reuters

    UAE delays launch of first nuclear reactor until 2018

    May 6, 2017. The United Arab Emirates (UAE) delayed the start-up of its first nuclear reactor until 2018 for further safety checks because regulators have not yet granted an operating licence. The reactor, one of the four being built at the $20 billion Barakah plant west of Abu Dhabi by a consortium led by Korea Electric Power Corp (KEPCO), had been due to begin operating this year. But UAE nuclear regulators are still reviewing the operating licence application which was submitted in March 2015, Emirates Nuclear Energy Corp (ENEC) announced. It said the new schedule reflects “lessons learned” from problems at South Korea’s New Gori No. 3 reactor.  ENEC said the project, which will be operated by a joint venture with KEPCO, is now 79 percent complete. When fully operational the four reactors are expected to provide up to a quarter of the UAE’s electricity.

    Source: NDTV

    European Commission clears French renewable energy projects

    May 5, 2017. The European Commission cleared three French renewable energy initiatives which will jointly produce more than 17 GW of energy, saying they were compliant with European Union state aid rules. The main project to be cleared is for the installation of 15 GW of on-shore wind turbines which will pay small scale producers a premium on top of the market price. Two further initiatives to support small scale operators of solar panels and sewage gas installations were also cleared.

    Source: Reuters

    Google’s project Sunroof solar power initiative now available in Germany

    May 5, 2017. E.ON has partnered with Google to bring the United States (US) search giant’s Sunroof tool to Germany. Around seven million buildings are covered by the website, including those in major urban areas like Munich, Berlin, Rhine-Main and the Ruhr. Using this technology, homeowners can easily and precisely determine their home’s potential solar capacity and generate plans for installing a solar system. All they need to do is enter their address online. E.ON, Google and software producer Tetraeder are joining forces to promote the expansion of solar energy in Germany. The Sunroof website brings together technologies like Google Earth & Maps, 3D models, and machine learning in order to answer inquiries as precisely as possible. Sunroof calculates how much sunlight falls on a roof during the course of a year. It takes into account weather data, the position of the sun in different seasons, the area and slope of the roof as well as shadows from surrounding buildings or trees. Then Sunroof “converts” the data on sunlight into energy and calculates the potential cost savings. During the platform’s launch in Germany, “Sunroof” will be available exclusively at www.eon-solar.de. Interested homeowners not only can determine their solar potential, they can also assemble a suitable all-in-one package consisting of a photovoltaic module, an Aura battery storage unit and E.ON SolarCloud.

    Source: Energy Business Review

    Australia confident in meeting its 2020 renewable target

    May 5, 2017. According to the Renewable Energy Target (RET) 2016 Administrative Report released by the Clean Energy Regulator, Australia is on track to meet its 2020 renewable generation target. The report highlights progress toward the RET, which requires Australia to generate 33 terawatt hour (TWh) of new renewable generation capacity by 2020, resulting in covering more than 23% of power generation with renewables by 2020. In 2016, renewable power plants generated 18.3 TWh. The total capacity of committed projects in 2016 reached 1.35 GW, which should generate more than 3.9 TWh per year.

    Source: Enerdata

    EU’s energy-related CO2 emissions dipped by 0.4 percent in 2016

    May 5, 2017. According to Eurostat’s latest estimates, CO2 emissions from energy use in the European Union (EU) dipped by 0.4% in 2016. This slight decline is related to emission cuts in eleven countries, especially in Italy (-2.9%), the United Kingdom (-4.8%), Portugal (-5.7%), Bulgaria (-7%) and in Malta to a lesser extent (-18%). The United Kingdom remained the second largest CO2 emitter in the European Union in 2016 with 11.7%, behind Germany (22.9%), and followed by Italy (10.1%). CO2 emissions rose in a majority of EU countries, with moderate increases in the Netherlands (+0.4%), Germany (+0.7%) and France (+0.9%) and higher increases in Denmark (+5.7%), Slovenia (+5.8%), Cyprus (+7%) and Finland (+8.5%).

    Source: Enerdata

    New 750 MW solar power project announced in Mexico

    May 5, 2017. US (United States) solar tracker manufacturer NEXTracker has started supplying single-axis trackers to a 750 MW solar PV project developed in northern Mexico. Mexico is betting on renewable energies and recently awarded more than 4 GW of solar power projects to independent power producers through an auction process.

    Source: Enerdata

    US will lose jobs if it quits Paris climate deal: UN

    May 4, 2017. The United States (US) will shoot itself in the foot if it quits the Paris climate accord because China, India and Europe will snap up the best power sector jobs in future, United Nations (UN) Environment Chief Erik Solheim said. US President Donald Trump is expected to announce as early as whether he will take the US out of the climate pact, having vowed during his campaign to “cancel the Paris Climate Agreement” within 100 days of becoming president. The Paris accord, agreed by nearly 200 countries in 2015, seeks to limit planetary warming by cutting emissions of carbon dioxide and other gases from burning fossil fuels. Solheim’s new target is pollution, with plastic in the oceans expected to equal the weight of fish by 2050. The green revolution is being led by iconic firms such as Google, Walmart, Microsoft, Apple and Facebook, so the momentum does not depend on Washington, Solheim said. Political leadership would shift to the European Union, China and India, and the UN is already talking to them about meeting the funding gap if the US steps back – not only from the climate deal but UN funding in general.

    Source: Reuters

    DATA INSIGHT

    Electrification Scenario in Indian Railways

    YearRoute Kilometres (RKM) of Railway Lines Electrified
    2014-151375
    2015-161730
    2016-172013
    Total (till 2016-17)30,012
    Plans to Electrify Route Kilometres by 2020-21
    2016-172000
    2017-184000
    2018-196000
    2019-206200
    2020-216200

    Share of Electrification in Indian Railways

    Energy Consumption Indian Railways per annum (appx): 18 Billion Units of Electricity

                                                                                       2.4 Billion Liters of Diesel/Fuel Oil

    Source: Compiled from various news items of Press Information Bureau

    Publisher: Baljit Kapoor
    Editorial advisor: Lydia Powell
    Editor: Akhilesh Sati
    Content development: Vinod Kumar Tomar

     

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