Energy News Monitor I Volume VIII, Issue 33

Will the Golden Age of Gas bypass India?

 

 

NEWS BRIEF

OIL & GAS

January 26, 2012. ONGC CMD Sudhir Vasudeva said the company has been able to arrest the decline in its oil production, maintaining it at the level of 1 to 1.5 per cent, and asserted that it was for the government to decide on its proposed 5 per cent follow-on public offer. Vasudeva said the world-over, the decline in oil companies' production is 4 per cent to 5 per cent, but ONGC has maintained the decline in oil production at the rate of 1 per cent to 1.5 per cent. In this regard, he said 70 per cent of ONGC's oil production comes from 15 major fields out of the total 110 fields the company has, and on average, all of them are 30-35 years old. On 5 per cent disinvestment in ONGC, Vasudava said it was for the government to take a decision on the proposed issue. During the previous fiscal, the company registered a record production of 62.05 million tonnes of oil and oil-equivalent gas from domestic and overseas assets. ONGC accounts for 73 per cent of oil and 48 per cent of gas production in India. To a question, Vasudeva said hydrocarbon reserves are not going to run out in the next 40 years, but said ONGC is focused on tapping the potential of new sources of energy like coal bed methane, underground coal gasification and shale gas.

January 31, 2012. Hindustan Petroleum Corp plans to shut a 60,000 barrels per day (bpd) crude unit and fluid catalytic cracker at its Vizag refinery in southern India for maintenance in April-May. The plannned maintenance shutdown will continue for about 45 days. HPCL earlier had planned to shut the two units at its 166,000 bpd Vizag refiner in November. HPCL, said dates for the shutdown had not yet been decided. HPCL also operates a 130,000 bpd Mumbai refinery in western India.

January 27, 2012. Essar Oil announced starting production of viscosity grade (VG) bitumen from its Vadinar refinery in Gujarat. The 300,000 barrels per day refinery is equipped with a state-of-the-art refinery, which is dedicated to developing superior grade petro products that find acceptance in both domestic and international markets. Essar is expanding Vadinar refinery capacity to 405,000 bpd.

January 25, 2012. India and Pakistan agreed in-principle to have a uniform transit fee for ferrying natural gas through the proposed $7.6 billion pipeline from Turkmenistan. India will pay a transit fee to Pakistan and Afghanistan for getting its share of 38 million standard cubic metres per day of gas through the Turkmenistan-Afghanistan-Pakistan-India pipeline, while Islamabad has to pay ferrying charges only to Afghanistan for allowing passage of the fuel. The 1,735-km-long pipeline will run from Turkmenistan's Yoloten-Osman gas field to Herat and Kandahar province of Afghanistan, before entering Pakistan. In Pakistan, it will reach Multan via Quetta before ending at Fazilka (Punjab) in India.

January 25, 2012. Indian state-run explorer Oil and Natural Gas Corp (ONGC) sold a Russian Sokol crude cargo to load in March at a lower premium than the previous month after sentiment for rival Middle East grades weakened. The 700,000-barrel cargo to load on March 21-24 was sold to an oil major at a premium just above $8 a barrel to Oman/Dubai quotes. ONGC previously sold a Sokol cargo for February-March loading at a premium of around $9 a barrel to Oman/Dubai quotes.

January 25, 2012. India's biggest importer of Iranian crude oil, Mangalore Refinery & Petrochemicals Ltd (MRPL), is concerned about possible supply disruption because of international sanctions and is keeping all options open. Concerns about supply disruption have escalated after the European Union agreed to ban oil imports from Iran starting July 1, joining the United States in putting pressure on Tehran's nuclear programme. This can hit Indian oil purchases because oil companies use a Turkish bank route to pay for Iranian oil after the Reserve Bank stopped payments through a regional clearing house. There is no supply disruption but the company is prepared for any eventuality and is in discussions with suppliers in Latin America, the Middle East and Africa. MRPL, a subsidiary of ONGC, will import about 7.1 million tonnes of Iranian crude in 2011-12 and plans to continue such imports in the next fiscal year too.

January 31, 2012. State-owned oil companies slashed jet fuel prices by over 3 per cent as an appreciating rupee made imports cheaper. The price of aviation turbine fuel (ATF), or jet fuel, in Delhi was cut by ` 1,974 per kilolitre (kl), or 3.02 per cent, to ` 62,908 per kl, Indian Oil Corporation said. The reduction comes in the wake of a steep ` 1,805.44 per kl, or 2.9 per cent, hike in jet fuel rates to ` 64,882.11 per kl from January 16. The reduction was possible as the rupee has appreciated to about ` 49.50 per US dollar from over ` 52 to a dollar at the time of the last hike. Prior to the last hike, IOC and sister public sector fuel retailers Hindustan Petroleum and Bharat Petroleum had reduced ATF prices twice -- by 1.3 per cent on December 16 and by about 1 per cent from January 1. In Mumbai, ATF will cost ` 63,864 per kl, as against the current rate of ` 65,920.87 per kl. Jet fuel constitutes about 40 per cent of an airlines' operating cost and the reduction in prices will slightly ease the burden on cash-strapped airlines. The three fuel retailers revise jet fuel prices on the 1st and 16th of every month, based on the average international price in the preceding fortnight.

January 27, 2012. Oil Minister S Jaipal Reddy asked Finance Minister Pranab Mukherjee to impose additional excise duty of ` 80,000 on diesel vehicles and grant 10-year tax holiday for oil and gas hunt and refineries in the forthcoming Union Budget. Reddy met Mukherjee with a long-list of proposals concerning the oil and gas sector for consideration in Budget 2012-13. The oil ministry also demanded scrapping 5 per cent customs or import duty on liquefied natural gas (LNG) to reduce cost of imported fuel for core sectors of fertilizer and power plants. It argued that cleaner LNG should be treated at par with crude oil, which at present attracts nill customs duty. Also, it renewed is age-old demand for granting declared goods status to natural gas and LNG so that the environment friendly fuel attract a uniform sales tax of 5 per cent instead of current system of varied taxes ranging from 12.5 per cent (Gujarat and Maharashtra) to 20 per cent (in Assam). To buttress its claim, the ministry said like coal, which has been granted the declared goods status, gas is a preferred fuel for power generation with 40 per cent of electricity being generated using the environment-friendly fuel. Gas replaces liquid feedstock in the fertilizer sector as well as in other applications and therefore qualifies for the declared goods status as has been granted to crude oil. Besides, piped natural gas is being used as cooking fuel in households and as CNG in transport sector replacing polluting liquid fuels. Reddy was for inclusion of crude oil and petroleum products under the proposed Goods and Service Tax (GST) regime. Crude oil, petrol, diesel and ATF are now kept outside GST. The central and state taxes would continue to be levied at the prevailing rates on these products.

January 27, 2012. Petronet LNG Ltd is planning to set up its third terminal in the east coast of India. After the terminals at Dahej and Kochi in the west coast, the third one will come up at Gangavaram in Andhra Pradesh. Petroleum secretary and Petronet LNG chairman G C Chaturvedi said the 100th board meeting of the company held in Kochi has given sanction for the project. It has entrusted French consultant Tractabel for preparing the detailed feasibility report. The approximate cost of the 5 million tones capacity terminal will be ` 4500 crore. For the third quarter ended December 31, 2011, the company's net profit rose 73 % to ` 295 crore compared with the corresponding quarter of the previous year. The turnover of the company increased by 74 % to ` 6330 crore during the period. Petronet LNG said higher increase in net profit is on account of additional volumes with better margins along with higher operational efficiency. The 5 million tonne Kochi terminal of Petronet LNG will be ready by July and will be operational by October. The terminal has a long term contract for the supply of about 1.5 million tones of LNG from Gorgon in Australia from 2015. The terminal will have to buy from the spot market till then. Though the long term supply prices is $ 16 per mmbtu, it will be still feasible for companies using feedstock naptha or furnace oil.

January 26, 2012. Unfazed by the US and EU sanctions, India said that it is open to all mechanisms for payment, "whatever it takes," to buy Iranian oil as it contributes around 12 per cent of New Delhi's oil imports and it's difficult to find replacement on this scale. It could include a mix of options that will enable India to buy Iranian oil without violating the UN sanctions, highly-placed government sources told a day after an Israeli website suggested that India has agreed to pay Iran in gold for oil purchases. India is confident of finding "a way out" to buy Iranian oil without being seen as breaker of UN sanctions.

