Energy News Monitor I Volume VI, Issue 52
Managing Volatility & Growth: A New Energy Paradigm (part IV)
(Selection of Observations from presentations made at the conclave)
Continued from Volume VI, Issue No. 51…
Dr U.D. Choubey, DG, SCOPE & Former CMD, GAIL
as is a key energy resource of this era. New sources of gas like shale gas as well as the potential of exploitation of gas hydrates offer great potential in widening our energy sources. India has been working on understanding this sector for over 15 years but much remains to be done to realize the potential of gas hydrates and shale gas. Before the potential of what is called non traditional gas resources is realized, what is important is to develop the potential for traditional gas. For developing gas markets, infrastructure is the most important element. Market levers and drivers must be identified to compete with alternate fuels. Legal and regulatory frameworks must also be developed simultaneously. Natural gas has been a significant player in India only for the last two decades. Before that there was marginal utilization of gas but with the establishment of HBJ pipeline gas use increased rapidly.
The HBJ pipeline was built to carry 18 metric million standard cubic meters per day (mmscmd) of gas. Today GAIL alone has an infrastructure capable of carrying about 130 mmscmd. Apart from that we have Reliance which has an infrastructure for carrying about 80 mmscmd. We have also a third significant player in Gujarat State Petronet Limited which is confined to the State of Gujarat, but has plans for 2500 kilometers of pipelines of which at least 60 percent has already been laid. In India’s Eleventh Plan, a gas demand of 226 mm scmd in 2009-2010, going up to 280 mm scmd in 2011-2012 is indicated. Against this demand, the supply in 2009-2010 is projected to be 168 mm scmd and in 2011-2012, the supply is projected to be 191 mm scmd. There is a gap of 90 mm scmd in 2011-2012. In order to meet this gap various options are being examined. One is intensive exploration through NELP and the other is importing gas through cross border pipelines or in the form of LNG. As far as cross border pipelines are concerned, negotiations have been going on for over 15 years but none have the potential to materialize in the foreseeable future.
The infrastructure within the country is growing very rapidly. GAIL has almost over 6000 km of transmission pipelines and Reliance has about 1500 Km. There has been a talk of creating a national gas grid for number of years. Parts of it are in progress but further development requires more supplies to be available because more sources will enable more pipeline projects to become viable. The significant projects that are being carried out by GAIL are Dadri-Nangal, Chainsa-Jhajjar Hissar, Jagdishpur-Haldia, Dabhol-Bangalore. Reliance also has plans apart from its East-West pipeline.
Its pipelines may extend to the East coast of India going South to as far as Tuticorin and also North from Kakinada. India has only 3.29 km/1000 sq.km in terms of pipelines whereas world over they are more than 50 km/1000 sq.km. Even Pakistan has about 70 km/1000 sq.km. Pakistan has been ahead of us in terms of gas distribution because they use almost 45 percent of the primary energy in the form of gas. As far as city gas distribution is concerned the effort started with Mahanagar Gas in Mumbai in 1995. It was a joint venture between GAIL and British Gas and a few years later Indraprastha Gas was established as a joint venture between GAIL and BPCL. Both these companies have been successful in meeting the requirements of gas in Mumbai and Delhi and part of NCR but more than that it has been successful in reducing local pollution. There are number of players entering the city gas segment.
Adani is one key player in Gujarat. Before that Gujarat Gas Company was started by Government of Gujarat in collaboration with NOCIL and was later on taken over by British Gas. That company has been supplying gas in southern Gujarat, Surat, Ankeshwar and Baruch. Subsequently Ahmedabad was given to Adani. Adani is also active in the NCR Region in Faridabad and Noida. Subsequently Noida has been given to IGL. There are now a number of projects that Petroleum and Natural Gas Regulatory Board has been trying to develop. But unfortunately there are legal issues which have been preventing the regulator from acting effectively. There is an embargo by the High Court on PNGRB granting new licenses. There is a need for having an effective regulatory process to take city gas distribution into more and more cities in India and to have a level playing field where new players can come in and increase activities in this area.
Mr.Nitin Zamre, Director – Consulting, CRISIL Infrastructure Advisory
City gas distribution (CGD) is the ‘last mile’ in the natural gas value chain which consists of upstream exploration production flow into the midstream pipelines or trunk pipelines and then ultimately to consumers through city-gas networks. Though in terms of volume city gas is not significant, the fact that it goes directly to consumers makes it an important sector. City gas has different drivers in different regions of the globe. In the Northern Hemisphere the driver is residential consumption as heating fuel. Countries which are closer to the equator may not have that requirement but it offers value as cooking fuel in addition to being a very clean fuel for vehicle transportation. Over the last couple of years we have seen significant increase in the availability of gas whether it is gas from fields of Reliance which has almost doubled the domestic gas supplies or it is re-gasified LNG which started in 2004 and has assumed a significant proportion of the total gas supplies, or it is the gas from smaller fields which are coming on stream and compensating for the decline in domestic gas supplies in the market.
Figure 3 : New Domestic Sources of Gas to Fuel CGD
Supply is expected to grow substantially from about 150 mmscmd and to about 276 mmscmd by 2015. Most of this gas is likely to come from sources which are going to be beyond the administered pricing mechanism. This gas is expected to come from new sources such as additional LNG supplies from existing terminals or from new terminals in addition to volumes coming from Coal Bed Methane. Out of this volume there is an allocation of about 5 mmscmd of gas and further 2 mmscmd of gas in 2009 for the city gas distribution projects. This provides the lifeline for these city gas distribution projects. For an upstream player who is trying to monetize his gas, these projects are not very attractive compared to bulk consumers.
Therefore it is very important that allocation of gas for CGD projects has been indicated by policy makers and that is something that is going to play an important role in developing these projects further.Infrastructure has grown substantially over last 20 years after the beginning of the HBJ pipeline. However, over the last 3 to 4 years we have seen one major project coming up which is that is the East West Pipeline connecting the new frontier basin for gas production in India - the KG basin - to the developed markets of the north and western India.
We are also seeing other capacities being expanded by GAIL on the existing pipelines as well as a pipeline connecting Maharashtra and Gujarat. These projects were started over last 2-3 years and we have seen good amount of capacity being added to take care of the gas that is being brought into the system. These capacities are likely to expand over next 10-15 years as long as the gas supply keeps pace with it. These capacities and the new transmission lines have been stimulated because of the new finds that have come on stream. Further new finds will spur the development of different pipelines.
Figure 4 : Current Gas Pipeline Network in India
Figure 5 : Future Gas Pipeline Network in India
The maps above show the state of gas pipelines today and what they would look like in the next 10-15 years. This is not very difficult to envisage because the number of potential gas sources is increasing. Apart from the gas finds in the KG basin, there are gas finds in the north east and there are finds in the Cauvery basin. In addition there are LNG terminals which are being planned or already operational on the west coast. As long as the volumes are sufficient to develop this infrastructure, opportunities for city gas distribution projects will increase due to the fundamental fact that CGD projects do not require huge quantities of gas. Setting up a pipeline network specifically for CGD projects is impossible given the small volume requirement. Therefore CGD projects will come up on the basis of development of trunk pipelines which would be set up based on requirements of bulk consumers. New pipelines will connect new demand centers and a National Gas Grid will integrate sources with demand centers. Ultimately a Gas Highway is being proposed which will increase connectivity.
(The remarks are compiled from the recorded transcript of the presentations by the respective speakers. The remarks are strictly not to be reproduced or quoted.) to be continued…
Courtesy: 8th Petro India Conference on ‘Managing Volatility & Growth: A New Energy Paradigm’ organized by the Observer Research Foundation (ORF) and the India Energy Forum (IEF) on November 24-25, 2009, New Delhi.
Myanmar Joins Nuclear Race
by Rajeev Sharma*
uclear energy is the newest fad among nations today ever since climate change concerns dominated the international agenda some five years ago. But in the name of boosting their nuclear energy potential, nations often pursue a nuclear weapon programme. Iran has been a classic case of this for years. But now trouble is brewing along India’s borders as yet another power has embarked upon a clandestine mission of becoming a nuclear weapon state: Myanmar. Is reclusive military ruled Myanmar going nuclear with support from North Korea? According to a report -- ‘Nuclear Related Activities in Burma’ – released in June 1st week by Norway-based Burmese media organization Democratic Voice of Burma (DVB) Myanmar is mining uranium and acquiring components for a nuclear weapons programme. In what could bolster claims of Myanmar developing nukes, a United Nations report in May claimed that North Korea has been secretly exporting missile and nuclear technology to Myanmar. UN experts said in a report that North Korea is exporting nuclear and ballistic missile technology and using multiple intermediaries, shell companies and overseas criminal networks to circumvent UN sanctions. The seven-member panel monitoring the implementation of sanctions against North Korea said its research indicates that Pyongyang is involved in banned nuclear and ballistic activities in Iran, Syria and Myanmar. The North Korean nuclear programme has a China connection as well.
Under Beijing’s protective umbrella, North Korea has deployed nuclear weapons, test-fired ballistic missiles, sold advanced weaponry to other renegade states, counterfeited millions if not billions in foreign currency, laundered cash for drug traffickers and now carried out a major unprovoked military attack against a South Korean vessel. The UN report basically suggests that North Korea has exported nuclear and missile technology with the aid of front companies, middlemen and other ruses. Pyongyang was suspected last year of attempting to transfer weapons to Burma on its cargo ship Kang Nam. North Korea has employed "a number of masking techniques" to skirt export restrictions, such as providing false information about the cargo and its intended end site. Pyongyang also keeps weapons merchandise disassembled as another means of hiding the illicit cargo until it reaches its destination. Along with its formal commerce sites, the North "has also established links with overseas criminal networks to carry out these activities, including the transportation and distribution of illicit and smuggled cargoes," the report asserts. This might involve WMD and weapons materials, nuclear non-proliferation experts say. The North Korean nuclear weapons programme dates back to the 1980s. In the 1980s, focusing on practical uses of nuclear energy and the completion of a nuclear weapon development system, North Korea began to operate facilities for uranium fabrication and conversion.
