Published on Jan 21, 2025
Energy News Monitor I Volume XXI, Issue 22

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Monthly News Commentary: Oil

Ethanol blending to cut oil imports

India

Demand

India’s Union Minister for Petroleum and Natural Gas, Hardeep Singh Puri, hopes that global oil prices will come down despite geopolitical tensions. According to the minister, there is no shortage of oil in the world as more supplies are coming into the market from countries such as Brazil and Guyana.

According to Union Minister of Road Transport and Highways, Nitin Gadkari, research around blending 15 percent ethanol in diesel is in advanced stages, and the government is exploring ways to prioritise it based on sound evidence. According to government data, ethanol blending in India has surged from 1.53 percent in 2014 to 15 percent in 2024. Spurred by this progress, the government has set an ambitious target of reaching 20 percent blending in petrol by 2025. The progress on building an ethanol ecosystem—where ethanol pumps complement ethanol production and with the launch of vehicles that can run on ethanol— is on fast-track in four states: Karnataka, Tamil Nadu, Uttar Pradesh, and Maharashtra. The Indian Oil Corporation (IOC) has decided to establish 400 ethanol pump stations.

Retail Prices

The Union Oil Minister called to build consensus over bringing petrol and diesel under the Goods and Services Tax (GST). To enhance its energy security, India needs to focus on strategic petroleum reserves and prioritise exploration and production to reduce its heavy reliance on imported fuel. The minister highlighted that, with a population of 1.4 billion (bn), and energy consumption projected to be three times the global average, India is positioned to be a key player in the global energy landscape. Over the next two decades, India is expected to contribute 25 percent to the world's increase in energy consumption. The minister emphasised that achieving this new policy requires unanimous approval from all states, and he acknowledges the challenges in getting states on board, as petrol and diesel are significant revenue generators for them.

Refining

According to the Union Oil Minister, India is expected to receive investments worth US$87 bn in the next decade to meet the nation’s rising demand for petrochemicals. India’s per capita petrochemical consumption is far below that of developed nations, which offers opportunities of higher investment in the sector. India consumes 25 to 30 million metric tonnes (MT) of petrochemical products annually, and the chemical and petrochemicals sector, currently valued at US$220 bn, is expected to grow to US$300 bn by 2025. India, China and the Middle East have been developing domestic petrochemical production to provide tailwinds to decades of oil refining, even as the world looks to switch to cleaner energy sources. Indian state-run and private oil companies, such as Nayara Energy and Haldia Petrochemicals, have already announced plans to boost production. India’s petrochemicals production is projected to increase from 29.62 MT to 46 MT by 2030.

India’s oil marketing companies (OMCs) are expected to add 35-40 MT of crude oil refining capacity and take the installed base to  around 295 MT by the end of the fiscal year 2030 to address the expected growth in consumption as the current capacities are already being optimally utilised. Project risk in these investments is expected to be low, which, coupled with the expectations of steady returns from the business, will support the credit risk profiles of OMCs.

Imports

The ongoing conflict between Israel and Iran is unlikely to have a significant impact on India’s crude oil imports, as analysts said that India sources only a negligible volume of oil from Iran. The country currently imports oil from around 40 nations, including major suppliers like Russia, Iraq, Saudi Arabia, Abu Dhabi, and the United States (US), allowing India to effectively manage its supply needs. As per Hindustan Petroleum Corporation Limited (HPCL)’s former chairman M. K. Surana, while crude oil supply issues may not be a primary concern for India, price volatility is expected, with occasional spikes and higher monthly average prices. Surana said that increases in average crude oil prices above US$80 per barrel would likely occur only in the event of a significant escalation in conflict affecting logistics, particularly in the Strait of Hormuz. While India’s oil supply may remain stable, experts warn of potential temporary price spikes and higher monthly averages due to the elevated geopolitical tensions.

Rest of the World

World

Goldman Sachs expects oil prices to average US$76 a barrel in 2025 based on a moderate crude surplus and spare capacity among major producers, with concerns easing over a potential disruption in Iranian supply, it said in a note. The geopolitical risk premium is limited, they said, as Israel-Iran tensions have not affected oil supply from the region, and as spare capacity is high among producers in OPEC+ (the Organisation of Petroleum Exporting Countries (OPEC) and its allies). However, supply risks will persist as long as the conflict in the Middle East remains unresolved, and potential disruptions could tighten oil balances. Oil prices settled higher for the second consecutive session, with Brent futures at US$76.04, as traders downplayed hopes of a Middle East ceasefire and focused on signs of improving demand from China.

According to the International Energy Agency (IEA) , the world oil market is heading for a sizeable surplus in the new year, as it reassured markets that the agency stood ready to act if needed to cover any supply disruption from Iran. Oil prices have risen in recent weeks on investor concern that Israel may retaliate against a missile attack from Iran, a major oil exporter and OPEC member, by hitting its oil facilities or nuclear sites. The e IEA, however, which manages industrialised countries' emergency oil stocks, is of the view that public stocks were more than 1.2 billion barrels and spare capacity in OPEC+ stood at historic highs. As per the agency’s estimates, world oil demand will rise by 860,000 barrels per day (bpd) this year, down 40,000 bpd from the previous forecast. For next year, it sees an expansion of 1 million bpd, about 50,000 bpd higher than expected last month. China has, for years, driven global rises in oil consumption.

