Energy News Monitor | Volume XI; Issue 29

[2015: It will be different for energy]

                             “It is likely that businesses and the Government are not passing on the benefits of low oil prices to consumers because they know that these prices are unsustainable in the longer term. They are probably aware that the fundamentals of oil extraction have not changed. Low oil prices are definitely not the result of the return to the era cheap easy to extract oil…”

Energy News

[GOOD]

Rationalising coal supply through swap arrangements will improve coal availability!                                   

                                                                                                  [BAD]

Cash subsidy scheme for LPG may be the World’s biggest but that does not make it the World’s best!

[UGLY]

Natural gas price formulae set by the bureaucracy is no match for price set by the market - with or without caps!

 

NEWS BRIEF

[NATIONAL: OIL & GAS]

December 29, 2014. Private explorer Cairn India, along with its joint venture partner, state-run ONGC, has put forward a $700 million plan to develop and produce gas reserves at the Raageshwari fields in the prolific Barmer block in Rajasthan. The Management Committee, comprising petroleum ministry, Directorate General of Hydrocarbons (DGH) and the explorers that oversees operations of the block, is likely to discuss the proposal. This assumes significance as volumes of commercially produced gas from the block would determine whether Cairn India gets a renewed lease for the asset for 10 or five years. So far, the DGH has held the view that Barmer is primarily oil producing and, hence, contract can be extended only for five years. Cairn India’s contract for the Barmer block in Rajasthan – RJ-ON-90/1 – is valid till May 14, 2020. The Anil Agarwal-promoted explorer wanted the contract to be extended till oil flows or at least by another 10 years till 2030. Of the $700-million programme, nearly $245 million would be spent for drilling 35-37 wells and another $315 million will be utilised for setting up surface facilities. Recently, the ONGC, which holds 30% stake in the block, approved the proposal to develop Raageshwari Deep Gas field.

The gas output from Raageshwari fields in the Barmer block is pegged to go up to 2.80 million metric standard cubic meters per day (mmscmd) by 2017 from nearly 0.25 mmscmd now. It is yet to be seen whether the latest field development plan (FDP), to be approved by Management Committee, would qualify the block to get a 10-year extension based on gas potential. The Barmer block in Rajasthan, the biggest onshore crude oil fields contributing nearly 25% of country’s production, touched the peak output of 200,000 barrels of oil per day (bopd) in FY14 but has gradually dropped from the high levels. (www.financialexpress.com)

December 29, 2014. Larsen & Toubro (L&T) said it has bagged an offshore contract worth ` 894 crore from Oil & Natural Gas Corporation (ONGC) for additional development of the Vasai East project. The company's fully owned subsidiary L&T Hydrocarbon Engineering (LTHE) has bagged the contract on complete turnkey basis from ONGC to improve recovery factor of Vasai East field where production started in 2008, and it is scheduled to be completed by April 2016. The ` 2,500 crore project will result in incremental oil production of 1.83 million metric tonne and incremental gas production of 1.971 billion cubic metres by 2030. (economictimes.indiatimes.com)

December 25, 2014. Reliance Industries Ltd (RIL), along with partners BP and Hardy Oil, has surrendered its discovered gas block KG-D3 in the Krishna-Godavari (KG) basin due to operational restrictions placed by the defence ministry. The basin is estimated to contain 500 billion cubic feet of in-place gas reserves. Hardy Oil, the consortium partner, cited the uncertainty over long-term natural gas pricing in India as one of the other reasons for the decision as well as the government-imposed gas price being lower than expected. The consortium led by RIL is expected to write down about ` 1,400 crore invested in the block so far and the relinquishment of the block will release them from any further work programme liability, including any further financial liability related to unfinished minimum work programme penalties.

Hardy said that the access restrictions imposed in 2012 covered more than a third of the block, affecting exploration, development and production. Reliance has a 60 per cent stake in the D3 block in the KG basin off India's east coast. BP has a 30 per cent stake and Hardy Oil owns the remaining 10 per cent. (economictimes.indiatimes.com)

December 30, 2014. Indian Oil Corp (IOC) and other state-run fuel retailers have piled up inventory loss of over ` 10,000 crore which together with depreciating rupee has severely strained their finances ahead of a revision in petrol and diesel prices. IOC along with Hindustan Petroleum Corp Ltd (HPCL) and Bharat Petroleum Corp Ltd (BPCL) are to decide on revising petrol and diesel prices, amidst clamour for a rate cut on falling crude oil prices. The firms, however, rue that petrol and diesel prices are not set based on trends in crude oil prices. They are benchmarked against internationally traded rates of gasoline (for petrol) and gas oil (for diesel) as well as rupee-dollar exchange rate. (economictimes.indiatimes.com)

December 29, 2014. Oil’s slump has almost doubled the value of India’s big, state-owned refiners, outpacing the rest of the industry from China to the U.S. The companies had been forced to make a large proportion of sales at below cost for over a decade. Now, they can profit from fuels after India’s new government saw its opportunity in falling oil prices to deregulate the market without bothering its inflation targets. OPEC’s decision to sit on its hands in the face of an oil glut has only accelerated share gains. India’s big three state refiners -- Indian Oil Corp, Bharat Petroleum Corp and Hindustan Petroleum Corp -- are up 53 percent, 84 percent and 131 percent respectively over the year to Dec. 24. Hindustan Petroleum is the best performing oil stock in the world. For comparison, Asia’s biggest refiner, China Petroleum & Chemical Corp, is down 1.4 percent, while the largest U.S. processor, Phillips 66, has lost 6.5 percent. Whether India’s refiners can maintain their tear will depend on the constancy of politicians and markets. In the meantime, there’s a new-found freedom to make money. India’s refiners have to mostly import their oil to turn it into petroleum products. In the case of diesel, which accounts for almost half the fuels consumed in India, the selling price was below the cost of production to deliver on a government mandate to keep energy cheap and inflation low. That changed in October, when the government ended price controls. The companies continue to sell cooking fuels such as kerosene and liquefied petroleum gas below cost, in a country where about a third of its 1.2 billion citizens live on only a few dollars a day. The global refining industry has done better from oil’s slump than other energy businesses because of lower input costs. It’s a different story if you drill for oil. Russia’s OAO Rosneft, the world’s biggest publicly traded oil producer, has lost about half its value this year in London trading. Exxon Mobil Corp, the world’s largest oil company by market capitalization, is down about 7.3 percent. Since June, when oil began to slide, analysts covering India’s refiners have become more bullish. Indian Oil and Hindustan Petroleum’s average ratings are either at or near the year’s highs. (www.bloomberg.com)

