Energy News Monitor | Volume X; Issue 41

 

 

NEWS BRIEF

OIL & GAS

March 24, 2014. Oil and Natural Gas Corp (ONGC) said it will invest ` 2,477 crore in additional development of its Vasai East field in the Arabian Sea. The project, to be completed by December 2018, will result in incremental oil production of 1.83 million tons and incremental gas production of 1.971 billion cubic meters by 2030, the company said. The ONGC accorded approval to the additional development of the Vasai East field at a total estimated capital cost of ` 2476.82 crore. ONGC's oil and gas fields in the Arabian Sea are of an over 40-year vintage. ONGC, now recognised as one of the best brownfield managers in the exploration and production world, has increased its recovery factor to over 40 per cent by aggressive redevelopment efforts since 2001. ONGC also said a new oil and gas discovery has been made in South & East Bassein block of Western Offshore basin. (economictimes.indiatimes.com)

March 23, 2014. ONGC has approved its partner Cairn India's raising the cost of developing the second biggest oilfield in the prolific Rajasthan block by 30 per cent to USD 608 million. Cairn India has revised field development plan of the Bhagyam field in the Rajasthan block by raising the capex required from USD 469.6 million to USD 607.97 million. The ONGC has approved the revised cost. Originally, Cairn, which is the operator of the Rajasthan block with 70 per cent interest, had in October 2009 pegged the Bhagyam field development cost at USD 526.1 million. Later, with a view to expediting the project implementation, it optimised the field development plan (FDP) in August 2010, bringing it down to USD 469.6 million. ONGC holds the remaining 30 per cent interest in the Rajasthan block. Cairn had in the FDP proposed to drill 81 wells to produce a plateau of 40,000 barrels of oil per day (2 million tons a year). An estimated 93.6 million barrels out of ultimate reserves of 415 million barrels was to be recovered till May 2020. However, the Bhagyam field, which was put on production in January 2012 has lagged the forecasts. Cairn proposed what is known as Bhagyam FDP Revision-1, proposing to drill additional 54 wells. Under the new plan, Cairn has increased the reserves to 525 million barrels from 415 million barrel previously but the cumulative production is envisaged at 85.56 million barrels as compared to 93.05 million barrels till the term of Rajasthan contract ie May 2020. Bhagyam is the second biggest of the 28 oil and gas discoveries Cairn has made in the Rajasthan block. It currently produces over 190,000 barrels per day of crude oil from the block with about 150,000 bpd coming from the giant Mangala field. Bhagyam produce over 25,000 bpd. (economictimes.indiatimes.com)

March 20, 2014. After two months of increase, natural gas production from Reliance Industries' eastern offshore KG-D6 block has again started to drop. Output, which had risen to 13.63 million standard cubic meters per day (mmscmd) in February, has dropped to 13.28 mmscmd this month, the Directorate General of Hydrocarbon (DGH) said in a production status report to the Oil Ministry. RIL produced a total of 13.58 mmscmd of gas from Dhirubhai-1 and 3 gas fields and MA oil and gas field in the KG-DWN-98/3 or KG-D6 block in Bay of Bengal in the first week of February, which rose to 13.63 mmscmd in the following week. However, output has since dropped to 13.28 mmscmd in the week ending March 9, it said. This output is made up of 8.17 mmscmd from D1&D3 and 5.11 mmscmd from MA field. RIL had in January began production from the MA-8 well on the MA oil and gas field to help reverse the declining trend in output from the KG-D6 block. The well added over 1.5 mmscmd to the output to take MA production to 5.33 mmscmd last month. Production at KG-D6 had last month dropped to just about 11.7 mmscmd and MA-8 has helped reverse the falling trend of the past three years. RIL, which is the operator of the block with 60 per cent interest, has so far drilled 22 wells on D1&D3 fields but has put only 18 on production so far. During the week under review, "total 8 wells were on production and 10 wells were kept closed", the DGH report said. BP of UK has 30 per cent stake while Canada's Niko Resources the remaining 10 per cent. Out of 7 wells on MA field, 5 wells are on production. Of the 13.28 mmscmd of cumulative production, 12.58 mmscmd was sold to fertiliser plants and the remaining 0.7 mmscmd gas was consumed by the East-West pipeline which transports the fuel from east coast to the west, the report said. (economictimes.indiatimes.com)

March 24, 2014. Bharat Petroleum Corporation Limited (BPCL) has decided to develop its Assam-based Numaligarh Refinery as an export hub for petroleum products to neighbouring Bangladesh and Nepal. While the company is planning to lay a 130-km oil pipeline connecting the refinery's marketing terminal at Siliguri in West Bengal with Parbatipur in Bangladesh, it has already signed an agreement with Nepal's Birat Petroleum for supplying petroleum products. The pipeline will cost ` 200 crore and have a carrying capacity of 1 million metric tonne per annum (mmtpa) of high speed diesel (HSD). Bangladesh has a shortfall of 1.5 mmtpa of petroleum products. Numaligarh Refinery had in 2007 exported 4,800 million tonne of diesel to Bangladesh through the waterways. The value of the export was around ` 15 crore. Bharat Petroleum is in the process of expanding the refinery's capacity to 9 mmtpa from 3 mmtpa. As for Nepal, the government of that country has approved import of petroleum products from Numaligarh Refinery. The ministry of petroleum and natural gas had approved inclusion of Numaligarh Refinery along with Indian Oil Corporation (IOC) for supply of petroleum products to Nepal. IOC has till now been the sole supplier to Nepal. According to the agreement, Numaligarh Refinery will supply 100 kilo litre of motor spirit and 5,000 kilo litre of HSD per month to Birat Petroleum. The supply is expected to begin from June. (economictimes.indiatimes.com)

March 23, 2014. Indian Oil Corporation (IOC) said West Bengal government's silence on Haldia Petrochemicals Limited (HPL) was 'surprising' as there has been no communication since the country's largest oil marketing company made its offer in October last year. Although IOC had close to nine per cent stake in HPL at present, the oil PSU had been eyeing a berth on HPL's board for long. IOC would now see the outcome of the financial restructuring, which the lenders had agreed to carry out for the troubled petrochemicals firm. IOC had bid for Bengal's stake in HPL at a price of ` 25.10 per share. But the share transfer process got stuck following the other promoter TCG's opposition and subsequently moving court over the controversial 155 million shares which the Bengal government had clubbed along with its own stakeholding. (economictimes.indiatimes.com)

March 25, 2014. A parliamentary panel has questioned Oil & Natural Gas Corp's $2.1 billion acquisition of Imperial Energy and accused it of hiding Moscow's warning that Imperial's reserve claims were inflated, as production at the Russia-focused explorer has fallen to less than a tenth of what was projected before the deal. The panel said ONGC should have acted more cautiously in the deal. ONGC Videsh, the ONGC unit that runs Imperial, contested the panel's views and said Russia and the company were using different methods to measure the reserves which led to Russia's opinion. The Imperial acquisition was also under the scanner of the Comptroller and Auditor General (CAG) of India after its output fell sharply and the company started incurring losses. ONGC cites geological complexities for the fall in output, which is now 7,500 barrels of oil a day compared with 80,000 barrels forecast at the time of the deal. (economictimes.indiatimes.com)

March 25, 2014. Navigant Technologies, a mid market outsourcing company providing customer interaction solutions to domestic public sector companies, was awarded a multi-crore contract by Indraprastha Gas Limited (IGL) for the Delhi National Capital Territory (NCT) & National Capital Region (NCR). As on March 31, 2013, IGL provided piped natural gas (PNG) connection to 3.9 lakh and 1,382 industrial and commercial users in the region. IGL has awarded the contract to Navigant Technologies for providing 24X7 telephonic support, both inbound and outbound to its PNG users in the NCT & NCR region. Under the contract, Navigant is responsible for disseminating information to users on new connections, billing queries, transfer cases, and is the first line of redressal for IGL's PNG users for complaints such as faulty connections, cheque misplacement, emergency calls (e.g. for leakage). Navigant's call centre currently supports 3,000 to 4,000 calls everyday from IGL's PNG users. It expects this call volume to increase by nearly 200% over the time frame of the contract, in line with IGL's expansion plans. (economictimes.indiatimes.com)

