Energy News Monitor | Volume XIV; Issue 21

     ENM, Energy Monitor, Petrobas, Solar Energy, LPG, CNG, LPG, CIL, November, Energy

    PETROLEUM PRICES: TO BE OR NOT TO BE IN GST FOLD

    Oil News Commentary: October 2017

    India

    Rationalisation of GST rates will give the petroleum sector a positive push. The GST council, in order to reduce the cascading impact of taxes on the oil and gas industry due to non-inclusion of key petroleum products, had recommended a tax structure for offshore oil and gas services, import of oil rigs, transportation of natural gas and sale of bunker oil. The reduction in GST rate for bunker fuel to 5 percent from 18 percent earlier will enhance its sale to foreign vessels and the GST rate reduction in offshore contracts to 12 percent from 18 percent earlier will reduce tax burden on offshore hydrocarbon activates. Exemption from 5 percent Integrated IGST for the import of rigs and ancillary equipment in the hydrocarbon sector will promote activities in the upstream sector and rate reduction in transportation of natural gas through pipeline to 5 percent from 18 percent earlier will make the fuel more affordable. While the new tax regime included most of the goods and services, core petroleum products including crude oil, natural gas, petrol, diesel and aviation turbine fuel were kept out of its ambit due to stiff opposition from state governments. Also, other oil products such as kerosene, LPG gas and naphtha were included in the GST. This resulted in oil companies having to comply with both the old and the new tax regimes as well as deal with stranded taxes. According to ratings agency ICRA, the recommendations made will fare well for upstream companies and help them control their capital expenditure.

    Chiefs of several global and Indian oil companies are said to be wanting petroleum products to be included in the GST, according to Niti Aayog. Global oil giants, including Saudi Aramco and Moscow- controlled oil giant Rosneft, have committed to increasing investment in India. CEOs are reportedly confident of India’s potential to become a gas-based economy.

    Meanwhile election bound Gujarat became the first state to say it would cut VAT on petrol and diesel after the Centre urged states to cut their levies on fuels by 5%. Other BJP-ruled states, such as Madhya Pradesh, Chhattisgarh, Uttarakhand, and Jharkhand, and states where it shares power, like Bihar, seemed likely to follow suit with cuts or seriously consider the option of doing so. Similarly, Madhya Pradesh was likely to announce a Diwali gift for consumers by slashing petrol and diesel prices. But Haryana, though a BJP state, appeared in no mood to cut taxes. Kerala said a reduction was unfeasible, while Odisha felt the request was unjustified. Tamil Nadu declined to react, while Punjab said his state didn't need to effect cuts because, though Centre had hiked excise duty on fuel 11 times in 36 months, the state had not increased VAT. Kerala ruled out the possibility of a VAT reduction, saying the state government could not accept the extra burden that would be created by lowering VAT on the fuels as Kerala had already been crippled by the heavy burden of GST. The federal government urged state governments to reduce VAT on petrol and diesel by 5 percent to further ease retail price of the auto fuel after the central government cut excise duty on these by ₹ 2/litre.  The argument is that raising excise duty on fuel during the low global oil price era also involved a responsibility to bring it down when necessary. The Centre sacrificed ₹ 260 billion in revenue in the duty cut (the full year impact of the duty cut.) For the rest of the financial year, the impact is ₹ 130 billion. The central government raised excise duty by ₹ 11.77/litre on petrol and ₹ 13.47/litre on diesel between November 2014 and January 2016 to take away gains arising from plummeting international oil rates. The central government slashed excise duty on petrol and diesel by ₹2/litre to tame rising inflation and to shield consumers from the surging price of auto fuels. The move is in response to criticism that increase in taxes on petrol and diesel, while global prices remained low, was pinching consumers. Fuel prices have started moving up owing to refinery shutdowns in the US following recent hurricanes. The petrol price in Delhi was ₹ 70.83/litre, its highest since 16 January; diesel cost ₹ 59.07, also its highest since the same date. Crude oil price, which had touched a monthly average of $123.6/barrel in March 2012, eventually declined to $28.1 in January 2016. In September 2017, the global crude oil price averaged $54.52/bbl according to information available with the PPAC an arm of the oil ministry. The finance ministry attributed the current spike in domestic auto fuel prices to rising global prices and said the trend had started reflecting in inflation.

    ONGC has drawn a blueprint to raise crude oil production by 4 mt and almost double its natural gas output by 2020 to meet the target of cutting India’s import dependence by 10 percent. The state-owned firm will raise crude oil production from 22.6 mt in 2017-18 to 26.42 mt in 2021-22. The nation’s biggest oil and gas producer has prepared the ‘Road map for Import Reduction’ two years after the target for reducing oil import dependence by 10 percent, from 77 percent was set. India imported a record 4.83 million bpd of oil in September as several refiners resumed operations after extensive maintenance to meet rising local fuel demand. The world’s third-biggest oil importer shipped in 4.2 percent more oil last month than a year earlier and about 19 percent more than in the previous month, ship-tracking data showed. ONGC plans to increase focus on EOR projects after a policy incentivizing the activity is formulated. The policy is expected to benefit the company which garnered an incremental gain of 7.36 mt through EOR activities last fiscal year contributing to 35 percent of ONGC’s crude oil production. Also, ONGC spent around ₹ 51.95 billion on EOR activities in 2016-17. The new policy is aimed at arresting the declining trend in domestic crude oil production. The upstream regulator of the country DGH had called for stakeholder consultation for the policy in April this year and appointed consultancy firm Deloitte to undertake a study on the best practices existing worldwide on EOR. ONGC is working on a plan to invest ₹ 578.25 billion on 28 EOR projects to tap an additional 194 mtoe. Of the 28 projects, the company has already completed 23 projects at a cost of ₹ 475.67 billion helping it tap more than 112 mt of additional crude by the end of 2016-2017. ONGC and Cairn India currently deploy EOR techniques in mature fields. State owned Oil India Ltd had also recently signed a MoU with the University of Houston to collaborate in the fields of IOR and EOR for production enhancement from mature fields.

    During the first nine months of the year India’s oil imports rose 1.8 percent to about 4.4 million bpd, with most supplies coming from the Middle East, followed by Africa and Latin America. Indian fuel demand typically eases in the third quarter as monsoon rains hit construction, industrial activity and reduces consumption of transport fuels. That provides refiners with an opportunity to carry out maintenance. Capacity addition is also driving up India’s oil imports. The country added 170,000 bpd of capacity at plants owned by BPCL and HPCL-Mittal Energy, which are gradually ramping up crude runs. India, which imports about 80 percent of its oil needs, has emerged as a key driver for growth in global oil demand. India is increasing refining capacity to keep pace with the expected growth in fuel demand as India seeks to boost the manufacturing sector.

    IOC has bought two new types of US crude for December delivery as it tests different grades from the US. IOC bought 1 million barrels each of US Southern Green Canyon (SGC) and WTI Midland crude likely from a Chinese trader. The purchase was in addition to 2 million barrels of Basra Light crude to be delivered in the same month. The US has become a new source of crude supply for Asia since Washington lifted a ban on crude exports in late 2015. India joined other Asian countries in buying US crude in the fourth quarter to widen its import sources as well as to reduce trade surplus with the US. IOC has issued another sour crude tender that will close later to purchase more oil for the same period. The refiner has bought about 5.5 million barrels of US crude so far this year. Other Indian refiners to have bought US crude include BPCL, Bharat Oman Refinery, HPCL and RIL.

    As a leading energy consumer, India is looking to upgrade its relationship with producing countries to a strategic one, instead of mere buyer-seller. Saudi Aramco, which established its business presence in India last year, has formed an Indian subsidiary that will engage in crude oil and LPG marketing, engineering and technical services, and other business development activities.

    Kuwait’s Al Arfaj Group plans to build a 600,000 bpd oil refinery and a 10 mtpa LNG terminal in the Indian coastal state of Andhra Pradesh. India, which imports about 80 percent of its oil needs, aims to raise its refining capacity by 50 percent in the next seven years to about 7 million bpd. Saudi Aramco said it planned a ‘mega investment’ in refining, petrochemicals and fuel retailing in India.

    Rest of the World

    Global supply and demand for crude oil will be largely balanced next year, as growth in consumption helps erode a three-year-old overhang of unused fuel and should mostly offset a steep rise in output, the IEA said. The Paris-based IEA said it continues to see global demand for crude growing by 1.6 million bpd in 2017, before moderating to 1.4 million bpd in 2018. Commercial oil stocks likely fell in the third quarter of this year, only the second draw since the crude price crashed in 2014, thanks to a drop in the amount of oil held in floating storage or in transit, the IEA said. Commercial stocks in industrialized countries fell in August by 14.2 million barrels to 3.015 billion barrels, leaving a surplus of 170 million barrels above the five-year average, the IEA said. However, the IEA said its numbers implied a build of up to 800,000 bpd could take place in the first quarter of next year, meaning the OPEC and its partners cannot afford a slip in adherence to their supply-restraint deal. OPEC supply was little changed in September at 32.65 million bpd, but down 400,000 bpd from a year earlier, meaning the group’s compliance with its self-imposed 1.2-million bpd output cut stood at 88 percent last month and 86 percent for the year to date, the IEA said. Together with its partners, which include Russia, Oman and Kazakhstan, the group has agreed to restrain output by 1.8 million bpd until March next year. The IEA said it expects demand for OPEC’s crude to rise to 32.98 million bpd in the fourth quarter of this year, above September’s output, and then to fall to 31.87 million bpd in the first three months of 2018. The IEA said it sees non-OPEC crude supply rising by 700,000 bpd in 2017, and by 1.5 million in 2018 to reach 59.6 million bpd, with the US being the largest contributor. US crude production, aided in large part by resurgent shale output, grew by 550,000 bpd in July compared with a year earlier to 9.24 million bpd, its highest since November 2015. The impact of Hurricane Harvey, which hit the US Gulf Coast in late August, is expected to have curtailed production in August and September. But for 2017 as a whole, the IEA expects US crude output to grow by 470,000 bpd and by 1.1 million bpd in 2018. Southeast Asian demand for oil will keep growing until at least 2040 as emerging nations there rely on the fossil fuel to transport their rapidly growing populations, ship goods and make plastics, the IEA said. Oil usage in the region will expand to around 6.6 million bpd by 2040 from 4.7 million bpd now, with the number of road vehicles increasing by two-thirds to around 62 million, the agency said in a report. It did not make any forecasts beyond 2040. A global push to replace combustion engines in vehicles with electric-powered ones to fight climate change has raised concerns in the oil industry that demand for the commodity could peak in the next 10-20 years. But oil will continue to meet around 90 percent of transport-related demand in Southeast Asia, especially for trucks and ships, the IEA’s director of energy markets and security, said. Oil demand from the petrochemicals sector, one of the largest users of the fossil fuel, will also grow fairly substantially. Southeast Asia will have to fork out more than $300 billion in 2040 for net energy imports, equivalent to about 4 percent of the region’s total gross domestic product, the IEA said.

    According to Saudi Arabia, demand for oil will increase between 2030 to 2040 because there will be a need from petrochemical and other industries, not just for energy production. Global oil demand is expected to grow by 45 percent by 2050 despite an international push for using more renewable sources of energy according to the Kingdom. The kingdom, which is the world’s biggest crude exporter, would remain a cornerstone of the global oil industry through state-owned Saudi Aramco.

