[The Twists and Turns of Indian Gas Pricing have Come to an End...for the Time being]

                             “Keeping in mind that the reform on natural gas pricing was politically and economically rather controversial and overdue, the new government has shown once more the will to act and to set examples for the improvement and development of India’s natural gas industry. As always, the devil is in the details, and it should therefore be expected that much work remains to be undertaken to satisfy all the stakeholders involved…”

 

 

 

NEWS BRIEF

[NATIONAL: OIL & GAS]

October 19, 2014. Oil and Natural Gas Corporation (ONGC) in collaboration with Russian experts is planning to explore petroleum in the bed of Bay of Bengal near Rameswaram, said BS Josyulu, ED, ONGC (Chennai). Speaking on the sidelines of a workshop organised at a college, he said that a survey of sub-surface imaging was being done in the Bay using Ocean Bottom Cable (OBC) technology. The experts were probing the presence of three major gas fields through offshore extension mapping. The workshop aims at teaching students about the latest technologies in the field of oil exploration, skills and industrial requirements, apart from developing their employability. (www.newindianexpress.com)

October 15, 2014. Oil and Natural Gas Corporation (ONGC) has cancelled its agreement with Great Eastern Energy Corp (GEECL) to divest 25% farm-in right to its Ranigunj CBM block in West Bengal. Coal India, which is also partner in the block, is believed to have prevailed upon ONGC to cancel the stake sale, arguing that it is a competent authority to develop and operate the block. ONGC has 74 percent stake while Coal India owns the rest. Great Eastern and also other parties like Dart Energy and Deep Industries were selected in May 2013 as successful bidders for three CBM blocks of ONGC. (www.naturalgasasia.com)

October 20, 2014. India's scrapping of diesel price controls opens the door for private sector refiners to return to a domestic retail market from which they have been excluded for years because they could not compete with state firms. But, before they rush to reopen old filling stations that have been gathering dust or used to store grain, they want to make sure that Prime Minister Narendra Modi's commitment to free markets will survive any serious spike in oil prices. Reliance Industries plans to revive its old business cautiously, while Total of France will allow Mangalore Refinery and Petrochemicals Ltd to sell fuel through its modest distribution network. Modi lifted diesel controls, taking advantage of a 25 per cent fall in global oil prices since June to make the move. At a stroke, he knocked $6.5 billion off the government's energy subsidy bill, while handing a 6 per cent discount to drivers and truckers who had grown fed up with monthly hikes in regulated prices. Diesel makes up nearly half of fuel demand in Asia's No.3 economy. Consumption is set to rise as Modi seeks to launch an investment-led economic recovery. The top three state refiners, Indian Oil Corp (IOC), Bharat Petroleum Corp and Hindustan Petroleum Corp, between them sell nearly all of the of the 70 million tonnes of diesel consumed annually in India.

Reliance, operator of the world's biggest refining complex at Jamnagar in the western state of Gujarat, plans to restart about 1,500 of its filling stations. The stations have been shut since 2008, as global oil prices surged towards $150 a barrel and the government's subsidy to state fuel retailers knocked privately-owned retailers out of the market. Reliance will not make significant investments to expand its fuel retail operations and will wait for "clarity and stability" of policy. Royal Dutch Shell, which has a licence to run 2,000 filling stations in India but operates only 78, has no plans to expand retail operations in India following the diesel deregulation.

Total, Europe's biggest refiner, is one of the few companies to see retail opportunities in India. It is in talks with the Mangalore Refinery Petrochemical Ltd (MRPL) to boost its presence. The oil ministry said MRPL's proposal to sell fuel through Total's network would be cleared in 10 to 15 days. In its first foray into the domestic market in 2005, Reliance quickly won market share with modern filling stations and slick loyalty schemes. This time around, the state retailers are not worrying - yet. Private refiners sell 700,000-800,000 tonnes per month of fuel, mainly diesel, to state refiners. It will take as much as two years for them to build up their retail infrastructure so that they can market these volumes directly, IOC said. (economictimes.indiatimes.com)

October 17, 2014. India will pay Iran $900 million in two tranches to clear part of the past dues for crude oil it buys from the Persian Gulf nation. This payment will be on top of $1.65 billion it had paid in June/July to clear more than one-third of over $4 billion in dues that had accumulated. Indian refiners - Mangalore Refinery and Petrochemicals Ltd (MRPL), Essar Oil, Indian Oil Corp (IOC) and Hindustan Petroleum Corp Ltd (HPCL) will make payment of first installment of $400 million. The remaining $500 million will be paid before November 24. (economictimes.indiatimes.com)

October 16, 2014. Real estate firm Hiranandani Group has awarded a contract to Sener-Afcons J.V. for an 8 million tonnes per annum LNG import, storage and regasifications terminal at Jaigadh port at Ratnagiri in Maharashtra. This will be the first truly merchant terminal in India which will function exclusively on a tolling model. The Front End Engineering and Design (FEED) of the project was carried out by Hyundai Engineering and reviewed by WorleyParsons.

Bids for the offshore supplies and the EPC works were invited from international and domestic EPC companies in August 2013 and were evaluated by the H-Energy Gateway Private limited (HEGPL), a Hiranandani Group Company, project team with the support of HR Wallingford and WorleyParsons, its technical advisors. The facility would be on its way to commissioning in 2018. (economictimes.indiatimes.com)

October 15, 2014. Facing shutdown due to drastic cut in natural gas supplies, over two dozen small industries of South Gujarat have accused GAIL India Ltd of selectively and arbitrarily taking action that is in contravention of stated policy. GAIL slashed gas supplies to 30 small industries in South Gujarat to meet fuel requirement of CNG and piped cooking gas supplies in cities. South Gujarat industries including Pragati Glass, Piramal Glass, Haldyn Glass, Gujarat Borosil and Savana Ceramics are facing closure as they cannot afford imported LNG that costs four times the domestic gas price of USD 4.2 per million British thermal unit. The total allocation to 30 small consumers in South Gujarat put together is merely 0.6 million standard cubic meters per day (mmscmd). The proposed cut is being forced to make about 0.35 mmscmd available for PNG/CNG use. (economictimes.indiatimes.com)

October 15, 2014. Teheran's troubled ties with the West continue to dog India's efforts to secure energy supplies. In the latest instance, GAIL India has expressed unwillingness to enter into a non-binding framework agreement with NIGEC (National Iranian Gas Exports Company) for buying gas through a transnational undersea pipeline for fear of losing access to international financing. The oil ministry had authorized GAIL as the nodal agency for pursuing the project, being promoted by SAGE (South Asia Gas Enterprise), jointly promoted by a Delhi-based group and UK firm, and has the blessings of governments of Oman and Iran. India formally discussed with foreign ministers of Oman and Iran in February the possibility of joining the project. SAGE proposed signing a three-way framework agreement among gas seller NIGEC, transporter SAGE and Indian gas buyer GAIL, IndianOil and Gujarat State Petroleum Corporation. Since the agreement involved an Iranian entity, GAIL sought opinion on the impact of American sanctions laws from a US law firm, Akin Gump Strauss Hauer & Feld LLP. The legal opinion broadly said signing a non-binding agreement would not attract any US or UN sanctions. But, it could lead to blocking of GAIL's access to international commercial or financial services and capital markets in its global business ventures.

GAIL has substantial investments in US shale gas and LNG facilities. It also plans to tap global funding and technology for its ventures. That's why the company has told the ministry it may not be possible to sign the agreement till such time a clear position emerges on US sanctions on Iran. The 1,400-km SAGE pipeline is an ambitious multi-billion dollar project to wheel gas from Iran, Oman and Qatar. The project has been in the works for several years and has been touted as an alternative to the overland energy lifeline from Iran via Pakistan. The overland pipeline from Iran via Pakistan has been in the freezer since Iran came under US sanctions. The official position is that discussions are still on. Even before the sanctions came in, the overland pipeline had been dogged by India's apprehensions over the physical security of the stretch of pipeline passing through Pakistan. The SAGE pipeline is said to have addressed those concerns. (economictimes.indiatimes.com)

October 21, 2014. Deep sea natural gas fields that have already been discovered but not developed so far will not be given any premium on gas pricing but new finds in challenging terrains can charge a price higher than $5.61 per unit approved by the Cabinet, Oil Minister Dharmendra Pradhan said. The government had announced incentives for gas discovered in difficult, costly areas. Analysts had interpreted this as a declaration that fields discovered in deep-sea regions, but not yet developed, would also be able to charge a premium. The minister said that the price of $5.61 per unit will not be inflated on account of calorie value. Some industry executives had argued that the actual price that customers pay would be 11 per cent higher than the announced rate of $5.61 per unit because natural gas also contains moisture for which factories will not pay. Technically, these are called gross calorie value and net calorie value. He said that in terms of gross calorie value, the approved price is $5.05 per unit, which would increase to $5.61 per unit on a net basis.

The gas price is based on a new formula that excludes costly liquefied natural gas (LNG) prices from the calculation, making the increase significantly lower than the price from the Rangarajan formula, which would have doubled the rate to $8.4 per unit and on NCV basis, price would have been $9.3 per unit. While announcing the new gas price, the Cabinet also settled the contentious issue of GCV and NCV. The controversy over the heat value emerged during the previous UPA government when Reliance Industries asked its gas consumers to renew gas sale and purchase agreements (GSPAs) with new terms, which included calculation of gas price at GCV basis. Fertiliser companies raised objection and said it would accept the GCV rate only if the oil ministry specified it in writing because it would have raised urea subsidy. The new price has disappointed private gas producers because they were expecting a price between $7 per unit and $8 per unit. (economictimes.indiatimes.com)

October 21, 2014. The government has stepped up efforts to sell 5% of its stake in Oil and Natural Gas Corporation (ONGC), the country's biggest explorer, two days after it lifted state control on diesel prices and raised prices of natural gas. The government is hoping decisions will help it get a better valuation for its stake in ONGC as diesel deregulation will reduce the company's subsidy burden while it will get a higher price for its gas. Stake sale in ONGC may take place in November. The disinvestment department has already selected five merchant bankers—Citigroup, HSBC Securities, UBS Securities, ICICI Securities and Kotak Mahindra Capital—for managing the stake sale. (economictimes.indiatimes.com)

October 20, 2014. Industrial consumers will actually pay about $6.17 per unit for domestic gas instead of $5.6 announced by the government because of changed parameter for determining heating value in the new formula. The government announced a new pricing formula on the basis of recommendations of a panel of secretaries. The new formula made several changes in the mechanism suggested by a panel under C Rangarajan that was approved by the UPA government.

The key change in the new formula is a shift from net calorific value (NCV) to gross calorific value (GCV) for calculating the price for each unit of gas. Calorific value is the quantity of heat produced by burning one unit of fuel at constant pressure and at zero-degree temperature. Gross calorific value assumes that moisture present in fuel turns into vapour, which adds to heating during combustion. Net calorific value is the actual heating users get and assumes that there is heat loss from moisture turning into vapour during combustion. As a result, the heating property under GCV is higher than NCV and entails a 10% lower price for each unit of fuel.

The existing gas price of $4.2 per unit is on the basis of NCV. The gas sale purchase agreements between sellers and buyers specify the price on the basis NCV. Now that the government has changed the heat value parameter to GCV, the actual price on the ground would be higher by 10%, or $6.17 per unit, marking nearly 45% increase against 33% indicated in $5.61 announced by the government. The government was looking at a price of $5.5-6.8 per unit. Gas sellers are expected to change the pertinent terms in tune with the new formula. The fact is that even under the GCV regime, the new price would be much lower than $8.4, or double the present price, estimated on the basis of Rangarajan formula.