January 26, 2012. Power Ministry wants Reliance Industries to supply natural gas from its KG-D6 fields to state-owned NTPC's Kawas and Gandhar expansion projects without waiting for a court decision on the gas supply dispute between the companies. RIL had in response to an NTPC tender in 2004 quoted a price of $2.34 per million British thermal units for supply of 12 million standard cubic metres per day to the state-owned firm's Kawas and Gandhar expansion projects. However, a dispute over commercial terms, including RIL's liability in case of a default in supply, led NTPC to drag the RIL to the Bombay High Court, where the matter is still pending. The Power Ministry, in response to the agenda floated by the Oil Ministry for the meeting of the Empowered Group of Ministers (EGoM) has proposed allocation of 9.7 mmscmd of gas from KG-D6 to the Kawas and Gandhar expansion projects to achieve a 70 per cent plant load factor (or plant capacity utilisation). In support of its demand, the Power Ministry has quoted the opinion of former Solicitor General Gopal Subramanium on gas allocation to NTPC. The EGoM should consider the case of NTPC, which is a public utility, without waiting for the outcome of the court case. The opinion was circulated to the members of the ministerial panel in August, 2010, as per the decision of the last EGoM. The Power Ministry had at the last meeting of the EGoM, proposed that 12 mmscmd of gas should be given to NTPC at the discovered international competitive bidding price of $2.34 per mmBtu without waiting for the outcome of the pending NTPC-RIL suit in the Bombay High Court. However, this time around, the ministry is not insisting on the $2.34 per mmBtu price and is comfortable with the 2007 government approved price of $4.205 per mmBtu for KG-D6 gas. The Power Ministry stated that NTPC has already started work on expansion of its Kawas and Gandhar power projects in Gujarat to meet the milestones necessary for getting gas allocation. An equipment supply tender for the projects was floated in March, 2011. The Power Ministry also wants the EGoM to order RIL to sign an agreement to supply 2.16 mmscmd of gas to NTPC plants other than Kawas and Gandhar. RIL has not signed pacts for supply of 2.74 mmscmd out of the 4.46 mmscmd of gas allocated to five power projects by the EGoM. Of these, state-owned NTPC is the most-affected, with 2.16 mmscmd of gas supply pending.

January 26, 2012. The government has amended the KG-D6 contract to formally induct British energy giant BP as 30% partner in India's biggest gas field operated by Reliance Industries. With this BP gets a legal role in the management of India's giant gas block in the eastern coast. The British firm has been waiting for formal signing of contracts since August 2011 when the government approved its $7.2-billion deal to acquire 30% stake in 21 blocks held by RIL. Reliance and BP had announced the deal in February last year for 23 blocks but the government did not approve their partnership in two blocks due to technical reasons. The Directorate General of Hydrocarbons (DGH) had given a clean chit to the global energy major on financial obligations in 21 blocks and the government would soon sign amended contracts with BP. The DGH expedited the matter after BP India had written a letter to Oil Minister Jaipal Reddy seeking a quick decision. Earlier, the DGH had blocked formal inclusion of BP as 30% partner of RIL in the D6 block saying that the company had not furnished a bank guarantee. BP had, however, contested this saying guarantees were needed for exploration blocks and the D6 block was past the exploration phase. The DGH later clarified that as per article 29.3 (a) of the PSC, the contractor was required to furnish bank guarantee with respect to work programme to be undertaken for the following year of the exploration phase. But in this case, exploration phase was over three years go. The formal inclusion of BP in the D6 PSC was also delayed by almost four months due to some minor corrections in the draft contract. The Cabinet Committee on Economic Affairs had cleared BP's proposal to pick up 30% stake in 21 blocks held by RIL. Subsequently, the oil ministry formally conveyed the government's approval to BP on August 8. The approval was subject to certain conditions such as financial and performance guarantees with respect to individual PSCs. BP Exploration (Alpha) Ltd had furnished performance guarantee of its parent company.

January 25, 2012. HPCL may buy 2.8 million tonnes of crude from Iran in 2012/13 against three million tonnes this fiscal year. The lower volume could be because of "refinery economics" and not due to payment problems with Iran, India's second-biggest oil supplier after Saudi Arabia. Iran's supplies to India have been fraught with payment problems in the past 13 months after a clearing mechanism was scrapped in December 2010 and refiners have sought alternative supplies. The European Union banned imports of oil from Iran and imposed a number of other economic sanctions, joining the United States in new measures aimed at deflecting Tehran's nuclear development programme and hitting its oil revenue.

POWER

January 31, 2012. Against the backdrop of fuel shortage, country's largest power producer NTPC has said that adequate availability of coal could have helped the company to produce 10-15 per cent more electricity every year. NTPC has an installed capacity of 36,014 MW. Responding to a query on how much capacity have been affected by coal shortage, NTPC said it would be difficult to quantify. For the current fiscal (2011-12), NTPC's coal requirement is about 164 million tonnes (MT). Out of the total, about 114 MT is estimated to come from Coal India.

January 29, 2012. Bangladesh signed a $1.5 billion deal with India's NTPC to build a 1,320 MW coal-fired power plant, the country's biggest, to help ease acute power shortages. Bangladesh's state-owned Power Development Board (PDB) struck the 50:50 joint venture deal with India's public sector National Thermal Power Company (NTPC). Under the pact, a JV company will be floated to install and operate the plant while the PDB and the NTPC will implement the $1.5 billion project. PDB and NTPC signed the agreement. The plant will be set up at Bagerhat's Rampal and Bangladesh and India will have equal partnership in production. India's power secretary Uma Shankar said the deal opened up a "great platform" for better cooperation between the two neighbours. The plant is expected to be commissioned by 2015. Of the total project cost, 70 per cent will be arranged through loans and the rest will be equally shared between the JV partners. PDB said that cost of per unit electricity will vary from Taka 5 to Taka 7 if existing international market price of coal is taken into account.

January 25, 2012. Around 15 Indian companies, including Tata Power, GMR Group and Adani Power, are among candidates shortlisted by the Nigerian government to participate in the privatisation of power projects of state-owned National Electric Power Authority (NEPA). Struggling on home ground with multiple issues which have delayed capacity addition, Indian power companies are exploring participation in power generation and distribution projects in Nigeria to fuel their growth despite the civil unrest in the country. Nigeria is in the process of selling a 51% stake in four thermal and two hydro power generation units and 11 transmission projects since NEPA's poor operational and financial performance has deterred capacity addition in the country.

January 29, 2012. State-run power transmission companies in Madhya Pradesh have registered a considerable reduction in losses during the last nine years. The per centage of transmission losses was 7.93 in 2002-03, which has come down to 3.74 in 2010-11. The companies have chalked out a comprehensive action plan for strengthening and upgrading the transmission grid in Madhya Pradesh. Work of laying 18.47 circuit kilometer transmission lines was completed in 2010-11. During the period, four 220 KV and nine new 132 KV power sub-stations were also constructed in the state. A target has been fixed to lay 749 circuit kilometer transmission lines in 2011-12.

January 29, 2012. Buoyed by the growth in the transmission and distribution segments, power equipment manufacturer Diamond Power Infrastructure (DPIL) plans to invest ` 770 crore over the next three years to fuel its expansion plans. DPIL is engaged in five business verticals—cables (low, high and extra high voltage), conductors, transformers, towers and various EPC projects where it undertakes planning, designing and commissioning of turnkey transmission and distribution projects.

January 26, 2012. Delhi's power regulator DERC has found certain "discrepancies" in the audit report of Reliance Infrastructure-backed discoms BRPL and BYPL between April and December 2011 and observed that the financial condition of the companies appeared not as bad as it has been made out to be. The Delhi Electricity Regulatory Commission (DERC) had asked the discoms to submit a detailed account of their monthly revenue generation and expenditure since April 2011 so as to keep a tab on their accounts. BYPL and BRPL had expressed its inability to clear dues to the tune of ` 3,000 crore to various power generation and transmission companies citing severe fund crunch which led to possibility of widespread power cuts with NTPC threatening to cut supply to the city. Although the city government initially refused to help the discoms, later it agreed to infuse fresh equity of ` 500 crore into the company considering the gravity of the situation. Delhi Government has 49 per cent share in the two discoms while Reliance Infrastructure has 51 per cent share. After the government agreed to offer the financial help, DERC had asked the BYPL and BRPL to provide month-wise details of revenue generation and expenditure since April 2011. The regulator also strictly told the discoms to pay its outstanding dues to the power generation and transmission utilities by February one and threatened to take action if it fails to comply with the directive.

