Energy News Monitor | Volume XIV; Issue 16

    ₹ 2.5 TRILLION WINDFALL FOR CENTRE FROM OIL TAXES  

    Oil News Commentary: August – September 2017

    India

    The largest opposition party in the Indian parliament said that the Centre was targeting the poorest of the poor by not reducing the taxes of LPG, kerosene and other petroleum products. According to the opposition, party prices of essential commodities were mounting due to the Centre’s apathy towards the poor. It said that the Centre had been providing “absurd reasons” such as ‘Hurricane Harvey and Irma’ for the increase of petrol and diesel prices. It said the central excise duty was increased 11 times in last three-and-a-half years, resulting in a cumulative rise of 133.47 percent on the price of petrol and 400.86 percent on diesel. It added that while the Consumer Price Index recorded an increase of 3.36 percent in August from a year earlier, the Wholesale Price Index rose to a four-month high to 3.24 percent compared to the year-ago period. According to the party, the Centre earned a windfall of around ₹ 2.5 trillion from the reduced price of crude oil.

    Petrol and diesel prices have risen to their highest in three years in some cities in the country. Petrol price in Mumbai rose to its highest since August 2014 while diesel prices reached their peak since August 2014 in Kolkata and Chennai. In Delhi, Kolkata and Chennai, petrol prices are at their peak since January this year. Since July 1, petrol has climbed ₹ 5.18/litre in Mumbai, and diesel by ₹ 5.75/litre in Kolkata, and ₹ 5.71/litre in Chennai. Indian fuel retailers such as IOC, BPCL and HPCL started daily revision of prices of petrol and diesel from the middle of June, replacing the previous practice of fortnightly revision. Companies align local fuel prices with international rates and account for currency fluctuations in daily revision. Daily price changes are small and rarely make it to the headlines and go largely unnoticed. The recent price spike is expected to result in enormous gains for oil companies who while charging higher fuel prices also benefitted from lower crude rates as refinery shutdown in US cut demand for crude oil.

    The government said the dynamic pricing regime would continue despite petrol prices going up by over ₹ 7/litre since the scheme was introduced pan-India from mid-June.  The government said that dynamic pricing ensured that the benefit of even the smallest change in international oil prices can be passed down the line to the dealers and the end-users. Daily revision allows any fall in international oil rates to be passed on to consumers immediately rather than having to wait for 15 days as in the old system. What this means is that the government is no longer the mediator of oil price risk. The consumer is now at the mercy of global oil price volatility.  Earlier, the state-run oil marketing companies used to review and revise retail fuel prices every fortnight on the basis of global crude oil prices, while the revision took effect from midnight. Dynamic fuel pricing is followed in many developed countries and India opted for it as a response to the recent volatility in global crude oil prices.

    Indian petrol and diesel prices are much higher than what prevailed on the same day in Southeast Asian nations such as Malaysia and Indonesia and neighbouring countries like Pakistan, Nepal, Sri Lanka, Bhutan. Petrol price of ₹ 32.19/litre in Malaysia was less than half what prevailed in India. The diesel price in the Southeast Asian country at ₹ 31.59/litre was 44% lower compared to India. On the same day, petrol and diesel were available in Indonesia at prices that were 41% and 24% lower compared to India. The difference in auto fuel prices in India and countries within the subcontinent is also no less surprising. For example, on the same day petrol was available at ₹ 42.14/litre at fuel retail outlets in Pakistan, a price that is nearly 40% lower compared to India. Similarly, diesel was cheaper by 17% there. Petrol and diesel were selling at ₹ 53.47 and ₹ 39.69/litre in Sri Lanka, nearly 23% and 30% lower compared to India. In Nepal, retail prices of petrol and diesel were 12% and 19% lower than prevailing rates of auto fuels in India on the same day. In Bhutan, the selling price of petrol was nearly 10% lower compared to India, though difference in diesel price was less pronounced at 1%. While the retail price of petrol in Bangladesh was nearly at the same level as in India on that day, diesel price was 10% lower.  Crude oil prices are currently ruling at less than half their 2012-13 and 2013-14 levels. Petrol and diesel prices ruled at ₹ 68.31-73.16/litre and ₹ 48.63-55.48/litre respectively in 2013-14 when the price of Indian crude basket averaged at the staggeringly high level of $105.52/bbl. However, retail fuel prices still remain at the same level, though the price of Indian crude basket has fallen to below $47.86/bbl since then. However, the reason for India’s high fuel prices is quite clear. Taxes constitute 45%-52% of the retail price of auto fuels, far higher than what would be the incidence if petrol and diesel are brought under introduced GST and the highest tax rate of 28% is levied. The UPA government had decontrolled petrol prices in June 2010. Diesel pricing was deregulated by the NDA government in October 2014. The economic logic was that market forces should determine fuel prices and not the government. But the NDA government has taken away benefits of low oil prices from consumers, acting against the very logic propounded for the deregulation of the retail auto fuel market.

    Maharashtra, Gujarat and UP top the list of states earning the most from VAT on petroleum products, fresh data from the PPAC, the statistical arm of oil ministry shows. Maharashtra earned ₹ 231.6 billion in 2016-2017 followed by Gujarat at ₹ 159.58 billion and UP at ₹ 158.5 billion in the same year. Collection of VAT on petroleum products contributed to over 8 percent of the state governments’ total revenue receipts last financial year and collection of excise duty on petroleum products by the centre contributed to over 24 percent of the centre’s total revenue receipts in the same period, PPAC data indicated. The central government earned over ₹ 3.3 trillion in 2016-2017 from levy of central excise on petroleum products, a growth of 30 percent over ₹ 2.5 trillion earned in the previous fiscal year 2015-2016. Andhra Pradesh and Madhya Pradesh charge the highest VAT on petrol and diesel but fall behind in total VAT collections as compared to states like UP, Tamil Nadu, Karnataka and Rajasthan due to the higher quantum of POL sold in the latter states. Andhra Pradesh registered 6,584 tmt of POL products sale in 2016-2017 as compared to 15,926 tmt of POL products sold in the same period in UP. UP earned more than Andhra Pradesh despite its significantly lower VAT on POL products. Similarly, 6,962 tmt of POL products were sold in MP in 2016-2017 as compared to 13,285 tmt of POL products sold in the same period in TN. TN earning more than MP despite its lower VAT rate on POL products. The central government wants to bring oil products within the ambit of the GST in the interest of consumers.

    Petroleum imports including crude oil shipments accounted for 21 percent ($80 billion) of India’s total value of imports at around $380 billion last financial year. Petroleum products accounted for 10 percent of the country’s total outbound shipments in 2016-17. Petrol and diesel prices has seen an upward trend OMCs implemented daily fuel revisions from 16 June this year.

    India’s trade growth for August is likely to record slight moderation while inflation could be higher, thanks to the high crude oil prices observed last month, global financial services firm Morgan Stanley has said. The Indian basket of imported crude oils gained nearly $3.50 a barrel even as petrol prices in the country touched their highest levels since the new government assumed office three years ago, data showed. The Indian basket, comprising 73 percent sour-grade Dubai and Oman crudes, and the balance in sweet-grade Brent, averaged $53.28 per barrel in August, 27 percent up as compared to $41.91 per barrel in the same month last year.

    The effective tax rates for subsidised kerosene and cooking gas rose up to 5% but fell on average 10-12% for most other oil products such as fuel oil, naphtha and lubricants under the freshly rolled out GST, an analysis by the oil ministry showed. For subsidised cooking gas used by households, the effective tax rates went up by 4-5% in several states including Delhi, Rajasthan, Tamil Nadu, UP, Bihar, West Bengal, Karnataka, Jammu and Kashmir, Goa and Chhattisgarh. In many other states, tax rates remained unchanged or rose just a bit. The GST rate is 5% on domestic cooking gas, and 18% on non-domestic gas. In most states, the effective tax rates have fallen 3-6% on non-domestic cooking gas although in some states the rates have marginally risen too. The effective tax rate on subsidised kerosene, which attracts 5% rate under GST, has swelled 3-5% in several states including Rajasthan, West Bengal, Uttarakhand, Odisha, Jharkhand and Haryana. For kerosene used for industrial purpose, which attracts 18% GST, the effective tax rate has shrunk 10-12% in most states. The effective tax rate has substantially fallen in most states for fuel oil, naphtha, light diesel oil, bitumen and lubricants, all of which attract 18% GST. On average, the decline in effective tax rates under GST in most states is 12-13% for fuel oil, naphtha and lubes. The fall varies between 10-20% for light diesel oil. In case of bitumen, the decline is mostly limited to less than 2%.

    Subsidised cooking gas or LPG price was raised by over ₹ 7/cylinder, in line with the government's decision to hike prices every month so that all subsidises are eliminated by this fiscal-end. A subsidised 14.2 kg LPG cylinder now costs ₹ 487.18 in Delhi as against ₹ 479.77 previously, according to IOC. The government had asked state-owned oil companies to raise subsidised LPG prices by ₹ 4/cylinder every month to eliminate all the subsidies by March next year. Rates were, however, raised by ₹ 2.31/cylinder on the previous due date on August 1 and the oil companies have effected a larger hike to equalise that. Since the implementation of the policy of monthly increases of ₹ 2 from July last year, subsidised LPG rates have gone up by over ₹ 68/cylinder. A 14.2 kg LPG cylinder was priced at ₹ 419.18 in June 2016. The government had previously asked IOC, BPCL and HPCL to raise rates of subsidised domestic LPG by ₹ 2 per 14.2 kg cylinder per month (excluding VAT). The quantum has now been doubled so as to bring down the subsidy to nil. Every household is entitled to 12 cylinders of 14.2 kg each at subsidised rates in a year. Any requirement beyond that is to be purchased at market price. The price of non-subsidised LPG or market-priced cooking gas has also been hiked by ₹ 73.5 to ₹ 597.50/cylinder. Rates were at the last revision cut by ₹ 40/cylinder. Simultaneously, the oil companies also raised prices of ATF by 4 percent, in keeping with rising global rates. ATF, or jet fuel, now costs ₹ 50,020/kilolitre, ₹ 1,910 more than ₹ 48,110 previously. This hike comes on the back of a 2.3 percent increase effected from August 1. Also, price of kerosene sold through PDS was hiked by about ₹0.25/litre. The government is adopting the same policy as in LPG for eliminating subsidy on kerosene. Since July 1 last year, rates have been hiked by ₹ 0.25/litre each fortnight. While Delhi has been declared a kerosene-free state, the fuel now costs ₹ 22.27/litre in Mumbai compared to ₹ 22/litre previously. Kerosene was on July 1, 2016, priced at ₹ 15.02/litre in Mumbai.