March 24, 2014. GAIL announced that during the Gastech Conference being held in Seoul, South Korea, the company had signed a Memorandum of Understanding (MoU) with Chubu Electric Power Co., Inc., Japan (Chubu). Under the MoU, GAIL and Chubu shall mainly explore possibilities for collaboration in the area of joint LNG procurement. Besides, the two companies will also seek to collaborate on shipping optimization. Chubu and GAIL are large LNG importers having considerable synergy between their LNG business profiles. It is assessed that with GAIL joining hands with Chubu for jointly pursuing LNG procurement and other allied business opportunities, such a collaboration shall augment GAIL's efforts to aggressively source LNG volumes on competitive terms and would be a win-win proposition for both companies. GAIL's latest move is also in sync with the company's recent efforts in establishing and promoting Asia LNG Forum, a sort of Asian LNG buyers' club. GAIL is also actively working towards establishing a regional gas trading hub for Asia as well as an Asian gas index. This MoU with Chubu is yet another effort by GAIL towards bridging the gap in demand supply of natural gas in the Indian market. This is in addition to other initiatives of GAIL towards LNG sourcing, creating LNG regasification infrastructure, reserving liquefaction tolling capacity in overseas projects and augmenting transmission capacity significantly over the next few years. GAIL will continue to make efforts to tie-up affordable LNG in its portfolio to meet the rapidly growing energy demand of the Indian market. Speaking during the inaugural Ministerial session of the Gastech B. C. Tripathi, CMD, GAIL, highlighted the enormous potential for gas demand in Asia and said that despite being the largest importer of LNG, Asian market is paying premium for LNG. On way forward for Asia, he emphasized the need for developing synergies among Asian countries by promoting cross border pipelines to bring gas from central Asia, interlink Asian countries through gas pipelines and also promoting Asian Co-operation Forum to address Asian Gas Grid and Asian LNG forum and AsiaHub/index. He also said that in times to come, Asian market will prefer suppliers who have reliable/diverse source of supply and can offer transparent and competitive pricing methodologies. He reiterated that contract with destination flexibilities and innovative pricing including S-curve have become essential as it helps to tap the new demand in Asia by bringing a win-win proposition for both suppliers and buyers. Chubu is one of the largest importers of LNG in Japan, and has significant presence across gas value chain including upstream assets, liquefaction capacity and regascapacity. The company procured ~10 MMTPA LNG in 2013. It operates 5 LNG terminals in Japan, and has contracted liquefaction capacity (based on equity participation) in Gorgon and Ichthys LNG projects in Australia, and has acquired 2.2 MMTPA liquefaction tolling capacity in the 1^st train of Freeport LNG Liquefaction, LLC, US. Chubu has also made a foray in the LNG shipping industry, and presently has a fleet of 3 LNG carriers under construction which are likely to be delivered in 2014 / 2015. (www.business-standard.com)

March 21, 2014. Land acquisition issues and stiff opposition by the Tamil Nadu government has disrupted a key section of GAIL India's ambitious ` 3,400 crore Kochi-Kuttanad-Bangalore-Mangalore gas pipeline project. The state-run firm has scrapped a supply contract worth ` 250 crore awarded to engineering firm Fabtech for building 300 km of the 900 km pipeline. The pipeline links Petronet LNG's new liquefied natural gas (LNG) terminal in Kochi with Bangalore. It will ultimately be connected with the natural gas grid and will pass through Coimbatore, Tirupur, Salem, Erode, Namakkal, Dharmapuri and Krishnagiri districts. Earlier, Tamil Nadu's Chief Minister J Jayalalitha said the project was anti-farmer. The state stopped GAIL from implementing the project as it passed through farm land in seven districts of Tamil Nadu. The state's notification was quashed by the high court, but the Tamil Nadu government and a farmer body challenged the order in the Supreme Court, which asked GAIL India in January to maintain status quo. It also issued a notice seeking to know its stand on land acquisition within the next four weeks. The bench also asked GAIL to explain why the project had to acquire farm land and why could the project not come up along the national highway instead. (economictimes.indiatimes.com)

March 25, 2014. The Election Commission ordered deferment of an increase in gas prices that was to take effect from April 1, saying that the decision should be left to the government that's formed after the general election, with the Aam Aadmi Party's Arvind Kejriwal taking credit for the move. The decision will put consumers and producers such as Reliance Industries and ONGC in a quandary because the hike has been stalled after the oil ministry's notification that the new rates would apply from the start of next month. Oil Minister Veerappa Moily said that the Commission had taken a decision after a review of the proposal. Moily said he had done his duty as oil minister to the best of his ability and that the gas price revision was aimed at boosting exploration and production activity and making the sector more attractive to foreign investors. According to government, the commission also asked the oil secretary to put off the price increase because the matter is sub judice as there's a case related to it in the Supreme Court. Kejriwal said his party was the only one that had raised the issue with the poll watchdog. Election Commission asks Oil Ministry to defer new gas price till poll ends. (economictimes.indiatimes.com)

March 24, 2014. Reliance Industries Ltd (RIL) said it will from next month charge consumers of its KG-D6 gas on changed terms as the gas pricing formula to be implemented from April has components that will result in rate on gross calorific value basis. RIL currently charges consumers the government fixed rate of USD 4.205 per million British thermal unit on Net Calorific Value (NCV) basis. One Gross Calorific Value (GCV) equals to 0.9 NCV and so on a like to like basis consumers will have to pay 10 per cent more price if billed on GCV basis rather than on NCV. The Rangarajan formula of pricing natural gas at an average of international hub rates and actual cost of importing LNG into India does not specify pricing the fuel on GCV or NCV basis. Currently, almost all domestically produced gas is priced on NCV basis. (economictimes.indiatimes.com)

March 21, 2014. Reliance Industries Ltd (RIL) dubbed as a "canard" allegations that the near-doubling of natural gas prices will lead to a similar hike in domestic cooking gas (LPG) and inflation in food item rates. RIL said gas from its eastern offshore KG-D6 field is not used to manufacture LPG and as such the increase in rates from next month will have no bearing on the price of the cooking fuel. Also, goods carriers used for transporting food items do not run on natural gas and will not be impacted by the gas price increase. The video produced by the company, recorded in the format of a news broadcast, seeks to counter propaganda by the Aam Aadmi Party (AAP), which had opposed the decision to almost double natural gas rates to US $ 8 per million British thermal units, saying it would lead to a windfall for RIL and hit the common man hard. Stating that the truth about natural gas pricing and its impact deserves to be understood, it said LPG is manufactured from compounds called propane and butane, which are not present in KG-D6 gas. LPG is manufactured from crude oil in refineries and "there is no relation between LPG prices and natural gas rates," it said, adding that natural gas prices have not been revised during the past five years even though LPG rates have gone up to about ` 450 per cylinder from ` 280. Without naming anyone, the company said some people did not want to present facts and want to mislead people for their narrow political propaganda aimed at garnering votes in the election season. (economictimes.indiatimes.com)

March 21, 2014. The department of fertilizer is worried that the government has not increased its subsidy in the interim budget although gas prices will double next month, but the oil ministry has turned down its request for cheaper gas as the department was involved in the Cabinet's decision to raise gas rates. Gas customers are worried about both the falling output of natural gas from Reliance Industries-operated KG-D6 block as well the new pricing formula that will double gas price to about $8.4 per unit from April 1. (economictimes.indiatimes.com)

March 21, 2014. Losses to be borne by Indian Oil Corporation (IOC) and other retailers of diesel, kerosene and cooking gas may quadruple to ` 3,700 crore in this financial year as the finance ministry is unwilling to provide additional subsidy. IOC, HPCL and BPCL together are projected to lose about ` 1,41,000 crore in revenue this financial year on selling diesel, LPG and kerosene at rates set by the government. Of this shortfall, the finance ministry is willing to provide no more than ` 72,800 crore. Another ` 64,500 crore will come from upstream firms such as ONGC, leaving ` 3,700 crore to be absorbed by the three state-owned fuel retailers. The loss they will bear is four times more than the ` 900 crore hit taken by IOC, BPCL and HPCL in 2012-13. The finance ministry had given the fuel retailers ` 27,772 crore in cash as subsidy for selling diesel, cooking gas and kerosene below cost in the first nine months of 2013-14. It will provide another ` 10,000 crore this financial year and will roll over ` 35,000 crore to 2014-15. ONGC and other upstream firms, which provided about ` 47,972 crore as subsidy support during April-December, will give a little less than ` 6,530 crore in the fourth quarter. Finance Minister P Chidambaram provided ` 65,000 crore towards fuel subsidy in his interim budget for 2014-15. This includes ` 35,000 crore carried over from the current fiscal, leaving only 30,000 crore for 2014-15. (economictimes.indiatimes.com)

March 21, 2014. Gujarat Gas Co Ltd (GGCL) has won a licence to retail CNG to automobiles and piped cooking gas to households in Bhavnagar in Gujarat, the oil regulator PNGRB has said. The Petroelum and Natural Gas Regulatory Board (PNGRB) said GGCL is authorised to lay, build, operate or expand city or local natural gas distribution network in Bhavnagar. GGCL can lay pipelines to transport gas and set up retail stations for selling compressed natural gas (CNG) in an area of 8,153 square kilometres. GGCL, which beat Gujarat government firm GSPC Gas Co Ltd to win the licence, will have exclusive rights to retail CNG and piped cooking gas in Bhavnagar for 5 years. PNGRB had in July 2010 invited bids for giving licences for retailing CNG to automobiles and piped cooking gas to households in eight cities in West Bengal, Gujarat, Punjab and Haryana. These included Asansol-Durgapur (in West Bengal), Bhavnagar, Ghandhidham-Anjar, Bhuj-Mundra and Jamnagar (all in Gujarat), Ludhiana and Jalandhar (in Punjab) and Panipat (in Haryana). PNGRB in February 2011 opened bids seven cities offered in the third round of CGD bidding. GGCL and GSPC Gas were the only two firms to have bid for Bhavnagar. It had invited bids for licences in 2009 for 13 cities in first two rounds. GAIL Gas Ltd, a unit of state gas utility GAIL India Ltd, walked away with four of the six cities offered in round one. It won Sonepat in Haryana, Dewas in Madhya Pradesh, Meerut in Uttar Pradesh and Kota in Rajasthan while Bhagyanagar Gas Ltd got Kakinada in Andhra Pradesh and DSM Infratech Mathura in Uttar Pradesh. (economictimes.indiatimes.com)