January 31, 2012. Under fire from industrial users, India's state-run monopoly coal miner, Coal India, rolled back an increase in prices under a new pricing policy, but will review the system after assessing its Jan-Mar quarter performance. Coal India decided this month to benchmark pricing for non-coking coal to gross calorific value (GCV) from the current useful heat value (UHV) based gradation. The move evoked protests from users in cement and steel sectors. While the GCV pricing system would continue, domestic prices would not be linked to global rates, a move that will make coal cheaper. The new pricing policy, to come up for review after March, had led to an increase of 5-12 percent for various grades, but delinking local prices from global rates would help offset a projected 12.5 percent rise in prices. India has about 10 percent of the world's coal reserves but struggles to provide private players more access to coal blocks and swifter environmental clearances and land acquisition. Domestic output by Coal India, the world's biggest coal producer, has stagnated. And coal and natural gas shortages and delays in acquiring land, have crimped the rollout of new power plants by big producers and left many existing units running below capacity. Some of India's biggest tycoons met Prime Minister Manmohan Singh to resolve the country's worsening electricity crunch by freeing access to fuel, primarily coal, for power plants. Coal Minister Sriprakash Jaiswal said the new coal pricing mechanism will be reviewed after assessing the Jan-Mar quarter revenues of Coal India, which produces about 80 percent of India's coal. Jaiswal said any revised mechanism would be revenue-neutral for Coal India, which aims to produce 464 million tonnes of coal in 2012/13.

January 31, 2012. India is hopeful of getting more than $100 billion worth of foreign investment in the nuclear power sector in the next two decades and a quarter of it would come from France, Commerce and Industry Minister Anand Sharma has said. Sharma said France would play an important role in developing nuclear power facilities in India. Sharma said though over $14 billion worth of French investments in India were in the pipeline, it was not up to the potential. He urged French firms to enhance their business engagements with India. Sharma, who also holds the textiles portfolio, invited French fashion design institutes to bring their best practices to India in partnership with indigenous lifestyles industry. Referring to recent decision to allow 100 percent FDI in single brand retail, the minister hoped that French luxury goods companies will establish manufacturing bases in India.

January 29, 2012. At a time when coal and gas shortages have crippled operations at most of India’s thermal stations, a boost in nuclear fuel is set to take atomic power generation to a seven-year record next fiscal. With supplies from a new uranium mine and processing facility at Tummalapalle in Andhra Pradesh set to commence later this year, the capacity factor of the 20 operational nuclear reactors, adding up to an installed capacity of 4,780 MWe, is now projected to top 80 per cent in 2012-13, according to latest estimates drawn by the Department of Atomic Energy. Uranium imports from Russia, France and Kazakhstan have already helped half the nuclear fleet achieve near-optimal operations.

January 28, 2012. Coal India Limited (CIL) will revise prices to assuage industry fears about a steep rise in energy costs following its decision to introduce a new coal grading system based on gross calorific value (GCV). CIL had switched to the new pricing system on January 1, 2012 replacing its earlier pricing system based on useful heat value (UHV) of coal. This had led to a flurry of protests from energy-intensive industries like power, cement, steel and aluminium. The revised pricing is likely to contain the price shock mainly in C, D, and E grades of coal under UHV category. CIL had switched over to the new pricing mechanism with effect from January 1. Under the new system, prices are linked to the actual calorific value or quality of coal. The grading system based on useful heat value (UHV) deducted ash and moisture content from the standard formula.

January 26, 2012. Reliance Power and Germany's RWE Power International have entered into an agreement for technical assistance related to coal mining for Anil Ambani Group firm's 3,960-MW Tilaiya UMPP in Jharkhand. Reliance Power, Jharkhand Integrated Power Ltd (JIPL) and RWE Power International have entered into a tripartite Memorandum of Understanding (MoU) for technical assistance related to the coal mining portion of the Tilaiya Ultra Mega Power Project. JIPL is the Special Purpose Vehicle created for implementing the UMPP in Hazaribagh district of Jharkhand. As per the MoU terms, RWE shall provide technical assistance relating to coal mine design and planning and engineering and procurement and commissioning of quality mining equipments for the Kerendari BC coal mine.

January 26, 2012. State-owned power producer NTPC said it got the Ministry of Environment and Forests (MoEF) clearance for its Kudgi Super Thermal Power Project Stage-I (3x800 MW) being set up in Bijapur district of adjoining Karnataka. The Board of Directors recently cleared investment proposal to the tune of ` 15,166 crore for setting up the project, NTPC said. The company said it would be soon starting work at the plant site. NTPC has sourced the 800 MW units through bulk tendering process. Kudgi is the first plant to be set up in Karnataka by NTPC with a total installed capacity of 4,000 MW in two stages, with Phase 1 of 2,400 MW. Karnataka Industrial Area Development Board recently handed over 1923 acres of land required for the main plant. Land acquisition for the rest 1,600 acres is in progress. To meet the water requirement, Karnataka Government has sanctioned 5.2 TMC of water per annum from Almatti Dam, which is 18km from the plant site. The power to be generated from this project would be supplied to Karnataka, Tamil Nadu, Andhra Pradesh and Puducherry.

January 26, 2012. The Ministry of Power (MoP) is believed to have sent its proposal for addition of 76 GW of power capacity in the 12^th Five-Year Plan to the Planning Commission, even as the sector battles acute fuel shortages and environmental issues. The Power Ministry has set a target for adding 76 GW of electricity capacity in the 12^th Plan (2012-17) and 93 GW in the 13^th Five-Year Plan (2017-2022). The ministry is understood to have sent the recommendation to the Plan panel. The Planning Commission may fix a target for about 100 GW of capacity addition in the power sector. During this period, an investment of about ` 6 lakh crore is expected in power generation projects. The government had earlier set a goal for adding 78,577 MW of electricity capacity during the 11th Five-Year Plan, which was scaled down to 62 GW by the Planning Commission in its mid-term review, citing environmental and land acquisition hurdles. However, Power Minister Sushilkumar Shinde said the sector would not be able to achieve even the revised target and may end up adding 52 GW during the five-year period to March, 2012. The remaining capacity addition target would be carried forward to the next Plan. He said the country has achieved about two-and-a-half times the capacity addition witnessed in the 10th Plan. The Power Ministry may not be able to meet its target for the 11^th Plan due to environmental issues and coal and gas shortages. Power projects being executed by state-owned hydro-power generation company NHPC, which were scheduled for commissioning during the current Plan, would now start electricity generation in the 12^th Plan. NHPC's 2 GW Subansiri project in Assam and 3 GW Dibang project in Arunachal Pradesh are still awaiting environment clearances. The country's largest power producer, NTPC, which had set itself a mammoth target of becoming a 75 GW company by 2017, is also believed to have brought down this target to 70 GW because of scarcity of gas.

OIL & GAS

January 30, 2012. Comstock Resources will refocus its drilling efforts away from natural gas in 2012 due to ongoing weakness in U.S. natural gas prices, the company said. The company in February and early March will move its remaining two gas-directed drilling rigs from its North Louisiana Haynesville shale drilling program to its recently acquired properties in West Texas. In 2010, the company had seven operated rigs drilling in North Louisiana. The company moved two rigs to its oil-focused Eagle Ford shale drilling program and released three rigs. Comstock now plans to spend approximately $458 million for drilling and completion activities. The company will drill 84 wells and complete an additional 29 wells drilled in 2011.

January 30, 2012. Norway's Statoil, together with its partners, has selected a Spar platform to develop its Luva field in the Norwegian Sea. As a gas transport solution has also been decided, a major step has now been taken towards deepwater production in the Norwegian Sea. The Luva field, which is a deep-water pioneer in the Norwegian Sea, may be the first to have a Spar platform on the Norwegian continental shelf.

January 31, 2012. TonenGeneral Sekiyu KK agreed to buy partner Exxon Mobil Corp.’s Japanese business in a $3.9 billion deal that may force the oil refiner to seek new alliances. TonenGeneral will acquire 99 percent of Exxon Mobil Yugen Kaisha, which produces and sells fuels, for 302 billion yen ($3.9 billion) using cash and bank loans. Refiners in Japan are grappling with rising operating costs after a 2010 order from the government to upgrade their oldest plants to extract more fuel from crude. While Japan’s consumption is declining due to a shrinking population and greater use of hybrid and electric autos, the transaction also reflects Exxon Mobil Chief Executive Officer Rex Tillerson’s strategy of focusing on oil exploration.

January 31, 2012. Russia's Lukoil is maintaining its Odessa Oil Refinery in working order, awaiting a decision from the Ukrainian authorities on improving the economics of oil refining in order to re-launch the refinery. The refinery's operations were halted due to the economic situation with oil refining on Ukraine's market. The issue regarding a route for oil supplies to the refinery has not yet been resolved.