    India’s Oil Minister said that fuel prices may come down by Diwali, which falls next month. The comments come amid criticism by opposition parties of a sharp rise in oil prices after the daily rate revision mechanism was introduced by the government recently.

    The oil ministry is considering withdrawing from management committees of O&G fields, crucial bodies comprising nominees of the ministry, upstream regulator and the contractor, which oversee field development plans, annual work programme and budgets. The government hopes the proposed move would enhance ease of doing upstream business, but industry executives say that the presence of bureaucrats in these committees also has some benefits. The O&G fields auctioned under the previous policy are guided by a production-sharing contract, which provides for a management committee to ensure that the spending proposed and incurred by the operator of the field did not adversely affect the government’s revenue interests. There are about 250 production-sharing contracts operational in the country. For each contract, there’s a management committee comprising one nominee each from the oil ministry, the DGH, and all companies with stake in the field. DGH is the technical arm of the oil ministry and also acts as the upstream regulator.

    India will offer larger areas with higher oil and natural gas reserves in the next auction of discovered fields later this year to curtail rising crude oil imports. India last year offered 67 small oil and gas fields holding about 625 million barrels of reserves in its first auction in six years allowing new entrants such as drug-makers and engineering companies to try their hand at boosting local production. The government also relaxed rules by allowing pricing freedom for oil and gas and a uniform policy for extraction of all hydrocarbons under a single license to encourage investments. Cairn Oil & Gas is producing more than a quarter of India’s crude oil output through the six blocks it operates in India. A 10 percent cut in oil imports by 2022, involves a lot of work ahead. A burgeoning appetite for energy has increased India’s import dependence to 82 percent last year from 76 percent five years ago. The IEA estimates India will be the fastest-growing oil consumer through 2040. The South Asian nation’s oil imports are estimated to touch $85 billion in the year to March 2018, according to India’s oil ministry. The government approved spending more than $452 million for appraising new areas with limited data. The DGH has created a data bank of the nation’s sedimentary basins and has launched an open-acreage licensing program, that gives explorers the freedom to carve out areas for exploration.

    In a step that could further promote collaboration in the O&G sector between India and Myanmar, IOC’s Assam based subsidiary NRL dispatched the first consignment of HSD by land route, the oil ministry said. NRL has entered into an agreement with Parami Energy Group of Companies of Myanmar for the supply of diesel and collaboration in the retail petroleum sector of Myanmar. Under which NRL dispatched 30 mt of HSD through NH 37 across the Moreh custom check point on the Indian side and Tamu custom check point on the Myanmar side. OVL, GAIL (India) Ltd and Oil India Ltd have assets in the upstream sector as well as pipelines in Myanmar. In their effort to strengthen the oil and gas engagement, more Indian companies are planning to set up their offices in Myanmar soon. OVL has an office in Yangon.

    IOC expects its largest and newest east coast Paradip refinery to outperform benchmark Singapore GRMs in the third quarter ending December. GRM is the difference between price of crude oil price and total value of petroleum products produced by the refinery. GRM is one of the parameters which indicate the physical performance of a refinery. Normalised GRM accounts for the gross refinery margin excluding the inventory gain or loss. Paradip refinery posted a capacity utilization of 88 percent for the first quarter ended June 2017 and is expected to run at 100 percent capacity from the second quarter of the current fiscal which is expected to boost the bottom line of IOC and improve the overall GRM of the company. Also, with Paradip being a coastal refinery, its inventory is expected to account for lower inventory losses. Paradip refinery has been configured to have a nelson complexity index of 12.2, second highest in the country. The nelson complexity index indicates the ability of a refinery to process heavy crudes. With Paradip refinery reaching average capacity utilization of 100 percent from second quarter, coupled with a high nelson index configuration, the refinery will be able to source cheaper heavy crudes leading to increased profitability, improved crack spread and higher GRM. The company also informed it plans to invest ₹ 200 billion as capex in the current financial year of which ₹ 45 billion will go for the refinery segment, ₹ 19 billion for pipeline, ₹ 60 billion for marketing and ₹ 30 billion towards Exploration and Production activities.

    Rest of the World

    Global use of petroleum and other liquid fuels will grow by nearly a fifth by 2040, driven by the transportation and industrial sectors, the US government said. Consumption is set to grow from 95 million bpd in 2015 to 104 million bpd in 2030 and 113 million bpd in 2040, according to the US EIA’s international energy outlook for 2017. That reference case would mean a 19 percent increase between 2015 to 2040. Countries outside of the OECD account for most of the increase, with demand rising by 1.3 percent per year, compared with a slight decrease for those in the group. OPEC countries will maintain or increase their combined market share of crude and lease condensate production, the EIA said.

    Oil prices are expected to hold between $50 and $60/bbl as bloated global stocks fall after a deal between OPEC and other producers to trim output, BP said. The OPEC and other producers, including Russia, are reducing crude output by about 1.8 million bpd until next March in an attempt to support prices by cutting a glut of crude oil on world markets. OPEC top producer Saudi Arabia and several other countries have held talks in recent days on a possible extension of the deal.  Russia expected the 2018 price of Brent crude to be in the range of $45 to $55/bbl.

    CNOOC Ltd is searching for partners to develop oil prospects deep into the Gulf of Mexico as the Chinese giant extends its global reach. After bidding alone for exploration rights in Mexico’s first-ever deep-water auction in 2016, CNOOC is seeking deals known as farm-outs, a common type of joint venture where a stake in an oil prospect is exchanged for help with drilling and production. The company has yet to choose partners. China has sought a foothold in crude production everywhere from Africa to Canada as it looks to ensure supplies to its fast-growing economy. Several Latin American countries like Venezuela and Brazil have taken advantage of China’s thirst for crude to secure investments or loans that haven’t always been easy to obtain elsewhere. CNOOC is the first foreign producer to seek a farm-out in Mexico since the opening of the country’s oil industry to competition, following decades of a monopoly in the hands of state-owned producer Petroleos Mexicanos.

    Independent oil refiners in China’s Shandong province are planning to form a consortium to integrate their production of oil products and petrochemicals, according to a planning document. Since late 2015, China has allowed 31 mostly privately owned oil refineries to import crude oil, the majority of them based in Shandong province. With a combined capacity to import about 2 million bpd, their demand has upset oil trading flows in Asia and in the wider global crude market. Shandong Dongming Petrochemical Group and Shandong Qingyuan Group Co, both independent, or teapot, refineries in the province, will be among the key investors of the proposed group, according to the document that Shandong provincial authorities approved on September 1. The group will have the name Shandong Refining & Chemical Group Co, according to the document. Most of China’s independent refiners are based in the eastern province of Shandong.

    Chinese refineries newly allowed to import crude oil will be penalized for reselling crude oil or expanding capacities without approvals, according to the NDRC. Qualifications will be stripped and trade permits revoked for the refineries that recently were allowed to use or import crude oil if they are caught in these violations, the NDRC said. Experts said the policy to crackdown on these violations is not new but the government was reaffirming the penalties amid growing concerns that abuses are getting more widespread. China has since late 2015 allowed about 31 companies, mostly privately-run refineries, to import crude oil in an unprecedented liberalization of China’s oil market, the world’s second-largest after the United States.

    Venezuela published the price of its oil and fuel in Chinese currency in what it called an effort to free the socialist-run country from the “tyranny of the dollar,” echoing a plan recently announced by the President. The Venezuelan government would shun the dollar after the US announced sanctions that blocked certain financial dealings with Venezuela on accusations that the ruling Socialist Party is undermining democracy. The global oil industry overwhelmingly uses the dollar for pricing of products.

    Royal Dutch Shell is set to end a century of oil production in Iraq by withdrawing from two of the Arab state’s flagship fields to focus on more profitable gas development. Shell’s retreat highlights the challenges foreign operators face with low-margin oil contracts in Iraq, an OPEC member that sits on some of the world’s biggest oil reserves and wants to boost production after years of conflict hindered development. The Anglo-Dutch firm said it had agreed with Iraq’s oil ministry to relinquish operations at Majnoon field to the government after unfavorable changes to fiscal terms. Shell is also selling its 20 percent stake in West Qurna 1 oil field in the south of the country. The field is operated by Exxon Mobil. Shell produced almost 20 million barrels of oil from Iraq during 2016, which accounted for about 3.5 percent of the firm’s total oil output last year, according to Shell’s annual report. Foreign firms in Iraq have long urged Baghdad to revise oil production contract terms to encourage development of reserves that Iraq estimates at about 153 billion barrels, the fourth biggest in the OPEC.

    War-ravaged South Sudan is considering scrapping state subsidies on oil because it hasn’t been able to pay civil servants for four months and diplomatic staff abroad are being evicted over unpaid rent. Ending the subsidies would free up desperately needed cash. The government expects to receive $820 million from oil this year. Out of that, $453 million will go to neighbouring Sudan as payment for using its infrastructure for export; $183 million on the oil subsidy; and $166 million is allocated to the budget, which has a gaping deficit. State-subsidized oil sells at 22 SSP per liter, but severe shortages mean many people buy it on the black market for 300 SSP per liter. The SSP trades at about 17.5 to the dollar on the black market and 17.68 at the central bank.

    Saudi Arabia will supply full contracted volumes of crude oil to at least five north Asian term buyers in October, while a sixth regional refiner was notified of cuts to its October Arab Extra Light supplies. Saudi Arabia is likely taking advantage of the lower refinery run rates and ample crude inventories in the United States in the wake of Hurricane Harvey, to redirect the allocation cuts from Asia to the US. Saudi Arabia plans to cut crude oil allocations to its customers worldwide in October by 350,000 bpd. In comparison, Saudi Arabia pledged last month to cut its September crude oil worldwide allocations by 520,000 bpd. Iran will reach an oil production rate of 4.5 million bpd within five years. Iran has been producing around 3.8 million bpd in recent months. Iranian gas production will reach 1.3 BCM/day and production of gas condensate will reach 864,000 bpd in the next five years. The boost in oil production will come from an increase of 420,000 bpd from the West Karoun oil field and an additional 280,000 bps from oil fields in central and southern Iran as well as the Falat Ghare oil company. Oil exports are expected to reach up to 2.5 million bpd within five years.

