Despite government policy to reduce oil imports by 10 percent, growing demand for oil in India has only led to more dependence, which has gone up to 81 percent from 77 percent in 2015. Current recovery factors of ONGC and OIL for crude oil are as low as 27 percent and 23 percent, against international benchmark of 35-40 percent and 55-70 percent.
Vietnam has extended an Indian oil concession in the South China Sea and begun drilling in another area it disputes with China in moves that could heighten tensions over who owns what in the vital maritime region. The moves come at a delicate time in Beijing’s relations with Vietnam, which claims parts of the sea, and India, which recently sent warships to monitor the Malacca Straits, through which most of China’s energy supplies and trade passes. Vietnam granted Indian oil firm ONGC Videsh a two-year extension to explore oil block 128. Part of that block is in the U-shaped ‘nine-dash line’ which marks the vast area that China claims in the sea, a route for more than $5 trillion in trade each year in which the Philippines, Brunei, Malaysia and Taiwan also have claims.
Despite the fall in crude oil prices, upstream companies such as ONGC and OIL are said to offer better risk-reward ratio compared with downstream companies such as BPCL, HPCL and IOC due to superior volume visibility and attractive valuations. ONGC has guided for strong production in gas, as new projects start by the end of 2017. Oil and gas production has been lackadaisical in the past few years. However, ONGC and OIL reported a turnaround in FY17. ONGC’s monthly hydrocarbon (oil and gas) production in the FY17 was the highest in two years. Total domestic hydrocarbon production in FY17 was 44.3 mtoe 1.8 percent higher than in the previous fiscal. ONGC expects offshore crude oil production to increase to 16.8 mtoe in FY18 from 16.3 mtoe in FY17. Offshore production is expected to increase from incremental crude oil production in the fields, including WO-16, B-127. ONGC has also guided for production rebound in gas to 64 mmscmd in FY18 as compared with 54 mmscmd, up 18.5 percent YoY. A positive policy environment may further benefit production growth. The Directorate General of Hydrocarbons is evaluating a policy for incentivising EOR, which focuses on the implementation of various techniques for increasing the amount of crude oil that can be extracted from an oil field. Any green nod for implementation of EOR technique will be positive for the upstream companies and could potentially be a significant share of incremental volumes. Also, the expected recovery in domestic gas prices augurs well for earnings growth. According to analysts’ estimate, domestic gas price is likely to rise to $3.3/mmBtu and $3.6/mmBtu in the second half of FY18 and the first half of FY19, respectively, compared with the current $2.8/mmBtu. The domestic gas price formula is linked to global gas prices with a lag. The burden of the subsidy of LPG and kerosene is gradually coming down due to monthly price increases. This has resulted in a drop of ₹ 70 billion per year in the subsidy, which makes cash flows of upstream companies more predictable. The losses on kerosene and LPG may end by 2020 if crude prices remain at or below $50 per barrel. ONGC and OIL are expected to deliver 8 percent annualised earnings for the next two years. They trade at 25 percent discount to global peers based on a price-to-cash flows, higher than the historical average of 16 percent. This offers reasonable risk reward ratio.
India, the world’s third-largest oil importer, has sealed a first deal to import crude oil from the US and the shipment is expected to touch Indian shores in October. US Mars is a heavy, high-sulphur grade which will be processed at IOC’s newest refinery at Paradip in Odisha. The IOC move has already led to more purchases by other Indian refiners. BPCL too tendered to buy one million barrels of crude either for loading on August 16-September 5 or delivery on September 26- October 15. But for importing crude from the US, IOC had to take special permission from the shipping ministry. So, IOC obtained permission to buy the cargo on a delivered basis where the seller arranges for the ships. The cargo contracted will be delivered at Paradip refinery in the first week of October. IOC is looking at five to six grades of US crude, including Mars crude, for future purchases.
Indian companies have also stepped up purchases of high-sulphur crude oil from the Middle East and Russia in the spot market to feed demand from expanded refining capacity. Four refiners in the world’s third largest crude importer bought 9 million barrels of Middle East and Russian crude loading in July-August via spot tenders last month, drawing down excess supplies in the market after China’s demand slowed. Refiners such as IOC and BPCL have opted to buy more spot crude as they gradually ramp up output, rather than increase long-term crude supplies, traders said. IOC expects to run its new 300,000 bpd Paradip refinery at full capacity this year, while BPCL plans to ramp up output at its Kochi refinery to 310,000 bpd by September after an expansion. Indian refiners have also increased spot purchases during a period of abundant supplies, allowing them to react quickly to market changes and pick up cargoes when prices are competitive. IOC said that in May it plans to buy 68 percent of its oil needs from term suppliers, down from 80 percent earlier. MRPL and BPCL have bought Omani and Bahraini crude while IOC bought 5 million barrels of Abu Dhabi, Iraqi and Russian Urals crude. India is buying more Brent-linked Urals crude this year, with imports to hit an all-time high of 4 million barrels in July, after the price gap between Brent and Dubai narrowed to multi-year lows of below $1 a barrel. India’s crude demand is expected to fall early in the fourth quarter as several refineries are scheduled to shut for maintenance.
India’s diesel imports this year may rise to the highest since at least 2011 as refiners shut down to upgrade their units to meet new fuel standards and as warmer temperatures spur demand. India’s state-owned refiners are already seeking or have bought up to 967,000 tonnes of diesel through July. That exceeds then-record imports of 962,000 tonnes in 2016, according to full-year government data going back to 2011. The upgrades to meet new Euro IV fuel standards implemented on April 1 and warmer temperatures are boosting diesel imports into the world’s third-largest oil consumer. While monsoon rains typically reduce the need for diesel used in irrigation pumps, the curtailed supply because of the maintenance shutdowns will likely continue to boost imports into the country. India is a net exporter of diesel with its refinery production usually enough to meet domestic demand, limiting imports. But the change in fuel standards has boosted imports of cleaner diesel while it has exported more lower sulphur diesel. India’s diesel demand is expected to rise to record levels again this year as a slew of infrastructure projects boosts the use of the fuel, although a government-induced cash shortage will hold growth to its slowest in three years. Diesel demand is expected to grow by 3 percent this year, lower than the 5.1 percent growth in 2016.
Petrol pump dealers have deferred till month-end their planned ‘no-purchase, no-sale’ agitation against daily revision in fuel prices on expectations that oil companies will raise their sales commission. FAIPT, which claims to represent petrol pump operators in 23 states, had called on its members not to buy any fuel from oil companies or sell any petrol and diesel to consumers on July 12. The oil companies have promised to study the implementation of the daily price revision till August 15 to see if the dealers actually suffer any losses. Dealers said they suffer losses as they buy petrol and diesel from oil companies at one rate but the very next day rates would be cut. All India Petroleum Dealers Association said the OMCs have promised to devise some compensation scheme if the two months study (June 16 to August 15) throws out findings that dealers had suffered substantial losses due to daily price revision. Prices of petrol and diesel are revised at 0600 hrs every day since June 16 to reflect any change in international oil price in the previous day. Previously, the revision in rate would happen on 1st and 16th of every month and was based on average international oil price and foreign exchange rate in the preceding fortnight.
Before the rollout of daily price revision FAIPT demanded an automated system to reflect price changes from the state-run oil marketing companies. The main concern of the dealers is that they will have to stop the sales every midnight for considerable time to change the daily rates. However, the IOC successfully rolled out the daily revision of petrol and diesel prices across the country through its network of 26,000-plus petrol pumps. IOC has developed various information modes for the customers to check the price being charged by the petrol pumps including the mobile app wherein the customers will be able to fetch daily updated prices of petrol and diesel at all cities through IOC’s mobile app Fuel@IOC. It will also enable customers to cross-check the prices applicable in their cities by sending SMS on various dealer codes, including various other options.
A city-based start-up MyPetrolPump which recently started a first-of-its-kind door delivery of diesel here, has hit a roadblock, after PESO directed state-run OMCs and private retailers not to sell fuel to it, citing “safety.” A request to pass an interim order for certain limited quantity of delivery which would allow the firm to resume its operations on pilot basis until PESO notifies guidelines for doorstep fuel delivery businesses has been sent. The government was said to be exploring ways to facilitate home delivery of petroleum products. ANB Fuels, under the brand MyPetrolPump, had launched its operations from June 18 with three delivery vehicles, each with a capacity of 950 litres, but had to suspend the delivery within four days of launch due to a circular issued by PESO to oil companies to stop providing fuel to it that resulted in the nascent firm losing over ₹3 million per month. The firm received 4,000 calls and 600 order requests for delivery within three days of the launch.
PESO has instructed all the state-run oil marketing companies and the private retailers to not sell fuel to the Bengaluru-based start-up which recently started home delivery of diesel in the city. In a strongly worded letter, the agency entrusted with the responsibility to ensure safety of public and property from petroleum products said in absence of guidelines, the act of site delivery of petroleum products is fraught with danger. The letter noted that the truck and tank used by the company is not approved by the agency. It also said as per the Petroleum Rules 2002, retail outlets should only dispense petroleum products in tanks connected to automobiles.
Petroleum products such as petrol, diesel and aviation turbine fuel have been kept out of the GST as of now. The Centre is said to be keen on bringing petroleum products under GST. However, state governments have consistently opposed including petroleum under GST. Petroleum, including oil and gas, is a strategic sector that is still not under GST, while the industry has been pushing for its inclusion so as not to be deprived of the benefits of input credit. BP Europe’s third-biggest oil company and RIL have been invited by the MoPNG to invest in fuel retailing. While RIL already has a fuel retailing license and has some 1,400 petrol pumps on the ground, BP last year got approval to set up petrol pumps in India. RIL and BP are partners in oil and gas exploration but have no such collaboration in downstream fuel retailing business. BP is the tenth player to enter the lucrative fuel retailing business that is seeing double digit growth, not seen anywhere in the world. BP had in January last year won in-principle approval to retail ATF to airlines in India. RIL too operates aviation fuel services separately. India currently has about 59,595 petrol pumps, with public sector firms operating a majority of them. Private sector operators are limited to Essar Oil and RIL, which between them have some 4,900 petrol pumps. Royal Dutch Shell operates 85 petrol stations. NRL and MRPL are late entrants and have six outlets between them. IOC owns 26,212 petrol pumps, HPCL 14,412 stations and BPCL 13,983 outlets. In ATF or jet fuel retailing, there are 211 aviation fuel stations, 104 of which are owned by IOC, 42 by BPCL and 37 by HPCL. RIL has 27 aviation fuel stations at airports, while joint venture of Shell and MRPL owns one. India is currently the ninth largest aviation market in the world. Its jet fuel market is circa 7.3 mtpa and is expected to continue to grow at over 8.6 percent to support the growth of the Indian economy.
The global oil market is expected to rebalance in the second half of 2017, but further output increases among key producers such as Nigeria and Libya could hamper this process according to the IEA. Some key producers including Libya and Nigeria had significantly increased output in recent months. The North Sea crude oil market is finally showing signs of long-lost strength, suggesting that some of the pessimism that has driven down oil futures by 5 percent and created a record bet against a price rise may be unjustified. About 6 million barrels of North Sea Brent crude were being stored on ships, down from four-month highs of as many as 9 million. A major driver of the weakness in both the physical and the futures market has been the resistance of global crude inventories to the efforts of OPEC and its 11 major partners to force a drawdown by cutting their oil production. OPEC and a number of exporters such as Russia and Oman agreed to extend a 1.8 million bpd production cut into March next year to force global inventories to return to their long-term average levels and help price rise.