January 31, 2012. Tatarstan's oil refineries plan to refine 15 million tonnes of oil in 2012. Tatarstan's oil refineries processed over 10 million tonnes of oil. In particular, OJSC TANECO (a subsidiary of Tatneft), launched into commercial production last year, refined 2.08 million tonnes of oil. The enterprise produced straight-run gasoline, technical kerosene, vacuum gas oil and fuel oil. OJSC TAIF-NK processed 8.3 million tonnes of material last year, or 2.8% more than in 2010. Light hydrocarbon fraction production was up 13%, straight-run gasoline output grew 5%, and automobile gasoline production rose 6%. TAIF-NK is part of the TAIF Holding. The oil refining complex includes an oil refinery, a gasoline plant and a gas condensate processing facility.

January 25, 2012. Kuwait chose Total SA as the third partner to build a $9 billion oil refinery in China, the head of Kuwait Petroleum Corp. said, as the Gulf state seeks a foothold in Asia’s biggest consumer of refined products. China Petroleum & Chemical Corp. holds the remaining 50 percent. The complex, scheduled to start operating in 2015, will include a refinery with an oil-processing capacity of 15 million metric tons a year, or about 300,000 barrels a day, as well as a 1 million ton-a-year ethylene plant, China Petroleum said. Kuwait Petroleum is pushing ahead with the joint venture in southern China’s Guangdong province and a 200,000 barrel-a-day refinery in neighboring Vietnam as part of a strategy to expand abroad. Kuwait is the fourth-biggest producer in the Organization of Petroleum Exporting Countries, and Asia is its biggest market, accounting for 84 percent of the Gulf state’s crude exports in 2010. The Kuwaiti company also plans to build an oil refinery at home, at a cost of at least 4 billion dinars ($14.4 billion), to help meet domestic demand. The 615,000 barrel-a-day Al-Zour plant is still awaiting final approval from the Supreme Petroleum Council, the country’s highest decision-making body for oil policy. Kuwait National Petroleum Co., the state-run refiner, is seeking foreign companies to work as consultants on the Al-Zour project, which stalled three years ago amid political opposition.

January 25, 2012. The European Union’s embargo on Iranian oil threatens to accelerate refinery closures in Europe. The European Union agreed to ban oil imports from Iran starting in July as part of measures to target financing for the country’s nuclear program. The policy comes as refiners fight overcapacity and falling fuel demand. Petroplus Holdings AG, which has five plants across Europe, declared insolvency after banks called in loans.

January 27, 2012. More than 70 percent of investors say an attack on Iran’s nuclear facilities would create only a short-term disruption in oil markets. About a third of the 1,209 global investors, traders and analysts surveyed said an attack may trigger an oil shock leading to a global recession. The European Union agreed to ban oil imports from Iran starting July 1 as the West increased pressure on the Islamic republic to halt its nuclear program. An Iranian member of parliament reiterated the same day his country will respond by closing the Strait of Hormuz, the regional transit point for about 20 percent of the world’s oil. Saudi Arabia has pledged to make up for any lost production.

January 27, 2012. With Singapore currently studying how best to secure future LNG supplies for power plants and industries here as well as for potential trading purposes, Keppel Corporation is set to play a role. The Singapore conglomerate - already a leading global offshore rig and shipbuilder, power producer and also gas importer bringing in piped natural gas from Malaysia - is 'ready to contribute to this effort', by helping to secure additional, competitive supplies of liquefied natural gas, as well as provide floating storage and regasification units.

January 27, 2012. The CEO of Russian gas giant Gazprom, Alexei Miller, and the general director of OJSC Sovcomflot, Sergei Frank, had a working meeting in Moscow at which they discussed the world liquefied natural gas (LNG) market, as well as test-shipping LNG via the northern sea route. Gazprom's information department said that the two noted the substantial increase in the urgency of LNG shipments to countries in the Asian-Pacific Region (APR) via that route. The parties also talked about issues of mutual effort in the development of the Prirazlomnoye deposit, including the organization of transporting oil. NOVATEK was first to transport product via the northern rout. In August of 2010, a Sovcomflot tanker left port carrying NOVATEK gas condensate on an experimental voyage along the northern route. The company said it planned to use the rout to deliver LNG to the APR. Gazprom Global LNG and Sovcomflot signed last June an agreement on the long-term rental of two new icebreaking LNG tankers with carrying capacity of around 170,000 cubic meters. The vessels can be used between any existing LNG terminals, including for the year-round transportation of LNG from Sakhalin-2 and Shtokman. In June of 2010, Gazprom and Sovcomflot inked an agreement regarding working together on issues involved in the organization of shipping Shtokman LNG by sea.

January 27, 2012. Proposals to build new pipelines to carry oilsands crude to the United States, or through British Columbia for export to Asia, have sparked political battles between environmentalists and politicians on both sides of the border. But the debates have also focused attention on how Canada uses the oil that it has. Canada exports about two-thirds of its oil to the United States while half of the oil used in Canada is imported from other countries. Western Canada is self-sufficient, supplying its own oil before exporting the rest. But Eastern Canada relies on imported oil despite the fact that some provinces are oil producers. There are several offshore drilling operations in Newfoundland and Labrador, but none of the oil is actually used in Canada. The Maritime provinces rely on an oil supply that's imported from Saudi Arabia, Africa and Venezuela.

January 26, 2012. BG Group announced that it has reached agreement with Sabine Pass Liquefaction, LLC (Sabine Liquefaction), a subsidiary of Cheniere Energy Partners, L.P., to purchase an additional 2 million tonnes of liquefied natural gas (LNG) over a 20-year period from the Sabine Pass terminal in Louisiana, USA. BG Group announced it had signed a fully-termed sale and purchase agreement (SPA) with Sabine Liquefaction for the purchase of 3.5 mtpa of LNG over a 20-year period. The additional volumes associated with announcement have been incorporated into the SPA. Construction of the liquefaction facilities at Sabine Pass is scheduled to begin in 2012, with an initial phase of two LNG trains. Construction of the second phase, an additional two trains, is expected to commence in 2013, with exports from the initial phase to start as early as 2015 and for the second phase from as early as 2017. At the same time, BG Group is pursuing an expansion of the Lake Charles LNG terminal, in Louisiana, USA, to provide natural gas liquefaction services. The US Department of Energy (DoE) has authorised the terminal to export up to 730 Bcf of natural gas per year (approximately 15 mtpa) to countries that have a free trade agreement in place with the USA. The DOE is reviewing an application to export natural gas from the Lake Charles LNG terminal to countries that do not have a free trade agreement with the USA.

January 25, 2012. Asian refineries will boost their imports of West African crude oil for loading in February to the highest in at least seven months amid cheaper Atlantic Basin grades and rising demand in China. Shipments totaling 62.4 million barrels, or 2.15 million barrels a day, will be exported from Angola, Nigeria, the Republic of Congo, the Democratic Republic of Congo, Equatorial Guinea and Gabon, according to a survey. That’s 18 percent more than the revised 1.83 million barrels a day scheduled for this month.

Refiners in Asia can buy Middle Eastern crude or West African grades and their choice normally depends on the value of the lighter, low-sulfur, or sweet, blends from Angola and Nigeria versus heavier, high-sulfur, or sour, grades from Saudi Arabia and Iran. Lighter crude yields more lucrative products such as diesel and gasoline. The spread between European and Middle East grades has been narrowing over the past month after the U.S. and European Union imposed tougher sanctions on Iran. The moves came at a time when supply of sweet crude increased in the Atlantic Basin with the resumption of Libyan exports.

January 25, 2012. South Sudan and Kenya signed a memorandum of understanding to build an oil pipeline to the Kenyan port of Lamu. The need for a new pipeline has taken on added urgency since South Sudan started to shut down oil production because Khartoum is confiscating its crude and demanding a transportation fee of $32 a barrel. Juba has offered $1 a barrel. Sudan is said to have “looted” $815 million worth of his country’s oil. South Sudan took control of about three-quarters of Sudan’s output of 490,000 barrels a day when it gained independence in July. The crude is pumped mainly by China National Petroleum Corp., Malaysia’s Petroliam Nasional Bhd. and India’s ONGC Videsh Ltd.

Kenya and South Sudan have been discussing plans for a new pipeline over the past few years and have identified possible investors, including Toyota East Africa. Negotiations between the two countries in Addis Ababa, the Ethiopian capital, have been extended until “some kind of agreement” is reached on how much landlocked South Sudan will pay to transport its oil across Sudan to the Red Sea. South Sudan says Sudan is seizing exports that pass through its territory to an export terminal on the Red Sea. Sudan says it is diverting the crude to cover unpaid bills.

January 29, 2012. International Atomic Energy Agency inspectors arrived in Tehran for talks on Iran’s nuclear program while lawmakers drafted a ban on oil sales to Europe. Iran has been at loggerheads with western countries over accusations that the country is using its nuclear program as a cover for developing weapons, a charge the government denies.