    France will stop granting new exploration permits next year as it seeks to end all oil and gas production by 2040, according to a draft bill presented at a cabinet meeting. The move would allow the government to turn down more than 40 exploration requests already made, while some existing permits may be extended to respect contracts. France pumped 6 million barrels of oil in 2015, covering just 1 percent of its demand. Oil and gas exploration and production on French soil generates as much as €300 million ($358 million) in annual revenue, and accounts for as many as 5,000 jobs, directly and indirectly. Existing production licenses wouldn’t be extended beyond 2040 under the proposed law. France will end the sale of gasoline- and diesel-powered vehicles by 2040.

    Iraq’s proposal to change the way it prices crude oil in Asia faces resistance from refiners who fear that longer lead times between pricing and deliveries will expose them to more risk. Iraq’s state oil marketer SOMO surprised traders by seeking feedback on plans to switch its Basra crude benchmark in Asia to pricing based off the Dubai Mercantile Exchange from January 2018, dropping quotes based on assessments by oil pricing agency S&P Global Platts. The move would affect the price of about 2 million bpd of crude oil supplies to Asia, mainly shipped to India, China and South Korea. Some buyers were concerned that almost 80 percent of the crude used to price DME Oman futures goes to China, reflecting the economics and fundamentals of just one Asian buyer.

    US shale production is set to rise for the 10th month in a row in October, the US government said, spurred by US oil prices rising above the $50 a barrel threshold. Output across seven shale plays is forecasted to rise by nearly 79,000 bpd to 6.1 million bpd, according to the US EIA’s monthly drilling productivity report. North Dakota’s Bakken output is set to rise by 7,900 bpd to 1.06 million bpd, the highest since May 2016. In Texas, Eagle Ford oil output is set to fall by 9,000 bpd to 1.27 million bpd, the first monthly decline since April, the EIA said. Permian production is forecast to rise by nearly 55,000 bpd to 2.6 million bpd, the highest level in records dating back to 2007.

    NATIONAL: OIL

    RIL world's third largest energy firm: Platts rankings

    September 26, 2017. Reliance Industries Ltd (RIL) and Indian Oil Corp (IOC) have made big leaps in the global energy sector this year, according to the latest S&P Global Platts Top 250 Global Energy Company Rankings, which saw Russia’s Gazprom end American giant ExxonMobil’s 12-year reign at No.1. Germany-based energy company E.ON SE ranked second. While RIL improved its position by five places to third, IOC breached the top 10 for the first time and was placed seventh against last year’s fourteenth. Significantly, 10 of the 14 Indian energy companies that made it to the S&P list this year improved their rankings. In 2016, the list included 15 Indian firms.

    Source: Business Standard

    India’s crude oil production falls 2 percent in August, import bill rises 12 percent

    September 25, 2017. India’s crude oil production for the month of August fell around two percent to 22.1 million barrels for the month of August as compared to the corresponding month a year ago while natural gas output witnessed a growth of 3.69 percent to 2,773 million metric standard cubic meter (mmscm) in the same month. The country’s gross petroleum imports in value terms increased 12 percent to $7.4 billion in August as compared to the corresponding month. Cumulatively, gross petroleum import bill increased 16.55 percent to $35.9 billion in the first five months of 2017-18 fiscal as compared to the corresponding period last year adding pressure on the country’s current account deficit which ballooned to $14.3 billion in the first quarter ended June. Crude oil production dipped due to poor performance of fields under Production Sharing Contracts. The growth in natural gas production can be attributed to healthy performance of acreages under government-owned Oil and Natural Gas Corp (ONGC) and Oil India Ltd (OIL), data released by Petroleum Planning and Analysis Cell (PPAC) indicated. ONGC, responsible for 60.80 percent of country’s crude oil production in August, witnessed a crude output growth of 1.78 percent to 1,898 thousand metric tonne (tmt) in August. Cumulatively, the oil and gas behemoth witnessed a 2.52 percent increase in production to 9,458 tmt in the first five months. The company’s natural gas production witnessed a growth of 5.83 percent to 1,953 mmscm in August as compared to the year ago period. Cumulatively, gas production increased 10.13 percent to 9,738 mmscm in the first five months.

    Source: The Economic Times

    HPCL makes its first US oil purchase: Chairman

    September 25, 2017. Indian state refiner Hindustan Petroleum Corp Ltd (HPCL) has made its first purchase of US (United States) oil, buying high sulfur crude Mars in a tender, company chairman M. K. Surana said. Earlier Indian Oil Corp (IOC) and Bharat Petroleum Corp Ltd (BPCL), both state refiners, had purchased the US oil through tenders. HPCL has bought 1 million barrels of Mars oil from trader Trafigura for delivery in December at the southern Indian port of Vizag, he said.

    Source: Reuters

    BPCL to increase focus on highway segment to arrest diesel market share decline

    September 25, 2017. Bharat Petroleum Corp Ltd (BPCL) plans to ramp up focus on the highway retail segment in order to arrest the decline in the company’s diesel market share. BPCL’s petrol and diesel share among Public Sector Undertakings (PSUs) stood at 28.81 percent during the first quarter of 2017-2018 as against 28.51 percent recorded in the corresponding period last year. In case of diesel, its market share dipped to 28.56 percent during the first quarter as against 28.84 percent in the corresponding period last year. Overall, the company’s market share in petrol remained the same at 28.5 percent at the end of 2016-2017 and diesel market share dropped to 26.7 percent in 2016-17 from 26.8 percent in 2015-2016. The company had traditionally enjoyed a strong foothold in the Highways segment and is now trying to regain the share that was lost to both public and private sector competition through focus on diesel sales. BPCL plans to invest around Rs 1 lakh crore in the next five years as part of its capex programme.

    Source: The Economic Times

    IOC board clears Rs 274.6 bn refinery of its unit CPCL

    September 25, 2017. Indian Oil Corp (IOC) said its board has given approval to setting up of a Rs 27,460 crore refinery by its subsidiary, Chennai Petroleum Corp Ltd (CPCL). The board of directors of CPCL had in April this year recommended setting up a new 9 million tonnes a year refinery at an estimated cost of Rs 27,460 crore (with an accuracy of plus-30 percent). The expansion was subject to the approval of board of IOC, the holding company of CPCL. The final approval of the project would be obtained after preparation of Detailed Feasibility Report of the project. The planned refinery will be CPCL's third refinery. It currently operates a 10.5 million tonnes Manali refinery in Tamil Nadu.

    Source: Zee News

    India's refining capacity expansions lags growth in fuel demand

    September 25, 2017. India may export fewer fuels in the next four years as growth in the demand for oil products is rising faster than new refining to produce them is being added, Essar Oil said. India’s rising disposable income has helped boost its demand for refined fuels, including gasoline, jet fuel and liquid propane gas (LPG), but its capacity to keep up with this demand may be strained in the coming years. With only about 350,000 barrels per day (bpd) of refining capacity being added through new greenfield projects over the next four years, India’s dependence on LPG imports may rise while limiting its exports of oil products such as gasoline and diesel so it can cope with its domestic demand, Essar Oil said.

    Source: Reuters

    DGH, Joint Secretary be government nominees on oilfield oversight panels

    September 24, 2017. Upstream regulator Directorate General of Hydrocarbons (DGH) and Joint Secretary (Exploration) in the oil ministry will be the government nominees on oversight committees that will monitor the 30 small discovered oil and gas fields awarded in the first round of auction. The so-called Management Committees will also have representatives of the companies or consortiums that won the rights to produce from the fields, the DGH said. Of the 46 fields offered for bidding in the round, contracts for 30 fields (23 onshore and 7 offshore) were signed on March 27, 2017. In all, 46 idle fields, which were taken away from state- owned Oil and Natural Gas Corp (ONGC) and Oil India Ltd (OIL), were put on bidding in DSF-I, the first bid round in more than six years. A total of 34 of them received bids. Of these, 31 bids were approved but one of the awardees did not take up the offer and so contracts for only 30 fields were signed. These fields, which hold in-place reserves of 62 million tonnes of oil and oil equivalent gas, can cumulatively produce a peak of around 15,000 barrels of oil per day and 2 million standard cubic metres per day of gas, according to DGH.

    Source: India Today

    Fuel prices will come down soon: Oil Minister

    September 24, 2017. Attributing the recent rise in fuel prices to a hurricane in the US, Oil Minister Dharmendra Pradhan said the rates will come down in the next few days. The petrol and diesel prices had been linked to the market since the last 20 years. When asked over the possibility of reduction in taxes on petroleum products to curb the fuel prices, Pradhan said taxes can't be slashed as funds are necessary for infrastructure development and welfare schemes. Pradhan expressed hope that petroleum products will soon be brought under the ambit of Goods and Services Tax (GST).

    Source: Business Today

    Shiv Sena agitates against fuel price hike, inflation in Maharashtra

    September 24, 2017. The Shiv Sena, which is an alliance partner in both the Bharatiya Janata Party (BJP)-led Central and Maharashtra governments, launched agitations against the runway fuel price hike and inflation by carrying empty gas cylinders and organising mock funerals of the BJP. Thousands of Shiv Sena activists led by ministers, MPs, MLAs, and local unit leaders led the agitations carried out at 12 places all over Mumbai and its suburbs. The Shiv Sainiks, many carrying empty gas cylinders or fuel cans, posters and placards, raised deafening slogans attacking the central and state governments headed by Prime Minister Narendra Modi and Chief Minister Devendra Fadnavis respectively. The protests were held at Chhatrapati Shivaji Maharaj Terminus, Borivali, Kandivali, Jogeshwari, Dadar, Kurla, Ghatkopar, Bhandup, Chembur, where the speakers alleged a scam in the current high prices of petrol, diesel and gas, and organised a mock funeral of the BJP government in Borivali.

    Source: The Economic Times

    Oil ministry seeks exemption from IGST for bunker fuel

    September 23, 2017. Foreign ships have begun turning to Sri Lanka and Bangladesh for refueling, prompting the oil ministry to seek an exemption from Integrated Goods and Services Tax (IGST) on bunker fuel. The ministry's view is that no IGST should be levied on these foreign vessels as they only stop to refuel and move on. The migration to neighbouring ports that have lower taxes would dent the country’s exports of petroleum products. The issue could be taken up by the GST Council, which is the apex decision making body for the new tax regime that was implemented on July 1. GST has replaced multiple state and central taxes. Bunker sales to these ships were treated as exports under the previous regime and not taxed. Some states imposed tax, but this only went up to 5%. Such sales now face IGST of 18%, making bunkering at Indian ports unviable. This comes at a time when the government wants to encourage the practice. Bunker fuel is the generic term given to any fuel poured into a ship's bunkers to power its engines. Typically, deep-sea cargo ships use what’s left after gasoline, diesel and other light hydrocarbons are extracted from crude during the refining process. What has worried petroleum refiners as the shipping ministry is that foreign ships have begun to avoid refueling in India, hurting their business. As against 64,801 million tonnes (mt) sold in April-June, bunker fuel sales in July-August stood at 35,886 mt.