Oil minister Dharmendra Pradhan had said PM Narendra Modi made it clear that common man should be protected from any major impact from the gas price hike. Pradhan said CNG and PNG suppliers (such as Indraprastha Gas Delhi) would see how much they can absorb, gas transporter GAIL would look at pruning transportation charge wherever possible and states would be urged to lower taxes to avoid any sharp rise in CNG or PNG prices. The new price appears acceptable to power and fertilizer industries also. Though the cost of power from gas-fired stations is estimated to rise by 45-55 paise per unit, the impact on overall tariffs would be minimal since such type of plants account for about 7% of generation capacity. (economictimes.indiatimes.com)

October 19, 2014. Oil and Natural Gas Corp (ONGC) will rake in about ` 1,950 crore in additional profit this fiscal from the 46 per cent rise in natural gas prices announced by the government. After postponing three times, the government approved a revised formula of pricing almost all domestically produced natural gas from November 1. The current price of $4.2 per million British thermal unit (mmBtu) will rise to $6.17 per mmBtu on a like-to-like basis.

Finance Minister Arun Jaitley said the price from November 1 will be $5.61 per mmBtu on heat value the fuel will generate on gross calorific value (GCV) basis. But the current $4.2 per mmBtu rate is on net calorific value (NCV) basis, which is roughly 10 per more than heat value on GCV basis. In GCV terms, the current price comes to $3.8 per mmBtu. Using GCV methodology announced by Jaitley, the price has gone up from $3.8 to $5.61 per mmBtu, over 46 per cent rise. If compared on NCV terms, the price will rise from $4.2 to $6.17 per mmBtu, a 46 per rise. ONGC said the decision is a positive for the company as it will help monetise some of its small and marginal gas discoveries. An almost $2 increase in gas price will result in ONGC net profit going up by about ` 4,700 crore on an annualised basis. For the five months of current fiscal, ONGC will stand to benefit about ` 1,950 crore. (economictimes.indiatimes.com)

October 19, 2014. The Centre's move to increase natural gas prices to $5.61 per million British thermal units (mmBtu) from November 1 would be a negative for Reliance Industries Ltd (RIL), analysts said, as RIL would continue to get the current rate of $4.2 till it made good the shortfall in output from its KG-D6 block. Last year, RIL had secured the government's approval to invest $3.18 billion for production at D-34. D-34, or the R-cluster, comprises four discoveries - D-29, 30, 31 and 34. Of these, D-34 has been declared commercially viable so far. JPMorgan's Asia Pacific Equity Research analysts Samuel Lee and Neil Gupte, in a report on RIL, had said they expected gas prices to rise in a staggered fashion, rather than a large one-time increase.

In the past, RIL and its partners, BP Plc and Niko Resources, have reiterated fresh investment in new fields will not be viable at a price lower than $8.4 per mBtu. RIL and its partners planned to produce about 13 million standard cubic metres a day of gas for 13 years from the D-34 discovery in the KG-D6 block, by 2017-18. (www.rediff.com)

October 18, 2014. The government's decision to deregulate diesel will be advantageous for consumers, Essar Oil said. Diesel deregulation will also bring the private oil marketing company (OMC) retail network into system. This will increase competition, benefiting the end consumer, Essar Oil said. The decision has come at a time when global crude prices have been receding. (economictimes.indiatimes.com)

October 18, 2014. The government has decided to increase prices of domestically produced natural gas from the existing $4.2 per mBtu to $5.61 per mBtu. The new price, based on the recommendations of a Committee of Secretaries (CoS) that reviewed the UPA government's gas pricing guidelines of January 2013, would lead to an impact on prices of power, fertilisers, CNG and PNG consumers. The government will get additional revenue of ` 3,800 crore annually. The new price will be determined on Gross Calorific Value (GCV) basis and reviewed every six months against the Rangarajan committee's recommendation of annual revisions. The first price would be determined on the basis of global prices prevailing between July 2013 and June 30, 2014. This would come into effect from November 2014, and would be valid till March 2015. The price would then be revised for the next six months ending September 2015 on the basis of prices prevalent between January 2014 and December, 2014. The prices would be announced 15 days in advance of the half year. (www.business-standard.com)

October 16, 2014. Moody's Investors Services said Reliance Industries' credit metrics will remain stable over the next 12 months on the back of strong earnings contribution across the refining and petrochemical segments. RIL results for the quarter ended September 30 were largely stable on contributions from the downstream refining and marketing segment and a modest improvement in the petrochemicals business, which more than offset the continued weak results from the upstream oil and gas segment, Moody's said.

Moody's report said that the firm's refining business should improve over the next 2-3 years, as the company focuses on improving its yield pattern. Moody's report said that RIL's downstream refining and marketing segment is its key earnings contributor, reporting stable results in 2Q despite continued softness in regional refining margins. Moody's anticipated a $400 million revenue increase for RIL if prices had risen on April 1, 2014. (economictimes.indiatimes.com)

October 15, 2014. According to EY, India’s expanding economy and growing population have led to increased consumption of primary energy resources such as coal, oil and natural gas in the country. In line with this, its primary energy consumption grew at a compounded annual growth rate (CAGR) of 6% to 563.5 million t of oil equivalent (toe) in 2012 from 420.1 million toe in 2007. The share of natural gas in its primary energy mix increased marginally from 8% in 2008 to 8.7% in 2012. This is fairly low, compared to the global average of 24%, primarily due to supply side constraints. Furthermore, in terms on individual consumption, India’s natural gas consumption of 44 m³ per capita is far behind the global average of 470 m³ per person.

Despite low gas consumption relative to global trends, India’s natural gas market is nevertheless seeing a supply deficit, primarily due to low domestic production and an inadequate transmission and distribution infrastructure. According to EY, domestic gas production received a significant impetus with commencement of production at the KG-D6 field, located in the country’s east coast in 2009, however the field’s output has steadily declined and has hit a trough of 12 million m³/d in the third quarter of 2014. According to Reliance Industries Ltd (RIL), the fall in KG-D6’s production is mainly due to geological complexity and a natural decline in the fields. The decline in most of the country’s ageing fields has further compounded the supply deficit. (www.energyglobal.com)

 [NATIONAL: POWER]

October 21, 2014. Damodar Valley Corporation (DVC) denied reports that it had taken a decision to permanently shut down any of its power plants. Some reports suggested that the DVC authority had decided to shut down the Durgapur Thermal Power Station (DTPS) and the Bokaro Thermal Power Station (BTPS).

The 140 MW unit of the DTPS was set up in December, 1966 and the second unit of 210 MW was set up in September, 1982. It employs some 900 people at the Durgapur units. The DVC currently has an installed capacity of 6357.2 MW. (economictimes.indiatimes.com)

October 19, 2014. Power generation at the Srisailam hydroelectric power station has become the latest bone of contention between Telangana and Andhra Pradesh (AP), already tangled in various issues of power sharing. It all began with a reported request by AP to Telangana to stop the generation at Srisailam left bank power station, in view of the future requirements of AP.

AP Chief Minister N.Chandrababu Naidu reportedly directed the authorities to stop generation at the Right Bank power station, in view of the drinking water requirements of Rayalaseema region. This order came after an MP from Rayalaseema had registered his protest over the unrestrained power generation on both sides. However, Telangana Irrigation Minister T.Harish Rao categorically denied any request from AP, and said there is no question of stalling the power generation from Left Bank, in view of the hardships faced by the Telangana farmers. (www.thehindu.com)

October 17, 2014. Union Minister of State for Home Kiren Rijiju said he is "traditionally" against construction of big dams in North East and favoured smaller ones with 300-500 MW capacities. He supported construction of smaller or mid-level projects in the range of 300 MW or 500 MW capacities in North East. (economictimes.indiatimes.com)

October 16, 2014. State-run power equipment maker BHEL said it has operationalised a 600 MW thermal unit in Madhya Pradesh (MP). The first unit at the same power project was commissioned by BHEL in November, 2013. BHEL's scope of work includes design, engineering and commissioning of project. The company has a share of more than 90 per cent in the thermal generating capacity of the state utility in Madhya Pradesh. BHEL is executing 1x500 MW Vindhyachal and 2x800 MW Gadarwara coal based projects of NTPC in Madhya Pradesh. (economictimes.indiatimes.com)

October 15, 2014. Adani, Jindal Power, Sterlite and GMR have pulled out of the race for ultra mega power projects (UMPPs) in Odisha and Tamil Nadu, leaving only NTPC in the fray for the proposed 4,000 MW size plants. Only NTPC is left in the fray now for these proposed plants. Power Finance Corporation (PFC) is the nodal agency for UMPPs in the country. For the Odisha UMPP, NTPC, NHPC, Tata, Adani, JSW Energy, Jindal Power, Sterlite, CLP and L&T were among the pre-qualified firms while for the Cheyyur (Tamil Nadu) UMPP, NTPC, Adani, CLP, GMR, Jindal, JSW Energy, Sterlite, L&T were among the pre-qualified parties. 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. An 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. (economictimes.indiatimes.com)

October 20, 2014. BGR Energy Systems Limited, a leading EPC and BoP company has received orders worth ` 250 crore in the electrical sub-stations segment of its Electrical Projects Divison (EPD). Chennai-based BGR Energy's EPD have secured three Substation orders from Tamil Nadu Transmission Corporation Ltd., for Establishment of 230KV AIS Substation at Puraisai, Villupuram, 110KV GIS Substation at Thirumangalam South, 400/230-110 KV AIS substation with all associated equipment, systems and civil works at Palavadi in Dharmapuri district. All orders are on Total Turnkey basis. Besides the new orders, Electrical projects division is currently executing Main Plant Electrical Systems package (including nuclear island electricals) for 4x 700 MW (PHWR) for Nuclear Power Corporation of India Ltd (NPCIL) and 220 KV and 400 KV Air Insulated Substation works. (www.business-standard.com)

October 19, 2014. Coal India Ltd (CIL) has so far signed 162 fuel supply agreements (FSAs) with power plants. The government had earlier directed the coal major to sign supply pacts with power projects of 78,000 MW capacity. As many as 172 FSAs are to signed in this regard. The remaining fuel supply pacts could not be signed as some of power producers are yet to achieve milestones like forest clearances. The coal ministry had earlier said that CIL was yet to enter into fuel supply pacts with some of the power units as issues like change in ownership and extension of coal supplies were still being examined by it.

Two deadlines set for the signing of FSAs by CIL with the power producers could not be adhered to. The government had set the deadline of August 31, 2013 for signing of FSAs, which could not be met. The second deadline was set for September, last year. The company, which accounts for 80% of the domestic coal production, dispatched 353.83 million tonnes (MT) of coal to the power sector in FY2014. CIL produced 462 MT in the last fiscal. It targets an output of 507 MT in the current fiscal. (www.business-standard.com)

October 18, 2014. Jharkhand Agriculture Minister Banna Gupta said the agriculture department has issued a no-objection certificate in transferring six acres of land to Jharkhand State Electricity Board (JSEB) to set up a 100 MW power grid in Baliguma. The construction work of the power grid, which was pending since 2010 despite approval, will start within a month time, Gupta said. The power grid would be set up at a cost of about ` 43 crores, he said claiming that the capacity of the proposed power grid could be expanded to 300 MW in future. (economictimes.indiatimes.com)

October 17, 2014. Government said initial discussions have started for setting up an integrated power transmission grid connecting India with its neighbouring nations including Bhutan, Bangladesh and Pakistan. Power and Coal Minister Piyush Goyal said that hydroelectric power generated in North East India could be transported via Bangladesh, India and Pakistan, on to Afghanistan, or offshore wind projects could be set up in Sri Lanka's coastal borders to power Pakistan or Nepal. Goyal said this will not only strengthen the economic ties among the SAARC nations but also deepens the people to people relationship. The Power Minister further stated that economic sustainability of SAARC region is based on energy security as 30 per cent of the region's energy demands are met through imports.