March 20, 2014. BP Plc and Niko Resources, partners of Reliance Industries Ltd (RIL) in the controversial KG-D6 block, may formally join ongoing arbitration proceeding between RIL and the government so as to be able to furnish bank guarantees and raise gas prices from April 1. The consortium informed oil ministry in a recent meeting that BP and Niko were willing to join the arbitration. BP holds 30% interest in RIL-operated KG-D6 block, Niko holds 10% and balance is held by RIL. Reliance has initiated an arbitration case against a penalty imposed by the government because of declining output from the KG-D6 gas field. Government say BP and Niko need to join the arbitration proceedings, or RIL will have to furnish bank guarantees on behalf of its partners to help them get new rates. The government was not in a position to take bank guarantees from BP and Niko without their formal involvement in the arbitration because the Cabinet approved taking bank guarantees as a hedge against arbitration initiated by RIL. If guarantees were furnished by BP and Niko, who are not parties to the arbitration case, the bank guarantee could neither be encashed nor returned, they had said. Thus the two foreign companies would have to take part in the arbitration before the government could accept their guarantees. After reviewing the applicability of its June 2013 decision to have a uniform gas price across the country based on the Rangarajan formula, the Cabinet allowed Reliance Industries to charge new rates against bank guarantees. The oil ministry is still working out modalities to take bank guarantees from RIL. The bank guarantees will be encashed by the government if Reliance loses the case in arbitration, which is pending since Nov 2011. BP and Niko had earlier disagreed with the oil ministry's interpretation of the cabinet decision but may have come around to avail of the new prices. (economictimes.indiatimes.com)

March 19, 2014. Reliance Industries Ltd (RIL) is directly reaching out to aam admi with text messages on people's cellphones, in a bid to counter Arvind Kejriwal's relentless attacks on RIL chairman Mukesh Ambani. The text message from 'Team Reliance' to the public urges people to click on a link to read three documents titled "In the court of people", "KG gas — the flame of truth" and "Why KG gas matters to you". These documents were emailed to journalists last week in response to allegations by Kejriwal, the leader of the Aam Aadmi Party and activist lawyer Prashant Bhushan. The documents question the credentials of former cabinet secretary TSR Subramanian, on the basis of whose complaint Kejriwal had ordered an FIR against Ambani, Petroleum Minister Veerappa Moily and others for alleged collusion to raise gas prices. The text messages, sent through BPL's mobile network in Mumbai from 'LM522644' urges the recipient, to "see and share" the documents in a weblink that leads to the online presentation-sharing platform Slideshare. Kejriwal is opposing the government's decision to adopt a new pricing system that would double gas rates from April 1. He alleges both Bharatiya Janata Party and Congress are backing Ambani as both parties are, in his world-view, beholden to India's richest man, because of his financial clout. The government has justified its decision saying higher prices were necessary to lure investment in exploration and increase domestic production, without which the country will be forced to increase import of liquefied natural gas (LNG), which costs twice as much as the estimated new gas price. RIL, ONGC and the petroleum ministry have argued that many gas fields are not commercially viable at the current price. RIL has also rubbished claims that it was producing gas at a cost of less than $1 and selling it at a much higher price. It says the biggest beneficiary of higher rates would by ONGC as RIL accounted for only a small part of the country's gas output. The increase in gas prices has been strongly opposed by power firms also but Reliance Industries says the impact would not be harsh because gas-fired plants provide barely 5% of the electricity generated in India. Critics have also argued that transportation costs would rise because compressed natural gas (CNG) will cost more. Reliance Industries says this fuel is used in only 3% of vehicles. The remaining vehicles run on petrol and diesel, whose prices have been rising steeply for years. (economictimes.indiatimes.com)

POWER

March 25, 2014. The Simhadri power station of the NTPC here is expected to generate about 14,720 million units this year, surpassing the last year generation of 12,663 million units. Simhadri station stands first among all NTPC coal stations in auxiliary power consumption (APC) and lowest trip/1000 hours of operation per unit. The Plant Load Factor (PLF) will be around 84 per cent this year and the main reason for shortfall was coal shortage. The station availability factor is expected to be 91 per cent. The Simhadri unit of the NTPC was the first coastal coal fired thermal power project. The total capacity of the unit is 2,000 MW (stage one 2x500 and stage II 2x500 MW) and the total coal requirement this year is 120 lakh metric tonnes. This year the station received 100 lakh metric tonnes of coal as against last year receipt of 90 lakh metric tonnes. Efforts are on to receive total requirement of 120 lakh metric tonnes with the support of imported coal. The NTPC will take up 4,000 MW (5x800 MW) power station at Pudimadakka in the district and it will require 1,500 acres of land, which will be provided by the Andhra Pradesh Industrial Infrastructure Corporation. The NTPC board has given its clearance for going ahead with the land acquisition for the project. (www.business-standard.com)

March 24, 2014. Reliance Power has commissioned the third 660 MW unit of its Sasan ultra mega power project (UMPP) in Madhya Pradesh. The balance three units are in advanced stages of construction and will be commissioned over the next few months, the company said. Coal production has already commenced from the 20 million tonnes Moher and Moher-Amlohri coal mines associated with the power project. With this unit, Reliance Power's generation capacity has increased to 3,865 MW which includes 3,780 MW of thermal capacity and 85 MW of renewable energy based capacity. The first 660-MW unit of the Sasan UMPP was commissioned in March 2013 while the second unit was commissioned in January 2014. (www.business-standard.com)

March 23, 2014. The last dates for submission of final price bids for the two ultra mega power projects (UMPPs) in Tamil Nadu and Odisha have now been extended as interested parties want more time to evaluate the tender norms. The last date for filing RFP (Request for Proposal) for the Tamil Nadu (in Cheyyur) project is now April 23, 2014 and Odisha (in Bedabahal) project is May 7, 2014. Earlier, the final price bid submission date for the UMPPs was February 26. NTPC, Tata Power, NHPC, Adani Power, JSW Energy, Jindal Power, Sterlite Infraventures, CLP India and Larsen & Toubro had submitted applications for the Odisha project. NTPC, Adani Power, CLP India, GMR Energy, Jindal Power, JSW Energy, L&T and Sterlite Infraventures had submitted bids for the Cheyyur UMPP in Tamil Nadu. Odisha UMPP is a pit-head power project. Based on domestic coal to be sourced from allocated captive coal blocks, it is expected to cost around ` 25,000 crore. The Cheyyur UMPP is a coastal power project, based on imported coal, with an expected investment of about ` 24,200 crore. The preliminary bids for these projects were invited, after the government revised the existing Standard Bidding Documents (SBDs). Under the revised norms, any escalation in cost of fuel will be passed on to the consumer as higher tariff and the companies executing projects will have to mandatorily source equipment from domestic manufacturers. Am UMPP is a thermal power project of at least 4,000 MW capacity. So far, four UMPPs have been awarded. Of this, Sasan (Madhya Pradesh), Krishnapatnam (Andhra Pradesh) and Tilaiya (Jharkhand) have been bagged by Reliance Power. Tata Power is operating the Mundra UMPP in Gujarat. (www.business-standard.com)

March 20, 2014. SJVN Ltd said its Rampur hydroelectric project in Himachal Pradesh has started generating power and will operate at full capacity by June. The 412 MW Rampur project has commenced power generation with the synchronisation of its first 68.67 MW unit with the Northern Grid, the company said. The project will now be able to supply electricity to the northern transmission grid. The first three units will start power generation during the current financial year, while the remaining three units will be commissioned by June. Once the project is fully operational, it will generate 1,770 million units of electricity per annum, of which 30 per cent will be supplied to Himachal Pradesh. As the home state, Himachal will also get 12 per cent free power from the plant. At present, SJVN's installed capacity is 1,547.6 MW, including 1,500 MW in hydropower and 47.6 MW from wind plants.