    Russian said it plans to discuss a possible extension of the global oil output cut deal and the general situation on world oil markets with Saudi Arabia.  Russia held on to its position as China’s top crude oil supplier ahead of Angola and Saudi Arabia for the seventh straight month in September, with shipments hitting a record as refiners rushed to buy lower-sulfur oil to meet cleaner fuels standards. Imports from Russia last month were almost 6.35 mt or 1.545 million bpd up 60.5 percent from the same month last year, according to the General Administration of Customs data. For the first three quarters, crude volumes from Russia gained 18 percent year-on-year to nearly 45 mt or 1.2 million bpd, also holding firm its top ranking. The lower cost of Russian crude and China’s shift to cleaner diesel was the key driver behind the record Russian oil purchases. Meanwhile Angola, China’s second largest source of crude, supplied 11.7 percent more oil than a year earlier at 4.677 mt or 1.14 million bpd. Angola also maintained the second spot for the January-September supplies ahead of Saudi. Supplies from Saudi Arabia were up 9.6 percent last month year-on-year at 4.276 mt or about 1.04 million bpd. Russian supplies could climb further next year as privately run conglomerate CEFC China Energy agreed earlier this month to buy 220,000 to 260,000 bpd of oil from Rosneft, as part of a $9.1 billion investment in the world’s largest listed oil company. China’s total crude oil imports in September climbed to the second highest on record at around 9 million bpd, buoyed by purchases from CNOOC and as independent refineries returned from maintenances.

    Russia’s largest oil producer Rosneft wants to boost its supplies of oil to China through Kazakhstan to as much as 18 mtpa (360,000 bpd) from around 10 mt in 2017. Such a big increase may significantly drain flows of Urals blend to Europe at a time when Russian oil output has been reduced as part of a global pact to support prices. Russian oil production has been steady, at around 10.9 million bpd due to a global pact to reduce total production by around 1.8 million bpd to support weak oil prices. Russia has steadily increased oil supplies to China over the past years to become the main supplier of oil to the country. This year, Rosneft’s total oil supplies to China are set to reach a record high of 40 million tonnes (800,000 barrels per day). Rosneft and China’s CNPC agreed in January on an increase of oil supplies via Kazakhstan through to 2023 with total supplies of 91 mt over a 10-year period. Kazakhstan’s energy ministry said Rosneft has not officially applied for an increase in transit volumes to China.

    Saudi Arabia and Iraq expressed satisfaction with the orientation of the global oil market towards recovery as a result of a deal to boost prices by limiting production. OPEC, Russia and a number of other oil producers are cutting output until March 2018 in an effort to boost the price of crude. Saudi Arabia and Iraq are respectively the biggest and second-biggest producers in the OPEC.

    Iraq and Iran boosted crude exports in September, taking advantage of a slower pace of shipments from rival Saudi Arabia to win buyers in key markets like China and the US. Iraq shipped 3.98 million bpd the highest since December, while Iran’s exports rose to 2.28 million bpd, the most since February, according to ship-tracking data. Saudi Arabia’s exports were 6.68 million barrels a day, the second-lowest for this year, the data show. Iran and Iraq’s moves to grab market share cast a light on internal tensions within OPEC as Saudi Arabia, the group’s de facto leader and world’s top oil exporter, works to re-balance the global market. Saudi Arabian Oil Company, known as Aramco, will make the deepest cuts in supplies to customers in its history in November, the energy ministry said.

    OPEC and other oil producers may need to take “some extraordinary measures” next year to rebalance the oil market, the OPEC said. Saudi Arabia and Russia helped secure a deal between the OPEC and 10 rival producers to cut output by about 1.8 million bpd until the end of March 2018 in an effort to reduce a glut.  Consultations were under way for the extension of the OPEC-led pact beyond March 2018 and that more oil producing nations may join the supply pact, possibly at the next meeting of OPEC in Vienna on November 30. Saudi Arabia said it hoped to reach a consensus with Russia and other major oil producers on the future of the deal before November’s meeting.

    Iraq and Iran boosted crude exports in September, taking advantage of a slower pace of shipments from rival Saudi Arabia to win buyers in key markets like China and the US. Iraq shipped 3.98 million bpd the highest since December, while Iran’s exports rose to 2.28 million bpd, the most since February, according to ship-tracking data. Saudi Arabia’s exports were 6.68 million barrels a day, the second-lowest for this year, the data show. Iran and Iraq’s moves to grab market share cast a light on internal tensions within OPEC as Saudi Arabia, the group’s de facto leader and world’s top oil exporter, works to re-balance the global market. Saudi Arabian Oil Company, known as Aramco, will make the deepest cuts in supplies to customers in its history in November, the energy ministry said.

    The EU banned the sale of oil and oil products to North Korea, in a largely symbolic move aimed at encouraging countries that have more significant levels of trade with the country to follow suit. EU Foreign Ministers also imposed a blanket ban on doing business with North Korea in sanctions that go beyond the latest UN measures. The EU does not sell oil to Pyongyang. Following North Korea’s most powerful nuclear test, the United Nations Security Council capped North Korean imports of crude oil, but China and Russia resisted an outright ban.

    NATIONAL: OIL

    Oil Minister to make case for rational energy pricing at Asia meet

    October 31, 2017. Oil Minister Dharmendra Pradhan will again make a case for rational pricing of energy when he speaks at the 7th Asian Ministerial Energy Roundtable (AMER) in Bangkok. India is the current chair of International Energy Forum, which is promoting the roundtable that brings together energy ministers and experts from Asian countries on November 1-2. Pradhan will participate in the ministerial roundtable and speak on 'Natural Gas: Overcoming Market and Policy Hurdles to the Golden Age of Gas', an official statement said. Energy Ministers from Saudi Arabia, Russia, United Arab Emirates (UAE), Thailand, Iraq, Qatar, Kuwait, Bangladesh, Malaysia and Brunei are also participating in the roundtable. Pradhan, during his meetings and interactions with OPEC Secretary General has called for replacing the 'Asian Premium' on oil with 'Asian Discount', it said. The 7th AMER at Bangkok will be an important IEF event before India hosts the 16th IEF Ministerial meeting.

    Source: The Economic Times

    IOC gets green nod for Rs 2.7 bn KSPL augmentation project

    October 30, 2017. Indian Oil Corp (IOC) has been given green nod for augmenting its Koyali-Sanganer pipeline (KSPL) capacity up to 6 million tonnes per annum (mtpa) from existing 4.6 mtpa at a cost of Rs 273.23 crore. The company's proposal is to expand KSPL, which traverses from Koyali in Gujarat to Sanganer in Rajasthan, by augmenting the capacity of pumping stations located at Vadodara, Pali and other allied facilities. The company has informed that no additional land would be required for the project as the augmentation work is to be done in the existing stations only and not in pipeline route. Presently, the entire demand for petroleum products of North Gujarat and Rajasthan is met from Koyali refinery through KSPL. Other modes of transportation are uneconomical. With augmentation of KSPL, IOC in its proposal said, the current Viramgam-Mohanpura section of KSPL will receive product from one source at a time either from the Koyali refinery through Koyali-Viramgam section of KSPL or from Kandla port. Cross-country pipelines are globally recognised as the safest, cost-effective, energy-efficient and environment- friendly mode for transportation of Naphtha oil and petroleum products. IOC operates a network of about 11,750 km long Naphtha oil, petroleum product and gas pipelines with a throughput capacity of 85.5 mtpa of oil and 9.5 million metric standard cubic meter per day of gas.

    Source: The Economic Times

    ONGC could borrow Rs 250 bn to part fund HPCL acquisition: Moody's

    October 30, 2017. Oil and Natural Gas Corp (ONGC) could opt for borrowings to the tune of around Rs 25,000 crore to fund its acquisition of downstream refiner Hindustan Petroleum Corp Ltd (HPCL), according to Moody’s Investors Service. Based on HPCL's average market capitalization over the three months to 24 October 2017, the stake to be acquired by ONGC is worth around Rs 35,000 crore. Moody's also said the planned acquisition of a majority stake in HPCL will cause ONGC's leverage to approach the upper limit of its rating. Post acquisition, ONGC's strategic importance to the Indian government will also increase, given that the merger would create the country's first integrated oil & gas company with significant upstream and downstream operations. The analysis is based on the government of India and the board of directors of ONGC having given in-principle approval for ONGC to purchase the government's 51.11% stake in HPCL. Moody's said it views the increase in ONGC's leverage from the acquisition as an indication of stronger government influence on the company's financial profile. This level of influence will no longer support the current two-notch gap between the local currency ratings of ONGC and that of the government. On HPCL, Moody's said that after the merger, HPCL will continue to be of strategic importance to the government and will form ONGC's largest subsidiary. HPCL will stay strategically important to the government because of its large-scale refining and marketing operations. HPCL will also retain its status as a state-owned entity — based on the government's 69% ownership in ONGC — and the government will keep its ability to appoint all HPCL board directors.

    Source: The Economic Times

    Indian firms eye stake in ADNOC's offshore oil concession

    October 27, 2017. Indian oil firms are in talks with Abu Dhabi National Oil Co (ADNOC) to acquire a stake in its ADMA-OPCO offshore oil concession when it comes up in 2018. India, the world’s third biggest oil consumer, has told state oil firms to acquire assets overseas to improve energy security. India imports about 80 percent of its crude needs. ONGC Videsh Ltd, Bharat Petroleum Corp, Oil India and Indian Oil Corp (IOC) are jointly seeking the stake. Two company officials said they wanted 10-12 percent. ADNOC said in August it would split its ADMA-OPCO offshore oil concession into two or more areas with new terms to unlock greater value and increase opportunities for partnerships. The existing ADMA-OPCO concession, in which Adnoc has a 60 percent stake that it will retain, produces around 700,000 barrels per day (bpd) of oil and is projected to have a capacity of about 1.0 million bpd by 2021. Prime Minister Narendra Modi, who wants to cut India’s oil imports by 10 percent by 2022, is steering efforts to buy foreign energy assets, taking advantage of low oil prices. During Modi’s visit to the United Arab Emirates (UAE) in 2015, the first by an Indian Prime Minister since 1981, the two countries announced a $75 billion joint infrastructure fund. UAE is India’s fifth biggest oil supplier. ADNOC signed a deal this year to store about 6 million barrels of oil at India’s Mangalore storage site, taking up about half of its capacity.

    Source: Reuters

    Government expects $40 bn in Indian E&P in 4-5 years: Oil Minister

    October 26, 2017. Oil Minister Dharmendra Pradhan said investments worth $40 billion is expected in Indian exploration and production (E&P) 4-5 years. The government's liberal policies and transformational reforms were undertaken recently, have led to an investment of $25.2 billion being committed under Production Sharing Contract (PSC) regime, he said. Field development plans (FDPs) worth $13.6 billion are already approved an investment worth $11.6 billion have the declaration of commerciality, he said. An investment of about $300 million for development of 61 contract areas under Round 2 of DSF, is expected soon, he said. Meanwhile, he said, Discovered Small Fields (DSF) round was a huge success. DSF 2016 was concluded in a record time of 8 months, he said.