December 26, 2014. The Gujarat refinery of Indian Oil Corp Ltd (IOC) will start the process of land acquisition for its proposed ` 6,800 crore capacity expansion project, the company has said. IOC said the process will start and they have received directives from the Gujarat government to purchase private land. The refiner will invest ` 5,000 crore to increase its overall capacity to 18 million tonnes from the present 13.7 million tonnes and ` 1,800 crore to make the end product compliant with the low-sulphur Bharat Stage norms. The refinery, located at Koyali on the outskirts of the city, is spread across 1,950 acres, which includes its Asoj and Dumad terminal operations. The expansion will lead to improved distillate yield, thereby enabling production of more value added products from the refinery, IOC said. The process of negotiations with land owners to acquire a large chunk of land has started, IOC said. (economictimes.indiatimes.com)

December 25, 2014. Diesel worth lakhs of rupees was stolen from a Mathura oil refinery pipeline, police said. The incident took place, when thieves stole diesel from a Bharat Petroleum Corp Ltd (BPCL) pipeline after drilling a two-inch hole and using a valve in Chainpura village, police said. The supply to the pipeline was restored after sealing the orifice, police said. A complaint filed in this connection by BPCL at Chata police station, police said. (economictimes.indiatimes.com)

December 25, 2014. Reliance Industries Ltd (RIL) said it has signed a long-term agreement with Japan's biggest shipping company Mitsui OSK Lines for transportation of liquefied ethane from North America to India. Mitsui will manage six very large ethane carriers (ships) that the Indian conglomerate is building at Samsung Heavy Industries. It will supervise the construction of 87,000 cubic meter ships and upon vessel delivery, manage the ships. Mitsui said the very large ethane carriers (VLECs), being built by Samsung, are expected to be delivered in the last quarter of 2016. Neither of the companies disclosed the value of the deal. Ethane, a natural gas component, is expected to be produced in large volumes in North America due to the shale gas revolution, which has generated an abundance of liquefied natural gas (LNG) and cooking gas LPG. Ethane is primarily used as a petrochemical feedstock to produce ethylene by steam cracking. RIL plans to ship 1.5 million tonnes a year of ethane from its US shale joint ventures to its chemical complex in Gujarat. (economictimes.indiatimes.com)

December 30, 2014. The government is examining a proposal to tweak the newly approved gas price formula to bring in a cap with the aim of protecting consumers from volatility in the international market. Under a formula approved by the cabinet on October 18, the prevailing domestic rate is aligned with global benchmarks. As a result the price of gas, which was set at $5.61 per unit from November 1 this year, was potentially liable to change every six months. According a recent Cabinet decision, the Directorate General of Hydrocarbons (DGH) will examine the concept of a cap in the recently approved price formula under which domestic gas price was set at $5.61 per unit. The gas pricing mechanism approved by the cabinet in October was based on the recommendations of a committee of secretaries (CoS), which had also proposed a cap on the price, the government said. CoS had asked the Cabinet to consider a cap, as gas consumers had sought introduction of a ceiling. Officials from the oil and gas disputed this logic. Several members of Association of Oil & Gas Operators (AOGO) said India's pricing policy discourages natural gas production. (economictimes.indiatimes.com)

December 29, 2014. Expressing satisfaction at quick registration of Direct Benefit Transfer of LPG (DBTL) in Odisha, Oil and Natural Gas Minister Dharmendra Pradhan said he was optimistic about seeing all LPG consumers in the state getting the benefits of subsidy by the end of January. Though the pace of registration of DBTL in Odisha was not very encouraging barely 20 days ago, it has picked up and reached the level of national average, Pradhan said. Pradhan visited Keonjhar and Balasore districts during the day. Ahead of the country-wide launch of DBTL scheme from January 1, 2015, Pradhan said the number of subsidised gas consumers was gradually increasing. The deadline for the implementation of DBTL scheme across the country is March 31 next year. (economictimes.indiatimes.com)

December 29, 2014. With oil prices slumping to five-year low, India's fuel consumption has risen by 4.9 per cent in November on back of a sharp recovery in diesel sales. Fuel consumption in November rose 4.9 per cent to 13.9 million tonnes from 13.3 million tonnes in the same period a year ago, according to latest data available from the Oil Ministry. Diesel, the most consumed fuel in the country, saw a sharp recovery with sales rising 3 per cent to 6.002 million tonnes. The rise was in contrast to drop in consumption in the previous two months. Fuel consumption this fiscal has risen by 3.88 million tonnes or 3.7 per cent to 108 million tonnes. International oil prices have fallen 46 per cent this year, the biggest annual drop since 2008, as oil cartel OPEC resisted supply cuts to defend market share even as production in the US climbed to the highest level in three decades amid a shale boom. Brent crude, a pricing benchmark for more than half of the world's oil, is trading around USD 60 per barrel. With retail prices been successively cut since August, petrol consumption has been on rise - it grew by 3.6 per cent to 1.5 million tonnes in November and by 9.5 per cent in April-November to 12.5 million tonnes. Diesel, which makes up for 43 per cent of all petroleum products consumed in the country, saw sales rise by 1 per cent in April-November to 45.8 million tonnes. LPG consumption rose 14.5 per cent to 1.57 million tonnes in November and by 10.4 per cent to 11.6 million tonnes in first eight months of current fiscal that began in April. With domestic output stagnant at 3.1 million tonnes, India imported 3 per cent more crude oil in November at 15 million tonnes. However, in value terms the imports cost USD 8.8 billion, down from USD 11.2 billion in November 2013. India had paid USD 142.9 billion for oil imports in 2013-14 fiscal. Imports in first eight months cost USD 89.3 billion, down from 95.4 billion in April-November 2013. Crude oil imports this fiscal have been marginally lower at 125.7 million tonnes as compared to 126.9 million tonnes a year ago. (economictimes.indiatimes.com)

December 27, 2014. Union Petroleum Minister Dharmendra Pradhan said his ministry would launch a new pilot project providing concession to Below Poverty Line (BPL) families seeking new gas connections in the country. The project to be launched Jan 25, 2015 will provide subsidy of about ` 1,400 on new gas connections to the BPL families up to March. A consumer has to spend ` 2,400 for a new gas connection in the country. The minister has also targeted to bring the gas penetration in Odisha at par with national level. He said every block will have distribution points in the state. (economictimes.indiatimes.com)

December 26, 2014. Prime Minister Narendra Modi's focus on northeast India has prompted the government to engage a global consultant to prepare an incentive package for investors following its decision to extend subsidy on gas supplied by private producers in the region. The subsidy on gas was until now limited to state-run Oil and Natural Gas Corp (ONGC) and Oil India. Besides ONGC and Oil India, companies such as Geopetrol International of France, GAIL India, Hindustan Oil Exploration Company (HOEC) and Jubilant Energy are active players in the north-eastern states. Companies have already found oil and gas in Arunachal Pradesh, Assam, Nagaland, Tripura and Mizoram. The government recently decided to extend subsidy on gas produced by private firms to send a positive signal to global investors, the oil ministry said. In 2010, the government had announced a 113% hike in the price of gas produced from fields awarded without auction to ONGC and Oil India.