SJVN is a joint venture between the Indian government and the Himachal Pradesh government formed to execute, operate and maintain hydroelectric power projects. The company is implementing 10 hydroelectric projects in the states of Himachal Pradesh, Uttarakhand, Nepal and Bhutan. SJVN's flagship 1,500 MW Nathpa Jhakri hydropower station has generated 7,096 million units of electricity so far this financial year. (profit.ndtv.com)

March 25, 2014. A turnaround in the power transmission industry has helped makers of electrical equipment such as power cable and high-voltage switchgear increase sales in the second half of this fiscal. The Indian Electrical and Electronics Manufacturers' Association (IEEMA) stated that electrical equipment industry has shown some revival in the first half of the current fiscal, after a negative growth of 7.8 per cent in production in 2012-13. Industry insiders said they are confident that the trend will continue next fiscal despite the country's sluggish improvement in adding power generation capacity, on the back of growth in demand from ongoing and upcoming transmission projects. Power transmission and distribution (T&D) projects help equipment cos revive sales Power Grid Corporation of India (PGCIL), which dominates transmission activities, has revised its budget outlay by 15 per cent for the 13^th Five-year Plan while state utilities, too, are augmenting their respective networks to reduce transmission losses. While developers are struggling to commission and operate their power projects due to rising costs of fuel and inability of electricity purchase by distribution companies whose losses are accumulated to nearly ` 2 lakh crore, equipment makers that built their capacities in the past few years are eyeing opportunities in transmission projects. Alstom Grid, a power equipment division of French conglomerate Alstom, expects investments in grid to grow fastest in the value chain of power sector by 2020. Alstom T&D India has secured a Euro 20.1 million (` 161 crore) contract from Powergrid for the extension of air-insulated substations (AIS) at 14 sites across five states, and 765 kV reactors at Bhiwani. The expansion will reduce transmission line overloading and improve grid stability in North India. The turnkey project covers the design, manufacturing, supply, erection, testing and commissioning of 765 kV, 400 kV and 220 kV AIS equipment, 765 kV reactors for Bhiwani and 50 MVAR shunt reactor for one of the substations, all with civil works. The equipment for the project will be manufactured at Alstom T&D India's manufacturing facilities across India. (economictimes.indiatimes.com)

March 19, 2014. Lack of electricity may play the spoiler in a clutch of states, including the key electoral battleground of Uttar Pradesh (UP), in the run-up to the Lok Sabha elections. The northern grid to which these states belong does not have the required electricity transmission corridor for sourcing power from the western region. While states across the country are gearing up to provide round-the-clock electricity for the 16^th Lok Sabha elections, the northern grid comprising UP, Punjab, Rajasthan, Haryana, Delhi, Himachal Pradesh, Uttarakhand, Jammu and Kashmir and Chandigarh can only source 44 MW under the short-term market from the western grid. These eight states account for 146 of the 543 seats in the Lok Sabha and have been blamed for India’s worst grid failure. Of these, UP sends the maximum number of 80 lawmakers to the Lower House, followed by Rajasthan (25). The trade in electricity sees a spike during elections as states, fearful of a political backlash, buy additional power to avoid outages. India has an inter-regional electricity transmission capacity of 37,000 MW, of which only 17,000 MW can be transferred. Investments in transmission and distribution have not kept up with investments made in power generation. While the country has an installed power generation capacity of 234,000 MW, the daily generation is only about 125,000 MW. The northern grid is the largest of the five regional power grids in India. The other grids are—southern, eastern, north-eastern and western. (www.livemint.com)

March 24, 2014. The Delhi High Court (HC) directed three discoms of Tata Power and Reliance ADAG to comply with its single judge's order and fully cooperate with the Comptroller and Auditor General (CAG) in the audit process. The court also did not grant any interim relief to the discoms - Tata Power Delhi Distribution Ltd (TPDDL) and Reliance Anil Dhirubhai Ambani Group firms, BSES Rajdhani Power Ltd and BSES Yamuna Power Ltd - and said, "You comply with the orders." It passed the order while listing for May 1 the appeals of the discoms against the single judge's order and a PIL filed by an NGO seeking CAG audit of their accounts. The court directed the discoms to complete the pleadings, filing of affidavits and counter affidavits, before May 1 in their respective appeals. The discoms have moved the larger bench of the court against its single judge's January 24 order refusing to stall the CAG audit of the discoms and asking them to cooperate with the top auditor by furnishing the details sought. The single judge had said that the report of the audit will not be released without the court's permission. (www.business-standard.com)

March 21, 2014. With the general elections round the corner, implementation of power tariff hikes by distribution utilities in FY15 could remain limited across the states, ratings agency ICRA said. According to ICRA, states are likely to emulate the tariff subsidy in Delhi, Haryana and Maharashtra. The subsidy dependence projected by the utilities for FY15 continues to remain significant across majority of the states, varying from 13 per cent to 26 per cent of the annual revenue requirement projected by utilities. While discoms in states such as Andhra Pradesh, Gujarat, Odisha and Uttarakhand have proposed fairly stiff tariff revisions in the range of 15-26 per cent, Haryana, Punjab, J&K and MP have not proposed any tariff revision for FY15. According to ICRA, the revenue gap projected for FY15 has been quite significant for the utilities in a few states considering the increase in cost of power procurement and other O&M expenses, etc. (economictimes.indiatimes.com)

March 21, 2014. Gujarat government has banned state-based companies from sourcing electricity from other states, a move that will compel them to buy costlier power from government-run utilities. The decision, ahead of the general elections beginning next month, will affect companies across industries such as Reliance Industries, Nirma, Larsen & Toubro, Hindalco, Apollo Tyres, Sun Pharma, Petronet LNG, Gujarat Florochemicals, United Phosphorus and Alembic. Companies say their costs will rise by at least ` 2.75 a unit of electricity, as they will have to pay close to ` 7 for a unit of electricity supplied by state-run utilities, against ` 4.25 they were paying earlier. Gujarat-based industries import close to 1,000 MW power from other states through trade on electricity exchanges, while state-run utilities have almost 2,500 MW of idle generation capacity. (economictimes.indiatimes.com)

March 20, 2014. Nationalisation of retail liquor trade, no power tariff hike for the next five years on top of 24-hour power supply in three years’ time, house sites and housing loans at a cheaper rate to middle class families are some of the promises made by the Loksatta Party in its ‘people’s manifesto’ released. (www.business-standard.com)

March 20, 2014. NTPC will make a presentation within a week to electricity regulator CERC to consider its case against the new 5-year tariff regulations. The Delhi High Court asked Central Electricity Regulatory Commission (CERC) to consider and decide on the NTPC representation against the regulations that would take effect from April 1. As per the regulations notified by CERC, there will be changes with regard to tax and calculation of incentives for thermal power plants. The regulations also require thermal plants to calculate incentives based on plant load factor (PLF) rather than plant availability factor (PAF). The PAF is the declared capacity or the total generation capacity of the plant, whereas PLF is the actual generation which is based on the demand. (www.business-standard.com)

March 19, 2014. The city government told the Delhi High Court that erstwhile Arvind Kejriwal-led cabinet's decision to give 50 per cent waiver on power arrears of people who did not pay their bills from October 2012 to December 2013 cannot be implemented due to non-allocation of funds for the same in the budget for 2013-14. Delhi government said no provision was made in the budget to release funds, to the tune of ` 6,821 crore, for providing the one-time relief to the electricity consumers who did not pay their bills. (economictimes.indiatimes.com)

March 19, 2014. India's electricity consumption is expected to rise to around 2,280 BkWh by 2021-22 and 4,500 BkWh (billion kilowatt hours) by 2031-32, according to Forest College and Research Institute at nearby Mettupalayam. In a release issued by the institute on the eve of a two-day national workshop on 'Dendro Biomass Based power generation,' it said that concomitant to the real GDP growth of 8.7 per cent in the last five years, per capita energy consumption has increased from 1,204 KWh in 1970-71 to 6,419 KWh in 2011-12, with an annual growth of 4.06 per cent. However, India is not well endowed with conventional energy resources like oil gas or uranium. Coal is abundant but regionally concentrated and of low calorie and high ash content, it said. Under such circumstances, India rightly shifted focus to tapping renewable power generation and currently installed power generation capacity is higher with coal at 58.3 per cent, followed by hydro 17.7 per cent, renewable energy 12.3 per cent, gas nine per cent, nuclear 2.1 per cent and oil 0.5 per cent, the release said. (economictimes.indiatimes.com)

OIL & GAS

March 24, 2014. Santos Limited announced that natural gas production has commenced ahead of schedule and on budget from the Peluang gas project offshore East Java in Indonesia. The project is expected to have gross peak production of 25 million standard cubic feet per day. Santos said Peluang first production represented the delivery of another project into the company’s expanding Asian portfolio. Santos said Peluang gas will be used by domestic consumers in East Java, Indonesia, as is the case with other gas produced by Santos in East Java. (www.rigzone.com)

March 23, 2014. Libya has cut production at the southwesterly el-Feel oilfield to between 50,000 and 60,000 barrels a day from 80,000 due to a pipeline problem, the National Oil Corp (NOC) said. Engineers closed a pipeline valve after pressure had built up too strongly, the NOC said. El-Feel, which has a capacity to pump 130,000 bpd, is operated by Mellitah – a joint venture between NOC and Italy's Eni. (www.rigzone.com)

March 22, 2014. Anadarko Petroleum Corp. (APC) officials urged BP Plc to drill deeper into the Gulf of Mexico well that caused the worst offshore oil spill in U.S. history even after BP warned that doing so would be unsafe. A BP executive and a geologist working on the Macondo well rejected Anadarko’s urging to deepen the well, according to e-mails sent the week before the April 2010 deep-sea blowout. BP officials said in the e-mails, unsealed in lawsuits over the spill, that the well’s condition “provided for little to no margin to continue drilling” safely. (www.bloomberg.com)