    Source: Business Standard

    NATIONAL: GAS

    Return profiles of City Gas companies to remain strong: Ind-Ra

    October 31, 2017. As the government is unlikely to implement major policy-level interventions in the city gas distribution (CGD) entities either through a change in the gas allocation policy or capping the returns earned by them, their return profiles are likely to remain structurally strong, Ratings agency India Ratings & Research (Ind-Ra) said. The business profile is strengthened by the players' sole supplier status in their respective geographical areas, supply-side advantages in the form of access to crucial inputs such as gas supply and availability of land for setting up a marketing infrastructure for both compressed natural gas (CNG) and piped natural gas (PNG). Ind-Ra said CGD as a space complements the government's move towards cleaner fuels and any policy directed towards lowering the importance of CGD could derail the objective. Ind-Ra said oil marketing companies (OMCs) do not pose a threat to the business models of CGD players in terms of setting up their own city gas infrastructure post marketing exclusivity.

    Source: The Economic Times

    RIL, partners put only $82 mn in gas pool account

    October 30, 2017. Reliance Industries Ltd (RIL) and its partners, BP and Niko Resources, have so far paid only $82 million to the gas pool account — maintained to park the differential between the notified gas price given to others and the $4.2 per unit that the three contractors charge their customers. The firms are yet to pay the penalty imposed on them for disallowing recovery of cost incurred for missing the target during six years from 2010. After a fresh penalty of Rs 264 million in August, the total now stands at $3.02 billion. Fining them, the government had cited their failure to drill the committed number of wells and producing less than the targeted natural gas from the Dhirubhai-1 and 3 fields in the eastern offshore Krishna-Godavari-D6 block. Production was supposed to be 80 million standard cubic metres per day. The firms have contested the fine. They are of the view that the disallowance of costs incurred by the joint operation has no basis in the production-sharing contract and that there are strong grounds to challenge the government’s position. Since November 1, 2014, after the new domestic natural gas price came into effect, the contractors were being paid the earlier price of $4.2 per mmBtu (million metric British thermal units) and the difference between this and the revised price was getting deposited to the gas pool account. Niko said that commencing April 2016 and, thereafter, to date, the revised gas price under the guidelines was below $4.2 and deposits were not required to be made to the account. The companies were, therefore, also not paying to the account for nearly 18 months, despite lower gas-price regime. The government fixes prices based on a formula linked to key gas markets across the globe. Analysts cite the prices were below $4.2 much before March 2016 — they were down to $3.82 in October 2015. Since October, the prices came down further to $2.89. This means RIL and its partners should have deposited a larger amount of differential into the account.

    Source: Business Standard

    IOC aims for LNG import capacity of 13.5 mt in five years

    October 27, 2017. Indian Oil Corp (IOC) aims to have capacity to import about 13.5 million tonnes (mt) of liquefied natural gas (LNG) in five years, its head of business development G.K. Satish said, helping India to gradually move to a gas-based economy. Prime Minister Narendra Modi’s government wants to raise the share of natural gas in India’s energy mix to 15 percent in the next few years from about 6.5 percent now. IOC currently holds rights to annually import 2.25 million tonnes of the super cooled fuel at Petronet LNG’s Dahej terminal in western Gujarat state. The company is betting big on growing demand for natural gas for transport and manufacturing. It has a target to generate 15 percent of its revenues from its gas supply and distribution business by 2021. IOC is adding capacity through its own upcoming LNG terminal and through stakes in other regasification plants. It is in talks to buy about a 25 percent stake in the 5 million tonnes per annum (mtpa) Mundra LNG terminal, besides leasing 1 million tonnes of capacity at Swan Energy’s 5 mtpa facility at Jafrabad. Both of these plants are being built in the western state of Gujarat. Western India is connected with pipelines and LNG import facilities, while industries in the east are still deprived of the cleaner fuel because of a lack of infrastructure. To fill that gap, IOC is building a 5 mtpa LNG import terminal at Ennore on the eastern coast. It has also booked 3 mtpa of capacity at Adani Enterprises’s 5 mtpa Dhamra LNG terminal and plans to lease about 0.5 mtpa of capacity at Petronet’s Kochi LNG plant in south India. IOC, which has long-term agreement to import 0.7 million tonnes from the Cameron LNG Project in the United States, is scouting for more such deals. Supply from the Cameron project will begin by end of 2018, he said. The company is also looking at a mix of long-term and LNG spot deals. Currently, the company on average imports two spot LNG cargoes a month, he said.

    Source: Reuters

    RIL, BP finalise plans to develop all KG-D6 fields by 2021-22

    October 26, 2017. Reliance Industries Ltd (RIL) and its partner BP plc of UK (United Kingdom) have submitted to the government a $2 -2.5 billion plan to bring to production India's deepest gas discovery by 2021-22. The partners submitted to the Directorate General of Hydrocarbons (DGH) a field development plan (FDP) for the MJ-1 gas find, which is located about 2,000 meters directly below the currently producing Dhirubhai-1 and 3 (D1 and D3) fields in the eastern offshore KG-D6 block. MJ-1 is estimated to hold a minimum of 0.988 Trillion cubic feet (Tcf) of contingent resource. With this, RIL-BP have finalised investment plans totaling %5-5.5 billion (about Rs 33,000 crore to Rs 36,000 crore) for three sets of discoveries in the KG-D6 block. Earlier this month, they submitted an FDP of $1.4 billion for bringing to production six satellite gas discoveries in the block. RIL-BP combine had in 2013 submitted a $3.18 billion investment plan for D-34 or R-Series gas field in the same block, sources said adding the actual investment in the find may actually be $1.4-1.6 billion only. The investment in MJ-1 would be slightly higher because a floating production storage and offloading (FPSO) will be used to produce the gas. Work on the three sets of discoveries will start sometime in 2018 and contracting for equipment and services has already started.

    Source: Business Standard

    Oil ministry launches Rs 320 crore startup fund for entrepreneurs

    October 25, 2017. In a novel initiative by the petroleum ministry, 10 oil and gas companies under it launched a startup programme for entrepreneurs with a fund corpus of Rs 320 crore to be disbursed over a 3-year period to support innovations in the energy sector. The scheme was launched here with Memoranda of Understanding (MoU) being signed by 36 startups for partnering with various state-run firms like Indian Oil Corp (IOC), Hindustan Petroleum Corp Ltd (HPCL) and GAIL (India) Ltd, which is India’s largest gas transmission utility. Oil Minister Dharmendra Pradhan said India could not afford to miss out on the ongoing Industrial Revolution 4.0 that signifies the changes being wrought by information technology. He said that being the third largest energy consumer in the world with an annual oil import bill of Rs 7 lakh crore, India urgently needed to act on import substitution.

    Source: Hindustan Times

    NATIONAL: COAL

    Delhi Court to hear Madhya Pradesh coal scam matter

    October 31, 2017. A Delhi Court will hear Madhya Pradesh coal scam matter involving industrialist and former Congress parliamentarian Naveen Jindal. Earlier on September 4, the special Central Bureau of Investigation (CBI) court granted bail to Jindal, along with three others, in connection with the alleged irregularities pertaining to the Urtan North Coal Block in Madhya Pradesh on a condition of furnishing a bond of Rs 1 lakh. Besides Jindal, the others summoned as accused were Sushil Maroo, the former Director of Jindal Steel and Power Ltd, former Deputy Managing Director Anand Goyal and Chief Executive Officer (CEO) Vikrant Gujral. The CBI had charge-sheeted the accused under sections of criminal conspiracy and cheating of the Indian Penal Code. The industrialist is also facing prosecution in a case relating to allocation of Amarkonda Murgadangal coal block in Jharkhand.

    Source: The Economic Times

    Despite efforts, coal stocks at Maharashtra power plants alarming

    October 31, 2017. Despite efforts of state and central governments, the coal stock position in power plants of the state remains alarming. Not a single power plant in the state that supplies power to Maharashtra State Electricity Distribution Company Ltd (MSEDCL) has adequate coal stock. Any disruption at the mines or in railways will see return of load shedding. Ideally, a plant should have over 14 days’ coal stock to ensure that generation is not affected even if there is a major disruption at mines or in railway traffic. Among MSEDCL’s suppliers, Parli plant of Maharashtra State Power Generation Company (MAHAGENCO) has the maximum stock equivalent to 9.5 days of its daily coal consumption. In order to avoid load shedding in the state, MAHAGENCO is generating at full capacity unmindful of the stock. However, any reduction in supply due to a variety of reasons will force the company to reduce production.

    Source: The Economic Times

    Coal issue burns red hot across Goa

    October 30, 2017. The twin projects of the proposed transportation of coal and nationalisation of six Goan rivers came under scathing criticism at several gram sabhas across the state, as members and elected panchayat representatives unanimously adopted resolutions to oppose them. Panchayats in Goa's southern border in Loliem-Polem to Uguem in Sanguem in the east and Agarvaddo-Chopdem in the north opposed the nationalization of rivers. In some cases, like Agarvaddo, the members protested against only the nationalization but did not take up the issue of coal transportation. In Calangute, the gram sabha opposed the increase in coal handling at Mormugao and the transportation of coal as it will lead to pollution and respiratory diseases, as well as the nationalisation of rivers. Goa Against Coal (GAC) said over 20 panchayats took up the twin issues at their gram sabhas and adopted resolutions, opposing the projects. The stakeholders expressed fears that nationalization of rivers would destroy the ecology in estuarine areas and displace traditional communities plying their occupations of fishing. The transportation of coal would cascade into a serious health issues, if the expansion proposals were taken up, they said.

    Source: The Times of India

    Government asks CIL to ramp up output, dispatch to 2 mt per day

    October 29, 2017. In the backdrop of robust demand for coal, the government has asked Coal India Ltd (CIL) to ramp up the production and dispatch to 2 million tonnes (mt) per day against around 1.6 MT at present, Coal Secretary Susheel Kumar said. The direction to CIL comes at a time when the power plants in the country have low fuel stocks. The dispatch of coal to the power sector in the month of August has been 14.4 percent higher compared to the same month last year, and 22 percent higher in September as against the same month last year, Kumar said. In view of increased demand for coal, the Secretary said the government has also asked CIL to liquidate its stock at pithead and bring it down to nil from present 30 million tonnes. In order to liquidate the old stock, Kumar said, CIL is dispatching vigorously. Kumar had earlier blamed power producers for low coal stocks at plants and had asserted that there was no shortage of coal and plants should adhere to the Central Electricity Authority's guidelines for stocking of the dry fuel. The Secretary had said if power plants do not stock dry fuel as per the guidelines of the CEA, then during monsoons there would be disruptions and they should face it. Karnataka Chief Minister Siddaramaiah had asked the Centre to ensure adequate supply of coal and early allocation of a coal block situated in Odisha to meet the severe fuel shortage being faced by power units in his state. Rajasthan Urja Vikas Nigam had said power generation at thermal power stations has reduced by 2,700 MW due to shortage of coal, forcing it to resort to load shedding in the state.

    Source: The Times of India

    Coal ministry augments fuel supply to states with critical stocks

    October 27, 2017. The coal ministry has drafted a coal supply augmentation plan to supply 730,000 tonne of fuel on a priority basis to multiple states in a bid to tackle shortages at thermal power plants. As per the plan, it has been decided to supply 220,000 tonne coal to Uttar Pradesh (UP), 129,000 tonne coal to Madhya Pradesh, 56,000 tonne to Gujarat, 52,000 tonne to Rajasthan, 187,000 tonne to Maharashtra and 84,000 tonne coal to Tamil Nadu on a daily basis. Many states have recently complained of coal shortages leading to disrupted power supply. Following a review meeting last month, the ministry had decided to increase coal loading through railway rakes to 250 rakes per day by Coal India Ltd (CIL) of which 225 rakes per day were to be supplied to the power sector. Coal Secretary Sushil Kumar said there has been heavy rain this month in the coal belt areas of the eastern parts of the country which had an impact on production at CIL subsidiaries Bharat Coking Coal Ltd (BCCL), Eastern Coalfields Ltd (ECL), Mahanadi Coalfields Ltd (MCL), and Central Coalfields Ltd (CC). The overall loading of railway rakes stood at 214.6 per day in the current calendar year so far, 4 percent higher than the loading during the same period last year, Kumar said. In October, the average loading has increased to 209 rakes per day as compared to 173 rakes in October last year.