Narendra Modi government set to lure investors to oil and gas rich North-East In order to protect customers in the northeast region from the steep hike, the government had decided to bear 40% of the gas price. But this subsidy was not available to customers who bought gas from blocks awarded to public or private explorers through auctions. The Cabinet recently corrected this anomaly, the oil ministry said. The development of the region is the focus of NDA government, the oil ministry said. The Directorate General of Hydrocarbons (DGH) has been directed to appoint a global consultant by January to conduct a study, which aims to have a policy that would encourage exploration and production of oil and gas in the region, the oil ministry said. The oil ministry said the consultant will identify infrastructure gaps and accessibility issues that are essential for exploration in the region. It will also examine needs and means to create common hubs of service providers in the region and resolve issues related to skilled manpower. (economictimes.indiatimes.com)

December 25, 2014. The ambitious scheme of giving cash subsidy on cooking gas directly to consumers has become the world's largest direct benefit transfer with 2.5 crore households getting about ` 550 crore since November 15. The direct benefit transfer on LPG (DBTL), under which cash subsidy is paid to consumers so that they can buy cooking gas at market price, was rolled out in 54 districts from November 15 and will be extended all over the country from January 1. The scheme has surpassed number of beneficiaries in direct benefit transfer programmes in China and Brazil. Oil Minister Dharmendra Pradhan said he has personally reviewed roll out of the scheme in as many as 42 districts so far and will do so in 10 or so before the end of the year. His ministry officials as well as top executives of oil marketing companies have adopted one district each in the country to oversee roll out of the scheme under which consumers have to get their bank accounts seeded with their LPG connection. The moment they join the scheme, oil companies transfer advance cash subsidy in their bank accounts to enable them to buy LPG refills at market rate. Once a consumer takes delivery of the cylinder, another advance cash subsidy is transferred to the bank account.

At present, a subsidised LPG cylinder costs ` 417 per 14.2-kg bottle while its market price is ` 752, the difference being the subsidy component. From January 1, LPG consumers across the country will have to buy cooking gas at market rates. They will get the difference between current subsidised rate and market price for 12 cylinders in a year in cash that will be transferred to their bank accounts. The Direct Benefit Transfer Scheme for LPG, which has now been renamed PAHAL, has been modified to exclude the requirement of unique identification number (Aadhaar) for availing the cash subsidy. Aadhaar is now optional but consumers should have a bank account linked to their LPG connection number. PAHAL or Pratyaksh Hanstantarit Labh has been rolled out in 54 districts from November 15 and will extend to rest of the country from January 1. DBT (direct benefit transfer) is designed to ensure that the subsidy meant for genuine domestic customers reaches them directly and is not diverted. In 54 districts covering 11 states, the scheme covers 2.33 crore households. Currently, the Aadhaar generation level is 95 per cent in these districts. (economictimes.indiatimes.com)

December 25, 2014. The government may soon allow ONGC and Reliance Industries Ltd (RIL) to develop six gas discoveries, which have been unexploited for several years because of disputes over methods to confirm their commercial viability. These discoveries have at least 4 trillion cubic feet (Tcf) by way of reserves, enough to generate 4,000 MW of power for two decades. The oil ministry has prepared a framework for the cabinet to resolve these dispute. The ministry is in favour of allowing contractors to conduct any appropriate test. But in case the contractor gets the assessment wrong, it will be barred from recovering expenditure incurred in developing the field. Testing the commercial viability of a discovery is an important step in the development of oil and gas fields and the contractor's estimates of expenditure and output are based on the test results. The ministry plans to allow ONGC and RIL to develop at least six discoveries in various blocks in the Krishna-Godavari basin. In case of RIL, the discoveries were earlier rejected by the Directorate General of Hydrocarbons (DGH) as the company resisted carrying out a test known as the drill-stem test (DST) to establish that the discoveries are economically viable. DGH said that DST is a must because it is more predictable and precise in estimating oil and gas reserves. Explorers have disputed DGH's stand citing the production sharing contract (PSC), which left selection of testing methods to the technical judgment of the contractor. RIL and ONGC chose a modern and less expensive method, known as the Modular Dynamic Test (MDT) to prove viability of their discoveries. Companies argued that DGH earlier certified dozens of discoveries on the basis of MDT. However in October 2010 after sitting on their proposals for over eight months, DGH insisted on the DST route. In July 2012, RIL agreed to the DST method on the insistence of DGH. But, it missed the timeline for developing the discoveries because of prolonged delays in getting approvals, sources said. RIL's three discoveries are D-29, D-30 and D-31 in the KG-D6 block. A similar exemption will be given to ONGC, which is also in a similar dispute with DGH. Its UD-1 discovery alone holds about 2.8 trillion cubic feet of gas reserves and other two discoveries (D and E) have estimated 587.6 billion cubic feet of gas. The move may also give fresh lease of life to about half-a-dozen more gas discoveries in Reliance's NEC-25 and KGDWN-2003/1 blocks in the east coast. In April this year, former Oil Minister Veerappa Moily had circulated a Cabinet note intended to resolve such disputes. (economictimes.indiatimes.com)

December 25, 2014. In a bid to make cooking gas (LPG) easily available to consumers, 5-kg mini LPG cylinders will now be available at select petrol pumps and neighbourhood grocery stores besides regular gas agencies in almost all major cities. Till now, cooking gas (LPG) was available for domestic use in 14.2-kg cylinders only from gas agencies. Consumers were entitled to 12 such bottles in a year at a subsidised rate of ` 417 in Delhi. Now the subsidised cooking gas will also be available in 5-kg cylinders. Those entitled to subsidised gas can buy 34 bottles of 5-kg each at ` 155 per cylinder in Delhi. While the subsidised 5-kg mini LPG cylinder will be available only at regular LPG distributor, market-priced mini LPG cylinders costing ` 351 can be bought across-the-counter without prior booking and minimal paper work at petrol pumps, gas agencies and select grocery stores.