In order to improve the situation, Goyal advocated a three pronged strategy by leveraging -- harnessing conventional and renewable sources of energy, building inter-connected transmissions grids and forging efficacious power trading agreements. SAARC is a robust market but constraints are primarily on the supply side as there are pockets where deficits persist, Goyal said. Goyal said that the impact of electricity on human lives is profound ranging from healthcare to education to employment opportunities. He called upon all member countries to take this as a challenge and we all should commit ourselves for pushing up household per capita consumption. For rapid progress and prosperity of the SAARC region, it is imperative that the power sector be expanded to ensure universal access to electricity in the region, Goyal said. (economictimes.indiatimes.com)

October 16, 2014. Mysore-headquartered Chamundeswari Electricity Supply Company (CESC) has taken up the restoration of power supply in the hurricane Hudhud-affected areas of Andhra Pradesh (AP). It has supplied 32 capacity distribution transformers, extending its help in restoring power supply to Visakapatnam and other affected areas. CESC said more staff will be deputed depending upon requirement for speedy restoration. (www.business-standard.com)

October 16, 2014. NTPC is firming up plans to enter power distribution, an area the state-run company has mostly stayed away from so far despite producing more than a quarter of India's total electricity output. It plans to bid for distribution rights in cities that may open up the segment to the private sector. Just a handful of Indian cities at present have private distributors, all in joint ventures with state utilities, a model that NTPC too is considering. NTPC will venture into distribution through its wholly owned subsidiary, NTPC Electric Supply Co, which currently provides turnkey execution of transmission projects, project monitoring, third-party quality inspection and consultancy.

In fact, the company has some experience in distribution. It has an equally owned joint venture with the Kerala Industrial Infrastructure Development Corporation to supply power at the state agency's industrial parks. To begin with, it plans to appoint experts and engage professionals who would advise the company on bidding processes that are currently on or are in the offing. The aim is to win circles that will be profitable. The distribution sector in the country is dominated by state-owned distribution companies or state electricity boards as distribution licensees. But several states have now opened up the sector and are already inviting private companies to take up distribution in cities.

The World Bank in a recent report said India's power distribution sector needed sweeping reforms if it is to bring back the country to a high growth trajectory and meet its goal of expanding access to electricity to all by 2019. The study has identified electricity distribution to the end consumer as the weak link in the sector. The report recommended freeing utilities and regulators from external interference, increasing accountability and enhancing competition in the sector to move it to a higher level of service delivery. The power sector's total accumulated losses were $25 billion in 2011. These losses are concentrated among distributors and bundled utilities — state electricity boards and state power departments, the report said. (economictimes.indiatimes.com)

October 15, 2014. Alstom T&D India has secured a Rs 138 crore (approximately Euro 17 million) contract from Power Grid Corporation of India Limited (PGCIL) to supply transformers and reactors for the expansion of 400/220 kV grid substations across southern India. The project is part of Power Grid’s System Strengthening Scheme to boost power handling capacity of substations, and stabilise the transmission infrastructure in southern India. Under this new contract, Alstom will supply six units of 400/220 kV, 500 MVA transformers and two units of 420 kV, 125 MVAr shunt reactors. All equipment will be supplied from Alstom T&D India’s manufacturing facilities across the country.

This is Alstom’s second win to strengthen the country’s transmission infrastructure under the System Strengthening Scheme. The first power transmission reinforcement contract was awarded in July 2014 to expand 400/200 kV grid substations across eastern India. (www.business-standard.com)

October 21, 2014. India and Nepal inked a historic Power Trade Agreement (PTA), allowing exchange of electricity and opening up new vistas of cooperation in the hydropower sector. During the visit of Prime Minister Narendra Modi to Nepal in August, the two sides had agreed to sign the agreement that would allow exchange of electricity generated from hydel projects in Nepal. A draft agreement of the PTA was prepared by the two governments. Nepalese Secretary in the Ministry of Energy Rrajendra Kishore Kshatra and Energy Secretary of India Pradeep Kumar Sinha inked the agreement at a function held at the Prime Minister's Office.

The joint group will sit every six months and take up issues not only pertaining to the existing cooperation in power sector between the two countries but will also explore and identify new areas of cooperation. Nepalese authorities and GMR group of India last month signed Project Development Agreement to construct 900 MW Upper Karnali Project in the presence of Union Home Minister Rajnath Singh. (economictimes.indiatimes.com)

October 21, 2014. The weekly two-day power holiday enforced for the industrial sector by the Telangana government would continue till November first week owing to the continued agriculture demand, according to the Federation of Andhra Pradesh Chambers of Commerce and Industry (FAPCCI). FAPCCI has sought relief from the ongoing power holidays as small units cannot afford the backup diesel generation sets and also they do not have the open access facility unlike the large industries. (www.business-standard.com)

October 21, 2014. Companies reacted positively to the new coal auction rules announced by the Narendra Modi government. They said it would help them to plan future investments properly and save those already made in the coal, power and cement sectors. Chief executive officers (CEOs) in the sectors concerned say a lot of uncertainty was created with the Supreme Court (SC) order cancelling coal block allotments made over the past 20 years. They say the new rules are fair to all and to the state governments, which will get royalties from the mines to be auctioned in future. The government has also decided to keep foreign companies out of the auction process, good news for Indian ones. Among the big beneficiaries of the new rules will be the Adani Group, the country's largest power sector company. The Ahmedabad-based group's coal mines for power projects in Maharashtra were cancelled by the SC. (www.business-standard.com)

October 20, 2014. After the big-ticket oil sector reforms, the government is turning to the power sector to help banks. Developers of about 16,000 MW stranded gas-based power plants will be able to service their debt, if a joint proposal of the power and oil ministries is approved by the Union Cabinet. The government proposes to increase the fixed cost of the gas-based plants at ` 1.10 per unit of electricity while keeping the tariff at ` 5.50 per unit, which will allow the operating companies to meet their financial obligations. This will prevent the idling projects, put up at an investment of ` 64,000 crore, from turning non-performing assets. The proposal will benefit power plants of Lanco Infratech, Essar Power, Reliance Power, GVK Group and GMR Energy, among others. The fixed cost cap has been raised from ` 0.85 per unit planned earlier by the two ministries. The proposal has been made after major power companies conveyed their willingness to the government to forego part of their fixed costs.

The fixed cost of ` 1.1 per unit are much less than the actual average fixed cost of about ` 2 per unit that the companies incur in operating the projects. Fixed costs increase when the projects are under-utilised. As per the proposal being prepared jointly by the ministries of oil and power to bailout power plants idling due to acute scarcity of domestic gas, power companies will be supplied domestic and imported gas enough to operate their plants at 40 per cent capacity. (economictimes.indiatimes.com)

October 19, 2014. A case of alleged cheating and corruption has been registered by CBI against Jindal Steel and Power company relating to the probe into coal blocks allocated during 1993-2005 period. CBI said that it is the 36^th FIR in connection with its probe in the coal allocation scam. The fresh case has been registered against Jindal Stripes Ltd (now known as Jindal Steel and Power Limited) and unknown public officials for alleged criminal conspiracy, cheating under the Indian Penal Code and Provisions of the Prevention of Corruption Act, CBI said. Soon after registering the case, the agency carried out searches at four locations in Raigarh, Chhattisgarh, CBI said. CBI said the case pertains to allocation of Gare Palma IV/1 coal block Jindal Strips Limited and JSPL. CBI said the instant case is the outcome of PE registered on September 26, 2012 looking into allocations of coal blocks during the period 1993-2005. (economictimes.indiatimes.com)

October 19, 2014. Andhra Pradesh (AP) chief minister (CM) N Chandrababu Naidu said power supply in the cyclone-hit Visakhapatnam, Vizianagaram and Srikakulam districts of coastal Andhra Pradesh will be restored by October 25. Naidu said that power supply would be restored up to 90 per cent in Visakhapatnam by October 23, in all the mandal headquarters of the three districts by October 22, and in most of the villages by October 25. Describing the Hudhud cyclone as unprecedented, he said 57 EHT (extra high tension) towers of power transmission corporation had collapsed. Losses in the three districts were estimated at ` 300 crore for APTransco, ` 700 crore for APEPDCL (Andhra Pradesh Eastern Power Distribution Company) and ` 200 crore for others. Naidu said physical inspection had to be conducted for 2,700 km of 33 KV (kilo watt) lines, 18,000 km of 11 KV lines, 42,000 km of LT (low tension) lines and 55,000 DTR in the three districts.

The administration has been able to restore power supply to 1 million power connections and power supply has to be restored to 1.3 million connections under EPDCL in Visakhapatnam. As many as 13,765 engineers and other employees, including contract labour, have been deployed for the electricity restoration work, with 289 cranes and other heavy equipment. Meanwhile, the death toll in the three districts rose to 50 - 36 is Visakhapatnam, 13 in Vizianagaram and one in srikakulam, Naidu said. (www.business-standard.com)

October 19, 2014. The Advisory Group, set up under former Power Minister Suresh Prabhu to suggest ways to enhance growth and address regulatory issues in the coal and power sectors, will submit its report to the government. The issues include enhancing growth of the coal sector, addressing railway bottlenecks impacting the transportation of the fuel and providing solutions for 24x7 electricity supply. As per the latest official data, 61 thermal power stations, out of the total 103 projects, are grappling with critical coal shortage with less than a week's stock at their disposal. The group is also likely to soon finalise new methodology for auction of non-operating coal blocks which were cancelled by the Supreme Court. The Ministry of Coal had said that the policy of coal mines auction and methodology was being revisited by the group. (www.business-standard.com)

October 18, 2014. Nagaland Power Minister Kipili Sangtam said the state government was in the process of formulating a new Power Policy to utilise its hydel resources. He did not share details such as what will be the focus of the policy and by when it is likely to be implemented. The state is interested to have thermal power plants to meet the deficiency. He said Nagaland was one of the most backward states and had lowest per capita generation of power. (www.dnaindia.com)

October 18, 2014. The Narendra Modi-led government is following the same policies of the previous UPA regime that "crippled" the power sector, an association of power engineers has said. All India Power Engineers Federation (AIPEF) President Shailendra Dubey said the Centre is still following the same policy of privatising the profits and nationalising the losses in the power sector which is "unacceptable". (economictimes.indiatimes.com)

October 17, 2014  The power ministry has assured the Prime Minister (PM) that electricity supply will not be affected due to nonavailability of coal from the blocks whose allotment was quashed by the Supreme Court last month even as the ministry promised to maximise generation from other sources.

The ministry said that since the Supreme Court has given six months' time to the coal block allottees, power supply is not likely to be immediately affected due to non-availability of coal from these blocks. The Prime Minister's Office (PMO) had sought a plan of action to ensure thermal power plants in public and private sector are not stranded due to lack of coal. However, the ministry did not suggest any plans or alternatives immediately. (economictimes.indiatimes.com)

October 16, 2014. ACME Group, which provides energy efficient and environment friendly solutions, has received final approval for credit facility worth $ 100 million (` 618 crore) from Asian Development Bank (ADB). This is the company's second loan in two months. ACME Group also sourced an investment from IFC in the form of loan of up to $ 34 million (` 201.9 crore) for the 100 MW project in Rajasthan.