European Union foreign ministers agreed on Jan. 23 to ban Iranian oil imports starting in July and freeze the assets of the country’s central bank, the latest in a series of sanctions by the United Nations, U.S. and EU. Iranian lawmakers responded by drafting legislation that calls on the government to halt oil exports to Europe as long as the import ban is in place. The bill would also require Iran to block imports from countries participating in the EU ban. The draft was submitted to the parliament’s energy commission for review. The measure must be discussed with the government before it is formally proposed to the parliament.

January 27, 2012. European Union sanctions on Iranian oil will extend to about 95 percent of tankers because they are insured under rules governed by European law. The International Group of P&I Clubs insures all but 5 percent of the global tanker fleet and its 13 member clubs follow European rules to participate in the claim-sharing pool. Carrying Iranian oil would invalidate the ships’ cover against risks including spills and collisions.

While the embargo on Iranian oil only covers the EU’s 27 member states, the extent of the region’s role in insuring ships will curb trade globally. Iran is the second-biggest member of the Organization of Petroleum Exporting Countries, and sends oil to China, Europe, Japan, India and South Korea. EU foreign ministers agreed to the ban, seeking to increase pressure on Iran over its nuclear program, which the nation says is for civilian and medical purposes.

January 27, 2012. BP Plc can’t collect from Transocean Ltd. part of the $40 billion in cleanup costs and economic losses caused by the 2010 oil well blowout and Gulf of Mexico spill, a judge ruled. BP must indemnify Transocean for pollution-related economic damage claims under its drilling contract, U.S. District Judge Carl Barbier in New Orleans ruled. London-based BP sued Transocean in April to recover a share of its damages and costs from the spill.

January 26, 2012. Uzbekistan will attract $1.894 billion of direct investments to 34 investment projects in the oil and gas sector in the frame of government-approved investment program for 2012. It is planned to direct $607.6 million of Chinese CNPC investment to the construction of the third string of the Uzbekistan - China gas pipeline with total project cost of $2.2 billion in 2012.

Chinese CNODC will start active phase of development of Mingbulak field in Namagan province worth $211.7 million. The investor plans to invest $30 million to carry out planned work in 2012. A consortium of Korean companies led by KOGAS will continue to build a gas chemical complex Ustyurt worth $ 4.1 billion. It is planned to spend $300 million of investment to the project in 2012. Uzbekistan GTL with the participation of NHC Uzbekneftegaz and Sasol of South Africa will provide $110 million construction of synthetic fuel producing plant (GTL - gas to liquid process) in Kashkadarya in the south of the provisional value of $3.7 billion. Malaysia's Petronas will continue to develop hydrocarbon deposits in two PSA with cost of $2.07 billion in 2012. The company invests $40 million in developing of Ustyurt and in Surkhandarya field. Singapore Indorama Group will begin the construction of gas processing facility on the basis of Mubarek Gas Processing Plant in the south, worth $1.64 billion. The investor will direct $50 million to the project. The Russian Lukoil will invest $520 million in implementation of two PSAs in Uzbekistan worth $4.3 billion in 2012. The Russian company will send $300 million project to develop the gas fields of Kandym group in the Bukhara region and exploration in Ustyurt. It is planned to invest $220 million on the project to develop fields in the South Hissar. Gazprom will invest $32.5 in completing exploration work in Ustyrt province with a total amount of investment worth $400 million in 2012.

January 26, 2012. Some European Union countries may tap their strategic oil reserves after an EU embargo cuts Iranian exports from July. The 27-nation EU decided three days ago to ban imports of Iranian oil as of July 1 because of concerns that Iran is developing nuclear weapons. The five-month phase-in, during which existing contracts are allowed to continue, is meant to give member states such as Greece that are relatively dependent on Iranian crude time to find alternative sources of supply. EU rules require countries to hold emergency fuel stocks of at least 90 days of the average daily domestic consumption in the previous calendar year.

January 26, 2012. Colombia, South America’s third- largest oil producer, expects about $10 billion in international investment in crude, mining and energy projects. The amount is similar to last year’s foreign direct investment. Foreign direct investment in Colombian coal mines and metals and oil projects climbed to $6.5 billion in the first nine months of 2011 from $3.6 billion a year earlier. Oil production will increase 18 percent to an average of 1.1 million barrels a day in December from a year earlier, while coal output this year will climb about 14 percent to 97 million tons. Colombia is the third-largest crude producer in South America after Venezuela and Brazil.

January 25, 2012. China's apparent oil demand in December rose 0.7 percent year on year to 41.02 million metric ton (mt), or an average 9.69 million barrels per day (bpd). Yet, the oil demand growth in December of 0.7 percent was the second time last year that the rate of increase was below 1 percent. On a quarterly basis, oil demand growth of 1.6 percent in the fourth quarter was the lowest among all four quarters in 2011. The drop-off in oil demand growth in the second half of the year pulled the annual growth rate down to 6.1 percent in 2011, from 11.3 percent in 2010. December's apparent oil demand was a tad more than the previous all-time high of 40.73 million mt, or 9.62 million bpd, recorded in the same month a year ago, when the country was besieged by a diesel shortage. For the whole year, China's apparent oil demand was at 460.65 million mt, or an average 9.25 million bpd, 6.1 percent more than the previous year. The 2011 figure was the highest-ever by the world's second largest oil consumer and was the first time that oil demand has breached 9 million bpd for a full year. The rate of increase in 2011, however, was lower than the 11.3 percent growth recorded in 2010. China's refineries processed 39.23 million mt of crude oil, or an average 9.28 million bpd, with throughput hitting an all-time high for the second consecutive month. December's crude throughput was 1.3 percent higher compared with a year ago, and 0.3 percent more than November's throughput of 9.25 million bpd, which was the previous record high. Chinese state-owned refiners have been ramping up production since October—when most of their plants returned online after completing scheduled turnarounds—to replenish refined product inventories, particularly for diesel. Sinopec and PetroChina have said previously that their refineries have been running at full capacity since October amid earlier signs of tightening supply of diesel in certain parts of the country. Meanwhile, refined products imports rose 2 percent year on year to 4.04 million mt in December, the highest volume in nearly 2 1/2 years. December's imports were also 20.6 percent more than the previous month. In July 2009, oil product imports were also at 4.04 million mt. Oil product exports in December were 19.1 percent higher year on year at 2.25 million mt. Net product imports in December totaled 1.79 million mt—the highest in a year—a surprising figure considering that growth in gasoline and diesel consumption has waned in recent months according to earlier released data by the central government.

POWER

January 31, 2012. Korea Electric Power Corp. and two partners won an $800 million order from Jordan’s National Electric Power Co. to build and operate a diesel-powered plant in the Middle East nation. The 600-megawatt plant, which will the biggest diesel station in the country, will be located in Almanakher. Commercial operations are scheduled to begin in March 2014. The utility known as Kepco will own 60 percent of the venture handling the project and Mitsubishi Corp. of Japan and Waertsilae Oyj of Finland will take the remainder. The station will generate revenue of $10.2 billion during the 25-year period the Jordanian company has committed to buying power from the plant. Kepco, is focusing on winning more offshore projects this year to improve deteriorating margins from power sales at home.

January 27, 2012. Japan will be able to avoid power cuts this summer even if the nation's last few nuclear reactors cease operating due to public safety fears after the Fukushima crisis, the government said. Until the March 11 earthquake and tsunami, nuclear energy provided a third of Japan's power. But public anxiety since the disaster, which triggered a radiation crisis at Fukushima Daiichi nuclear plant, has prevented the restart of reactors shut for routine checks. Only three of the nation's 54 reactors remain in use and all are due to go off-line by the spring, despite government efforts to regain public trust in the industry. The loss of nuclear power has raised fears of forced power rationing and temporary blackouts in the summer peak demand period, when air conditioning puts extra strains on supply. But Trade Minister Yukio Edano said there was a good chance of coping without such mandatory cuts on electricity usage even if all the reactors were shut. The government, worried about a power crunch, is pushing for reactors to resume operations, even as it reviews the role of nuclear power in the resource-poor country's energy mix in a new mid- to long-term programme to be decided in coming months. Japan has abandoned its plan to boost nuclear power to more than half of its electricity supply by 2030, but proponents argue that atomic power is vital to prevent more Japanese companies from moving abroad in search of lower costs, and to provide a stable electricity supply. Last summer, Tokyo Electric Power Co, the operator of the Fukushima plant, struggled to meet power demand, sparking government-mandated power savings by big industrial users. This winter the government urged users to reduce electricity use during peak hours in Osaka and surrounding areas of western Japan, covered by Kansai Electric Power Co, and on the southern main island of Kyushu, covered by Kyushu Electric Power Co. Kansai Electric and Kyushu Electric are two of Japan's most nuclear-reliant utilities. Officials are now reviewing results of stress tests that use computer simulations to show if reactors can withstand extreme events like last year's quake and tsunami.