Oil Minister Dharmendra Pradhan used the 'Good Governance Day' to relaunch the scheme at more outlets across the country. The sale of market-priced mini LPG cylinder, which was launched in March by the then Oil Minister M Veerappa Moily at a handful of petrol pumps that are owned and operated by state run fuel retailers, has now been expanded to other outlets as well as grocery stores. The market-priced LPG was being sold at 610 petrol pumps in major cities and this list has been expanded now. It is available at additional 100 locations in the national capital alone, Pradhan said. Also, the 5-kg subsidised LPG cylinder which is available only in remote and hilly areas, will also be available in cities, he said.

Pradhan said BPL-card holders will get new LPG connection at concessional rate. Earlier the scheme, under which the security deposit of 14.2-kg LPG connection and cost of pressure regulator amounting to ` 1600 was borne by oil companies, was only available for BPL families in rural areas under Rajiv Gandhi Gramin LPG Vitran Yojana. This has now been extended to all households below the poverty line including in urban areas, he said. The cost of connection will be borne by oil companies from their corporate social responsibility (CSR) fund. (economictimes.indiatimes.com)

December 24, 2014. The BJP-led government announced that the decision to abolish Value Added Tax (VAT) on petrol after coming to power in Goa, would now be reversed. The cost of petrol is lesser than diesel in Goa, which is not fair. The state government will impose five per cent VAT on petrol so that its price is little more than diesel, Chief Minister Laxmikant Parsekar said. He said that petrol prices would be matched with diesel. At present, petrol prices in Goa are the lowest. Petrol per litre is costing ` 53 and diesel ` 55. The imposition of VAT will hike petrol prices to ` 55-56 per litre, Parsekar said. BJP led government after assuming power in the state in 2012 had abolished VAT on petrol as an anti-inflation measure reducing the prices on fuel by almost ` 11 per litre. The decision which was taken by then chief minister Manohar Parrikar was hailed across the country. The CM said that the state treasury had suffered after abolition of VAT on petrol. The VAT imposition is expected to bring in ` 70-75 crore more to the coffers. (economictimes.indiatimes.com)

 [NATIONAL: POWER]

December 30, 2014. The first 1,000 MWe unit of Kudankulam Nuclear Power Project (KNPP) is expected to start its commercial operation at midnight tonight. Though the unit has been running at full capacity of 1,000 MW since last ten days, the commercial operation would get KNPP better tariff from the grid, KNPP Station Director R S Sundar said. Sundar said that continuous generation of power from the unit during the trial period was over, and the Director (Operations), Nuclear Power Corporation of India, had permitted commercial production of power from midnight tonight. In July last year, the first unit attained criticality and has been generating power and connected to the southern grid. (economictimes.indiatimes.com)

December 26, 2014. Andhra Pradesh (AP) government is planning to add 15,869 MW power generation capacity in the next five years. The state energy department said that this capacity in addition would include thermal power (3,240 MW), central generating stations (1,949 MW), solar (3,150 MW), wind (7,030 MW) and other sources. Chief Minister N Chandrababu Naidu, reviewing the power situation in the state, said that the government was confident of sustaining round the clock power supply and seven-hour supply for agriculture, the department said. Naidu emphasised the need to work out ways to expedite the construction of power projects to meet the increasing demand which is expected to be around 15 per cent, it said. (economictimes.indiatimes.com)

December 25, 2014. In a bid to meet the growing demand of electricity in the state, Haryana Chief Minister (CM) Manohar Khattar said that efforts are being made to set up a new power plant at Yamunanagar. A meeting has already been held with the officers of Power department in this regard. The state government has urged the Centre to allot a special coal block keeping in view the growing demand of coal for power generation, he said. (economictimes.indiatimes.com)

December 30, 2014. The Centre has earmarked an amount of ` 3199.45 crore for Arunachal Pradesh to undertake a comprehensive project for strengthening of power transmission and distribution systems in the state. The ambitious project was approved by the Centre for Arunachal and Sikkim to create reliable state power grid and its connectivity to the upcoming load centres, state BJP President Tai Tagak said. He said a regional research station of Central Institute of Temperate Horticulture in the state had been approved by the Union Agriculture Ministry in the 12^th plan expenditure finance committee meeting. (economictimes.indiatimes.com)

December 30, 2014. Having seen "reduction" in power generation due to short-supply of coal in summer this year, Punjab State Power Corp Ltd (PSPCL) has proposed to use imported coal worth ` 1,552 crore to run its thermal power plants without any "disruption". In its Aggregate Revenue Requirement (ARR) petition submitted with the power regulator PSERC for the fiscal 2015-16, Punjab State Power Corp Ltd (PSPCL) has "considered the option of importing coal" to meet coal requirements of its thermal power units during next financial year 2015-16. PSPCL has pointed out that the "short supplies" of coal by Panem coal mines had caused "depletion in its coal stock" at its plants that led to "decrease" in power generation.

PSPCL has claimed the coal supplier supplied 2.5 rakes on an average per day as against linkage of 5 rakes of coal per day during April 2014 till August 2014. Punjab government had even sought intervention of the Centre for stepping up coal supplies when coal stock of PSPCL plants reached critical stage. PSPCL gets coal supplies from Panem Coal mines sourced from its captive mine Pachwara coal block and also from Central Coalfields Ltd (CCL) for its three thermal plants. (economictimes.indiatimes.com)

December 29, 2014. Coal India Ltd (CIL) arm Bharat Cooking Coal Ltd (BCCL) plans to allocate the piled up dry fuel to power consumers having long-term purchase agreements with distribution companies. The development comes at a time when the country is grappling with coal shortages and as many as 42 thermal power plants are facing significant fuel deficit. A PPA (Power Purchase Agreements) is a contract between two parties, one who generates electricity and one who is looking to purchase electricity. BCCL said that interested power consumers will have to evacuate the coal on their own from the stock till the month-end. However, the commercial arrangement for such lifting shall be as per FSA (Fuel Supply Agreement) or prevailing arrangement, as applicable. As per latest data from the Central Electricity Authority (CEA), 42 thermal power plants had coal available for less than seven days as on December 25. (economictimes.indiatimes.com)

December 26, 2014. Even as Power Grid Corporation gets big-ticket transmission projects from the government, about 15 major transmission lines are pending with the company. In most cases, the commissioning date has been extended by at least three years. For transmission corridors scheduled to have been readied by 2012, commissioning has been postponed to the end of this year or early next year. The company has told the government securing land for sub-stations and right of way for laying transmission lines is extremely difficult in certain areas. Among the delayed inter-regional transmission lines are those connecting thermal power plant sites in Vindhayachal, Bokaro and Rihand. The line connecting Solapur and Pune, an important link for southern India, has also been delayed. The recent synchronisation of the southern grid with the national one awaits the commissioning of transmission corridors, which will connect it to areas in Jharkhand and Odisha that have many coal-based thermal power plants. Between April and August, Uttar Pradesh, which accounts for about half the delayed projects, recorded peak power supply deficit of 15 per cent. Owing to transmission bottlenecks, Tamil Nadu and Andhra Pradesh recorded supply deficits of 2.6 per cent and 7.9 per cent, respectively. (www.business-standard.com)