Oil prices fell in early July weighed down by a continuing expansion in US drilling that has helped to maintain high global supplies despite an OPEC led initiative to tighten the market by cutting production. The price of oil is down around 14 percent since late May, when producers led by the OPEC extended their pledge to cut output by 1.8 million bpd by an extra nine months. There was a relatively big draw of around 50 million barrels from floating storage and a drop in industrialised nations’ onshore storage of 65 million barrels compared to July last year. Compliance in April and May with the OPEC-led output deal was above 100 percent. Libya’s production is expected to return to normal levels. OPEC members Libya and Nigeria were exempted from the supply cuts because unrest had curbed their output. If the US rig count continues rising beyond the end of July, oil prices may need to fall further to bring the drilling boom back under control.
The US shale drilling boom is likely to ease next year as demand on the industry’s service sector is unsustainable according to Halliburton. The number of rigs drilling for oil in the US rose to 763, the highest in more than two years, showing that despite oil trading below $50 a barrel, shale oil explorers are still ramping up activity. The count may rise above 1,000 by the end of the year, but not beyond that. Oil services companies cut back dramatically when demand for their products fell oil prices started falling in 2014 and it has taken them longer to readjust their output. 800-900 rigs is a more sustainable level in the medium term. The increase in shale activity has been a boon for companies like However, appetite for oil and gas equipment is still weak outside of the Americas. Halliburton was said to be under additional pressure following the acquisition of rival Baker Hughes, which it failed to buy last year after regulatory opposition, by GE Oil & Gas. GE-Baker Hughes will leapfrog Halliburton to become the world’s second-biggest oil services company after Schlumberger. OPEC oil output has risen in June by more than 300,000 bpd according to figures the exporter group uses to monitor its supply, as a recovery in two nations exempt from a supply cut deal countered high compliance by many others. OPEC agreed to cut output by about 1.2 million bpd from January 1 to reduce a glut and support prices. Russia and 10 other non-OPEC states agreed to cut half as much. Including Nigeria and Libya, which are exempt from the deal, output by all 13 OPEC members in June rose to about 32.47 million bpd, according to the average assessments of secondary sources OPEC uses to monitor its output. OPEC is scheduled to publish the assessment of June output based on secondary sources in its monthly oil market report. OPEC uses two sets of figures to monitor its output figures provided by each country and those provided by secondary sources that include industry media. This is a legacy of old disputes over real production levels. The production cut agreed last year was from levels as assessed by the secondary sources.
Oil price agency S&P Global Platts is proposing to remove from next month restrictions it had placed on Qatari crude in its pricing assessment after Saudi Arabia and some other Arab states cut ties with Doha. Platts, a unit of S&P Global Inc, initiated a review on June 6 on the deliverability of crude loading from Qatari ports in its Middle East crude price assessments after Saudi Arabia and the other states moved to isolate Qatar over charges that it was supporting terrorism. The dispute disrupted Gulf shipping routes and raised problems with oil and gas deliveries. That prompted Platts to stipulate that during its review Al-Shaheen loading from Qatar could not – unless mutually agreed by buyer and seller – be nominated for delivery once a deal had been struck in its pricing process known as market-on-close. Platts said it will continue to monitor events in the Middle East crude markets and is ready to renew its review of any crude stream deliverable into the Dubai and Oman benchmarks.
As the global oil market frets about a stubborn supply glut, faltering demand growth in key Asian crude importers is further hampering efforts to restore market balance. A fuel glut in China, a hangover from demonetization in India, and an ageing, declining population in Japan are holding back crude oil demand growth in three of the world’s top four oil buyers. The three countries make up a fifth of 97 million bpd in global oil consumption, and any hiccups among them will mean lower-than-expected oil demand growth in Asia, helping to undercut the OPEC led effort to support prices. In China, vying with the United States as the world’s biggest oil importer, imports in May were still at a near record of 9 million bpd, but a looming cut in refinery operations is set to hit demand for crude oil in the third quarter. For the first five months of the year, India’s imports are about flat to the same period last year, following an annual rise of 7.4 percent last year. In Japan, Asia’s most advanced economy, oil demand has been in structural decline for years due to a declining, ageing population, and the rise of cars with better mileage or that use alternative fuels. The cheap spot price comes despite the effort led by the OPEC to cut production by 1.8 bpd that has been in place since January. Doubts over OPEC’s compliance with its own targets and soaring US output have led to scepticism that markets will re-balance soon.
BHP Billiton said that its $20 billion investment in US shale oil and gas six years ago was, in hindsight, a mistake. BHP entered the shale business at the height of the fracking boom in 2011 and invested billions more developing the operations. The fall in oil prices since then has led to pre-tax write-downs of about $13 billion on the business. Activist shareholder and hedge fund Elliott Management, holding 4.1 percent of BHP’s London-listed shares, has been trying to gain support from other shareholders to persuade BHP to sell the shale oil and gas business.
Longer horizontal wells and technology improvements will help Argentine state-run oil company YPF SA lower costs at its most productive shale field, but better infrastructure is still needed in the remote Vaca Muerta play. The breakeven price at the Loma Campana field is $43 per barrel and falling while development costs are $12.90 per barrel and expected to fall to $10 next year. YPF produces 40,000 barrels of oil equivalent per day and co-investor Chevron Corp produces another 20,000. The cost cuts are good news for Argentina which has sought to attract investment to Vaca Muerta to help close Argentina’s costly energy deficit since taking office in late 2015. While the play is thought to have some of the world’s largest shale oil and gas reserves, just two of its 19 concessions have moved from the pilot to production stage amid investor concerns over high labour costs and logistical difficulties in the distant Patagonian province of Neuquen. Vaca Muerta contains 308 trillion cubic feet of shale gas and 16.2 billion barrels of shale oil, according to the US Energy Information Administration.
Some of China’s top oil refineries are having to take the highly unusual step of cutting operations during what is typically the peak demand summer season when hot weather drives up power usage and families take to the road during school holidays. Almost 10 percent of China’s refining capacity is set to be shut down during the third quarter, signaling that demand growth from the world’s top crude importer is stuttering further. West African and European suppliers are already feeling the chill from China’s reduced demand, and a global glut has dragged spot prices for crude this week to their lowest since November, 2016. Major Chinese oil refineries, including PetroChina’s Jinzhou will set their run rates around 6,500 bpd lower than the second quarter, sources at the affected refineries said. Petrochina’s Fushun refinery, with an annual capacity of 233,200 bpd, began a 45-day full shutdown at the start of June. Rival Sinopec is considering slashing as much as 230,000 bpd, equivalent to about 5 percent of its average daily production last year, in what would be only the second time in 16 years that the firm has cut runs.
China has opened more than 6,000 trading accounts for its long-awaited crude futures contract – with three-quarters coming from individual traders, as it pushes ahead with plans to compete with global pricing benchmarks. China’s oil majors and about 150 brokerages have also registered, but the strong interest by ‘mom-and-pop’ investors looks set to mark out China’s crude futures from western counterparts, which are dominated by institutional investors. Shanghai’s crude futures are aimed at giving China more clout in pricing crude in Asia and a share of the trillions of dollars in oil futures trade. Most oil trades are priced off two crude derivatives, US WTI and London’s Brent, traded on the Intercontinental Exchange and the New York Mercantile Exchange owned by CME Group. Successful crude derivatives would be the jewel in the crown in China’s push to ramp up futures trading on products from dates to steel to open up markets and offer new avenues for investors. While Chinese banks are barred from futures trading, the new market is expected to attract interest from deep-pocketed private equity firms and funds, while state-owned oil majors, like PetroChina and Sinopec will provide liquidity.
Oil traders are shipping diesel out of Europe to Asia and the Middle East where strong demand and tighter supplies have boosted prices, in a rare arbitrage that reverses traditional routes. At least three 90,000 tonne diesel cargoes were booked in recent days out of northwest Europe options to go to Singapore and the Middle East, shipping data showed. BP chartered the long-range Nan Lin Wan and Front Antares tankers for loading out of the Amsterdam-Rotterdam-Antwerp storage and refining hub in mid-July, the data showed. Asia’s diesel refining margins have received a reprieve recently, climbing to a 2-1/2-month high as a buying spree from India that began in April and higher than usual regional refinery maintenance lowering supply. Imports from the Middle East and Asia, where a large number of state-of-the-art refineries have been constructed in recent years, have steadily increased to become a regular source of supply for Europe. But still, the strong Asian market in recent weeks has opened the rare arbitrage. The Netherlands shipped nearly 100,000 tonnes of diesel to Singapore in late June.
July 18, 2017. The government is taking its liquefied petroleum gas (LPG) distribution to tiger reserves in order to meet its goal of providing cooking gas to 95 percent of the population by 2020. In a first move of this kind, the directors of three tiger reserves — Bor, Tadoba, and Nagzira, all in Maharashtra — will be distributing LPG cylinders. In a similar move, about 98 agricultural and other government co-operative societies in Andhra Pradesh, Chhattisgarh, and Andaman and Nicobar Islands will get dealerships. Soon, state forest departments may get LPG dealerships on a nomination basis. Increasing LPG penetration in tiger reserves also helps in dissuading the use of wood for cooking. State-run Indian Oil Corp (IOC), Bharat Petroleum Corp Ltd (BPCL) and Hindustan Petroleum Corp Ltd (HPCL) will reach out to tribals in these tiger reserves and Maoism-affected areas. This is part of the strategy designed by Oil Minister Dharmendra Pradhan to achieve about 95 percent LPG penetration by 2020. LPG penetration increased from 56 percent of the population in 2014 to 74 percent in 2017. According to a three-year achievement booklet brought out by the oil ministry, about 38 percent of Pradhan Mantri Ujjwala Yojana (PMUY) beneficiaries belong to Scheduled Castes and Scheduled Tribes. Currently, there are about 19,000 agencies in India, and the government wants to increase the number to 25,000 by 2019. This year, the government is giving about 2,843 licences, of which 1,029 will be in Uttar Pradesh and 984 in Bihar. The Union Cabinet is likely to take a call on another 30 million LPG connections to be given under the PMUY. To reach the target of 50 million, Rs 8,000 crore was allocated. Government support for each connection is Rs 1,600. In a year, the oil marketing companies (OMCs) added 25 million LPG connections in 704 districts. President Pranab Mukherjee gave the 25-millionth connection in Jangipur, West Bengal. According to Pradhan, the largest number of connections (5.5 million) has been in Uttar Pradesh and West Bengal has the second-largest. LPG demand in the country has grown by more than 33 percent over the past three years. More than 5,000 distributors have been added, primarily in rural areas. Directors of three tiger reserves — Bor, Tadoba and Nagzira, all in Maharashtra — will be distributing LPG cylinders In a similar move, about 98 agricultural and other government co-operative societies in Andhra Pradesh, Chhattisgarh, and the Andaman and Nicobar Islands will get dealerships. Increasing LPG penetration in tiger reserves also helps in dissuading the use of wood for cooking by tribals LPG penetration increased from 56% of the population in 2014 to 74% in 2017
Source: Business Standard
July 18, 2017. The government has ordered Reliance Industries Ltd (RIL), Royal Dutch Shell and Oil and Natural Gas Corp (ONGC) to pay $3 billion in penalty following an arbitration award in the Panna Mukta Tapti (PMT) oil field dispute that went in favour of the government. RIL and Shell own 30% each in the PMT fields, while ONGC holds 40%. Shell is the operator of the field. Shell assumed the operatorship of the field last year after taking over British Gas.
