Energy News Monitor I Volume VI, Issue 8

International Negotiations on Climate Change: Road to Copenhagen

Background

he 15th Conference of Parties (CoP 15) on Climate Change is scheduled to begin on December 7, 2009 in Copenhagen and continue till December 18, 2009. The conference will attract the world’s environment ministers and about 15,000 officials, journalists, NGOs and other interested parties. The world needs the CoP 15 to be a success. At this point it is difficult to say what would be labelled a ‘success’ at Copenhagen, given that there is a tendency to conclude that all conferences on climate are successful even if participating countries fail to commit to CO₂ emission reductions. It is really important that this year ‘success’ is achieved in terms of commitments for emissions reduction and not just in terms of a conflict free conference.

Perspective of Developed Countries

The mandate from Bali is to reach an ambitious and fair agreement in Copenhagen. Going by Science, the agreement in Copenhagen must allow us to limit average temperature increases to less than 2ºC by restricting CO₂ concentrations in the atmosphere to about 450 parts per million. Towards this end, we need to identify common ground among parties. We also have to ensure that different dialogues on climate change feed into the negotiation process. There is reason for hope as political leaders and heads of State are getting involved. The fact that the United States which has been sceptical thus far is now reengaging in climate change negotiations adds to the expectations from Copenhagen.

Energy News Monitor I Volume Vi Issue 8

A future agreement on climate change should begin with a shared vision to limit global emissions in accordance with Science. Second, it must set ambitious mitigation targets for developed countries along with Nationally Appropriate Mitigation Action (NAMA) by developing countries. Third, it should lay out adaptation strategies. This is important because climate patterns are already changing and the only way to deal with it is to adapt to it. The fourth component is technology and the fifth is finding ways and means to fund investment in mitigation and adaptation.

Energy News Monitor I Volume Vi Issue 8
The EU has said that it would reduce emissions by 20 percent compared to 1990 levels by 2020. If there is an ambitious agreement in Copenhagen this is likely to go up to 30 percent. The US has said that it would limit emissions to 1990 levels by 2050. A Bill introduced in the US Congress, if passed would reduce emissions by about 5 percent of 1990 levels by 2020 and probably by 80 percent by 2050. Australia has said that it would reduce emissions by 25 percent of 2000 levels by 2020. Norway has committed to becoming CO₂ neutral by 2030. Russia has said that it would reduce emissions by 10 to 15 percent compared to 1990 levels (when it was part of the USSR) by 2020 and also increase energy efficiency by 40 percent but Russian targets are not as ambitious as they sound because Russia’s emissions are already 30 percent below 1990 after the collapse of the USSR. Japan has said that it will reduce emissions by 15 percent compared to 2005 levels which amount to only 7 or 8 percent reduction from 1990 levels. This rather un-ambitious target from Japan is one of the early disappoints in the run up to Copenhagen. As shown in the figure below, Denmark has been able to de-link economic growth and energy consumption.

Note: Energy consumption for international maritime traffic (international bunkering) is not included in the individual country’s energy consumption under international rules for energy statistics, but is calculated separately; therefore it does not appear in the figure.

Denmark has increased energy efficiency and also increased the share of renewable energy in its energy basket. Even though the Danish GDP increased by about 80 in the last 25 years its green house gas emissions have been stabilised. Denmark plans not only to meet but also exceed EU emission targets. Clean technologies and renewables account for 10 percent of the total export of Denmark and it remains one of Denmark’s fastest growing export areas.

Indicative targets from different countries add up to between 10 to 15 percent reductions in 2020 compared to 1990. At this early stage of negotiations, targets are being collected from individual nations on a bottom-up basis. Part of the task at Copenhagen would be see if these individual targets add up to what Science demands from the world which is a reduction of emissions by 25 to 40 percent by 2020 if temperature increases are to be limited to 2°C. It is now clear that individual targets may have to be supplemented by ‘top-down’ emission limits if we are serious about combating climate change. Negotiations with developing countries would be based on the basic premise of ‘Common but Differentiated Responsibilities’. Developed nations are responsible for most of the stock of GHG accumulated in the atmosphere and the responsibility to limit further flow of emissions rests primarily on developed countries.

The problem is that even the best efforts of developed countries are unlikely to have the required impact on the climate. In this light, there is probably no choice but to seek some contribution from developing countries. Developing countries have drawn up very constructive and ambitious proposals. China has said that their emissions would peak in 2035 and that they would achieve a 40 percent reduction in energy intensity and derive 15 percent of their energy needs from renewable sources. South Africa has said that its emissions would peak in 2020-2025 and that emissions would reduce from 2030. Costa Rica has said that it would be carbon neutral by 2021. In the recent negotiations in Bonn, Mexico said that it would reduce emissions by 8 percent in 2012 compared to 2009 emissions and by 50 percent by 2020. Brazil has said that it would reduce deforestation by 70 percent. The Indian Prime Minister has assured the world that per capita CO₂ emissions of India will remain far below that of developed countries even after two or three decades. India has also put forth a National Action Plan on Climate Change with eight different focus areas key among which are the use of solar energy and energy efficiency technologies and measures.

Despite these ambitious announcements, there are challenges that have to be addressed in order to have agreement in Copenhagen:

Ensuring deep, early and mandatory cuts in emissions of industrialised countries through ambitious mitigation commitments.
Ensuring that developed countries deliver new, predictable and additional financial support through enhanced commitments and better oversight of those commitments.
Ensuring enhanced mitigation actions by developing countries and putting in place the needed support and incentives.
Ensuring a meaningful response to the challenge of preparing for and adapting to the impacts of climate change.

Financing mitigation measures was one of the key pillars of the Bali Action Plan. In the light of the financial crisis, there is a feeling that funding for climate measures will be limited. Though this is not completely untrue, many countries are using green stimulus packages to facilitate the move towards a low carbon environment. South Korea has spent a staggering 81 percent of it’s stimulus package on ‘green initiatives’. Other countries have also pledged significant sums towards eco-friendly spending as shown in the table below.

There is agreement in developing countries that they need to play a role in mitigation of GHGs. The only question for which they are yet to receive a clear answer is ‘who will pay for these interventions?’ There are many interesting and innovative financial mechanisms on the table. One of them is the ‘International Fund for Greenhouse Gas Emissions’ from the shipping industry. When bunker fuel is purchased, a contribution towards mitigating GHGs is paid to the registered bunker fuel supplier, who then transfers the contribution directly to the International Fund. If the contribution is fixed at 0.5 percent of the bunker fuel price, it has the potential to generate about $2 billion a year for the fund. Depending on the political will to combat climate change the magnitude of the contribution could be increased.

It is correct that ‘technology’ has the greatest potential to deliver us from climate change. However the call from developing countries for transfer of technology without IPR constraints may be premature. Most of the emission reductions that are required can be achieved with available technologies which are inexpensive. New clean and efficient technologies will probably have to be introduced in the next two or three decades. In this context India’s call for collaborative research and development in clean technologies is very relevant. Picking winners among the numerous renewable technologies is not among the mandates for the Copenhagen negotiations. Each region or country may make a choice depending on its resource endowments and structural characteristics. In this respect financing becomes an important aspect in facilitating identification of core technologies that specific countries or groups of countries could develop and scale up. Scalability is an important aspect in making the right technology choice.

The Bonn meeting earlier this year revealed that the divisions between the North and South are yet to be mastered. If the deadlock persists between the developed and the developing nations, the substantial gains made in developing countries in terms of poverty eradication and improved quality of life could be wiped out completely. There is no question that the developed world should carry the burden of responsibility. In fact the world should be grateful to countries like India where over half the population are vegetarians. This is definitely one of the main reasons why the emissions per capita in India are so low. However cultural issues such as this that require behavioural change at the individual level in the developed world may prove to a key barrier to reaching an agreement in Copenhagen.

The 200 page negotiating text that emerged out of Bonn must necessarily transform into a shorter and more concrete set of proposals if we want an agreement at Copenhagen. At this point there are two different texts: One is focussed on the commitments of Annex I countries as per the Kyoto Protocol and the other which targets ‘Long Term Positive Action’ from all countries.

Perspectives of Developing Countries

Key Questions

How do we bridge the North-South divide in international negotiations?
Is climate change only a cost to industry or are there opportunities for industry?
Is low carbon growth possible in Developing countries?

to be continued…

Comments may be mailed to: [email protected]

Gas in India – Issues, Opportunities and Challenges

Introduction

ny economy, developing or developed, has to assess its energy needs in terms of its development. India, encouraged by the achievements of the past few years, is very ambitious. Compared to 3 per cent annual growth of the yesteryears, India is now in the regime of 8-10 per cent growth making it the second fastest growing economy in the world. India is now a member of the trillion-dollar economy club in the world and is among the top ten economies in terms of GDP. GDP measured in terms of purchasing power parity, makes India the third largest economies in the world. Naturally its energy needs are growing at unanticipated rates.

Thirty percent of energy consumption in India comes from non-commercial sources. The projections are that in the next 25 years, this will reduce to 10 per cent. But to enable the transition from non-commercial energy use to commercial energy use by users who are currently below the poverty line, their purchasing power must be enhanced. In this context the price of energy today and tomorrow becomes a vital question.

In terms of energy consumption on a per capita basis, an average Indian consumes just seven per cent of what an average American consumes and just one-third of what an average person in the world consumes. The share of oil in India’s commercial energy basket is about 32 per cent and that of gas about 9 per cent. But given the inherent advantages of natural gas, consumption of gas is expected to grow twice as fast as that of oil. For the next 25 years, gas consumption is estimated to grow by over 6 per cent on an average as compared to little over 3 per cent on an average for oil.