December 26, 2014. With power tariff being a major poll plank in the Delhi elections, power distribution companies are adopting transparency tools to manage electricity supply. Reliance Power-owned BSES plans to launch a mobile application for its consumers to view consumption, bill details and status of new connection, among others. BSES will become the first in Delhi and among a handful of power utilities in the world to launch a mobile application. The new tool would make it easier for consumers to access important information and services related to their electricity accounts. During the last polls, Arvind Kejriwal-led Aam Aadmi Party (AAP) had alleged fudging of electricity bills by discoms. The discoms have always contested their quantum of supply is not in tandem with the retail tariff. With AAP promising to halve the electricity bills, discoms are now coming up with innovative measures to educate consumers about the tariff-supply equation. The BSES app also allows consumers to lodge ‘no supply’ complaints. It will help consumers view their consumption history, bills details (past five bills), status of a new connection and also get energy saving tips. According to BSES, the mobile app will be functional before the next summer. Delhi has a peak demand of 5,000-6,000 MW during the summer months of June to September, leading to load shedding in parts of the city. Initially, the app will run only on Android phones, but will be extended other platforms later on. The company will also later add new features. Consumers will be able to download the App from ‘Google Play’ or from www.bsesdelhi.com. BSES will also launch a user-friendly wireless application protocol site for mobile phones — m.bsesdelhi.com. Through this, a consumer can access their bill and connection account on phone, among other things and also get their customercare-related queries answered. (www.business-standard.com)

December 30, 2014. The government is likely to allow power companies to swap coal supplies with the nearest source to save costs and decongest the rail network. A policy for rationalisation of coal linkages is in the works and Coal India Ltd (CIL) will be overseeing swapping. The government will set up a separate designated authority for swaps between supply from CIL and other coal sources. Interested parties could go in for mutual consultations. The coal and power ministries would assist the parties in coming to an agreement. The government has already identified rationalisation proposals of 21 public and private thermal power plants in Gujarat, Tamil Nadu, Maharashtra, Punjab, Haryana and Rajasthan. Global consulting firm KPMG — appointed to look into benefits of re-organising coal tie-ups— had reported that swapping coal supplies to fuel power plants with closest coal mines could save up to ` 6,000 crore spent by power companies and Coal India in transporting the fuel across nation. Besides logistics savings of ` 4,500-Rs 6,000 crore, rationalisation of supplies would also lead to additional power generation of 3,500 MW with potential benefit of ` 3,500 crore, KPMG report had said. The report, submitted to the power ministry, said this will also decongest the railway network as average distance travelled by coal will come down to 429 km per tonne, from 589 km per tonne. It will hedge coastal power projects against any interruptions in supply. (economictimes.indiatimes.com)

December 30, 2014. An inter-ministerial panel on fuel linkages has recommended providing coal to end-use plants linked to the blocks that have been cancelled by the Supreme Court. The first category is of those end use plants (EUPs) which already had long-term linkages/LoAs (Letter of Assurances) but were later converted to tapering-linkage. The second category is of those EUPs which were granted tapering linkages. Tapering linkages are interim supply arrangement made for power projects where production from linked captive coal blocks is delayed. Tentatively, additional 5-7 million tonnes of coal may be made available under current arrangement and till March 31, 2015. EUPs linked with the operational blocks should not be covered under the current arrangements as they are entitled to receive coal till March 31, 2015. EUPs to be supplied coal under current proposal will be offered coal from the mines nearest to them and they should lift coal by road. EUPs linked with those coal blocks which are under the investigation of CBI and FIRs have been registered against them shall not be considered for supply of coal. In a major blow to the corporate sector, the Supreme Court had in September quashed allocation of 204 coal blocks allotted to various companies since 1993 terming it as "fatally flawed". (economictimes.indiatimes.com)

December 29, 2014. The Tamil Nadu (TN) government has raised questions over the Centre's proposal to allocate 50 MW of power from the Kudankulam nuclear power plant (KNPP) to Telangana. In a letter to the Prime Minister, Tamil Nadu Chief Minister O Pannerselvam said it has learnt that 50 MW of the 150 MW unalloacted power of Kudankulam Atomic Power Plant Unit-II will be given to Telangana. He said the state government in a memorandum submitted in June 2014 had asked for the entire un-allocated power for Tamil Nadu. (www.business-standard.com)

December 29, 2014. The Dabhol power project's management and promoters NTPC and the Maharashtra state government oppose the plan of lenders and the central government to sell the plant's liquefied natural gas terminal to pare its ` 8,500 crore debt. The plan is unviable and one sided and only protects lenders' interests, putting an unfair financial burden on the promoters, according to the promoters. NTPC and GAIL India own 32.74% each of Ratnagiri Gas and Power Pvt. Ltd (RGPPL), while the Maharashtra State Electricity Board has a 16.94% stake. ICICI Bank, IDBI Bank, SBI and Canara Bank collectively hold 18.12%. (economictimes.indiatimes.com)

December 28, 2014. Paving the way for having imported fuel for its nuclear power reactors, India will complete the process of placing its civilian reactors under International Atomic Energy Agency (IAEA) safeguards in the next two days. The last lot of the two reactors- units 1 and 2 of the Narora Atomic Power Station in Bulandshahar in Uttar Pradesh- will go under safeguards of the international atomic energy body in the next two days and necessary paper work is under process. Until now 20 facilities have gone under IAEA safeguards. This includes unit 1 and 2 of Tarapur Atomic Power Station (TAPS), units 1 to 6 of Rajasthan Atomic Power Station, units 1 and 2 of Kudankulam Nuclear Power Plant, units and units 1 and 2 of Kakrapar Atomic Power Station. These reactors are eligible for using imported uranium India is procuring from different countries. Apart from it, Nuclear Material Store, Away from Reactor (AFR) Fuel Storage Facility, both at Tarapur, Uranium Oxide Plant, Ceramic Fuel Fabrication Plant, Enriched Uranium Fuel, Enriched Uranium Oxide Plant, Enriched Fuel Fabrication Plant and the Gadolinia Facility- all the Nuclear Fuel Complex in Hyderabad- have been placed under the IAEA safeguards. The new reactors, which will come up with the help of foreign collaboration, will automatically be placed under the IAEA regards safeguards. Unit 1 of the two Pressurised Heavy Water Reactors (PHWR) - each with a capacity of 220 MW- was commissioned in January 1 while the second unit was commissioned in July 1992. Indian power reactors have been running below the capacity "due to the mismatch of power and supply demand of uranium". The two reactors, which have been running below their capacity, will get much needed fuel. The development comes ahead of the visit of US President Barack Obama to India next month, hereby completing the mandatory
process under the Indo-US nuclear deal.  Under the Indo-US nuclear cooperation agreement, India was to sign and ratify the Additional Protocol of the IAEA. A separation plan was chalked out after the deal, segregating the military and civilian reactors. The civilian reactors were to be placed under the IAEA safeguards by December 2014, which will enable India to use the much needed international fuel for civilian reactors. Incidentally, before Prime Minister Narendra Modi's visit to US in September last year, India ratified the Additional Protocol with the IAEA in June this year. The IAEA on its part refused to share details of the safeguard issues. (economictimes.indiatimes.com)