Earlier a report by Washington-based Institute for Science and International Security (ISIS) suggested that the Burmese junta may have developed nuclear ambitions and has been cooperating with North Korea on possible procurement of nuclear technology. The reasons for those ambitions are not too difficult to guess—the generals who rule the country are under pressure from the international community to restore civilian rule in the country. Their lesson from the politics of North Korea and Iran, and the experience of Saddam Hussein’s Iraq is that the best way to neutralize foreign intervention is to possess a nuclear weapon. If that is the case, India could well have to soon contend with a third nuclear neighbour, besides current ones, China and Pakistan. With couple of months left for general polls in Myanmar, the junta may just want to tighten their grip over the country in the face of Western criticism. The DVB report has been co-authored by Robert Kelley, former director of the International Atomic Energy Agency and Ali Fowle. Fowle is the DVB’s Editor and Research Assistant. According to Kelly, Myanmar was trying to build pieces of a nuclear programme, specifically a nuclear reactor to make plutonium and a uranium enrichment programme.
Kelley claims that Myanmar’s intention is clear - to build a nuclear bomb. Kelley has spent months scouring photographs and documents provided by a former Myanmarese defence engineer who has defected. Defector Maj. Sai Thein Win (STW) is a former defence engineer and missile expert who worked in special factories making prototype components for missile and nuclear programme. Sai has also received training in Russia in the early part of the last decade. "The information brought by Sai suggests Burma is mining uranium, converting it to uranium compounds ... and is trying to build a reactor and/or an enrichment plant that could only be useful for a bomb," Kelly claimed. “Sai’s information on nuclear programme organization is impressive and it correlates well with information from other published and unpublished sources. But the most important thing he has brought forth is hundreds of color photographs taken inside critical facilities in Burma…Our analysis leads to only one conclusion: this technology is only for nuclear weapons and not civilian use or nuclear power,” the authors of the DVB report claim.
The colour photographs analyzed in the report show Myanmarese military officials and civilians posing beside a machine called the vacuum glove box, which is used in the production of uranium metal. "The machines had been built in the factories seemed quite clearly to be for making chemical compounds of uranium. That vessel looks like it's made to turn enriched uranium grain salt into uranium metal, while there are other reasons you could do that, but it's likely to be for a nuclear programme," the report claimed. The ISIS photographs also claim construction work on a possible nuclear reactor site near Mandalay. The ISIS report has been written by leading proliferation experts including David Albright and Paul Brannan. The report says that the military junta is cooperating with North Korea on possible procurement of nuclear technology and appears to be misleading overseas suppliers in its efforts to obtain it.
The ISIS report, titled ‘Burma: A nuclear wannabe; suspicious links to North Korea; high-tech procurements and enigmatic facilities,’ says, “For several years, suspicions have swirled about the nuclear intentions of Burma’s secretive military dictatorship… Certain equipment, which could be used in a nuclear or missile programme, went to isolated Burmese manufacturing compounds of unknown purpose.” Myanmar in the past did nurse nuclear ambitions but in a more open manner. In 2007, Myanmar signed a MoU with Russian atomic energy agency to establish a nuclear studies center in Myanmar, build a 10-megawatt nuclear research reactor for peaceful purposes and train several hundred technicians in its operation. Moscow is not unduly worried with the report. The ISIS report claims that Myanmar’s military cooperation with North Korea has increased over the last several years, fueling concerns about nuclear cooperation.
Evidence of North Korean-Burmese cooperation includes the reported presence in Burma of officials from Namchongang Trading (NCG), a North Korean trading company that is sanctioned by the UN Security Council. However, there is no concrete evidence that North Korea is supplying Burma a reactor. The evidence does support the view that Burma and North Korea have discussed nuclear cooperation, but is not sufficient to establish that North Korea is building nuclear facilities for Burma’s military junta, despite recent reports to the contrary. “Nonetheless, no one can ignore the possibility of significant North Korean nuclear assistance to this enigmatic, military regime,” authors say. This report assumes significance as it comes in the aftermath of global nuclear security Summit in Washington in April 2010 where India was represented by the Prime Minister.
New Delhi has been concerned with clandestine nuclear proliferation by neighbouring Pakistan as well as North Korea and Iran. The ISIS report cautions that because Burma is buying a wide variety of suspicious dual-use goods internationally, governments and companies need to be more vigilant in examining Burma’s inquiries or requests for equipment, whether via Burmese governmental entities, Burmese trading companies, or other foreign trading companies. Companies should treat inquiries from Burma no differently than those from Iran, Pakistan or Syria, it suggests. The two factories analyzed in the DVB report appear to be solely run by Myanmarese engineers. Burma’s nuclear effort is managed by the Directorate of Defence Services Science and Technology Research Center (DDSSTRC). This organization is located in May Myo, also called Pyin Oo Lwin at the Defense Services Technological Academy (DSTA). The DDSSTRC is responsible for a programme, which is charged with building a nuclear reactor, enriching uranium, and building a nuclear weapon.
Myanmar’s nuclear programme is headed by Dr. Ko Ko Oo who has attended meetings abroad and openly asserts his interest in nuclear matters. STW has an interesting background, according to his interviews with us and with the DVB. He received an engineering degree from the DSTA. He joined the military and later was chosen to go to Moscow for additional training in missile technology in 2001. He was in the first group of students going to Russia. Hours before the DVB report was released, U.S. senator Jim Webb on June 3 cancelled a planned trip to Myanmar. Webb cited the report's findings and the US concerns about an alleged shipment of North Korean arms to Burma. "I do not know the validity of this information, but at the same time I think there is enough in these two allegations of Burmese involvement with North Korea and potentially with a nuclear programme," claimed Webb. “Until there is further clarification on these matters, I believe it would be unwise and potentially counterproductive for me to visit Burma.” Webb is Democratic chairman of the US Senate Foreign Relations Committee Subcommittee on East Asia and Pacific Affairs, and has been key in the Obama administration's new effort to open a dialogue with the military junta.
Views are those of the author Concluded
*The writer is a New Delhi-based journalist and commentator on international relations and terrorism. Author can be contacted at [email protected]
Note: Part V of the article on Oil & Gas Discovery & Production in India: Historical Milestones will be published in coming issues
NEWS BRIEF
OIL & GAS
RIL discovers more oil at Cambay Basin
June 12, 2010. Reliance Industries (RIL), has discovered more oil at an onland site in Gujarat’s Cambay Basin, raising the potential of the exploratory fields it has been drilling. The energy major made its sixth discovery in the 635 sq-km block located in the Cambay basin, about 130 km from Ahmedabad, the company said in a release. The company has signed sales purchase agreements with several customers for selling gas from its Krishna-Godavari basin fields. The Supreme Court recently ordered that RIL would supply gas at the $4.2 per million metric British thermal unit (mmBtu), set by the government, compared with $2.34 per mmBtu agreed under a family settlement in 2005. As a result of the ruling that sovereign interest cannot be overridden by private agreements, Reliance Industries gets to keep an estimated Rs 3,000 crore a year that might have gone to Anil Ambani.
RIL looks to acquire shale gas assets of US' Pioneer
June 11, 2010. Reliance Industries (RIL) is considering buying a stake in shale gas assets owned by Pioneer Natural Resources, two people with knowledge of the matter said. Pioneer, based in Irving, Texas, said last month that it expected to announce a JV for its Eagle Ford shale gas assets in the second quarter.
Reliance, which acquired a stake in shale gas areas in the US from Atlas Energy in April for $1.7 billion is joining Royal Dutch Shell and Exxon Mobil to buy unconventional gas reserves, anticipating that prices for the cleaner-burning fuel will recover. Shale-gas deposits were not considered worth tapping before Houston billionaire George P Mitchell pioneered new extraction techniques in the 1990s. Unconventional gas is the industry term for the fuel trapped in shale formations, coal beds and impermeable sandstone rock. BP chief executive officer Tony Hayward described shale gas as a “game changer” after its role in the US overtaking Russia in total gas production last year.
Output from OIL's Assam fields falls
June 9, 2010. State-run Oil India said it was forced to cut crude oil production at its fields in Assam after Numaligarh Refinery Ltd shut down plant for upgrade. Oil India (OIL), which sells close to 2 million tonnes of crude oil annually to Numaligarh Refinery Ltd (NRL), had to curtail output following a shutdown at NRL. Output fell to about 5,000 tonnes a day in April/May from 9,800 tonnes per day normal production.
NRL had from March 16 taken a 60-day shutdown to upgrade units to produce higher quality Euro-III/IV compliant diesel at the refinery. The shutdown, however, got extended and it is now expected that the refinery would be back on full stream later this month. OIL produced 3.32 per cent more crude at 3.611 million tonnes (MT) in 2009-10 and has set a target of producing 3.7 MT to 3.8 MT crude in the current fiscal.
Gas production was 2415.59 million cubic meters which was around 6 per cent higher than the previous year's. OIL holds 26 per cent stake in NRL. The 3 million tonnes a year refinery is promoted by Bharat Petroleum Corporation which has 61.65 per cent stake. The Government of Assam has 12.35 per cent stake in the refinery.
ONGC sees rise in insurance premium for offshore assets
June 9, 2010. State-run Oil and Natural Gas Corporation said it expects insurance premium for offshore assets to rise sharply following an oil leak in the Gulf of Mexico that has been described as the worst in the US history. ONGC had brought down the insurance premium for its offshore assets by around 20 per cent this fiscal in spite of an 8 per cent increase in their valuation.
The company paid USD 27.05 million premium for 2010-11, down over USD 7 million from USD 34.19 million paid in 2009-10. The value of these assets was pegged at USD 26.50 billion, up from about USD 25 billion in 2009-10. ONGC insured the offshore assets prior to the spill in the Gulf of Mexico. Post spill the premium would have been three times higher. The US ordered halt in deep-water drilling and extended a ban on new permits after the oil spill caused by an April 20 fire aboard the BP Plc-leased Deepwater Horizon rig in the Gulf.
Downstream
Reliance Industries restarts FCCU at new refinery
June 15, 2010. Reliance Industries has restarted a giant fluid catalytic cracker unit (FCCU) at its 580,000 barrels-per-day refinery after a nearly week-long unplanned shutdown. The unit was expected to reach full capacity. Reliance had shut the unit on June 13 after it encountered a technical snag. In May 2009, Reliance started a 200,000 barrels-per-day (bpd) FCCU, the world's largest, at its export-focussed refinery, located next to the old 660,000-bpd plant in Jamnagar in western Gujarat state. The FCCU converts vacuum gas oil into light value-added products like liquefied petroleum gas, gasoline-blending components and diesel. The 580,000-bpd refinery started operations in late December 2008. In its annual report for the 2009/10 fiscal (April-March), Reliance said the refinery achieved peak capacity utilisation rate of 120 percent during the year.