India imports about 80 per cent of its crude oil requirements and this import dependency is set to grow to 90 per cent in the next 25 to 30 years. In the last few years, India has started importing natural gas in the form of LNG. In fact, imported natural gas accounts for 28 per cent of India’s consumption. In the light of increasing natural gas imports, India’s first priority needs to be that of accelerating efforts towards exploration and production. In the 1960s oil was discovered in Assam and India became self sufficient in the production and consumption of oil. Even though many experts in the field felt that there was little chance of more hydrocarbon discoveries in India, India made a large find in the Arabian Sea. Now, oil production has begun in the Krishna-Godavari basin. India came out with a new exploration licensing policy (NELP) in the early part of this century and by the end of 2008 six licensing rounds were completed. About 162 blocks were offered out of which many have shown promising results.

In order to accelerate the process of exploration and production, contract terms in NELP will have to be improved. This will ensure the best of investment and the best of technology in Indian hydrocarbon prospects. India has also increased investments in prospects abroad. Within the last seven to eight years, Indian companies have established their presence in 22 countries and equity oil production outside India by ONGC Videsh (OVL) amounts to about 14 percent of indigenous production. India hopes to aggressively acquire hydrocarbon assets abroad in the future.

Despite these developments, Indian production of oil has stagnated at about 34 million tonnes and that of gas at 32 bcm. But with new finds coming on stream, about 40 million standard cubic meters a day will be available by 2009 and in the next two and a half years production of gas is likely to exceed 80 mmscmd.

to be continued…

Summary of proceedings at the 7^th Petro India Conference on ‘Gas in India – Issues, Opportunities and Challenges’ organized by the Observer Research Foundation (ORF) and the India Energy Forum (IEF) on 25th & 26th September 2008, New Delhi.

NEWS BRIEF

NATIONAL

OIL & GAS

Upstream

Murli Deora launches NELP VIII and CBM-IV

August 8, 2009. Murli Deora, the Union Minister of Petroleum & Natural Gas on Saturday inaugurated the first roadshow of the eighth bid round of the New Exploration Licensing Policy (NELP-VIII) and fourth bid round of the Coal Bed Methane (CBM-IV) in Mumbai. A total of 70 oil & gas blocks have been offered under NELP-VIII and 10 blocks have been offered under CBM-IV. The bid closing date for NELP-VII and CBM-IV is 12th October. Promotional Roadshows for NELP-VII and CBM-IV have been planned at Houston, Calgary, London, Perth and Brisbane. To facilitate data viewing by Exploration and Production companies, the government of India has opened a data centre at Noida. At other centres viz, Houston, London, Calgary and Perth, the data centres will be available for access on request. A total of 119 companies representing some the leading E&P companies and service providers participated in the held road show at Mumbai. These included 67 E&P companies (53 Indian, 14 foreign), 30 oil and gas field service providers and 22 other organizations including financial institutions participated in the Mumbai Roadshow.

Partial uncontrolled flow of hydrocarbon in Padra 33 of ONGC

August 7, 2009. Well No Padra 33 located around 2-2.5kms NE of Padra Township, observed partial uncontrolled flow of hydrocarbon. At that time workover operation was going on at the rig to test the prospectivity of the upper zone. Earlier, the well was completed in the year 1996-97 and produced oil from the depth around 630 mts. Recently, it seized to produce oil and gas and as per the standard practice followed in the oil industry, workover operation was taken up to shift to higher zone. The gas coming out of the well is combustible in nature and it is same gas used for the house hold purposes.

RIL to buy stake in KGGNL

August 5, 2009. Reliance Industries Ltd. (RIL) will acquire a 67 oercent stake in Krishna Godavari Gas Network Ltd. (KGGNL). The Mukesh Ambani owned RIL has sought time to meet the Andhra Pradesh Chief Minister Rajasekhara Reddy between Aug. 11-14 to sign the shareholders' agreement. An MoU will be signed between Reliance Gas Corporation and Gujarat State Petroleum Corporation (GSPC), IDFC Equity Fund and the Infrastructure Corporation of AP (IncAP) by mid-August. The three partners will have a 11% stake each in the special purpose vehicle, promoted by the Andhra Pradesh government. Currently, RIL is producing around 31 mmscmd. Of this, it is supplying only 10 mmscmd to Andhra, though the state’s actual allocation is only 7.79 mmscmd. GAIL is also supplying another six mmscmd, taking total supplies to 16 mmscmd.

‘RIL can hit peak gas output by Oct’: Govt

August 5, 2009. India's upstream regulator said Reliance Industries can raise gas supply to its peak rate faster than planned, but output from the new fields was rising slowly as there were not enough buyers yet. Reliance had said its deep-sea fields off the east coast would reach an 80 million cubic metres a day (mmscmd) peak by December, but V.K. Sibal, director general of hydrocarbons, said this was possible by October. He said 18 wells have been drilled in D-1 and D-3 gas fields in D-6 block at Krishna Godavari basin, but only eight had been opened while testing is going on at 2 wells.

Downstream

Chennai Petroleum postpones crude unit shutdown

August 10, 2009. Chennai Petroleum Corp has deferred its planned two-month shutdown of nearly a third of its 190,000 barrels-per-day (bpd) Manali refinery in southern India by a month to meet local fuel demand. The shutdown is aimed at routine maintenance and to increase capacity by 20,000 bpd.

BPCL, IOC launch b2b initiative

August 10, 2009. Mr P. K. Sinha, Additional Secretary and Financial Advisor - Ministry of Petroleum and Natural Gas, has launched the business-to-business (b2b) initiative of Bharat Petroleum Corporation Ltd and Indian Oil Corporation at a function held at the Kochi Refinery. BPCL and IOC often share products and facilities at many locations across India, which helps them serve its customers efficiently and reduce costs by making optimum use of available resources. On an average BPCL and IOC annually exchange product worth Rs 40,000 crore. The product is exchanged via modes of transport such as pipelines, wagons and lorries. But, the consolidated financial settlements and reconciliations over thousands of such transactions happen at regional offices and head offices of both these companies through an elaborate and independent process.

Essar in race for UK's second-largest oil refinery

August 9, 2009. India's Essar group has joined the race to buy the UK's second-largest oil refinery, Shell's Stanlow complex. Shell hopes to pocket up to 1.5 billion pounds from the sale. Shell's Stanlow complex, near Ellesmere Port, Cheshire, produces a sixth of the UK's petrol and is the oil giant's only refinery in Britain which is being sold along with two German refineries, at Heide and Harburg. The auction is being run by Lazard and final bids are due on August 17. Shell has put its Stanlow complex up for sale as it tries to rein in its huge cost base and struggles with the effects of an oil price that is half the level of the historic high seen last year.

Three PSU refiners to buy 0.7 MT of Cairn crude

August 6, 2009. Three PSU oil refining companies have been allocated 0.7 metric tons of crude oil to be produced from Cairn India operated RJ-ON-90/1 Block in Barmer, Rajasthan, during the current financial year 2009-10, Minister of State for Petroleum & Natural Gas Jitin Prasada. He further added that Hindustan Petroleum Corp. Ltd. (HPCL) has been allocated 0.3 MT of Barmer crude during 2009-10, while Mangalore Refinery & Petrochemicals Ltd. (MRPL) and Indian Oil Corp. Ltd. (IOC) would be able to buy 0.2 MT each.The crude allocation to the three state-run refiners nominated by the Government will be increased to 2.4 MT in 2010-11. HPCL will get 0.5 MT of Barmer crude in 2010-11, MRPL 0.4 MT and IOC 1.5MT, Prasada said.

Transportation / Trade

India's Petronet to buy LNG from Exxon's Australian project

August 11, 2009. Petronet LNG Ltd, India's largest liquefied natural gas importer signed an agreement to import 1.5 million tons of LNG from Australia. Petronet signed a sales and purchase agreement (SPA) with the Australian subsidiary of Exxon Mobil Corp for buying 1.5 million tons a year of LNG for 20 years from the proposed Gorgon LNG project. Petronet's Kochi terminal would be commissioned in 2011-12. The company in May concluded term sheets for all agreements for buying 1.5 million tons a year of LNG from Exxon Mobil Corp for 20 years, beginning 2014. Exxon has further stated it can sell another 1.3 million tons of LNG to Petronet but the Indian buyer has not yet committed to additional volumes as it has not tied-up consumers for that. US energy major Chevron Corp is the operator of the Gorgon project with a 50 percent stake while ExxonMobil and Royal Dutch/Shell hold 25 percent each.

OIL to enter capital market

August 10, 2009. Oil India Ltd (OIL), is reportedly said to hit the market with an offering of equity shares this year, may price its IPO that opens on September 7 at Rs 1,000-1,100 a share. OIL is looking at pricing its initial public offering (IPO) at closer to the prevailing share price of Oil and Natural Gas Corp (ONGC), add reports. OIL, believes its earnings per share (EPS) and book value are better than ONGC and so it is looking at pricing the issue in the range Rs 1,000-1,100.

Policy / Performance

‘Make details on RIL gas issue public’: Ex-power secy

August 10, 2009. In the midst of the ongoing legal battle between the two industrialist brothers, former power secretary E A S Sarma in a letter addressed to Prime Minister Manmohan Singh has also warned that a higher price fixed by the government for the gas could not only lead to greater profits for RIL, but also an additional subsidy burden for the government. Stating that the government’s move to declare that gas from RIL’s KG fields was not private property had been delayed, he said that “a family agreement that violates the sovereign authority of the government cannot survive”. “Both royalty and the profit will adversely impact the consumers of electricity, the users of fertiliser and the households that use gas for cooking. These are the three large consuming sectors for gas. Since these are sectors that cannot bear high tariffs, the additional cost will have to be borne by the government through subsidies,” he added. Sarma further added that RIL was also understood to earn additional profits of $1 per mmBtu for transporting the gas through its own pipeline.

‘Audit of RIL books yet to be completed’: CAG

August 10, 2009. India's official auditor has said his office was yet to ratify the Rs.45,000-crore ($9-billion) capital expenditure claimed by Mukesh Ambani-led Reliance Industries for tapping natural gas from the Krishna-Godavari basin. The remarks run contrary to a statement by Director General of Hydrocarbons V.K. Sibal that the office of the Comptroller and Auditor General of India had already carried out the necessary audit on the matter. The Anil Ambani group said based on the original estimate of the gas output of 40 million units a day, when the fields were handed over to Reliance Industries, the capital expenditure was pegged at Rs.12,500 crore ($2.5 billion). In June, the Bombay High Court asked Reliance Industries to supply 28 million units of gas from the fields to Anil Ambani-led Reliance Natural Resources for 17 years at $2.34 per unit. But Reliance Industries challenged the verdict in the Supreme Court, which heard the case July 20 and fixed Sep 1 as the next date of hearing. The court also asked all parties to file their replies on the government position on the matter by then.