    Source: The Economic Times

    1 lakh LPG panchayats over next 18 months

    September 23, 2017. The nationwide launch of the Union government initiative to organize 'LPG Panchayats', to encourage rural population to become sustainable consumers of clean fuel for cooking, will take place in Gandhinagar. The government plans to conduct one lakh LPG panchayats across the country in the next year-and-a-half. Oil Minister Dharmendra Pradhan along with Gujarat Chief Minister Vijay Rupani will launch the first LPG panchayat at Isanpur-Mota village of Gandhinagar, confirmed state level coordinator for the oil industry, Sanjeev Jain. According to Jain, LPG panchayat will serve as an interactive platform for the beneficiaries of LPG cylinders under the Pradhan Mantri Ujjwala Yojana (PMUY) while for the officials, NGOs and other stakeholders, it will be a medium to identify the issues faced by the rural population for using LPG. Apart from addressing the rural populace's issues, the government also plans to include safe practices, quality of service provided by distributors and availability of refill cylinders, as part of the panchayat. Within 16 months of the launch of PMUY by Prime Minister Narendra Modi, the oil industry has facilitated liquefied petroleum gas (LPG) connections to some three crore beneficiaries. This includes some 11.39 lakh in Gujarat. A significant chunk of the targeted Rs 8,000 crore fund for PMUY comes from cooking gas users who gave up their LPG subsidies. According to government officials, some 1.13 crore users let go off their subsidies through the 'Give it up' initiative.

    Source: The Times of India

    Link fuel prices to international market: AAP

    September 20, 2017. The Aam Aadmi Party (AAP) urged Oil Minister Dharmendra Pradhan to direct oil companies to link petrol and diesel prices to the international market and pass on the "huge profits" being made by them to the public. The Delhi Minister Gopal Rai said in a memorandum to Pradhan that "the mandate of the public sector oil companies is to make fuel available to the common man at reasonable prices and not to (be) like an unscrupulous, greedy corporate house. The AAP leader said the central government first tried to distance itself from the rising prices, stating that petrol and diesel prices have been deregulated. The AAP announced it will launch a nation-wide campaign against the high petrol and diesel prices.

    Source: The Economic Times

    RIL plans major expansion at world's largest oil refinery complex

    September 20. 2017. Reliance Industries Ltd (RIL), operator of the world’s largest refining complex, is considering expanding its oil processing capacity by over 40 percent by 2030. RIL may expand the capacity at its dual refinery complex in Jamnagar in the western Indian state of Gujarat by 30 million tonnes a year to 100 million tonnes per year. RIL operates two refineries at the Jamnagar complex with an installed capacity of 1.2 million barrels per day (bpd), or 60 million tonnes per year. The plants typically operate above their installed capacity and process 1.4 million bpd of crude, or about 70 million tonnes per year. The refineries are among the most complex in the world and have facilities that can maximize the production of diesel and gasoline from so-called heavy, or higher density, crude oil that typically sells for less than other crude grades. Raising the refining capacity at the Jamnagar complex to 100 million tonnes per year would equal about 2 million bpd. The expansion makes sense in light of forecasts for strong fuel demand growth in the country, the world’s third-biggest oil consumer. Consultant FGE estimates India’s fuel demand to rise to 6.5 million bpd in 2030 from an estimated 4.2 million bpd in 2017.

    Source: Reuters

    NATIONAL: GAS

    ONGC's gas production to increase this fiscalOil Minister

    September 25, 2017. Gas production is expected to increase further by about 6-7 million metric standard cubic meter per day (mmscmd) by the end of current financial year, Oil Minister Dharmendra Pradhan said. The rise in production will be owing to the commencement of production from Vashishta-S1 fields in East Coast and commissioning of booster compression facilities in Bassein field of Western Offshore.

    Source: Business Standard

    Essar to set up 2 LNG ports in 18 months

    September 24, 2017. Ruias-owned Essar Ports is looking to invest around $500 million or over Rs 2,500 crore to set up one liquefied natural gas (LNG) terminal each on the western and eastern coasts in the next 18 months. The company is looking at a cluster of small ports which will be closer to potential customers. Hazira and Salaya, where it already operates ports, could be the sites where it can set up the LNG terminals. Typically, each terminal will cost between $150-300 million, depending on the amount of work to be carried out, the company said. The capacity will range between 2.5-5 million tonnes. The company will tie up with banks and also put in its own resources as equity. Essar Ports, which delisted in late 2015, will close 2017-18 with a pre-tax profit of about Rs 1,000 crore and is targeting to take it up to Rs 1,300 crore with the commissioning of new facilities, the company said.

    Source: Livemint

    IOC gas pipeline to run from Gujarat to Gorakhpur

    September 23, 2017. Indian Oil Corp (IOC) announced that it will lay a gas pipeline from Kandla to Gorakhpur. The liquefied petroleum gas (LPG) pipeline, which is one of the biggest investments planned by the leading oil marketing company, will pass through IOC's bottling plants at Allahabad, Lucknow, Kanpur, Varanasi and Gorakhpur. The total investment is estimated to be around Rs 1,261 crore. Besides being a safer and smooth transport medium for LPG, the proposal will also have other benefits, including reduction of pollution and traffic jams caused by trucks. Most importantly, it will help provide uninterrupted supply of LPG cylinders. IOC plans to invest Rs 140 crore to upgrade its Trisundi bottling plant. It will also set up a new terminal at Mirzapur (relocation of Mughalsarai and Allahabad terminals) for better storage and distribution of fuel. The investment on this terminal will be Rs 650 crore. IOC will be setting up a bottling plant at Gorakhpur and Hindustan Petroleum Corp Ltd at Gonda and Varanasi at a total cost of Rs 463 crore.

    Source: The Times of India

    ONGC likely to relinquish CBM block in West Bengal

    September 21, 2017. Oil and Natural Gas Corp (ONGC) plans to relinquish its coal bed methane (CBM) block in Raniganj, West Bengal, but is on course to produce gas from another CBM block in Bokaro in February. It would be difficult to develop the Raniganj North block since an air strip is coming up on the same land, Ved Prakash Mahawar, director (onshore) of ONGC, said. The company evaluated the feasibility of lateral drilling to tap gas underneath the air strip, but it was found that this was not possible, Mahawar said. ONGC has stakes in three other CBM blocks in Bokaro, Jharia and North Karanpura. Of the total nine CBM blocks allocated to ONGC, five have already been relinquished due to poor output potential. It plans to produce first gas from its Bokaro block in February. Land acquisition for the project is in progress with ONGC purchasing or taking land from owners on long lease. A key contract to build gas gathering station has been awarded and is expected to be ready by mid-2019. A peak production of 7 lakh cubic meters a day is expected from the field. Recently, the government freed up pricing for CBM. ONGC is finalising a marketing plan for its output from Bokaro, he said.

    Source: The Economic Times

    NATIONAL: COAL

    Captive coal output goes up 7.2 percent in 5 months

    September 25, 2017. Captive coal production in India rose 7.2% to 14 million tonnes in the five months to August, according to data compiled by the Coal Controllers Office. The output was 13.45 million tonnes in the year-ago period. Data showed that Sasan Power produced 7.3 million tonnes from its Moher and Moher Amlohri Extension mines, while Rajasthan Rajya Vidyut Utpadan Nigam Ltd (RRVUNL) produced a shade over 3 million tonnes from its Parsa East and Kanta Block. Jaiprakash Power produced around 1.7 million tonnes from its Amelia North coal mine during the period. NTPC, which started coal production this year, mined 0.6 million tonnes during the period from its Pakri Barwadih block. Rest of the captive coal block holders, 11 in number, each produced less than a million tonne of coal during the period.

    Source: The Economic Times

    Panel suggests coal linkage for NTPC's Vindhyachal project in Madhya Pradesh

    September 20, 2017. A high-level panel has recommended to provide fuel linkage to NTPC's Vindhyachal project in Madhya Pradesh if the plant is delinked from any coal mine alloted to the power producer, the government said. According to the project proponent, Pakri-Barwadih coal block in Jharkhand was alloted to the power PSU as a basket mine and NTPC's Vindhyachal V (500 MW) was one of the end-use plants. The Central Electricity Authority and the power ministry suggested to supply coal to this unit as per the provisions of the linkage policy for the power sector.

    Source: The Economic Times

    Two Adani Power companies secure over a third of CIL coal

    September 20, 2017. Two Adani Power companies managed to secure a shade over one third of the total coal auctioned by Coal India Ltd (CIL) under the Shakti scheme by offering discounts ranging between 1 paise per unit and 3 paise per unit over their existing tariffs. Others in the race were GMR’s power arm GVK Power, Inland Power, Lalitpur Power, ACB India, KSK Mahanadi Power and Sai Lilagar Power. They were among the 10 companies, including Adani, that collectively managed to secure 27 million tonnes of coal supply contract for 25 years on committing to generate power at discounts ranging between 4 paise per unit and 1paise per unit over their existing tariffs. Adani Power Maharashtra and Adani Power Rajasthan together secured supplies of 9.9 million tonnes of coal. The grade they have been allocated ranged from G6 and G13. It would be supplied from South Eastern Coalfields’ Korba, Mand Raigarh, and Korea Rewa mines, Mahanadi Coalfields’ Ib Valley, Basundhara and Talcher mines as well as from Western Coalfields and Northern Coalfields. Others like GMR Kamlanga Energy secured 1.5 million tonnes of coal while GVK Power bagged 1.7 million tonnes. ACB India managed to secure 200,000 tonnes of coal a year, Inland Power secured 67,400 tonnes of coal while Sai Lilagar Power Generation bagged supplies of 376,200 tonnes of coal.

    Source: The Economic Times

    Coal supply to be normal from early October: Coal Minister

    September 20, 2017. Coal Minister Piyush Goyal assured power plants that they will get adequate coal supplies by the end of the month or early October as the government was taking urgent measures to resolve the supply issues. About a dozen power plants have been facing erratic coal supplies for a month or so.