Selling Rajastan crude oil to RIL, Essar using heated pipeline: Cairn
June 15, 2010. Cairn India said it has started selling crude oil from its Mangala oilfield in Rajasthan to private sector Reliance Industries and Essar Oil using a heated oil pipeline. Till now Cairn shipped crude oil from the nation's most prolific on-land oilfield via road trucks to the Gujarat coast for onward transport to Mangalore Refinery and Jamnagar refinery of Reliance, Mangala crude's only customers till now.
The company has now completed a 590-km pipeline from the Thar desserts of Rajasthan to Salaya in Gujarat that has enabled the sale of crude oil to Essar's Vadinar refinery in the state. Essar said it has received the "first batch of domestic Mangala crude oil through a dedicated heated and insulated pipeline system from oilfields in Rajasthan." The 14 million tonnes a year Vadinar refinery has contracted 30,000 barrels per day of Mangala crude oil.
Australian group to supply 1.5 mt LNG to Petronet
June 14, 2010. The Australian consortium Gorgan Projects will supply 1.5 million tonnes of LNG to Petronet LNG Ltd (PLL)'s 2.5-million-tonne-a-year terminal in Kochi to be commissioned in the first quarter of 2012. Qatar had offered long-term contract, but the price settlement was a problem as it was on the higher side. The long-term price is at $12 mbtu and spot cargo was available cheap at $7 mbtu. But one cannot depend on short-term cargo as its availability cannot be ensured.
PLL has initiated discussions with the users and end-users about the price. Meanwhile Kerala State Industrial Development Corporation (KSIDC) and GAIL had started another market survey, following the availability of gas from the Krishna-Godavari basin. The survey would study whether it would have significant impact on the original estimates and prices. The report is expected later this month.
PNGRB approves GAIL tariff for transporting gas
June 15, 2010. Oil regulator Petroleum and Natural Gas Regulatory Board (PNGRB) has approved the tariff that state-run GAIL India will charge from consumers for moving natural gas through its two main trunk pipelines. The PNGRB allowed GAIL to charge four different distance-based tariffs on its Hazira-Vijaipur-Jagdishpur (HVJ) and Dahej Vijaipur pipelines. GAIL will charge Rs 19.83 per million British thermal units to transport gas for the first 300 kilometres on the HVJ line. It will charge Rs 22.48 per mmBtu for the next 300-km zone, Rs 25.10 for zone-3 and Rs 27.70 per mmBtu for zone-4, PNGRB said in a order dated June 9. The company will charge Rs 42.46 to Rs 59.32 per mmBtu over four zones on the Dahej-Vijaipur pipeline, it added.
PNGRB had, on April 19, approved a provisional levelised (or average) tariff of Rs 25.46 per mmBtu for the HVJ pipeline and Rs 53.65 per mmBtu for the Dahej-Vijaipur line. The regulator had also approved the tariff for the East-West pipeline, which is majority-owned by Reliance Industries.
Delhi petrol pump strike postponed
June 13, 2010. The Delhi NCR Petrol Dealers Association said that all 408 Delhi petrol pump dealers have postponed the indefinite strike from June 14, in the wake of an assurance given by the Chief Minister, Ms Sheila Dixit. After going through the facts and seeing the list of 200 pumps which have become unviable to operate, Ms Dixit guided the Sales Tax Commissioner to take a sympathetic view on the problems. According to the association, the Chief Ministers of Haryana and Punjab till date have not replied to the letter sent to them by the Delhi Chief Minister requesting them to raise VAT rate on diesel in their respective States, thereby stopping the leakage of diesel sales from Delhi.
Oil cos plan Rs 1,000 cr investment in Kerala
June 11, 2010. The public sector oil companies will be investing Rs 1,000 crore in Kerala in the next 3-4 years for expanding their marketing network in the State, given the growing demand for petroleum products. Mr S. Sundareshan, Secretary, Petroleum and Natural Gas said that the marketing initiatives of the four PSU companies in the State included LPG distribution expansion, expansion of storage facilities and storage tanks etc. Mr Sundareshan said that there is 80 per cent coverage of LPG connections in Kerala as against the national average of 40 per cent. Over 60 lakh households have LPG connections, which are expected to grow 3-5 per cent. Both BPCL and HPCL will be setting up a new bottling plant at Kozhikode with a capacity of 60,000 tonnes a year at an investment of Rs 25-30 crore, he said. As far as petrol and diesel are concerned, there has been a 14 per cent growth in the consumption of petrol and 6-7 per cent growth in diesel in the State.
EGoM may decide to deregulate fuel price
Jun 10, 2010. An Empowered Group of Ministers (EGoM) may meet to consider freeing petrol prices from government control and possibly giving limited autonomy to oil firms to price diesel closer to market rates. Also on the cards is a Rs 25 per cylinder hike in domestic cooking gas (LPG) rates in an effort to align retail prices closer to their cost. The EGoM headed by Finance Minister Pranab Mukherjee may decide to free petrol price from government control for the first time since 2004, when the UPA in its first stint decided to price auto fuels below their imported cost to keep inflation under check. This move, going up by the current international crude rates, will result in a Rs 3.35 per litre increase in price of petrol in Delhi, sources said.
The EGoM, which could not reach a decision at its first meeting on June 7 as key ministers like Railway Minister Mamata Banerjee and Agriculture Minister Sharad Pawar were absent, may also decide to give oil companies freedom to price diesel if international oil price stayed below USD 90 per barrel. If approved, diesel rates would immediately rise by Rs 3.49 per litre as current retailing selling price is calculated on USD 60 per barrel-level of crude oil prices while the actual rate is USD 72 per barrel now, they said. If the crude climbs to USD 90 per barrel, diesel price in Delhi would rise by over Rs 7 per liter over the current selling price of Rs 38.10 a litre.
India fuel reform at mercy of rain and politics
June 9, 2010. India's government is hoping monsoon rains will soon give it the political cover it needs to start cutting costly fuel subsidies, but reforms will have to proceed slowly to keep reluctant coalition allies on board. Waiting 10 days or so will give the government a better sense of the strength of the oncoming summer monsoon. If it is normal, as expected, this will bolster farm output and give a respite from food price inflation. And that could give the government a window of opportunity to cut fuel subsidies. Submitting fuel to full market pricing would bolster India's fiscal health as fuel accounts for a quarter of its estimated subsidy bill of 1.2 trillion rupees ($25.5 billion).
Reliance, Essar gear up for fuel deregulation
June 9, 2010. Essar Oil and Reliance Industries plan to boost retail networks if India eases control on fuel prices, a move that will reduce both exports and imports of refined products. Essar Oil and Reliance Industries had together captured about 17 per cent of the domestic retail market for diesel and accounted for 10 per cent of gasoline sales by 2005 before heavily subsidised sales by state run firms knocked them out of the arena.
POWER
NTPC-BHEL JV aims to produce equipment of 5000 MW capacity a year
June 10, 2010. NTPC BHEL Power Projects said it has submitted a detailed project report about the company's work to the Ministry of Heavy Industry and Public Enterprises. The report would work as a guideline for capital investment of Rs 6,000 crore to become a 5,000 MW company in the field of power generating equipment, it said. NBPPL is a 50:50 joint venture firm between state-run NTPC and BHEL. It was set up in April 2008 for carrying out engineering, procurement and construction (EPC) contracts for power projects as well as manufacture and supply equipment in India and abroad. The administrative control of the joint venture firm lies with the Ministry of Heavy Industries and Public Enterprises.
Record power generation in Nathpa Jhakri
June 2010. During first two months of the financial year 2010-11 the country's largest 1500 MW Nathpa Jhakri Hydro Power Station has recorded more than 25% growth in power generation in comparison to the corresponding period of the previous year, said Shri H.K. Sharma, CMD of SJVN Ltd. During April and May, 2010, the power station achieved a gross generation of 1366 million units of electricity against 1086 million units achieved last year. The generation is also 137 million units more than the MoU targets of 1228 million units, Shri Sharma said.
The 1500 MW power station, which is the flagship project of public sector SJVN Ltd. and supplying valuable electricity to the nine northern grid states, has also achieved a Plant Availability Factor of more than 100% during the period, he added. During the year 2009-10 the power station had established an all time record by generating 7018 million units of electricity which was more than 400 million units higher not only than the MoU targets given by the Ministry of Power, but also than the generation achieved during the year 2008-09. SJVN, which recently came out with an IPO (Initial Public Offer) of 41.5 crore equity shares is implementing ten hydro power projects in various parts of the country including Nepal and Bhutan, to add 4000 MW of capacity. Its 412 MW Rampur Hydro Electric Project is in an advanced stage of completion during the year 2013. The Company has also entered the business of power transmission with taking up of 400 KV/DC transmission line for its 900 MW Arun-III Hydro Electric Project in Nepal. It also plans to enter the wind power generation shortly.
Transmission / Distribution / Trade
PowerGrid may sell 20 pc stake to raise Rs 8,000 cr
June 10, 2010. Electricity transmission company PowerGrid Corporation may sell 20% to public that could raise Rs 8,000 crore, which may be equally split between the government and the company. The government plans to sell 10% and Power Grid will issue new shares comprising 10% of post-issue capital to raise funds for expansion, which is estimated at Rs 55,000 crore. The fund-raising target is a calculation based on current market price. The power ministry has approved the issue and the company is currently preparing the documents for inviting expression of interest from investment bankers, said the first official privy to the development. Finance minister Pranab Mukherjee has pencilled in revenues of Rs 40,000 crore from sale of stakes in government enterprises this fiscal year.
Bengal discom faces liquidity crunch; borrows Rs 400 cr
June 10, 2010. Stung by liquidity crisis, West Bengal State Electricity Distribution Company Ltd (WBSEDCL) raised over Rs 400-crore short-term loan between March-May 2010 to meet regular expenses. The State distribution utility has also liquidated Rs 300 crore of its fixed deposits to meet the crisis. According to the Managing Director, Mr Moloy De, the liquidity crisis has arisen due to piling up of Rs 1,780-crore “regulatory assets”.
JSW Energy to buy 70 pc stake in South African firm
June 10, 2010. JSW Energy said it may pick up 70 per cent stake in South Africa-based Indian Ocean Mining Ltd, a move that would help the company in enhancing its fuel security. The MoU is part of the company's strategy to enhance fuel security for which the company is continuously evaluating various strategies and proposals to secure long-term imported coal linkages, it said. The pact is subject to company carrying out due diligence, execution of definitive agreements and compliance with regulatory requirements.