Not favouring RIL: Oil Minister to PMO

August 8, 2009. The Oil Ministry has informed Prime Minister Manmohan Singh it was not favouring Mukesh Ambani in his ongoing tussle with younger brother Anil and it had moved Supreme Court only to protect its rights on natural gas. Responding to queries raised by the Prime Minister's Office on the basis of a letter to Singh from Anil Ambani, Petroleum Ministry said in a communication that it has not shown any favouritism to Mukesh-led Reliance Industries. Lawyers had advised that the only way out was to go to Supreme Court to protect sovereign rights on gas, given the the Bombay High Court judgement that gave effect to the Ambani brothers' agreement on gas, the Petroleum Ministry reply said.

‘Oil & gas explorers cannot violate PSC’: Govt

August 8, 2009. The Government said oil and gas explorers are bound by the production sharing contract (PSC) which gives it the right to approve a gas price formula and decide on utilisation of the fuel. The PSCs signed for the blocks that have been awarded in seven bid rounds since 1999 provide for Government approving a gas sales formula and sale of the fuel according to the gas utilisation policy of the Government.

Govt may change terms of oil, gas pricing

August 7, 2009. The Government is reportedly planning to change the terms of pricing and sale of crude oil and natural gas for new exploration blocks that are being offered to bidders. The proposal is said to give the Government equal rights along with the winning bidder to set gas prices. This will also put the government in a position to decide the customers and amount of gas they can buy, report stated. The Government will also decide who gets to buy the gas and how much. Existing production sharing contracts (PSC) allow the operators of oil and gas fields the freedom to set the price, subject to approval by the Government. They are also allowed freedom to market the output. The proposed new rules are being planned in the backdrop of the raging dispute between the estranged Ambani brothers and the Government over the sharing and pricing of natural gas being produced from the Krishna-Godavari basin.

RIL calls for restraint in KG basin gas dispute

August 7, 2009. Reliance Industries Ltd. (RIL) finally decided to respond to the non-stop media campaign mounted by Reliance Natural Resources Ltd. (RNRL) against it in the highly controversial dispute over the marketing of Krishna Godavari (KG) basin gas. After being a silent spectator to the daily dose of media statements being made by RNRL over the past several days, RIL asked ADAG chief Anil Ambani to exercise restraint and let the Supreme Court take a call on the gas row. Refuting the baseless, tendentious and motivated allegations and insinuations made by Anil Ambani and his associates, RIL said that the public statements by Anil Ambani and his aides were attempts to convert legal issues into a public spat.

RIL gas field cannot sustain at $2.40 mmBtu

August 6, 2009. Reliance Industries' prolific gas field in Bay of Bengal cannot sustain at a "lower" gas price of USD 2.40 per million British thermal unit, investor advisory firm Bernstein Energy has said in a report. At a lower gas price of USD 2.40 per mmBtu development of deep water gas would not be possible and would discourage deep water gas exploration, which is critical for India's long-term energy security, the US firm said in a July 30 report. The report also said that successful resolution to the gas pricing dispute is important for RIL and for the future of Indian deep water gas. The firm said that the government was right to back a USD 4.20 per mmBtu gas price and expressed optimism that this price will prevail. Bernstein Energy said deep water exploration off India's east coast has yielded one of the worlds largest deepwater gas discoveries over the past decade, Dhirubhai in block KG-D6.

‘Kerosene, LPG prices lowest in India’: Govt

August 6, 2009. Kerosene and domestic LPG prices in India are the lowest in South Asia, while the rates for petrol and diesel are comparable with its neighbours, Petroleum Minister Murli Deora said. In a written reply to a question in the Lok Sabha, he said kerosene at Rs 9.22 per litre in Delhi is the cheapest cooking fuel in South Asia. Kerosene in Pakistan costs Rs 34.89 a litre, Rs 30.53 in Bangladesh, Rs 21.26 in Sri Lanka and Rs 34.35 per litre in Nepal. Similarly, a 14.2 kg domestic LPG cylinder in Delhi priced at Rs 281.20 is cheaper than Rs 483.06 in Pakistan, Rs 670.12 in Bangladesh, Rs 666.31 in Sri Lanka and Rs 702.72 per cylinder rate in Nepal, he said. Petrol at Rs 44.63 in Delhi is costlier than Rs 36.52 a litre price in Pakistan but cheaper than Rs 51.36 a litre price in Bangladesh, Rs 54.19 in Sri Lanka and Rs 34.35 a litre in Nepal. Diesel at Rs 32.87 per litre in Delhi was a shade higher than Rs 30.53 rate in Bangladesh and Rs 30.43 a litre price in Sri Lanka. But it was cheaper than Rs 36.82 a litre price in Pakistan and Rs 34.35 per litre rate in Nepal, he said.

Govt price for RIL gas lower than others

August 6, 2009. Stressing that the price fixed for gas produced by Reliance Industries was lower than rates charged by other private firms, the government said its gas utilisation policy was aimed at operationalising idle and unutilised assets. Replying to a calling-attention motion in Rajya Sabha, Oil Minister Murli Deora said the USD 4.2 per million British thermal unit price fixed for gas produced from KG-D6 fields of RIL was lower than the average of USD 5.51 per mmBtu charged by UK's BG-led consortium for Panna/Mukta and Tapti gas. It was also lower than the USD 4.3 per mmBtu price of gas produced from Cairn's Ravva Satellite fields and USD 4.75 per mmBtu for the UK firm's Lakshmi fields. Deora, replying to the motion moved by Tapan Kumar Sen on availability of gas for power generation, said that an empowered Group of Ministers had fixed the price formula as well as usage of gas.

POWER

Generation

NTPC likely to set up power plants in Nigeria and Srilanka

August 9, 2009. National Thermal Power Corporation Limited (NTPC), country's largest power utility, is likely to set up power plants in Nigeria and Srilanka. Two 250 MW coal based power plant in Trincomalee region in Srilanka will be set up for which site is being identified and a joint venture Ceylon electricity company is under finalization. NTPC is exploring possibility of setting up new coal power project, taking up R&M of old stations and also sourcing of field in Kazakshtan. It is also pursuing coal blocks amongst NTPC, RNRL SAIL NMDC and CIL for sourcing coking coal and thermal coal from abroad for which International Coal Venture Pvt Ltd was incorporated on May 20 this year. The Joint Venture (JV) will explore various opportunities in Australia, Mozambique, Indonesia and Canada etc.

Bhushan Power to invest Rs 3k cr

August 7, 2009. Bhushan Power and Steel (BPSL) plans to invest Rs 3,000 crore to add 250 mw capacity to its existing power plant and to increase production of value-added steel at its Orissa facility over the next one year. The privately held company has a hot rolling steel plant and a 260 mw captive power plant in Sambalpur (Orissa). Plans are already afoot to increase its capacity to 390 mw by the year-end. The planned capacity addition will take the company’s power-generation capacity to 640 mw. The company plans to sell additional power generated through open access at spot prices in the market. BPSL also has a small cold rolling mill which it intends to expand. It also plans to produce steel wires and rods close to its existing plant.

NJHPS clocks record of 1144 units of electricity

August 5, 2009. The country’s largest 1500 MW Nathpa Jhakri Hydro Power Station (NJHPS) of public sector Satluj Jal Vidyut Nigam Limited has achieved yet another milestone by generating a record 1144 against the target of 1009 million units of electricity during July, 2009 and surpassed the previous best of 1091 million units achieved during July, 2008.

The Power Station is generating 36.9mn units of electricity daily. The cumulative generation of NJHPS up to 31st July 2009 during the current financial year is 3299 million units against the target of 3218 million units. This has been achieved at a time when country at a large is facing acute power shortage due to weak monsoon and less availability of water in the rivers.

The Plant availability factory (PAF) achieved by NJHPS during the month of July 2009 is 105.26% and cumulative plant availability factory for the station achieved is now 102.88%. This is the highest PAF achieved by the Central Sector Hydro Power Station operating in Northern Grid.

Transmission / Distribution / Trade

Mundra Port consortium bags Mormugao project

August 10, 2009. A consortium led by Mundra Port and Special Economic Zone Ltd, the largest private port in the country, has won the bid for development of coal handling terminal at port of Mormugao, Goa on a design, build, finance, operate and transfer basis. The contract involves development and operating a berth at Mormugao Port to handle about 6.5 million tonnes (mt) of cargo annually. It would handle 5 mt in the first year and have a revenue share of 20 per cent with the port trust. The volume of cargo would increase with mechanisation. It would have a concession period of 30 years in accordance with a concession agreement to be executed between the Mundra Port-led consortium and Mormugao Port Trust.

Solid start to NHPC IPO

August 7, 2009. The NHPC IPO received a strong response from the institutional segment. The initial public offering (IPO) of the public sector hydro power development company was subscribed over three times. According to the data available on the National Stock Exchange, majority of the bids came from the QIB segment. It was subscribed by 6 times. Whereas, bids from the Non-Institutional Investors (HNI) and the Retail Individual investors added up to only 0.1 times. Most bids came in at Rs 36 per share which is the upper end of the Rs30-36 price band.

‘Shown tremendous patience in asking REL to sign PPA’: Tata

August 6, 2009. Tata Power Chairman Ratan Tata said the company had shown a tremendous amount of patience in asking Reliance Energy to sign an agreement for purchase of 500 MW and failing which, had only exercised its right by deciding to sell the power on a merchant basis. Tata Power Company (TPC) and Reliance Energy (REL) were engaged in a legal battle over supply of 750 MW of power to the Anil Ambani-led company. REL had moved the Apellate Tribunal for Electricity (ATE) against Tata Power's decision to allocate 800 MW to civic utility BEST and only 500 MW to REL, thus resulting in a shortfall of about 250 MW for the Anil Ambani-led firm, which supplies electricity to some parts of Mumbai.