Africa & Middle East/ OPEC+

Iranian authorities are working to control an oil spill four miles (6.4 kilometres) off the nation’s Kharg Island. The leak from oil pipelines was reported and required actions have been taken. Iran is a member of OPEC, with production of around 3.2 million bpd, or about 3 percent of global output. Most of Iran’s oil and gas is in the south of the country, where the Kharg Island terminal is situated and from which around 90 percent of Iranian oil exports are shipped.

OPEC cut its forecast for global oil demand growth in 2024, reflecting data received so far this year. It also lowered its projection for next year, marking the producer group's third consecutive downward revision. The weaker outlook highlights the dilemma faced by OPEC+, which is planning to start raising output in December after earlier delaying the hike against a backdrop of falling prices. OPEC, in a monthly report, said world oil demand will rise by 1.93 million bpd in 2024, down from the growth of 2.03 million bpd it expected last month. Until August, OPEC had kept the forecast unchanged since it was first made in July 2023.

The Nigerian National Petroleum Corporation, (NNPC) Ltd, has increased petrol prices by over 15 percent, marking the second hike in less than a month after its exit from a costly subsidy programme that has strained its finances. At NNPC fuel stations in Lagos, the price of gasoline rose to 998 naira per litre (US$0.63) from 858 naira (US$0.56), while in Abuja, the price increased to 1,030 naira per litre (US$0.67) from 950 naira (US$0.62). Long queues formed as customers came to terms with higher prices. NNPC, the country’s sole importer of refined products, can now recover its costs in full, having bought gasoline from the Dangote Oil Refinery at 898 naira per litre (US$0.58). This is the first time in three decades that Nigeria is selling gasoline at full market prices, relieving the treasury of the heavy cost of subsidies, projected to cost the government at least US$3.7 billion this year. President Bola Tinubu scrapped a costly but popular subsidy on petrol last year, to cut government expenditure. However, he reintroduced the subsidy partly after inflation skyrocketed, worsening a cost of living crisis and stoking tension among the population. By September, NNPC said it faced severe financial strain, admitting it was unable to continue importing fuel after weeks of scarce supplies at its petrol stations. Gasoline prices are a particularly sensitive issue in Nigeria, where millions of households and small businesses rely on generators powered by fuel due to the country’s creaking national electricity grid. Nigeria began selling crude oil to the Dangote Refinery in naira, with the understanding that the refinery would fully meet the country’s fuel needs. This month, NNPC is supplying the refinery with 13 cargoes of crude oil.

Iran’s Oil Minister, Mohsen Paknejad, landed on Kharg Island, home to the country’s main export terminal, and held talks with a naval commander amid concern that Israel could attack energy facilities. Iranian oil exports have climbed this year to near multi-year highs of 1.7 million bpd despite US sanctions. China, which does not recognise US sanctions, is Tehran’s biggest oil customer, and according to analysts, imported 1.2 to 1.4 million bpd from Iran in the first half of 2024.

OPEC oil output fell in September to its lowest this year, a survey found, as unrest disrupted Libyan supply and Iraq made progress in complying with its cutbacks pledged to the wider OPEC+ alliance. OPEC pumped 26.14 million bpd, down 390,000 bpd from August’s revised total, the survey found, with Libya accounting for the bulk of the drop at 300,000 bpd. A drop in Libyan exports and production amid a standoff between political factions over control of the central bank helped boost oil prices, which have come under pressure from concern about demand and rising supply outside OPEC+.Output should rebound after a dispute over the leadership of the country’s central bank was resolved and the national oil company lifted the force majeure at the oilfields. Aside from Libya, which is exempt from OPEC+ agreements to limit production, the biggest decline came from Iraq, which is seeking to boost compliance with its OPEC target. Iraq is still pumping 90,000 bpd above quota, the survey found. Nigeria pumped 40,000 bpd less oil as exports declined, according to tanker tracking firms. Among countries posting higher outputs, the only gain was in Iran, which is also exempt from OPEC targets. OPEC pumped about 130,000 bpd more than the implied target for the nine members covered by supply cut agreements, with Iraq still accounting for the bulk of the excess, the survey found.

OPEC and its allies will go ahead with a planned oil production increase in December but first need to cut output to address overproduction by some members, OPEC+ said. OPEC+ said the plan didn’t represent any major change from existing policy after Saudi Arabia committed to OPEC+, raising production on 1 December, and dropping its unofficial US$100 a barrel oil price target to win back market share. OPEC and Saudi Arabia have repeatedly said they do not target a certain price and make decisions based on market fundamentals and in the interest of balancing supply and demand. OPEC+ is scheduled to raise output by 180,000 bpd in December. Iraq and Kazakhstan have pledged to cut 123,000 bpd in September to compensate for earlier pumping above agreed levels. OPEC+ is currently cutting output by a total of 5.86 million bpd, equivalent to about 5.7 percent of global oil demand. Global crude benchmark Brent was down about 2.5 percent to below US$72 a barrel. Russian Deputy Prime Minister Alexander Novak said that there were no changes to OPEC+ plans to start phasing out oil production cuts from December. Russian Deputy Energy Minister Pavel Sorokin said that Russia does not want to flood the market with oil when speaking about plans to raise the country's output to 540 MT from 2030.