Policy / Performance
Govt to divest 10 pc stake in CIL, HCL
June 15, 2010. The government approved disinvestment of 10 per cent equity each in mining companies Coal India Ltd and Hindustan Copper Ltd. The decision was taken at a meeting of the Cabinet Committee of Economic Affairs. The Committee also decided to allow 5 per cent price concession to retail investors and employees of Coal India Ltd (CIL). The paid up equity capital of CIL is Rs 6,316.36 crore and the government owns 100 per cent stake in the coal major. For the disinvestment of Hindustan Copper Ltd, there will be a fresh issue of equity to extent of 10 per cent of the pre-issued paid up capital.
RIL may bid for Surguja power project in Chhattisgarh
June 15, 2010. After the telecom foray, Mukesh Ambani has set his sights on the power sector, with Reliance Industries (RIL) planning to bid for the Surguja ultra mega power project (UMPP) in Chhattisgarh. The government has set July 5 as the deadline for submitting the bid. The Chhattisgarh entry would be RIL's second major diversification plan after the Ambani brothers last month cancelled the non-compete agreements that barred them from entering each other's businesses. With RIL sitting on a mountain of cash, funding its newly-identified high-growth businesses like telecom and power should not be a problem for the company. Besides, the company on the strength of its balance sheet has been raising cheap money from the market. RIL mopped up $1 billion, a seven-year loan at an attractive rate. The 4,000-mw UMPP calls for an investment of about Rs 16,000 crore.
NTPC may re-tender Rs 25,000 cr equipment order
June 14, 2010. State-run NTPC's Rs 25,000-crore bulk tender for sourcing energy efficient equipment may be floated again due to some issues in the document submitted by one the potential bidders.
Adani Power gets govt nod for two projects
June 14, 2010. India’s national authority on clean development mechanism (CDM) has approved Adani Power’s two power projects to draw carbon credits worth Rs 290 crore annually. The company has made efforts to significantly reduce greenhouse gas emissions (GHG) and increase productivity of its plants located in Maharashtra and Gujarat. The combined power generation capacity of the two power projects are 3,960 MW. Adani Power (APL) is setting up the two coal-fired power plants with super-critical technology. The technology, which is operated at higher temperatures, increases plant’s efficiency and lowers emissions of carbon dioxide. The company is investing about Rs 18,270 crore in the two projects. The two units will be eligible to generate 2,617,567-carbon emission reduction (CER) per annum till 2012. The current trading price of CER is at 12 Euro per CER. Thus, APL will be able to generate revenues of Rs 140-150 crore annually from it.
$1 bn fund to boost Indian power firms in S. Asia
June 14, 2010. The Government is firming up plans for an over $1 billion sovereign-backed fund to boost trade and investment by domestic power utilities in South Asia. The Commerce Ministry has asked the Export-Import Bank of India (Exim) and the Export Credit Guarantee Corporation of India (ECGC) to work out the contours of the fund. The fund is aimed at developing a South Asian regional energy grid, with focus on renewable sectors such as hydro, solar and wind.
This could step up investments by domestic firms led by renewable players and transmission utilities including Suzlon Energy, Moser Baer, Satluj Jal Vidyut Nigam (SJVN), NHPC Ltd and Power Grid in countries such as Bhutan, Nepal, Sri Lanka, Maldives and Bangladesh. The competitively-priced fund will be scaled up later. After the details are finalised, the Government will organise workshops to gauge industry's response to the fund. The proposal for the fund followed an internal assessment of the huge power deficit situation prevailing across the entire region.
Bombay HC refuses interim relief to Tata Power in feud with R-Infra
June 12, 2010. The Bombay High Court refused to grant interim relief to Tata Power Company (TPC) against the state directive that forced it to supply 360 mw electricity to Reliance Infrastructure (R-Infra). The state, meanwhile, made a complete volte-face by informing the High Court that it did not forced the TPC but just “issued an advisory”.
The division bench of acting Chief Justice JN Patel and Justice SC Dharmadhikari held that since the Maharashtra Electricity regulatory Commission would be looking into the matter of power diversion by the Maharashtra State Load Despatch Centre (MSLDC) to R-Infra there was no requirement to set-aside an advisory.
The state government in its affidavit submitted that TPC had not challenged any action taken by MSLDC before the HC. The MSLDC decisions have been challenged before the MERC and are pending before it. So this issue cannot be dealt with by the High Court as of now.
Energy labelling scheme to cover more products
June 10, 2010. The Bureau of Energy Efficiency (BEE), a statutory body under the Union Ministry of Power, plans to extend the ambit of mandatory star labelling to five-to-six more products such as washing machines, set top boxes, geysers and computers, among others, over the next two years. Energy labelling programme is currently mandatory for products such as air-conditioners, frost-free refrigerators, tubular fluorescent lamps and distribution transformers.
The programme is voluntary for products such as direct cool refrigerators, general purpose industrial motors, mono-set pumps, ceiling fans, domestic gas stoves and colour televisions, among others. The energy labelling programme initiated under the Standards and Labelling scheme has helped the BEE achieve energy savings of around 2,000 MW so far. BEE expects to surpass the target of 3,000 MW of energy savings set for the Eleventh Plan soon.
Bid process for Orissa UMPP begins this week
June 10, 2010. The government will kick-start the bidding process for the 4,000 mw Orissa power project, undeterred by the setback suffered by the Chhattisgarh ultra mega power project that faces uncertainty over allocation of captive coal blocks. Power Finance Corporation, the nodal agency for ultra mega power projects (UMPP) projects in the country, will invite pre-qualification bids (request for qualification or RFQ) for the project.
Bidders can submit their RFQs till July 27 and the process will be completed by July 30. The 4000 MW pit head power project will need an investment of about Rs 20,000 crore. Orissa Integrated Power (OIPL), a wholly owned subsidiary of PFC and the shell company for the Orissa project, has already got allocation of the Ib valley coal fields located about 30-40 km from the project site.
The fate of the Chhattisgarh UMPP still hangs in balance. PFC had to extend the last date for submission of RFQs for the project by a couple of months to get more clarity on allocation of captive coal blocks. The Hasdeo Arand coal field attached with the UMPP has been declared a “no go” area for mining by the environment and coal ministries.
India and Australia to work together to train the manpower in mining sector
June 10, 2010. Mr. Sushilkumar Shinde, Union Minister of Power met Mr. Martin Ferguson, Australian Minister for Energy, Resources and Tourism in Canberra. During the course of meeting they discussed about the strategic long time co-operation in energy sector.
Mr. Shinde highlighted India's commitment towards climate change issues in terms of National Solar Mission under which 20,000 MW of capacity through solar energy is to be added by 2020 and other initiatives of the Government of India. Besides, various other schemes and reforms in the energy sector also came up for discussion.
The agenda of co-operation between India and Australia in the field of technical training got a further push as Mr. Ferguson said that his country is already collaborating with Indonesia for training people. He said that a similar programme can be worked out to train the Indian manpower in the mining sector.
In the meeting that took place at the Parliament House Office of the Australian Minister in Canberra, both the dignitaries further discussed the possibilities of Indian companies acquiring coal mines in Australia and export of liquefied natural gas from Australia to India.
Both the Ministers acknowledged the success of the India - Australia Energy Forum, Perth, June 7-8, 2010. Appreciating the visit of Mr. Shinde, the Australian Minister said that the visit had opened a new era of operation between the two countries. Both the dignitaries also acknowledged the fact that their countries share common values which can be used for future co-operation not only in power sector but also in other fields.
The Indian delegation led by Mr. Shinde also visited the Global Carbon Capture and Storage Institute, GCCSI, in Canberra and held a detailed discussion with Mr. Dale Seymour, Senior VP of Strategy.
GVK Power sees FY11 profit Rs 1.75-2.25 bn
June 9, 2010. GVK Power and Infrastructure expects profit of 1.75-2.25 billion rupees in 2010/11 on a turnover of 20 billion rupees. The firm that operates power plants over 900 MW capacity and builds roads and airports, posted a consolidated net profit of 1.56 billion rupees on total income of 18.16 billion rupees in 2009/10, BSE data showed.
Merchant power is sold in the open market often at a premium to long term agreement rates. Analysts pegged the firm's FY11 net profit at 2.61 billion rupees.
Power Minister addresses India Australia energy and Mineral forum
June 2010. Union Power Minister Shri Sushilkumar Shinde has said that Australia can play a major role in the energy sector of India which is growing at rapid pace with huge opportunities for investments and technology. Speaking at the 1st Australia-India Energy and Minerals Forum in Perth, Australia, today, he said that the two countries can work together in the areas of development of the use of Brown Coal (Lignite), energy efficiency, efficiency improvements of coal based power plants, hydro power development, power generation technology research and development of smart Grid in India. Shri Shinde indicated cooperation with Australia in developing Gas based power plants especially in western India since Australia has huge reserves of Gas.
Addressing a distinguished gathering of policy makers, business leaders and other stakeholders in the energy and mineral sector, the Minister observed that Indian companies are interested in procurement of coal and liquefied natural gas (LNG) from Australia. In the area of exploration, he said, companies are beginning to invest in each other's country and expressed hope that these investments would grow further. Indian companies have invested in coal mining, copper mining, oil and gas exploration and entered into a partnership agreement with a uranium exploration company also. The five action plans that were signed in November 2008 with Ministries of Power, Coal, Petroleum & Natural Gas, Mines, New & Renewable Energy are the buildings blocks to build on and to take forward the bilateral engagement in the energy sector.