Chamber decries unscheduled power cut

August 6, 2009. The Indian Chamber of Commerce and Industry (ICCI), Coimbatore, has decried the erratic power supply to industries and the punitive action taken by TNEB for even minor violation of peak hour restrictions. It wanted that the maximum demand (MD) charges should not be levied for the duration of the peak hour cut and scheduled power cuts. TNEB enforced a 40 per cent cut on both maximum demand and energy for HT industries that was subsequently reduced to 20 per cent in stages, due to improved wind power generation. Because of strict enforcement of stoppage of work during peak hours (between 6 pm and 10 pm) and scheduled power cut of 2 hours, factories were unable to use even the allocated units and in almost all factories units have lapsed during July.

Tata Power draws Rs 24,000 cr capex plan for next 3 years

August 6, 2009. Tata Power said it has lined up nearly Rs 24,000 crore as capital expenditure in the next three years. Tata also said that over 30,000 consumers till July-end have evinced interest to switch over to Tata Power for their electricity.

The private sector utility supplies power to around 28,500 consumers, including individual and bulk industrial consumers like airports and state installations. On the power situation in Maharashtra, Tata said that there would be shortages but the company would take steps to ensure that Mumbai did not fall short of power.

Policy / Performance

Assam power scene improving

August 10, 2009. Assam State Power and Industries Minister Pradyut Bardoloi said that the power scenario had witnessed substantial improvement following the recent monsoon rains. As the State is dependent on hydel projects up to 80 per cent for power generation, the prolonged rainless spell caused a power crisis. But now things have improved. The Karbi Langpi project, which almost stopped power generation during the lean period, is functioning to its full capacity of 100 MW. Bardoloi stressed the need for looking for alternatives to hydro-electricity and said that measures were being initiated towards that end.

LIC keen on funding public sector units’ power, infrastructure projects

August 10, 2009. Faced with a shortage of high-yielding, long-term Government securities, the Life Insurance Corporation (LIC) has switched to funding projects of State-owned power sector and infrastructure entities. Among the major beneficiaries of the LIC’s project funding interest include the NHPC. NHPC officials said LIC has provided it a secured loan of Rs 1,896 crore.

RPG eyes Rs 1,700-cr loan for Haldia thermal project

August 10, 2009. The Goenkas of RPG are close to stitching up a debt finance of nearly Rs 1,700 crore for its 600 mw greenfield thermal venture in Haldia. Talks are on with a battery of domestic and international lenders and a final call on the loan-mix will be taken once CESC finalises the local-to-imported coal ratio for the project.

Indications are that CESC will import about 30% of the requisite coal (roughly 2.8 mt per annum) for the Haldia greenfield venture, while a majority 70% will be sourced from the Mahanadi coalfields in Orissa. It is known that apart from state-owned Bharat Heavy Electricals (BHEL), two Chinese power equipment makers, Dong Fang and Sepco Electric, are the front-runners in the race for the prized Haldia project.

Coal India eyeing tie-ups with global mining firms

August 10, 2009. State-run Coal India Ltd (CIL) is looking to tie up with global mining firms to jointly mine for coal abroad. The country’s largest coal firm is looking to secure assets in four countries, namely Indonesia, Australia, South Africa, and the US, and the proposed tie-up would focus on these locations. CIL is sitting on Rs 30,000-crore cash reserves while global mining firms have the technology but not the money. The proposed joint ventures will be formed by Coal India and not its arm Coal Videsh. CIL plans to directly import 4 million tonnes of coal in the current fiscal.

India to open new uranium mines, boost nuclear power

August 10, 2009. India is embarking on opening new uranium mines and boosting nuclear power generation capacity as fuel supplies are expected to get a major push from domestic and international sources. The first consignment of 120 tonnes of uranium pellets had already landed in India, and the government was engaged in a dialogue with international vendor countries to get more such supplies. Prospective vendor companies are currently in discussion mode and have to go through a lot of understanding about the reactors and their design, among other things. India's current nuclear power generation capacity is 4,120 MW which is planned to be increased by around 3,000 MW within the next two years as some of the reactor projects are currently under construction. The focus is also on reaching full capacity at the existing and new nuclear power plants.

‘NTPC to invest over Rs 9,000 crores in two projects’: Solanki

August 8, 2009. The National Thermal Power Corporation Limited (NTPC), a Government of India undertaking, will invest more than Rs 9,000 crore in its two new expansion projects located at Jhanor and Kawas in Gujarat. NTPC has planned the expansion of its power stations at Kawas and Jhanor by adding 1,300 mw of capacity (nominal) at each location in Stage II expansion of these projects. Key clearance for the projects have been obtained. The estimated cost of Kawas II and Jhanor II are Rs 4,635.89 crore and Rs 4,371 crore respectively as per 2004 cost estimation. The projects have been held up for want of fuel (gas).

‘Speed up indigenous manufacture of N-reactors’ components’: M. R. Srinivasan

August 8, 2009. Dr M. R. Srinivasan, Member of the Atomic Energy Commission (AEC), underscored the need for speeding up indigenised manufacture of critical components for nuclear reactors, which could pave the way for building of larger reactors. Stating that India had to step up production of power through nuclear reactors to achieve energy security, he said only indigenised manufacture of equipment for reactors could ensure production of nuclear energy at cheaper costs. He was happy that Indian companies such as L&T and BHEL were showing interest in this sector.

Coal India seeks coal price hike

August 7, 2009. Navratna PSU Coal India sought a hike in coal prices on the back of a decline in its retained earnings. Coal India has reported a sharp drop in retained earnings because of wage built annual impact. A profit of Rs 300 crore on a turnover of Rs 45,000 crore is low. Retained earnings are that per centage of net earnings of a company that is not paid out as dividends but is retained by the company to be reinvested for the growth of the business, like investing in machinery etc.

Power regulator notifies new transmission rules

August 7, 2009. The government has allowed power producers with capacity of at least 250 MW to transfer power beyond their state limits through contracts for three to 25 years, Central Electricity Regulatory Commission (CERC), the regulator, said. The new rules were to enable medium and long-term 'open access' or easy transfer of power across states. Medium open access refers to transfer of power for three months to three years, while long-term access is for 12 to 25 years, according to CERC's definition. The Central Electricity Authority (CEA) and Central Transmission Utility (CTU) will plan the transmission lines for thermal power producers with capacity of at least 500 MW and hydro power makers with at least 250 MW capacity, CERC said. Thus, these companies need not build dedicated transmission lines, CERC said. State-run Power Grid Corp has a status of CTU. In Jan 2008, CERC had come up with short-term open access norms that allowed free flow of electricity across states for a period of up to one month at a time.

Disinvestment plan for CIL to be firmed up soon

August 7, 2009. Coal India Ltd (CIL) said the proposal to divest up to 10 per cent Government stake in the Navratna PSU is likely to be finalised in a couple of months. The disinvestment proposal (in CIL) is expected to be firmed up in a couple of months. The Coal Minister, Mr Sriprakash Jaiswal, had earlier said the first right for purchase of shares would be given to the company employees to make them partners in the company and then offered to those whose land had been acquired by CIL. The Coal Ministry would, however, have to introduce a Bill to amend the Coal Mines Nationalisation Act for the proposed disinvestment. CIL has estimated coal reserves of up to 100 billion tonnes and over 80 per cent market share in the country. The company produced about 403 million tonnes of coal last fiscal.

RPower acquires stake in Jharkhand Integrated Power

August 7, 2009. Reliance Power Ltd has acquired 100% ownership of Jharkhand Integrated Power Ltd (JIPL) - the special purpose vehicle Company formed to implement Tilaiya UMPP - from Power Finance Corporation Ltd (PFC). The pit head based coal fired power plant to be developed in the State of Jharkhand will have estimated outlay of Rs 200bn. This is the 3rd Ultra Mega Power Project secured by the Company in addition to the following UMPP's which are already under implementation. 4,000 MW pit head coal based Ultra Mega Power Project at Sasan, Madhya Pradesh and 4,000 MW imported-coal based Ultra Mega Power Project at Krishnapatnam, Andhra Pradesh.

TNEB asks Ennore Port to treble coal handling capacity

August 6, 2009. The Tamil Nadu Electricity Board (TNEB) has asked Ennore Port Ltd (EPL) to increase the port’s installed capacity to handle coal (only for the TNEB) by nearly three times in the next five years. The TNEB wants the port to be able to handle a total volume of around 35 million tonnes (mt) of coal by 2013-14 from the present 12 mt. The expansion is to meet the TNEB’s plans of adding nearly 5,000 MW of capacity in the next five years. EPL’s capacity expansion, including a new berth and dredging, could cost around Rs 200 crore. EPL will request the Indian Maritime University to take up a detailed feasibility study on the project. Last financial year, the port handled nearly 10 mt of coal for the TNEB.

FKCCI seeks cancellation of power supply cos’ licences

August 6, 2009. Alleging that the load shedding enforced in Karnataka by electricity supply companies (Escoms) was only an indirect and illegal attempt to “tamper with the power tariff,” the Federation of Karnataka Chambers of Commerce and Industry (FKCCI) has appealed to the State power regulator to cancel the distribution licences of all the five Escoms in the state. In a petition filed before the power regulator, the Karnataka Electricity Regulatory Commission (KERC), the FKCCI has appealed to the Commission to levy a penalty of Rs 1 crore on each of the five Escoms, for the alleged violation of several regulations of the power regulator and provisions of the Electricity Act.