December 27, 2014. In the first tranche of coal block auction, government invited bids for 24 mines, including seven in Chhattisgarh. Besides six blocks are being offered in Madhya Pradesh, three each in West Bengal, Maharashtra and Jharkhand and one each in Andhra Pradesh and Odisha, according to the bid document available in public domain. The Union Cabinet had approved re-promulgation of the coal ordinance and necessary guidelines for mine allocations. Entire auction process will be transparent, efficient and conducted online, Coal and Power Minister Piyush Goyal had said while launching the portal for e-auction of 24 coal mines -www.mstcecommerce.com/auctionhome/coalblock. Goyal had said the auction process will comprise techno- commercial bid for qualification and financial bid (e-auction) for selection of successful bidder. (timesofindia.indiatimes.com)

December 26, 2014. Competition in the power distribution sector will improve efficiency and rationalise tariff, Finance Minister (FM) Arun Jaitley said. The Electricity (Amendment) Bill 2014, which aims to bring reforms in the power sector and safeguard consumer interest, was introduced in Lok Sabha. The amendments will usher in much needed further reforms in the power sector. It may be recalled that Power Minister Piyush Goyal had earlier said that this proposed legislation would promote competition, efficiency in operations and improvement in quality of supply of electricity in the country. This would result in capacity addition and ultimate benefit to the consumers, Goyal had said. The concept of multiple supply licencees is proposed by segregating the carriage from content in the distribution sector and determination of tariff based on market principles, while continuing with the carriage (distribution network) as a regulated activity. Jaitley said the coal block auction was the first step towards controlling power tariff as the lowest bidders would supply electricity at a cheaper cost. The process of coal block auction for cancelled coal mines began with the launch of a portal for electronic bidding for 24 coal blocks in the first tranche. The Cabinet has approved re-promulgation of the coal ordinance and necessary guidelines for mine allocations, a move that could make the kitty of coal-rich states fatter by ` 7 lakh crore over the next 30 years. (www.business-standard.com)

December 25, 2014. Electricity demand in Tamil Nadu is estimated to grow by around 20 per cent in 2014-15 as compared with last year. The demand in the current year is pegged at 91,642 million units as against 76,445 million units in 2013-14. Last year, this was higher by 14 per cent over that of the previous year. Electricity minister Natham R Viswanathan said while the all India average usage per person was 917 units a year, in TN this stood at 1,196 units. Demand has increased to 12,500 MW from 10,500 MW. Of the total demand, 37.38 per cent is met through the TN Electricity Board, 33.32 per cent from the Centre allocation, 16.28 per cent through long-term agreements and the balance through other sources. (www.business-standard.com)

December 25, 2014. Power Minister Piyush Goyal has sought to cut the term of the members at electricity regulatory commissions from the present five years to three years sending a panic wave among the sitting members. The appointees at electricity regulatory commissions, both at the Centre and in States, are closely reading the 50-page amendments to the Electricity Act, 2003, the minister has tabled in the Lok Sabha to see if there could any escape route. There is none, apparently. The power sector experts are trying to figure out if there is a political spin to this particular amendment to Section 89 of the Act. An appointee can hold office for five years or up to the age of 65 years, whichever is earlier. The Power Minister, while wanting to trim the term to three years, however, has proposed reappointment of members or the chairman for a second term of three years. While experts, including members at regulatory bodies, say the new set of amendments has quite a few positives for the power sector, and are aimed at improving the health of the public sector utilities, the one about slashing the tenure has not gone down well. (economictimes.indiatimes.com)

December 25, 2014. The shortfall in electricity supply when demand is the highest, or peak power deficit declined to 3.7 per cent in last month from 4.4 per cent in October mainly on account of weaker demand. Power requirement during November was 1,37,620 MW of which 1,32,530 MW was met, leaving a shortfall of 5,090 MW, according to the Central Electricity Authority (CEA) data. Northeastern region, comprising Assam, Meghalaya, Manipur, Arunachal Pradesh, Mizoram, Nagaland and Tripura, was the worst affected reporting a deficit of 15.8 per cent in the month. Total demand of the region was 2,525 MW and supply was 2,125 MW, the data showed. Northern region (Delhi, Haryana, Himachal Pradesh, Punjab, Jammu & Kashmir, Rajasthan, Uttar Pradesh and Uttarakhand) reported a shortage of 1,525 MW or 3.8 per cent. The total electricity requirement of the region was 40,595 MW of which 39,070 MW was met. Western states including Gujarat, Chhattisgarh, Madhya Pradesh and Maharashtra recorded a peak power deficit of 1.9 per cent, as 43,293 MW demand of the region was met with a supply of 42,462 MW. The peak electricity shortfall in the South Indian states of Andhra Pradesh, Telangana, Karnataka, Kerala, Tamil Nadu, Puducherry and Lakshadweep was 6 per cent. The total power demand of the region was 35,096 MW of which 33,003 MW was met leaving a shortfall of 2,093 MW, the CEA data said. Eastern states of Bihar, Jharkhand, Odisha, West Bengal, Sikkim reported a deficit of 1.5 per cent. Their demand stood at 16,111 MW and against the supply of 15,870 MW. Meanwhile, peak power deficit in the April-November period, this year, stood at 7,006 MW or 4.7 per cent. Total electricity demand during the period was 1,48,166 MW as against supply of 1,41,160 MW, the CEA data said. (economictimes.indiatimes.com)

 [INTERNATIONAL: OIL & GAS]

December 30, 2014. U.S. oil drillers, facing the lowest crude prices in five years and rising competition from suppliers abroad, idled the most rigs since 2012. Rigs targeting oil declined by 37 to 1,499, the lowest since April, Baker Hughes Inc. said. Those drilling for natural gas increased by two to 340, the Houston-based field services company said. The total rig count, which includes one miscellaneous rig, dropped 35 to 1,840.