    Source: The Economic Times

    Coal pricing formula caused Rs 84 bn under-recovery

    October 27, 2017. The power producers are now asking for a separate index for deciding the price of coal and its transportation, because, they are claiming, they pay more than what the indices work out. The cost of coal comprises several elements before it lands at the power unit. These include taxes imposed by states, the cess imposed by the Centre and states, the coal terminal surcharge, the busy season surcharge, and the development surcharge during various demand seasons. The clean energy cess is imposed to recover the cost of investment in renewable and environment projects. The tax and surcharges on transportation are done by the railways in accordance with rake availability and seasonal demand for coal and wagons for it.  The faulty coal and transportation price escalation index, where presently 49 percent of coal costs and 21 percent of fuel transportation costs are not covered, has been leading to under-recovery to the tune of Rs 8,400 crore for 12,000 Mw of installed generation capacity, the Association of Power Producers (APP) said. Cases on allowing such costs as pass through are pending in several courts and regulatory bodies. The power developers have asked for passing through of these charges under “change in law”.  The National Tariff Policy, 2016, has laid down that any change in cost after a project has been awarded would come under the category of “change in law” and would be allowed to be passed through in the final cost of power. However, any change in power tariffs requires approval from either the state or the Central Electricity Regulatory Commission (CERC). The CERC in an order of October last year had observed that the index for deciding the cost of coal and its transportation needed revision.

    Source: Business Standard

    Shortage of coal gives Tamil Nadu power sector a jolt

    October 26, 2017. From a comfortable position, the Tamil Nadu power situation has suddenly turned precarious due to hot and humid weather this time of the year. Coal shortage and shutdown of unit 2 of Kudankulam along with a unit in Vallur plant have disrupted supply, which had been smooth until a month or two ago. Residents in Chennai have been complaining of unscheduled outages. Wind power generation has ground to a halt and there is coal stock only for three days for the state's thermal power units against the normal stock position of 30 days. Unit one of Kudankulam is functioning only at 50% capacity.  Despite both the units being commissioned two years ago, the nuclear units at Kudankulam reactor have not touched maximum capacity generation of 1000MW each. The unit 2 will generate power continuously, provided there is no problem for three months. From February next year, the unit will be shut down for annual maintenance.

    Source: The Times of India

    NATIONAL: POWER

    India records highest peak power deficit in 16 months

    October 31, 2017. Higher electricity demand coupled with supply constraints led to India recording a peak time power deficit of 2 percent in September – highest since April 2016 when the gap between demand and supply stood at 2.1 percent, according to ratings agency India Ratings & Research (Ind-Ra). Ind-Ra said coal inventory levels at power plants declined in September due to a sudden rise in electricity generation from thermal plants amid limited coal output and supply. Coal India Ltd (CIL)’s production in September rose 10 percent year-on-year. However, the increase was lower on a month-on-month basis at 3 percent. CIL has increased its supplies to improve the coal situation at power plants. During the month, the growth in coal supply to power plants was 21 percent at 35.1 million tonnes (mt) compared with 29.1 mt in September 2016.

    Source: The Economic Times

    Supreme Court order to bring PPA discipline

    October 31, 2017. A recent Supreme Court ruling that electricity regulators’ “inherent powers” are circumscribed and can’t be used “to deal with any matter which is otherwise specifically provided under the Electricity Act 2003,” would have implications for many delayed power projects wanting to extend the “tariff periods” under the existing power purchase agreements (PPAs), industry analysts said. The apex court, in an October 25 ruling, set aside the Gujarat Electricity Regulatory Commission’s (GERC) order, which allowed a private generator — Solar Semiconductor Power Company (SSPC) — to extend the start of the tariff period from 2010, when the PPA was signed, to 2012, when it actually commenced operations. While the regulatory panel used the power under the Act to extend the tariff period — which would practically raise the tariffs, the court said that such decision, which has the effect of amending the PPA can be done only as per PPA’s own provisions, and not by invoking the regulator’s inherent power. Industry experts believe that the Supreme Court has raised its objections to arbitrary exercise of powers by regulators.

    Source: The Financial Express

    Maharashtra Energy Minister appeals to farmers to clear pending dues

    October 31, 2017. Maharashtra Energy Minister Chandrashekhar Bawankule appealed to the farmers to clear their pending power dues without payment of any penalty under the 'Mukhyamantri Krushi Sanjeevani Yojana'. There are around 41 lakh farmers whose electricity dues are pending, the minister informed. Bawankule said to avail the benefit of the scheme the farmers should pay their current bill in the next one week. If the bill is not cleared by next week the government will issue order for disconnection, he said. The consumers, whose dues are less than Rs 30,000 will get the option of paying it in five installments, he said. The payment dates for this dues are in December 2017, March 2018, June 2018, September 2018 and December 2018, he said. Those consumers whose electricity bill dues are over Rs 30,000 will get an option to clear the same in 10 installments with a time span of 45 days between each installment, he said. He said the government is spending Rs 6.50 per unit for supplying electricity to farmers, but it is charging merely Rs 1.80 per unit from them. The present situation is that electricity bill of Rs 19,272 crore is pending from the farmers, informed the minister, adding, in the last three years not a single electricity connection of a farmer has been disconnected by the government. Bawankule has appealed to the farmers to pay their pending electricity bills as the government has to purchase electricity from power supply companies everyday.

    Source: The Economic Times

    Karnataka government overrules regulator's order to reduce discom tariff

    October 31, 2017. In an unprecedented step, the Karnataka government has overruled a regulatory order that had reduced the tariff the state distribution company (discom) would pay for wind energy projects for which power purchase agreements were signed before this fiscal year. The state has invoked special provisions under Section 108 of the Electricity Act to veto the decision of the Karnataka Electricity Regulatory Commission (KERC) -- largely an autonomous body -- to insist that developers whose PPAs were signed before March 31 this year, should be paid Rs 4.50 per unit, and not Rs 3.74 per unit as the KERC had laid down. The regulatory order had jeopardised many wind projects.

    Source: The Economic Times

    India's 76 percent LED bulbs found to be spurious

    October 30, 2017. Three-fourths of light emitting diode (LED) bulbs sold in India’s $1 billion market were found non-compliant with government’s consumer safety standards, market research firm Nielsen said in a survey. The report, based on a study of 200 electrical retail outlets across major cities like Mumbai, Hyderabad, Ahmedabad and New Delhi in July, found the products to be spurious and riskier, with the highest number of violations in the national capital. In August, the Bureau of Indian Standards (BIS) had ordered LED makers to register their products with BIS for safety checks, in a market where smuggling of Chinese products is rampant. The findings showed that 48 percent of LED bulb brands had no mention of manufacturer’s address and 31 percent did not have a manufacturer’s name.

    Source: Reuters

    KSEB seeks state power regulator's nod to recover power surcharge

    October 29, 2017. Kerala state electricity board has approached the state power regulatory authority, seeking permission to recoup close to Rs 75 crore from consumers as power surcharge. The power surcharge is demanded for the additional liability of Rs 74.60 crore the board had incurred for purchasing an additional 3,632 million units of power to meet the demands during the first quarter of the financial year 2017-18, that is, from April 2017 to June 2017. As per the provisions in the electricity act and the regulations issued by the Kerala State Electricity Regulatory Commission (KSERC), the power utility Kerala State Electricity Board (KSEB) can approach the commission, seeking approval for recouping the additional expense on power purchase from consumers. As per KSERC (terms and conditions for determination of tariff) Regulations, 2014 KSEBL is eligible to recover the additional liability on account of variation in actual fuel cost over approved level through fuel surcharge at the rates approved by the commission. The board has also sought commission's approval for the purchase of 61.5501 million units power from BSES, Kochi.

    Source: The Economic Times

    Punjab orders audit of all PPAs signed during SAD-BJP regime

    October 29, 2017. The Punjab government has ordered an audit of all power purchase agreements (PPAs) signed between the previous SAD-BJP regime and private power companies. State Congress president and Gurdaspur MP Sunil Jakhar alleged that the previous government had signed PPAs with private thermal plants at unreasonably higher rates. After reviewing all the agreements, the Congress government would endeavour to rationalize power tariffs soon, Jakhar said. Jakhar further blamed the previous state government for the recent power tariff hike in the state. He said the SAD-BJP government had signed a tripartite Memorandum of Understanding (MoU) with the central government and Punjab State Power Corp Ltd (PSPCL) to hike tariff every year in the state. He said as per the UDAY (Ujwal Discom Assurance Yojana) MoU, the previous government agreed to a 5% hike in power tariff for 2016-17 and 9% for 2017-18. He said Punjab was paying fixed charges at Rs 1.35 per unit to Talwandi Sabo plant, Rs 1.50 per unit to Rajpura plant and Rs 1.93 per unit to Goindwal Sahib plant. However, fixed charges for Mundra thermal plant in Gujarat were 90 paisa per unit and for Sasan thermal plant in Madhya Pradesh was 17 paisa per unit only. Accusing the SAD of indulging in political gimmickry over the recent power tariff hike, Jakhar asked the SAD leaders to stage protests in Delhi rather than resorting to dharnas in Punjab as the Prime Minister and other senior BJP leaders, along with the Badals, were responsible for burdening the people of the state. Power tariff in the state during the previous regime of the Congress government from 2002 to 2007 was raised by 22.51% (average 4.5% per year), Jakhar said. The SAD-BJP had effected a hike of 77.33% (average 7.73% per year) during their decade long tenure.

    Source: The Times of India

    No power tariff hike in Odisha

    October 26, 2017. In a major relief to power consumers in the state, the Odisha Electricity Regulatory Commission (OERC) rejected the petitions filed by Odisha Hydro Power Corp (OHPC) and OPGC on power tariff hike and kept the power tariff rate unchanged in the state. Both OHPC and Odisha Power Generation Corp (OPGC) had moved the OERC seeking a hike in power tariff. They sought an average hike of Rs 2 per unit. However, the petition filed by the Grid Corp of Odisha (Gridco), the bulk power supplier to the consumers, is yet to be heard by the commission. The power generating bodies had filed the review petitions four months after the power tariff was increased by 10 paise per unit on March 23.

    Source: Business Standard

    No burden of extra power purchase on consumers: MSEDCL

    October 26, 2017. Maharashtra State Electricity Distribution Company Ltd (MSEDCL) consumers need not fear about paying surcharge to recover cost of extra power purchase done in the past three months to mitigate load-shedding. Calculations done by MSEDCL show that the average rate of extra power purchase was Rs 3.89 per unit, which is well within the cap of Rs 4 per unit imposed by Maharashtra Electricity Regulatory Commission (MERC). MSEDCL was forced to go for extra power purchase because its power suppliers, including Maharashtra State Power Generation Company (MAHAGENCO), were not supplying contracted quantum due to coal shortage. The acute shortage of fuel had hit private as well as state-run plants. In order to prevent heavy burden on consumers, MSEDCL had preferred load-shedding in high-loss areas in August and September instead of buying power at exorbitant rates. From October, it started buying 1,450 MW on short-term basis, which ended load-shedding. This power purchase was reduced as soon as availability from regular sources increased. Nevertheless, power experts have flayed MSEDCL for load-shedding. According to them, the company should have foreseen the situation and arranged power accordingly.