The company has a portfolio of 197.5 MW including 100 MW JNNSM (Jawaharlal Nehru National Solar Mission) Phase II Projects, in the states of Gujarat, Madhya Pradesh, Rajasthan, Odisha and Chhattisgarh. It aims to generate 1,000 MW by the year 2017. The portfolio includes 100 MW plants in Rajasthan, 25 MW plant in Madhya Pradesh, 25 MW plant in Odisha, 30 MW plant in Chhattisgarh and a 15 MW in Gujarat. Some of these projects are at various stages of commissioning, the 100 MW Rajasthan projects are expected to be commissioned by April, 2015. (economictimes.indiatimes.com)

October 16, 2014. The Telangana government has expressed optimism that the power situation in the state would improve by June next year and was confident the measures initiated in the last few months would lead to availability of additional 2,000 MW by the end of 2015.

IT minister KT Rama Rao said the state had received bids from 108 companies for its plan to award rights for generating 500 MW solar power in the first phase, and the bids for these would be finalised soon. The minister alleged that the Andhra Pradesh government was not cooperating with Telangana on overcoming the power problem even as the Krishnapatnam thermal power plant was ready for operating, from which Telangana is assured of its share. (www.business-standard.com)

October 16, 2014. The Atomic Energy Regulatory Board (AERB) has set December 2015 as the deadline for implementing long-term additional safety measures in nuclear installations, said its Chairman S.S. Bajaj. Bajaj said that during the safety audit in nuclear installations conducted after the Fukushima disaster, it was found that some additional safety measures had to be put in place for environmental and public safety. (www.thehindu.com)

October 15, 2014. India and Finland signed 19 agreements including one for peaceful use of nuclear energy as well as management of radioactive waste from atomic power plants as President Pranab Mukherjee began his two-day visit to the key Scandinavian country. The president began his visit to Finland after inspecting a guard of honour which was followed by a one-to-one meeting with his Finnish counterpart Sauli Niinisto and delegation-level talks. Indian Ambassador to Finland Ashok Kumar and Director General of Radiation and Nuclear Safety Authority of Finland Petteri Tiippana signed the agreement for nuclear cooperation in presence of Mukherjee and Niinisto. The arrangement for cooperation between the Atomic Energy Regulatory Board of India and the Radiation and Nuclear Safety Authority of Finland will ensure cooperation in the field of nuclear and radiation safety regulation concerning exchange of information personnel related to the peaceful use of nuclear energy and radiation related to nuclear installations, radiation and nuclear safety including radioactive waste management, safety related issues and research. It will also cover radiation safety, emergency preparedness, and radioactive waste management associated with the operation of nuclear power plants. Immediately after the signing ceremony, the Finnish president underlined the importance of India in the world order and said his country was keenly observing the 'Make in India' policy announced recently and also that the two sides had agreed for doubling the trade from existing USD 1.5 billion to USD 3 billion in next three years. (www.asianage.com)

October 15, 2014. Canada and India are negotiating commercial contracts for supply of uranium for Indian nuclear reactors. John Baird, Canada's foreign minister is in Delhi for the second round of strategic dialogue he held with India’s foreign minister Sushma Swaraj. The restart of nuclear cooperation with Canada has been a long journey for both countries. Therefore it was a pleasant surprise to nuclear watchers here when India and Canada concluded their nuclear deal in virtually record time. The India-US deal still remains unconsummated and it will be a while before all the procedures are completed on the India-Australia front.

Canada expressing support for Indian membership of the Nuclear Suppliers Group. The two countries plan to cooperate on building higher capacity nuclear reactors. Indian reactors are based on the CANDU model. The Department of Atomic Energy (DAE) wants to upgrade Indian nuclear reactors from their current capacity of 200 MW to 750 MW, the Ministry of External Affairs (MEA) said. As a result of the conversations between Baird and Swaraj, the two countries will do some joint development. They will also joint host a nuclear security workshop in India with some 15 countries, the first such meet India would be organizing with another country. Prime Minister Narendra Modi will have his first meeting with his Canadian counterpart, Stephen Harper, in Brisbane on the sidelines of the G-20 summit. (timesofindia.indiatimes.com)

October 15, 2014. Global consulting firm KPMG will submit the draft report on coal rationalisation to the government. Coal linkage rationalisation, which is aimed at linking power plants to the nearest mines, is likely to bring financial benefit of about ` 700 crore to the sector. The report will be submitted to the Power and Coal Minister Piyush Goyal. The move will also help in overcoming power shortages which are hampering generation at some thermal plants. According to the latest data by Central Electricity Authority (CEA), 60 coal-based power plants have critical fuel stock position with less than seven days of raw material. Also, as part of the government's plan to modernise old power plants of about 32,000 MW capacity, coal linkages to these plants will be rationalised.

The government has also allowed automatic transfer of linkages from old and inefficient plants to ultra-modern supercritical plants in order to maximise power generation from the same amount of coal. It has also allowed the Gujarat government to swap the quantity of coal it receives from coal mines in Chhattisgarh for its plants with NTPC's imported coal. NTPC imports coal through Gujarat ports for its thermal plants in Chhattisgarh.

Coal India will spend ` 5,000 crore to purchase 250 rail rakes for faster evacuation of coal from mines. The proposed move will help the government in bringing about a transformative change in the power sector and ensure affordable 24x7 power for all homes, industrial and commercial establishments and adequate power for farms. (www.business-standard.com)

October 15, 2014. Developers of electricity projects whose coal blocks have been cancelled by the Supreme Court (SC) will get long-term fuel supply from Coal India if the Union Cabinet approves a proposal that the power ministry is working on. The power ministry proposes coal supply to power projects that have secured debt, placed equipment orders and acquired land.

The proposal will immediately benefit projects with combined capacity of 36,000 MW that are ready or likely to be commissioned by March 2017. These projects were to use coal from captive mines. The proposal will be sent for inter-ministerial consultations before being put up before the Cabinet Committee on Economic Affairs. (economictimes.indiatimes.com)

 [INTERNATIONAL: OIL & GAS]

October 21, 2014. Norway's Statoil that it has proved new oil resources in the D-Structure that lies in the vicinity of the Grane field in the North Sea. Well 25/8-18S, drilled by the Transocean Leader rig in production license 169, proved an 82-foot oil column in the Heimdal formation.

The estimated volume of the discovery is in the range of 30-to-80 million barrels of recoverable oil. The D-structure is located on the Utsira High, just four miles north of the Grane field and in the immediate proximity of the Grane F oil discovery made by Statoil in 2013. The D-structure was originally penetrated in 1992 by well 25/8-4, which encountered just three feet of oil corresponding to about six million barrels. (www.rigzone.com)

October 20, 2014. A British oil company claims to have found Paraguay's first oil reserves, sparking a jump in share price and hope for the floundering economy of the land locked Latin American nation. According to preliminary exploration by the President Energy Company, they have found an oil reserve that will be profitable, making it the first time the South American nation would produce oil.

Paraguay has been searching since 1944, when the first well was drilled since it has similar geological structures to Argentina and Bolivia that contain oil. Paraguay imports all its oil. After the announcement, the shares of President Energy doubled. However the Paraguayan government remains cautious to the news. Deputy energy and mining minister Emilio Buongermini says it will take a couple of months to analyze whether the basin can be exploited commercially. (www.telesurtv.net)

October 20, 2014. Genel Energy Plc, the oil explorer headed by former BP Plc Chief Executive Officer Tony Hayward, discovered oil at its Moroccan project while it continues testing for definitive results. The company has “encountered oil during drilling operations” in a well in the Sidi Moussa block offshore Morocco, Serica Energy Plc, Genel’s partner in the project, said. Some of the world’s biggest oil companies, including BP and Chevron Corp., plan to expand operations off Morocco, while oil explorers including the U.K.’s Cairn Energy Plc and Gulfsands Petroleum Plc have abandoned drilling in some blocks after failing to find commercial reserves. (www.bloomberg.com)

October 20, 2014. PetroChina Co., the country’s biggest oil and gas producer, is on course to surpass a 2.6 billion cubic meter target for shale gas production in 2015 from fields in the southwest province of Sichuan. PetroChina’s success in drilling for shale gas is good news for China, which is seeking to replicate the boom in the U.S. China’s hopes have rested on China Petroleum & Chemical Corp., known as Sinopec, which operates the nation’s largest shale-producing project in Fuling. The country halved its target of producing 60 billion cubic meters by 2020 because of geological challenges. PetroChina aims to produce 5 billion cubic meters by 2017 and 12 billion cubic meters by the end of the decade. Output this year may reach 200 million cubic meters and large-scale commercial production will begin in the first quarter of next year. The company has nine shale gas exploration rights in Sichuan and Chongqing. Four have started or are close to commercial production.

Geographical structures in PetroChina’s fields in southern Sichuan are more difficult to drill through than the Fuling project and gas reservoirs have been smaller. PetroChina will invest 13 billion yuan ($2.1 billion) on Sichuan shale gas exploration and production this year and the first six months of next year. Drilling cost per well in the region is about 65 million yuan at present, which should come down following large-scale drilling and better understanding of the geology. The company has about 3.9 trillion cubic meters of shale gas reserves in Sichuan and Chongqing, of which 1.5 billion cubic meters are buried in areas less than 4,000 meters deep. It will concentrate on exploring for the fuel in those relatively easy depths in the short term. China plans to produce 6.5 billion cubic meters of shale gas by 2015. (www.bloomberg.com)

October 20, 2014. Inpex through its wholly-owned subsidiary Japan Oil Development has begun oil production from the Umm Lulu oil field, offshore Abu Dhabi, UAE. The oil field, which is situated 30km north-west of Abu Dhabi City, has been jointly developed by Inpex, Abu Dhabi National Oil Company, BP and Total. Under the initial development phase, Inpex started oil production from the field by using existing facilities of the nearby Umm Al-Dalkh oil field.

Full field development is presently in progress, and upon completion, the field is expected to produce 105,000 barrels of oil per day. The oil produced in the first development phase is transported through an existing subsea pipeline to Zirku Island, and eventually it will be supplied to customers in Japan and other Asian countries as Upper Zakum Crude. (www.energy-business-review.com)

October 18, 2014. Saudi Arabia and Kuwait halted production at a jointly run oil field, a move that could help ease a supply glut that has pushed global prices down 25 percent. The 300,000-barrel-a-day Khafji field, located in the neutral zone between the two countries, was being shut because of environmental concerns. The shutdown comes as Saudi Arabia and other OPEC members face increasing pressure to scale back production while supply expands from the U.S. and other countries and demand growth slows. Asia’s oil market has become particularly flooded as the U.S. imports fewer cargoes.

The joint venture runs the offshore area of a partitioned neutral zone between Saudi Arabia and Kuwait, a region that the U.S. government estimates to have a total capacity of 600,000 barrels a day. Japan sold 300,000 kiloliters (1.9 million barrels) of Khafji crude from reserves that was scheduled to load July 20 to Sept. 30 from the Shibushi terminal in the Kagoshima prefecture, the Ministry of Economy, Trade and Industry said.

Production in the U.S. expanded to a 29-year high at 8.95 million barrels a day. Libya’s output grew to 780,000 barrels a day in September from 215,000 in April, increasing the supply of light crude competing for a buyer. The International Energy Agency said that global demand would grow this year at the slowest pace since 2009. Saudi Arabia increased output by 50,000 barrels a day to 9.65 million in September, 31 percent of the total from the Organization of Petroleum Exporting Countries, according to a survey. Kuwait pumped 2.94 million barrels, the third-biggest producer in the group. (www.bloomberg.com)

October 15, 2014. Pakistan Petroleum Limited (PPL), operator of Gambat South Block, with 65 percent working interest (WI) along with its joint venture partners Government Holdings (Private) Limited and Asia Resources Oil Limited with 25 percent and 10 percent WI, respectively, announced another gas-condensate discovery from exploratory well Kinza X-1 in District Sanghar, Sindh, Pakistan.