Saudi Arabia is preparing to abandon its unofficial US$100 a barrel oil price target as it gets ready to raise output to win back market share, even if it means lower prices. The OPEC+, which is de facto led by Riyadh, has been cutting oil output to support prices. However, prices are down nearly 5 percent so far this year, amid increasing supply from other producers, especially the US, as well as weak demand growth in China. Earlier this month, OPEC+ agreed to delay a planned oil output increase for October and November after crude prices hit their lowest in nine months, saying it could further pause or reverse the hikes if needed.

Russia/Central Asia

Kazakhstan's biggest oil field Tengiz, operated by US major Chevron, boosted output to a record high in October, potentially complicating the country’s future efforts to comply with its OPEC+ quota. OPEC+ has named the top 10 global oil producer, Kazakhstan, along with Iraq and Russia as countries that have repeatedly failed to comply with its pledges to curb oil production this year. Tengiz boosted daily production to 699,000 bpd in early October from 687,000 bpd in September, when output increased by 30 percent from August after the completion of maintenance. Kazakhstan—which relies on Tengiz and two other major fields, Karachaganak and Kashagan, for most of its production—is subject to output targets as a member of OPEC+. The country’s oil production quota under the OPEC+ deal stands at 1.468 million bpd, a target it exceeded in September by around 170,000 bpd.

Russian oil companies have held talks with the government on whether firms that do not produce diesel should be banned from exporting it because of concern over refiners potentially losing subsidies. Russia is the world’s biggest seaborne exporter of diesel, just ahead of the United States, and diesel represents the greatest share of its oil product exports. The possible ban on fuel exports was on the agenda of a meeting on the domestic fuel market chaired by Russian Deputy Prime Minister Alexander Novak. High prices of diesel, whose local Russian index has reflected an expensive winter grade from 1 October, could lead to the cancellation of, or a significant decrease in subsidies known as damper payments. They were introduced to compensate local fuel producers for giving priority to the domestic market over usually more lucrative exports. Novak discussed the situation on the fuel market, and fuel transportation via railways and supplies to farmers.

Russia expects "serious" growth potential in global oil demand through to 2050, and is ready to supply additional barrels, its Deputy Energy Minister Pavel said. The energy ministry expected Russia to produce 540 MT of oil in 2030 (10.8 million bpd), up from 531 MT in 2023. The ministry sees a global oil demand growth of at least 5 million bpd to 7 million bpd, or 4.5-5.5 percent higher than current consumption rates through to 2030.

Kazakhstan expects preliminary results of multi-billion arbitration proceedings against international oil companies developing its giant oil fields by December, the country’s energy ministry said. The central Asian country last year launched claims against the groups developing its Kashagan and Karachaganak oilfields of over US$13 bn and US$3.5 bn respectively, over disputed costs. The oilfield’s crude contains high concentrations of poisonous hydrogen sulphide, which complicates the extraction process. Its production reached around 380,000 bpd last year. Kazakhstan’s oil exports to Germany via the Soviet-built Druzhba pipeline were seen at 1.2 MT (24,000 barrels per day) this year, while Germany sought to double its imports to 2.5 MTPA. Kazakhstan’s role as an oil exporter has increased following Western sanctions against Russian oil over the war in Ukraine.

Asia Pacific

Japan Petroleum Exploration Company Limited (JAPEX) is seeking buyers for its stake in an oilfield in the British North Sea, the latest in a string of exits from the ageing basin as companies face growing uncertainty over government tax plans. JAPEX is calling for bids for its 15 percent interest in the British Petroleum (BP)-operated Seagull oil and gas field. JAPEX acquired the stake in the field in 2014. Seagull started production in 2023, and is expected to produce around 50,000 barrels of oil equivalent per day at peak output. JAPEX said it is considering exiting its UK (United Kingdom) upstream position via either the sale of its local unit or the sale of its stake in Seagull, its only asset in the basin. JAPEX holds £150 million(US$195 mn) in tax losses, which would allow any buyer to offset future investments in the basin.

Sinopec is advancing development of shale oil at its pilot project Jiyang in east China, now pumping 1,600 metric tonnes per day (11,680 bpd), up from 100 tonnes in 2021, the state oil and gas group said. At this rate, Sinopec is on track to deliver a target set in 2022 to produce 500,000 tonnes a year in 2025 at Jiyang, which is situated mostly in Shandong province and covers 7,300 square km (1.8 million acres). Following a call from the central government to boost domestic energy security, China’s national oil companies are making greater efforts to tap hard-to-extract shale deposits in order to help compensate for older, fast-depleting conventional oilfields. Currently Jiyang has 36 wells that each pump more than 100 tonnes a day, with the Fengye 1-1HF well having the highest daily output of 262.8 tonnes, Sinopec said. The Jiyang shale oil zone, part of the ageing conventional Shengli oilfield, has an estimated shale oil resource of 10.5 billion tonnes (BT), of which 1.73 BT have been identified as prospective reserves, Sinopec said. Despite the huge resource size, shale oil remains among the geologically most challenging and costly types of oil to explore and produce, with output making up only 1 percent of China’s total crude oil production.