Source: Livemint
July 18, 2017. Uttar Pradesh (UP) tops the list of states which have recorded the highest number of cases of petrol sales fraud committed at retail stations through the tempering of dispensing units using high-end chips, according to the oil ministry. UP is followed by Gujarat and Madhya Pradesh in the highest number of such cases reported in the past two-and-a-half years, according to the oil ministry. A total of 101 cases of petrol/diesel theft across the country have been reported in the last two and half years up to June 2017, out of which half have been reported in UP alone. According to the statement released by the oil ministry, UP recorded 51 cases on petrol and diesel thefts followed by 17 cases in Gujarat, 10 cases in MP and seven in Rajasthan since April 2015. The ministry informed the joint inspection teams comprising state government officers and oil marketing companies (OMCs) executives have conducted more than 9,489 inspections at retail outlets in Maharashtra and Uttar Pradesh after the petrol chip scam was uncovered by the UP Special Task Force (STF) in April 2017. The inspections and subsequent evidence of tampering has led to 44 retail outlets being terminated by OMCs in UP and Maharashtra.
Source: The Economic Times
July 18, 2017. India’s landmark taxation reform, the Goods and Services Tax (GST) that came into effect earlier this month, is a major negative for the Oil and Gas (O&G) industry and broadly neutral for utilities operating in the electricity sector, US-based Fitch Ratings, one of the three big credit rating agencies globally, has said. The new GST regime, which came into effect on 1 July, will replace a vast array of indirect state taxes and the national service tax. Key oil and gas products – crude oil, natural gas, motor spirit or petrol, high-speed diesel and aviation fuel – are excluded from GST. So, oil and gas companies will not be able to offset any GST levied on services received or capital goods purchased by them, thereby driving up costs. This is likely to have a negative impact on the profitability of upstream, refining and gas-trading firms. Petrol, diesel and Aviation Turbine Fuel (ATF), three key petroleum products, have been kept out of GST for now, given that many states derive significant Value Added Tax (VAT) revenue on petroleum products and alcohol, and these tax rates can vary across different states. In view of this, upstream products were also excluded.
Source: The Economic Times
July 17, 2017. Oil and Natural gas Corp (ONGC) need not pay a premium for government stake in Hindustan Petroleum Corp Ltd (HPCL) since the latter is widely traded and fairy valued by the market and the transaction would involve no change in state control over the two companies, ONGC said. The government is planning to sell its entire 51.11% stake in the HPCL to ONGC. Stock markets are concerned about the price ONGC may have to pay for acquiring the refiner. The transaction would also influence the status of Mangalore Refinery and Petrochemical Ltd (MRPL), jointly promoted by ONGC and HPCL. ONGC and HPCL own 71.63% and 16.96% respectively in MRPL, while the balance 11.42% is owned by the public. Paying a premium can drain away ONGC’s resources already needed for its planned capex of Rs 30,000 crore in 2017-18. The company has just about $2.5 billion of cash reserve, half of which would go into paying for the acquisition of KG Basin asset of Gujarat State Petroleum Corp (GSPC). Acquisition of government’s 51.11% stake in HPCL would require ONGC to pay $4.7 billion at current market prices.
Source: The Economic Times
July 17, 2017. The second round of bidding for discovered small and marginal fields (DSF) in the petroleum sector is set to take place in October. The Directorate General of Hydrocarbons (DGH) has shortlisted these blocks, now before the oil ministry for clearance. India is the third largest consumer of petroleum products, after America and China. The country’s share of global demand is expected to grow from the current 5.5 percent to nine percent by 2035. The DSF rounds and the Open Acreage Licensing (OAL) policy round are considered vital for reducing of import, in the schedule approved by the ministry. In the first round of DSF, blocks were awarded to 30 companies — 23 onshore and seven offshore ones. The government had launched a National Data Repository (NDR) for investors keen on the OAL round. In the NDR, sedimentary basins are divided into zones, with corresponding data. Investors will also have the option to go for a petroleum operations contract or reconnaissance contract. The latter will be valid for three years and the former will allow eight years for exploration and 20 years for development and production
Source: Business Standard
July 16, 2017. Hindustan Petroleum Corp Ltd (HPCL) will invest Rs 61,000 crore over the next four years in expanding and upgrading its existing refining capacity to meet higher quality fuel norms, the company said. HPCL is upgrading both its Mumbai and Visakh refineries to produce fuel meeting Euro-VI emission norms. It will invest Rs 20,928 crore in expanding its Visakh refinery in Andhra Pradesh from 8.33 million tonnes per annum (mtpa) to 15 mtpa by July 2020. Also, the Mumbai refinery is being expanded to 9.5 mtpa from current 7.5 mtpa at a cost of Rs 4,199 crore. HPCL said it plans to expand Mundra-Delhi, Visakh- Vijayawada and Ramanmandi-Bahadurgarh pipelines to meet rising fuel demand. Besides, new liquefied petroleum gas (LPG) lines will be laid and bottling plants set up to cater to the increased demand for cooking gas. HPCL said it is building a new 9 mtpa refinery-cum-petrochemical complex at Pachpadra in Rajasthan and a petrochemical complex at Kakinada in Andhra Pradesh. It also holds a 25 percent interest in the mega 60 million tonnes refinery state-owned firms led by Indian Oil Corp (IOC) plan to build on the west coast in Maharashtra. Besides, the two refineries at Mumbai and Visakh, HPCL owns 14,412 petrol pumps and 4,532 LPG distributor agencies in the country.
Source: India Today
July 12, 2017. Petrol pumps have made big money at the cost of oil companies by cleverly adjusting their inventory before the fortnightly price revision, the oil ministry has found. A study of 1,500 high-selling petrol pumps showed gains of Rs 57 crore in a year by reducing inventories when prices were about to fall, and filling up their tanks with cheaper fuel just before a price hike. Some dealers even stored fuel in tankers, the oil ministry said. However, petrol pump owners said very few of them made money by inventory management. All India Petroleum Dealers Association (AIPDA) said consumers tried to predict the price trend. Dealers had called off the proposed strike, which was called to protest daily price revision. The oil ministry’s study was based on a sample of 500 pumps each of Indian Oil, Bharat Petroleum and Hindustan Petroleum to understand how dealers reacted to impending price changes for a year and if that affected their income. The study took note of the orders made in excess or less than the average fortnightly sales for each pump. It found that these 1,500 pumps had made a net gain of Rs 57 crore in the period. Pumps controlled by Hindustan Petroleum Corp Ltd (HPCL) made Rs 20.5 crore while those of Indian Oil Corp (IOC) and Bharat Petroleum Corp Ltd (BPCL) made Rs 19 crore and Rs 17.5 crore respectively. These pumps also made losses in fortnights when prices fell but gained overall. The sample size of 1,500 is not big compared to a total of 54,000 state-run petrol pumps operating across the country but the study offers a glimpse of the way pumps had picked up the art of timing stock purchases. Based on their prediction of price trends, dealers would begin varying their stock purchases from the tenth day of the fortnight only, according to the company.
Source: The Economic Times
July 18, 2017. The Assam government expressed displeasure at ONGC (Oil and Natural Gas Corp)’s slow pace of work in providing gas to industrial consumers in the state. Last year, small tea-growers had to throw their produce due to non-availability of gas, Assam Commerce and Industry Minister Chandra Mohan Patowary said. Assam is now talking to Oil India Ltd (OIL) for getting gas from the National Gas Grid in Barauni through a new pipeline, he said. The company responded positively. Accordingly, he said, the situation had improved from April. OIL has submitted a feasibility report to the central government for laying gas pipelines from Barauni in Bihar to Numaligarh in Assam to tackle shortage of gas in the North Eastern state.
Source: Business Standard
July 17, 2017. Reliance Industries Ltd (RIL) is considering a plan to enter retailing of liquefied natural gas (LNG) and setting up of charging stations for electric vehicles at its petrol pumps. At the end of April 2017, RIL operated 1,221 of its 1,470 fuel retail outlets. The company plans to re-open the rest of the outlets by the end of the year. RIL holds licences for 5,000 fuel retail outlets. Royal Dutch Shell and Petronet LNG, importers of liquid gas, are also planning to set up LNG retail outlets in the country. RIL also plans to provide charging stations for electric vehicles (EV) at its fuel outlets as the firm expects electric vehicles to become popular. RIL and BP said that the companies would expand their existing partnership for strategic cooperation on new opportunities across India’s energy sector.
Source: Livemint
July 15, 2017. The Competition Commission of India (CCI) ordered a fresh investigation against GAIL (India) Ltd for alleged abuse of dominant position with regard to supply of natural gas. This is the second time in less than one year that the company has come under the lens of the watchdog for alleged unfair business practices. After finding prima-facie evidence of competition norms violations, the CCI has ordered the probe based on a complaint by Rajasthan-based TMT bars maker Shri Rathi Steel (Dakshin) Ltd. It was alleged that GAIL abused its dominant position by incorporating unfair terms and conditions in the Gas Sale Agreement (GSA). For this case, the regulator considered the market for supply and distribution of natural gas to industrial consumers at Alwar in Rajasthan as the relevant one. Shri Rathi Steel had entered into a GSA pact with GAIL in March 2009. The conduct of GAIL in implementing such ToP (Take-or-Pay) liability from 2015 appears to be a modus to ensure de facto exclusivity of the contractual arrangement. It is observed that imposition of ToP liability as per contractual terms cannot per se be regarded as abuse of dominant position, the CCI said.
Source: The Economic Times
July 13, 2017. India’s natural gas sector will see more market-friendly reforms which will help create a trading hub in the country, Oil Minister Dharmendra Pradhan said. The government was working on a plan to build a natural gas trading hub that could aid better price discovery for domestic as well as imported gas, and could eventually become Asia’s pricing hub competing with Singapore, Shanghai or Tokyo. A market-driven pricing is considered necessary for the domestic market to mature, and a local trading platform could help. An electronic trading platform is expected to be ready by early 2018 which will allow only physical trading. Pradhan invited investors to the exploration and production sector, where a new policy allows companies the freedom to carve their own blocks, use just one licence to exploit all forms of hydrocarbons and the liberty to price their gas. The rising middle class of emerging Asian countries like India will drive the demand for energy both in terms of electricity and cooking and transportation fuel, Pradhan said. India is the only country where the demand will continue to rise for more than a decade.