R-Power invites bids from EPC contractors for Dadri project

August 6, 2009. Reliance Power has kick-started the process of inviting bids for the engineering, procurement and construction of the Dadri and Shahpur projects in Uttar Pradesh and Maharashtra, even as the promoters of the project are in the court, fighting a case against the fuel supplier RIL, to ensure the supply of gas to the power plant. Reliance Power is planning to invite bids for the International Competitive Bidding process for selection of the EPC contractors. It may be pointed out that while the jury is still out on whether RIL will supply gas to this project, the empowered group of ministers had said that gas would be given to the Dadri power plant subject to availability.

BHEL wins order worth Rs 26 bn

August 5, 2009. BHEL has secured an order worth Rs26bn for the main plant package for an upcoming Thermal Power Project (TPP) in Orissa, involving two new-rating units of 600 MW each. The order for the greenfield power project, located at Derang in Angul district of Orissa, has been placed on BHEL by Jindal India Thermal Power Limited (JITPL) and reflects the customer’s confidence in the company’s technological excellence and capabilities in executing projects of this magnitude. Coming close on the heels of an order for a 600 MW thermal power plant of Korba West Power Company Limited in Chhattisgarh, this order is testimony to the confidence reposed by Independent Power Producers (IPPs) in BHEL’s capabilities. It also reinforces BHEL’s leadership status in the execution of thermal power projects involving supply of state-of-the-art equipment, suited to Indian coal and Indian conditions.

NHPC-led JV to develop hydropower project in Manipur

August 5, 2009. A joint venture led by NHPC will develop the 1,500-MW Tipaimukh hydropower project in the north-eastern state of Manipur. The project requires Rs81.38bn of investment and was initially awarded to the state-owned North Eastern Electric Power Corporation Ltd. (Neepco). The Union Power Ministry has reportedly asked NHPC, Satluj Jal Vidyut Nigam (SJVN) and the state government of Manipur to form a joint venture to develop the project. NHPC would hold a 69% stake and SJVN another 26%. The other 5% share would be with the Manipur government. With the Tipaimukh project out of its shelf, Neepco’s planned capacity addition target has come down to 3,000 MW from 4,500 MW earlier being planned by the end of March 2017. It has a current installed generation capacity of 1,130 MW. According to reports, NHPC is finalising the draft Memorandum of Understanding for the proposed Tipaimukh JV. The work is already in process. The draft MoU would be submitted within a month to the government, as desired by the Power Ministry.

INTERNATIONAL

OIL & GAS

Upstream

Hess Indonesia says it may have struck huge gas reserve

August 11, 2009. PT Hess Indonesia said it believed it has found a huge gas reserve in the Semai V field in the Arafuru sea off Papua. The Semai V field may hold gas reserve as big as that of Tangguh. The Tagguh gas field in the Bintuni Bay of Papua has a reserve of 14 trillion cubic feet, the country's largest gas reserve being operated by BP. The geological basin in Semai is similar to that of the Tanggug block indicating the reserve could be the same in size.

International firm hopes to find oil, natural gas in Northeast Slovenia

August 11, 2009. In September the Slovenian branch of international company Nemmoco is to start seismic surveying in the northeastern region of Prekmurje, where they hope to find oil and natural gas. Nemmoco Slovenia Corporation's branch from the town of Lendava in Prekmurje will perform seismic survey on some 200 square kilometers of Filovsko polje in order to find fields of hydrocarbon, oil and natural gas. However, before getting down to work, the company, owned by an English oil and gas exploration and production company Ascent Resources, must first obtain permissions from the landowners.

Petrobras notifies ANP of oil traces in offshore BS-500 block

August 11, 2009. According to the National Petroleum Agency (ANP), Petrobras identified traces of oil in an offshore well located off the coast of Brazil in the promising Santos Basin. Drilled by the Peregrine 1 drillship to a total depth of 4,163 meters, the 5BRSA744RJS well is situated in the offshore BS-500 block of the Santos Basin and has indicated evidence of oil. Oil companies operating in Brazil must disclose any oil, gas or hydrocarbon find to the oil and gas regulator within 48 hours; however, the notification does not necessarily mean that the find will be commercially viable.

BG Egypt starts gas production at Sequoia offshore field

August 10, 2009. BG Egypt, a subsidiary of UK-based BG Group, started gas production from its Sequoia subsea development. The project, located 90 kilometers in the Mediterranean Sea, represents a $1 billion investment and was delivered six months ahead of schedule, BG Egypt said in a statement. BG Group, which holds a 62.99% unit interest in Sequoia, said the project brings into production six new subsea wells, three located in each of the concessions, which will help maintain overall plateau production.

Brazil to control recent big oil find

August 7, 2009. A Brazilian government proposal for exploiting recent deep-water oil discoveries calls for direct state control and is expected to give a key role to oil company Petroleo Brasileiro SA. The new plan follows the discovery off Brazil's coast of giant pools of oil. They are among the largest petroleum finds in recent years, and could make Brazil into a significant energy exporter. Brazil's government plans to greatly increase its role in managing huge deep-water oil finds off the coast. Details leaked in recent weeks indicate that Brazil will adopt a strategy common in the Middle East and other major oil-producing regions, in which companies sign production-sharing deals that give most of the barrels to the host government.

Sinopec Spuds Patolon-2 well in Myanmar

August 7, 2009. Sinopec has started drilling the Patolon-2 well in Myanmar, according to the Sinopec-run website. This is Sinopec's third well in Myanmar, the other two being the Patolon-1 and Yagyi-1 drillings, both of which led to oil and gas finds. The drilling of the 5,700-meter Patolon-2 well is expected to take Sinopec 274 days.

Chevron hits Paydirt in Block 0 offshore Angola

August 7, 2009. Chevron announced that its affiliate, Cabinda Gulf Oil Company Limited (CABGOC) and its partners, have made a successful discovery in Block 0 located adjacent to the Cabinda coastline in Angola. The discovery well, drilled in March 2009 by the Rowan Gorilla VII in 397 feet (120 meters) of water to a total vertical depth of 13,000 feet (3965 meters), encountered over 225 feet of net hydrocarbon pay in the Upper Pinda formation. The well was tested from a single 150 ft. perforated interval and flowed at a rate of 11.6 million cubic feet of natural gas and 2,550 barrels of liquid hydrocarbons per day.

Sinopec's subsidiary discovers Black Gold in Inner Mongolia

August 6, 2009. A medium-sized oil field has been found in China's northern Inner Mongolia Autonomous Region, the Zhongyuan Oil Exploration Bureau, a subsidiary of Sinopec Group, announced. Preliminary drilling data shows that the finding, located in Inner Mongolia's Wulate Rear Banner, has a proven reserve of about 140 million tons. Further test drillings would be carried out covering 388 square kilometers around the primary find to collect full information on the oil field.

Gulf Keystone strikes oil in Kurdistan's Shaikan Block

August 6, 2009. The Shaikan Block Gulf Keystone Petroleum International (50% GKP, 50% ETAMIC) has made a significant discovery at the Shaikan-1 exploration well. The well is located in the Shaikan Block, situated near the city of Dihok, approximately 85 kilometers North-West of Erbil in the Kurdistan region of Northern Iraq.

OPEC may maintain oil output level at next meeting, Kuwait says

August 6, 2009. OPEC may decide to maintain current crude output levels when it meets next month in Vienna, Kuwait’s oil minister said. Sheikh Ahmed Abdullah al-Sabah ruled out the possibility of the Organization of Petroleum Exporting Countries cutting production further. The current oil price is suitable for Kuwait, he said. OPEC agreed at three meetings last year that the members with quotas would cut output by a combined 4.2 million barrels a day to 24.845 million in a bid to bolster prices. The group is scheduled to discuss production levels in Vienna on Sept. 9 after leaving output unchanged at two meetings this year.

Oil set for new high in 2009, Barclays says: Technical analysis

August 6, 2009. Crude oil is set to rise above $74 a barrel in New York, passing this year’s high, after prices formed an “inside bar” pattern, according to technical analysts at Barclays Capital. The highest and lowest prices on Aug. 4 were within the trading range of the previous day, a formation on a candlestick chart known as an “inside bar” that usually indicates the continuation of a price trend, Barclays said. A narrowing gap between monthly contracts of Brent crude and a “positive macro backdrop” lend support, it said. The difference between Brent contracts to be settled in a year’s time and those settling a month from now shrank to $6.22 a barrel yesterday, compared with $11.69 a barrel on March 30. The narrowing of the discount between short- and long-term crude often indicates that an oversupply in the near-term is abating.

Downstream

GTI commissions gasification tech facility

August 11, 2009. Gas Technology Institute (GTI) recently commissioned an Advanced Gasification Test Facility (AGTF), a 5-level process research building which houses pilot-scale gasification and gas processing systems. This new lab, supported in part by the Illinois Department of Commerce and Economic Opportunity (ILDCEO), bolsters capabilities in advanced energy development. The AGTF is an expansion of GTI’s Flex-Fuel Test Facility (FFTF), designed to evaluate gasification processes for fossil and biomass solid fuels. The combination of these facilities allows integrated piloting of advanced gasification and downstream technologies that enable commercialization of better processes to produce power, chemicals, and gaseous and liquid fuels.

Mozambique to relocate proposed refinery to protect Elephants

August 11, 2009. Mozambican energy firm Oilmoz has moved the site for a planned $8 billion oil refinery to avoid putting a nearby elephant reserve at risk. The proposed site for the 350,000 barrel a day refinery has been shifted from the southernmost district of Matutuine, home of the Maputo Elephant Reserve, to Marracuene, about 125 kilometers to the north.

Sinopec, PetroChina in station-building turf war

August 11, 2009. Sinopec and PetroChina have begun establishing petrol stations within each others traditional geographic areas, reflecting the Chinese oil giants' efforts to strengthen their presence in the domestic market. Sinopec in August announced plans to invest five billion yuan over three years to build 300 petrol stations in Sichuan and Chongqing, considered PetroChina's turf. The move is considered an equivalent retaliation to PetroChina's recent decision to squeeze into the sales market of the Yangtze River Delta, Sinopec's traditional territory.