The Indian Oil Corporation (IOC) and the Nepal Oil Corporation (NOC) signed a Business to Business (B2B) Framework Agreement paving the way for the development of critical petroleum infrastructure projects in Nepal. This agreement follows the Government-to-Government (G2G) Memorandum of Understanding (MoU) signed earlier between India’s Ministry of Petroleum and Natural Gas (MoP&NG) and Nepal’s Ministry of Industry, Commerce and Supplies (MoICS) on 31 May 2023. The Government-to-Government (G2G) MoU encompasses the extension of the Motihari-Amlekhgunj Petroleum Pipeline (MAPL). South Asia’s first transnational petroleum product pipeline, commissioned in 2019 to Chitwan, Nepal. Additionally, the MoU covers the construction of oil storage terminals at Chitwan and a new transnational pipeline from IndianOil's facility in Siliguri to Jhapa alongside an oil storage terminal at Jhapa. These projects are expected to transform petroleum logistics between the two countries. These pipelines have been designed to meet the future energy needs of Nepal, with ample storage capacity at both the Chitwan and Jhapa terminals. The B2B Framework Agreement signed enables IOC and NOC to take up construction on these vital projects. This collaboration is crucial for optimising the transportation of petroleum products, which will significantly reduce costs for Nepal Oil Corporation by minimising its reliance on tank trucks.

News Highlights: 23 – 29 October 2024

National: Oil

India’s crude oil demand set for 4 percent rise in Q4

25 October: India’s crude oil demand is about to increase by 4 percent during the fourth quarter (Q4) of the year amid a festival season that also coincides with increased agricultural activity after the monsoon season. The forecast comes from S&P Global Commodity Insights, which said that it expected India’s fuel demand to rise by between 50,000 and 55,000 barrels daily of gasoline and diesel in the period between November and December. India is one of the largest consumers of crude oil and due to limited domestic supply, it is also one of the biggest importers. As much as 85 percent of the subcontinent’s consumption is covered by imported oil. Over the past two years, India has become a key buyer of Russia’s oil, which is selling at a discount because of the sanctions and embargoes on Russian crude exports to Western countries. The attractiveness of cheaper crude supply has made Russia the single biggest supplier of oil to India, especially as New Delhi plans a significant expansion in its domestic refining capacity. By 2028, plans are to boost refining capacity by 20 percent, to a total of 6.19 million barrels daily, in order to meet rising fuel demand in the medium term. According to OPEC, India will remain the world’s biggest driver of oil demand growth well into the 2040s as well, with demand rising by 6.6 million bpd over the period until 2045.

Distribution of three free LPG cylinders to start from Deepavali in Andhra Pradesh

25 October: Andhra Pradesh is set to launch the distribution of three free LPG (liquefied petroleum gas) cylinders annually to eligible households this Deepavali. The Minister for Food and Civil Supplies, Nadendla Manohar, has announced that the government has completed preparations for this programme, aimed at easing financial strain for families across the state. The Minister said that the scheme would begin on 29 October, allowing beneficiaries to book their first gas cylinder, with deliveries starting on 31 October. Beneficiaries need to meet basic eligibility requirements, including possessing an LPG connection, a white ration card, and Aadhaar linkage.

TNPCB proposes a INR 730 million penalty on CPCL for damages caused by Ennore oil spill

24 October: The Tamil Nadu Pollution Control Board (TNPCB) has estimated a penalty of INR 730 million for Chennai Petroleum Corporation Limited (CPCL), because of the damages caused by the Ennore oil spill that occurred during Cyclone Michaung in December 2023. The TNPCB submitted this in a report before the southern bench of the National Green Tribunal as part of a suo motu case on the oil spill.

National: Gas

PNGRB invites bids on suo motu basis for Kochi-Kanyakumari-Thoothukudi Natural Gas Pipeline

25 October: The Petroleum and Natural Gas Regulatory Board (PNGRB) has unveiled an ambitious plan to enhance the natural gas infrastructure in South India by proposing a new Kochi-Kanyakumari-Thoothukudi Natural Gas Pipeline. PNGRB has commenced invitation for bids on a suo motu basis from interested and eligible entities to develop the natural gas pipeline, adhering to established regulatory frameworks. Bidding commenced on 17 October 2024, and the last submission date is 18 February 2025. The pipeline will create a crucial link between the Kochi LNG terminal operated by Petronet LNG Limited, and the Indian Oil Corporation Limited’s Ennore-Thiruvallur Bengaluru-Nagapattinam-Madurai-Tuticorin pipeline at Thoothukudi. The proposed 425 kilometre (km) pipeline project aims to empower underserved regions, including Kanyakumari and its neighbouring districts in Kerala and Tamil Nadu, by ensuring efficient access to natural gas for various sectors, particularly City Gas Distribution (CGD) entities. Under Regulation 5 of the PNGRB (Authorising Entities to Lay, Build, Operate or Expand Natural Gas Pipelines) Regulations, 2008, the pipeline will have an initial capacity of at least 6 million cubic metres per day (m3/d). The project is expected to significantly contribute to completing the national gas grid, facilitating more equitable natural gas distribution across South India. The initiative aims to elevate natural gas’s share in the country’s energy mix from the current 6 percent to an impressive 15 percent by 2030. Natural gas, known for its cleaner-burning properties compared to oil and coal, is pivotal in addressing environmental challenges and meeting energy demands. PNGRB has authorised all mainland geographical areas to develop a CGD network to achieve this target. As of June 2024, 33,475 km of the Natural Gas pipeline had been authorised, 24,921 km of which is operational, and 10,789 km is currently under various stages of construction.