    Source: The Times of India

    Lens on foreign firms investing in Indian power sector

    October 25, 2017. A high-level panel will look at possible checks on foreign firms investing in the Indian power sector, a move aimed at preventing cyberattacks on the electricity grid. This comes about two months after the eastern electricity grid suffered a malware attack, allegedly from China. Overseas firms eyeing investments in power plants in the country may have to undergo security clearances and may be mandated to employ majority Indian nationals including at top managerial positions. Most private power generators prefer Chinese power equipment that comes with cheaper line of credit. Chinese firms such as Dongfang Electric Corporation, Harbin Electric International Company and Shanghai Electric have bagged a chunk of equipment orders from Indian power developers in the past. Restricting foreign stake in power companies is a bad idea. India must take steps that further its energy security goals, and should focus on making it possible for Indian companies to become competitive. Security checks make sense, especially given the vulnerability of power systems to outside attack. Rather than a diktat on hiring local workers and executives, the focus should be to invest in their training and skilling.

    Source: The Economic Times

    NATIONAL: NON-FOSSIL FUELS/ CLIMATE CHANGE TRENDS

    IIT Kharagpur-Arka Renewables Energy College plan solar e-charging station on commercial scale

    October 31, 2017. IIT Kharagpur and Arka Renewables Energy College have submitted a plan to the Department of Science and Technology (DST) for setting up solar e-vehicles charging station on a commercial scale in the state. The project will be the first one in the country on this scale, Arka Renewable Energy College chief S P Gonchaudhuri said. The station, with 250 kilowatt hour capacity, will be capable of e-charging upto 500 cars a day, he said. A small e-charging station prototype has been set up in Kharagpur for e-rickshaws to demonstrate that it is commercially exploitable. If successful, then the startup cell of DST will assist entrepreneurs in installing such charging stations in the country. With ever-rising pollution and its effect on the environment, the Union government has ambitious plans for e-cars and is procuring such cabs for government departments. If e-vehicles are charged with fossil fuel power, the environment will not benefit and the cycle will be complete only when e-vehicles are charged with renewable power.

    Source: The Financial Express

    India must encourage hydro power projects development: Power and Renewable Energy Minister

    October 31, 2017. Power and Renewable Energy Minister R K Singh said India must encourage development of hydro power projects as they help in providing inexpensive power in the long-term and are ideal for meeting peaking load demand. Singh was speaking at the meeting of the Consultative Committee attached to his ministries in Guwahati. The meeting reviewed the functioning of NHPC Ltd and implementation of the government’s Solar Rooftop Programme and the Solar Pumps Programme. During the meeting, NHPC Chairman and Managing Director (CMD) Balraj Joshi gave a presentation on the company’s areas of operation, portfolio of projects, performance on financial parameters, diversification into thermal and renewables and the way forward. NHPC Chairman and Managing Director (CMD) Balraj Joshi informed the committee that NHPC is commissioning 22 projects of 6,691.2 MW capacity and is engaged in 25 projects of 14,000.5 MW capacity which are under various stages of development involving hydro, solar and thermal projects. Also, 14 projects of 9,167.5 MW are at various stages of clearances. He said that NHPC has expanded its objective of developing renewable source of energy by commissioning 50 MW wind project in Jaisalmer, Rajasthan. The committee was also informed that 2,363 megawatt peak (MWp) solar rooftop systems have been sanctioned and about 810 MWp aggregate capacity projects have been installed in the country so far. The ministry said it is in the process of formulating a new scheme for solar pumps to promote stand-alone solar off-grid pumps with an objective to replace existing diesel pump sets. Similarly, a new scheme for solarisation of grid-connected solar pumps is also being formulated for areas where agriculture power feed is separated.

    Source: The Economic Times

    Tata Power commissions 30 MW solar power plant in Maharashtra

    October 31, 2017. Tata Power Ltd announced the commissioning of a 30 MW solar power plant in Palaswade in Maharashtra. The power plant is developed by its wholly owned subsidiary, Tata Power Renewable Energy Ltd. It will produce over 6.2 crore units of solar power, covering the annual energy needs of over 14000 Indian households, Tata Power said.

    Source: The Times of India

    India, Italy confirm full implementation of Paris Agreement

    October 30, 2017. India and Italy confirmed their strong commitment to the full implementation of the Paris Agreement adopted under the United Nations Framework Convention on Climate Change (UNFCCC). Prime Minister Narendra Modi and his Italian counterpart Paolo Gentiloni pledged to work together in the run up to and at CoP23, and beyond, on the next steps towards substantial and balanced progress on all items of the Paris work programme. The two leaders acknowledged the enhanced technical cooperation in the renewable energy sector and welcomed the MoU (Memorandum of Understanding) between the Ministry for the Environment of Italy and the Ministry of New and Renewable Energy of India. They recognised the ongoing progress in both the countries in replacing traditional energy sources with green ones, as a contribution to the global engagement against climate change. They further noted with appreciation the second Mission Innovation (MI) International Workshop on Smart Grids Innovation Challenge that will be held in India from November 16 to 19. MI is a global initiative of 22 countries and the European Union to dramatically accelerate global clean energy innovation.

    Source: Business Standard

    SBI-World Bank sanction Rs 23 bn loans for rooftop solar projects

    October 30, 2017. State Bank of India (SBI) announced the sanction of loans worth Rs 2,317 crore in collaboration with the World Bank to finance grid-connected solar rooftop projects in the country. SBI Chairman Rajnish Kumar said that it has availed line of credit facilities worth $625 million from World Bank for onward lending to viable solar rooftop projects. SBI said the loans are intended for developers and end-users for installation of rooftop solar systems on the rooftops of commercial, institutional and industrial buildings. The seven companies sanctioned loans are JSW Energy, Hinduja Renewables, Tata Renewable Energy, Adani Group, Azure Power, Cleantech Solar and Hero Solar Energy. Kumar said SBI has so far sanctioned 43 projects with aggregate credit facilities of Rs 2,766 crore under the programme, which would add 695 MW of solar rooftop capacity to the grid. He said the bank has so far drawn-down over 50 percent of the line credit and the remaining facilities are expected to be used in the next 18 months. So far, the SBI has lent a total of Rs 12,000 crore to solar energy projects, while there are hardly any bad loans-related concerns in this sector, he said.

    Source: Business Standard

    Maharashtra’s climate change policy asks districts to prepare management plan

    October 30, 2017. Faced with unseasonal hailstorms, wet and dry droughts, and damage to eco-systems, the state government has finally come out with a climate change policy. The comprehensive policy, announced two days ago, has directed all district collectors to prepare strong action plans considering geographical conditions of the district to make disaster management plans in line with climate change indicators. Protecting forests with participation of people, adopting crop pattern with changing situations, going solar for farming, setting up of climate proof villages, promoting organic farming, eco-system based schemes, and judicious use of water are some of the recommendations of the climate change policy announced by the government. As per the government, Nandurbar followed by Dhule, Buldhana, Jalgaon, Hingoli, Nashik, Jalna, Gondia, Washim and Gadchiroli districts are top on vulnerability index of climate change effects. The Centre had in 2008 directed all states to prepare an action plan. Based on the plan, the state has warned that owing to climate change there will be adverse impact on horticulture crops like pomegranate, grapes, oranges, bananas, mangoes etc by 2030. Besides, increasing temperatures and irregular rains will lead to spread of diseases. The government has defined a role for every department to tackle climate change. Forest department has been told to increase ecological services, by even paying people to protect forests, and reduce biotic pressure on forests. It has been told to take up scientific management of forests. To gear up to face the challenge, the state has recommended various steps for all departments by categorizing them in first and second priority. Forest department has been told to take up all recommendations on top priority.

    Source: The Times of India

    Initiate clean cooking movement by tapping solar energy market: PM Modi to startups

    October 29, 2017. Prime Minister (PM) Narendra Modi gave a call to start-ups run by the city youth to initiate a clean cooking movement by tapping the huge market potential of solar energy, saying they would get blessings of women from the poor sections of society. Modi said in the last 35 years, governments had spent Rs 4,000 crore on renewable energy but within three years of his government assuming office, nearly Rs 11,000 crore had been spent. Modi said by 2030, India aimed to address 40 percent of its power needs by means of renewable energy. The government's aim is to produce 175 GW power by 2022, he said. He said LED (light emitting diode) bulbs which earlier cost more than Rs 350 were now available for Rs 40 to Rs 45 under the Ujala scheme. More than 27 crore LED bulbs had been distributed so far, he said, adding that through this scheme the middle class had been able to save Rs 7,000 crore. The government had distributed more than three crore gas connections to rural women which had not only made a positive difference in their lives, but also contributed to a cleaner environment, he said.

    Source: The Times of India

    ONGC proposes to partner in building nuclear power reactors: Singh

    October 28, 2017. In a bid to push nuclear power development in India, the state-run Oil and Natural Gas Corp (ONGC) has submitted a plan to collaborate with the Nuclear Power Corp of India Ltd (NPCIL) for setting up reactors, Minister of State in the Prime Minister's Office Jitendra Singh, who also looks after the Department of Atomic Energy, said. The government has recently amended the Atomic Energy Act 1962 to enable the NPCIL to form joint ventures with public sector undertakings in order to meet the high cost of setting up nuclear plants. Earlier this year, the government approved the construction 10 indigenous pressurised heavy water nuclear reactors with a total capacity of 7,000 MW. Each of the reactors would have a capacity of 700 MW. Singh also said that the Centre is currently working with various state governments to sensitise about the additional uses of nuclear energy in fields other than electricity like in irradiation of agriculture products, medicine, among others. He also stressed the need for a vast sensitisation programme to remove misconceptions about the health and safety aspects of nuclear power.

    Source: The Economic Times

    KOR Energy installs solar power systems at cold storages in Haryana

    October 28, 2017. KOR Energy (India) Pvt Ltd, a solar power company has successfully installed a grid connected rooftop solar systems at three cold storages in Haryana. A 90 kilowatt peak (KWp) system at Maan Brothers Cold Storage at Kurukshetra, 77KWp system at Lawrance Agro Storage Pvt Ltd and 66KWp system at R.P Cold Storages Pvt Ltd at Sonipat have been installed by KOR Energy recently. KOR Energy has used tier 1 modules of Vikram Solar and ABB String Invertors in these projects to ensure maximum yield and performance consistency. The systems installed have the capability of remote monitoring of production with accurate fault recognition and real time performance monitoring. With 1400 to 1500 units of electricity produced per Kilowatt, cold storage rooftop solar plant will achieve break even within 4 to 5 years. With 25 years of performance warranty on solar modules, it makes a wise investment decision for cold chains to go solar. Banks are also financing upto 80 percent of project cost in these projects. The solar system will have an additional benefit of net metering, which will result in receiving credit in electricity bill against the excess electricity generated by the solar system and there is no need to store electricity.