Source: The Economic Times
July 13, 2017. Credit rating agency India Ratings and Research (Ind-Ra) expects domestic coal consumption growth in India to remain tepid on account of subdued demand from thermal power plants, with an expectation of power plant capacity utilisation remaining sub-65% in the medium term. It has estimated that prices for the benchmark Newcastle coal with 5,500 calories of energy value will hover between $50 per tonne and $60 per tonne between 2018 and 20220. Ind-Ra feels that government’s policies on large seaborne trade and persistent substitution to renewable energy are likely to have a significant influence on coal prices. However, India’s domestic coal production is all set to increase on account of government efforts to reduce imports. The higher target is partly to be met by production in coal blocks fraught with clearances issues. Freight costs and volume-based taxes make an economic case for steady demand for high-quality coal. For instance, India doubling clean energy cess to Rs 400 per tonne reduces the economic value of low-quality coal. Ind-Ra believes investment in new coal projects is likely to remain subdued globally due to gloomy long-term demand prospects. Many top global suppliers may not invest in raising output, creating a strong floor for prices. Although coking coal prices are likely to weaken in 2018 due to a production recovery in Australia and China, the average price for the full year may continue to remain high compared with that for first half of 2017 due to continued supply-side constraints and low inventory levels. However, with the restart of idle sites and new capacity ramp-ups, supply from top producer countries could improve in 2019. Ind-Ra estimates medium-term price of coking coal at about $ 100 per tonne.
Source: The Economic Times
July 13, 2017. Even as Essar Power seeks tariff hike to revive its 1200 MW imported coal-based power plant at Salaya in Gujarat after the apex court denied compensatory tariffs to power plants based on imported coal, the company has started exploring options to import coal from countries other than Indonesia to reduce the impact of higher coal price. The higher cost of coal has led to high under recovery of around 55 paise per unit at the Salaya plant, leading to complete wipe-out of its net worth in the last five years. Essar Power is evaluating coal sourcing from Russia, Mongolia, Cambodia, China and Australia to isolate its Salaya plant from the current volatility of coal price. The company, is negotiating the landed price of coal through reverse e-auction method to arrive at cheaper options instead of spot market price. At present, the landed price of coal from Indonesia is around $85 per tonne, which has more than doubled in the last six months.
Source: The Financial Express
July 12, 2017. With the third tranche of linkage auction on the anvil, the coal ministry now wants to adopt a flexible mode of transportation using both the roadways and railways for easy evacuation of coal. Following the second tranche of linkage auction in which Coal India Ltd (CIL) offered 15 million tonnes, the miner could not conclude the fuel supply agreements since there were supply constraints from Mahanadi Coalfields Ltd (MCL), South Eastern Coalfields Ltd (SECL) and Central Coalfields Ltd (CCL). SECL has recently notified that they would not take booking over trigger level for power utilities but power utilities, if required, could place orders above trigger level if they were ready to carry coal through road mode. CIL has the obligation to supply 75% of the required coal to new power plants and 90% to old power plants, which is known as trigger level. Failing to supply this quantity CIL is liable to pay a penalty to its consumers. Non-power consumers also receive a certain percentage of their annual coal requirement. The railways generally give preference to the coal sector in supplying these wagons because of priority supplies to the power plants.
Source: The Financial Express
July 17, 2017. The Uttar Pradesh Electricity Regulatory Commission (UPERC) has cancelled power purchase agreements (PPAs) with five power units owned by Bajaj Energy because of the higher cost. UPERC Chairman Desh Deepak Verma confirmed that notice of cancellation has been sent to the company. The commission sent the notice to five units, each of 90 MW, located in Utraula (Balrampur), Khambarkheda (Lakimpur Kheri), Barkheda (Pilibhit), Kundarki (Gonda) and Maqsudpur (Shahjahanpur). The UP Power Corp Ltd (UPPCL) was purchasing power from the five units at a cost of Rs 7.22 per unit, which was Rs 3.11 more than the average purchase cost of Rs 4.11 per unit from all sources. The UPERC also took note of a petition by UP Rajya Vidyut Upbhogta Parishad that claimed that the state government had agreed to purchase power worth over Rs 1770 crores in 2017-18.
Source: The Times of India
July 17, 2017. GVK Energy Ltd has closed funding for its 540 MW coal-fired power project in Punjab, having raised Rs 500 crore from Deutsche Bank in priority funding. The funds raised will be used to make the plant—run by GVK Power (Goindwal Sahib) Ltd (GPGSL)—operational, GVK said. Priority funding involves extending credit to a company on the promise that the lender will be given higher priority during the payout phase, once a turnround is effected or the company is liquidated. Incorporated in 1998, GPGSL is a unit of GVK Energy, which in turn, is the subsidiary of GVK Power and Infrastructure Ltd (GVKPIL). While GPGSL has signed power purchase agreements with Punjab State Power Corp Ltd for 25 years, it has not been able to start operations due to last-mile funding gaps. The project’s two units were commissioned in April last year, after a delay of two years.
Source: Livemint
July 17, 2017. Lanco Infratech’s effort to rescue its Amarkantak power project in Madhya Pradesh might go nowhere, with insolvency proceedings initiated by one of its lenders, IDBI Bank. The approval of the National Company Law Tribunal is required for any debt restructuring or bailout for companies under an insolvency scanner. For the second phase (2×660 MW) of the project (units three and four), Lanco had requested a cost overrun facility from government-owned Power Finance Corp (PFC). The latter is lead lender of the consortium that gave loans totalling Rs 10,000 crore for the project. Amarkantak’s phase-1 of 600 MW is operational but the second phase of 1,320 MW is facing operational and financial issues, being unable to find buyers for power supply. The company said a fuel supply agreement for phase-2 was available, for linkage coal from South Eastern Coalfields.
Source: Business Standard
July 16, 2017. The deal with regard to buying JSPL (Jindal Steel and Power Ltd)’s 1,000 MW power plant in Chhattisgarh is on track and is likely to close by June next year, JSW Energy has said. For the Tamnar asset, it said the JSW Energy has paid an interest bearing advance of about Rs 373 crore to JSPL as on March 31, 2017 against the shareholders approved limit of Rs 500 crore. JSW Energy had earlier signed firm agreement with JSPL to acquire 1,000 MW Tamnar project. JSW Energy had said that it will acquire JSPL’s 1,000 MW power plant in Raigarh, Chhattisgarh for Rs 6,500 crore with certain pre-arranged conditions. JSW Energy had also entered into a pact with Jaiprakash Power Ventures Ltd to acquiring 500 MW Bina thermal power plant.
Source: India Today
July 15, 2017. Gurgaon district will get 24-hour power supply from August 15 and a blueprint has already been prepared, Haryana Public Works (Building and Roads) Minister, Rao Narbir Singh said. He said that Gurgaon railway station would be modernised and Dhankot-Gurgaon railway station would be upgraded with all modern facilities.
Source: NDTV
July 15, 2017. The Delhi Electricity Regulatory Commission (DERC) will hold a public hearing on “Draft Business Plan Regulations, 2017, and tariff petitions”. This will mark an important step in the tariff revision process, which started last month. DERC will analyse expenses and revenue requirements of power utilities, including discoms. For the last two years, there has been no power tariff hike in Delhi and keeping the rates low has been a key policy of the Aam Aadmi Party (AAP) government, which is also providing a Rs 1,720-crore subsidy for the current financial year. The last time a 5% tariff hike was effected was in July 2014 and was applicable for FY16. There was no tariff order for FY17. Since then, consumers pay for electricity at Rs 4 per unit for consumption of up to 200 units, going up to Rs 5.80-5.90 per unit for 200-400 units and Rs 7.30 per unit for 400-800 units or higher. Discoms (distribution companies) claim that they are incurring heavy losses, primarily due to non-revision of tariffs. For the BSES discoms, the expected revenue gap for FY18 on a standalone basis is reportedly around Rs 1,600 crore. For Tata Power Delhi Distribution Ltd (TPDDL), it is estimate at Rs 1,355 crore for TPDDL. In their respective petitions to the regulator, the three utilities — BSES Yamuna Power Ltd (BYPL), BSES Rajdhani Power (BRPL) and Tata Power Delhi Distribution (TPDDL) — have quoted an aggregate revenue requirement of Rs 21,624 crore.
Source: The Economic Times
July 15, 2017. The Patna University (PU) campus is likely to face dark days soon, thanks to the recent move of the electricity board to install prepaid electricity meter in all its colleges and postgraduate departments. Such prepaid meters have already been installed in the PU office and some postgraduate departments. The South Bihar Power Distribution Company Ltd (SBPDCL) had earlier disconnected power supply to the PU office as the university had earlier refused to accept its proposal for installing prepaid meters at all points inside the university. The power supply was restored recently when PU allowed the SBPDCL to get the prepaid meters installed at some locations to start with. It may be mentioned that even in April this year, power supply to PU was disconnected owing to non-payment of around Rs 6 crore dues. However, the power supply was restored in May following the intervention of Energy Minister Bijendra Prasad Yadav. PU vice-chancellor Ras Bihari Prasad Singh had earlier urged the minister to use his good offices to restore power supply and also requested the education department to release necessary funds for payment of power dues. The recent SBPDCL move is aimed at restricting the use of power on the campus. Now, its colleges and postgraduate departments would have to cough out handsome amount well before using power which they are unlikely to do in the absence of the sufficient grants from the government.
Source: The Times of India
July 14, 2017. Assam Power Minister Pallab Lochan Das said the government plans to go for re-conduction of old wires and electric lines after 21 electrocution deaths were reported in the state this year. The government is going to make installation of Earth Leakage Circuit Breaker (ELCB) mandatory in every house that has a electricity connection above 2 KW, Das said. Das said the government has already installed 40,000 line spacers in Guwahati to ensure that electric wires do not fall from the poles. Das said that the re-conduction of 1,200 km wiring will be completed by October this year. Asked about the infrastructural lapses like faulty electric wires hanging on roadsides that often leads to fatalities, Das blamed the previous government and said that there was no mechanism in the Assam Power Distribution Corp Ltd (APDCL) to check the discrepancies. Das said the power department is planning to include some tricks to avoid electrocution in school curriculum. Assam Chief Minister Sarbananda Sonowal ordered an inquiry into the chronology of circumstances leading to an alleged spurt in the incidents of electrocution deaths during seasonal floods in Assam.
Source: The Economic Times
13, 2017. A new ‘Long Term Distribution Perspective Plan’ is being drafted by the ministry of power to collate details of all the power distribution companies (discoms) across the country. Being prepared by the Central Electricity Authority (CEA), this the first ever draft proposal aimed at envisaging the infrastructure and investments required by the various discoms across the country on an annual basis, till 2021-22. CEA has been deliberating upon a long-term perspective plan for the generation and transmission of power supply in the country and its plan on the issue is already out. The report on the distribution sector would be finalised within 3-4 months, the power ministry said. Also, this would complement the efforts made by the states in favour of a restructuring program for discoms under the Ujwal Discoms Assurance Yojana (UDAY). Earlier reports on generation and transmission created a stir in the power sector after the CEA estimated an ‘end of road’ for the thermal power industry in India in the coming decade. The CEA said that the last mile infrastructure needs to grow in the states for robust power supply.
Source: Business StandardJuly
July 13, 2017. The threat of yet another drought is looming large over the state after being reduced to its knees following regular drought for the last three-years. Poor progress of monsoon has resulted in reduced inflow into reservoirs that generate hydel power. Shortage of water has also left major thermal power station shut their operations for over a month. Bailing out the state from an imminent power crisis, the state government decided to purchase 1,000 MW of power. Chief Minister Siddaramaiah gave green signal to purchase 1,000 MW of power.