    Source: The New Indian Express

    NATIONAL: POWER

    PM Modi promises electricity to every house by December 2018

    September 26, 2017. Prime Minister (PM) Narendra Modi said he will not relent in his "battle against corruption" even as he sharpened his government's development and welfarist image by announcing a mega scheme to provide electricity connections to four crore families deprived of regular power. Modi launched a Rs 16,000 crore scheme, Pradhan Mantri Sahaj Bijli Har Ghar Yojana (shortened to Saubhagya, meaning good fortune) that he said will deliver free electricity connections by December 2018. However, they will have to pay the monthly power bill. A large number of people lacked electricity connections more than a century after the invention of the incandescent bulb. Even 70 years after Independence, four crore out of 25 crore families did not have a power connection. The scheme reflects the Modi government's focus on delivering on schemes like housing, power, loans and farm insurance to key sections of the electorate. He said that all villages would be electrified by December this year, beating the deadline of May 1, 2018.

    Source: The Times of India

    NLCIL outlines projects to generate 5.3 GW power to compensate shelving of Sirkali plant

    September 23, 2017. NLC India Ltd (NLCIL) has proposed several projects to generate 5,300 MW power across Tamil Nadu to compensate shelving of 4,000 MW Sirkali power project. The company has been under fire for shelving the Sirkali project and deciding to establish onsite thermal power station near the Talabira mines in Odisha. The company proposes one more 800 MW unit at the NLC India Ltd-Tamil Nadu Power Ltd (NTPL), a subsidiary of NLCIL, at Tuticorin by using the excess coal available at Talibara mines in Odisha. The company proposes to establish a 450 MW windmill project at various places in the state for Tamil Nadu Power Generation and Distribution Corp (TANGEDCO). The company decided to shelve Sirkali project after finding that the cost of generation will overrun the rate fixed in the power purchase agreement signed with the southern states.

    Source: The Times of India

    PowerGrid board approves investment for Indo-Bdesh power link

    September 20, 2017. Power Grid Corp's board has approved an investment of Rs 198.48 crore for setting up India portion of Baharampur-Bheramara (Bangladesh) 2nd 400 kilovolt (kV) double circuit (D/C) transmission line. The board of directors has approved the Rs 198.48 crore investment for India portion of Baharampur-Bheramara (Bangladesh) 2nd 400 kV D/C transmission line with 24 months commissioning schedule in their meeting held on September 19, Power Grid Corp said.

    Source: The Times of India

    NATIONAL: NON-FOSSIL FUELS/ CLIMATE CHANGE TRENDS

    Power ministry forms committee to woo private participation in hydropower sector

    September 26, 2017. In a bid to seek more private sector participation in the hydropower sector, the power ministry has formed a committee under Central Electricity Authority of India (CEA) to propose recommendations to the ministry. This also comes at a time when hydropower generation has seen a decline of 12 percent in the month of August compared with the corresponding month, last year, according to the power ministry. According to experts, private sector remains reluctant due to various issues pertaining to project execution. At present, as many as 20 under construction hydro power projects totalling 6,329 MW are either stalled or stressed in the country and Rs 30,147.08 crore has been spent on them, Former Coal, Power, New & Renewable Energy and Mines Minister Piyush Goyal had said. According to Niti Aayog’s draft energy policy, the think-tank has proposed a bail out of stranded large hydropower projects of around 11,000 MW capacity. The government of India also aims to add 1,305 MW of additional hydropower generation capacity in the current financial year out of which 305 MW expected from the private sector while 266 MW has already been commissioned.

    Source: The Economic Times

    Siemens Gamesa bags wind-solar hybrid contract in Karnataka

    September 26, 2017. Siemens Gamesa said it has bagged a contract to develop a large commercial level renewable wind solar hybrid project in Karnataka. The wind solar hybrid project constitutes the hybridisation of an existing 50 MW wind farm with 28.8 MW solar power plant, the company said. The project is expected to be commissioned by the end of this year. With the potential of hybrid at around 15000 MW in India, it will be the perfect techno-commercial solution for ensuring the best optimal outcome of renewable energy systems, the company said.

    Source: India Today

    16 solar companies to invest Rs 90 bn in Tamil Nadu

    September 26, 2017. The Tamil Nadu government signed Memoranda of Understanding (MoU) with 16 solar power companies for 1500 MW of electricity. All the 16 companies will invest a total of Rs 9,000 crore in the coming year at the rate of Rs 6 crore per MW of solar power. These companies had bid for various capacities of solar power for the year 2017-18 and won bids after they agreed to the lowest tariff of Rs 3.47 per unit. The 16 companies led by Rasi Green, which won the bid at Rs 3.47 per unit, will set up solar plants in the state. NLC will provide 709 MW unit followed by six companies, 100 MW each. Other companies have been allocated 1 to 54 MW.

    Source: The Times of India

    IOC, HPCL, BPCL eyeing electric vehicles, renewables business

    September 25, 2017. Wary of being left behind in the race for renewables and electric vehicles, oil marketing companies are quietly drawing up plans to expand their modest presence in renewable energy space. Indian Oil Corp (IOC) is exploring opportunities for setting up battery charging stations and battery replacement facilities for electric vehicles in its petrol pumps. The centre is pushing solar and wind energy as well as electric vehicles, to curb oil imports and pollution, and meet its commitments under the Paris accord on climate change. India pledged to reduce carbon emissions relative to its gross domestic product by 33-35% from 2005 levels by 2030, under the accord. India pledged that by 2030, 40% of the country’s electricity would come from non-fossil fuel-based sources such as wind and solar power. By 2021-22, Bharat Petroleum Corp Ltd (BPCL) sees 5% of its revenue coming from non-fossil fuel sources. BPCL has shortlisted 10 oil depots and liquefied petroleum gas bottling plants for installation of rooftop solar plants. By March 2017, rooftop solar units had been installed in 1,001 of its retail outlets. BPCL is carrying out a detailed feasibility and system design study at 19 company-owned and company-operated retail outlets in a pilot for solarizing (putting solar panels) large-format retail outlets. Hindustan Petroleum Corp Ltd (HPCL) is strengthening its presence in natural gas and renewables to align its business to the changing patterns of demand and seeking to tap potential opportunities. HPCL operates wind farms of 100.9 MW capacity installed in Rajasthan and Maharashtra.

    Source: Livemint

    NGT raps MoEF over emission standards for thermal power plants

    September 24, 2017. The National Green Tribunal (NGT) has rapped the Ministry Of Environment and Forests (MoEF) for not abiding by its directions on implementation of a notification on air pollution emission standards and water consumption for coal-based thermal power plants. The lawyer appearing for the MoEF had earlier told the NGT that the ministry was contemplating setting up a committee to ascertain whether the thermal power plants have complied with the notification. The tribunal was hearing a plea filed by environment activist Sunil Dahiya seeking direction to the environment ministry and all the State Environmental Impact Assessment Authority (SEIAA) to ensure that all new approvals comply with the standards provided in the 7 December 2015 notification. According to the plea, the ministry had promulgated the notification to bring about a reduction in air pollution and water consumption by thermal power plants across the country. Dahiya had said that as per the notification, coal thermal power plants installed after 1 January this year should adhere to stricter air pollution norms and the ones installed before 31 December 2016 were given time till 7 December 2017 for compliance.

    Source: Livemint

    MP CM lays foundation of solar plant at Raja Bhoj Airport

    September 23, 2017. Madhya Pradesh (MP) Chief Minister (CM) Shivraj Singh Chouhan laid the foundation stone of a solar plant for Raja Bhoj Airport in MP. To encourage the use of renewable resources, the Airports Authority of India (AAI) has signed an agreement with Madhya Pradesh Energy Development Corp for setting up a one Mega Watt solar energy plant. The solar plant will help to save more than 90 percent of electricity per month.

    Source: Zee News

    Azure Power Commissions 50 MW NTPC Solar Project in UP

    September 23, 2017. Azure Power, a leading independent solar power producer in India, has announced that it has commissioned the final phase of its 50 MW solar power plant in the state of Uttar Pradesh (UP). The 50 MW project is spread across 300+ acres of land. Azure Power will provide power for 25 years at a tariff of Rs 4.78 ($ 0.07) per kilowatt hour (kWh) to NTPC, the largest power utility of the Government of India. Azure Power secured the 50 MW power purchase agreement (PPA) through an auction under the National Solar Mission Phase II, Batch-II Tranche I. UP is the most populous state in India and has a large peak energy supply deficit, according to the Central Electricity Authority. Azure Power is one the largest solar developers in UP and built the first utility-scale solar project in UP in 2015.

    Source: The Economic Times

    Himachal Pradesh first hill state in country to run electric buses

    September 22, 2017. After two years of trial runs on the challenging Manali-Rohtang highway, Himachal Roads Transport Corp (HRTC) finally launched its electric bus service on the route on a regular basis. With this, Himachal Pradesh has become the first hill state in the country to run electric buses. Electricity charging points have been installed at Manali and Marhi. Initially, two mid-size buses with a seating capacity of 27 and 32 respectively will ply on the route, but more will be added once 50 more are added to the existing fleet of conventional buses of HRTC. The buses will ply on Manali-Kullu and Mandi routes during winters when the road to Rohtang is blocked with snow. The government has also decided to start an eight-seater electric vehicle service in Manali town. Transportation Minister G S Bali, who had come to Kullu to lay the foundation stone of a modern bus stand in the township, flagged off the electric buses to Rohtang. Concerned about the ecology of Rohtang pass, National Green Tribunal had ordered Himachal government to stop plying of all petrol and diesel vehicles on Manali-Rohtang route and run compressed natural gas (CNG) and electric vehicles only. The government then conducted trial runs with CNG and electric buses.

    Source: The Times of India

    India has limited fossil fuels to support demand of 1.25 bn people, renewable energy only way: MNRE Secretary

    September 22, 2017. Renewable energy is the only way for a country like India with the population as large as 1.25 billion that has finite fossil fuels to cater to the needs of all, Ministry of New and Renewable Energy (MNRE) Secretary Anand Kumar said. However, asserting the fact that India is determed to achieve the target of installing 175 GW of renewable energy capacity by 2022, Kumar said that advancements in technology and dropping prices of solar and wind, the country can even surpass the target. While speaking at the 11th edition of Renewable Energy India Expo in Greater Noida, Kumar said that in recent consultations, the MNRE has begun to take more seriously the potential of India’s offshore wind and hydropower capacities, and hinted that these technologies will be brought under the renewable energy target. Meanwhile telling about India’s ‘silent revolution’ which will see the country rapidly scale up its electricity generation capacity and consumption, he underlined the key challenge of how to enable higher energy consumption in India, at a cost people are willing to pay, and not only willing to pay, but able to pay as well. He affirmed the path of least resistance is the one with the lowest carbon intensity. Kumar also turned his attention to manufacturing, particularly solar manufacturing where, he said India’s capabilities are “modest” at best.