Sharing with the audience a paranomic view of the Indian economy in general and of the power sector in particular, Shri Shinde observed that India during the global downturn managed to achieve one of the highest growth rates in the world. He said that in spite of all odds the Indian economy exhibited significant resilience in 2009-10 and closed the year with a respectable growth rate of 7.4%. India's capacity to withstand the global shock better than many other emerging market economies was assisted largely by the sound macro-economic and financial sector policy environment that had been put in place in the post reform period by careful assessment of the opportunities and risks associated with reforms. The Indian power sector has come a long way from a mere 1362 MW generation capacity at the time of our independence in 1947 to almost one hundred and sixty thousand MW today. India now has the fifth largest electricity in the world and the world's third largest transmission and distribution network. However, the demand from increased manufacturing activities, a growing population and the rising energy needs of a rapidly growing consumer base has led to a situation where the supply of energy falls short of the demand. Shri Shinde said that the gigantic task of providing power for all can be successful only when the efforts of Government are strongly supported and complemented by the private sector. Recognizing the need for an overall and comprehensive legal architecture and a policy framework conducive to larger and more sustained investment in the power sector, he said, the Government of India has taken numerous steps to reform the sector. The Minister observed that Investor confidence has returned to the sector which is amply borne out by the fact that all projects of the 11the Five Year Plan have achieved financial closure. He said that success of Ultra Mega Power Projects, which are of 4000 MW each and involve investments to the tune of US$ 4 billion, has renewed the faith of the private investors in Indian power sector. 4 projects have already been completed bidding for, fifth is under process and sixth is ready for bidding. Eight more projects are being planned, Shri Shinde added. The Minister also highlighted a low carbon growth strategy for the Indian Power Sector which includes elements such as Super Critical Technology in Thermal Plants, the rapid induction of Clean Coal Technologies and a sharper focus on renewables. He observed that international majors like Mitsubishi, Toshiba, Alstom and Ansaldo have already started the process of partnering with Indian manufacturers to set up Super Critical Manufacturing facilities in India. Mentioning the recently launched Jawahar Lal Nehru National Solar Mission for the creation of a capacity of over 20 thousand MW based on Solar Energy by the year 2020, Shri Shinde said that steps are being taken to provide incentives for the rapid deployment of Wind Energy throughout the country. Referring National Action Plan on Climate Change, Shri Shinde said that the Ministry of Power is deeply involved with the National Mission on Enhanced Energy Efficiency, one of the eight missions under the Plan. He said a strategy for implementing this mission through a market transformation approach has been drawn up which includes programmes such as Energy Saving Certificates, Mandatory Standards and Labeling and fiscal incentives to facilitate adoption of energy efficiency. The Minister said that the Mission will be launched within the next few months. Shri Shinde also pointed out that India has expressed the intent to be a founding member of a Global Carbon capture and storage initiative undertaken by Australia and is keen to participate in R&D activities by deputing our scientists/engineers to the CCS demonstration projects outside India. The MOU with Australia will be finalised very soon, he said.
OIL & GAS
Exillon raises reserves estimates, production
June 14, 2010. Russian oil producer Exillon Energy Plc raised its reserves estimates for recoverable oil and said production had risen 24 percent. Group 1P reserves grew 23 percent to 80 million barrels, 2P reserves climbed 5 percent to 137 million barrels and 3P reserves rose 6 percent to 391 million barrels. The London-listed oil company said higher production from its asset in West Siberia, Exillon WS, increased the company's combined output rate to 5,400 barrels per day (bpd) on June 12. Production at Exillon WS will be increased to 2,600 bpd in the second half of June, from 2,100 bpd currently, and is expected to rise to 6,000 bpd upon completion of additional infrastructure.
Canada energy companies not yet hurt by oil spill
June 14, 2010. Canadian energy companies operating offshore could face new regulations in the aftermath of the Gulf of Mexico oil spill and the more aggressive oversight may put their shares at risk. The spill, the worst ever in the United States, has shaved the stock market value of BP Plc by almost 40 percent since the April 20 blowout at its Deepwater Horizon rig.
The accident killed 11 and left as much as 40,000 barrels a day of crude flowing into the Gulf. A number of countries, including Canada and the United States, are reviewing regulations governing offshore exploration following the disaster. New rules haven't been set but it's likely companies will face increased scrutiny and greater delays in their offshore operations. No one yet knows what the impact of additional restrictions will be. Five of Canada's eight largest oil and gas producers have significant offshore operations, though only one, Nexen Inc operates in the Gulf of Mexico.
BP may lose U.S. oil leases, contracts after spill
June 14, 2010. BP Plc may lose control of its U.S. oil and natural gas wells and be barred from doing business with the federal government as punishment for the worst oil spill in U.S. history, industry and regulatory analysts said. President Barack Obama and lawmakers are debating penalties that would cripple the company’s ability to do business in the U.S. as public outrage intensifies. In addition to BP’s culpability in the Gulf of Mexico spill, a 2005 explosion at BP’s Texas City refinery that killed 15 workers and a 2006 pipeline leak that dumped 200,000 gallons of crude at Prudhoe Bay, Alaska, will figure in the debate. The U.S. may revoke BP’s status as operator of producing wells in the Gulf of Mexico, such as Thunder Horse, or of leases at Prudhoe Bay. Separately, Congress is considering measures to bar BP from contracts with the Department of Defense and Environmental Protection Agency. Lawmakers including House Speaker Nancy Pelosi are demanding that BP defer the payment of any dividends until fishermen and others are compensated for losses from the spill. BP should set up an escrow account to cover claims, Obama aide David Axelrod said. The spill’s cost may reach $40 billion, Standard Chartered Bank estimated.
Work completed for Qatar gas 3, 4 projects
June 14, 2010. Qatar gas has taken a major step towards completing work for its Qatar gas 3 and Qatar gas 4 ventures with the Mechanical Acceptance and handover of the first of three offshore gas production platforms, known as QW8, from contractor, J. Ray McDermott (JRM). The offshore facilities are located 65 kilometers north of Ras Laffan, in Qatar's North Field. The total facilities comprise three 2,200-ton platforms, 33 gas wells and two 65 kilometer pipelines, which are shared by the separate Qatar gas 3 and Qatar gas 4 ventures. The offshore assets will deliver gas to two liquefied natural gas (LNG) mega-trains at Ras Laffan, one each owned by Qatar gas 3 and Qatar gas 4. Each train will be capable of producing 7.8 million tonnes of LNG, plus other associated products, annually. The trains are due to start production by the last quarter of 2010.
Offshore drilling backlash may boost shale, oil sands
June 14, 2010. The massive Gulf oil spill may hasten the development of shale gas and oil sands, North America's two most important emerging energy sources. The risk of pursuing deepwater oil reserves dwarfs the environmental concerns facing both onshore sectors. Neither Canadian oil sands petroleum nor natural gas from U.S. shale beds will immediately substitute for delayed Gulf of Mexico crude output in the wake of a six-month drilling moratorium. Both offer even more promise than the deep waters off the U.S. Gulf Coast.
Alberta's oil sands are the largest source of crude outside the Middle East, with enough reserves to meet all U.S. demand for 25 years; shale beds beneath many U.S. states could meet the country's natural gas needs for a century. Both resources face environmental worries, yet they may be deemed lesser evils compared to the worst U.S. oil spill in history. The spill has officials reconsidering the drive to drill ever deeper in more difficult conditions and should result in tighter and costlier regulations. It's neither a straight nor clear line from Gulf oil to other forms of energy to the north, yet it is important for energy markets wondering whether fallout from the BP spill will constrain future deepwater oil supply.
BP drilling outside industry norm: Exxon Mobil
June 14, 2010. Exxon Mobil will tell U.S. lawmakers at a congressional hearing that BP's Deepwater Horizon oil rig was operated outside the industry norm, leading to the biggest offshore oil spill in U.S. history. Exxon said if oil companies properly designed offshore wells, built in layers of protective redundancy, properly inspected equipment and focused on safety, then incidents like the current Gulf oil spill "should not occur."
Statoil sees higher drilling cost after U.S. spill
June 11, 2010. Norwegian oil and gas group Statoil said it expected higher drilling costs on the Norwegian continental shelf with tighter regulation following BP's oil spill in the Gulf of Mexico. “If there is (tighter) regulation, it will push costs up," Statoil Chief Executive Helge Lund said. He said the risk level was already seen as satisfactory, with 2,000 exploration wells having been drilled during the last decade without major incidents. Norway said that it will not open new deepwater areas for drilling until an investigation sheds light on BP's well blowout and large oil spill in the Gulf of Mexico. Statoil is the largest oil and gas producer on the Norwegian continental shelf. It is in the process of shutting down drilling on two deepwater wells in the Gulf of Mexico following a six-month drilling ban.
Brazil sees silver lining in BP spill
June 11, 2010. Brazil could benefit from the BP Gulf of Mexico spill as a U.S. moratorium on offshore drilling boosts available rigs for the country's deep water oil exploration program. Even as an ecological catastrophe makes the future of U.S. offshore drilling less certain, Brazil is plowing ahead with a $220 billion five-year plan to tap oil fields even deeper than BP's ill-fated Gulf well, which is still leaking crude. With an estimated 35 rigs idled in the Gulf of Mexico, Brazil is already receiving inquiries from companies looking to move their rigs here, where vast discoveries in recent years may soon turn the country into a major crude exporter. Since operators are shutting down at least temporarily in the U.S. Gulf, some companies are planning to move their rigs to Brazil.
Gazprom upbeat on long-term demand despite May slump
June 10, 2010. Russia's gas export monopoly Gazprom expects robust gas demand in Europe and a recovery in pipeline gas prices no later than 2012 despite a new fall in supplies in May due to Europe's financial turmoil. It expects the gap between pipelines gas prices and spot prices to close no later than 2012," Chief Executive Alexei Miller said. Miller, who two years ago had predicted a boom in oil prices just before the economic slump sent prices lower, added that he expects oil prices to hit $100 per barrel by 2012. Gazprom, which supplies a quarter of Europe's gas needs via major pipelines under long-term contracts, said there was an unprecedented slump in demand last year as the global financial crisis played out and as its main customers switched to cheaper liquefied natural gas and spot gas sources. The company had to postpone the launch of some of its key projects, including on the Yamal peninsula and the giant Barents Sea Shtokman field. Miller said Gazprom was determined to stick to its latest deadline to complete the South Stream gas pipeline, designed to supply southern Europe with new volumes of Russian gas, by end of 2015 but admitted the target was ambitious.
Apache buys Devon Shallow Gulf assets for $1.05 bn
June 10, 2010. Apache has completed its previously announced acquisition of Devon's oil and gas assets in the shallow waters of the Gulf of Mexico Shelf for $1.05 billion. Apache estimated net proved and probable reserves of 83 million barrels of oil equivalent at year-end 2009.
The properties are projected to produce 9,500 barrels of liquid hydrocarbons and 55 million cubic feet of gas per day (net) after closing - the same balance of liquids and natural gas in Apache's current worldwide production. About half of the estimated proved reserves of 41 million barrels equivalent are oil and natural gas liquids. The acquired assets comprise 477,000 net acres across approximately 150 blocks. Virtually all of the production is located in fields in waters less than 500 feet deep.
OPEC averages 29.28 million bopd in May
June 9, 2010. Organization of the Petroleum Exporting Countries' (OPEC) crude oil production output averaged 29.28 million barrels per day (bn/d) in May, up 70,000 bn/d from an estimated 29.21 million bn/d in April, according to a survey of OPEC and oil industry officials and analysts. However, excluding Iraq, which does not participate in OPEC output agreements, output from the 11 members bound by quotas (OPEC-11) fell by 60,000 bn/d to 26.83 million bn/d from 26.89 million bn/d in April, the survey showed.