January 31, 2012. Wind turbine-maker Suzlon said it has bagged an over ` 600 crore contract from CLP India, the Indian subsidiary of Hongkong-based power company CLP, for setting up a 100-MW project in Rajasthan. Suzlon Group has signed a contract for a 100-MW wind power project with CLP, India. The project, which would be set up in Rajasthan, comprises 48 wind turbines. It is scheduled to be commissioned by January, 2013. Suzlon will execute the contract under its end-to-end business model. The deal is valued at over ` 600 crore (approximately $122 million). CLP India is engaged in renewable energy, supercritical coal-fired and gas-fired power generation, with its current capacity amounting to over 2,715 MW. Upon completion, this new wind energy project will take the company's wind power portfolio to more than 740 MW.

January 30, 2012. Indian Energy Ltd. (IEL) and Trishe Developers Pvt. agreed to develop as much as 1,000 megawatts of wind farms in stages as the South Asian nation seeks to boost its clean energy production. The agreement is one of the largest announced in India, behind a 2,000-megawatt deal struck by Mytrah Energy Ltd. and Gamesa Corp. Tecnologica SA (GAM) last May. India expects to add 2,400 megawatts of new wind capacity in the financial year ending in March as part of a target to have 15 percent of its electricity generated from clean sources by 2020. Indian Energy and Trishe expect about 300 megawatts to be completed in 2013, 350 megawatts in 2014 and the remainder by 2016. The projects will be built in Tamil Nadu, Karnataka and Maharashtra states. Infrastructure India Plc (IIP), an investment company based in the Isle of Man, bought Indian Energy in September.

January 30, 2012. In sun-drenched India, the fledgling solar energy market is poised for a vertical take-off aided by falling solar panel prices, mirroring the now famous Indian telecom revolution, Welspun Group said. The Welspun Group is lining up ambitious plans to be among the top three producers of solar power in the country in the next two-three years by producing at least 500 MW of solar power by 2014. What Welspun and other players in the renewable energy space are betting on is that coal-based power tariffs are bound to increase while solar-based power tariffs will keep declining. Industry observers think the inflection point could be when cost of solar-based power becomes equal or close enough to that of coal-based power. Already the price per unit has come down from 18 to 8.50 and it will fall further as technology improves, solar energy evangelists like Mittal believe. Welspun has already commissioned a 30-MW solar energy project and is working on various projects totaling another 80 MW which are in various stages of completion. The BK Goenka-led group is also bidding for solar power projects outside India, especially some Asian countries.

January 30, 2012. When India's solar power developers want to choose a site for their project, they usually turn to NASA and its satellite images to identify the best locations. This is because even though India is endowed with abundant sunshine, it is vital to know the exact spots to locate projects so that they become viable. The US space agency's radiation maps help them do this, but they are not quite adequate. Now, an obscure government agency based in Chennai is promising to change that. It hopes to deliver within two years a state-of-the-art solar atlas of India that could clear a major hurdle obstructing speedy development of solar power projects. The atlas, which will identify the solar hotspots where the sun's radiation has optimum intensity for power generation, will enable developers to accurately pinpoint locations for projects, according to the Centre for Wind Energy Technology, which is creating the database.

The expectation is that project developers, armed with the information, will be able to predict the plant's output with reasonable accuracy. Also, they can make a better choice of which solar technology (photovoltaic, solar thermal or any other) to use. Sun-soaked India, which is chronically energy deficient, has drawn up a plan to generate 20,000 MW of solar power by 2022. Out of India's installed power generation capacity of some 1.9 lakh MW, solar energy currently accounts for just over 100 MW. But projects with many times that capacity are being planned, with prominent business houses such as the Tatas, Reliance and the Mahindras as well as smaller developers vying for a piece of the solar pie. For now, radiation data for most locations in India are largely provided by satellites from Nasa and others.

Some developers have observed a variation in the actual power output compared to the estimates made from satellite data. The Centre for Wind Energy Technology will also use satellite imagery - it is requesting the Indian space agency Isro for help. But before that, an important part of the project was completed. This involved measuring radiation in 51 locations in India, which threw up some surprises, including the fact that pollution-free Ladakh is more suitable for a photovoltaic project than even Rajasthan. The agency is also developing an algorithm to validate the data.

January 30, 2012. Universal Solar System, a developer of clean-energy projects in India, completed its first 2- megawatt plant in Gujarat state. The project, located at a solar park in Patan, used panels supplied by Miasole Inc. and inverters from SMA Solar Technology AG. The Ahmedabad-based company plans to develop power plants in the U.S. through its offices in Texas and California. Gujarat, home to India’s biggest solar program, has awarded licenses to build solar plants with a combined 959 MW. The projects were awarded a tariff ranging from ` 11 (22 cents) to ` 15 per kilowatt-hour for the first 12 years.

January 29, 2012. In an eco-friendly initiative, Delhi's leading power discom BSES has come out with a solar-powered water pumping system, aimed at cutting down on consumption of electricity. Renewal Energy Assisted Pump (REAP), claimed to be first of its kind in the country, has been developed by BSES Yamuna Power Ltd, a subsidiary of BSES, in collaboration with IIT Delhi. A complete REAP system including the solar panels has been priced at ` 4 lakh and a consumer can place an order for its installation through BSES' call centre. So far, 250 consumers of BSES Yamuna Power Ltd have shown interest in buying the REAP system, which was unveiled by Chief Minister Sheila Dikshit. The BSES had signed an MoU with IIT-Delhi in July 2010 for the collaborative project which is among the first industry-institute initiative between a power distribution company and a premier engineering institute. The pumping system has been developed basically keeping in mind the irrigation needs of farmers.

January 28, 2012. The Gujarat Electricity Regulatory Commission (GERC) refused to extend the deadline for commissioning of solar projects that had signed a power purchase agreement at a tariff of ` 12.54 a unit with a state utility. These projects, which had to start generating power to be eligible for a higher tariff, will now have to settle for ` 9.28 a unit. As many as 35 developers, including Moser Baer, GMR and Lanco Infratech, with a proposed capacity of over 400 MW, had approached the regulator seeking extension of the deadline. Experts said viability of ` 6,000 crore worth of projects would be adversely affected. These companies had sought extension of on the ground of unavailability of finance, equipment, land and grid connectivity. The GERC order said none of the petitioners has indicated any "universal" ground because of which the projects have been delayed.

January 26, 2012. Pointing out that Pakistan has "excellent" relationship with India Prime Minister Yousuf Raza Gilani said cooperation between the two to tackle climate change was "doable". He said Islamabad wants to work with New Delhi on this front. Gilani said Pakistan has been hit by "horrible" droughts and floods last year and sought a "global fund" to tackle the climate risk issues. The United Nations has already proposed a $100 billion Green Climate Fund. The fund was central to agreements reached in 2010 by UN treaty negotiators in Cancun, Mexico.

January 25, 2012. REpower Systems, a wholly-owned subsidiary of Suzlon Energy, said it has bagged a contract for delivering 25 wind turbines from US-based enXco. US developer enXco is an EDF Energies Nouvelles company. REpower Systems SE has concluded a contract for the delivery of 25 wind turbines with enXco. The turbines will be used at the Shiloh IV wind farm, situated in Solano County, California, Suzlon said. After completion, the wind farm will have a power output of more than 50 MW. In 2008 and 2011 REpower delivered wind turbines for enXco's Shiloh II and Shiloh III wind farms. Together, Shiloh II, III and IV wind farms will have a capacity of more than 300 MW, making them REpower's largest US wind project to date. Installation of the wind farm is scheduled for the fall of 2012. The Suzlon Group has installed over 3,150 MW across 20 states in US and two provinces in Canada.

January 25, 2012. India is producing power from solar cells more cheaply than by burning diesel for the first time, spurring billionaire Sunil Mittal and Coca-Cola Co.’s mango supplier to jettison the fuel in favor of photovoltaic panels. The cost of solar energy in India declined by 28 percent since December 2010. The cause was a 51 percent drop in panel prices as the world’s 10 largest manufacturers, led by China’s Suntech Power Holdings Co., doubled output capacity. India joins pockets of Italy, Spain and Hawaii where rising fuel costs and lower panel prices make solar pay for itself without state subsidies. Factories and homes in the Asian nation switch on emergency diesel-fired generators during chronic blackouts and to bridge gaps in the power-delivery grid as the government prepares a $400 billion program through 2017 to curb the shortfall and spur growth.