This is the fourth discovery in the block after Wafiq, Shahdad and Sharf gas-condensate discoveries. The expected output from the well will translate into approximately 2,100 barrels per day in oil equivalent and foreign exchange saving of $200,000 per day. (www.rigzone.com)

October 16, 2014. Petroleo Brasileiro SA (PBR), the state-run producer being probed for cost overruns, is set to spend 60 percent more than budgeted at one of its refineries, according to the tribunal overseeing state spending. Petrobras, as the Rio de Janeiro-based company is known, will pay $21.6 billion to complete the Comperj complex that’s scheduled to open in 2016, Jose Jorge, a member of the TCU tribunal, said in documents released in Brasilia. Comperj was initially planned as an industrial complex that would include petrochemical units. It consists of just two refineries.

The original project would cost $47.7 billion if fully executed, Jorge said. The first of Comperj’s units has the capacity to process 165,000 barrels a day. Abreu e Lima, Petrobras’ first new refinery in 30 years, is scheduled to be operational by next month and is expected to cost $18.5 billion, for two units with a total processing capacity of 230,000 barrels a day, according to the company’s business plan. The cost per barrel is obtained by dividing the total cost by the refining capacity. (www.bloomberg.com)

October 15, 2014. French oil company Total, Europe's biggest refiner, said refining margins in the region had risen to an almost two-year high in the third quarter of 2014, recovering for the second consecutive quarter after a 4-year low hit early in 2014. The economic slowdown has hit European oil demand in the past few years, leaving European refineries operating at overcapacity, with margins shrinking. But a recent drop in U.S. diesel exports due to refinery maintenance in the Gulft Coast hub and stock building ahead of the winter on the East Coast have provided some relief to European refiners. (www.downstreamtoday.com)

October 21, 2014. Brent crude rose for the third time in four sessions as China’s economic growth beat analysts’ estimates, increasing demand for oil. West Texas Intermediate (WTI) also climbed. Futures climbed as much as 1.1 percent in London. China’s gross domestic product rose 7.3 percent in the July-September period from a year earlier, the statistics bureau said in Beijing. While that exceeded the 7.2 percent median estimate in a survey of analysts, it was also the slowest expansion since the first quarter of 2009. The country’s oil demand increased by 7.1 percent in September, more than double the growth rate in August. Oil is paring its collapse into a bear market as banks including BNP Paribas SA and Bank of America Corp. predict the rout may be over. They’re in part counting on the Organization of Petroleum Exporting Countries to reduce supply as the U.S. pumps the most oil in almost three decades and Russia’s output rises to a near a post-Soviet record. (www.bloomberg.com)

October 20, 2014. When Zaur Leshkasheli decided to sell his majority stake in Azerbaijan’s largest onshore oil field, the former Russian diplomat-turned-entrepreneur expected to pocket more than $500 million. Instead, Credit Suisse Group AG bankers forced a sale in February 2008 for less than half that amount to Mikhail Gutseriev, the billionaire founder of OAO Russneft, according to a lawsuit filed by Leshkasheli in London. Leshkasheli will argue Credit Suisse was negligent and breached a contract when the Zurich-based bank called in a loan to force the sale of his 51 percent stake in the Kyurovdag field, a joint venture with Socar, Azerbaijan’s state oil company. The Swiss bank ignored or frustrated interest from potential buyers in Asia, Russia and the Middle East, according to Leshkasheli’s lawsuit filed in 2012, and less than a year after the sale, one of the bankers involved in the deal left to work for Gutseriev. (www.bloomberg.com)

October 20, 2014. China's second biggest steelmaker Baoshan Iron & Steel Co Ltd (Baosteel) said it had won a contract to supply pipes for a natural gas pipeline running from Turkey to Azerbaijan. The company will provide 370 kilometeres of pipes for the project known as TANAP. (www.downstreamtoday.com)

October 20, 2014. The partners in Israel's offshore Tamar gas field said they are negotiating the sale of at least 5 billion cubic metres (bcm) of gas over three years to private customers in Egypt via an old pipeline built to send gas in the other direction. The supplies would pass through an underwater pipeline constructed nearly a decade ago by East Mediterranean Gas (EMG), the company that oversaw a now-defunct Egyptian-Israeli natural gas deal. Egypt had been selling gas to Israel in a 20-year agreement, but the deal collapsed in 2012 after months of attacks on the pipeline by militants in Egypt's lawless Sinai Peninsula. It has since been out of commission and EMG is suing the government of Egypt for damages. Recent offshore discoveries such as Tamar, with an estimated 280 bcm of gas, and Leviathan, which is more than twice as big, have turned previously import-dependent Israel into a potential energy exporter. Egypt has been slow in developing its own sizable gas resources and now faces an energy crisis. The Tamar consortium, led by Texas-based Noble Energy and Israel's Delek Group, said they signed a letter of intent to negotiate with Dolphinus Holdings, a firm that represents non-governmental, industrial and commercial consumers in Egypt. Any deal would be subject to various approvals in Israel, Egypt and from EMG. The gas to be sent through the pipeline would be "interruptible", meaning it would only come from excess reserves. It would be sold at a price comparable to other export agreements from Israel and based mainly on a linkage to Brent oil prices. Tamar began production last year and output is mostly earmarked for the Israeli market. In addition, the Tamar partners are already in talks to provide an annual 4.5 bcm of gas for 15 years to Union Fenosa Gas for its liquefied natural gas (LNG) plant in Egypt and a total of 1.8 bcm over 15 years to Jordan. Union Fenosa Gas is a joint venture between Spain's Gas Natural and Italy's Eni. Noble and Delek are also developing the Leviathan field and are working on a major deal with BG Group to export 7 bcm of gas a year over 15 years for their LNG plant in Egypt. (www.downstreamtoday.com)

October 18, 2014. Oil traders might see the 27 percent slide in global prices as a bear market. For U.S. consumers, it’s more like an early holiday gift. The drop in crude has pulled retail gasoline down more than 50 cents a gallon from the year’s high in April. That means annual savings of $500 for the average U.S. household, which consumes about 1,000 gallons of fuel a year, according to data from the Federal Highway Administration and Energy Information Administration. Gasoline’s slide represents the biggest benefit that U.S. consumers have seen to date from a record boom in domestic oil production, a surge that’s contributing to a global crude glut and helping reduce international prices. U.S. gasoline is being exported at record levels for this time of year. (www.bloomberg.com)

October 17, 2014. Chevron Corp. CEO John Watson spends an hour talking about the future of global energy and doesn’t once mention the price of oil. When pressed later, he shrugs off “surplus capacity today” and speaks of growth going forward and the “inevitable decline” of existing supplies. An economist by training in an industry of engineers, nothing fires up Watson quite like matching the $150 billion of new projects Chevron has in the pipeline to his belief that billions of new customers will be coming on stream for oil and natural gas. Since taking charge of the world’s third-largest crude producer almost five years ago, Chairman and Chief Executive Officer Watson has presided over an era of skyrocketing costs, dramatic market swings, declining production and rising concern about how fossil fuels might be harming the planet. He’s convinced he’s on the right track.

Companies Chevron’s size keep their eye on the long-term horizon when market disruptions like the current one occur, as was the case for a similar plunge in oil prices two years ago when crude fell to $77 a barrel. When he looks out, Watson sees 2.2 billion backers for his belief that 19^th century fuels will enjoy a secure future in the 21^st century as the desire for a higher standard of living trumps actions on climate change. (www.bloomberg.com)

October 16, 2014. The bear market in oil is showing the world there’s still only one country in a position to choose winners and losers in the global market: Saudi Arabia. The world’s largest oil exporter is trying to protect its market share by keeping its production steady even as prices hit a four-year low. Energy producers in turmoil, such as Russia, Iran and Venezuela, stand to lose the most, U.S. shale drillers and other Saudi rivals will suffer and industrialized importing countries including Japan will get a boost from cheaper prices. (www.bloomberg.com)

October 15, 2014. Russia has proposed to Tokyo building a natural gas pipeline connecting fields in its far east with northern Japan. The construction of a gas pipeline between the two countries, which has been mooted for decades, would face many obstacles, including a dispute over islands taken by Russian forces at the end of World War II that has prevented Moscow and Tokyo from signing a formal peace treaty. The plan to build a pipeline between Sakhalin and the northern Japanese island of Hokkaido was presented to Japan last month by Russia.

Moscow, which is heavily dependent on taxes from oil and gas sales to western Europe, has been trying to shift focus to Asian countries including Japan and China as potential customers for its vast reserves in eastern Siberia. It has been offering lower priced gas to Japan, which buys about a third of world shipments of liquefied natural gas (LNG), a supercooled form of the fuel. Japan's imports of LNG have surged in the wake of the Fukushima nuclear disaster of March 2011, which has led to the shutdown of all the country's reactors.

Russia supplied almost 10 percent of Japan's LNG imports last year. Moscow and Tokyo have been discussing a number of projects involving LNG supplies to Japan from Sakhalin and Vladivostok, but talks have slowed as the Japanese government fell in line with sanctions on Russia over the Ukraine crisis. (www.downstreamtoday.com)

October 15, 2014. U.S. railroads are rallying customers, including lumber and steel executives, to fight a government safety proposal to slow trains hauling another commodity: crude oil. More than a dozen companies and business groups, urged by railroads including Union Pacific Corp., are warning regulators that cutting speeds to 40 miles an hour from 50 would have a cascading effect, delaying other trains sharing the tracks carrying cargo such as furniture, grain and electronics. Slower trains would add days to a two-week trip for wood from Canada, raising costs and frustrating customers, Will Higman, chief operating officer for Reliable Wholesale Lumber Inc., a family-owned business in Huntington Beach, California, said Regulators in the U.S. and Canada are considering rules to prevent accidents involving trains hauling crude oil, such as one that killed 47 people in Lac-Megantic, Quebec, last year. Carloads of crude surged 40-fold since 2008, which safety advocates say poses a risk to communities near the tracks. (www.bloomberg.com)

October 21, 2014. Poland plans to expand a new liquefied natural (LNG) gas terminal aimed at bolstering energy security and easing dependence on Russian supplies, the gas utility PGNiG said. State-controlled PGNiG and Polskie LNG, the company building the terminal on the Baltic port of Swinoujscie, have signed a letter of intent to build a third gas storage unit on the site, the companies said. The $3 billion terminal in Swinoujscie -- initially able to accept 5 billion cubic metres (bcm) annually -- is scheduled to come on stream next year and will import gas from Qatar. A third storage tank could boost capacity to 7.5 bcm, the head of Poland's gas grid told Reuters last month, adding that market interest justified the expansion. Poland and other central and southeast European countries get most of their gas from Russia and want to cut dependence on their former Soviet master, particularly as the crisis between Ukraine and Russia could threaten deliveries this winter. However, Poland's bid to boost energy security by building the LNG terminal comes at a cost. It has contracted to import 1.6 bcm of gas a year from Qatar for 20 years, a deal that could saddle it with some of the highest prices in the world. The government approved the terminal in 2008, and construction started in 2011. The project's original timeline has been pushed back several times, but the facility is expected to open in the first half of 2015 without any further delays. (www.downstreamtoday.com)

October 20, 2014. Egypt's former petroleum minister Osama Kamal said global crude oil prices are set to fall drastically, predicting a further erosion of as much as a third in the coming days. Kamal expect crude oil prices to touch $60 per barrel. India is among the major investors in Egypt, with about a dozen firms employing over 35,000 locals there. Kamal said Egypt's economy is back on the path to recovery. Egypt is implementing an ambitious plan of developing the Suez Canal Axis through a project involving ship building and maintenance yards, which will bring in $100 billion in investments into the country, he said. He said that Egypt's transition to civilian rule is progressing in accordance with the plan. (economictimes.indiatimes.com)

October 20, 2014. Thailand's military-backed government will raise prices of liquefied petroleum gas (LPG) used for transportation by 0.63 baht (0.02 U.S. cents) per kg, the second increase in a month, the energy ministry said. The move is part of the country's closely-watched energy reforms aimed at shifting the structure of domestic fuel prices from a highly-regulated system to a market-based one. Transport LPG prices will be raised to 22.63 baht/kg, at par with prices for LPG meant for household use, the ministry said. The increase will also help prevent users from swapping LPG for transportation with cooking gas. On Oct 1, the government had hiked transport LPG prices by 0.62 to 22 baht.