Idemitsu looks overseas for refinery growth

August 10, 2009. Idemitsu Kosan Co. expects to make a final investment decision around June next year on a joint venture refinery it plans to build in Vietnam, and it is also mulling other foreign refining projects as it retools to cope with Japan's shrinking oil market. Idemitsu posted net losses of Y3.2 billion in the April-June quarter, mainly due to lower sales volume and poor margins for refined oil and petrochemical. It has four refineries in Japan. The 200,000 barrels a day Vietnam refinery, to be sited on the coast near Hanoi, is one launchpad for Idemitsu's future growth. However, it is the only foreign refinery project that a Japanese refiner is involved in, for now.

Petroplus jumps on earnings, cuts refinery run rates

August 6, 2009. Petroplus Holdings AG, Europe’s largest independent oil refiner, rose the most in 2 1/2 years in Zurich trading after second-quarter profit exceeded estimates. The Zug, Switzerland-based company ran its plants at 79 percent of capacity during the quarter, not including its halted Teesside refinery in the U.K. Petroplus expects demand for middle-distillate fuels such as diesel and gasoil to rise in the second half as an increase in U.S. consumption cuts Europe-bound exports. The recession has reduced fuel use this year, forcing refiners including Total SA and Repsol YPF SA to curb operations at some plants and close others temporarily.

Transportation / Trade

Williams, Dominion propose keystone connector

August 11, 2009. Williams and Dominion announced their intention to form a joint venture to market and develop a new pipeline to transport up to 1 billion cubic feet per day of natural gas produced in the Rockies and Appalachian basins (including the southern Marcellus Shale) to growing markets in the Eastern and Mid-Atlantic regions. The proposal, to be known as the Keystone Connector, would extend from the terminus of the Rockies Express pipeline in eastern Ohio to Williams' Transco Station 195 in southeastern Pennsylvania. Williams and Dominion will be working with potential shippers to determine the level of interest in the proposal.

Inter Pipeline Fund provides update on corridor expansion

August 10, 2009. Inter Pipeline Fund provided an update on the construction, cost, and timing of its $1.8 billion capacity expansion project on the Corridor pipeline system. This project commenced in 2006 and primarily involves the construction of a new 42-inch diameter diluted bitumen pipeline between the Athabasca Oil Sands Project's ("AOSP"s) bitumen mining operations near Fort McMurray, Alberta and the Scotford upgrading facility near Edmonton, Alberta.

Kitimat, Apache sign LNG supply MOU

August 10, 2009. Kitimat LNG Inc. announced that it has signed a memorandum of understanding (MOU) with Apache Corp. to supply natural gas to Kitimat LNG's proposed liquefied natural gas (LNG) export terminal. The MOU sets a framework for Kitimat and Apache to negotiate a definitive agreement to supply 200 million to 300 million cubic feet (MMcf) of natural gas feedstock per day to the terminal, which has a planned capacity of 700 MMcf per day. Apache also obtained an option to purchase an equity stake in the Kitimat LNG terminal.

ExxonMobil announces first LNG cargo at Adriatic Terminal

August 10, 2009. ExxonMobil Corp. announced that the first liquefied natural gas (LNG) cargo arrived at the Adriatic LNG regasification Terminal located offshore of Porto Levante, Italy aboard the LNG carrier, Dukhan. Terminale GNL Adriatico ("Adriatic LNG") is owned by Qatar Terminal Limited (45 percent), a Qatar Petroleum subsidiary, ExxonMobil Italiana Gas (45 percent) and Edison (10 percent). The Terminal is the first offshore Gravity Based Structure in the world for unloading, storage and regasification of LNG. It utilizes ExxonMobil proprietary technology and is designed around a large concrete structure, which houses two LNG storage tanks, a regasification plant, and facilities for mooring and unloading LNG vessels. When it reaches full operational capacity later in 2009, the Adriatic LNG Terminal will be able to deliver 775 million cubic feet of natural gas per day (8 billion cubic meters per year), or approximately 10 percent of Italy’s current natural gas requirements.

NNPC, Agip sign deal for NLNG trains

August 10, 2009. The NNPC in Abuja signed a modified carry agreement with Nigeria Agip Oil Company (NAOC) to finance "Train 4" and "Train 5a-' of the Nigerian Liquefied Natural Gas (NLNG) project.The project, which is expected to cost 473.3 million U.S. dollars (about N71 billion), would guarantee gas supply of 131 million metric standard cubic feet of gas per day to the LNG plant trains. The Group Managing Director (GMD) of NNPC, Mr Mohammed Barkindo, who signed on behalf of the corporation, said at the event that NAOC would, under the agreement, finance in full (100 per cent) NNPC"s portion of the project cost, estimated at 284 million dollars (about N42.6 billion).

Turkey says gas pipelines not rivals

August 7, 2009. Turkish diplomatic sources said that Turkey was not a partner of the South Stream project, and the Nabucco project was still a priority for the country. Commenting on the recent news claiming that Nabucco project would lose its significance after the cooperation agreements on energy signed by Turkish and Russian premiers recently, diplomatic sources said Turkey had never seen Nabucco and South Stream projects as rivals of each other but it accepted the two initiatives as complementary projects.Expressing Nabucco's importance and priority for Turkey, officials said that Turkey was a partner in Nabucco project, however there was no such partnership in South Stream.

Gazprom will ship gas to Asia in bid to curb Reliance on Europe

August 6, 2009. OAO Gazprom, the world’s biggest natural-gas producer, plans to start piping East Siberian gas to Asia, where an increase in demand over the next 20 years may outpace growth in its traditional European markets. Gazprom will send surplus gas east from the Yakutia fields, Deputy Chief Executive Officer Alexander Ananenkov said last week at a ceremony in the eastern town of Khabarovsk, as work began on a new pipeline to the Pacific Ocean. A boom in Asian demand may open export opportunities as Gazprom taps new Siberian fields. The Moscow-based company, which in 2008 sent all its exports west, entered the Asian market this year by shipping liquefied gas from its Sakhalin Island development. It’s seeking to add customers in the region after pricing disputes with Ukraine disrupted shipments to Europe twice since 2006.

Thai PTTEP signs Bongkot gas sale deal with PTT

August 6, 2009. Thailand's PTT Exploration & Production PCL PTTE.BK said its joint venture with Total and BG had signed an agreement to sell gas from the Bongkot gas field to PTT, the country's biggest energy firm. The start will be from the middle of 2012 to the middle of 2013, PTT Exploration said in a statement to the stock exchange. Under the agreement, the daily contractual quantity (DCQ) for natural gas is 320 million cubic feet per day (MMSCF/D), it said.

Policy / Performance

EIA: OPEC members could barrel in $555 bn for’09

August 11, 2009. Based on projections from the EIA August 2009 Short-Term Energy Outlook (STEO), members of the Organization of the Petroleum Exporting Countries (OPEC) could earn $555 billion of net oil export revenues in 2009 and $667 billion in 2010. Last year, OPEC earned $968 billion in net oil export revenues, a 42 percent increase from 2007. Saudi Arabia earned the largest share of these earnings, $285 billion, representing 29 percent of total OPEC revenues. On a per-capita basis, OPEC net oil export earning reached $2,680 in 2008, a 40 percent increase from 2007.

West Australia gives environmental nod to Gorgon Project

August 10, 2009. The West Australian government has given final environmental approval to the nation's biggest resource project. Environment Minister Donna Faragher announced the latest step in the process towards development of the expanded A$50 billion (US$41.68 billion) Chevron-led Gorgon liquefied natural gas project on Barrow Island. Artificial light emissions would also be minimized to protect the local population of flatback marine turtles and the turtle conservation plans would be extended from 30 years to the total life of the project.

Petrobras clarifies on operatorship of Brazil's pre-salt blocks

August 10, 2009. Brazilian BasinsPetrobras, in response to written notice received from Securities and Exchange Commission of Brazil, has clarified on news published in the Brazilian Press, titled "Petrobras will be the operator of all blocks." Under the terms of clause IX of article 20 of the Federal Constitution, mineral resources, including the subsoil, belong to the Federal Union, and the Government is solely responsible for all the decisions on how it will be explored.

Malaysia mulls joint oil exploration with Brunei

August 7, 2009. Malaysia has proposed to Brunei the possibility of embarking on joint oil exploration in the territorial waters of both countries. The Malaysian side was also looking at various aspects, including the role of the national oil corporation, Petronas, which would be worked out within the framework of the Malaysia-Brunei Letters of Exchange (LoEs) pertaining to the demarcation of land and maritime borders.

Shell gas find supports W Australia floating LNG plan

August 7, 2009. Royal Dutch Shell PLC said it has struck gas in the Browse Basin offshore Western Australia state, possibly supporting its plans to build what could be Australia's first floating liquefied natural gas plant.

The discovery was made at the Concerto-1 well in Shell's fully owned permit WA-371-P, which is close to the Prelude gas field. It is the 10th well in a 12-well drilling campaign in that permit and follows the initial Prelude-1 discovery there in 2007, made 16 kilometers away. The floating plant is expected to be 480 meters long with a width between 70 meters and 80 meters and would be built outside Australia and towed to the Prelude field, Shell said.

LNG terminals traditionally need 5 trillion cubic feet of gas to get built and Shell indicated a few years ago that it would like to use floating LNG technology to develop smaller resources.

Japan's Bontang LNG contract with Indonesia to be extended

August 7, 2009. The Indonesia government hopes to thrash out talks this year with Japanese buyers on the extension of sales of liquefied natural gas (LNG) from Bontang, East Kalimantan. BP Migas Oil and Gas Executive Body deputy chief said talks were expected to come to a conclusion by October, extending the contract from 2011 to 2020.

Brazil govt to up Petrobras stake by ’10

August 7, 2009. Brazil's government plans to boost its stake by 2010 in state-run oil company Petrobras, which is partly owned by private investors, by offering new oil fields in exchange for company shares. The plan is part of President Luiz Inacio Lula da Silva's proposed regulatory overhaul that would change rules on how companies can access offshore sub-salt reserves that the industry views as a new frontier for the oil business.

Petrobras would issue new shares and give them to the government in exchange for rights to develop unexplored oil fields owned by the state, but would assign a conservative value to the assets to ensure minority shareholders' stakes are not diluted.