January 31, 2012. More than 60,000 U.S. jobs would be threatened by tariffs on Chinese solar-energy equipment that are being sought by American companies, according to a study prepared for competitors that oppose the additional duties. Tariffs of 100 percent on solar cells and modules would result in the loss of as many as 50,000 net jobs, with an additional 11,000 in jeopardy from retaliation by China on U.S. exports, according to the report by the Brattle Group, a Washington-based consulting firm. The report was in response to a complaint filed last year by SolarWorld AG’s U.S. unit on behalf of companies that said they are harmed because China’s government uses cash grants, discounts on raw materials, preferential loans and tax incentives to boost exports of solar cells. The U.S. Commerce Department is weighing duties. The 100 percent tariffs would result in losses from $698 million to $2.6 billion in losses to consumers, according to the report. Tariffs of 50 percent would cut as many as 43,000 jobs.

January 31, 2012. Greece’s wind-powered electricity capacity in Greece rose more the 23 percent last year, the Hellenic Wind Energy Association said. Installed capacity rose to 1,626.5 megawatts in 2011 from 1,320.4 megawatts in 2010, the Athens-based Association said. France’s EDF SA was the biggest producer of wind energy in Greece last year, accounting for 272.03 megawatts or almost 17 percent of total production.

Spain’s Iberdrola Renovables SA was the second-largest producer with 250.68 megawatts and Greece’s Terna Energy SA was third with 241.52 megawatts. Vestas Wind Systems A/S accounted for 49 percent of wind turbines installed in Greece in 2011, Enercon GmbH for 22 percent, Siemens AG for 12 percent, Gamesa Corp Technologica SA for 10 percent and Nordex SE for 5 percent, the association said.

January 31, 2012. Xinjiang Goldwind Science Technology & Co., China’s second-largest wind-turbine maker, signed a financial agreement with China Development Bank Corp. for wind power projects worth 35 billion yuan ($5.5 billion). The accord signed through its unit Beijing Tianrun New Energy Investment Corp. also covers asset acquisition. The agreement runs to 2013.

Goldwind’s latest agreement comes after it received a 10 billion-yuan credit facility from Industrial & Commercial Bank of China Ltd. in November. China’s state-controlled banks are signing billions of dollars of credit lines with wind and solar manufacturers including Sinovel Wind Group Co. and Suntech Power Holdings Co. Ltd. to fund capacity expansion and overseas business.

January 31, 2012. Wind Energy Holding Co., a Bangkok- based developer, plans to add 270 megawatts of wind-power plants in Thailand costing as much as $550 million as the nation seeks to boost its clean-energy production.

Wind Energy will develop three projects each with a 90- megawatt capacity in the Korat province north of Bangkok. Thailand, hoping to rebound from its worst floods in 70 years last year, is aiming to get 25 percent of its energy from renewables by 2022 to curb dependence on fuel imports. The nation, which offers premium payments for wind power, imports about 80 percent of its oil, according to the Ministry of Energy.

January 31, 2012. Samsung Heavy Industries Co. will base its first European 100 million-pound ($158 million) offshore wind project in Scotland, creating more than 500 jobs in the country. Samsung Heavy, the world’s second-largest shipbuilder, will build its new seven-megawatt offshore wind turbine at the Fife Energy Park in Methil. Clyde Blowers Plc’s David Brown Gear Systems will co-locate a gearbox assembly plant at Methil. Salmond’s ruling Scottish National Party wants Scotland to generate all its electricity from renewable sources by 2020. The country is the windiest country in Europe, according to the Glasgow-based ScottishPower Renewable Energy Group. Billionaire Donald Trump is fighting plans to build 11 offshore wind turbines, each 640-feet (195 meters) high, in Aberdeen Bay in view of a golf course he is constructing north of Aberdeen.

January 31, 2012. A potential European Union move to a stricter emissions-reduction goal is conditional on efforts by non-EU nations to cut greenhouse gases. Poland maintains its position that the EU agreed to lower pollution by 20 percent by 2020 from 1990 levels and that deepening the goal to 30 percent “is conditional on comparable moves by other countries”. The costs of tightening the EU’s carbon-reduction target are less than previously estimated, an analysis by the European Commission. A 30 percent goal would involve cutting greenhouse gases by 25 percent in the bloc, and using imported emissions-reduction credits to account for the remaining 5 percent.

January 30, 2012. Renewable energy mergers and acquisitions rose 40 percent in value last year, bucking the uncertainty caused by the European Union debt crisis, the global consultant PwC said. About $53.5 billion of wind, solar, biofuels, energy efficiency, geothermal, biomass and hydro deals were completed, up from $38.2 billion in 2010, PwC said. It’s the highest in the four years that PwC has conducted the survey. The overall number of deals dropped to 570 from 606. The uptick in money spent on mergers and acquisitions against a backdrop of European governments cutting spending to balance budgets and “challenging” debt markets shows how the renewables industry has matured.

Wind and solar each had more than $15 billion of deals while $10 billion of transactions were completed in energy efficiency. European bidders accounted for 48 percent of the total, North America 24 percent. The value of deals with Asian bidders almost doubled to $9.4 billion, or 18 percent of the total, up from 12 percent last year. The year’s biggest deal was CPFL Energia SA of Brazil’s $2.9 billion purchase of ERSA Energias Renovaveis SA, according to PwC. It classified Iberdrola SA’s acquisition of part of its clean energy unit Iberdrola Renovables SA as a share repurchase.

January 30, 2012. China may decide to withhold emission-reduction offsets to comply with its own climate targets after 2015, limiting supply to the European Union. Surging supply of offsets from the so-called CDM helped drive prices in the European Union to four-year lows earlier this month. That market, the world’s biggest, banned supply from new projects in most emerging nations including China after 2012. Still, China has supplied 59 percent of all credits issued since 2005, and based on projects already registered may maintain that portion of the market through this year.

January 30, 2012. The European Union’s executive arm said it partially activated a single regional database for carbon transactions to enable the transfer of free allowances to airlines, which joined the bloc’s emissions market this year. The single carbon registry will replace a system of national databases that track transactions in the EU cap-and- trade system, the world’s largest. No transfers will be possible within the registry until it’s fully operational, a step that won’t take place before June, according to the commission.

The EU emissions trading system, or the EU ETS, was started in 2005 and imposes pollution quotas on more than 11,000 manufacturers and power producers. As of this year it was expanded to cover flights from and to Europe, with airlines becoming the second-largest industry in the program after utilities. One EU general permit, also known as an EUA, is equivalent to one metric ton of carbon dioxide.

While aircraft operators can buy EUAs issued to manufacturers and power producers to cover their discharges, EU aviation allowances, or EUAAs, can only be used for compliance by airlines.

Aircraft operators won’t be able to transfer their aviation allowances or receive general allowances in the single registry before its full activation. Meanwhile, those that want to trade EUAs and imported carbon credits can open an account in a national registry.

January 28, 2012. California will require automakers to sell millions of “zero-emission” vehicles -- battery- electric, plug-in hybrid and hydrogen-powered -- setting new standards followed by states from New York to Oregon. The rules adopted by the California Air Resources Board mean manufacturers will have to produce about 1.4 million advanced vehicles for sale in that state alone by 2025, more than 40 times the number put on the road from 1996 through 2010, according to a state analysis. The regulations have implications for the broader automotive market because 10 other states, including New York and New Jersey, plan to adopt the standards. Earlier rulings by the California board led to the addition of catalytic converters and exhaust-treatment systems as standard equipment on all cars sold in the U.S. Starting in 2018, the requirements that now apply to the six largest carmakers, all from the U.S. and Japan, will widen to the top 12, to include German and Korean companies. Failure to meet the standards could bring fines and, at the extreme, limits on sales in the state.

January 28, 2012. House Republicans investigating the collapse of Solyndra LLC asked Defense Secretary Leon Panetta to turn over documents relating to the solar-panel maker. Representatives Fred Upton, a Michigan Republican and chairman of the House Energy and Commerce Committee, and Cliff Stearns, a Florida Republican who heads the committee’s investigations subcommittee, are seeking communications between the Defense Department and the company, its investors, and the White House by Feb. 7. Solyndra received a $535 million U.S. loan guarantee from the Energy Department and filed for bankruptcy two years later.

January 28, 2012. The U.S. Commerce Department said it has again delayed its decision on additional tariffs for Chinese solar-equipment imports. A preliminary determination will be made on March 2. The decision had been scheduled for Feb. 13. U.S. solar-equipment manufacturers say they are being harmed because China’s government uses cash grants, discounts on raw materials, preferential loans and tax incentives, and manipulates its currency to boost exports of solar cells. SolarWorld, a maker of solar modules, filed a complaint Oct. 19 with the U.S. International Trade Commission and the Commerce Department, seeking duties to offset the practices. The trade commission said the Chinese subsidies have harmed equipment makers, ruling on the petition by Bonn- based SolarWorld seeking antidumping and countervailing duties. The commission is investigating possible economic harm to SolarWorld from Chinese imports, while the department determines the penalty for companies that illegally dump products.