Thailand plans to gradually raise domestic gas prices over the next 12 months to bring them more in line with the import prices paid by the state supplier, Energy Minister Narongchai Akarasanee said. State-controlled PTT PCL, the country's sole gas supplier, has shouldered losses from fuel subsidies as it has to import LPG at global prices, which are at $747 per tonne, and sell them at the government-fixed price of $333 per tonne. In 2013, LPG for household cooking accounted for 32 percent of Thailand's total LPG consumption, while the petrochemical sector accounted for 35 percent and transportation 24 percent, according to data from the energy ministry. (www.downstreamtoday.com)

October 20, 2014. Norway, where oil helped create one of the world’s most stable and prosperous societies, finds itself among the most exposed to falling crude prices. Though the blessings of energy wealth have hardly turned to a curse, the industry’s highest labor costs, which saw the average offshore worker earn $179,000 last year, threaten to curb investment as oil tumbles. In August, Helge Lund, chief executive officer of state oil company Statoil ASA, remarked that while $100-a-barrel oil once provided an excuse for champagne, it now barely covered the expense of new projects. Two months later, with crude hovering near $85 a barrel and Lund, the leading figure in Norway’s oil industry for 10 years, moving to a smaller British competitor, lower prices risk undermining economic growth and cutting tax receipts. Norway has already been coping with 13 years of production declines from its aging North Sea fields and reduced revenues will imperil further developments to replace that oil. (www.bloomberg.com)

October 20, 2014. A lawsuit and a slump in oil prices are deterring investors including Sweden’s Tundra Fonder AB and Coeli Asset Management from Pakistan’s biggest asset sale in eight years. Book-building to sell a 10 percent state holding in Oil & Gas Development Co. (OGDC) worth about 75.7 billion rupees ($736 million) has been delayed as investors wait to see what happens when the nation’s top court hears a case with a provincial government contesting the transaction. The court intervention has coincided with a drop in Brent oil to a four-year low, cooling investor demand for Pakistan’s most-valued company and likely hurting the country’s plans to meet targets attached to a $6.6 billion International Monetary Fund loan. OGDC is the second-biggest loser on the KSE100 Index (KSE100) in the past month, data show. The northwest Khyber-Pakhtunkhwa province asked for the transaction to be halted, saying it wants representation in the sale because OGDC operates in the area. The Supreme Court allowed the government to proceed with the sale on condition it won’t transfer shares to buyers until a ruling. The company contributes 30 percent of the nation’s natural-gas output and about half of its oil production. (www.bloomberg.com)

October 20, 2014. Plunging oil prices spurred hedge funds to cut bullish wagers by the most in six weeks, losing confidence in the willingness of producers to constrict supply. Money managers cut net-long positions in West Texas Intermediate (WTI) by 8.1 percent in the week ended Oct. 14. Short positions jumped to the highest level in 22 months, U.S. Commodity Futures Trading Commission data show. WTI tumbled 8.8 percent this month as U.S. production expanded to a 29-year high. That added to signs of a global supply glut just as the International Energy Agency cut its forecast for demand growth. Crude is now trading in a bear market, underpinned by speculation that OPEC members are favoring market share over prices.

Global crude consumption will rise by about 650,000 barrels a day this year, the Paris-based IEA said in its monthly market report on Oct. 14. That was 250,000 fewer than last month’s estimate and the slowest growth since 2009. The adviser to energy-consuming countries cut its 2015 demand growth forecast by 100,000 barrels a day to 1.1 million. U.S. crude output reached 8.95 million barrels a day in the week ended Oct. 10, the most since June 1985. Production will climb to 9.5 million next year, the most since 1970, the Energy Information Administration said. The Organization of Petroleum Exporting Countries pumped 30.935 million barrels a day in September, the highest since August 2013, led by surging output from Libya, a survey of oil companies, producers and analysts showed. Bank of America Corp. and BNP Paribas SA predict prices will hold above $80 a barrel and Goldman Sachs Group Inc. said that the drop in crude was excessive because there’s no oversupply. (www.bloomberg.com)

October 17, 2014. Singapore-listed RH Petrogas Limited, engaged in the business of exploration, development and production of oil and gas resources, announced that the Group’s Overall Development Plan (ODP) for the phased development of the Yongping Oilfield in the Fuyu 1 Block has received approval from the National Development and Reform Commission (NDRC) of the People’s Republic of China. The approval of the ODP will allow the Group to advance into the development and production phase for Fuyu 1 Block. Fuyu 1 Block is located in Songliao Basin, Jilin Province, the People’s Republic of China and is operated by Kingworld Resources Limited (KRL), a wholly owned subsidiary of the Group. KRL entered into the petroleum contract for Fuyu 1 Block with China National Petroleum Corporation (CNPC) in November 2007. KRL has a 100 percent working interest in the Fuyu 1 Block during the evaluation phase. Upon the commencement of commercial production under the Fuyu 1 PSC, CNPC would back in for a 51 percent working interest. The approved ODP allows KRL to operate and drill up to 1,008 wells in Fuyu 1 Block over a course of five years. These are shallow wells with average depth of less than 984 feet. Fuyu 1 Block is expected to yield a total of 14.6 million barrels of oil during its production cycle, of which RHP will hold a 49 percent interest. (www.rigzone.com)

October 16, 2014. OPEC must keep reducing prices to undercut competing supplies from Latin America and West Africa, Indian refiners said. Saudi Arabia, Iran and Iraq, which account for about half the output from the Organization of Petroleum Exporting Countries (OPEC), will sell crude to Asia next month at the biggest discounts since at least January 2009. Hindustan Petroleum Corp. and Mangalore Refinery & Petrochemicals Ltd. say that’s still not enough to stop them looking for alternatives. The highest U.S. production in almost 30 years is reducing America’s demand for oil and giving consumers in Asia a greater choice of suppliers, from Venezuela to Alaska and Nigeria. The glut has driven futures into a bear market and prompted OPEC members to cut prices to defend their market share. The U.S. imported 7.62 million barrels a day of crude in July, down 29 percent from the peak in June 2005, data from the Energy Information Administration show. European consumption is also shrinking as refineries are shutting or converting to storage depots at the fastest pace since the 1980s after demand for oil products dropped. Crude that may have previously found a buyer in the U.S. or Europe is now available for Asia and competing with traditional suppliers from the Middle East, according to the Paris-based International Energy Agency. Asia will account for more than half of global demand growth this year. Saudi Arabia’s share of China’s crude imports narrowed to less than 16 percent in the first eight months of this year, from 19 percent last year. China Petroleum & Chemical Corp.’s Jinling refinery said the Saudi price cuts wouldn’t have any immediate effect on the crude types Chinese refiners purchase because they import on the basis of long-term contracts. (www.bloomberg.com)

October 16, 2014. Kuwait's government is moving towards cutting some of the energy subsidies which drain billions of dollars from the state budget every year, in a politically sensitive reform which could start to curb waste and overuse of its oil resources. The cabinet "accepted" a report by a committee at the Ministry of Electricity and Water on hiking prices of diesel and kerosene more than threefold. The report discusses raising the prices of both fuels at wholesalers and fuel stations to 0.170 dinar (59 U.S. cents) per litre from 0.055 dinar, minister for social affairs and labour Hind Al-Sabeeh said.

Despite Kuwait's vast oil wealth and big state budget surpluses, the budget could conceivably fall into deficit later this decade if the country does not rein in wasteful spending growth, the International Monetary Fund (IMF) has warned. Subsidy cuts are key to restraining spending because lavish subsidies, mostly on energy, swallow about 5.1 billion dinars annually, or roughly a quarter of the government's projected spending this fiscal year, according to official figures. However, as in most of the Arab world, cutting subsidies is politically risky.

In recent years, Kuwait's parliaments have repeatedly been dissolved over procedural disputes or for challenging the cabinet, in which members of the ruling family hold top posts. The cabinet began considering subsidy cuts months before the recent plunge of global oil prices, which has brought Brent crude down to $83 a barrel, its lowest level since 2010, from around $115 in June. But the sliding oil price may have concentrated minds in the Kuwaiti cabinet and made officials more willing to take the political risk of reforms. The country is in no danger of running out of money - the IMF has estimated it needs an oil price of only $52 to balance the state budget - but if current prices persist, budget surpluses will shrink considerably. Oil minister Ali Saleh al-Omair said that lifting prices for petrol and butane gas was not on the agenda. (in.reuters.com)

October 16, 2014. Since becoming Venezuela’s president 18 months ago, Nicolas Maduro has contended with chronic shortages of everything from toothpaste to medicine, the world’s fastest inflation and sinking foreign reserves. His predicament is about to get worse. Prices for Venezuela’s oil, which accounts for 95 percent of the nation’s exports, are tumbling to a four-year low and threatening to choke off the export dollars the country needs to pay its debts. The slump in oil prices comes as Harvard University economists Carmen Reinhart and Kenneth Rogoff warned that Venezuela is almost certain to default on its foreign-currency bonds. Deepening concern the South American country will renege on its debt payments triggered a selloff in its $4 billion benchmark bonds due 2027, causing yields to soar to a five-year high of 17.87 percent. The price of Venezuela’s oil basket has declined 18 percent from a nine-month high in June to $82.72 per barrel, the lowest since December 2010. The decline is in line with the drop in benchmark Brent crude prices sparked by a combination of a slowing global economy and rising world output. (www.bloomberg.com)

October 15, 2014. Singapore, the world's largest bunkering port, plans to supply liquefied natural gas (LNG) to fuel ships by 2020, Transport Minister Lui Tuck Yew said, as part of a global trend to move away from oil to gas to reduce emissions. The city state planned to start a pilot programme by early 2017 to fund up to S$2 million ($1.57 million) per vessel for up to six LNG-fueled vessels for the testing of safety procedures and standards, Transport Minister said. More than 42 million tonnes of marine fuel has been sold annually in Singapore in the past three years, making it the world's largest bunkering port. From next year, shipping firms will have to cut polluting sulphur emissions in vessels going to parts of Europe and North America, sparking a race for alternatives to standard diesel between fuel sources such as methanol and LNG. (www.downstreamtoday.com)

October 15, 2014. The decline in oil prices may be depriving Russian President Vladimir Putin of his biggest ally. Oil has been the key to Putin’s grip on power since he took over from Boris Yeltsin in 2000, fueling a booming economy that grew 7 percent on average from 2000 to 2008. Brent crude is down more than 25 percent from its June high, cutting billions of dollars in tax revenue from Russia’s most valuable export. The budget will fall into deficit next year if oil is less than $104 a barrel, according to investment bank Sberbank CIB. At $90, Russia will have a shortfall of 1.2 percent of gross domestic product. Brent for November fell 4.3 percent to settle at $85.04 a barrel in London, and was down a further 7 cents to $84.97 at noon New York time. The country has spent about $6 billion on currency interventions this month trying to keep the ruble afloat. Russia’s largest oil company, OAO Rosneft; gas producer OAO Novatek; and the largest lender, OAO Sberbank, are among companies targeted by the sanctions. (www.bloomberg.com)