    Source: The Economic Times

    PPCB to promote brick production with rice-ash

    October 28, 2017. The Punjab Pollution Control Board (PPCB) after getting conducted a research had now advised the brick kiln owners to help them save the environment by using rice husk ash in the production of bricks that would not only become cheaper and profitable for brick-kiln owners but would also save coal or fuel. A research team of PPCB has been working to carry on further this study on providing an alternative to clay under which the rice husk ash will be mixed with the soil for production of the bricks. The production cost of the bricks is reduced and the bricks are well shaped, found the study conducted by a team of PPCB. The PPCB is now trying to link the brick kiln owners with the industry. This, according to their study, will not only benefit the brick-kiln owners and rice millers but also save 25 percent fuel energy. The PPCB conducted this research using up to 40 percent of rice husk ash mixed with clay to make bricks and the results were found very encouraging due to carbon contents present in the rice husk ash which further make a better quality of bricks on baking. It was further established that the quantity of the rice husk ash is directly and equally proportional to the saving of coal as fuel. Kahan Singh Pannu, Chairman of the PPC Board advised the brick kiln owners of the state to start mixing up to 30 percent the rice husk ash in the soil depending upon the texture of the soil to make bricks.

    Source: The Times of India

    Sonowal directs Power department to formulate solar policy for Assam

    October 27, 2017. Assam Chief Minister Sarbananda Sonowal directed the Power department to formulate an exhaustive solar power policy in the state. Sonowal told the principal secretary of the department, Jishnu Baruah to take the lead in shaping the solar power policy on a fast track basis so that the same can be tabled in the next cabinet meeting. Sonowal took note of the progress of different on-going projects like Lower Kopili Hydroelectric Project, Margherita Thermal Power and Namrup Replacement Projects. The meeting also discussed a roadmap for effectively implementing Prime Minister Narendra Modi's Saubhagya scheme which envisaged to reduce use of kerosene lamps in non-electrified households by giving last mile power connections across the country. Sonowal also directed the Power department to prepare a detailed project report for successful implementation of the project to illuminate 25 lakh households in the state through Saubhagya.

    Source: Business Standard

    Railways launches first set of solar plants in Delhi

    October 27, 2017. With the Indian Railways launching its first set of solar plants having cumulative capacity of 5 MW, Railways Minister Piyush Goyal announced that the national transport monolith is aiming to commission such facilities for 1,000 MW in the coming days. Noting that the project is part of India’s solar mission, Goyal said. The minister launched the plants at the inauguration of the “International Conference on Green Initiatives and Railway Electrification”. The plants on the roof tops of Hazrat Nizamuddin, New Delhi, Anand Vihar and Delhi railway stations will generate 76.5 lakh units of solar power cumulatively per year, and shall meet about 30% of the energy requirement of these stations. Through the project, the Railways will save Rs 421.4 lakh annually and will reduce 6,082 tonnes of CO2 emissions. The project was awarded in December 2016. The cost of the project is Rs 37.45 crore and has been brought in by the developer under the PPP model. The developer will also maintain it for 25 years and the Railways will only pay energy consumed at Rs 4.14 per unit. Goyal said that the Indian Railways has targeted 10% reduction in energy consumption in non-traction operations, thereby saving about Rs 250 crore annually.

    Source: The Tribune

    Nissan tests waters in India for its e-Power technology

    October 26, 2017. Japanese auto major Nissan said it has started testing its e-Power technology-equipped vehicle in India as part of the strategy to enhance electric mobility in Asia. The company, which is part of a working group in partnership with the Indian government, expects the country to become a key market for electric vehicles in the long run. Nissan's e-Power technology uses an electric motor to power the vehicle, but at the same time, it has a small gasoline engine to charge the battery when needed, thus doing away with the need for an external charger.

    Source: The Times of India

    Government to launch 150 projects on Ganga by March: Gadkari

    October 26, 2017. The government is all set to launch 150 projects on Ganga by March, Union Minister Nitin Gadkari said while asking investors to join hands with the Centre in cleaning of the river. The projects, he said, aim at containing discharge of polluted water in the river and recycling the waste water to produce bio compressed natural gas (CNG) to power transport fleet. The government, he said, is ready to offer technology free of cost to the investors who can produce methane and bio CNG from the waste water which could be used to power buses and other vehicles. Of the 150 projects, 90 have already been awarded, while the 7 will be awarded soon, Gadkari said, adding that the remaining projects are on the anvil and work on all the 150 will begin within five months. Gadkari said it was unfortunate that some states were fighting over river water distribution while nobody paid any attention to 70 percent of the rainwater going to sea in absence of water harvesting. Likewise, no one is concerned about river waters going to Pakistan as India shares 6 rivers with Pakistan while states remain busy in internal fights over sharing of river water, he said. He said three projects on Ganga worth Rs 80,000 crore will be started within three months.

    Source: Business Standard

    High Court puts Gujarat wind power auction on hold

    October 25, 2017. The Gujarat High Court has passed an interim order restraining the state from holding its first wind energy auction scheduled for November 1. The court acted in response to a petition by Indian Wind Energy Association, which said the Gujarat State Electricity Commission’s permission to hold the auction was contrary to law because the Centre has not issued guidelines for the sale of state wind projects. The state distribution company, Gujarat Urja Vikas Nigam Ltd., has been stopped from going ahead with the auction until the matter is disposed of.  The association said guidelines governing wind auctions by states had not yet been announced by the Centre, as required by the Electricity Act, 2003. The auction of 500 MW of wind projects in Gujarat was originally slotted in mid-July and was delayed for various reasons. The GERC was ambivalent about giving permission for the sale before sanctioning it on October 6. GUVNL set a deadline of October 24 for techno-commercial bids, which have to pass muster before bidders are allowed to participate in the price auction, which was scheduled for November 1. Following the court order, the last date for techno-commercial bids has been extended to November 3 and no date has been set for the actual auction. Techno-commercial bids for about 1,500 MW of wind projects have already been submitted for the auction.

    Source: The Economic Times

    INTERNATIONAL: OIL

    BP expects oil prices of $50-$55 a barrel next year: CFO

    October 31, 2017. BP is working on an assumption oil prices will average $50 to $55 a barrel next year as global inventories gradually return to normal levels, Chief Financial Officer (CFO) Brian Gilvary said. An agreement reached between OPEC (Organization of the Petroleum Exporting Countries) and other major oil producing nations to limit output in order to reduce a glut is having an impact, Gilvary said, but he did not expect oil prices to remain at their current levels above $60 a barrel. BP’s operations will be able to generate profit next year at $50 a barrel and perhaps $45 a barrel, he added. In the longer term the company is working to reduce its breakeven level to $35 a barrel, he said.

    Source: Reuters

    OPEC oil output falls in October led by drop in Iraqi exports

    October 31, 2017. OPEC (Organization of the Petroleum Exporting Countries) oil output fell this month by 80,000 barrels per day (bpd), a survey found, as exports from northern Iraq dropped and other producers maintained adherence to a supply cut deal. OPEC’s adherence to its pledged supply curbs rose to 92 percent from September’s 86 percent, the survey found, as top exporter Saudi Arabia continued to pump below its OPEC target and output in Venezuela, in economic depression, declined further. The drop in Iraqi output has helped support prices. Benchmark Brent crude topped $60 a barrel, a price that Saudi Arabia sees as a good level, for the first time since 2015. The OPEC is reducing output by about 1.2 million bpd until March next year, as part of a deal with Russia and other producers, which have also committed to production cuts. The producers are expected to extend the supply reduction deal further into 2018 when they meet on November 30. The biggest drop in output in October, of 120,000 bpd, came from Iraq. Output and exports in northern Iraq fell mid-month when Iraqi forces retook control of oilfields from Kurdish fighters who had been there since 2014. Production in Venezuela, where the oil industry is starved of funds due to the country’s economic woes, slipped further below its OPEC target, the survey found. Both exports and refinery operations were lower in October. Combined supply from Nigeria and Libya, the two producers exempt from the cut whose extra barrels helped OPEC output reach a 2017 high in July, was flat in October, the survey found. OPEC last year announced a production target of 32.50 million bpd, based on low figures for Libya and Nigeria. The target includes Indonesia, which has since left OPEC, and does not include Equatorial Guinea, the latest country to join. According to the survey, output in October has averaged 32.65 million bpd, about 900,000 bpd above the target adjusted to remove Indonesia and not including Equatorial Guinea.

    Source: Reuters

    China's Sinopec mulls US oil projects ahead of Trump's visit

    October 31, 2017. China’s state oil major Sinopec is evaluating two projects in the United States (US) that could boost Gulf Coast crude oil exports and also expand storage facilities in the Caribbean with US President Donald Trump set to visit Beijing next week. The trio is mulling building a pipeline to move shale oil from the Permian basin in Texas to the U.S. Gulf Coast for export. This project also includes the construction of a terminal that can load 2 million barrels of crude onboard a Very Large Crude Carrier (VLCC). Sinopec and the US firms have also been exploring an expansion of oil storage at Limetree Bay (LB) Terminals in St. Croix, US Virgin Islands, in the Caribbean, and restarting an idled refinery at the same site. The investments could reduce China’s trade deficit with the US, a source of tension between the world’s two largest economies, while allowing Beijing to tap growing US crude supplies as the top global oil importer seeks to diversify its import sources. Taking stakes in oil infrastructure is also part of Sinopec’s ambition to expand its global trading profile. Sinopec already owns part of a Saudi refinery at the Red Sea, although a recent attempt to buy a Chevron refinery in South Africa’s Cape Town was thwarted by Glencore PLC. LB Terminals, a joint venture between ArcLight and Freepoint Commodities, said that it planned to double its oil storage capacity and restart the 650,000 barrels per day (bpd) refinery at the site. In a 10-year strategic deal, Sinopec has already leased 75 percent of the existing crude oil storage capacity at LB Terminals. China overtook the US to become the world’s largest crude oil importer this year as shipments grew on declining domestic oil output and refinery expansions. Sinopec’s trading arm Unipec is set to import 5.7 million tonnes, equal to about 42 million barrels, of US crude in 2017, making it the largest US crude buyer in Asia. The Americas are expected to overtake Africa as the world’s second-biggest crude supplier to Asia by 2025, Unipec said.

    Source: Reuters

    Asian imports of Iranian oil hit highest in six months

    October 31, 2017. Imports of Iranian crude by major buyers in Asia rose in September for a third straight month to their highest since March, boosted by a surge in purchases in China and South Korea. China, India, South Korea and Japan imported slightly more than 1.9 million barrels per day (bpd) last month, up 5.1 percent from a year earlier, government and ship-tracking data showed. Their imports rose nearly 20 percent from August. Imports by the Asian buyers, which take the bulk of Iran’s oil exports, are likely to fall in coming weeks as shipments bound for the region have dropped below 1.5 million bpd for October.

    Source: Reuters

    Mexico spent about $1.2 bn on 2018 oil hedges

    October 31, 2017. Mexico spent some 24.1 billion pesos ($1.26 billion) on contracts to hedge its 2018 oil exports, finance ministry chief economist Luis Madrazo said, part of government’s efforts to stabilize its budget. Madrazo did not specify the number of barrels of export production that Mexico had hedged with derivatives contracts nor did he detail the average price per barrel of put options that the government has purchased. In September, the finance ministry proposed a 2018 budget that based expected oil export revenue on an estimate of $46 per barrel. Members of Congress increased that estimate to $48.5 per barrel earlier this month as global oil prices rose. For more than a decade, Mexico’s government has paid for a hedge every year in a bid to guarantee its revenues from oil exports by state company Pemex. The program is seen as the world’s top sovereign derivatives trade. Last year, the government bought put options at an average price of $38 per barrel to cover 250 million barrels of crude at a cost of $1.03 billion and underpin the 2017 budget, which was based on an average price of $42 per barrel. The government set aside $4 a barrel from a special fund to make up the difference between its put options and the budgeted price.