    Source: The Financial Express

    Developers, Jharkhand government resolve solar power pricing deadlock

    September 21, 2017. Solar developers and the Jharkhand government have resolved an 18-month long deadlock over the price of solar power, with the developers agreeing to a reduced tariff of Rs 4.95 per kilowatt hour (kWh). The problem arose after the Jharkhand Renewable Energy Development Agency (JREDA) held a mega auction of 1,200 MW in March 2016 to set up solar projects at 45 different areas across the state. Winning bids ranged from Rs 5.08 to Rs 5.48 per kWh for the larger projects of above 25 MW and Rs 5.29 to Rs 7.95 for those below. The biggest winner was ReNew Power, which secured 522 MW. Meanwhile, solar tariffs kept falling in succeeding auctions, reaching a record low of Rs 2.44 per kWh in an auction conducted by Solar Corporation of India at the Bhadla Solar Park in Rajasthan in May this year. Last month, the developers finally agreed to a reduced tariff of Rs 4.99 per kWh for projects above 25 MW, which the state government agreed to consider.

    Source: The Economic Times

    Gujarat solar power auction sees winning tariff of Rs 2.65 per unit

    September 20, 2017. A reverse auction of 500 MW of solar projects held by the Gujarat government saw the lowest winning bid at Rs 2.65 per kilowatt hour (kWh). This was the first solar auction held after the two conducted by Solar Energy Corp of India in May, when one of the winning bidders had promised to sell power at a record low of Rs 2.44 per kWh. The auctions in May were held for projects at the Bhadla Solar Park in Rajasthan’s Jodhpur district, where solar radiation is the highest in the country. It was expected that winning bids at the latest auction conducted by Gujarat Urja Vikas Nigam Ltd, as the state’s nodal power company is called, would be a shade higher. This is because Gujarat has less intense solar radiation than Rajasthan, and the developers will not be provided land in solar parks — they will have to acquire land on their own. Further, in the four months since the last auction, the cost of solar modules in China, from where 90% of Indian solar developers source their equipment, have begun rising, after having fallen steeply for two years before that. The lowest bid, seeking 90 MW at Rs 2.65 per kWh, was made by GRT Jewellers India, a renowned name in the jewellery business. The company, headquartered in Chennai, is venturing into solar for the first time. The second and third lowest bidders were both state-owned power generation companies — Gujarat State Electricity Corp and Gujarat Industries Power Company — bidding for 75 MW each at Rs 2.66 and Rs 2.67 per kWh, respectively. The remaining 260 MW (out of 500 MW on offer) of projects were won by NYSE-listed Azure Power, one of the largest solar developers in the country, which also bid Rs 2.67 per kWh. There were 14 bidders in all in the auction. Among those who lost out were heavyweights such as Tata Power, ReNew Power, Finland-headquartered Fortum Solar, Lightsource Renewable Energy of the United Kingdom (UK) and Canadian Solar Energy.

    Source: The Economic Times

    Abraaj Group joins hands with ENGIE to set up wind energy platform in India

    September 20, 2017. Dubai-based emerging markets buyout fund Abraaj Group has joined hands with ENGIE, a multinational utility company and global independent power producer to set up a wind energy platform in India. The Indian renewable energy sector continues to grow rapidly, underpinned by an increasing demand for power. Power consumption in the country is expected to grow at 9% year-on-year until 2020. The Indian government’s target of 60 GW of wind power capacity by 2022 will require a near doubling of the current installed capacity of 32 GW over the next five years. In 2015, Abraaj Group tied up with Aditya Birla Group to create a large-scale renewable energy platform that will focus on developing utility-scale solar power plants in India.

    Source: The Economic Times

    INTERNATIONAL: OIL

    Rising diesel consumption is main driver for higher oil demand in 2017: Shell

    September 26, 2017. A massive surge in diesel fuel demand this year has been the main driver for higher crude oil consumption in 2017 along with buying to fill up strategic petroleum reserves, Mike Muller, Shell’s vice president of crude trading and supply, said. Diesel demand for 2017 is making up about 50 percent of the year-on-year demand growth in oil products after only making up 27 percent of the increase in last year’s consumption, he said. In 2016, gasoline and other oil products pushed demand higher, he said. The recent hurricane that shut down refiners along the Gulf Coast of the United States (US) contributed to higher demand for diesel and other middle distillates, he said. Hurricane Harvey dumped record amounts of rain on the Texas and Louisiana coasts and caused about 4.4 million barrels per day of refining capacity to close, or about 24 percent of the US total. To make up that shortfall in oil product output buyers have turned to European refiners while European buyers have raised imports from processors in Asia.

    Source: Reuters

    Duvernay field holds Canada's biggest shale oil resources

    September 26, 2017. The Duvernay field in Canada’s western province of Alberta holds the country’s largest marketable resources of unconventional light shale oil and condensate, according to a new report from the national energy regulator. It is the first time the National Energy Board (NEB) has done a detailed study of resources in the 130,000 square kilometer Duvernay play, which covers around 20 percent of Alberta, Canada’s main crude-producing province. The NEB report showed the Duvernay holds 3.4 billion barrels of marketable light oil and condensate and 6.3 billion barrels of natural gas liquids. The United States Eagle Ford formation has around four times as much light oil and similar amounts of gas and natural gas liquids. Most drilling has been concentrated in the western portion of the play but land sales have recently spiked in the oil-rich Duvernay East Shale Basin.

    Source: Reuters

    US shale oil producers profitable despite low crude prices: WPX Energy

    September 26, 2017. US (United States) shale producers are making more money now than at the time when oil prices were much higher as they have become more efficient, US independent shale oil producer WPX Energy said. US crude for November delivery stood around $52 per barrel.

    Source: Reuters

    Gazprom subsidiary begins production from Otdelnoye oil field in Russia

    September 25, 2017. Gazpromneft-Noyabrskneftegaz, a subsidiary of oil giant Gazprom, has started commercial production at the Otdelnoye field in Khanty-Mansiysk Autonomous Okrug-Yugra, Russia. Gazprom said that currently there are two production wells at the oil field having a total production of 170 tons per day. Two production wells are currently in operation at the field, with total production running at 170 tons per day. The Otdelnoye field is located 70 kilometers from Novosibirsk in the northern part of the Surgut District. Gazprom revealed its plans to drill over 20 wells at the Otdelnoye field in 2017–2018. According to the Russian oil firm, initial recoverable reserves of the Otdelnoye field were estimated at 4.8 million tons of oil. On the other hand, reserves in place of the oil field were estimated at 21 million tons of oil.

    Source: Energy Business Review

    US oil exports to meet 5 percent of non-US global demand by 2022: Enterprise

    September 25, 2017. Crude oil exports from the United States will increase to meet 5 percent of global demand by 2022, as refiners seek more low-sulfur crude to meet stricter rules for cleaner fuels, Enterprise Partners LP said. US oil exports may rise to about 4 million barrels per day (bpd) by 2022, a four-fold jump from this year, Brent Secrest, a senior vice president at Enterprise Products, said. During that same period, global oil demand, excluding the U.S., may rise to as much as 73 million bpd, up from 65 million bpd currently, he said. Demand for light, low-sulfur, or sweet, crude is set to rise as countries push refiners to produce cleaner fuels, as highlighted by the Internationals Maritime Organization’s new rules to cut the sulfur content in the fuel used in large container ships, or bunker fuel, by 2020. US crude oil production has spiked following the higher output of low-sulfur crude from shale formations since the late-2000s, causing a glut in domestic crude supplies. US refiners, however, are geared toward processing denser oil with a higher sulfur content. Enterprise currently exports around 100,000 bpd of crude oil from the US Gulf Coast, Secrest said.

    Source: Reuters

    UAE's oil supply cut compliance is 100 percent: Energy Minister

    September 25, 2017. The United Arab Emirates (UAE) Energy Minister Suhail Al Mazroui said the country’s compliance with a pact on global oil supply cuts stood at 100 percent. Al Mazroui has said that the Abu Dhabi National Oil Company (ADNOC) had cut crude allocations by 10 percent in September and October.

    Source: Reuters

    Tullow to resume Ghana oilfield expansion after border dispute ruling

    September 25, 2017. Africa’s biggest independent oil producer, Tullow Oil, is back on track to expand its flagship oilfields off Ghana’s coast after a two-year drilling block due to a border dispute. Tullow said it will resume drilling at the Tweneboa, Enyenra and Ntomme (TEN) oilfields around the end of the year to lift production to full capacity of 80,000 barrels per day (bpd), following an international tribunal ruling favoring Ghana in a dispute with its neighbour Ivory Coast. Tullow is battling to reduce a heavy debt pile it accrued during the oil market downturn that coincided with heavy spending to bring the TEN fields onstream. The company said that it expects to gain necessary environmental and other permits from Ghana, but declined to give an estimate for when the TEN fields would reach full capacity. They were producing around 50,000 bpd over the first half of this year.

    Source: Reuters

    Japan's Cosmo Oil to boost diesel output to meet demand from ships from 2020

    September 25, 2017. Japan’s Cosmo Oil plans to increase diesel output at its Sakai refinery in Osaka, looking to capitalize on an expected jump in demand when a global mandate for ships to switch to cleaner fuels kicks in from 2020. The company is considering adding units such as a desalter that will allow its 100,000-barrels per day crude distillation unit to process more heavy oil and maximize diesel output from its delayed coker in Sakai, Cosmo Oil President Hisashi Kobayashi said.

    Source: Reuters

    Domestic glut pushes up China gasoline exports

    September 23, 2017. China’s gasoline exports rose in August as refiners continued to sell excess product abroad amid a domestic glut, the General Administration of Customs data showed. August gasoline shipments rose 35.2 percent from a year ago to 910,000 tonnes, data showed. Diesel exports rose to 1.47 million tonnes in August, up 38.2 percent on a year ago, data showed. The gain came as state oil companies seek higher export quotas for the fourth quarter to take advantage of higher overseas profits and ease domestic oversupply. Some have already used most of their allocated volumes in August. China issued a new batch of refined fuel export quotas to five state-run companies in September, but it is not yet clear if they will receive extra quotas.  Kerosene exports fell 7.8 percent from a year ago to 1.04 million tonnes in August.