October 15, 2014. OPEC is resisting pressure to cut oil production while demand slumps as it tests how low prices must go to make U.S. shale oil unprofitable. As producers become more efficient, that floor is sinking. The Organization of Petroleum Exporting Countries (OPEC) boosted output by the most in 13 months in September, even as crude plunged into a bear market and demand growth weakens to a five-year low, according to the International Energy Agency (IEA). Saudi Arabia and Kuwait, the largest and third-largest members of OPEC, indicated the price slump doesn’t warrant immediate production cuts, the IEA said. While OPEC acted as a “swing producer” over the past decade, responding to surpluses by cutting output, it’s now letting oil slide to see if North American production can withstand lower prices, said Antoine Halff, head of the IEA’s oil industry and markets division. So far drillers are showing no signs of cracking, with the U.S. government forecasting record shale output in November, helping boost the nation’s crude supply to the highest level since 1986. (www.bloomberg.com)

 [INTERNATIONAL: POWER]

October 19, 2014. Power Division has selected a Chinese joint venture company to install a 150 MW peaking power plant at Shikalbaha in Chittagong under the dual fuel system. Power Division said due to gas crisis in Chittagong district, the 150 MW peaking power plant at Shikalbaha usually remains inoperative. Bangladesh Power Development Board (BPDB) floated a tender in last February and later the tender evaluation committee selected the Chinese joint venture company. According to a proposal made by BPDB, the estimated cost for implementing the project was only Tk43.77 crore in 2009. But the project cost went high due to hike of equipment. Although a German company signed a contract, it did not start the construction work of the dual fuel power plant at Shikalbaha as the warranty was over, the proposal said. Apart from Fujian Electric Power Engineering Company, German firm Siemens, AG, Islam Enterprise Ltd, Dhaka and Chinese firm Sinohydro Corporation took part in the tender. (www.dhakatribune.com)

October 18, 2014. Ethiopia is planning to build two more hydro-electric dams over the southern Omo River on border with Kenya for generating electricity. The two dams will have the capacity to generate 2,050 MW of electricity. Ethiopia has begun to sell bonds in the capital market as to generate funds for its mega-projects.

Ethiopia built the Gilgel Gibe I on the Omo River in 2004. The dam has an electric output of 184 MW. Gilgel Gibe II was inaugurated in 2010 and 80 percent of the construction has been finalized. Ethiopia has the potential to produce more than 45,000 MW of electricity from hydro-power. Ethiopia is planning to build a number of dams for electricity generation, including a controversial hydroelectric dam on the Nile's upper reaches, which has strained relations with Egypt. (www.worldbulletin.net)

October 18, 2014. Three state-owned power plants will be refurbished, announced Zesa Holdings Ltd Group. Chief executive officer Josh Chifamba for the Zimbabwe Electricity Supply Authority (ZESA), announced in Windhoek, Namibia, that Zimbabwe will invest $USD 300 million for new boilers for state-owned power plants.

The three plants are located in the cities of Harare, Bulawayo and Munyati. Presently, the Harare facility is not operational. According to the Zimbabwe Power Company, the Bulawayo and Munyati plants are currently operating at a capacity of 30 MW and 100 MW respectively. Zimbabwe is the world’s second largest platinum producer after South Africa.

The country has plans to expand its capacity to generate power, in order to address the blackouts that have affected the mining and platinum industry. Jaguar Overseas Ltd., a company based in New Delhi, India, will refurbish the Harare plant. According to Chifamba, work is expected to start soon, although financing for the facilities in Bulawayo and Munyati has yet to be secured. (www.telesurtv.net)

October 17, 2014. The Burmese government and companies based in Burma, Japan and Thailand signed a Memorandum of Understanding (MoU) to conduct a feasibility study and an environmental and social impact assessment study for a coal power plant the consortium is planning to build in Tenasserim Division’s Myeik City. The cost of building the 1,800 MW power plant is expected to be around US$ 3.5 billion. (www.dvb.no)

October 16, 2014. The Lower Colorado River Authority (LCRA), power supplier to the city of Brenham and Bluebonnet Electric Cooperative, has dedicated its new Thomas C. Ferguson Power Plant in Horseshoe Bay. The new 540 MW combined-cycle power plant is producing power for the state’s electric grid as one of the newest, most efficient and reliable electric generating facilities in Texas. (www.brenhambanner.com)

October 21, 2014. The power unit of Poland’s state railway will start trading German electricity to boost profits and benefit from cheaper prices in Europe’s biggest market. PKP Energetyka SA will carry out its first transaction outside Poland on the Leipzig, Germany-based European Energy Exchange AG, according to Wojciech Szwankowski, the company’s head of trading and business development. German benchmark power has been on average 14 percent cheaper than the comparable Polish contract this year, the biggest gap since at least 2008, according to broker data.

Polish power prices rose above Germany’s this year as the eastern European nation started paying utilities to ensure stable supplies. PKP Energetyka, which has no generating assets, this year expanded its team of traders to five by hiring Kordian Graf as head of its proprietary trading desk to gain access to EEX, Szwankowski said.

German power for next year averaged 35.18 euros ($44.96) a megawatt-hour this year, about 5 euros less than the comparable Polish contract, broker data show. The discount was 6.20 euros. That compares with an average premium of 2 euros in 2013. Brokers handled about 383 terawatt-hours out of a total 468 terawatt-hours traded last month, according to data from the London Energy Brokers’ Association and Trayport Ltd. (www.bloomberg.com)

October 20, 2014. The Iranian and Armenian energy ministers agreed on the construction of a new power transmission line from Armenia to Iran in line with the two country’s efforts to boost energy ties. Energy Minister of Iran Hamid Chitchian and his Armenian counterpart Yervand Zakharyan held talks on ways to boost electricity for gas trade, based on which Iran supplies gas to Armenia and receives electricity. Chitchian said during the talks it was agreed that the third power transmission line between the two countries and two hydroelectric power plants be constructed in a bid to increase the potential for energy exchange. He said that over the past two decades, the two countries have had good cooperation in the area of energy and the meeting was an emphasis on the continued cooperation between Iran and Armenia. (www.armradio.am)

October 17, 2014. A P988-million 230-kilovolt (kV) line, which will loop northern and southern Mindanao, was recently energized in anticipation of load growth in the region, the National Grid Corporation of the Philippines (NGCP) said. The 213-circuit kilometer-long line from Villanueva, Misamis Oriental to Maramag, Bukidnon is part of the second stage of new Mindanao 230-kV Transmission Backbone Project, the private firm said. The Mindanao Backbone Project intends to increase NGCP’s transmission capacity in Mindanao from 138 kV to 230 kV, thereby providing additional corridor for the transmission of power supply from the Agus and Pulangi Hydro facilities, which accounts for the bulk of power supply in Mindanao. According to NGCP, the southeast and southwest areas of Mindanao comprise 49 percent of the whole Mindanao power demand. (www.sunstar.com.ph)

October 17, 2014. Up Energy Development Group said it’s picked the bottom of the coking coal market after the Hong Kong company agreed to buy control of a Canadian mine from its two owners by paying them $1 each. Grande Cache Coal Corp. comes with liabilities, the bulk of which are a $350 million loan from China Minsheng Banking Corp. due by the end of this year, and the sellers retain the right to market much of its output. Up Energy Chairman and Chief Executive Officer Qin Jun said prices for the coal used to make steel are near their global cost of production and he’s betting output cuts at other mines could drive up prices by 50 percent within two years. He said he’s looking for more deals in North America and Australia. Three mines in Australia and at least eight in the U.S. have shut as price fell to their lowest since 2008. With more mines likely to shutter or cut output, Qin, a former bureaucrat in China’s Ministry of Machinery and Electronics, says now is the time to transform nine-year-old Up Energy from a Chinese coal business into a global mining and trading operation. Coking coal prices have more than halved from three years ago as steel output growth in China slowed amid an oversupply of raw materials. More coal production cuts globally should stabilize prices by the end of the year, Bank of America Merrill Lynch Global Research said. (www.bloomberg.com)

October 16, 2014. ABB has been awarded a contract by an Energinet.dk, the transmission system operator responsible for the eastern part of Germany, to upgrade the 600 MW Kontek high-voltage direct current (HVDC) transmission link. Under the $16 mn contract, ABB will install its state-of-the-art MACH control and protection system to enhance performance and reliability of the 600 MW Kontek HVDC interconnection link. Originally delivered by ABB in 1995, the link will be upgraded to help improve the operational reliability of the link and reduce maintenance needs. The upgraded link is expected to enter service in 2016. The contract marks the ABB's 23rd major HVDC modernization project since 1990, including 17 control system upgrades. The MACH system is a control solution deployed for HVDC and Flexible Alternating Current Transmission Systems (FACTS) installations, with over 1,100 such systems in operation throughout the world. (utilitiesnetwork.energy-business-review.com)

October 16, 2014. The US Federal Energy Regulatory Commission (FERC) maintained its position that the existing 11.14% base rate of return on equity for transmission in the ISO New England region is unjust and unreasonable and upheld an order cutting the rate to 10.57%. FERC's decision to reduce the ROE stemmed from a complaint filed in 2011 by states and industrials in New England who argued that a lower rate was warranted because capital market conditions had drastically changed since the commission set the ROE in 2006. (www.platts.com)

October 17, 2014. A court in Pakistan has restrained the government from initiating construction work on two proposed nuclear power plants unless environmental safeguards are adhered to. The two-judge bench at the Sindh High Court restrained the Pakistan Atomic Energy Commission (PAEC) to carry out work at the proposed sites in the southern port city of Karachi without adhering to environmental laws. The court directive was issued on a petition challenging the environmental impact assessment (EIA) report of the Sindh Environmental Protection Agency which approved the two plants.

The counsel of petitioner said that the reactors would be built by the China National Nuclear Corporation on a design known as ACP-1000 that has not been operational even in China. Pakistan government had finalised plans for starting work on two nuclear power plants of 11,00 MW each - adjacent to the Karachi Nuclear Power Plant - with support from China. Besides, subsequent plans for two more plants - K-4 and K-5 - were also under consideration. (www.business-standard.com)

October 15, 2014. Lockheed Martin Corp said it had made a technological breakthrough in developing a power source based on nuclear fusion, and the first reactors, small enough to fit on the back of a truck, could be ready for use in a decade. Tom McGuire, who heads the project, said he and a small team had been working on fusion energy at Lockheed's secretive Skunk Works for about four years, but were now going public to find potential partners in industry and government for their work. Initial work demonstrated the feasibility of building a 100 MW reactor measuring seven feet by 10 feet, which could fit on the back of a large truck, and is about 10 times smaller than current reactors, McGuire said. (www.reuters.com)

October 15, 2014. A Japanese governor said the country should not restart any nuclear plants until the cause of the Fukushima meltdown is fully understood and nearby communities have emergency plans that can effectively respond to another major accident. Hirohiko Izumida, governor of central Niigata prefecture — home to the seven-reactor Kashiwazaki-Kariwa plant — said regulators look at equipment but don't evaluate local evacuation plans.