March 21, 2014. Oil Basins Limited, an Australia-focused oil and gas exploration company, reported that the company wish to make the following ASX announcement to keep the market fully informed about the grant of Derby Block in Western Australia. The Western Australian Department of Mines and Petroleum (DMP) has confirmed to the Company after the close of trading that the Grant of Derby Block as Permit EP 487, has been made for a period of 6 years. (www.rigzone.com)

March 20, 2014. China's CNOOC Limited made a new mid-sized gas discovery Lingshui17-2 when drilling the deepwater exploration well in Qiongdongnan Basin in South China Sea recently, the company said. Lingshui17-2 is located in the east Lingshui Sag in deepwater area of Qiongdongnan Basin, with an average water depth of about 4,757 feet (1,450 meters). The discovery well Lingshui17-2-1 is drilled and completed at a depth of 11,515 feet (3,510 meters) and encountered the gas reservoir with a total thickness of about 180 feet (55 meters). (www.rigzone.com)

March 20, 2014. BP Plc’s bids for its first new U.S. offshore leases in two years aren’t expected to add any barrels of production until the middle of the next decade. The owner of the deep-water Macondo well that spewed millions of barrels of crude into the Gulf of Mexico during a 2010 blowout was the highest bidder on 24 blocks offered for lease by the Interior Department. The tracts are part of an area twice the size of Maine that attracted more than $1 billion in bids from oil and natural gas producers. BP’s 31 bids had a total value of $53.8 million; its 24 winning bids amounted to $41.6 million, bureau records showed. Fifty oil companies bid on 326 blocks offered, with winning bids in the auction totaling $851 million. High bids opened will be evaluated by government officials before the leases are formally awarded. BP, which counts on the U.S. section of the Gulf for one in every seven barrels of oil it produces worldwide, is still recovering from the aftershocks of the Macondo blowout that killed 11 rig workers, fouled the ocean for months, crippled exploration and so far has cost BP $28.5 billion for everything from skimming crude from seawater to testing seafood to bankrolling tourism advertisements. (www.bloomberg.com)

March 19, 2014. Norway's Statoil has discovered gas near the Visund field in the North Sea, the Norwegian Petroleum Directorate (NPD) reported. The discovery is estimated to amount to between 3.2 million and 12.6 million barrels of recoverable oil equivalent. The NPD said that wildcat well 34/8/17-S – located on the northeast flank of the Visund field on production license 120 in the northern part of the North Sea – was drilled to prove petroleum in Lower Jurassic reservoir rocks. A secondary exploration target was to prove petroleum in Lower Jurassic and Upper Triassic reservoir rocks. The well encountered a gross gas column of approximately 102 feet in the Tarbert, Ness and Etive formations in the Middle Jurassic – with around 65 feet being in sandstones of very good reservoir quality, the NPD said. (www.rigzone.com)

March 19, 2014. A joint venture (JV) of China National Petroleum Corp (CNPC) and domestic companies has started drilling its first shale gas well in the southwest Sichuan province, CNPC said. Sichuan Changning Natural Gas Development Co started drilling the Changning H3-6 well in Changning block and is expected to finish drilling in 70 days, CNPC said. Sichuan Changning Natural Gas Development Co was founded in Dec 2013 by CNPC, Sichuan Energy Investment Co, Yibin State Assets Operation Co and a Beijing investment fund. The company is China's first joint venture by an oil major and domestic companies dedicated for shale gas development, it said. CNPC, parent of PetroChina, plans to drill some 50 shale gas wells in Changning block this year. Shale gas production in Changning block is expected to be 1.0 billion cubic metres in 2015, it said. Changning block, spanning 4,200 square kilometres, is in one of China's most promising shale gas development areas. CNPC said the company planned to open six business areas to private investors, including unconventional oil and gas exploration and development. China's total shale gas output topped 200 million cubic metres in 2013, according to the Ministry of Land and Resources. The government has set its shale gas production target at 6.5 billion cubic metres in 2015. China, believed to hold the world's largest resources of shale gas, hopes to replicate the production success of the United States, but faces huge technological and environmental challenges because of its more complex geology and water scarcity. (www.rigzone.com)

March 20, 2014. Russia's top oil producer Rosneft has tendered to sell 570,000 tonnes of fuel oil and 550,000 tonnes of high-sulphur content diesel in 2014, according to the tender document seen. Both tenders were for fuel produced at the company's 340,000 barrel-per-day Ryazan refinery near Moscow. Rosneft offered 550,000 tonnes of 350ppm (parts-per-million) diesel for sale between April and October 2014 on a free-on-board (fob) basis out of Baltic Sea and Black Sea ports or the Russian land borders in cargoes of around 30,000 tonnes. The tender closes on March 31. It also offered 570,000 tonnes of fuel oil between May and December 2014 on a fob basis out of Black Sea ports. The tender closes on March 26. Rosneft tendered to sell around 300,000 tonnes of 50ppm gasoil per month between April and October for delivery to the Black Sea and the Baltic Sea. The Ryazan refinery refined 17.3 million tonnes of oil, producing 4.1 million tonnes of diesel, 3.3 million tonnes of gasoline and 1.1 million tonnes of jet fuel. (www.downstreamtoday.com)

March 25, 2014. No business has as much at stake as BP Plc, as the crisis in the West’s relations with Russia escalates. The British oil company, whose shares are down 6 percent since Putin deployed troops in Crimea, holds the single biggest foreign investment in Russia - a 20 percent stake in OAO Rosneft it acquired last year. U.S. sanctions against oil-trading billionaire Gennady Timchenko showed willingness to target Russia’s most important industry and Vladimir Putin’s closest associates. (www.bloomberg.com)

March 25, 2014. The closing of the Houston Ship Channel after a fuel spill is idling vessels that carried a record amount of U.S. natural gas liquids (NGLs) exports last year, raising questions about the need for geographic diversity in the burgeoning market. Most U.S. capacity to export NGLs is on the channel. The U.S. averaged 475,000 barrels a day of exports in 2013, up from 164,000 in 2010, according to Energy Information Administration data. Two companies, Enterprise Products Partners LP and Targa Resources Partners LP, have channel operations that combine to represent 380,000 barrels a day of export capacity. Authorities hoped to open part of the 52-mile (83-kilometer) channel, the U.S. Coast Guard said. The channel was shut March 22 when a vessel and barge collided close to where the waterway meets the Gulf of Mexico, spilling about 4,000 barrels of bunker oil. (www.bloomberg.com)

March 24, 2014. MDU Resources Group Inc is looking for more natural gas producers to sign up to use a planned $650 million pipeline that would transport the fuel through North Dakota to Minnesota, the company said. The company in January launched a 120-day period for prospective customers of the pipeline, the largest project in the company's history, to sign supply agreements to transport natural gas. (www.downstreamtoday.com)

March 21, 2014. Britain will begin this year to import gas from Russia under a formal contract for the first time, just as European calls to loosen Moscow's grip on energy supply mount because of the crisis over Ukraine. The country's biggest utility Centrica signed a deal in 2012 with Russian state-controlled Gazprom to import 2.4 billion cubic metres of gas over a period of three years, and the supplies will begin flowing in October. (www.downstreamtoday.com)

March 21, 2014. Kinder Morgan Energy Partners LP said its routinely overbooked Trans Mountain oil pipeline system between Alberta and the Pacific Coast is oversubscribed by 64 percent for April, meaning that shippers will only be able to deliver 36 percent of nominated volumes. The company said system throughput ex-Edmonton will be 288,087 barrels per day (bpd) for the Trans Mountain Mainline, 141,674 bpd for the Puget Sound line, and 73,286 bpd for Westridge Dock. (www.downstreamtoday.com)

March 20, 2014. Egypt is in talks with foreign companies including Algeria's Sonatrach to secure natural gas imports to run power plants this summer, Oil Minister Sherif Ismail said. Egypt has LNG plants and a pipeline to export gas, but it has no facilities to import LNG. Talk since last autumn from the army-backed interim government of securing an LNG import terminal has not yet resulted in any tender. The government saw Algeria as an option for gas imports as political tensions with gas giant Qatar cut off a lifeline Egypt enjoyed last summer, before the army ousted Islamist President Mohamed Mursi. Egypt, an oil- and gas-producing country of 84 million, has faced perennial summer energy shortages in recent years. The government has been unusually frank about the extent of the crunch it faces this summer - a problem linked to political turmoil and energy sector mismanagement. Egypt would need to import an additional $1 billion worth of petroleum products and secure significant natural gas supplies to get through the hot summer months. Egypt agreed to import Algerian gas during Mursi's year in office. But it was gifted LNG cargoes from Qatar, a close ally of Mursi and his Muslim Brotherhood, that helped Cairo cover its export commitments to foreign firms last year as Egypt diverted gas to cover its soaring domestic demand. (www.downstreamtoday.com)