    Source: Reuters

    Crude oil output from Mexico's Pemex dips again below 2 mbpd

    September 23, 2017. Mexican national oil company Petroleos Mexicanos (Pemex) reported that August crude production dipped by 10 percent compared to the same month last year, marking two consecutive months with oil output coming in below 2 million barrels per day (mbpd). Pemex’s crude production peaked at 3.4 mbpd in 2004 but has been declining ever since. August output averaged 1.93 mbpd, the lowest level of crude production for Pemex, officially known as Petroleos Mexicanos, since Hurricane Roxanne severely disrupted operations in October 1995, pushing down output that month to 1.90 mbpd. Pemex’s August crude exports were also down. Crude shipments slid 12 percent to reach 1.114 mbpd. Seeking to reverse the country’s stubborn output slump, a sweeping oil opening finalized in 2014 ended the company’s decades-long monopoly while allowing private producers to operate their own fields for the first time. Through the first eight months of this year, average crude production stands at 2.00 mbpd.

    Source: Reuters

    Sri Lanka in talks with two Chinese firms for $3 bn refinery

    September 22, 2017. Sri Lanka is in talks with two Chinese companies about investing up to $3 billion to build in a new refinery at its Chinese-controlled port. Sri Lanka wants to build a new refinery in its southern Hambantota port, where China Merchants Port Holdings (CMPH) has a 99-year lease to handle commercial operations. Located near the main shipping route from Asia to Europe, Hambantota port is likely to play a key role in China’s “Belt and Road” trade route initiative. Mangala Yapa, a director at the state-run Board of Investment, said two Chinese companies had put forward a joint venture proposal for the refinery, which is expected to produce 5 million tonnes per annum with an investment between $2.5 billion and $3 billion. This year, the government revised its original deal with CMPH to give greater influence to the Sri Lankan Ports Authority to try to allay concerns - including from Japan, the United States and India - that the port might be used for military purposes. Sri Lanka already has a deal for a 100,000 barrels per day-plus refinery with Indian Oil Corp (IOC) at the country’s eastern port city of Trincomalee with the aim of exporting fuel. Sri Lanka’s sole oil refinery, Ceylon Petroleum Corp’s decades-old 50,000 barrels per day bpd plant, was originally configured to run on Iranian crude and Sri Lanka had to import more refined oil products after United States sanctions led it to stop imports from Iran.

    Source: Reuters

    OPEC, non-OPEC producers must work on longer-term oil strategy: Russia

    September 22, 2017. Russian Energy Minister Alexander Novak said that OPEC (Organization of the Petroleum Exporting Countries) and other oil producers need to continue coordinated action and work on a strategy from April 2018. He said OECD (Organisation for Economic Co-operation and Development) oil inventories had fallen to 3 billion barrels in August, while crude in floating storage had been falling since June. Speaking at the opening of a meeting of some OPEC and non-OPEC ministers, he said oil market fundamentals were normalizing.

    Source: Reuters

    Europe diesel exports hit record as Harvey redraws trade

    September 22, 2017. Europe is set to export a record volume of diesel in September as Latin American buyers struggle to recover from a drop in U.S. supplies in the wake of Hurricane Harvey, according to shipping data and traders. Europe regularly imports large volumes of the road fuel as the region’s refineries are unable to meet demand. It is set to import over 2 million tonnes of diesel this month, but severe disruptions caused by Hurricane Harvey on refining operations in the Gulf Coast have led to a temporary redrawing of traditional trade routes. At least 600,000 tonnes of diesel and heating oil are expected to sail from Europe and the Mediterranean to Brazil and Argentina in September, according to shipping data and traders. Harvey knocked out about 4.4 million barrels per day (bpd) of refining capacity in the Gulf Coast, roughly a quarter of total United States capacity. Over 1 million bpd of crude distillation capacity remained offline. Brazil and Argentina are highly dependent on fuel imports due to a lack of domestic refinery capacity caused by years of under investment. Diesel imports from the Gulf Coast, a major source of supply for Europe, are also set to sharply drop in September and October.

    Source: Reuters

    Iran condensate exports to hit 5-month low in October

    September 22, 2017. Iranian exports of ultra-light crude oil known as condensate are set to fall to a five-month low in October, with supplies to its largest buyer South Korea cut by half. That comes after six industry sources said that the National Iranian Oil Co has informed buyers in Asia that it could reduce condensate exports in October due to maintenance at the South Pars gas field. Iran plans to load about 295,000 barrels per day (bpd) of condensate for exports in October, down 31 percent from an estimated 429,000 bpd this month. The expected drop in Iranian supplies has already boosted premiums for similar oil from Qatar to the highest in 10 months, while driving up prices for condensate produced in the Asia-Pacific such as Malaysia’s Muda. Iranian condensate exports to South Korea will fall by half from the month before to about 153,000 bpd in October. Supply cuts to South Korea are expected to continue in November. China will resume Iranian condensate imports in October, after a two-month halt, loading about 17,000 bpd. Iran has struggled to expand oil exports after it sold all the oil it had stored for years at sea earlier this year.

    Source: Reuters

    Russia's Lukoil eyes decade of oil output growth

    September 20, 2017. Russia’s second-largest oil producer Lukoil expects its output to rise over the next 8-10 years as it brings new fields onstream, vice president and co-owner Leonid Fedun said. Lukoil has suffered from sluggish production as its fields, located mostly in Western Siberia, are mature and depleted. But it has been focusing on growth in new producing regions, such as the Caspian Sea and other countries, including Iraq. Fedun, among the first in the Russian oil industry to call for an output curbing deal with OPEC (Organization of the Petroleum Exporting Countries), said Lukoil had already yielded at least $1.5 billion in additional profits from the global oil production cut, which has lifted crude prices.

    Source: Reuters

    INTERNATIONAL: GAS

    China plans to create national natural gas pipeline company

    September 26, 2017. China’s state economic planner, the National Development and Reform Commission (NDRC), has revived a plan to create a national natural gas pipeline company, aiming to provide gas producers with better access to infrastructure to help increase take-up of the cleaner-burning fuel. NDRC is working with state oil companies including China National Petroleum Corp (CNPC) and Sinopec Group on the proposal. The plan, first raised about five years ago, is part of Beijing’s proposed reforms to make the state-dominated oil and gas sector more efficient and follows a string of smaller steps over the past two years, including cutting down transportation costs and encouraging investment in gas storage. The proposed national pipeline company is expected to oversee China’s trunk line projects such as the West-to-East pipelines operated by CNPC and Sinopec’s project linking gas fields in the southwestern province of Sichuan to the east coast. China is the world’s third-largest gas consumer after the United States and Russia, with imports of the fuel making up about a third of consumption. The world’s top energy user aims to boost the use of natural gas, which emits half of the greenhouse gases produced by that burning coal produces, to about 15 percent of the total energy share by 2030 from just under 6 percent currently. The NDRC said earlier this year it expects the country’s gas pipelines to total 104,000 kilometers by 2020, up from 64,000 kilometers at the end of 2015. CNPC currently operates nearly 80 percent of China’s gas pipelines.

    Source: Reuters

    Veresen seeks approval to develop LNG export terminal and gas pipeline in US

    September 25, 2017. Veresen has submitted applications to the United States (US) Federal Energy Regulatory Commission (FERC) to construct and operate liquefied natural gas (LNG) export terminal and related gas pipeline in Oregon. The applications have been submitted for Jordan Cove energy project and Pacific Connector gas pipeline. Veresen is seeking approval for the construction and operation of a 7.8 million LNG export terminal in Coos Bay and Oregon, as well as the related Pacific Connector to transport natural gas from the Malin Hub in southern Oregon to the LNG export terminal. The company is expected to invest around $10 bn for the total engineering, procurement and construction of the LNG export terminal and gas pipeline.

    Source: Energy Business Review

    BP begins production at the Khazzan gas field in Oman

    September 25, 2017. BP said it had begun production at the Khazzan gas field in Oman, the sixth and largest of seven new upstream projects that are due to start for the British oil giant this year. About 300 wells are expected to be drilled over the lifetime of the Khazzan field, BP said. The two planned phases will develop an estimated 10.5 trillion cubic feet of recoverable gas resources.

    Source: Reuters

    Gas export curbs loom as Australia's east faces gas shortfall

    September 25, 2017. Royal Dutch Shell, ConocoPhillips and Santos face curbs on exporting gas from Australia’s east coast in 2018 if they fail to plug a projected local supply shortfall, Prime Minister Malcolm Turnbull warned. To deal with the crisis the government passed a law earlier this year that would allow it to limit exports from any of the three LNG plants on the east coast to beef up local supply. The three LNG exports plants, which were completed between 2014 and 2016, have long-term contracts to sell gas to customers in Asia, but have also been selling spot cargoes overseas instead of locally due to high costs and access issues on pipelines in Australia.

    Source: Reuters

    China's recoverable shale gas reserves fell by 6 percent in 2016

    September 23, 2017. China’s technologically recoverable shale gas reserves dropped by 6 percent in 2016, the Ministry of Land and Resources said, with no new volumes of the unconventional resource added last year. Reserves stood at 122.41 billion cubic meters (bcm) at the end of 2016, down from 130.18 bcm a year earlier. Shale gas was the only one of 22 major minerals listed to add zero newly discovered reserves in 2016, although potash was assigned a negative figure, indicating that some previous reserves were written off. The numbers suggest China’s efforts to replicate the North American shale gas revolution and reduce a hefty reliance on energy imports are running out of steam.

    Source: Reuters

    Fault at Israel's Tamar gas field prompts use of dirtier fuels

    September 22, 2017. A fault in the supply of natural gas from Israel’s only commercial field has forced Energy Minister Yuval Steinitz to authorise the use of alternative fuel sources to produce electricity, the energy ministry said. The ministry said supplies from the offshore Tamar field had been halted after the fault was discovered during routine maintenance. Tamar, which began production in 2013, is the primary natural gas supply for Israel and also exports to Jordan. So far it has produced more than 1 trillion cubic feet.