Prime Minister Shinzo Abe is pushing to restart two reactors in southern Japan that last month were the first to be approved under stricter safety requirements introduced after the Fukushima disaster. Nuclear Regulation Authority Chairman Shunichi Tanaka has called the new standard one of the world's highest. Abe has said he will restart all reactors deemed safe, reversing the previous government's policy of phasing out nuclear power.

Regulators are inspecting 18 other reactors, including two in Niigata operated by the utility that runs the Fukushima plant, which experienced meltdowns following the 2011 earthquake and tsunami. All 48 workable Japanese reactors are currently offline. The nuclear authority's approval of the two Sendai reactors paves the way for their restart within few months, considered a big boost for Japan's nuclear industry. (www.downstreamtoday.com)

 [RENEWABLE ENERGY / CLIMATE CHANGE TRENDS]

October 21, 2014. Voltech Group, as part of diversifying its business, forayed into power plant business and oil and gas, forming joint ventures (JV) with Kuwait-based Rank General Trading and Contracting Company and Zambia-based Goldberg Associates.

Voltech Group also formed another joint venture with Zambia-based Goldberg Associates for setting up a 10 MW solar power project. Voltech Group has invested ` 120 crore in the joint ventures and was expecting to garner revenues of ` 400 crore in the next five years. On the status of the company's Chennai plant, it would become operational next month. (economictimes.indiatimes.com)

October 20, 2014. In an attempt to provide 24x7 health care facilities available on all public health care centers, the government installed solar power plants in the hospitals here, some 37kms from Srinagar city. The plant which is charged by the sunlight provides 27 hours electricity to the hospital. The plant has been installed at the cost of rupees 43 lakhs with the funding from the central government. The locals are happy as they are getting round the clock health facilities and other procedures. The government is planning to install this solar system in other hospitals as well. (www.business-standard.com)

October 19, 2014. While Goa is "very vulnerable" to a large number of climate-change impacts, it must lead the way in sustainable development and with vision and innovation emerge as a model not only for India but also for the rest of the world, said Nobel peace prize laureate Rajendra Kumar Pachauri. Pachauri said Goa, being a coastal state, is vulnerable to the impact of climate change which is leading to sea level rise as a result of the melting of ice bodies across the globe. There is also thermal expansion of the oceans.

The inter-governmental panel on climate change, which Pachauri chairs and which won the Nobel peace prize in 2007 along with former US vice-president Al Gore, has in its fifth assessment report found that average sea level rise across the globe has been 19cm since the beginning of the last century up to 2010. He said that before submergence can take place, every time there is a storm surge and coastal flooding, because of the higher level of the sea, the extent of damage would be disproportionately higher.

Pachauri said that we need to be concerned about the beauty of Goa. Pachauri said that Goa must develop as a model of sustainable development not only as an example to India but to the whole world. There are challenges like high population density, but places like Japan, which have higher population density, have excelled in sustainable development, he said. (timesofindia.indiatimes.com)

October 18, 2014. A synergy between the parameters of environment protection and development is "extremely vital" for balanced sustainable development, Minister for Environment, Forests and Climate Change Prakash Javadekar said. The ministry of environment and forests said that Javadekar hoped that such a synergy would enable achieving the "Clean India, Green India" mission. Javadekar said that people's participation was a prerequisite to address the challenges facing the environment. He was speaking at the fourth Foundation Day celebrations of the National Green Tribunal (NGT). Javadekar also reiterated the role and relevance of the NGT in the current context, saying it had provided an institutional mechanism and framework to address the needs and concerns pertaining to the environment. He touched upon the recent initiatives undertaken by the government for the environment. (www.newkerala.com)

October 17, 2014. Suzlon Group has bagged contracts for wind power projects having total capacity of 150 MW, estimated to be worth about ` 1,200 crore. The orders have been received from various entities including Malpani Group, Rajasthan Gum Group, KRBL, Sterling Agro Group and an assortment of Small and Medium Enterprises. The projects were bagged in the last two months and are scheduled for execution across eight states that have high wind potential. There are repeat orders from existing customers including Malpani Group, Rajasthan Gum Group, KRBL Group, and Sterling Agro Group. Among others, KRBL Ltd's order size is 23.10 MW for a project in Maharashtra while Malpani Group has placed 29.4 MW contract for a plant in Madhya Pradesh. Suzlon Group is the world's fifth largest wind turbine maker and has installed generation capacity of over 24,700 MW. (www.business-standard.com)

October 17, 2014. Chempolis Ltd, a Finland based bio refining technology corporation has inked partnership agreement with State-run oil refiner-marketer Bharat Petroleum Corporation Ltd's Assam based refinery, Numaligarh Refinery Limited (NRL) to jointly partner to build a world class biorefinery. According to NRL the agreement commits both the parties to set up the bio refinery using bamboo as main biomass which is abundantly available in the state of Assam in North-East India. Project implementation is expected to take approximately 2.5 years. (economictimes.indiatimes.com)

October 16, 2014. Solar solutions provider Rays Power Experts said it has commissioned 20-MW solar project at Bikaner in Rajasthan. The company had invested ` 125 crore for setting up the project. Rays Experts has 650 MW capacity plants in its portfolio. (economictimes.indiatimes.com)

October 15, 2014. With the inauguration of a four-megawatt (MW) solar power plant at Boha, Punjab took a giant leap towards realising its dream of becoming a solar state. Inaugurated by Punjab Non-Conventional Energy Minister Bikram Singh Majithia, the ` 33.75 crore solar power plant set up by Gujarat-based Madhav Solar would generate six million units annually to meet the state government's target of 1,250 MW of solar power within three years. Majithia said it was a matter of pride for the state that companies successfully running solar power projects in Gujarat were now finding Punjab as a land of opportunities for their expansion.

He said the Punjab government had undertaken a comprehensive exercise to identify all the available panchayati and non-cultivable lands for setting up solar power plants having joint generation capacity of 1,000 MW power in the state. The Union ministry of non-conventional & renewable energy has in-principle agreed to set up an ultra mega solar power park. A detailed project report for setting up of 100 MW solar power plants on all major canals flowing through the state has also been submitted to the Union government.

He said the world's single largest rooftop plant of 7.5 MW capacity has been set up at Beas in Amritsar district. It was constructed at a cost of ` 150-200 crore. Rooftop solar photovoltaic plants were also being set up in 120 police stations across the state. Majithia said Chief Minister Parkash Singh Badal would inaugurate the project soon. He said the state government was also exploring the possibility of setting up solar power clusters to energise agricultural pumps.

The Punjab Energy Development Agency had prepared a proposal for exploring the mechanism by which power for agricultural use can be provided from solar photovoltaic pumps or power plants. The government's subsidy for agricultural power can be diverted for setting up of the one-time solar power projects infrastructure in the state, thereby saving the recurring subsidy bill. (www.business-standard.com)

October 21, 2014. The U.S. and China may help avoid dangerous climate change simply by learning from each other. China and the U.S. may reduce greenhouse-gas emissions 20 percent and 16 percent, respectively, in 2030 from current policy projections by adopting each other’s best practices, according to a report from the Climate Action Tracker, a project that analyzes global efforts to fight global warming.

China is the world’s top greenhouse-gas emitter, followed by the U.S., according to World Bank data. Together the two countries account for more than a third of total emissions. Both nations may close the emissions gap by 23 percent if they adopted best practices in domestic climate protection, for example by reducing coal use or cutting electricity consumption, the project said. (www.bloomberg.com)

October 21, 2014. China’s drive to build electric cars is likely to set up a greater-than-forecast surge in demand for aluminum, according to Novelis Inc., the world’s biggest supplier to automakers of sheets made of the lightmetal. China, the world’s biggest carbon emitter, is mandating that at least 30 percent of new government vehicles be powered by alternative energy by 2016 in the government’s latest salvo to combat pollution and reduce energy dependence. The use of aluminum in auto bodies by China, Japan and South Korea, Asia’s major carmaking countries, is around 50,000 metric tons and expected to grow at about 30 percent a year for at least the next decade, Novelis Asia said.

The government has identified electric vehicles as a strategic industry where it can gain global leadership, reduce energy dependence and cut emissions as it pledges to remove polluting cars from the road. China in 2009 set a goal of cutting carbon-dioxide emissions by as much as 45 percent from the 2005 level by 2020, joining the European Union and the U.S. in efforts to conserve energy. Meanwhile, the country is set to overtake the U.S. to become the top market for luxury vehicles by 2016, according to McKinsey & Co. (www.bloomberg.com)

October 16, 2014. Fracking technology has driven a boom in natural gas that many hope will prompt a switch away from coal use and put the brakes on the rise in Earth-warming carbon dioxide (CO₂) emissions. But a study said market forces will undo many of the potential benefits from this burgeoning energy source. Ever-cheaper prices will prompt higher energy consumption and CO₂ emissions, and discourage investment in lower-emitting alternatives like nuclear, wind and solar, it said. Advances in hydraulic fracturing -- pumping liquids into stone to break it up and release the gas within -- and horizontal drilling, have unlocked plentiful natural gas supplies, mainly in the United States to date. This could lead to CO₂ emissions up to 10 percent higher by the middle of the century, instead of lowering them. Increased gas production also led to higher emissions of another potent heat-trapping greenhouse gas, methane, due to leakages from drilling and pipelines. (zeenews.india.com)

October 16, 2014. The world’s first global carbon market will need less intervention by regulators to succeed, Dow Chemical Co. said. Politicians must avoid earlier missteps in Europe that included bans on imported carbon credits and a temporary cut of permits to curb a glut, said Russel Mills, director of energy and climate policy at the biggest U.S. chemicals maker. Such interventions need to be avoided in a post 2020 worldwide market presented by the European Union because both nations with mandatory limits on carbon and those without need to sign up, he said. European Union leaders will discuss next week how to reform the world’s biggest emissions market and set targets for 2030 as part of a planned global accord. European industry, already battling with natural gas prices more than double those in the U.S., is seeking a cost-effective climate policy as the economy shows signs of slowing amid sanctions against Russia. (www.bloomberg.com)

October 15, 2014. A surcharge included since 2000 on German household power bills to help fund renewable energy will be trimmed for the first time, network companies said. Germany has expanded renewable energy as part of sweeping changes that will include switching off nuclear power by 2022. The green energy surcharge will fall 1.1 percent in 2015 to 6.17 euro cents per kilowatt-hour from 6.24 cents, the transmission system operators (TSOs) said. The surcharge would fall to 6.17 cents, a smaller decrease than a fall to 6 cents forecast by green energy group BEE last month. The cut will save the typical household less than 3 euros a year, which consumer portal Verivox described as too small a savings given TSOs plan higher grid fees in some regions which could mean households face bigger, not small, power bills. The surcharge was introduced to help foster wind and solar power as part of Germany's efforts to reduce carbon output but the government is now curbing incentives. Renewable energy provided 28.5 percent of the power consumed in Germany in the first half of 2014. Installations will likely boost green energy output next year by 10 terawatt hours (TWh) to 160 TWh, the TSOs said. (www.reuters.com)

October 15, 2014. European government officials have approved a proposal to delay deadlines for final investment decisions and the operational launch of Europe's first commercial-scale carbon capture and storage plant and 40 renewable energy projects. The measure, proposed by the European Commission following pressure from seven EU member states including Britain, France and Germany, throws a lifeline to some projects struggling to comply with the EU's 2.1 billion euro ($2.7 billion) scheme to cut greenhouse gas emissions. The recipients under the first round of the NER300 program had been due to make their final investment decisions by the end of 2014 and be operational by the end of 2016, but seven EU nations asked the Commission to delay all deadlines by two years. Projects awarded funding in the second round announced in July now have until 2018 for final investment decisions and 2020 for activation. (www.reuters.com)

 

 

 

 

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