Source: The Economic Times
July 12, 2017. The National Democratic Alliance (NDA) government is looking to take the assistance of SBI Capital Markets Ltd in its effort to tackle the issue of stressed assets in the power sector. The investment-banking arm of State Bank of India, which will likely get the mandate from Power Finance Corp (PFC), will help devise a strategy for the resolution of stalled power projects. Stressed assets in the power sector account for around Rs 4 trillion of banks’ Rs 10 trillion of bad loans. Some of the issues faced by these projects include paucity of funds, lack of a power purchase agreement, and absence of fuel security. JM Financial Research wrote that its 2016 study of stressed power assets had concluded that of the total 28 GW generating capacity in question, assets accounting for 14 GW were at high risk. Stressed assets in the power generation sector, where developers have not wilfully defaulted on loans, are likely to be taken over by lenders under a resolution plan being worked out, Power Minister Piyush Goyal said. He said that the centre’s discussion with banks and financial institutions such as Rural Electrification Corp (REC) and PFC was close to reaching a resolution. The strategy being explored involves banks taking over the stressed projects and bringing in state-owned or private entities to manage plant operations efficiently till a buyer is found. REC and PFC are among the largest power sector lenders in India.
Source: Livemint
July 12, 2017. Power Grid Corp of India Ltd (PGCIL) has invited bids from potential aspirants for the role of a consultant in firming up its growth strategy. The two-stage tender involves a reverse e-auction wherein the lowest bidder will be appointed consultant—the first time the public sector unit is taking recourse to such a process, employed by the government in coal block auctions. Also, the tender is limited in nature, which means only a few consulting firms such as PricewaterhouseCoopers have been invited to bid by India’s central transmission utility to help it keep pace with a fast-changing electricity sector. The tender, titled ‘Preparation of business plan of Power Grid including strategy and diversification/business prospects’, would work like this. Once the invited consulting firms place their bids, the lowest three bids will be shortlisted on the basis of their evaluated proposal price, which will also be the applicable ceiling price. These shortlisted bidders will participate in a reverse auction process on the electronic platform of an application service provider, wherein the consultancy work will be awarded to the lowest bidder. With 134,750 circuit kilometres and 217 substations, PGCIL caters to national grid’s inter-regional electricity transmission capacity of 75,000 MW. PGCIL owns and operates around 36,500 km of telecom network.
Source: Livemint
July 12, 2017. The government is considering an Aadhaar-like unique identification for all the power projects in the country to know the right amount of electricity generation and consumption, electricity requirement, demand-supply patterns, and transmission system requirements. An online registry is proposed for the power producers, which include operators of all thermal, hydro, renewable and captive plants. The government is weighing taking stringent actions against non-compliance by power plant developers to ensure complete registration of power projects. The registry will also help new power plants secure regulatory clearances. About 40% of captive power plants are estimated to be unaccounted in the electricity produced in India. The power ministry said electricity generation in India is growing at a robust rate.
Source: The Economic Times
July 18, 2017. The Nagpur bench of Bombay High Court (HC), responding to the growing calls of reducing pollution and using green energy, has decided to shift to solar energy. This was announced by District Mineral Fundations (DMFs) member Anik Kilor. The DMFs, which are formed in every district as per Pradhan Mantri Khanij Kshetra Kalyan Yojana, will sanction the fund for the purpose. The solar panels will be installed on the roof of the historic edifice, popularly referred as ‘Poem in stone’ due to its unique structure. The new buildings will also be completely green ones with state-of-the-art infrastructure and completed in one and half to two years.
Source: The Times of India
July 18, 2017. With the steep fall in solar tariffs in the last two years, the Ministry of New and Renewable Energy (MNRE) has written to all states to ensure that solar developers do not get “undue benefits” from the development by insisting that solar projects meet the deadlines initially set for them without any extensions. Tariffs have fallen from Rs 7-8 per unit in mid 2015 to Rs 2.50-3.50 per unit at present. The lowest tariff was Rs 2.44 per unit at a solar auction conducted for projects at the Bhadla Solar Park, Rajasthan. The fall is largely due to the lowering of prices of solar cells and modules in the global market, especially in China, which has seen considerable overproduction. The MNRE is concerned that developers who signed power purchase agreements (PPAs) at fairly high tariffs while solar equipment prices were also high, could earn a windfall over the next 25 years – most solar PPAs are for 25 years – if they delayed buying their requirements and did so after prices had dropped.
Source: The Economic Times
July 17, 2017. Mizoram’s Solar Power Project Approval Committee (SPPAC) has approved the proposal for setting up of a 20 MW solar park. The project will be implemented by the state power and electricity department and Zoram Energy Development Agency (ZEDA). The Solar Power Policy of Mizoram, 2017 envisaged all government office buildings should harness solar energy in their building premises. The SPPAC decided to convene a meeting of all heads of departments to ensure implementation of the policy.
Source: The Economic Times
July 17, 2017. A French firm, which is to build six atomic reactors at Jaitapur, has submitted a fresh plan to the Nuclear Power Corp of India Ltd (NPCIL) proposing to share a larger role in the engineering aspect of the project, the company said. The firm, EDF, and the NPCIL have also resolved to sign the General Framework Agreement (GFA) for the Jaitapur Nuclear Power Plant (JNPP) by the end of the year. French President Emmanuel Macron is likely to visit India by the year-end and the two sides are working to fast track the negotiations so that the GFA could be signed during that time, the EDF said. The EDF is to build six reactors, each with a capacity of 1650 MW each. When operational, the proposed plant, some 500 km south of Mumbai, will be the largest nuclear power generation park in the country. A construction of a nuclear plant is usually discussed in terms of the EPC (Engineering, Procurement and Construction). The EDF has proposed to take care of the engineering part and a large chunk of the procurement of equipment which have to be sourced from abroad. This position has been different from what Areva, which has been taken over by EDF, had proposed when the negotiations had initially begun. However, the EDF insists that the NPCIL should take care of the construction part as it has an experience of building the Kudankulam Nuclear Power Plant.
Source: The Economic Times
July 15, 2017. Niti Aayog, the government’s policy think-tank, has set up four task forces to prepare a roadmap for reducing pollution levels in the country. The task forces on transport, biofuels, industries and air will be headed by Niti Aayog’s CEO, Amitabh Kant, and will include officials of the ministries of transport, environment and petroleum, Department of Industrial Policy and Promotion and the Confederation of Indian Industry (CII). The task forces are expected to give a detailed action plan, highlighting the role of all stakeholders and setting timelines. Base on the results of the Delhi plan, the scheme will be expanded nationally. The task forces will use the report prepared by Indian Institute of Technology, Kanpur, in 2015 as the base to kickstart assessment of the pollution problem in the national capital. According to the report, a big contributor to Delhi’s air pollution is road dust, which accounts for about 35% of tiny particles in the air, known as particulate matter (PM) 2.5, followed by vehicles, domestic cooking, power plants and industries. Vehicular emissions account for about a quarter of PM 2.5 levels, going up to 36% during winters. Industry body CII had, in November last year, launched its ‘Clean Air-Better Life’ initiative which aims to engage businesses, civil society and the government to take “actionable steps” to cut pollution in the Delhi, which ranks among the most polluted cities in the world.
Source: The Economic Times
July 15, 2017. A giant solar energy plant cum storage battery system with a capacity of 5 MW is coming up at Makkuva in Vizianagaram district to provide electricity for farm motor pumps falling under Andhra Pradesh (AP) Eastern Power Distribution Company Ltd. The energy generated from the solar plant will be supplied to agriculture pump sets in the day and surplus power will be stored in the batteries. Lithium ion batteries will be used to store unused power. The state government has planned two such units with a total capacity of six MW on a pilot basis — one in Vizianagaram of five MW and another with one MW capacity at Kassumarra in Nellore district. Twenty five acres of land has to be identified in Makkuva to set up the massive plant, the likes of which are yielding good results in Germany and United States. Nearly 2,000 farming consumers could be brought under the solar plant. The state is spending Rs 5 per unit to supply free power to the agriculture consumers as of now. AP will be the first state in the country as well to have a system of solar energy-stored power supply for agriculture. The successful bidder will have to install solar power panels to generate power. The AP distribution company will purchase the requisite power from the solar plant and divert it to the agriculture pump sets.
Source: The Economic Times
July 14, 2017. Tamil Nadu continues to lead in installation of rooftop solar projects in the country. The state has outperformed all its peers in rooftop solar installations. India has added 678 MW of rooftop solar capacity in 2016-17, growing at 81 percent year-over-year, reaching total installed capacity of 1,396 MW as of March 2017. With an installed capacity of 163 MW as of March this year, Tamil Nadu topped the rooftop capacity addition table, according to a report by Bridge to India, a global renewable energy consulting firm. Industrial segment remains a major driver for rooftop solar installations in the country with a share of 590 MW. In Tamil Nadu too, industrial segment contributed about 124 MW. Tamil Nadu, Maharashtra, Rajasthan, Gujarat and Karnataka contributed to 40 percent of the country’s total rooftop solar capacity of 1.4 GW. Bridge to India expects India’s rooftop solar capacity to cross the 2 GW mark in this fiscal, partly driven by several ongoing and recently completed rooftop solar tenders. The public sector segment is expected to grow at an impressive 205 percent during this fiscal. Companies such as Delta and SMA (including Zever) accounted for 60 percent of the total rooftop solar inverter market share in the country in 2016-17. CleanMax, CleanTech, Azure, Amplus and RattanIndia led the solar project development business in the same period. Improving economics of rooftop solar, government tenders and improving net-metering implementation across key states would be the biggest drivers for the segment and the total rooftop solar capacity is expected to reach of 13.2 GW by 2021.
Source: The Hindu Business Line
July 13, 2017. To promote solar energy, the state electricity department and Goa Energy Development Agency (GEDA) have conducted a study to set up roof top solar plants across the state on government buildings, the power ministry said. While solar power is generated at five government bodies, there are plans to increase the number of roof top solar power plants in the current financial year. As of now, government buildings with roof top solar plants are GEDA, Raj Bhavan, PWD works division IV-Tonca, Mormugao Port Trust and the National Institute of Technology. Given that Goa does not produce any electricity from conventional energy sources, the state government is now focusing on renewable energy to augment its electricity power needs, Power Minister Pandurang Madkaikar said.
Source: The Economic Times
July 13, 2017. Solar power may soon light up the government schools in Delhi as the Aam Aadmi Party government is considering a proposal to set up photo-voltaic panels on rooftops on all of its school buildings. The move will give momentum to the Delhi government’s flagship programme to make the national capital a solar city. The Delhi government, in its Solar Policy, targets to generate 2,000 MW electricity through solar power by 2025. The proposal to light up Delhi schools with solar energy was ready and would be implemented soon. In a related development, those consuming up to 400 units will continue to get 50 percent subsidy on their bills as the Delhi government extended the subsidy for the financial year 2017-18. The decision that was taken during a Cabinet meet chaired by Delhi Chief Minister Arvind Kejriwal and will cost Rs 1,720 to the state exchequer.