    Source: Reuters

    Glencore strikes multi-year purchase deal with Angola LNG

    September 20, 2017. Trading house Glencore is to buy liquefied natural gas (LNG) supplies from Angola LNG over a multi-year period, adding to similar recent deals between the producer and traders including Vitol. Angola LNG said the deal was another step toward building its sales book with the most important players in the LNG market. Last month it sold LNG to Vitol over a multi-year period and also entered a sales deal with the trading arm of Germany’s RWE. Until recently, Angola has been selling all of its LNG via competitive tenders in the spot market, partly because a previous plan to ship LNG to the United States (US) fell through because of the US shale gas boom. Concerns over the Angola LNG plant’s reliability as well as limitations on feed gas supplies from offshore fields also prevented the Chevron-led project from previously locking in an LNG sales deal.

    Source: Reuters

    INTERNATIONAL: COAL

    Italy's Enel draws interest for its sale of Russian coal plant

    September 21, 2017. Italy’s Enel, which has mandated Sberbank to find buyers for its Reftinskaya coal power plant in Russia, has received interest from potential buyers including from outside of Russia, Enel’s Russia chief Carlo Palasciano said. Enel, one of several foreign companies that bought into the Russian power sector after the state monopoly was broken up in the past decade, is selling the Reftinskaya plant to switch its Russian focus to wind energy.

    Source: Reuters

    INTERNATIONAL: POWER

    Power blackout leaves darkened Puerto Rico isolated and paralyzed

    September 26, 2017. Broken electricity poles and streetlights list into the middle of highways. Satellite images show an island devoid of light. Hurricane Maria’s devastation of the US territory of Puerto Rico left the entire island and its 3.4 million residents without power. A full damage assessment by Puerto Rico Electric Power Authority (PREPA) has been difficult because of the limited ability to get flights to the island and federal agencies concentrating on saving lives and providing power to crucial infrastructure like hospitals. New York Power Authority (NYPA) said power generation damage has been minimal, but transmission and distribution lines have been hit with “extensive” damage. Fixing those lines will be an extended process, so many will be relying on diesel and gasoline during that time.

    Source: Reuters

    BKW sells its Italian power distribution business to E.ON and Illumia

    September 22, 2017. The Swiss company Bernische Kraftwerke AG (BKW) has sold its Italian power distribution businesses and its majority stake in Casa delle Nuove Energie (CDNE) to E.ON and Illumia. E.ON will take over BKW’s majority stake in CDNE and Electra Italia’s major customers while the small and medium-sized enterprises (SME) and reseller portions of Electra Italia will be taken over by Illumia. However, the part of the transaction concerning Electra Italia is still requiring the approval of the Italian Competition Authority.

    Source: Enerdata

    Iran and Iraq expect to synchronize their power grids by end-2017

    September 20, 2017. The Iranian government expects to synchronize its domestic electricity network with Iraq by the end of November 2017, which would significantly increase the amount of power exchanges between the two countries. The rationale behind this plan is to enable the exchange of power between the two markets and in particular during peak demand hours. Iran estimates that it has been producing enough power throughout 2017 to be able to satisfy a significant portion of Iraq’s power needs without causing shortages in the domestic power grid. Iran already trades power with four neighbours, namely Azerbaijan, Turkey, Armenia and Iraq. Under swap deals, Iran imports electricity from Armenia and Azerbaijan in summer, when domestic demand soars, and exports electricity in winter.

    Source: Enerdata

    INTERNATIONAL: NON-FOSSIL FUELS/ CLIMATE CHANGE TRENDS

    French summer hydro power output tumbles on lack of rainfall

    September 26, 2017. French hydro electricity generation fell in July and August due to a lack of rainfall, leaving reservoirs at very low levels compared with previous years, grid operator RTE said. Electricity production from hydro sources fell 26.5 percent in July, and 9.9 percent in August compared with the same months in 2016, RTE said. French hydro power reservoirs are at their lowest level for this period of the year compared with the three previous years, according to data from RTE. Atomic power, which accounts for over 75 percent of French electricity requirements, rose in August by 5.4 percent compared with the August 2016, RTE said. Electricity from solar panels was stable during the summer months, up 1.5 percent year-on-year in July, and down 1.5 percent in August although installed solar capacity rose by 525 MW in the period to 7.1 GW. Power production from French wind turbines soared in July by 67.6 percent and by 4.6 percent in August compared with the same period a year ago.

    Source: Reuters

    MSU research to use algae to capture emissions from power plants

    September 25, 2017. A research team from Michigan State University (MSU) has found a way to use algae-based technologies to capture emissions from power plants and turn them into valuable products. The research project which is supported by United States Department of Energy’s $1 mn grant, includes faculties from the university’s Biosystems and Agricultural Engineering department and Chemistry department in a three-year cross-disciplinary effort. Green algae can capture carbon dioxide and other green house gases from the atmosphere through the process of photosynthesis. But, a single 100 MW coal-fired power plant produces about 4000 metric tons of carbon dioxide each day, would require thousands of acres of land to culture algae, which is not feasible for most power plant facilities. The research plans to use a process known as ‘biomass cascade conversion’ which can condense the process into something which is viable from economic and energy standpoint. The process optimises the components of algae to produce high value chemicals and biofuels. The cascade conversion will produce byproducts such as polyurethanes, biodiesel, and other value-added chemicals and fuels with a wide range of applications.

    Source: Energy Business Review

    US DOE to grant $36 mn for carbon capture research projects

    September 25, 2017. The United States (US) Department of Energy (DOE) has launched a federal program that will grant nearly $36 mn of financial assistance to advance carbon capture technologies to either the engineering scale or to a commercial design. The program announced by US Secretary of Energy Rick Perry will help cost-shared research and development projects working on the development of carbon capture technologies. Selected projects will be supported under the DOE’s Office of Fossil Energy, the Design and Testing of Advanced Carbon Capture Technologies funding opportunity announcement. The DOE has kept four awards which will have a combined funding of up to $30 mn. It will be for projects which will use already available host site Infrastructure to deliver scaling of carbon capture technologies to engineering scales.

    Source: Energy Business Review

    Iraq seeks other nations’ help to build a nuclear reactor

    September 23, 2017. Iraq’s Foreign Minister Ibrahim Al-Jaafari is asking nuclear countries for help building an atomic reactor for peaceful purposes, saying the country has a right to use atomic power peacefully. Al-Jaafari made the request in his speech to the United Nations (UN) General Assembly’s annual meeting of presidents, prime ministers and monarchs. He called for assistance “to build a nuclear reactor for peaceful purposes in Iraq, to acquire this nuclear technology.” Former Iraqi strongman Saddam Hussein’s previous efforts to build a nuclear reactor were met with an Israeli airstrike in 1981 and years of suspicion about his nuclear intentions.

    Source: Arab News

    Japan fires up biomass energy, but fuel shortage looms

    September 22, 2017. As the sun sets on Japan’s solar energy boom, companies and investors are rushing into wood-burning biomass projects to lock in still-high government subsidies. More than 800 projects have already won government approval, offering 12.4 GW of capacity -- equal to 12 nuclear power stations and nearly double Japan’s 2030 target for biomass in its basic energy policy. The sheer number of projects has raised questions about how they will all find sufficient fuel, mostly shipped in from countries like Canada and Vietnam, while some experts question the environmental credentials of such large-scale plants. The projects approved to date that use general wood fuel would need the equivalent of up to 60 million tonnes of wood pellets, compared with global output of 24 million tonnes in 2014, Takanobu Aikawa, a senior researcher at Japan’s Renewable Energy Institute, said. Other fuels such as local forest thinned woods or palm kernel shells from Indonesia and Malaysia would not make up the shortfall, he said. Biomass plants generate energy by burning fuels, releasing carbon dioxide into the atmosphere. They qualify as renewable because plants absorb CO2 as they grow, with a lifespan of years rather than the millions of years needed to make fossil fuels such as coal. Japan Renewable Energy, in which Goldman Sachs has a stake, is building its first biomass power station north of Tokyo, adding to solar and wind power plants. Major utilities, such as Chubu Electric Power Co, are also looking to co-fire biomass in their coal power plants to help cut emissions. Japan wants renewables to account for 22-24 percent of its electricity mix by 2030.

    Source: Reuters

    California cities sue big oil firms over climate change

    September 21, 2017. California cities San Francisco and Oakland filed separate lawsuits against five oil companies seeking billions of dollars to protect against rising sea levels they blamed on climate change, according to public documents. The lawsuits, filed in state courts in San Francisco and Alameda Counties, alleged Chevron Corp, ConocoPhillips, Exxon Mobil Corp, BP Plc, and Royal Dutch Shell Plc, created a public nuisance and asked for funds to finance infrastructure to deal with rising sea levels. The lawsuits are the latest in a growing body of legal action against oil companies over climate change. Prosecutors for New York and Massachusetts are investigating Exxon, for example, over the possibility it misled investors in public statements on the risks of climate change. Marin and San Mateo counties and Imperial Beach, California, in July brought similar public nuisance and failure to warn lawsuits alleging climate change impacts. Those three lawsuits sued the same five plus other oil companies and coal producers.

    Source: Reuters

    US nuclear reactors face uphill challenge, despite lower emissions

    September 20, 2017. The US nuclear power industry is facing an uphill battle to hang onto its share of the country’s electricity production, with some projecting a worst-case scenario where half of the nation’s 99 nuclear reactors could shut over the next couple of decades. Nuclear power looked to be on the verge of a renaissance about a decade ago. But a surge in domestic natural gas production, billions of dollars in cost overruns on new projects, Japan’s Fukushima accident in 2011, and multiple plant closures have the industry on its heels again. The United States (US) Department of Energy expects nuclear’s percentage of the power mix to drop to 11 percent by 2050 from the current 20 percent, and many reactors to close. In the past five years, operators have shut six reactors amid stagnant electricity demand and low natural gas and power prices, and plan to shut another six reactors in deregulated states over the next five years, in part because they cannot compete with gas-fired plants. Most states in the US Northeast and Midwest are deregulated. Merchant plants receive the same money for energy they sell as gas-fired and renewable plants, which are less expensive to operate.

    Source: Reuters

    DATA INSIGHT

    LNG Scenario in India: Present & Past

    Trends in Imports of Liquefied Natural Gas (LNG)

    (P): Provisional

    Note: Production denotes the gross production, which includes flared gas/loss by producing companies.

    Consumption denotes the net availability of gas after deducting for gas used for internal use by producing companies.

    Source: Petroleum Planning & Analysis Cell


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

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