Overall, 180,000 bn of increases from Iraq, Saudi Arabia, Kuwait and the United Arab Emirates (UAE) more than offset 110,000 bn/d in declines from Angola, Iran, Nigeria and Venezuela. Iraqi supply, which had fallen by 130,000 bn/d in April as bad weather hit exports, recovered by the same volume in May to average 2.45 million bn/d.
L.A. refinery operations normal after upset: Exxon
June 14, 2010. Exxon Mobil Corp said operations at its 150,000 barrel-per-day Los Angeles-area refinery in Torrance, California, were normal following mechanical problems on a production unit. The malfunction triggered flaring at the refinery, according to a notice filed with the California pollution regulators.
Chevron's Utah refinery leaks oil, output unaffected
June 13, 2010. Chevron Corp said that operations at its 45,000 barrel per day (bpd) Salt Lake City refinery were unaffected by a crude pipeline shut due to a leak into a creek that feeds Utah's Great Salt Lake. The 10-inch (25-cm) pipeline, which carries mid-grade crude to the refinery north of Salt Lake City, was shut after oil was discovered leaking from it into Red Butte Creek, which is part of a system of waterways feeding Utah's Great Salt Lake. Temporary dams were built along Red Butte Creek to prevent the crude spilled from spreading further. Chevron said the pipeline has stopped leaking since it halted the flow of oil through the pipeline on Saturday morning until repairs can be made.
Spectra to build gas plant near Dawson Creek
June 10, 2010. Spectra Energy announced it is responding to customer demand in the prolific Montney play of northeast British Columbia (BC) by building a new 200 million cubic feet per day (mmcf/d) natural gas processing plant west of Dawson Creek. The proposed Dawson Processing Plant will be built in two phases with the first 100 mmcf/d of processing capacity available in late 2011 and the remaining capacity available in early 2013. The expansion facilities are supported by long-term customer commitments and reinforce Spectra Energy's commitment to be the supplier of choice for existing and future Montney area infrastructure development. Building on more than five decades of experience, resources and assets in northeast British Columbia, Spectra Energy is continuing to grow its infrastructure to move new natural gas supplies safely, efficiently and responsibly to market. As overall BC natural gas production is forecast to double, further development opportunities in Northeast BC are anticipated.
Sinopec can now produce Euro-V gasoline, diesel
June 9, 2010. China Petrochemical Corp. (Sinopec Group), China's leading oil refiner, is now able to produce gasoline and diesel products in line with Euro-V emission-control standards, company officials said. The first batch of 4,500 metric tonnes of gasoline, made by Sinopec's Shanghai Gaoqiao Petrochemicals meeting Euro-V standard, has been shipped to the Hong Kong market in recent days.
The company also has the ability to produce diesels meeting the same standard, as Sinopec's Zhenhai refinery exported 10,000 tonnes of Euro-V diesel to Hong Kong in 2009. Under the Guo-III standard, the sulfur emission during the burning of gasoline will be reduced to 150 ppm from the previous 500 ppm.
China, Russia to boost energy ties with oil pipeline
June 15, 2010. By the end of October, China will be getting crude oil directly from Russia via pipeline for the first time, marking a major step in efforts to develop closer energy ties with its northern neighbour. Russia already supplies crude oil to China by rail and sea, sending in an average of 307,000 barrels a days last year. Once the pipeline is ready, it could add a further 300,000 barrels a day of Eastern Siberia oil, and in so doing widen China's rapidly-growing energy import network. The new crude supply is to be complemented by two natural gas pipelines to feed Chinese customers with up to 70 billion cubic meters of Siberian gas a year, once pricing and financing agreements have been hammered out.
The 1,000-kilometer crude oil branch pipeline China National Petroleum Corp., China's largest oil and gas producer by output is building from the Russian town of Skovorodino to the Chinese oil production and refining hub of Daqing, in the northeast of the country, will be operational by Oct. 31.
It will link to a new East Siberian-Pacific Ocean, or Espo, pipeline running from Taishet to Skovorodino. By 2014, this will be extended to Kozmino on the Pacific coast--for now, crude taken from the first stage of the pipeline is sent onwards by train.
Gas pipeline opens to ease Yangon's chronic power shortage
June 14, 2010. Myanmar officially opened a pipeline linking the Yadana natural gas field in the Andaman Sea to Yangon, to ease a chronic power shortage in its largest city. Energy Minister U Lun Thi turned a golden valve to open the 24-inch diameter pipeline in a ceremony in Insein Township north of Yangon. The gas pipeline is 136 kilometers on land and 151 kilometers offshore and is operated by Total SA, a French energy group, and US-based Chevron Corporation, in partnership with the state-owned Myanma Oil and Gas Enterprise.
The Thai state-owned company PTT is also a partner, and much of the offshore field's gas is directed to Thailand. The project has generated controversy, with human rights groups accusing the French and US companies of financially propping up Myanmar's military government. They also accused the junta of widespread abuses against the ethnic Karen minority, whose territory has been used for the pipeline project.
Putin welcomes Qatar in Russia's Yamal
June 11, 2010. Russian Prime Minister Vladimir Putin has endorsed a proposal by French oil major Total to invite Qatar to join major gas projects on Russia's Yamal, Total's chief Christophe de Margerie said. Last year, Total signed a deal to partner Russia's top independent gas producer Novatek to invest $1 billion in Termokarstovoye gas condensate field in the far northern region of Yamal-Nenets.
Total is also talking to Russia's gas export monopoly Gazprom on participating in liquefied natural gas projects on Yamal while Gazprom is looking itself to expand cooperation with Qatar.
Bulgaria drops $900 mn pipeline plan
June 11, 2010. Bulgaria has dropped a plan to build a large oil pipeline with Greece and Russia, Prime Minister Boyko Borisov was quoted as saying. He explained that the decision was based on economic and environmental concerns. Russia, Bulgaria and Greece had agreed in 2007 to build the pipeline from the Bulgarian Black Sea port of Burgas to Alexandropoulis in the eastern Mediterranean.
It was to replace the transport by ship of Caspian oil over the Sea of Marmara. Borisov's statement came a day after Russian Energy Minister Sergey Shmatko said it may "freeze" the project, warning Bulgaria over delays. The now abandoned 900-million-dollar pipeline was to transport 35 million tons of oil across 280 kilometres of land.
Peru set to export natural gas, opens LNG plant
June 10, 2010. Peru opened its first liquefied natural gas plant, which will allow the Andean country to become a natural gas exporter. U.S.-based Hunt Oil has a 50 percent operating interest in Peru LNG, the consortium that built the plant. Other stakeholders are Spain's oil major Repsol, South Korea's SK Energy and Japan's Marubeni. The companies have invested several billion dollars in Peru LNG, which will have LNG production capacity of 4.4 million tonnes per year, Repsol said in a statement.
LNG from Peru is earmarked for the Manzanillo terminal on Mexico's west coast. But Manzanillo is not yet ready to receive imports, so the Canaport terminal in eastern Canada could receive the first cargo from Peru. Repsol will export the plant's output and has a 15-year supply contract with Manzanillo, which the company says is worth approximately $15 billion. Neighboring Bolivia is the largest natural gas exporter in South America.
Until now, Peru has not exported the fuel. The export plans have caused headaches for Garcia amid complaints by leaders of several southern regions that shortages could arise in Peru's domestic gas market. But Garcia said there was plenty of natural gas for both the domestic and foreign markets and that barring natural gas producers from exporting the fuel would amount to breaching contracts.
For now, deepwater drilling in Energy Plan
June 15, 2010. It may be decades before the oil industry can restore confidence in its ability to handle deepwater drilling. By then, breakthroughs in biofuels or batteries that give an alternative may be in place. Meanwhile, however, oil remains the fuel for a billion vehicles across the world. Jeff Morris, CEO of Dallas-based refiner Alon Energy USA, expects U.S. consumers will move toward higher-mileage cars, hybrids and the like as a result of the BP oil well blowout. The oil industry, he said, will have to do a much better job anticipating and preparing for accidents.
“China, India and other developing nations will have to think about whether they want to build their auto fleets around gasoline, diesel or some other fuels. But we will all still have to work out how to live with our dependence on oil for several more years” he said. And deepwater drilling looks like it will be part of the picture. That's a problem getting too little attention from the Obama administration, argues energy fellow Amy Jaffe of the James A. Baker III Institute for Public Policy at Rice University.
S.Korea May LNG, coal imports rise yoy
June 15, 2010. South Korea's imports of liquefied natural gas (LNG) surged 56 percent year-on-year in May on bullish power demand driven by a recovering economy and cooler weather, customs data showed. South Korea, the world's second-largest LNG buyer after Japan, imported 1.96 million tonnes of LNG in May, up from 1.26 million tonnes a year earlier, according to the Korea Customs Service.
State-owned Korea Gas Corp (KOGAS) the world's No.1 LNG corporate buyer, said it sold 1.9 million tonnes of LNG last month, up 52.7 percent from a year earlier. The higher sales caused LNG stocks held by KOGAS at the end of May to drop an estimated 33 percent to 1.7 million tonnes from a year earlier. Bullish power demand also helped the country's coal imports rise 5 percent year-on-year in May, customs data showed.
Delaware river panel extends drilling ban
June 15, 2010. The Delaware River Basin Commission announced that its recent decision to temporarily ban new permits for natural gas drilling in the Delaware River watershed would also cover all exploratory wells. Environmentalists pushed for the extension, arguing that natural gas companies could get around the ban by simply calling new wells "exploratory" as they seek to tap into rich natural gas reserves in the Marcellus Shale, a geological formation that runs beneath much of Pennsylvania. The commission said the action was a recognition of "the risks to water resources . . . that the land disturbance and drilling activities inherent in any shale gas well pose."
Gas drilling at Pittsburgh Airports can't be used to balance budget
June 15, 2010. Allegheny County's attempt to profit from Pennsylvania's natural gas rush has stalled, even though companies soon can bid to drill at the county's two airports. County Airport Authority officials plan in late June or July to seek proposals from drillers who want to tap the gas-rich Marcellus shale a mile below Pittsburgh International and Allegheny County airports. But county elected officials have yet to find a way around Federal Aviation Authority rules that require any drilling royalties earned there to be reinvested at the airports.
Transocean and Justice Dept resolve liability spat
June 11, 2010. Transocean Ltd has resolved its spat with the Obama administration over the oil drilling company's attempt to limit its liability in the Gulf of Mexico spill. The company and the Justice Department have been arguing for weeks over Transocean's petition in federal court to limit its liability to just under $27 million over the sinking of its rig that was drilling the oil well for BP Plc.