January 27, 2012. The Environmental Protection Agency said that biodiesel made from palm oil doesn’t meet the requirements to be added to its renewable fuels program because its greenhouse-gas emissions are too high. The EPA said that palm-oil biodiesel, which is primarily produced in countries such as Malaysia and Indonesia, provides reductions of as much as 17 percent in greenhouse-gas emissions compared to traditional diesel fuel, falling short of a 20 percent reduction necessary to qualify under the law. By failing to meet that threshold, oil companies can’t use palm fuels to meet national renewable fuel standards. Other fuels they can use are made from soy beans, animal fat, recycled cooking grease or similar materials. Environmental groups, which are locked in a fight with the EPA over its approval of corn-based ethanol under the same program, praised the decision as an important marker by the agency. Palm-oil production has led to the deforestation of 6.5 million hectares (16.1 million acres) in Malaysia and Indonesia, according to Friends of the Earth.

January 27, 2012. Renewable energy companies are approaching the point where they can generate electricity at a price competitive with fossil-fuels without subsidies, the biggest wind and solar manufacturers said.

Suntech Power Holdings Co. said solar will reach parity with fossil fuels on electric grids by 2015. Vestas Wind systems A/S expects its turbines to compete without incentives “in the coming years”. Caught between oversupply and tumbling prices, the companies are reminding governments that their products are taking the biggest share of new power generation and increasingly rivaling oil and gas. That’s pushing green growth up the agenda as Germany and Japan close nuclear reactors and President Barack Obama defends U.S. support for renewables.

New electricity generation from the wind, sun, waves and biomass drew $187 billion in 2010 compared with $157 billion for added capacity from natural gas, oil and coal, according to Bloomberg New Energy Finance, the first time investment in renewables has exceeded that of fossil fuels. Subsidies to renewables totaled $66 billion worldwide in 2010. Incentives must be retained to meet existing targets of diversifying the energy supply. Power from solar panels costs more than triple natural gas, according to levelized cost of energy data from New Energy Finance. Onshore wind is close to parity with coal, and about a quarter more pricey than gas.

January 27, 2012. China may double its installations of solar panels this year, absorbing excess production that depressed prices and margins in 2011, chief executive officers from two of the industry’s top five manufactures said. Suntech Power Holdings Co. CEO Zhengrong Shi estimated the nation may add 4 gigawatts or more of panels, and Trina Solar Ltd. (TSL) CEO Jifan Gao expects 5 gigawatts. That compares with about 2.2 gigawatts installed in the country in 2011, more than double the capacity of the average nuclear reactor in the U.S. The cost of solar panels fell 47 percent last year as Chinese manufacturers led by Suntech boosted production, winning market share from Western rivals such as Q-Cells SE and First Solar Inc. With China’s government pushing to consolidate the industry, the remarks from Shi and Gao suggest rising demand may support the biggest panel manufacturers.

January 27, 2012. Developers installed wind turbines with capacity of 6,810 megawatts in the U.S. last year, 31 percent more than in 2010, as they rushed to qualify for a federal-tax grant that expired last month. Fourth-quarter installations reached 3,444 megawatts, topping the first three quarters combined, led by California, Illinois and Ohio, the fastest-growing state, the American Wind Energy Association said in a report. New wind farms with capacity of more than 8,300 megawatts are under construction now. Developers will try to complete them before another federal incentive expires Dec. 31. The Washington-based trade group is pressing Congress to extend the Production Tax Credit of 2.2 cents a kilowatt-hour for wind power to prevent manufacturers from firing workers by 2013.

January 27, 2012. Better Place LLC, a U.S. startup developing charging stations for electric vehicles, predicts the “tipping point” for electric car use will come as soon as 2015. Better Place, based in Palo Alto, California, started putting its first cars on the road in Israel this week and expects to go public in the next two years. The company has raised $750 million since it was founded four years ago and is in partnership with Renault SA to install electric-car charging systems in Israel, Denmark and Australia. Cars are expected to start using the company network in Denmark within weeks and in Australia later this year. Plug-in hybrids and all-electric vehicles have the potential to make up 9 percent of auto sales in 2020. That could rise to 22 percent of sales by 2030, or 4 million vehicles. At the same time, their high price and low performance compared with conventional vehicles may be a hurdle to growth, U.K. market-research company Technavio said in an August 2011 report.

January 27, 2012. BP Plc and its partners in a A$923 million ($981 million) solar-power project in Australia have asked the federal government for more time to reach supply agreements with utilities needed to obtain financing. BP, Europe’s second-largest oil company, is seeking until “mid-year” to complete the accords after missing a Dec. 15 deadline. BP, Fotowatio Renewable Ventures and Pacific Hydro Pty won A$306.5 million in Australian funding last year to build the 150-megawatt solar plant in New South Wales state. Australia, which has set a target of generating 20 percent of its power from renewable energy sources by 2020, also said in June it would provide A$464 million to a proposed solar project in Queensland led by a unit of Paris-based Areva SA. London- based BP and its partners expect to start construction of their solar farm in the second half of 2012, later than previously estimated, the company said.

January 27, 2012. Spain halted subsidies for renewable energy projects to help curb its budget deficit and rein in power-system borrowings backed by the state that reached 24 billion euros ($31 billion) at the end of 2011. The government passed a decree stopping subsidies for new wind, solar, co-generation or waste incineration plants. The system’s debts were racked up as revenue from state- controlled prices failed to cover the cost of delivering power. Costs have swollen in the past five years because of an increase in regulated payments for the power grid, support for Spanish coal mines and subsidies for renewable energy plants.

January 26, 2012. Airlines using U.K. airspace should be grounded if they refuse to comply with the European Union’s greenhouse-gas emissions-trading system, according to a panel of lawmakers. Any country or operator that refuses to accept EU carbon- trading rules on aviation could alternatively face an increased Air Passenger Duty tax in the U.K., the British parliament’s Energy and Climate Change Select Committee recommended. Aviation was included in the European carbon market, the world’s largest by traded volume, as of Jan. 1. The expansion sparked opposition from countries including the U.S., China and Russia, which said Europe should let the United Nations’ International Civil Aviation Organization decide on greenhouse- gas limits for the industry. The price of permits has dropped 49 percent to 7.75 euros ($10.18) a metric ton in the past year, on muted demand and surging supply. The ICAO said in November it wants to strike a deal to create a global carbon market for the airline industry this year.

January 26, 2012. Wacker Chemie AG said prices of polysilicon, the material used in most solar panels, are on their way up after the photovoltaic industry stopped running down inventories. Spot prices rose in January after solar-cell, wafer and module makers increased production and ordered more polysilicon, easing the build-up of stocks. Polysilicon makers such as Wacker and GCL-Poly Energy Holdings Ltd. boosted output in 2011, producing more than could be absorbed by demand for solar panels and creating a glut that took prices below production costs for most manufacturers. The company, which mostly sells polysilicon through long- term contracts, said contract prices remain above spot market prices. Wacker renegotiated the contracts with most customers so its market share should stay the same.

January 25, 2012. The appeal court has refused the Secretary of State permission to challenge an earlier ruling that solar Feed-in Tariffs can not be changed retrospectively; Judge also denies request for DECC to go to the Supreme Court, though DECC now indicates it will seek permission to appeal directly from the Supreme Court regardless of decision.

DECC has indicated it will now go directly to the Supreme Court to request permission to appeal. The decision means that for all installations the FiT remains at 43.3p for 25 years until the Government lays a lawful draft modification to the present rates before Parliament for a minimum of 40 days. This means that the earliest any new rate can kick in is March 3, something the Department of Energy and Climate Change (DECC) had already appeared to accept.

January 25, 2012. Those in the renewable energy industry looking for clues as to whether President Obama would continue to talk up renewables will not have been disappointed by his 2012 State of The Union speech. Obama called for "a future where we’re in control of our own energy, and our security and prosperity aren’t so tied to unstable parts of the world..." And he said now was an ideal time to set things in motion on U.S. manufacturing: "long before the recession, jobs and manufacturing began leaving our shores [...] so we have a huge opportunity, at this moment, to bring manufacturing back. But we have to seize it." Obama said he would not "stand by when our competitors don’t play by the rules. We’ve brought trade cases against China at nearly twice the rate as the last administration [...] it’s not fair when foreign manufacturers have a leg up on ours only because they’re heavily subsidised.."

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