    Source: Reuters

    Bangladesh inks a deal with China to build an oil import pipeline

    October 31, 2017. The Bangladeshi authorities have signed a framework agreement with China for the construction of a 220 kilometre (km) long oil pipeline, which will carry fuel from oil tankers in the Bay of Bengal up to Chinese storage plants. The contract foresees the construction of a diesel and crude oil storage tank at the Moheshkhali Island on the Bay of Bengal (Bangladesh), a 146 km offshore pipeline and a 74 km onshore pipeline to carry imported oil to a refinery in Chittagong district. The total project cost is expected to reach approximately $550 mn. Its unloading capacity will reach 9 million tonnes per year. The project is meant to reduce the system loss import of refined and non-refined fuel and ensure Bangladesh's energy security. Bangladesh is not capable of handling large vessels carrying imported crude oil, due to low navigability and constrained facilities at the main Chittagong seaport.

    Source: Enerdata

    Iraq's Kurds resume pumping oil by pipeline to Turkish port

    October 30, 2017. Oil exports resumed from Iraq’s Kurdish region after halting earlier, a port agent said, highlighting uncertainty about pipeline shipments from OPEC (Organization of Petroleum Exporting Countries)’s second-biggest producer. Iraq’s semi-autonomous Kurds began pumping oil again to Ceyhan, Turkey, at about 1:25 p.m. local time after Kurdish crude stopped arriving at the Mediterranean port at 4 a.m., the port agent said. The amount of oil flowing wasn’t immediately available, the agent said. The halt came days after Iraqi troops captured oil fields from Kurdish fighters in northern Iraq’s disputed Kirkuk province. Shipments by pipeline averaged 264,000 barrels a day before the stoppage, less than half their normal daily level of 600,000 barrels. Exports from Kirkuk, which had been flowing through the same pipeline network to Ceyhan, remained halted, the agent said. The central government rejected a Kurdish independence referendum in September and sent troops earlier this month to capture oil-rich Kirkuk from Kurdish forces. The government had started pumping crude last week from the Avana field in Kirkuk through a pipeline operated by the Kurdistan Regional Government. It was the first sign of a recovery in output from Kirkuk, a long-standing flashpoint between Arab, Kurdish and Turkmen communities.

    Source: Bloomberg

    UAE to keep cutting oil output to comply with global deal: Energy Minister

    October 30, 2017. The United Arab Emirates (UAE) will continue to reduce its oil output to meet its commitment to a global oil production cut agreement, its Energy Minister Suhail al-Mazroui said. Abu Dhabi National Oil Company (ADNOC) said it has cut the amount of oil supplies to its customers for December by reducing Murban grade by 15 percent, Das grade by 10 and Upper Zakum crude by 5 percent. The Organization of the Petroleum Exporting Countries (OPEC) and allied non-OPEC producers including Russia cut output by about 1.8 million barrels per day from January 1, and extended the existing supply curb into March 2018. OPEC will review policy at a November 30 meeting. Compliance with the cuts among OPEC and other oil producers were over 100 percent in the past couple of months, a rare level of commitment to supply curbs for the organization. The UAE’s compliance, however, has been lower because it is using its own, higher, output level as a reference point for its supply cut, rather than the supply baseline used in the agreement.

    Source: Reuters

    Shell bets big on Brazil as oil majors snap up offshore blocks

    October 27, 2017. Oil major Royal Dutch Shell Plc won half the blocks awarded in Brazil’s deep-water oil auction, while rival BP took two blocks and Exxon Mobil Corp one in a historic opening of the pre-salt play to foreign operators. Brazil awarded six of the eight blocks on offer in the auction for the rights to pump oil from the country’s coveted pre-salt region, where billions of barrels of oil are trapped below thousands of feet of salt in the country’s Atlantic waters. President Michel Temer said development of the blocks would lead to 100 billion reais ($30.84 billion) in investment from the winning companies and 130 billion reais in royalties and other revenues for the cash-strapped state. Shell has said it is confident it can pump oil from the pre-salt fields at below $40 a barrel.

    Source: Reuters

    TransCanada seeks to raise spot tariffs on Marketlink oil pipeline: FERC

    October 26, 2017. TransCanada Corp is seeking to raise the temporary discounted spot rate for light crude on its 700,000 barrel per day Marketlink pipeline effective December 1, according to the Federal Energy Regulatory Commission (FERC). Light crude oil moving from Cushing, Oklahoma into Port Arthur or Houston in Texas will be raised to $3.00 a barrel from $2.50 a barrel previously, according to the filing. The heavy crude tariff rate at $3.00 a barrel remains unchanged. US crude benchmark’s discount to global marker Brent widened to a session low after news of the announcement, touching $6.59 a barrel, the largest in a month.

    Source: Reuters

    Saudis buy Dutch oil storage in European market share push

    October 26, 2017. Saudi Aramco Overseas Company, a subsidiary of Saudi Aramco, is buying a stake in Rotterdam crude storage from commodities trader Gunvor in a move to expand its share of the market in northwest Europe, long dominated by Russia. Saudi Arabia and Russia have cooperated on production cuts to rebalance the oversupplied oil market and boost prices over the past year. However, competition for market share has increased over the last few years as US (United States) shale production soared, dampening US demand for foreign oil. Saudi Arabia and Russia both produce sour grades that refiners can switch between.

    Source: Reuters

    INTERNATIONAL: GAS

    Total, Edison sign lease for O&G exploration off Greece

    October 31, 2017. A consortium led by France’s Total moved a step closer to exploring for oil and gas (O&G) off Greece after signing a lease with the government for a block in the Ionian Sea. Greece wants to tap into its limited oil reserves to reduce dependence on oil imports and boost public finances. Western Greece is a frontier, underexplored area and very little data exists on its hydrocarbon potential. Greece, like other European countries, relies on Russian gas imports which account for over 60 percent of supplies. Russia covers about a third of Greece’s oil needs. During a meeting with US (United States) President Donald Trump this month, Greek Prime Minister Alexis Tsipras said Athens wanted US investment in energy too, and it planned to set up a taskforce to overcome red tape. Greece has one LNG terminal off Athens, where it imports Algerian gas, but an official at state-run gas firm DEPA said it plans to invite US companies to ship liquefied natural gas (LNG) there for the first time. It is also developing a floating storage and regasification unit (FSRU) off Alexandroupolis, a city close to the Turkish and Bulgarian borders near where EU-backed pipelines are being built to cut reliance on Russian gas. The FSRU, with an estimated annual capacity of 6.1 billion cubic meters, will seek to supply gas to south-eastern Europe via the Interconnector Greece-Bulgaria (IGB) pipeline, which is due to begin construction next year. The IGB and the FSRU could be connected to the Trans-Adriatic Pipeline which is being built to carry Caspian gas to European markets, which currently depends on Russian oil giant Gazprom for a third of its supply.

    Source: Reuters

    Engie, Mubadala, Pátria among groups vying for Petrobras Brazil gas pipeline

    October 31, 2017. French energy company Engie SA and Brazilian investment firm Pátria Investimentos Ltda are among 20 groups interested in a controlling stake in a gas pipeline network owned by Petroleo Brasileiro SA (Petrobras). Petrobras will receive a first round of non-binding proposals for a 90 percent stake in Transportadora Associada de Gás SA, known as TAG, by the end of November. Other contenders for TAG, which owns 4,500 kilometers (2,796 miles) of natural gas pipelines in the northeastern region of Brazil, include Abu Dhabi state-owned holding Mubadala Development Co., Canada Pension Plan Investment Board, and private equity group EIG Global Energy Partners LLC, the sources added. Singapore’s sovereign wealth fund GIC Pte Ltd, which bought a minority stake in another gas pipeline network from Petrobras last year, is also analysing the investment. Although TAG has a smaller network and serves an area responsible for a lower share in natural gas consumption, better perspectives for economic growth and investments could justify a higher price.

    Source: Reuters

    Slovakia, Hungary sign MoU on Eastring gas pipeline

    October 30, 2017. Slovakia and Hungary signed a Memorandum of Understanding (MoU) to support the planned Eastring gas pipeline aimed at loosening Russia’s supply hold on southeastern Europe. The project will ensure countries such as Bulgaria and Serbia, almost exclusively dependent on Russian gas, can receive gas even if Russian supplies via Ukraine are disrupted. Initial capacity is seen at about 15-20 billion cubic metres per year and it would be able to carry gas from Russia to the Balkans or from the West to the Balkans. Slovak gas pipeline operator Eustream said in September it expects to complete the feasibility study for the project in June 2018. Eustream said a rough estimate for the project’s completion is 2021, depending on the results of a feasibility study to be completed next June.

    Source: Reuters

    Exxon exit deals blow to Pakistan plans for LNG imports

    October 30, 2017. Exxon Mobil has pulled out of a major project in Pakistan, in a potential blow to plans to boost imports of liquefied natural gas (LNG) after years of winter shortages. Differences among the six-member group behind the project in Port Qasim in Karachi mean French oil major Total and Japan’s Mitsubishi may also quit and join a rival scheme. A highly-developed pipeline grid, extensive industrial demand and the biggest natural gas-powered vehicle fleet in Asia after China and Iran make Pakistan an easy fit for LNG and official estimates show imports could jump fivefold to 30 million tonnes per annum (mtpa) by 2022. The new project would include a floating storage and regasification unit (FSRU), where LNG will be converted back into gas for feeding into the country’s grid. Qatar Petroleum, the world’s biggest LNG producer, Turkish developer Global Energy Infrastructure Ltd and Norway’s Hoegh LNG, which will provide the FSRU, are the other partners. Pakistan plans to add its second LNG import terminal by the end of this year, but private companies have proposed building six more largely around Port Qasim.

    Source: Reuters

    Australia Pacific LNG steps up domestic gas sales

    October 26, 2017. Australia Pacific LNG (APLNG) said it has struck a deal to deliver more gas into the domestic market, following pressure from Canberra to shore up local supply to help drive down local gas and power prices. APLNG, run by ConocoPhillips and Origin Energy, is one of three liquefied natural gas exporters on Australia’s east coast that has come under fire for leaving the domestic market short of gas when it is badly needed for power plants as back-up for wind and solar energy. Origin, Australia’s biggest energy retailer, has agreed to buy 41 petajoules (PJ) of gas from APLNG over the next 14 months, raising APLNG’s sales into the home market to 186 PJ in 2018, meeting 30 percent of eastern Australia’s gas demand. The extra domestic supply will not affect APLNG’s export commitments.