Transocean seized on a 159-year-old law -- the Limitation of Liability Act of 1851 -- to make its case. After complaints by the Justice Department, the company told the court in Houston it did not mean to restrict claims by the U.S. government under a 1990 law on oil spills. After haggling over legal language, Transocean filed a letter and proposed a six-page order that excluded any claims or penalties that may be sought by the Obama administration and states under federal pollution and environmental laws.
Qatar on track to reach maximum lng output capacity
June 10, 2010. Qatar should reach its targeted production capacity of 77 million tons of liquefied natural gas by the end of this year, the emirate's energy minister said. Qatar Minister of State for Energy and Industry Affairs Mohammed Salef al-Sada also said the expansions of RasGas and Qatargas, the country's LNG-export companies, were proceeding without any problems.
RasGas has completed its seventh and final LNG train, or liquefaction facility, and they are all up and running, while Qatargas is finishing work on its sixth train and the seventh and final train should be completed by the end of this year, al-Sada said. Commenting on the low prices for natural gas worldwide, al-Sada said Qatar was unfazed.
Moody's lowers Transocean outlook to negative
June 10, 2010. Moody's Investors Service lowered its outlook for Transocean, Inc. to negative from stable on Thursday, citing growing uncertainty about the impact on the company from its involvement in the oil spill in the Gulf of Mexico. Moody's also affirmed Transocean's Baa2 senior unsecured ratings and the Prime-2 rating.
While the company, to this point, has not been held responsible for the cause of the blowout to the oil well, "Transocean's costs will increase due to the legal costs incurred to evaluate its liabilities and defend itself in the numerous lawsuits that have been filed against the company," Moody's said in a statement.
Senate bill would quintuple oil spill liability tax
June 9, 2010. A key oil-refining-industry organization is opposing a provision in a Senate bill that would quintuple a federal tax specifically used by agencies to clean up oil spills because it would increase fuel costs for consumers. The National Petrochemical and Refiners Association sent a letter to Senators Harry Reid (D., Nev.) and Mitch McConnell (R., Ky.) opposing a provision that would increase the Oil Spill Liability Trust Fund tax from 8 cents a barrel of crude oil to 41 cents a barrel.
The bill passed by the U.S. House of Representatives on May 28 had increased the tax to 34 cents a barrel, which NPRA didn't oppose. NPRA didn't oppose the tax 34-cent tax increase passed by the U.S. House of Representatives on May 28 to ensure that the fund was adequately financed to respond to future oil spills. This provision was passed as part of a broader jobs bill that extended unemployment benefits and various tax incentives.
Talisman plans to bid in Peru's oil-block auction
June 9, 2010. Perupetro, Peru's state licensing agency for hydrocarbon exploration, said Canada's Talisman Energy is among several companies that plan to bid for 25 new hydrocarbon lots. Talisman is among eight to 10 companies that have submitted letters of interest in parts of the northern and eastern Peruvian jungle regions of Amazonas, Loreto, Ucayali, Cusco, Cajamarca, Junin, Huanuco, San Martin, Piura and Lambayeque.
ConocoPhillips of the U.S. and France's Total also intend to make bids on the blocks. Total is interested in blocks in the northern Maranon basin, Amazonas and the eastern Ucayali basin. Both are close to recent discoveries.
POWER
Generation
PSE&G plans to buy wetlands to build N.J. nuclear power plant
June 15, 2010. Public Service Electric & Gas Co. plans to buy 84 acres of federally owned wetlands to build New Jersey's fifth nuclear power plant. The company is planning to build its fourth reactor on an island in Lower Alloways Creek Township in Salem County. The state's other plant is the Oyster Creek Nuclear Generating Station in Lacey Township. It is owned by Chicago-based Exelon Corp.
PSE&G discussed plans for its new reactor with the U.S. Nuclear Regulatory Commission. A review of the proposal is expected to take at least three years. The plan is supported by some who want the additional power, jobs and tax revenue. But some environmental groups oppose expanding nuclear power in New Jersey.
Transmission / Distribution / Trade
Listed Pacifica to bid for Cebu’s Naga power plant complex
June 15, 2010. Pacifia Inc. plans to bid for the independent power producer administrator (IPPA) contract covering the Naga power complex in Cebu, which will be auctioned by the government in August. In a disclosure to the Philippine Stock Exchange, Pacifica said it had submitted a letter of interest to the Power Sector Assets and Liabilities Management Corp. (PSALM) to bid for the right to manage the government’s supply deal with the Cebu complex. The Naga complex IPPA will manage the Naga Contracted Capacity, which is an aggregate of the contracted capacities of the 39-megawatt (MW) Cebu Diesel Power Plant 1 and the Cebu 1 and Cebu 2 coal power plant complexes, with a total installed capacity of 110 MW. The power complex is operated by Salcon Power Corp. (now SPC Power Corp.), which won the rehabilitation, operation, maintenance and management contract for the Cebu facility in 1994.
L&L Energy plans to buy stake in Shunda Mining
June 14, 2010. Coal company L&L Energy Inc plans to buy at least a 51 percent stake in Shunda Mining Co, including two coal mines and a coal washing facility, in a bid to tap into higher demand for coal and energy in China. The Seattle-based company said it has entered into a Memorandum of Understanding with Shunda Mining regarding the acquisition. The two coal mines that L&L Energy plans to buy have a total a production of 750,000 tons per year and the coal washing facility has annual production of 900,000 tons. L&L Energy is currently performing due diligence regarding the acquisition and expects the acquisition to add to its earnings in the first year.
Policy / Performance
'Politics delaying Bushehr plant launch'
June 15, 2010. Iran says the delay in the launch of the Bushehr nuclear power plant, which Russia insists to be purely technical, has proven to be due to political pressure. "After Russia voted yes to new sanctions against Iran at the UN Security Council, we reached the conclusion that the Kremlin's delay in launching the Bushehr power plant is also politically-motivated," Iran's envoy to the IAEA, Ali Asghar Soltanieh, siad. "Of course there may exist some technical complications, but it is hard to believe that these technical issues have continued to postpone the completion of the plant over the past 15 years," he added. He was referring to the UNSC session on June 9, in which 12 member states voted in favor of a US-drafted resolution to impose tougher sanctions against Iran.
Soltanieh said the Bushehr nuclear plant in southern Iran was originally scheduled to be completed "in no more than five years." Western corporations launched the construction of the plant in the 1970s but abandoned their commitments and pulled out of the project following the 1979 Islamic Revolution in Iran. Iran signed a deal with Russia in 1992 to finalize the construction of the nuclear power plant. Moscow has since postponed the launch of the Bushehr plant, which was initially planned to be completed in 1999.
Gas rally boosts coal’s allure for power plants
June 15, 2010. The 16 percent jump in natural gas prices in the past month may prompt U.S. power producers to move to coal, as rising temperatures boost air-conditioning demand. Gas surpassed $5 per million British thermal units in New York for first time in 16 weeks. The price of coal is about $4.58 per million Btu. A switch to coal would reduce demand for gas just as power producers enter the busiest season. Gas became cheaper than coal in March, when prices dropped to a six-month low.
Kenyan green group seeks ban on Ethiopian power
June 14, 2010. A Kenyan conservation group has appealed to the nation's high court to prevent the government and an energy company from buying power produced by the vast Gibe 111 hydropower dam in neighboring Ethiopia. Ethiopia hopes the 1.4 billion euro ($1.71 billion) project will nearly double its power generation capacity, currently just under 2,000 MW, end power cuts at home and allow the Horn of Africa nation to export electricity. But conservation groups fear the dam will harm the livelihoods of hundreds of thousands of people in both nations. They called on the court to freeze the deal, signed between Kenya and Ethiopia in 2006, until the impact of the project on local communities was fully understood. A hearing date has not yet been set. Conservation groups say the dam will affect 300,000 Kenyans whose livelihoods depend on the lake, in Kenya's remote northwest. A rights group also says the dam would leave another 200,000 people in Ethiopia dependent on aid.
Australia's Aquila in dispute with Vale on coal JV
June 14, 2010. Australia's Aquila Resources said it was in dispute with a subsidiary of Brazilian mining giant Vale over the budget of their joint Eagle Downs hard coking coal project. Aquila said Vale has proposed that the initial capital works programme for the project be conditional on a feasibility study being delivered and the partners making a decision to start mining.
Perth-based Aquila wants a clarification that the project's feasibility study would include port and rail logistics which are acceptable to financiers, but said Vale disputes the need for the clarification. The Eagle Downs coal project in Queensland, which is equally owned by Aquila and Vale, is expected to cost about A$1 billion ($859.8 million) and would export about 4 million tonnes of steelmaking coal a year. The dispute adds to tension between the two partners, which are already squabbling over the price Vale should pay for exercising its option to buy Aquila's 24.5 percent stake in the Belvedere coking coal project, and has raised questions about the future of the pair's three joint venture coal projects in Queensland state.
Sweden arrests activists over nuclear break-in
June 14, 2010. Police in Sweden arrested dozens of Greenpeace activists after they broke into the Forsmark nuclear power plant ahead of a planned vote on whether to replace the country's existing reactors. The activists entered Forsmark some 115 kilometres north of Stockholm and several gained access to a building rooftop, police said. The protestors did not enter any of the operating areas. 50 activists were being held on charges of breaking and entering and canine police units were checking whether any of the protestors remained inside the plant.
Sweden is heavily reliant on nuclear power and needs to refurbish plants, many of which were built in the late 1970s. The proposal to allow new reactors has met with opposition from several parties, including the Greens. Operated by state-owned power group Vattenfall, Forsmark was connected to the Swedish grid in 1980 and produces about one seventh of Sweden's electricity output.
Bill Gates-backed nuclear startup raises $35 mn
June 14, 2010. TerraPower, a nuclear energy startup backed by Microsoft Chairman Bill Gates, has raised $35 million in a new round of funding to aid the development of a reactor fueled by nuclear waste. Original investors Gates and Waltham, Massachusetts-based venture capital firm Charles River Ventures (CRV), and new investor Khosla Ventures participated in the latest Series BN round, Izhar Armony, general partner with CRV said.
TerraPower is a nuclear spin-off project from Bellevue, Washington-based incubator Intellectual Ventures, which is run by former Microsoft chief technology officer Nathan Myhrvold. TerraPower is working to develop so-called traveling-wave reactors, which would use depleted uranium as fuel and have the potential to run up to 100 years without refueling. Current nuclear reactors use enriched uranium, require frequent refueling and produce a lot of waste.