US Senator proposes to end U.S. Tax breaks for oil, gas speculators

August 6, 2009. Oil and natural gas speculators would lose tax breaks under legislation introduced by U.S. Senator Ron Wyden of Oregon. Wyden said speculators often pay lower capital gains rates on oil and gas trading profits than commercial buyers, such as refiners and airlines, that actually take delivery of the fuel.

The proposal would force hedge funds and other speculators to pay taxes on profits at the same rates as ordinary income. Tax-exempt investors, including pension funds and endowments, would have gains from oil and natural gas trading treated as unrelated business income.

Bangladesh looks to the sea for energy security

August 6, 2009. Bangladesh is among a group of the world's poorest countries that may be sitting on top of untold oil and gas wealth, but can't exploit it due to ownership arguments. But with severe economic problems driving it forward, Dhaka is soon to go ahead and award a string of offshore exploration blocks, including to major international companies like Conocophillips (COP).

Overseas oil firms, including the U.S. company, placed the highest bids for some of the blocks, some of which overlap or are near areas claimed by poor neighbor Myanmar and far more wealthy India. While its first licensing round of offshore blocks may go through without a big fuss, top government officials say they want to pave the way for future auctions of acreage that'll be farther away from its coastline and that could potentially provoke the wrath of neighbours.

Russia, Turkey sign South Stream deal

August 6, 2009. Russian Prime Minister Vladimir Putin and Turkish counterpart Recep Tayyip Erdogan signed an agreement that will allow the planned South Stream pipeline to pass through Turkey's waters. The pipeline is a Russian-Italian project that would bring Russian gas to Europe via the Black Sea. It is seen as a rival to the Nabucco pipeline, which some European leaders favour since that project does not rely on Russian gas.

Payment disputes between Russia and Ukraine, through which much of Russian gas destined for Europe flows, have blocked gas shipments to Europe in the past, making some question Russian reliability. Bypassing Ukraine with the South Stream pipeline should resolve that problem, argue Russian officials. Nonetheless, some European leaders would like an alternate, worrying that they are too dependent on Russia, which provides the bulk of gas for European consumption.

Shaw to support Navy fuel ops worldwide

August 6, 2009. The Shaw Group Inc. announced its Environmental & Infrastructure Group has been awarded an Indefinite Delivery/Indefinite Quantity (IDIQ) contract by the Department of Defense (DoD) to support its U.S. Navy fuel system operations.

The scope of Shaw's contract includes engineering, inspection and construction services at U.S. Naval Facilities Engineering Service Center Petroleum, Oils and Lubricants (POL) sites at DoD facilities around the world. Shaw will support the sustainment, restoration and modernization requirements on projects, including designing, building, engineering, inspecting, testing and constructing POL fuel systems and various components.

DOE-sponsored software app assists exploration of Fayetteville Shale

August 5, 2009. Fayetteville Shale AreaA project sponsored by the U.S. Department of Energy (DOE) has resulted in the development of the Fayetteville Shale Infrastructure Placement Analysis System, or IPAS, which is now available online.

The web-based software application enables oil and gas operators to better plan for natural gas recovery in environmentally sensitive areas. In a project managed by DOE's National Energy Technology Laboratory, the University of Arkansas joined with Argonne National Laboratory to develop the software planning tool, which aids oil and gas exploration and development companies in considering all ecosystem contingencies associated with the 50-mile-wide Fayetteville Shale play.

Cambodia says no plans to grant oil concessions in disputed area

August 5, 2009. Cambodian Deputy Prime Minister and Foreign Minister Hor Namhong has given assurances Phnom Penh has no plans to grant petroleum concessions to private companies in a maritime zone disputed with Thailand. Hor Namhong's assurance came amid media reports that Cambodia had given Total, a French firm, a concession to explore for oil in a 27,000 sq km area claimed by the two countries. The cabinet recently approved a loan of 1.4 billion baht for Phnom Penh to improve a road linking Samrong with O'Smach, near Thailand's Aranyaprathet district in Sa Kaeo province.

POWER

Generation

China Xishan coal raises coking coal prices

August 11, 2009. Xishan Coal and Electricity Power, a listed arm of China's top coking coal producer, said that it had raised prices for coking coal since the beginning of August as demand for the steel production ingredient recovered.It raised the price of washed coking coal to 1,125 yuan ($164.6) per tonne from 1,025 yuan. The price of fat coal was raised by 11 percent to 1,210 yuan per tonne, while price of washed lean coal was raised by 100 yuan to 930 yuan per tonne, the company said in a statement to the Shenzhen Stock Exchange. The prices were on a free-on-rail basis, the company said.

GE O&G develops gas turbine generators for Vankor oil field

August 10, 2009. GE Oil & Gas has designed unique gas turbine generators that can operate in temperatures up to -60ºC for a power plant project at the Vankor oil field (Turukhansky district, Krasnoyarsk region) owned by Rosneft oil company. The 210 MWt gas turbine power station at the Vankor oil field will become the only complete source of power and heat used for life support and oil and gas production, as well as part of the first stage of the oil field's launch into operation. Rosneft obtained licenses to explore the oil field in 2003. As part of its continuing cooperation with Rosneft, GE Oil & Gas is supplying eight gas turbine generators based on MS5001PA gas turbines. To ensure reliable operation of the equipment in extreme climatic conditions, GE Oil & Gas has developed a special turbine design and used automated heating systems to transport and store the equipment on the site.

China coal group says most supply deals inked-paper

August 5, 2009. A number of regional as well as top coal miners have signed annual coal supply deals with the country's five largest power producers after eight months of negotiations. Shanxi, Inner Mongolia, Shandong, Anhui, Guizhou, Jiangxi, Shaanxi, Shenhua Group and China Coal Group have signed key thermal coal supply contracts with the top five power groups. Top coal miners like Shenhua has insisted this year's contract price for coal with calorific value of 5,500 kcal/kg (NAR) should rise to 540 yuan ($79.1) a tonne, or 17 percent higher than last year. Power companies have complained that rising coal prices were weighing on their earnings. China liberalised coal prices in 2006 after years of government control, but power tariff is still set by the government.

Transmission / Distribution / Trade

Dynegy in $1.5 bn deal to sell 8 electricity plants

August 10, 2009. Dynegy said that it would sell eight power plants to the private equity firm LS Power for around $1.5 billion, ending a two-and-a-half-year collaboration between the companies. Dynegy also posted a wider second-quarter loss as lower power prices offset higher production. Dynegy will receive just over $1 billion in cash in return for the power plants, allowing it to pay some of its debt. LS Power also will return 245 million Dynegy Class B shares it received when the companies formed their venture. The firm’s remaining 95 million Class B shares will become common shares, leaving LS Power with a 15 percent stake in Dynegy.

ABB wins orders from Saudi Electricity Company

August 10, 2009. ABB, a leading power and automation technology group, has won orders worth $60 million (Dh220 million) from Saudi Electricity Company, Saudi Arabia's national power transmission and distribution utility, to improve the power efficiency of 28 distribution substations.

ABB is responsible for the design, engineering, supply, installation and commissioning of the projects, which are expected to be completed by 2010. ABB technologies will improve the power factor, which is a measure of how efficiently power is being used.

US-sanctions hitting Syrian electricity

August 9, 2009. Syria has a daily shortfall of up to 1,000 megawatts (MW) in its electricity supplies, and this has led to power cuts sometimes lasting several hours. The deficit is forecast to remain around 1,000 MW next year, rising to 1,400 MW in 2011 and 1,800 MW in 2012, the newspaper said.

Electricity ministry figures cited by the paper show Syria's power generating capacity is officially 7,188 MW, while peak demand from the country's 22 million people is around 6,500 MW. The shortfall is being aggravated by growing demand and because of US-imposed sanctions in place since 2004, the report said. These have prevented major international companies from building new power plants in Syria.

WTU retail energy asks Texans to reduce electricity consumption

August 6, 2009. With electricity demand expected to peak above 63,200 megawatts (MW) WTU is encouraging customers throughout the State to reduce electricity consumption this evening during peak usage. The Public Utilities Commission of Texas and ERCOT have placed the State on a Power Watch, meaning that while reserves are low, due to unplanned generation outages, demand is expected to be high.

Policy / Performance

Florida Cabinet approves nuclear power plant proposal

August 11, 2009. Despite some passionate pleas from environmentalists, Gov. Charlie Crist and the Florida Cabinet unanimously approved Progress Energy's bid to build a nuclear power plant in Levy County. But their approval is just an early step in a long process before the company can actually begin construction of a plant that wouldn't begin operating for about 10 years at the earliest.

Progress Energy still requires approval from environmental regulators and the federal Nuclear Regulatory Commission before it can begin construction on a 3,100-acre plot in Levy County about 10 miles north of Crystal River and eight miles inland from the Gulf of Mexico.

Yanzhou coal mining shares suspended

August 10, 2009. Trading in shares of Yanzhou Coal Mining Co Ltd was suspended pending a statement on an acquisition, the Hong Kong exchange said. Share trading in Australian coal miner Felix Resources Ltd was also suspended ahead of an announcement on the outcome of talks on a potential change of control transaction.

Media reports in June said China's Yanzhou Coal Mining had renewed its interest in Felix, although Felix said at the time it did not expect talks on a change of control to be concluded in the near future.

‘FG increases electricity tariffs’: Nigeria

August 10, 2009. Nigerians will pay more for electricity with effect from this month following a 10 per cent increase in tariffs, according to Federal Government's plan to encourage private sector participation in the power sector. But according to the Nigerian Electricity Regulatory Commission (NERC), consumers will not pay the new tariff which he said would be borne by the Federal Government through subsidy.

Chinese electricity use may mislead on economy

August 9, 2009. Electricity production – supposedly a rare “honest” gauge of Chinese industrial activity and economic growth – may be misleading investors on the true state of the nation, analysts warn.