The number of rigs targeting U.S. oil is down from a record 1,609 following a $55-a-barrel drop in global prices since June, threatening to slow the shale-drilling boom that’s propelled domestic production to the highest in three decades. As the Organization of Petroleum Exporting Countries (OPEC) resists calls to cut output, U.S. producers including Continental Resources Inc. and ConocoPhillips plan to trim spending.

While the U.S. rig count has dropped, domestic production continues to surge, with the yield from new wells in shale formations including North Dakota’s Bakken and Texas’s Eagle Ford projected to reach records next month, Energy Information Administration (EIA) data show. Oil rigs dropped by five to 527 in the Permian Basin in Texas and New Mexico, by three to 188 in the Eagle Ford of Texas and by two to 178 in the Williston of North Dakota, Baker Hughes said. In basins outside the 14 majors listed by Baker Hughes, oil rigs fell by 27 to 375. (www.bloomberg.com)

December 30, 2014. Iran has allocated $15.2 billion for the development of joint oilfields with neighbouring Iraq as part of its plans to increase output. The plan for developing joint oilfields in Iran's Karoun region is aimed at bringing about an added production capacity of 550,000 barrels of crude oil per day. The development plan will be implemented over the course of four years. Iranian Oil Minister Bijan Namdar Zanganeh has described the project as one of the largest development plans of his ministry, saying the implementation of the project would boost the country's oil output.

Based on studies, there are 23 joint hydrocarbon fields between Iran and Iraq, which are divided into exploration, development and production categories. Iran's total in-place oil reserves have been estimated at over 560 billion barrels, with about 140 billion barrels of recoverable oil. Heavy and extra heavy varieties of crude oil account for roughly 70-100 billion barrels of total Iranian reserves. (www.newkerala.com)

December 29, 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 and condensate discovery at its exploration well Faiz X-1 located in District Sanghar, Sindh, Pakistan. This is the sixth discovery in the block. This discovery will translate into approximately 4,030 barrels per day in oil equivalent and foreign exchange saving of $282,000 per day. (www.rigzone.com)

December 25, 2014. Sinopec Corp started a processing plant in China's southwest that treats high-sulphur natural gas pumping from a new field at Yuanba, Sinopec group reported. Yuanba, located in China's top gas producing province of Sichuan, will be able to produce 3.4 billion cubic metres (bcm) of gas a year by end of 2015, doubling the present 1.7 bcm/year, the report said. The start-up of the new gas field came a few days after Sinopec, China's second-largest energy major, announced it would raise its winter gas supplies to domestic users by 11 percent to meet a surge in heating demand. Yuanba field, spanning Guangyuan, Nanchong and Bazhong cities over 3,200 sq km, has a proven reserve of 219.4 bcm, the Sinopec report said. The gas reservoir has an average depth of 6,700 metres, among the deepest in Chinese conventional gas deposits. (af.reuters.com)

December 24, 2014. BP Plc is in talks to buy a direct stake in an East Siberian oil producer from OAO Rosneft, the Russian oil producer facing U.S. and European financing bans. The talks about Rosneft’s Tass Yuriakh unit started some time ago. The stake may be valued at $700 million to $800 million. BP has remained committed to its partnership with Rosneft, in which it holds 20 percent, as Russia’s relations with the U.S. and Europe sour over the conflict in Ukraine. U.S.-led sanctions, which restrict Rosneft from borrowing internationally and limit access to offshore and shale technology, don’t stop it from selling assets. BP has been seeking direct production ventures in Russia after selling its half of the TNK-BP venture to the state-controlled company last year. Rosneft’s and BP’s press services declined to comment on talks about Tass Yuriakh. Output from the field, located near a pipeline to the Pacific coast, will be used to supply Far Eastern refineries and China, according to Rosneft. Production will exceed 5 million metric tons a year, or 100,000 barrels a day, in 2017. The East Siberian unit also holds 155 billion cubic meters of natural gas reserves, according to Rosneft. President Vladimir Putin is pushing to boost energy supplies to Asian markets from East Siberia to lower Russia’s dependence on Europe and maintain demand for oil and gas, which contribute half of the government’s budget. Russia has held discussions on developing Tass Yuriakh with China National Petroleum Corp. The unit was intended to be the base for formation of a Russian exploration and production venture with the Chinese company, according to Rosneft. (www.bloomberg.com)

December 24, 2014. Offshore oil-drilling contractors, who last year were able to charge record rates for their vessels, are now under pressure to scrap old rigs at an unprecedented pace. The recent five-year low in oil prices is threatening an industry already grappling with a flood of new vessels and weakening demand. More than 200 new rigs are scheduled to be delivered in the next six years. That’s a 25 percent jump from the number currently under contract. To cope, many rig owners will try to keep revenue up by culling older vessels to balance supply and demand. The older assets, particularly those built before the 2000 time period, are really less desired by the industry, James West, an analyst at Evercore ISI in New York, said. Transocean, owner of the biggest fleet of offshore drilling rigs, said it will scrap seven “floaters” in addition to the four it previously announced and will take a fourth-quarter charge in the range of $100 million to $140 million as a result. (www.bloomberg.com)

December 25, 2014. Dung Quat oil refinery, Vietnam's sole such facility, will process 8.5 million tonnes (171,000 barrels per day) of crude oil a year after finishing its upgrade project by 2022, instead of 10 million tonnes, the operating firm said. The project aimed at upgrading the refinery's current annual capacity of 6.5 million tonnes requires $1.82 billion in investment and is slated to be completed in the third quarter of 2021, Binh Son Refining and Petrochemical Co, the refinery operator which is a subsidiary of state oil and gas group Petrovietnam said. Petrovietnam would provide 30 percent of the required $18.2 billion investment for the upgrade project, while the rest would come from loans, Binh Son said. The firm also said it would conduct negotiations with Gazprom Neft, a subsidiary of Gazprom, on the establishment of a joint venture, which could help speed the upgrade project. Gazprom Neft will ship 3 million tonnes of crude oil to Dung Quat in 2015, raising it to 3.6 million tonnes in 2016 and at least 6 million tonnes in 2018 and beyond. The refinery refined more than 5.8 million tonnes of oil products this year, beating its annual target by 20 percent. Binh Son said the refinery would run at least 7 percent above its designed capacity in 2015. (www.downstreamtoday.com)