Adani Total Gas posts bigger Q2 profit on steady CNG demand

24 October: Adani Total Gas posted a bigger profit for the seventh straight quarter, aided by higher sales of its compressed natural gas (CNG) amid the government’s push for a wider use of gas-based vehicles. The demand for CNG in India is climbing as the government seeks to cut vehicular pollution and make cleaner-burning energy more accessible. It is targeting setting up of 20,000 CNG stations by the end of the decade. Its CNG sales volumes, which account for 67 percent of its total sales, jumped 20 percent in the latest quarter, boosted by the addition of 18 new stations across the country. It has 577 CNG stations. The company secured its maiden financing, worth US$375 million, to help expand its distribution network across 13 states. Sales volume in its piped natural gas (PNG) segment, its second-biggest, rose 9 percent to 157 million cubic metres of gas per day.

Mahanagar Gas posts Q2 profit drop on higher fuel costs

24 October: Mahanagar Gas reported a 16.5 percent decline in second-quarter (Q2) profit, hurt by a surge in fuel costs. The state-backed natural gas distributor’s profit after tax fell to INR 2.83 billion (US$34 million) in the quarter ended 30 September from INR 3.39 billion a year earlier, the company said. Its revenue from operations rose 8.6 percent to INR 18.77 billion, while total expenses rose 18 percent to INR 15.55 billion, owing to a 20 percent increase in natural gas costs. Indian city gas distribution firms' earnings have been under pressure as they are forced to procure gas on the more expensive open market. The allocation of natural gas sold under government-set administered pricing mechanisms has fallen due to lower domestic output. Jefferies had expected the allocation of gas under the administered pricing mechanism for city gas distribution firms like Mahanagar Gas, Indraprastha Gas and Gujarat Gas to decline to 65 percent in the quarter, leading to a higher dependence on imported liquefied natural gas.

National: Coal

Coal India Q2 profit drops 22 percent to INR 62 billion on lower sales

25 October: Coal India Ltd (CIL) reported a 22 percent drop in consolidated net profit at INR 62.74 billion for the quarter ended 30 September 2024 on the back of lower sales. CIL had posted a consolidated net profit of INR 80.48 billion in the year-ago period. The consolidated income of the world’s largest coal miner in the July-September period dropped to INR 321.77 billion, over INR 347.60 billion in the second quarter of the previous fiscal.

National: Power

After Cyclone Dana, electricity connectivity restored in Odisha

27 October: After Cyclone Dana, the Odisha Chief Secretary Manoj Ahuja took stock of the damage done in the state, and relief efforts being carried out, highlighting that around 92 percent of connectivity has been restored across the state. Moreover, disaster relief and security forces carried out a rescue operation in the Tala Gopabindha village in the Bhadrak district.

NLC India signs agreement for power capacity addition

25 October: NLC India Limited (NLCIL) has signed an agreement with Rajasthan Rajya Vidyut Utpadan Nigam Limited (RRVUNL) to form two joint ventures for power capacity addition. The first joint venture, which is between NLC India Renewables Limited (NIRL) and RRVUNL, will be aimed at establishing renewable energy projects in Rajasthan. The second joint venture, between NLCIL and RRVUNL, will work towards the establishment of a lignite-based Thermal Power Station. In both the joint ventures, NLCIL will hold a 74 percent equity stake. RRVUNL will hold a 26 percent equity stake.

Opposition grows against Telangana power tariff hike; BRS urges state government to absorb costs

23 October: Opposition to the proposed power tariff hike in Telangana is intensifying, with the Bharat Rashtra Samithi (BRS) and various stakeholders, including farmers, industrialists, and everyday consumers, voicing strong resistance during a public hearing organised by the Telangana State Electricity Regulatory Commission (TGERC). Sirikonda Madusudhana Chary, leader of the Opposition in the Legislative Council and senior BRS leader, took a firm stand against the proposed tariff hike by the Telangana Southern Power Distribution Company Limited (TGSPDCL) and Telangana Northern Power Distribution Company Limited (TGNPDCL). Chary called on the state government to absorb the financial burden of the increase and provide compensation to the distribution companies (discoms) in the form of subsidies. Chary praised the leadership of Chief Minister K. Chandrashekhar Rao (KCR) for investing heavily in the power sector, resulting in a dramatic increase in installed capacity from 7,000 megawatt (MW) in 2014 to over 24,000 MW by 2023. He emphasised that the BRS never viewed the power sector as a revenue stream, but rather as a means to drive economic growth and development. The discoms had submitted that their total expenditure was around INR 400 billion, with an income of INR 340 billion and INR 50 billion government subsidies. Chary questioned why the tariff was being increased to cover a shortfall of INR 10 billion, suggesting that the state could easily bridge the gap without passing the burden onto the public.