Concerns about global warming and efforts to reduce carbon emissions have sparked renewed interest in nuclear energy as a clean fuel, but the difficulty of disposing of spent uranium and fear of accidents have made the technology controversial. Microsoft Chairman Gates has touted the TerraPower's promise in various public forums and said that TerraPower was more reliable than wind or solar. He has also said the reactor would be safer than current nuclear plants as it burns most of the waste.
Renewable Energy / Climate Change Trends
‘Solar energy next economic engine'
June 15, 2010. The solar energy sector is poised to emerge as the next economic engine fuelled by demand and consumption in the local market, according to Dr Madhusudhan V. Atre, President and Managing Director of Applied Materials India. Unlike few policy interventions in the case of telecom sector, the solar sector requires constant interactions and support from the Government. These include feeding tariff, grid connectivity, power purchase and roof top systems among others. The solar energy sector will grow rapidly like the telecom sector. This growth will be driven by domestic consumption as against the current focus on export-oriented business, he said.
Emami looks for other viable options to sell biodiesel
June 15, 2010. With Emami Biotech's biodiesel sale plan running into rough weather following the Petroleum Ministry's ban on selling the fuel for use in passenger and goods vehicles, the company is now mulling other viable options for pushing the product into the market. The company is looking at alternatives such as earth moving equipment, construction equipment, generator owners and vehicles among others, for probable use of the fuel.
Emami Biotech had entered into a memorandum of understanding with Calcutta Tramways Company (CTC) for the supply of 250 kilo litre of bio diesel a month in February 2009. However, the MoU could not be executed due to the ban. Emami Biotech had invested around Rs 150 crore to set up the biodiesel production facility at Haldia, which has the capacity to produce 300 tonnes a day. The price of biodiesel was lower as compared with normal diesel.
US companies to form solar power JV for India
June 13, 2010. US-based American Capital Energy and MSM Energy will soon announce a solar energy joint-venture for engineering, procurement and construction of projects in India. America's leading solar company, American Capital Energy (ACE), and MSM Energy (MSME), a leader in information technology and solar energy development, are set to announce a solar energy joint-venture based in India, a company statement said.
The new entity will immediately begin providing photovoltaic (PV) solar engineering, procurement and construction (EPC) to the Indian market, it said. The Indian government had announced the Solar Mission under the National Action Plan on Climate Change in November, 2009, with the goal to generate 1,000 MW of solar power by 2013 and 20,000 MW by 2020.
India set to add 1.1 GW solar power by next year
June 12, 2010. SEMI (Semiconductor Equipment and Materials International) India, the apex body representing semiconductor manufacturers and solar/photovoltaic sector, expressed confidence that the country could look forward to adding about 1,100 MW of solar power generation capacity by next year. This expectation is based on an installed capacity to support about 1,000 MW a year and investments being made by companies.
While this will be through small projects of 5-10 MW capacity initially, they are likely to be later ramped up to bring scale. The cost of per unit is also likely to come down by 10-15 per cent from Rs 15 crore a MW for installation within 12-18 months. Of particular interest is the issue of grid connectivity and its implications on the solar power plants.
While issues such as subsidies are clear, these implementation guidelines will clear the air about what to expect from sale of power generated from these solar photovoltaic generation projects. There have been extensive consultations by the Government with the industry and stakeholders to get feedback on various elements of the policy document. Based on interest Phase I (1,100 MW) will be accomplished by 2012-13.
EU carbon emissions, price forecasts to 2020
June 14, 2010. Analysts have increased their price forecasts for carbon permits under the EU's Emissions Trading Scheme for this year and beyond on expectations of a tighter cap on emissions from 2012 and higher emissions from companies as they recover from recession. Some Western European countries gave strong backing to deeper cuts in emissions to 30 percent below 1990 levels by 2020 from the current EU would require much tighter limits on companies' emissions output from 2012.
Emissions analysts polled said they expect 2010 EUA prices to average 16 euros ($19.50) a tonne this year, up from 15.4 euros a month ago. 2009 emissions have fallen to around 1.9 billion tonnes, meaning participants will have received a collective surplus of up to 170 million tonnes in EU permits. The analysts predict Phase 2 (2008-2012) emissions to average 2.06 billion tonnes, resulting in an annual surplus of 50 million tonnes. They also said the linear annual reduction in the scheme's emissions cap through Phase 3 (2013-2020) will see a shortage of around 250 million tonnes per year, and as a result EUA prices will double to average 30.6 euros per tonne.
Firms abusing Kyoto carbon trading scheme: watchdog
June 14, 2010. Firms participating in a Kyoto Protocol carbon scheme are abusing it by artificially inflating their greenhouse gas emissions, thereby allowing rich nations' emissions to rise significantly, a watchdog said. Under Kyoto's Clean Development Mechanism (CDM), worth $2.7 billion in 2009, companies can invest in carbon-cutting projects in emerging economies, and in return get carbon offsets that can be used against their own emissions. Findings released by CDM Watch, an initiative of non-governmental organizations, showed the most lucrative projects in the CDM, chemical plants that destroy a potent gas called hydrofluorocarbon-23 (HFC-23), may have inflated their emissions in order to destroy them and sell more offsets. It also found that plants produced less HFC-23 during periods when they were unable to request CDM offsets, called Certified Emissions Reductions (CERs). Due to inaction by the CDM's executive, CDM Watch said it made an official submission calling for new CERs handed to HFC projects to be discounted by over 90 percent, and for projects up for renewal to be reviewed at a panel meeting from June 21-25 and by the executive when it meets in late July. If approved, the revision could drastically alter the 2,236-project strong CDM, which to date has been ruled by the credits of 19 HFC projects, mainly in China and India. Because HFC-23 traps nearly 12,000 times more heat than a molecule of carbon dioxide, and because it is cheap to destroy, HFC offsets account for more than half of the 420 million CERs issued to date by the UN's climate change secretariat.
Goldwind shelves $1.2 bn Hong Kong share sale
June 14, 2010. Xinjiang Goldwind Science & Technology Co. shelved a plan to raise as much as HK$9.09 billion ($1.2 billion) in a share sale in Hong Kong, citing poor market conditions. The Chinese wind-turbine maker won’t proceed “in light of the deterioration in market conditions and recent unexpected and excessive market volatility,” Goldwind said in a statement to the Hong Kong stock exchange.
Goldwind, listed in Shenzhen, dropped its fund-raising plans after Hong Kong’s Hang Seng Index slid more than 10 percent since April 9 and as Europe’s debt crisis curbs investors’ willingness to take risk, prompting at least three other companies to shelve offerings in the city. Renewable-energy stocks have fallen worldwide after the failure of United Nations climate talks in December to produce a treaty to fight global warming and promote clean-power sources. The WilderHill New Energy Global Innovation Index, an 88- member benchmark with a $2.1 trillion market capitalization, has declined 24 percent in 2010. That’s almost four times more than the 6.7 percent drop by the MSCI World Index in the period. The delay may hamper Goldwind’s plans to grow abroad. The company, which last year got 99 percent of its revenue in China, had planned to channel almost a quarter of the proceeds from the share sale on expansion in the U.S., Australia and Europe.
U.S. sales of solar modules increasing: Suntech
June 14, 2010. Suntech Power Holdings Co., the world’s largest maker of polysilicon solar-power modules, said U.S. sales are increasing as lower prices make panels more attractive to utilities and residential customers. Suntech expects U.S. sales of 200 megawatts to 250 megawatts this year, compared with 65 megawatts last year. The U.S., which accounts for about 10 percent of the Wuxi, China-based company’s sales, will be its biggest market in four or five years. Lower production costs allowed Suntech to cut prices in the U.S. about 10 percent to $1.70 to $2 per watt this year. Globally, Suntech plans to sell 1,400 megawatts this year, compared with 704 megawatts in 2009. The company’s previous forecast for 2010 was 1,300 megawatts. Electricite de France SA is Suntech’s largest customer in the U.S.
|
Dear Reader,
You may have received complimentary copies of the ORF Energy News Monitor. Our objective in bringing out the newsletter is to provide a platform for focused debate on India’s energy future. You could be a partner in this effort by becoming a subscriber. You could also contribute recommendations for India’s energy future in the form of brief insightful articles.
We look forward to receiving your patronage and support.
ORF Centre for Resources Management
|
|
 ORF ENERGY
NEWS MONITOR
Sponsorship Form
Please fill in BLOCK LETTERS
|
|
· Commercial Sponsorship: Rs 15, 000 per annum
1 hard copy (52 issues) + soft copies by email as per list provided by sponsor
· Non Commercial/ Academic Sponsorship: Rs 2, 500 per annum
1 hard copy (52 issues) + soft copies by email as per list provided by sponsor
· Individual Sponsorship: Rs 1, 000 per annum
Soft copy only
|
|
Yes! I/we would like to receive copies of the weekly ORF Energy News Monitor for a period of ______year(s). I/we shall be entitled to one hard copy along with the option of soft copies to a list of e-mail addresses provided by me/us for the period specified.
Name……………………………Address…………….………………………Telephone……………………Fax………………….E-mail…………………
Please find enclosed cheque/Bank Draft No.........................dated …………………drawn at New Delhi for Rs.........……….favouring ‘Observer Research Foundation’
Please fill in this form and mail it with your remittance to
Mr. Vinod Kumar Tomar
ORF Centre for Resources Management
OBSERVER RESEARCH FOUNDATION
20 Rouse Avenue,
New Delhi - 110 002
Phone +91.11.4352 0020 extn 2120
Mobile: 9871417327
Fax: +91.11.4352 0003
E-mail: [email protected], [email protected]
|
Registered with the Registrar of News Paper for India under No. DELENG / 2004 / 13485
Published on behalf of Observer Research Foundation, 20 Rouse Avenue, New Delhi–110 002 and printed at Times Press, 910 Jatwara Street, Daryaganj, New Delhi–110 002.
Disclaimer: Information in this newsletter is for educational purposes only and has been compiled, adapted and edited from reliable sources. ORF does not accept any liability for errors therein. News material belongs to respective owners and is provided here for wider dissemination only. Sources will be provided on request.
Publisher: Baljit Kapoor Editor: Lydia Powell
Production team: Akhilesh Sati, Vinod Tomar & Satish Kumar Tezaa
The views expressed above belong to the author(s). ORF research and analyses now available on Telegram! Click here to access our curated content — blogs, longforms and interviews.
PREV