March 25, 2014. The Crimean crisis is poised to reshape the politics of oil by accelerating Russia’s drive to send more barrels to China, leaving Europe with pricier imports and boosting U.S. dependence on fuel from the Middle East. China already has agreed to buy more than $350 billion of Russian crude in coming years from the government of President Vladimir Putin. The ties are likely to deepen as the U.S. and Europe levy sanctions against Russia as punishment for the invasion of Ukraine. Such shifts will be hard to overcome. Europe, which gets about 30 percent of its natural gas from Russia, has few viable immediate alternatives. The U.S., even after the shale boom, must import 40 percent of its crude oil, 10.6 million barrels a day that leaves the country vulnerable to global markets. The alternatives to Russia also carry significant financial, environmental and geological challenges. Canada’s oil sands pollute more than most traditional alternatives, while Poland’s promising shale fields have yet to be unlocked. The biggest oil finds of the past decade are trapped under the miles-deep waters offshore Brazil and West Africa. (www.bloomberg.com)

March 21, 2014. European Union (EU) leaders want a road map by mid-year for reducing reliance on Russian natural gas as they seek to punish Russia for its annexation of Crimea, according to a draft EU document. The EU’s 28 chiefs plan to ask the European Commission, the bloc’s executive arm, to outline within three months ways to diversify energy sources away from Russia, which is the main supplier of gas and oil to Europe. The crisis in Ukraine, a transit country for Russian energy consumed by the EU, is set to dominate a two-day meeting of prime ministers and presidents in the European Council. The EU’s energy dependency rate is set to rise to 80 percent by 2035 from the current 60 percent, according to the International Energy Agency. Gas from Russia accounted for almost 32 percent and oil for about 35 percent of the bloc’s imports in 2010, according to EU data. (www.bloomberg.com)

March 21, 2014. Mexican companies are racing to be first in line to invest in the country’s energy industry even before lawmakers pass final legislation that would end a 76-year state monopoly. Alfa SAB, owner of Mexico’s largest petrochemicals producer, sold $1 billion of bonds to help fund its energy business and refinance debt.

State-owned Comision Federal de Electricidad plans to take advantage of the legal changes to sell natural gas, Chief Executive Officer Enrique Ochoa said. Former President Vicente Fox is creating a fund that aims to raise $500 million to invest in the country’s oil and power sector. (www.bloomberg.com)

March 21, 2014. Asian spot liquefied natural gas (LNG) prices may have bottomed out as Japanese buyers stepped back into the market to prepare for peak summer demand. Prices for May delivery rose to around $16.50 per million British thermal units (mmBtu), from $15.70 per mmBtu. Prices had fallen over the past month after topping $20 mmBtu due to limited spot supply and stockpiling after a cold winter. Malaysia's Petronas secured around 18 LNG cargoes of Nigerian origin from Portuguese utility Galp Energia in a tender. Galp launched the tender to sell up to 30 LNG cargoes from Nigeria's Bonny Island liquefaction plant over a period of five years, with 4-6 cargoes offered each year. (www.downstreamtoday.com)

March 21, 2014. German Chancellor Angela Merkel said that imports of U.S. shale gas could eventually be an option for European countries seeking to diversify their energy sources but the United States must first build the infrastructure to export. Many people think that this could be one component, if the United States decided to export shale gas, she said after European Union leaders discussed how to diversify energy sources away from reliance on Russian oil and gas. (www.downstreamtoday.com)

March 20, 2014. U.S. energy regulators approved a plan by a unit of Energy Transfer Partners LP to build a natural gas pipeline from Texas to Mexico. The U.S. Federal Energy Regulatory Commission (FERC) issued a presidential permit to Energy Transfer's Houston Pipe Line Co that will allow the company to build the pipeline across the federal border. It is one of several projects proposed by energy companies in the United States to export some of the nation's gas supplies from shale fields to Mexico and other nations.

Energy Transfer said the company expects the project to enter service in the fourth quarter of 2014. The company has not disclosed the cost of the project. (www.downstreamtoday.com)

POWER

March 21, 2014. GE is partnering with Sapphire Electric Company Limited through a Memorandum of Understanding (MoU) to co-create GE Predictivity solutions that will play an integral role in delivering more power to Pakistan, and help close a gap between the country’s power capacity and ongoing electricity demand. The MoU is part of GE’s strategic partnership approach to co-create tailored solutions that will increase the power plant output. GE’s MoU with Sapphire features the co-creation of a package of solutions that will help expand the operational performance of the Muridke Power Station, in Sheikhupura, Punjab, Pakistan. Sapphire expects the upgrades to improve both power plant output and reliability. (pakobserver.net)

March 25, 2014. Work at the power transmission line between Abu Hamad-Atbara in River Nile State began and the project is funded by Qatar by more than $200 million. The 310 km long project is expected to complete in two months. The project is intended to supply electricity to agricultural schemes to secure food for the area, said Eng. Mutaz Musa, Minister of Electricity. He said the project would also supply electricity to several towns in the area besides the agricultural schemes. The Minister welcomed Qatari investments in Sudan stating that relations between the two countries have witnessed remarkable development and would be further boosted over the coming period. He commended Qatar's support for Sudan in various areas including political and economic fields.  This is one of the most important power transmission lines in Sudan, he said. (news.sudanvisiondaily.com)

March 24, 2014. NEC Corp., a Japanese maker of computers and telecommunications equipment, will acquire the grid energy storage business of A123 Systems LLC from China’s Wanxiang Group Corp. for about $100 million. A new company, NEC Energy Solutions, will begin operations in June, Tokyo-based NEC said. A123 will continue to operate its other units, which deal in battery manufacturing and sales, research and development and automotive operations. Wanxiang Group bought the company in January 2013. NEC also plans to set up a joint venture with Wanxiang to develop an energy storage business in China. (www.bloomberg.com)

March 23, 2014. The North Dakota Public Service Commission has slated a public hearing for a proposed electric transmission line in the southeastern part of the state. The commission says the meeting is slated for April 1 in Ellendale. The transmission line would be owned jointly by Otter Tail Power and Montana-Dakota Utilities Co. (rapidcityjournal.com)

March 21, 2014. The drought across most of Australia’s Queensland state means coal producers are exporting record volumes into an oversupplied market, depriving them of the usual price gains caused by weather disruptions. Shipments from Queensland, the biggest exporter of coal used in steelmaking, will rise 14 percent to 205 million metric tons in the 12 months ending June 30, the government says. The heavy rains that crimped output and boosted prices in three of the past four years by flooding pits such as Cockatoo Coal Ltd.’s Baralaba mine haven’t come this year. Deluges in Queensland in 2010 and 2011 swamped mines and washed away rail lines, driving the cost of coking coal to a record and the price of thermal coal burned in power plants to a 30-month high. (www.bloomberg.com)

March 21, 2014. The California Independent System Operator Corporation (ISO) Board of Governors approved grid infrastructure upgrades that focus on the reliability needs in southern California in the wake of the San Onofre Nuclear Generating Station (SONGS) early retirement in June 2013. The 2013-2014 Transmission Plan recommends 30 grid solutions — three of which help to offset the SONGS retirement — and it emphasizes projects that minimize emissions and address the reduction of local gas-fired generation in response to state requirements regarding use of coastal water for cooling power plants. The comprehensive analysis behind the plan creates a more flexible grid that further enhances reliability, meets state environmental and energy goals as well as provides economic benefits to consumers. (www.pennenergy.com)

March 21, 2014. Swiss power group ABB has won an order worth around $110 million from the Saudi Electricity Company (SEC), Saudi Arabia’s state utility, to construct substations that will help boost transmission capacity in the country’s western region. The new substations will link the Taif East Governorate, a part of the Mecca region, to the national 380 kilovolt transmission grid. (www.arabianbusiness.com)

March 20, 2014. The long discussed Indo-Pak electricity deal has moved closer to reality with energy- starved Pakistan handing over draft of an initial power trade deal to India. The move comes as the World Bank has offered to finance the feasibility study and transmission line to import 1,200 MW of power from India. A draft of Memorandum of Understanding (MoU) was handed over to Indian authorities in a recent meeting held in New Delhi. India would respond to Pakistan after going through the draft of the initial deal. Indian diplomats said Pakistan and India have constituted technical working groups which would review the aspects of the export of 500 MW of electricity to Pakistan. The Pakistani cabinet had decided in January to import electricity from India. The Water and Power Ministry had initiated negotiations with India in this regard. The World Bank had undertaken to finance feasibility study of the project. The issue of electricity trade had come up for discussion during the meeting between Indian Commerce Minister Anand Sharma and Chief Minister of Pakistani Punjab Shahbaz Sharif during his visit to India in December. (www.business-standard.com)

March 24, 2014. The Spanish government is considering increasing subsidy payments to under-used gas-fired power plants to deter utilities from shuttering them. The government is concerned that unless the return on the plants increases, utilities including Iberdrola SA and Gas Natural SDG SA may mothball their facilities. Power subsidies paid by European governments have attracted the attention of the European Union’s regulatory arm because they risk breaching EU rules in state aid. In Spain, Prime Minister Mariano Rajoy has spent more than two years trying to untangle the state-backed system of subsidies, fixed prices and auctions that have together racked up 26 billion euros ($28 billion) of debt. (www.bloomberg.com)