Source: The Asian Age
July 13, 2017. Raja Bhoj Airport is going solar. It’s going to be only the second airport in India, after Kochi, to become self-sufficient through green energy, airport director Akashdeep Mathur said. The authorities have decided to install a 1 MW capacity solar plant to power all airport functions. Once operational, it will save Bhopal airport Rs 25 lakh a month in electricity charges. The project will cost around Rs 4.5 crore and the airport is expected to go all-solar in December 2017. Two years ago, a solar project was tried out for the first time with enough panels to generate 100 KW power. Buoyed by the saving in electricity consumption, the authorities sent a proposal to Madhya Pradesh State Urja Vikas Nigam Ltd to frame a policy on net metering, which will help them install a 1 MW capacity plant and produce enough clean energy to take care of the entire power consumption of the compound. It was cleared and Urja Vikas Nigam and the airport will install the solar panels. The airport’s peak consumption during summers is 1.3 MW.
Source: The Times of India
July 13, 2017. Hindustan Power, the New Delhi-based power producer, announced it has acquired 15 solar power generation projects in Japan with a capacity of 150 MW requiring an investment of $100 million for development. The company aims to increase its footprint in international markets from the current 450 MW to 2,000 MW by 2022. Hindustan Power has executed over 800 megawatt peak (MWp) of solar power projects which includes a 25 MW plant at Lauta, Germany, a 30 MW solar plant in Gujarat, a greenhouse rooftop plant in Sardinia, Italy among others. According to International Solar, Hindustan Power, the proposal to develop the four units of 25 MW projects has been submitted to Bangladesh government and the required land agreement has been signed. Hindustan Power has a portfolio of 6,000 MW of commissioned as well as under-construction projects which includes 500 MW installed solar capacity and 1,200 installed thermal capacity amounting to an asset size of $2 billion.
Source: The Economic Times
July 13, 2017. Low solar power tariffs discovered in recent rounds of bidding for solar power projects has raised questions on the viability of projects, Sajjan Jindal, Chairman and Managing Director of private power producer JSW Energy, has said. He said the government has set ambitious targets for setting up renewable capacities and hence the viability of projects will be a crucial factor to achieve the long-term goal of energy security. JSW Energy, part of the $11 billion JSW Group, is evaluating various opportunities involving next-generation technologies which are going to be disruptive in nature in the energy space, Jindal said. The current stress in the power sector could lead to consolidation which will offer good prospects for future investments, he said.
Source: The Economic Times
July 13, 2017. The Nation Hydel Power Corp (NHPC) has shut down its hydel power plant at Ramdi in Darjeeling hills after a mob of over 600 people began agitation outside the plant site, NHPC said. NHPC said the regional head of NHPC is slated to meet the West Bengal Power secretary to discuss the issue. NHPC will resume power generation at Ramdi plant once it gets assurance of security of the unit. NHPC has another unit Teesta Low dam IV of 160 MW in Darjeeling hills.
Source: The Times of India
July 12, 2017. Cochin International Airport Ltd (CIAL) is set to amplify its solar generation capacity further this year from 22 MW to 30 MW by fully commissioning its solar carport and solar panels at the Chengalthodu canal. CIAL plans to generate a total of 100 MW by 2020 from all their solar and hydro energy projects. When the latest international terminal was inaugurated by Chief Minister Pinarayi Vijayan earlier this year, he had also commissioned the expansion of CIAL’s solar project from 15.5 MW to 22 MW. The expansion was undertaken to meet the increased energy requirement of the international airport. To do so, the airport authorities added solar panels at three locations–the hangar premises which will generate 3 MW, the southern side of the airport to produce 2 MW and 1 MW from the solar carport. CIAL plans on generating another 62 MW from its hydroelectric projects by the end of 2020.
Source: The Times of India
July 12, 2017. NLC India is investing heavily in renewable energy as producing only lignite and generating power from it may not be sustainable for long. The company recently won a 709 MW solar project in Tamil Nadu and hopes green energy will boost top-line growth. It has firmed up a capex of about Rs 17,400 crore for setting up 4,200 MW of green energy generation capacities by 2020 as part of its diversification plan. The company said lignite extracted from pits has high moisture content of 30-40%. This makes it unviable to transport the fuel over long distances on rakes. Thus, lignite-based power stations are economic only if integrated power plants are set up at pit heads. So far, we are competitive because we do not have to transport lignite over long distances and all our plants are at pit heads. The company intends to set up 995 MW of solar generation capacity each at Tamil Nadu and Uttar Pradesh. The plant in Tamil Nadu is expected to be ready by March 2019 while that in Uttar Pradesh would be ready by September 2019.
Source: The Economic Times
July 12, 2017. BSES Rajdhani Power Ltd (BRPL) and The Energy and Resources Institute (TERI) have entered into a partnership to explore collaboration opportunities for solar rooftop, electric vehicles, energy storage systems, energy efficiency and smart grid technologies. The Memorandum of Understanding (MoU) has been signed for two years. BRPL has implemented 8 MW solar rooftop in its licenses area and estimates addition of another 20 MW during 2017-18, BRPL said. TERI said the outcomes of our study would enable informed decision making for large scale adoption of rooftop solar into their distribution grid.
Source: The Economic Times
July 12, 2017. Emphasizing on the need of electricity to scale up development in the state, the Uttar Pradesh (UP) government reiterated it would ensure 24-hour power supply to all electrified areas by October 2018. Making the point on the floor of the house during the budget session, Finance Minister Rajesh Agarwal said the state government entered into a ’24×7 Power for All’ agreement with Centre in April and would, therefore, perform its part by providing power to every citizen by 2019. Agarwal, nevertheless, claimed the state government was providing around 330 million units of electricity, which was almost 20% more than in the previous year. Accordingly, power supply has risen from a maximum of nearly 15000 MW in 2016 to over 17000 MW this year. The issue of poor power supply in state has been a burning issue that was raised by the BJP during the UP assembly elections. The state has also been reeling under recurrent power outages triggered by an overloaded transmission network. The new state budget, however, did not make any specific mention of the budgetary allocation towards the same.
Source: The Times of India
July 12, 2017. Delhi Mumbai Industrial Corridor Development Corp (DMICDC) said its 1 MW smart micro grid solar power plant in Rajasthan has started commercial operations. The project demonstrates integration of solar power with backup diesel generators and the plant has started supplying power to its first industrial consumer Mikuni India, DMICDC said.
Source: India Today
July 18, 2017. Brazil’s oil regulator may allow companies to apply more flexible local content rules to pre-existing exploration and production contracts, oil regulator ANP director Decio Oddone said. Oddone said the ANP would open a 30-day comment period on the proposal, followed by a hearing and publication of the rule in September. Contracts signed since 2005 but before more flexible rules went into effect this year would be eligible. Content rules dictate what percent of a project’s workers and inputs have to be local in origin. Many crude projects have been put on ice in Brazil, including exploration of the Libra oilfield in the subsalt region of the Santos basin, thought to be Brazil’s largest oil reserve, due in part to steep costs stemming from tough local content rules. Oddone said the ANP had received more than 230 requests for exemptions from the rules by companies with pre-existing contracts, including one by state-controlled oil firm Petrobras, which has partnered with Total, Shell and others to develop Libra. In February, ANP sharply reduced local content requirements in future oil exploration and production contracts in a boon to oil companies but a major setback for local suppliers. If approved as proposed, the plan announced would extend the more flexible rules to older contracts. Oddone also raised the possibility of reducing royalties for companies that decide to renew concessions in the future. He said an auction slated for September 27 would allow firms to use oil and gas reserves as collateral for bank loans.
Source: Reuters
July 18, 2017. Mexico will announce later this week the bid terms and blocks up for grabs in its next deepwater oil tender, which may include the first areas from the Cordilleras Mexicanas basin. The Cordilleras Mexicanas deepwater basin is home to national oil company Pemex’s Lakach natural gas project and located east of the Gulf Coast port of Veracruz. Cordilleras Mexicanas is viewed by the oil and gas industry as a major source of untapped potential. An auction would be the first time the basin has been made available to international oil majors, which for decades have profitably developed other fields in United States (US) waters nearby. Mexico’s first deepwater oil auction last December included blocks from the Perdido Fold Belt straddling the US-Mexico maritime border, and the Salina basin further to the south. For the next deepwater round, the energy ministry is also looking at areas in the Cordilleras Mexicanas basin, the National Hydrocarbons Commission said. The auction will likely take place in January, although no fixed date has yet been set, and will differ from the last deepwater tender by including a maximum additional royalty that interested bidders can offer to win development rights. The finance ministry said future oil auctions would include both minimum and maximum additional royalties, and in the case of a tie, a cash bond would be used to break it.
Source: Reuters
July 18, 2017. US (United States) oil and gas exploration and production companies are drilling new wells faster than they can be fractured and hooked up to gathering systems, creating a growing backlog of drilled but uncompleted oil and gas wells. By June, the number of drilled but uncompleted oil and gas wells across the seven largest shale plays had topped 6,000, according to estimates from the US Energy Information Administration.
Source: Reuters
July 17, 2017. Centrica has agreed with Bayerngas Norge to merge the companies’ North Sea assets, creating the region’s largest non-major oil and gas producer and allowing Centrica access to younger fields and to lower its decommissioning liabilities. The joint venture (JV), to be led by Centrica’s head of exploration and production (E&P), will produce 50-55 million barrels this year and have access to 625 million barrels of proved and probable oil and gas reserves. Centrica will own 69 percent of the new entity and raise its interests in younger fields, including the Cygnus gas field which started producing in December, as well as dilute its decommissioning costs and reduce its capital expenditure needs. The JV is expected to invest about 80 percent of its operating cash flow, after tax, to maintain production, resulting in investments of 400-600 million pounds a year, Centrica said. Centrica expects to buy and market all production from the JV’s assets.
Source: Reuters
July 16, 2017. State oil firm Saudi Aramco said the first phase of a new Energy Industrial City in Saudi Arabia will be completed in 2021. The Saudi government said it approved Saudi Aramco’s plans to set up two new companies that will develop and operate the new Energy Industrial City as the kingdom seeks to expand its industrial base. The city, which will be developed over 50-square km of land allocated for energy-related industries, will complete its first phase that covers almost 12-square km by that date, Aramco said. The city will be located between Dammam and Ahsa, at the heart of energy operations, Aramco said. The top oil exporter is trying to lower dependence on oil and build up new industries to speed up job creation for a rapidly rising young population.
Source: Reuters
July 14, 2017. Russian President Vladimir Putin said that the government would not allow gasoline prices to grow “without reason”, according to local news agencies. Russians are very sensitive about the price of transport fuel in a country which extends over 11 time zones. Russian fuel retailers have complained that the authorities have told them to ensure any price rises do not exceed inflation in what is a pre-election year, a demand they say amounts to a price freeze and may bankrupt some independent outlets.
Source: Reuters
July 13, 2017. A surge in Ghana’s oil output this year may do little to ease the West African nation’s fiscal strains as crude prices are lower than what it budgeted, eroding the gains from extra production. This year’s average Brent crude price of $52 a barrel is below the $56 forecast in the budget, which could complicate the state’s plans to narrow the fiscal deficit. Output is set to climb by more than a third in 2017 from a year earlier after Eni SpA started up the Sankofa field in May, and as production rises at Tullow Plc’s second project in the country. Ghana, which became an oil producer when Tullow started the Jubilee field in 2010, forecasts a production increase to an average of 123,416 barrels daily this year from 88,487 in 2016, it said in the March budget.