    Source: Reuters

    Africa should create gas pricing index as demand rises

    October 26, 2017. Africa should develop a gas pricing index based on the cost of electricity set midway between existing global benchmarks to ensure fairer pricing in new export projects on the continent. The idea is being floated when the world’s poorest continent, where 600 million people are without electricity, is turning to liquefied natural gas (LNG) as a cheaper way to power up amid plentiful global supply. Plans to boost African power generation by 30,000 MW by 2030 could translate into 42 million tonnes of additional LNG consumption a year, according to the U.S. Department of Energy. Equatorial Guinea’s minister Gabriel Obiang Lima said trading firm Gunvor could peg some sales of LNG from its planned Fortuna facility in Equatorial Guinea, due to start in 2020, to the index. Gunvor struck a deal to buy all of the plant’s output, but there is a provision allowing Equatorial Guinea and its partners to sell up to half the volumes within Africa. Equatorial Guinea already exports LNG to countries that include South Korea and Argentina. Angola and Nigeria are also major African LNG exporters, with Cameroon set to start this year. New LNG projects are planned in Senegal, Mozambique, Congo Republic and Tanzania. Equatorial Guinea aims to export LNG to Africa for the first time, including to Mali, Burkina Faso and Ghana. Africa’s natural gas consumption rose 20 percent from 2011 to 2014 from 3,909 billion cubic feet (bcf) to 4,689 bcf, according to the United States Energy Information Administration, still a tiny market but the world’s fastest growing. In Nigeria, Seplat Petroleum expects demand to grow rapidly for use in energy, cement and fertiliser projects. But the still small size of Africa’s gas market may make establishing an index difficult, industry experts said. But Ghana’s Energy Minister, Boakye Agyarko, said an index could be developed as the continent’s gas projects grew.

    Source: Reuters

    INTERNATIONAL: COAL

    China's small coal miners weakened even as prices soar

    October 27, 2017. China’s small coal miners are still losing money and struggling to pay off debt after being ordered to shut inefficient, outdated operations and forced to miss out on a historic price rally, China’s Coal Industry Association Vice Chairman Jiang Zhimin said. Jiang Zhimin flagged the widening gap between big state-owned coal producers and the smaller private ones in the world’s top consumer of the fuel in the wake of a crackdown by Beijing on illegal mines and curbs on coal transport by trucks. China’s coal market is expected to be balanced in the fourth quarter, he said.

    Source: Reuters

    INTERNATIONAL: POWER

    Puerto Rico's path to restore power shifts after Whitefish exit

    October 31, 2017. Efforts to restore electricity to Puerto Rico nearly six weeks after Hurricane Maria are shifting as the island’s utility and its regulators, along with US (United States) authorities, removed a key contractor and moved to triple the funding of another. The US Army Corps of Engineers, which is leading the federal power restoration effort, said it plans to boost the size of a key contract awarded to Fluor Corp by $600 million, to $840 million. It comes a day after Puerto Rican Governor Ricardo Rossello and the Puerto Rico Electric Power Authority (PREPA) said they would cancel a $300 million contract with Whitefish Energy Holdings, after an uproar over the deal’s provisions and the tiny Montana company’s lack of experience with projects of such a large size. Hurricane Maria knocked out power to all 3.4 million residents of Puerto Rico, and only about 30 percent of power has been restored nearly six weeks later. Conflict over who should lead the process of restoration and oversee PREPA has hampered efforts. PREPA, the island’s bankrupt power utility, and the governor have argued that the utility should maintain control, while a fiscal control board created by US Congress last year to restructure the island’s finances has also jockeyed for control.

    Source: Reuters

    Vistra to buy Dynegy in $1.7 bn Texas power producer deal

    October 30, 2017. Vistra Energy Corp said it would buy Dynegy Inc in an all-stock deal worth $1.74 billion, combining two Texas-based power producers in the latest merger in an industry dealing with shrinking profit margins. The combined company will be worth more than $20 billion, inclusive of debt, and have integrated power generating assets and retail businesses across six of the largest electricity markets in the United States. Debt-laden power producers such as Dynegy have seen their margins fall, as cheap natural gas from shale fields drives electricity prices lower, leading a handful of power companies to merge to cut costs and streamline operations. Earlier this year, utility Sempra Energy agreed to buy power transmission company Oncor for $9.45 billion, while Vistra’s rival, Calpine Corp, is selling itself to investors led by Energy Capital Partners in a $5.6 billion deal.

    Source: Reuters

    First Nations-led transmission project secures support from Ontario government

    October 26, 2017. The Ontario government has reinforced its support for the First Nations-led transmission project known as Wataynikaneyap Power, in its 2017 Long-Term Energy Plan. The project was first outlined by the Ontario Government in its 2013 Long-Term Energy Plan when it identified the need to connect remote First Nations communities to the electricity grid as a priority. The Ontario Government designated Wataynikaneyap Power as the transmission company to complete the project in 2016, amending the Rural Remote Rate Protection (RRRP) to help fund the project.

    Source: Energy Business Review

    INTERNATIONAL: NON-FOSSIL FUELS/ CLIMATE CHANGE TRENDS

    Korean firms to bid for Saudi nuclear power plant project: KHNP

    October 31, 2017. Korean companies will bid to take part in Saudi Arabia’s project to build nuclear power plants. Saudi Arabia is considering building 17.6 GW of nuclear-powered electricity generation capacity by 2032 and has sent a request for information (RFI) to international suppliers to build two plants, a first step towards a formal tendering competition. Asked whether Korean companies will be bidding for the Saudi project, Noh Baek-ail, executive vice president at Korea Hydro & Nuclear Power Co (KHNP), said “yes, we are bidding”. A consortium led by Korea Electric Power Corp (KEPCO) is building four nuclear reactors for Saudi neighbour the United Arab Emirates. Asked whether Kepco would lead a consortium for a Saudi bid, he said “Korean companies will bid as a group”.

    Source: Reuters

    China close to completing first offshore nuclear reactor

    October 31, 2017. China’s first offshore nuclear reactor is set to be completed soon, engineers involved in the project said, bolstering Beijing’s maritime ambitions and stoking concerns about the potential use of atomic power in disputed island territories. Beijing hopes offshore reactors will not only help win new markets, but also support state ambitions to become a “strong maritime power” by providing reliable electricity to oil and gas rigs as well as remote South China Sea islands. Zhang Nailiang, engineer with the China Shipbuilding Industry Corporation (CSIC), said the technology was “mature” and the first demonstration project would be deployed soon at drilling platforms in northern China’s Bohai Sea. The demonstration project is being developed by a research team established by CSIC, China National Offshore Oil Corp (CNOOC) and two reactor builders, China National Nuclear Corp (CNNC) and China General Nuclear Power (CGN). China has urged nuclear firms to develop technologies that will help boost domestic capacity and win projects abroad. Zhang said floating reactors also served a wider political goal to strengthen China’s maritime presence.

    Source: Reuters

    Pakistan plans to build several new nuclear reactors

    October 31, 2017. Pakistan plans to build at least three to four big reactors as it targets nuclear power capacity of 8,800 MW by 2030, Muhammad Naeem, Chairman of the Pakistan Atomic Energy Commission said. Pakistan has five small reactors in operation with combined capacity of just over 1300 MW. The last one in the four-reactor Chashma plant in Punjab province, built by China National Nuclear Corp (CNNC), went into operation in September this year. It is also building two Chinese Hualong One reactors with a capacity of 1100 MW each near the port city of Karachi. Naeem said these two new reactors are now 60 percent and 40 percent complete respectively and should become operational in 2020 and 2021. Pakistan is now also in the final stages of awarding contracts for an eighth nuclear reactor with 1100 MW capacity which would take the country’s total nuclear capacity to about 5,000 MW when it is finished. Pakistan’s five operating reactors - including a tiny 125 MW Canadian-built reactor in Karachi in operation since 1972 - generate just five percent of the country’s electricity, with the rest coming from oil, gas and some hydropower. With about one quarter of Pakistan’s population having no access to electricity, the government said late last year that it wants to boost nuclear capacity to 8,800 MW, or about 20 percent of power generation capacity, by 2030. Naeem said Pakistan is looking at building at least three to four more big nuclear reactors before 2030 in order to reach that target.

    Source: Reuters

    Macquaire group company to invest Rs 2.5 bn in solar power

    October 30, 2017. Lightsource Renewable Energy and the Macquarie group have entered into a partnership platform to fund the development, acquisition and ownership of large-scale solar power generation assets in India. Macquaire is entering the market through UK Climate Investments, part of the Green Investment Group within Macquarie Infrastructure and Real Assets, and would put in GBP30 million (Rs 256 crore).

    Source: Business Standard

    Siemens Gamesa wins wind turbine order in Norway

    October 26, 2017. Siemens Gamesa, the world’s second-largest maker of wind turbines, has won an order to supply one of Europe’s largest onshore wind projects, it said. The group, which emerged from the merger of Gamesa and the wind energy unit of Siemens, will supply 67 turbines with a combined capacity of 281.4 MW to the Norwegian onshore wind project Nordlicht. The deal, whose volume was not disclosed, also includes service and maintenance. As a rule of thumb, onshore wind projects cost about €1 million per megawatt, which would give the project a value of close to €300 million ($353 million). Comprising the Kvitfjell and Raudfjell wind farms in northern Norway, Nordlicht is expected to be commissioned in mid-2019 and will supply 50,000 households.

    Source: Reuters

    Senators from refinery states request Trump meeting on biofuels

    October 26, 2017. Nine US (United States) senators from states that have oil refineries sent a letter to President Donald Trump urging changes to the country’s biofuels policy and asking for a meeting to discuss the issue. The letter reflects growing tensions between refiners that oppose the US Renewable Fuel Standard - a law requiring them to blend increasing amounts of ethanol into the nation’s fuel each year - and the Midwest corn lobby that supports it. The Trump administration bowed to rising pressure from Midwest lawmakers last week, assuring them in letters and phone calls that it would ditch proposals, supported by the refining industry, to overhaul the biofuels policy. The senators said that decision could cost jobs. The Renewable Fuel Standard was implemented by former President George W. Bush in 2005 as a way to support farmers, reduce imports and combat climate change. The oil industry has opposed the regulation, mainly because the increasing biofuels volume mandates cut into their petroleum-based fuel market share. A number of independent refiners, like Valero Energy Corp, CVR Energy and PBF Energy are also vocally opposed to the regulation’s requirement that refiners blend the biofuels or purchase credits from rivals that do - which they say costs them hundreds of millions of dollars each year. The Environmental Protection Agency (EPA) said that it did not believe shifting the blending requirement off refiners was appropriate. The EPA also jettisoned a proposal to cut biofuels volumes mandates, and another to count ethanol exports against those mandates.

    Source: Reuters

    US fund, CIC snap up Equis Energy for $3.7 bn in bet on renewables

    October 25, 2017. US (United States) fund Global Infrastructure Partners (GIP) has agreed to buy Equis Energy, Asia’s largest independent renewable energy firm, for $3.7 billion with partners including sovereign fund China Investment Corp (CIC), underscoring growing global interest in renewables investment. Singapore-headquartered Equis is the largest renewable energy independent power producer in Asia‐Pacific, with over 180 assets comprising solar, wind and hydro generation spread across countries including Australia, Japan, India and the Philippines. Equis’ assets have installed capacity of more than 11 GW. A big chunk of the assets are based in Japan. Moody’s Investors Service said that renewables would become a central focus of national energy policies as more countries shift to renewable procurement through competitive auctions. Japanese trading firms, global pension funds, several companies and buyout firms were competing to buy Equis, at a time when many Asian governments are expanding the use of renewable power and its costs are falling. This year has already seen CIC sign a big-money deal, after it agreed to buy European warehouse firm Logicor Ltd for nearly $14 billion.

    Source: Reuters

    DATA INSIGHT

    Petroleum Products in India: Production, Imports & Exports

    Trends in Production of Petroleum Products

    Trends in Imports & Exports of Petroleum Products

    Source: Petroleum Planning & Analysis Cell


    Publisher: Baljit Kapoor

    Editorial Adviser: Lydia Powell

    Editor: Akhilesh Sati

    Content Development: Vinod Kumar Tomar

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