March 24, 2014. Japan is planning to start a $21 billion nuclear reprocessing plant, stoking concern in China that the facility’s output could be diverted for use in an atomic bomb. The issue will be one of the flashpoints at the Nuclear Security Summit starting in The Hague, Netherlands, that Japan Prime Minister Shinzo Abe and China’s President Xi Jinping are due to attend. It’s adding to bitterness marked by territorial disputes and left over issues from World War II between Asia’s two largest economies. The Rokkasho Reprocessing Plant in northern Japan will begin separating plutonium from spent nuclear fuel in the third quarter, Japan Nuclear Fuel Ltd. said. The plant has missed previous start up dates because of equipment failures. (www.bloomberg.com)

March 24, 2014. The Federal Government of Nigeria has entered into bilateral and multilateral relationships with the governments of other countries for the importation and exportation of electricity. Minister of Power, Prof. Chinedu Nebo said, the Federal Government had signed a memorandum of understating with the Democratic Republic Congo to import electricity into the country. The minister noted that the foregoing measures would greatly ramp up the total generation on the TCN grid, necessitating the massive and rapid expansion of the transmission and other infrastructure. (www.worldstagegroup.com)

March 24, 2014. The State Corporation Commission (SCC) of Virginia in US has approved Appalachian Power Company’s (APCo) request to recover $48.6 mn in increased costs associated with electric transmission services provided to the utility. Called a transmission rate adjustment clause (T-RAC) on customer bills, the rate adjustment is scheduled to become effective in May 2014. The new charge will increase the monthly bill of a residential customer using 1,000kWh of electricity by approximately $3.88 or 3.5%. (utilitiesretail.energy-business-review.com)

March 23, 2014. Israel Electric Corp. should offer a 15 percent stake to the public and sell off power stations to save the indebted state-owned utility, according to a government panel. The government should sell a 7.5 percent stake of the company in 2015 and the same amount in 2018, the panel said. It recommends the utility find buyers for three production plants to boost competition in the next decade. The Haifa-based utility is struggling under a debt load of 75 billion shekels ($22 billion) as the government seeks to restructure the country’s electricity market by 2025. It controls more than 90 percent of the country’s electricity production. Israel has been considering the sale of the utility since at least 1997. Moody’s Investors Service rates Israel’s debt A1, while Standard & Poor’s ranks it A+, four levels from the top grade, with stable outlooks. (www.bloomberg.com)

March 20, 2014. Ethiopia will begin generating electricity within 18 months from what will be Africa’s largest power plant, the government said. The sale of 7.1 billion birr ($367 million) of bonds over the past three years to domestic investors, has contributed to the 27 billion birr spent so far on the 75.5 billion birr Grand Ethiopian Renaissance Dam (GERD) hydropower project, said Zadig Abraha, deputy general director of the GERD national coordination office. The central bank in April 2011 ordered banks to buy government bonds equivalent to 27 percent of their loans to help fund infrastructure projects. Ethiopia’s funding of the 6,000 MW plant represents “the golden age of our history as far as economic development and public participation is concerned,” Zadig said. Africa’s second-most populous country after Nigeria is boosting electricity output to cater for increased demand as economic growth surges. The economy expanded at an average 9.3 percent over the past four years and the government is targeting growth of more than 10 percent, which may lead to annual increases in electricity demand of as much as 35 percent, Zadig said. An increase in Ethiopia’s current generating capacity of 2,000 MW will also allow the country to reduce a trade deficit of $8.5 billion last year by selling excess electricity. (www.bloomberg.com)

March 19, 2014. The U.K. risks power shortages because utilities may react to Europe’s toughest carbon-emissions rules by closing plants without replacing them. The amount of electricity available over peak demand may drop below 2 percent next year, the lowest level in western Europe, the nation’s energy regulator says. Centrica Plc, the biggest U.K. supplier, says investment in new generating capacity has “ground to a halt.” U.K. closures, already running at a record pace, may accelerate after a 2016 deadline to cut carbon emissions from old coal-fired generators. While Germany now gets 24 percent of its power from renewable energy after government policies encouraged the building of everything from wind farms to solar panels, in the U.K. the proportion is 12 percent. (www.bloomberg.com)

March 19, 2014. China is developing a new design of nuclear power plant in an attempt to reduce its reliance on coal and to cut air pollution. In an effort to reduce the number of coal-fired plants, the Chinese government has brought forward by 15 years the deadline to develop a nuclear power plant using the radioactive element thorium instead of uranium. A team of researchers in Shanghai has now been told it has 10 instead of 25 years to develop the world's first such plant.

According to the World Nuclear Association (WNA), China has 20 nuclear plants in operation and another 28 under construction, all uranium-fuelled reactors. China has been importing large quantities of uranium as it attempts to reduce its reliance on fossil fuels. However, according to the WNA, thorium is much more abundant. (www.theguardian.com)

March 25, 2014. Indian solar installations are forecast to be approximately 1,000 MW in 2014, according to Mercom Capital Group, llc, a global clean energy communications and consulting firm.

Solar installations in India totalled 1,004 MW in 2013 compared to 986 MW in 2012. In line with Mercom's forecast, there was very little growth in installations year-over-year. The firm's detailed survey of the market revealed that growth in installations might be elusive again in 2014 with numbers forecast to be similar to 2012 and 2013. (economictimes.indiatimes.com)

March 24, 2014. India's wind and solar energy financing policies are not as cost-effective as they could be, according to a joint study conducted by US-based think-tank Climate Policy Initiative (CPI) and Indian School of Business (ISB). The report, titled "SolvingIndia's Renewable Energy Financing Challenge: Which Federal Policies can be Most Effective", was released. It says a policy that both reduces the cost of debt and extends its tenor is the most cost-effective. For wind energy, reducing debt cost to 5.9% and extending tenor by 10 years can cut the cost of total government support by up to 78%. For solar energy, which is more capital-intensive, reducing debt cost to 1.2% and extending tenor by 10 years can cut the cost of support by 28%. The report finds policy options such as interest subsidies are more attractive than existing policies. For wind energy, compared to the existing Generation-Based Incentive (GBI) of ` 0.5 per unit, an interest subsidy of 3.4% would be 11% less expensive and support 83% more deployment. Similarly, for solar energy projects, as compared to the current policy of 30% viability gap funding, an interest subsidy of 10.2% would be 11 percent less expensive and support 30% more deployment. The report is part of a series on renewable energy financing in India. India targets to double renewable energy capacity to 55,000 MW over four years through 2017. (www.business-standard.com)

March 21, 2014. Solar and wind energy companies are waiting for the government to clear subsidies amounting to more than ` 1,000 crore as they stare at potentially unviable projects which they had launched due to the promise of incentives. The ministry of new and renewable energy is unable to pay the promised subsidies since it has received just a third of its budgetary allocation of ` 1,521 crore for 2013-14. To make matters worse, the allocation for the next fiscal has been reduced by as much as 71% to ` 441 crore. India offers generation-based incentives to wind energy projects and small solar projects of 100 kW to 2 MW to help them compete with conventional energy. The government had last disbursed the incentives to wind energy companies in August 2013 for April-September 2012. The total backlog is at least ` 600 crore, developers said. The amount pending for solar energy companies is about ` 550 crore, the ministry said. India aims to add 30,000 MW of renewable power capacity in the next four years, doubling it from the current capacity. The expansion of wind energy, and more recently solar power capacity in the last few years has been driven primarily by incentives. India launched incentives for renewable energy in the 1990s, accelerating capacity addition, especially in wind energy. Local and international firms and investors thrived on the incentives and upped their investment in the country while individual investors like cricketer Sachin Tendulkar and film actor Aishwarya Rai were attracted to the sector. In 2007, the government introduced generation-based incentives for wind and solar power in an attempt to weed out non-serious players and increase participation of independent power players. The next big step by the government was introduction in 2010 of the National Solar Mission, a programme to add grid-connected solar power capacity. (economictimes.indiatimes.com)

March 21, 2014. Three years after Prime Minister Manmohan Singh announced an ambitious plan to generate 20,000 MW of solar power by 2022 under the Jawaharlal Nehru National Solar Mission, the programme is yet to take off in a meaningful way and remains far behind target. Marred with delays, trade disputes and competition from state-level schemes, the central programme could so far contribute just one-third to the India's total solar capacity. The first phase of the solar mission from 2010-2013 added just 252.5 MW of solar power generation capacity against the targeted 1100 MW. In the second phase started in 2014, a year later than planned, the government aims to add 10,000 MW solar energy capacity by 2017, under both photovoltaic (PV) and concentrated solar power (CSP) or solar thermal technology. In a tender floated in January, it bid out PV projects totalling 750 MW, for which it received bids thrice the requirement. India's total solar power installation currently stands at 2208 MW, out of which 661 MW has been contributed from projects selected under the national solar mission. The balance is from the state schemes for solar power development, with 70% coming solely from Gujarat. Madhya Pradesh is looking to add another 800 MW of solar by June 2014. (economictimes.indiatimes.com)