Source: Bloomberg
July 13, 2017. Mexico should receive around $2 billion in investment during the lifespan of the onshore oil and gas contracts awarded, said Juan Carlos Zepeda, the head of the country’s national oil industry regulator. Zepeda said he expected the 21 areas awarded in two auctions to yield an additional 79,000 barrels per day (bpd) in crude production by 2025 as well as 378 million cubic feet per day of additional natural gas output. That production should start coming online in 2019, he said.
Source: Reuters
July 13, 2017. China imported 36.11 million tonnes, or 8.79 million barrels per day (bpd) of crude oil in June, customs data showed, again making the country the world’s top buyer for the month. June imports were up 17.9 percent from a year earlier, according to calculations based on weekly United States (US) data, although shipments dipped 2.9 percent from May’s figure, which was the second-highest on record. Imports compared with average shipments to the US in June of 7.94 million bpd, according to calculations based on weekly US data. For the first six months of 2017, China shipped in 212 million tonnes of crude, or 8.55 million barrels per day (bpd), up 13.8 percent on the same period in 2016, according to customs.
Source: Reuters
July 13, 2017. Oil major BP Plc is shipping diesel from the United States (US) to Australia in an unusual shipping flow. The Jupiter Express carrying about 35,000 tonnes of diesel loaded from BP’s Cherry Point, Washington refinery and is currently headed to Botany Bay, New South Wales in Australia, shipping data showed. Australia imports most of its diesel requirements from Singapore, South Korea and Japan but several refineries undergoing maintenance and prompt demand from India has tightened supply of the fuel in Asia, traders said. The cash differential for diesel with 10 parts per million (ppm) sulfur, a grade imported by Australia, rose to a six-month high in early July, data showed. BP last shipped diesel from the US to Australia in December, a shipbroker said, though such cargo movements were unheard of before that. US usually ships most of its diesel exports to Europe than Asia due to cheaper freight rates, traders said. BP has chartered the long-range Nan Lin Wan and Front Antares tankers for loading out of the Amsterdam-Rotterdam-Antwerp storage and refining hub in mid-July, headed to Asia, traders and shipbrokers said. But the unusual diesel imports could ease in the third quarter as refineries are expected to return from maintenance and as India’s imports of the fuel taper off due to the start of monsoon rains which typically reduce the need of the fuel in irrigation pumps.
Source: Reuters
July 12, 2017. Iran expects to sign deals with Russian companies on exploration and development of its oil and gas resources within the next 5-6 months, Iran’s Deputy Oil Minister Amir Hossein Zamaninia said. Zamaninia earlier said Russian firms Lukoil and Gazprom have expressed interest in oil exploration projects in Iran.
Source: Reuters
July 18, 2017. GE’s Baker Hughes has bagged a contract from the Iraqi government to develop advanced solutions for flare gas at the Nassiriya and Al Gharraf oilfields using its modular gas processing technology. The project which will be carried out in two stages would need the GE company to deliver fast-track solutions to aid in flare gas recovery from the oilfields. As part of the initiative by Baker Hughes, an advanced modular gas processing (NGL) plant has been recommended to be installed for the Nassiriya oilfield in the first stage. The NGL is expected to dehydrate and compress flare gas to generate gas of more than 100 million standard cubic feet per day. The project will also help Iraq in keeping a check on the amount of gas flared in the Nassiriya and Gharraf oilfields which are otherwise wasted. Baker Hughes had merged with GE’s oil and gas business to form a $32 bn company with operations in more than 120 countries.
Source: Energy Business Review
July 18, 2017. Energy Transfer Partners (ETP) said it has delayed the start of its Rover natural gas pipeline running from Pennsylvania to Ontario until later this summer. Rover, the biggest gas pipeline under construction in the United States, originally was expected to start in late July but the first phase was pushed back after regulators said ETP first needed to meet certain requirements. The company said it still expects the second and final phase of the $4.2 billion project to enter service in November.
Source: Reuters
July 17, 2017. The Canadian natural gas industry should not blame environmentalists, First Nation communities or the government for its failure to get liquefied natural gas (LNG) export infrastructure built. It should blame itself. That’s the view of Seven Generations Energy Ltd founder Pat Carlson, who stepped down as chief executive officer of the Calgary-based natural gas producer. The industry needs to do a better job of involving those most affected by its operations, Carlson said.
Source: Bloomberg
July 13, 2017. Japan’s Tokyo Gas, the biggest city-gas supplier in the world’s largest importer of liquefied natural gas (LNG), is in talks to renew supply contracts and will push to revise terms to get more flexibility and cut prices. The push for easier terms, a major concern among Japanese utilities after the Fukushima nuclear disaster six years ago led to a surge in LNG imports and drove prices higher, got a boost when the country’s anti-trust regulator last month ruled restrictions in supply contracts were anti-competitive. The decision by Japan’s Fair Trade Commission to rule that so-called destination clauses that restrict resale of LNG cargoes are anti-competitive is likely to lead to more trading by buyers in Japan and could prompt challenges to similar restrictions elsewhere in Asia. Asian LNG buyers have long complained that having destination clauses in LNG contracts unfairly restricts trading of the fuel at times when it would make more economic sense for buyers to on-sell supplies to other markets.
Source: Reuters
July 13, 2017. Polish gas pipeline operator Gaz-System expects the North-South Gas Corridor linking liquefied natural gas (LNG) terminals in Poland and Croatia to be ready by 2022, its chief executive officer Tomasz Stepien said. For Poland, seeking to reduce its dependence on Russian gas, 2022 could mark a turning point for its domestic gas market. Warsaw has said it does not intend to extend the long-term gas deal with Russia’s Gazprom when it expires in 2022. By then Poland plans to build a gas link called the Baltic Pipe to Norway to tap into gas deposits in the North Sea. With its already operational LNG terminal on the Baltic Sea, Poland could then replace Russian gas with other sources and also resell the excess to neighbouring countries. A key part is a cross-border gas link connecting the Polish and Czech systems, which has faced numerous delays. Stepien said the gas market in central Europe is undergoing significant change in the light of increased LNG supplies and as in many countries long-term supply deals with Russia were about to expire. He said if Poland did not invest in new gas connections to diversify supply the cost of its gas purchases would be higher by hundreds of millions of zlotys a year.
Source: Reuters
July 13, 2017. Turkey will take measures against Greek Cypriot exploration for oil or gas around Cyprus, Turkey’s Foreign Minister Mevlut Cavusoglu said. The ‘West Capella’ drilling vessel contracted by France’s Total and Italy’s ENI moved into position to start exploring for gas off Cyprus, the island’s energy ministry said.
Source: Reuters
July 12, 2017. China’s liquefied natural gas (LNG) receiving capacity is expected to rise 8.6 percent a year to 100 million tonnes (mt) by 2025, the National Development and Reform Commission (NDRC) said. Storage capacity of natural gas, including LNG, is forecast to rise 17 percent a year from 2015 to 2025 to reach 40 billion cubic metres (bcm), the NDRC said. The NDRC also expects pipeline capacity for natural gas imports to rise 7.6 percent a year from 2015 to 2025 to hit 150 bcm. The world’s top consumer of oil and coal, China has embarked on a huge investment programme to expand its LNG and pipeline infrastructure. China’s oil and gas pipelines are expected to total 169,000 kms (105,000 miles) by 2020 and 240,000 kms by 2025, the NDRC said.
Source: Reuters
July 12, 2017. Indonesia is unlikely to need to import liquefied natural gas (LNG) until at least 2020 due to robust gas production at home, even as the government has pushed increased domestic gas consumption. The country’s Director General of Oil and Gas, Wiratmaja Puja was referring to higher-than-expected output from the Jangkrik gas field operated by Eni. The field was designed to produce 450 million cubic feet per day of gas but output could be up to 600 million cubic feet per day, he said. Currently the world’s fifth-biggest exporter of LNG, Indonesia has lost market share to new production from Australia and Qatar and as output is reserved for domestic needs. However, the domestic gas market has not developed as anticipated even after the government promoted the fuel to replace coal for power plants and as an industrial fuel. Puja also called into question imports after 2020 when he mentioned BP’s Tangguh Train 3 project will supply more gas to Indonesia from 2020 onwards. Puja suggested those supplies could be redirected to other LNG buyers in Asia, particularly Bangladesh. Meanwhile, Puja said that Indonesia is looking for buyers for 16 to 18 uncommitted LNG cargoes for this year. He expects an average of 50 to 60 uncommitted cargoes per year until 2035.
Source: Reuters
July 12, 2017. Royal Dutch Shell Plc said it would sell its 45 percent stake in the Corrib gas venture to a unit of Canada Pension Plan Investment Board (CPPIB) for up to $1.23 billion, marking the oil company’s exit from the upstream business in Ireland. The deal includes an initial consideration of $947 million and additional payments of up to $285 million between 2018-2025, subject to gas price and production, Shell said. The development of the Corrib gas field, discovered in 1996, has faced protests since 2005 by residents concerned that the laying of a high-pressure pipeline to bring gas onshore could pollute their water supply. CPPIB and Vermilion Energy Inc will become the new operator of the gas field off the north-west coast of Ireland.
Source: Reuters
July 18, 2017. China’s top planning body National Development and Reform Commission (NDRC) said that the country has sufficient coal supplies to meet its current power demands, as Beijing seeks to ease concerns about tightening supply due to earlier government-enforced cutbacks. The NDRC said in it would “properly deal” with the impact of cutting capacity in the world’s top consumer of the fuel, and would try to stabilise supplies and prevent supply disruptions. This included 90 million tonnes of coal capacity already added in the first half of the year, the NDRC said. More projects were under construction and expected to be operating by the end of the year. The comments come as thermal coal futures have surged this year, hitting record highs above 600 yuan per tonne amid fears that supplies would fail to meet demand during a prolonged heatwave across the north of the country.
Source: The Economic Times
July 13, 2017. Working 50 meters (164 feet) under ground with minimal air supply, Uuganbaatar is one of thousands of Mongolians trying to make a living digging for coal. Although the mining season does not begin until autumn, when the ground freezes and work is safer, the 31-year-old and his colleagues are seeking to gain a head start by digging a shaft in Nalaikh, one of the nine districts of Mongolia’s capital Ulaanbaatar, in late June. But their mine could soon be shut by the government, which has launched an unprecedented crackdown on sites that don’t meet safety standards. Miners such as Uuganbaatar dig for coal under loose arrangements with local unions and private companies. Uuganbaatar works on extracting coal from a primitive mine in Nalaikh, one of the nine districts of Mongolian capital Ulaanbaatar, Mongolia June 29, 2017. In the past 25 years, the government has recorded 234 fatalities in Nalaikh’s coal mines, although residents say the real number is hundreds higher.
Source: Reuters
July 12, 2017. Opposition to a planned $3 billion coal-fired power plant in eastern Myanmar is highlighting the challenges facing Aung San Suu Kyi’s government in crafting a coherent energy policy in one of Asia’s poorest and most electricity-starved countries. With only a third of the country’s 60 million people connected to the grid and major cities experiencing blackouts, finding investors is tough for Myanmar and it is now looking at options, from coal to deep-sea gas, to boost its power supply. Coal would be one of the quickest ways to ramp up power generation but, as protests against the proposed 1,280 MW project in the eastern Kayin state show, the option is unpopular in Myanmar.