National: Non-Fossil Fuels/ Climate Change Trends

Adani Enterprises posts Q2 profit surge on renewable energy demand

29 October: Adani Enterprises reported a more than seven-fold surge in second-quarter (Q2) profit, as higher demand in its renewable energy division overshadowed its weakness in the mainstay coal trading segment. The ports-to-power Adani Group’s flagship firm posted a consolidated net profit of INR 17.42 billion (US$207.20 million) for the quarter ended 30 September, up from INR 2.28 billion a year ago. India, the world’s fastest-growing major economy and third-largest greenhouse gas emitter, saw a slump in coal-fired power output in the quarter, while solar power generation surged. The decline reflects a shift in fuel use patterns as India scrambles to achieve its 2030 clean energy target. The company recently signed a deal to supply clean energy to power Google’s cloud services and operations in India, while Adani Group is also making increased attempts to ramp-up cleaner energy projects locally and overseas.

Government to push green energy plans, will list ALMM for solar PV cells by 2026

27 October: The government is planning to introduce an Approved List of Models and Manufacturers (ALMM) for solar cells on the lines of module manufacturing to boost India’s transition towards green energy. The government is aiming to make the second list (List II) under the ALMM for solar photovoltaic (PV) cells effective 1 April 2026. The government introduced the ALMM order (List I) in 2019 for solar modules to boost the manufacturing and usage of made-in-India solar panels. It was made mandatory to source PV modules from models and manufacturers included in the ALMM List I. According to an office memorandum of the Ministry of New and Renewable Energy, the ALMM order dated 2 January 2019, specified models and manufacturers of solar PV modules, whereas List-II will identify and include models and manufacturers of solar PV cells. However, to date, List II of solar PV cells has not been issued because the installed capacity of solar PV cells in the country was lower than the demand, the government document said.

GAIL and VERBIO India ink MoU to develop agricultural residue-based CBG projects

26 October: GAIL (India) Limited and VERBIO India Private Limited signed a Memorandum of Understanding (MoU) to jointly explore the establishment of Agricultural Residue-based Compressed Biogas (CBG) plants in India. This collaboration aims to leverage the strengths of both the companies to promote sustainable energy solutions and enhance the utilisation of agricultural waste. Under the terms of the MoU, the parties intend to work together to identify suitable locations for the setting up of greenfield Agri Residue-based CBG plants in a Joint Venture (JV) mode.

Khattar pushes for renewable energy generation in Andamans

25 October: Union Minister for Power and Housing and Urban Affairs, Manohar Lal Khattar, highlighted the need to increase the share of renewable sources of power generation, especially wind energy, in the Andaman and Nicobar Islands. During a meeting in Sri Vijaya Puram (earlier Port Blair), to review the power sector in the archipelago, the minister said diesel-based power generation should be gradually reduced along with other efforts to bring down the per unit energy cost. The Minister suggested exploring the use of alternative sources of energy generation like ethanol and highlighted the need to work towards energy storage. The importance of Electric Vehicles (EV) and EV Charging stations was also emphasised.

International: Oil

Indonesia targets additional LPG output

29 October: Indonesia aims to raise liquefied petroleum gas (LPG) output by about 1 million metric tonnes a year to reduce imports of the cooking fuel, the head of the country’s upstream oil and gas regulator said. New President Prabowo Subianto has pledged to reach energy self-sufficiency through oil and gas production and biofuels, citing rising geopolitical uncertainties that could affect supply as the primary reason. To reduce LPG imports, Indonesia’s energy ministry targets doubling the domestic production of the popular cooking fuel from around 1.7 million tonnes (MT) per year. Upstream oil and gas regulator SKK Migas has identified 15 gas fields that can potentially supply propane and butane gas to produce an additional 1 MT of LPG per year. To boost investment into LPG production, the government will make sure that state energy firm Pertamina will offer LPG producers fair pricing in its role as the country’s sole distributor of the fuel. Data from the Energy and Mineral Resources Ministry showed that Indonesia imported 6.9 MT of LPG last year out of the 8.7 MT sold in the domestic market.

US seeks up to 3 million barrels of oil for emergency reserve

28 October: The United States (US) said it is seeking up to 3 million barrels of oil for the SPR (Strategic Petroleum Reserve) for delivery through May next year, a purchase that would leave the government with little money to buy more until lawmakers approve more funds. The solicitation for the oil, which would be delivered to the SPR’s Bryan Mound, Texas site from April through May 2025, is the latest step in bringing oil back to the reserve after its biggest sale ever in 2022 of 180 million barrels. President Joe Biden had ordered the sale after gasoline prices spiked following Russia’s full-scale invasion of Ukraine. The Department of Energy has now bought back more than 55 million barrels at an average price of about US$76 per barrel, nearly US$20 lower than the US$95 a barrel price it sold the oil for in 2022. As part of efforts to replenish the SPR, the department also worked with lawmakers in late 2022 to cancel 140 million barrels in sales that had been congressionally mandated through 2027. Democratic and Republican lawmakers had voted for those sales to pay for government programs. Working with lawmakers on the SPR could also involve cancelling future sales that Congress mandated years ago of about 100 million barrels of oil from 2026 through 2031. Cancelling the sales instead of buying oil only to resell it again could reduce wear and tear on the SPR’s underground caverns on the Texas and Louisiana coasts, where the oil is held.