March 20, 2014. At least five companies including Tata Power and engineering major L&T have shown interest to develop rooftop solar power project in Odisha. The companies have enquired about the request for qualification (RFQ) tender floated by Green Energy Development Company Ltd (Gedcol), the nodal agency of the state government to develop on grid solar power in the state. The rooftop solar energy project would cost around ` 50 crore for installing equipment to generate 5 MW power. The Gedcol will be providing the money from loan assistance financed by International Finance Corporation (IFC). The last date for applying to the RFQ proposal of the state undertaking is April 29. The interested bidders would be responsible for operation and maintenance of the project, which will be installed ‘on buildings to be specified by Govt of Odisha in the cities of Bhubaneswar and Cuttack’, the RFQ paper said. The solar project is aimed at reducing ever-increasing power bills of government offices. The government has been criticised by the high court for not clearing large amount of pending power bills in a tariff hike case. (www.business-standard.com)

March 23, 2014. Dubai Municipality said that the reconstruction of one of Dubai's oldest parks will transform it into the emirate's first to be powered by solar energy. The works being carried out at Satwa Reservoir Park are underway with the new-look park expected to be completed by the end of 2014. Taleb Abdul Karim Julfar, director of Public Parks and Horticulture Department, said it will be the first to be taken off the power grid and will rely on renewable energy only. He said the revamp plan was part of Dubai Municipality's strategy to expand green areas and provide entertainment services in the emirate. Currently, there are 103 public entertainment places in Dubai, including six major parks, two open beaches, four pond parks, 33 residential parks and 58 public squares in addition to a number of new parks under construction. (www.arabianbusiness.com)

March 23, 2014. People living in coastal regions of Asia could face the worst effects of global warming.  Climate experts warned that flooding, famine and rising sea levels will put hundreds of millions at risk in one of the world's most vulnerable regions. Hundreds of millions of people are likely to lose their homes as flooding, famine and rising sea levels sweep the region. The report, Climate Change 2014: Impacts, Adaptation and Vulnerability, revealed that for the first half of this century countries such as the UK will avoid the worst impacts of climate change, due to rising carbon dioxide levels. By contrast, people living in developing countries in low latitudes, particularly those along the coast of Asia, will suffer the most, the report said. A final draft of the report will be debated by a panel of scientists set up by the Intergovernmental Panel on Climate Change (IPCC) at a meeting in Yokohama, Japan. Scientists warned that millions of people will be affected by coastal flooding and land loss as global temperatures rise, ice caps melt and sea levels rise. (www.newkerala.com)

March 22, 2014. Climate change may aggravate water stress and scarcity in the world, UN Secretary General Ban Ki-moon warned in a message on the occasion of World Water Day. Ban said that all efforts to provide universal access to water and energy would be undermined if the current global warming trends continue. The theme of this year´s World Water Day is "Water and Energy". In 2014, the UN is focussing attention on the water-energy nexus, particularly addressing inequities, especially for the 'bottom billion' who live in slums and impoverished rural areas and survive without access to safe drinking water, adequate sanitation, sufficient food and energy services. Ban pointed out in his message that climate change was greatly driven by the unsustainable use of energy. (www.newindianexpress.com)

March 21, 2014. Global water inequality is growing with the poorest countries not receiving water and sanitation aid proportionate to their needs, according to WaterAid. Of the 48 poorest countries, eight were among the top 10 in assistance received over the last six years, which isn’t enough, said Barbara Frost, chief executive officer of the London-based organization. About 768 million people worldwide don’t have safe water to drink and 2.5 billion of Earth’s 7 billion lack proper sanitation. Wealthier nations receive more funds, according to a WaterAid report. Jordan, for example, where more than 90 percent of the population has access to both water and sanitation, receives $855 in assistance for each person lacking access compared with $1.56 in Ethiopia, according to the report. (www.bloomberg.com)

March 21, 2014. Energy production will increasingly strain water resources in the coming decades even as more than 1 billion of the planet’s 7 billion people already lack access to both, according to a United Nations report. Shale gas and oil production as well as biofuels “can pose significant risks” to water resources, pitting energy producers against farmers, factories and providers of drinking and sanitation services, the agency said ahead of annual World Water Day. Water-related needs for energy production have tripled since 1995, according to GE Water, while more than half of the global cotton production is grown in areas with high water risks. Electricity demand is forecast to rise at least two-thirds by 2035, driven by population growth. The warning comes as World Water Day events started in Tokyo and elsewhere. The U.S. shale energy boom has sparked concerns that hydraulic fracturing, which uses high volumes of water to extract gas and oil from shale, may hurt local waters’ quality and strain supplies. Globally, as water demand increases, more than 40 percent of the population is expected to be living in areas of “severe water stress” by about 2050. The International Energy Agency, a Paris-based adviser to oil-consuming nations, estimates energy production will require one-fifth of global water withdrawals by 2035 compared with 15 percent in 2010. Over the period, it forecasts water consumption, a measure of the volume taken and not returned to its source, will rise a “dramatic” 85 percent. (www.bloomberg.com)

March 21, 2014. Spain’s government says access to water and sanitation is a human right, and that energy is a similarly valuable commodity. Water and energy are “limited resources that must be managed together,” the Agriculture, Food & Environment Ministry said after the Cabinet approved a resolution on the subject. The ties between energy and water are the focus of World Water Day organized by the United Nations. Management of rivers and aquifers is a key political issue in Spain, where demand for water is among the highest in Europe compared with supply and few efforts have been made to privatize resources. Spain has promised 800 million euros ($1.1 billion) in support of Latin American water-supply and sanitation services through a program with the Inter-American Development Bank. Water use must be governed primarily as a human right, the ministry said. (www.bloomberg.com)

March 20, 2014. China, the world’s biggest emitter of greenhouse gases, estimated the direct economic loss from rising sea levels and storm waves linked to climate change last year increased to the highest level since 2008. The loss reached 16.3 billion yuan ($2.6 billion), compared with a 10-year average of 15.1 billion yuan, data from the State Oceanic Administration showed. Storm waves caused 94 percent of the damage, the administration said, with 121 people killed. (www.bloomberg.com)

March 20, 2014. BP Plc, recovering from an oil spill that may cost it as much as $42 billion, said it hasn’t set a new target for investing in renewable energy after investing $8.3 billion in the business. The company in 2005 set a target to spend $8 billion by 2015 and achieved that last year, BP said in a report on sustainability issued. It isn’t setting a new goal. BP has been disposing of assets to pay for the costs of the spill in the U.S. Gulf of Mexico in 2010 and last year put wind farms worth as much as $3.1 billion up for sale. In 2012, it scrapped a four-year old project to spend $300 million on a cellulosic ethanol refinery in Florida, and the year before, it shut its solar power business. It’s keeping biofuel research. (www.bloomberg.com)

March 20, 2014. Jordan has entered into an agreement with Arabia One for Clean Energy Investments to build a solar-run power generation plant in Maan, some 220km south of Amman. The plant is set to have a total capacity of 10 MW. The government is also planning to sign agreements with local and international by late March 2014 to build ten solar energy projects having combined capacity of 140 MW. The new plant is expected to start operations and connect to the grid during the last quarter of 2015. (solar.energy-business-review.com)

March 20, 2014. An El Nino weather pattern, which can parch Australia and parts of Asia while bringing rains to South America, will probably develop by July, according to forecaster MDA Weather Services. The chances of El Nino emerging later in the northern hemisphere summer are 75 percent. El Ninos affect weather worldwide and can roil agricultural markets as farmers contend with drought or too much rain. The phenomenon often touches off warmer winters across the northern U.S., heavier rains from southern Brazil to Argentina and drier conditions across southeast Asia, Indonesia and eastern Australia. It also can lead to a calmer Atlantic hurricane season and a stormier winter in the U.S. South. (www.bloomberg.com)

March 19, 2014. State actions on climate change are reducing emissions and offering templates for effective federal standards, according to Mary Nichols, chairwoman of the California Air Resources Board (ARB). Currently, Nichols said, climate regulation is on dual tracks, one state and one federal. ARB, Nichols said, got its start controlling vehicle emissions. The agency will work with EPA on GHG vehicle emissions and conduct a mid-term review of light-duty vehicle rules, considering new technologies, and make appropriate adjustments. Similar work with federal partners will be done on the next round of heavy-duty vehicle GHG standards that will take effect in 2019. (www.bloomberg.com)

March 19, 2014. Backers of using methanol from natural gas as a substitute for gasoline got a chilly reception from a federal official who said he is skeptical the fuel will gain widespread adoption for use in cars and trucks. Industry representatives face obstacles promoting methanol as a way to cut greenhouse-gas emissions and boost engine performance, Patrick Davis, director of the Energy Department’s Vehicles Technologies Office, said in Washington. Using the fuel would reduce reliance on imported oil and offer a hedge against oil-price shocks that raise gasoline prices, said John Hofmeister, founder of Citizens for Affordable Energy and president of Shell Oil Co., the U.S. unit of Royal Dutch Shell Plc, from 2005 to 2008. (www.bloomberg.com)

March 19, 2014. The biggest U.S. solar panel maker is preparing to set out its strategy for growth as sales lag for its large-scale power projects in the deserts of the southwest. First Solar Inc. gets about 65 percent of its revenue from selling giant solar farms to utilities, a market that’s slowing after its best customers bought all the clean energy they need. The manufacturer is missing out on the current boom in rooftop solar, which is surging since SolarCity Corp., backed by billionaire Elon Musk, helped popularize a way to finance home installations. (www.bloomberg.com)

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