Source: Reuters
July 17, 2017. A baboon plunged a Zambian tourist town into darkness after tampering with equipment at a hydro-electric power station, the state electricity company said. The 108 MW power station in Livingstone, a hub for tourists visiting nearby Victoria Falls, is close to a national park but it is rare for animals to wander into the plant. Zesco Ltd, which owns the power station, said the baboon disturbed a high voltage transformer leaving about 40,000 customers without electricity for five hours.
Source: Reuters
July 17, 2017. Siemens has bagged a high three-digit million euros worth contract for the 900 MW DolWin6 offshore grid connection in the German North Sea from TenneT TSO. Under the terms of the contract, the German technology giant will provide the entire technology that is needed for the offshore grid connection to efficiently transmit high-voltage direct-current transmission. For the project, Siemens will deploy its DC CS direct-current compact switchgear for the first time.
Source: Energy Business Review
July 14, 2017. The electricity supply to Gaza’s 2 million residents has dropped to unprecedented lows, with blackouts lasting for more than 24 hours, the territory’s power distribution company said. The Palestinian enclave needs at least 400 MW of power a day, but only 70 MW were available, when Gaza’s power plant shut down after fuel shipments from Egypt were interrupted following a militant attack. The coastal strip had already been experiencing the worst electricity shortage in years, limiting Gazans to about four hours of electricity per day. Palestinian President Mahmoud Abbas recently asked Israel, the main provider of power to Gaza, to cut shipments as a way of pressuring the Islamic militant group Hamas, which seized power in Gaza a decade ago. Several neighbourhoods were without electricity for more than 24 hours. Gaza’s power station has low storage capacity, and requires new fuel shipments on an almost daily basis.
Source: The Economic Times
July 18, 2017. Brazil is planning to lower the estimated capacity of several older hydroelectric dams before they are privatized by state-controlled power holding company Eletrobras. The revisions will reduce the amount of energy that the dams can legally offer to the market – part of an effort to create a more robust and predictable power grid as the government seeks more private investment for the sector. Earlier this year, a government study suggested that hydroelectric capacity estimates could be lowered by about 845 MW with nearly two-thirds of that coming from the massive Itaipu dam shared with neighbouring Paraguay. The proposed capacity revisions would not affect the hydro dams’ obligations, but would reduce their potential to generate revenue. By making them before Eletrobras puts the operations up for sale, the government is aiming to reduce uncertainty and bring more bidders to the table for the upcoming privatizations.
Source: Reuters
July 17, 2017. California lawmakers are nearing a high-stakes decision that will decide the fate of a climate initiative that Governor Jerry Brown holds up as a model to be replicated around the world to confront rising global temperatures. The vote on whether to give another decade of life to California’s cap-and-trade program has global implications as the largest US (United States) state moves to be a leader in reducing carbon emissions at a time when President Donald Trump is pulling back from fighting global warming. Lawmakers are considering a two-measure package, one to renew cap and trade through 2030 and another aimed at improving local air quality. State law requires California to reduce greenhouse gas emissions 40 percent from 1990 levels by 2030 – among the most aggressive mandates for carbon reduction in the world. Without cap and trade, state regulators will be forced to enact restrictive mandates on polluters that would be burdensome for businesses and significantly more expensive for consumers, Brown said. The legislation shows the divisions between environmentalists who work nationally, focusing on reducing global carbon emissions and creating a policy that can be replicated elsewhere, and environmental justice advocates who work locally. A quick extension would also bolster Brown’s global advocacy for climate action. He made a high-profile trip to China, plans to attend a climate summit in Germany in November and will host a climate conference next year in San Francisco.
Source: The Indian Express
July 17, 2017. Your chopped-off locks could help clean up oil spills in oceans, according to scientists who suggest that human hair waste from salons may be a valuable asset to remediate maritime disasters. Using hair to deal with oil spills is a fairly new area of research. Only a couple of studies having been conducted where the hair was either ground up or changed it in some way before being used. Several environmental groups experimented with hair booms during the BP Gulf of Mexico oil spill in 2010, but did not conduct scientific research. However, particular types of dispersants are actually doing more harm than good trying to clean up oil sites, Rebecca Pagnucco, from the University of Technology Sydney in Australia, said. As a result of this concern, there has been a push towards research using natural materials such as cotton or wool.
Source: The Economic Times
July 16, 2017. France should define a clear roadmap to fulfill its pledge to cut the share of nuclear power in its electricity generation to 50 percent by 2025, French Ecology Minister Nicolas Hulot said. A 2015 law requires France to reduce in eight years the share of atomic power generation to 50 percent from over 75 percent currently, and include more renewable wind and solar generation. Hulot said that for France to meet that target, it might have to shut down up to 17 of its 58 nuclear reactors operated by state-controlled utility EDF. Newly elected French President Emmanuel Macron has maintained the target of cutting French nuclear production by 2025. Hulot said that since the 2015 law was passed, little had been done and there was no clear strategy on how France would meet the 50 percent target. The closure of the nuclear plants is a hot-button issue in France with trade unions and some political parties saying the plan would cripple the French nuclear sector. Hulot said that EDF would have to accelerate its development into renewable energies.
Source: Reuters
July 16, 2017. Top oil exporter Saudi Arabia has asked companies to qualify to bid for its first utility-scale wind power project at Dumat al-Jandal, the energy ministry said, keeping on track to tender the first round of renewable energy projects this year. Requests to qualify for the 400 MW wind project in the north of the kingdom will close on August 10, and proposals will be received from August 29. Bidding closes in January next year, the ministry’s Renewable Energy Project Development Office (REPDO) said. The ministry had earlier said the Sakaka 300 MW solar PV plant and a 400 MW wind project in Midyan were part of the first round of projects. Saudi Arabia aims to generate 9.5 GW of electricity from renewable energy annually by 2023 involving 60 projects. The renewables initiative involves investment estimated between $30 billion and $50 billion. The ministry has said the first round will be to generate 700 MW of renewable energy followed by 1.02 GW in the second round which will be split into 620 MW solar and 400 MW wind whose bidding could happen between the fourth quarter of this year and first quarter of 2018.
Source: Reuters
July 14, 2017. Five new Melbourne Water mini hydroelectric power plants have arrived at their new homes at Dandenong, Wantirna, Mount Waverley, Boronia and Cardinia Creek and they are already putting power back into the grid. The plants were delivered in pre-assembled, self-contained units, offering simple, weather resistant power delivery solutions which can be brought online quickly. Melbourne Water Senior Project Manager Ian Royston said that the mini-hydro plants were harnessing energy that would otherwise go to waste. Royston said the five plants were already delivering power after being switched progressively over the last few months. Melbourne Water’s hydroelectric power plants combine economic and ecological efficiency to produce renewable electricity from sustainable sources.
Source: Energy Business Review
July 14, 2017. Record low renewable energy prices in Chile are to stay and will likely push power prices even lower, Chilean Energy Minister Andres Rebolledo said. Chile, with ample solar and wind resources, has become a poster child for renewable energy, with other countries looking to emulate the sector’s development. In August 2016, wind and solar producers won the right to supply around half of the power in a massive 12.3-terrwatt government auction to supply Chile’s public grid for 20 years starting in 2021. But some of the winning renewable projects are struggling to obtain financing, raising speculation that the rock-bottom prices at last year’s auction will not be repeated when producers come back to the table for a 2.2-terawatt contest this October.
Source: Reuters
July 13, 2017. Dominion Energy Inc said it would keep fighting to get the Connecticut legislature to include power from the company’s Millstone nuclear plant included in a state energy procurement plan. But NRG Energy Inc vowed to fight Dominion’s proposal, calling it “a cynical scheme that should not be rewarded.” The state has solicited power from renewable sources of generation to support environmental programs. Dominion has said including nuclear power in this program will help cut the state’s electricity costs, which are among the highest in the country. Millstone is among several nuclear plants in the United States Northeast and Midwest that could close before their licenses expire, as low wholesale power prices have squeezed profits. The ISO said Dominion had already committed to generate power through May 2021, but noted it could retire the reactors so long as the company provides energy from another source. Connecticut is one of several states exploring ways to keep reactors in service to preserve carbon-free energy, jobs, taxes and a more diverse power pool. In 2016, New York and Illinois adopted rules to subsidize some reactors that were in danger of closing due to generators run on cheap natural gas. Ohio, Pennsylvania and New Jersey have also considered proposals to protect their reactors.
Source: Reuters
July 12, 2017. Democratic Republic of Congo has decided to more than double the size of its planned Inga 3 hydroelectric plant to make it more economical, after the $14 billion project was hit by financing problems. Inga 3 is part of a $50 billion-$80 billion project to expand hydroelectric dams along the Congo River, but the project has repeatedly been delayed by red tape and disagreements between Congo and its partners on the project. Bruno Kapandji, director of the Agency for the Development and Promotion of the Grand Inga Project, said the plant would be built to produce between 10,000 and 12,000 MW of power, more than double the originally planned capacity of 4,800 MW.
Source: Reuters
July 12, 2017. EU (European Union) competition enforcers approved a Hungarian support scheme for renewable electricity worth up to 45 billion forints ($166.3 million) yearly, saying it complies with the bloc’s state aid and energy goals. The state aid consists of a feed-in tariff limited to installations below 500 kilowatt or a price premium for those above that level. Hungary also pledged to partially open up the scheme to foreign producers as of this year.
Source: The Economic Times
| State/UT | Electricity Generation from Small Hydro (Million Units) 2016-17 (April-January) |
State/UT |
Electricity Generation from Small Hydro (Million Units) |
| Chandigarh | 0 | Kerala | 374.73 |
| Delhi | 0 | Tamil Nadu | 89.8 |
| Haryana | 267.49 | Lakshadweep | 0 |
| Himachal Pradesh | 1885.33 | A & N Islands | 12.17 |
| J & K | 278.24 | Bihar | 20.05 |
| Punjab | 372.73 | Jharkhand | 0 |
| Rajasthan | 3.83 | Odisha | 218.15 |
| Uttar Pradesh | 22.07 | Sikkim | 34.38 |
| Uttarakhand | 726.65 | West Bengal | 92.84 |
| Chhattisgarh | 39.65 | Mizoram | 42.57 |
| Gujarat | 20.26 | Assam | 78.73 |
| Madhya Pradesh | 189.76 | Manipur | 0 |
| Maharashtra | 444.34 | Meghalaya | 54.75 |
| Dadra & Nagar Haveli | 0 | Arunachal Pradesh | 13.4 |
| Daman & Diu | 0 | Nagaland | 86.41 |
| Andhra Pradesh | 135.17 | Tripura | 40.03 |
| Telangana | 45.54 | Others (DVC) | 121.46 |
| Karnataka | 1491.55 | Total | 7202.06 |
Share of Small Hydro in Total Renewable Electricity Generation [2016-17 (April-January)]
Publisher: Baljit Kapoor
Editorial advisor: Lydia Powell
Editor: Akhilesh Sati
Content development: Vinod Kumar Tomar
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