Brazil firm Petrobras aims to boost Tupi oilfield output to 1 million bpd by 2027

24 October: Brazil firm Petrobras plans to bring oil production at its Tupi oil field back to 1 million barrels per day  (bpd) by 2027 as it plans new investments in the asset. Located in deep waters offshore, Tupi is Brazil’s largest oil field in terms of production, with 832,600 bpd, although this has been declining over the past few years, according to August data from oil regulator ANP (National Petroleum Agency). Petrobras now wants to bring Tupi’s production back to 1 million bpd. Buzios currently produces 605,600 bpd, ANP data showed. Buzios should outpace a production of 1 million barrels of oil equivalent per day (boepd) in the second half of 2025.

Output from Norway’s largest oilfield to begin decline in 2025

24 October: Norway’s largest oilfield, Johan Sverdrup, is expected to come off its production plateau early next year, operator Equinor said. The field hit a record daily output of more than 756,000 barrels of oil per day in September, equivalent to some 6 to 7 percent of Europe’s daily oil consumption, according to Equinor. The field has already pumped one billion barrels since coming on stream in October 2019. At the time of the startup, the field was estimated to hold 2.7 million barrels of oil equivalent in reserves, including some associated gas.

International: Gas

Egypt President, Eni CEO discuss moves to support gas production

28 October: Egypt President Abdel Fattah al-Sisi met with Eni CEO (chief executive officer) Claudio Descalzi to discuss moves aimed at supporting gas production, the Italian energy group said after the African country was forced to turn to the liquefied natural gas (LNG) market to cover domestic demand. The country had planned to become a major gas exporter after Eni discovered the giant Zohr offshore field in 2015, but domestic gas production in Egypt has been falling since 2021 to reach a six-year low this year. Average production at Zohr was 1.9 billion cubic feet per day in the first half of this year, well below the peak reached in 2019, fuelling speculation about technical issues and a halt of investment at the giant field. Egypt planned to issue a tender seeking up to 20 cargoes of LNG (liquefied natural gas) to meet requests for the first quarter of 2025.

Norway’s Equinor sees upward gas price pressure, lower storages next year

24 October: European gas prices are still subject to upward pressure due to rising demand in Asia and concerns over the future supply of Russian gas and liquefied natural gas (LNG), the Norwegian oil and gas producer Equinor said. Demand for LNG in Asia, which is driving competition with Europe, and imports of Russian gas will also affect prices. Even with a normal winter, European gas storage sites should be around 40 percent full in April 2025, compared with 60 percent at the same time this year. European gas storage sites are currently around 95 percent full, according to data from Gas Infrastructure Europe.

Germany’s SEFE secures long-term gas supply deal with ConocoPhillips for up to 9 bcm

23 October: Germany’s SEFE said it signed a long-term agreement with ConocoPhillips to purchase up to 9 billion cubic meters (bcm) of natural gas over the next decade. Initial deliveries under the deal have already started, with gas supplied through various European trading hubs. ConocoPhillips, which sources gas from Norwegian production and LNG (liquefied natural gas) imports, will contribute to SEFE's annual demand of around 20 bcm, the company said.

International: Power

US governors push back on PJM after record-high power plant prices

29 October: A group of five governors urged PJM Interconnection, the largest US (United States) grid operator, to change the process it uses to determine the price paid to power plants, after record-high prices awarded in its last auction. The most recent PJM capacity auction resulted in prices that were nearly 10 times the previous year, with results attributed largely to a shrinking power supply and rising electricity demand. The prices raised concerns about swelling power bills for everyday homes and businesses in the grid operator’s territory, and led environmental groups to file a complaint against PJM’s process to determine its prices.

Japan’s top power generator JERA H1 profit halves; full year forecast unchanged

29 October: Japan’s top power generator, JERA, said its April-September net profit halved, hit by a steep drop in gains from lagged fuel price adjustments and its US (United States) power generation business. The utility stuck to its annual profit estimate of 200 billion yen (US$1.3 billion), which included the impact of the shutdown of its Taketoyo coal-fired power plant, following a fire on 31 January. No date has been set yet for restarting the plant. JERA, an unlisted company jointly owned by Tokyo Electric Power and Chubu Electric Power, reported a net profit of 138.9 billion yen (US$880.6 million) for the six months through 30 September, down 52 percent from the year-ago period.

Kenyan high court suspends US$736 million Adani power line deal

25 October: Kenya’s high court suspended a US$736 million deal between a state utility and India’s Adani Energy Solutions to build and operate power infrastructure, including transmission lines. The public-private partnership agreement between state-owned Kenya Electrical Transmission Company and Adani Energy Solutions was signed earlier this month. On 11 October the energy ministry said it would help address persistent power blackouts and support economic growth. The high court said the government could not move ahead with the 30-year agreement with Adani Energy Solutions until the court makes a determination on a case brought by Law Society of Kenya challenging the deal. The law society also said KETRACO and Adani Energy Solutions did not carry out meaningful public participation around the project, a requirement under Kenya's Public Private Partnerships Act of 2021 which allows private sector development of public projects.