A recent surge in power generation may have more to do with the demise of a commodity arbitrage play than a revival of activity in China’s “workshop of the world” factory heartlands. It could also mean that the world’s third biggest economy may not find a base for broad recovery next year.

One strong note of caution on electricity consumption, issued this week by the chief China economist at Royal Bank of Scotland, said that changes in aluminium production – a notoriously power-hungry industry – were distorting the numbers and may be significantly exaggerating the true level of industrial improvement.

The warning comes amid mounting concern that official readings of the Chinese economy are being manipulated more than usual in Beijing’s haste to declare the country the first leading economy to emerge from the global crisis.

Ghana supplies Nigeria electricity

August 7, 2009. The Minister of Energy, has disclosed that arrangements are far advanced for Ghana to be "a major exporter" of electricity to Nigeria and other countries in the West African sub-region. The statement further added that the development of the various sectors of the economy, such as industry, agriculture, health, education, tourism, among others, depends heavily on reliable, adequate and economically priced power supply.

Though Ghana did not disclose how many megawatts of electricity the country would be transmitting to Nigeria, there are indications that it would add up to the projected megawatts the Federal Government was targeting. In the 1970s, 80s and 90s, Ghana's energy needs was supplied by Nigeria.

China investigates nuclear official

August 6, 2009. China said the head of the powerful company spearheading its expansion of nuclear power, a multibillion-dollar push that has attracted intense foreign corporate interest, is under investigation for "alleged grave violations of discipline.

The investigation was disclosed in a statement from officials within the Chinese Communist Party through state-controlled media. Mr. Kang, who is CNNC's top party official, has been a member of the powerful Central Committee of the Communist Party since 2007. Mr. Kang is at the heart of a program that involves commissioning nuclear-power plants and securing uranium supplies from countries including Jordan, Kazakhstan, Russia and Algeria. CNNC is directly involved in a number of projects and has a broader role in planning the nuclear expansion effort.

‘Minister calls for cost-price equilibrium in electricity tariffs’: Angola

August 5, 2009. The Angolan minister of Energy, Emanuela Vieira Lopes, in Luanda, urged a more balanced policy between cost and price of tariffs in the country, in order to ensure better quality in the provision of power to the population.

The Government intends to improve the equilibrium between price and cost of electricity tariffs, due to the fact that the amount paid by the consumer is far from meeting the actual costs of operations, as the Government subsidizes a portion of that amount.

Renewable Energy Trends

National

India to roll out solar power plan by Dec

August 10, 2009. India will roll out a 20 gigawatt solar power plan by the end of December, the country's renewable energy secretary said. India expects Rs1 trillion worth of investment in renewable energy by March 2012. The Government may add 14,500 megawatts (MW) of renewable energy capacity in the five years ending March 2012.

Move to tap non-conventional energy sources

August 10, 2009. The Tiruvanandapuram city Corporation has launched a project to prepare an integrated energy master plan for the State capital, with proposals to tap and promote the use of non-conventional energy sources. The project will be taken up under the Sampoorna Oorja Suraksha Mission, a State-level initiative aimed at achieving total energy security. The mission, which was launched in Thiruvananthpuram district panchayat in 2007, focuses on total electrification, energy conservation and tapping of renewable sources to meet the growing energy demands of the city.

India to host next International Renewable Energy Conference

August 10, 2009. India will host the next International Renewable Energy Conference (DIREC, 2010) during October 27-29, 2010 at New Delhi. This is a part of initiative taken at the 2002 World Summit on Sustainable Development in Johannesburg acknowledging the significance of renewable energies for sustainable development – especially for combating poverty and for environmental and climate protection.

The Delhi Conference is the fourth in the series, following events at Washington in 2008, Beijing in 2005 and Bonn in 2004 and is expected to be the premier all-Renewables gathering in India ever, with an attendance of over 9,000 delegates, over 250 industry leading speakers, experts, academicians, Government leaders, financial institutions and around 500 exhibitors from all over the world, which will make it the largest event of its kind.

Centre banks on volumes to bring down solar power costs

August 9, 2009. Driven by volume production, solar power generation costs could break the viability barrier. According to latest estimates firmed up by the Ministry of New and Renewable Energy, the capital cost of solar power projects could come down to around Rs 6-8 crore a MW in five years, down from around Rs 14-17 crore currently. The new cost estimates for solar, which could compare favourably with the capital costs for hydro and nuclear power, is being attributed by the Government to global research and development efforts, expanded utilisation of solar photovoltaic modules for various applications and volume production with new players including Bharat Heavy Electricals Ltd, Bharat Electronics Ltd, Reliance Industries Ltd, AES Solar, Astonfield-Areva and Lanco Infratech joining existing firms such as Tata-BP Solar and Moser Baer India Ltd. According to Ministry data, during the last five years, the cost of solar PV modules has reduced globally from $4,200 a kW (or Rs 18.90 crore a MW) to $2,700 a kW (or Rs 12.15 crore a MW), a reduction of 56 per cent. In India, the costs came down from around Rs 18 crore a MW to Rs 14.5-17 crore during the period.

CEL, Russian co plan silicon wafer making venture

August 6, 2009. State-owned Central Electronics (CEL) will set up a joint venture with Russian firm Podolsk Chemicals to set up a silicon wafer manufacturing plant in Europe with an investment of around Rs 1,200 crore. CEL manufactures photovoltaic cells that converts solar energy into electricity. Silicon wafers are used in solar cells. The two partners will set up a 50:50 JV that will manufacture silicon wafers which will mainly for captive consumption, he said. CEL has recently signed a memorandum of understanding (MoU) with the Russian firm for the proposed JV.

Grid-based solar units may get generation incentive

August 6, 2009. The grid-based interactive solar power generation projects may get a generation-based incentive from the Centre in addition to the tariff fixed by the State Utility. The tariff for one kilowatt hour has been approved at Rs 3.10 as purchase price by the Andhra Pradesh Electricity Regulatory Commission (APERC). The MNRE has issued guidelines for implementation of Grid Interactive Solar Power Generating Stations as demonstration projects in the country. The Union Ministry has decided to support a maximum capacity of 50 MW during the XI Plan period and of this the State is entitled to maximum 10 MW. These projects would be undertaken on build, own and operate basis by private firms. With regard to solar photo-voltaic power projects, the MNRE provides a generation-based incentive which shall not exceed Rs 12 per KWH after taking into account the power purchase rate provided by the APERC.

Solar Panels to line border in Kutch

August 5, 2009. With about 45 investment promises lined up in solar energy sector, Gujarat plans to promote the desert as a hub for renewable energy. However, the shadow that could fall on Gujarat's solar ambitions is that tapping energy from the Sun has so far proved technically complicated and economically unviable. The Clinton Foundation proposal which aims to generate about 5,000 megawatt of power is way larger than India's biggest power project of 3,260MW in Vindyachal. The biggest solar power plant planned so far is a 160MW project in Portugal. Gujarat has decided to allocate 1,500 hectares of land in the desert and a small stretch in Santalpur in Bankaskantha district. The Gujarat Industrial Development Corporation will create infrastructure for the ambitious `Solar Park'.

Global

BP, Martek sign sugar-to-biodiesel JDA

August 11, 2009. BP and Martek Biosciences Corp. announced the signing of a Joint Development Agreement (JDA) to work on the production of microbial oils for biofuels applications. The partnership combines a broad technology platform and operational capabilities to advance the development of a step-change technology for the conversion of sugars into biodiesel. Under the terms of the multi-year agreement, Martek and BP will work together to establish proof of concept for large-scale, cost effective microbial biodiesel production through fermentation.

Virginia Judge nixes permit for coal power plant

August 11, 2009. In a victory for environmental groups, a Richmond judge invalidated a permit for a coal-burning power plant being built in southwestern Virginia.Circuit Judge Margaret Spencer ruled that Dominion Virginia Power's mercury emissions permit for the Wise County plant would have improperly allowed the utility to adjust the limit after the plant is already operating.

A coalition of environmental groups has been fighting to block the power plant for years, arguing that emissions would harm air and water quality and contribute to global warming. About 42,500 people from across Virginia have signed petitions and sent comments to state and company officials opposing the project, according to the Southern Environmental Law Center.

Nigeria to get renewable power plant

August 11, 2009. The prospects of renewable energy in Nigeria is set to improve as The Nigerian Electricity Regulatory Commission (NERC), has secured the commitment of the African Development Bank (ADB), on behalf of intending investors to provide facilities for construction of power plants that will run on renewable energy in the country. The bank also reiterated its resolve to provide facilities for any investor in renewable energy plants, but that such proposals must be realistic and meet the conditions for good investment decisions and said that it has plans to support the country's efforts to improve power generation, through its non-concessionaire window for the public-private sector initiatives.

Nuclear naivety to solar success

August 10, 2009. As policy-makers prepare for the Copenhagen conference on climate change in December, a publicly listed but little known company at Lucas Heights in Sydney is getting closer to commercialising a nuclear enrichment technology that provides cheap, clean energy in an age of global warming.

The company, Silex Systems, is emerging as a key player in the green energy sector with its focus on next-generation uranium enrichment and a prospective solar cell technology that could deliver a material increase in conversion efficiency.

Silex takes its name from a sophisticated process for enriching uranium. The technology works, and if it succeeds in making the process commercially viable -- something it will know within the next six months -- it will revolutionise the global nuclear power industry.

Plastics that convert light to electricity could have a big impact

August 8, 2009. Researchers the world over are striving to develop organic solar cells that can be produced easily and inexpensively as thin films that could be widely used to generate electricity. But a major obstacle is coaxing these carbon-based materials to reliably form the proper structure at the nanoscale (tinier than two-millionths of an inch) to be highly efficient in converting light to electricity. The goal is to develop cells made from low-cost plastics that will transform at least 10 per cent of the sunlight that they absorb into usable electricity and can be easily manufactured.

A research team has found a way to make images of tiny bubbles and channels, roughly 10,000 times smaller than a human hair, inside plastic solar cells. These bubbles and channels form within the polymers as they are being created in a baking process, called annealing, that is used to improve the materials' performance.

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