European power demand set to lag 2030 expectations

24 October: Europe’s electricity demand could be significantly lower than government expectations by the end of the decade as faltering economic growth slows the switch to cleaner technologies, a recent McKinsey report showed. Electricity demand growth is a strong indicator of Europe’s industrial competitiveness with other regions, and is also a signal of the efficacy of energy transition plans, such as the switch to electric vehicles and cleaner fuels. The European Union, Norway, Switzerland and Britain have together forecasted around 460 terawatt hours (TWh) of additional demand by 2030. However, around 40 percent, or 180 TWh, might not materialise due to lagging growth and high market prices, the report said. European power demand has yet to fully recover from a steep dive in the wake of Russia’s full-scale invasion of Ukraine, when power and gas prices surged and governments urged industry to scale back power use.

International: Non-Fossil Fuels/ Climate Change Trends

QatarEnergy takes 50 percent stake in TotalEnergies solar project in Iraq

28 October: QatarEnergy, one of the world’s top suppliers of liquefied natural gas, said it had agreed to take a 50 percent stake in TotalEnergies' 1.25 gigawatt (GW) solar project in Iraq. The French energy giant will retain the remaining 50 percent stake in the project, which is part of Iraq's US$27 billion Gas Growth Integrated Project (GGIP), QatarEnergy said. The GGIP initiative aims to improve Iraq's electricity supply, including by recovering flared gas at three oilfields and using the gas to supply power plants, helping reduce Iraq's import bill. It also includes renewable energy projects. The solar project, which will be developed in phases to come online between 2025 and 2027, will generate up to 1.25 GW at peak, using 2 million bifacial solar panels, QatarEnergy said. It will be able provide electricity to about 350,000 homes in the oil-rich Basra region of southern Iraq, the company said.

US power system becomes more fossil-dependent than China's

25 October: Utilities in the United States (US) have relied on fossil fuels to generate a larger share of electricity than their counterparts in China since June, seriously undermining US claims to be a leader in energy transition efforts. US utilities have relied on fossil fuels to generate an average of 62.4 percent of total electricity production for the past four months, according to the energy think tank Ember data. In the US, clean power generation has been a priority over the past five years, with electricity output from clean energy sources rising by around 16 percent since 2019, according to Ember. Total US electricity generation has grown by around 5.5 percent from 2019 to 2024, as electric vehicles, data centres and artificial intelligence applications lift overall energy consumption. China’s mammoth manufacturing-led economy has faced a far steeper climb in total power demand in recent years, with electricity consumption rising by nearly 37 percent from 2019 to 2024, Ember data shows. The fact that clean generation has risen three times faster than fossil generation has helped China's power firms to boost overall power supplies while reducing coal's share of the generation mix. China's clean energy capacity also already exceeds total fossil capacity by roughly 20%, and continues to grow. In contrast, U.S. clean generation capacity remains around 35% less than fossil capacity.

Norway’s Equinor eyes lower spending on renewables after Orsted transaction

24 October: Norway’s Equinor said it may invest less in renewable energy towards 2030, following its acquisition this month of a stake in wind power group Orsted, while reporting weaker-than-expected third-quarter profits. The transaction would count towards Equinor’s renewable energy portfolio target, adding 1.7 gigawatts (GW) of net generation capacity out of the company’s goal of installing 12-16 GW by 2030, the Norwegian company has said.

Slovenia cancels referendum on new nuclear plant

24 October: Slovenian lawmakers voted to cancel a referendum on building a new nuclear plant after environmental groups and experts filed complaints questioning its legality at the constitutional court. The new JEK 2 plant was due to be constructed next to Slovenia’s existing Krsko nuclear power plant, which is jointly owned by Slovenia and Croatia and meets about 20 percent of the electrical energy demand in Slovenia and 16 percent in Croatia. Slovenia and Croatia agreed in 2023 to prolong the lifespan of the Krsko plant by 20 years until 2043. The thermal power capacity of Krsko is 1,994 megawatt (MW), with a net power output of 696 MW.

US firm NextEra considers nuclear restart in Iowa, while renewable deals swell

23 October: US (United States) firm NextEra Energy is conducting engineering studies and speaking with federal regulators about the possible restart of its Duane Arnold nuclear power plant in Iowa, the company said. NextEra is assessing the Duane Arnold plant and speaking with regulators with the Nuclear Regulatory Commission and local groups. After struggling for decades with poor economics and safety concerns that led to 13 reactors shutting down since 2012, the nuclear industry is experiencing a revival driven by a sudden turnaround in electricity demand. Two shut US (United States) nuclear power plants, including Three Mile Island in Pennsylvania, are in the process of being restarted. If the plants are resurrected, it will be the first re-launch of a retired reactor. The longer a nuclear plant is shut, the higher the chances of corrosion and other issues that could prevent a restart, and analysts broadly project that only a few of the country’s shut nuclear sites could be relaunched. Still, NextEra said it was focused on growing its renewable energy business. Nuclear power uses uranium to produce carbon-free electricity and is not renewable like wind and solar power. NextEra, which includes the world’s largest renewables business and one of the biggest US regulated electric utilities, has entered into "incremental framework agreements" with Fortune-50 to develop 10.3 gigawatts (GW) renewable energy and storage.


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