December 25, 2014. Huang Haidong misses the flush times in 2010 when his refinery in eastern China couldn’t produce diesel fast enough to fill the trucks lined up outside. Huang’s plant cut processing rates by half over the past four years as China’s refining capacity expanded 33 percent and economic growth slowed in the world’s second-largest oil consumer. While the country can process about 13.4 million barrels a day of crude, the International Energy Agency in Paris estimates demand this year will be just 10.3 million. Oil’s 48 percent plunge since June has benefited Chinese consumers with the lowest gasoline prices since 2010, yet provided little solace for refiners. The added refining has led to losses at privately owned plants for the first time since 2008, according to ICIS-C1 Energy, a Shanghai-based consultant. Profits at state-owned refineries, including those operated by China Petroleum & Chemical Corp., are also shrinking. Moody’s Corp. expects demand growth to slow to between 3 percent and 5 percent next year from as much as 10 percent in 2010 to 2012. China, which trails only the U.S. in fuel consumption, added about 723,000 barrels a day of processing over the past four years, ICIS-C1 estimated. With economic growth forecast at 7.4 percent this year, the slowest rate since 1990, fuel demand is set to decelerate. Capacity will increase to 14 million barrels a day by the end of 2015, according to China National Petroleum Corp., the country’s biggest energy company. That’s about 78 percent of what’s currently available in the U.S., data show. China will add 500,000 barrels a day of capacity in 2015 and another 602,000 a day in 2016, according to ICIS-C1. That’s equivalent of adding each year a new refinery the size of Exxon Mobil Corp.’s Baytown plant in Texas, the biggest refining complex in the U.S. China already is starting to divert an increasing proportion of crude imports into emergency reserves. The nation probably resumed strategic stockpiling in November amid the global oil-price slump, data show. (www.bloomberg.com)

December 30, 2014. Libyan oil production has fallen below 300,000 barrels a day after Islamist militants shifted attacks to energy facilities including the country’s largest oil export terminal, said Energy Aspects Ltd. Output is the lowest since May and down at least 65 percent from a recent high of 850,000 barrels a day in October following the assault on the Es Sider terminal, according to the Energy Aspects estimate. Libya holds Africa’s largest oil reserves. The fighting marked a turning point in the unrest that followed Muammar Qaddafi’s 42-year rule, according to Energy Aspects and Eurasia Group consultants. All the factions, including the Islamist militia coalition known as Libya Dawn, had committed to spare the energy industry that provides 80 percent of public spending. One of six storage tanks set ablaze in the assault on Es Sider, Libya’s largest oil port, collapsed, the Petroleum Facilities Guard, said. The fires started Dec. 25, when the Islamists shot rockets at the port in a second attempt to take it. The terminal has a capacity of 6.2 million barrels of oil, according National Oil Corp. (www.bloomberg.com)

December 30, 2014. A price war is brewing between Canada and Latin America over who will satisfy U.S. Gulf Coast refiners’ hunger for heavy oil. The new Seaway Twin pipeline will almost double the amount of heavy Canadian crude coming to Gulf terminals and plants to about 400,000 barrels a day starting in January, according to Calgary-based ARC Financial Corp. The shipments are growing even without the Keystone XL pipeline, which has been delayed for six years because of environmental opposition.

The Canadian supply will square off against crudes from Mexico and Venezuela that have traditionally fed refineries along the Texas and Louisiana coasts. State-owned Petroleos Mexicanos widened its discount for U.S. buyers in December by the most since August 2013. Valero Energy Corp. and Marathon Petroleum Corp., which invested in special equipment to refine heavy crude, stand to gain the most from the Canadian supply. New pipelines and rail terminals enabled more Canadian oil to head south to higher-value markets, partially offsetting a 48 percent collapse in global prices since June as the Organization of Petroleum Exporting Countries (OPEC) refused to cut production to counter a global glut. (www.bloomberg.com)

December 29, 2014. BG Group, a world leader in exploration and liquefied natural gas (LNG), announced that it has been loading the first cargo of LNG from its Queensland Curtis LNG (QCLNG) facility in Australia since Dec. 28. The vessel being loaded is the Methane Rita Andrea. The second cargo of LNG from the facility will be loaded onto the Methane Mickie Harper which is expected in Gladstone in the first week of January. QCLNG is the world's first LNG project to be supplied by coal seam gas. The start of production from the plant's first LNG train is the result of more than four years of development and construction on Curtis Island. The project will expand further with the start-up of the second train in the third quarter of 2015. At plateau production, expected during 2016, QCLNG will have an output of around 8 million tons of LNG a year. (www.rigzone.com)

December 26, 2014. Thailand's top energy firm PTT has approved a five-year investment plan (2015-2019) of 327 billion baht ($10 billion), half of the total in natural gas business. PTT aims to invest 85.5 billion baht in 2015 and 38.1 billion baht in 2016, mainly in natural gas business, its core, the company said. PTT Exploration and Production Pcl had agreed to dissolve PTT FLNG Limited by the end of 2015. PTT FLNG was established in 2010 to carry out business related to the production of Floating Liquefied Natural Gas, which is a development option for the PTTEP-operated Cash-Maple natural gas field in Australia. (www.downstreamtoday.com)

December 24, 2014. The U.S. shale boom is connecting markets and changing the way oil and gas is bought and sold, according to BP Plc’s trading unit. Understanding one commodity in a region is no longer enough, Carol Howle, head of global oil Europe and finance at BP Integrated Supply & Trading, said. Change in trade flows will come as the U.S. turns from an importer of liquefied natural gas to an exporter and liquefied petroleum gas export capacity increases, she said.

The U.S. shale boom, driven by advances in technology, bolstered oil and gas output, moved the country closer to energy independence and helped it overtake Russia as the world’s biggest gas producer. Flexible terms of LNG exports from the U.S. mean the fuel can be delivered anywhere globally depending on prices. The boom also led to cheaper U.S. coal exports to Europe, depressing the appeal of burning natural gas for electricity generation in the continent and affecting the emissions market. With banks from Barclays Plc to Credit Suisse Group AG exiting or scaling down commodity trading as regulations tighten, global energy companies, utilities and independent trading houses are competing to expand operations, adding products from LNG to LPG to their portfolios. (www.bloomberg.com)

December 24, 2014. Gold, the ultimate inflation hedge, isn’t much use to investors these days. Oil is in a bear-market freefall that began in June, spearheading the longest commodity slump in at least a generation. The collapse means that instead of the surge in consumer prices that gold buyers have been expecting for much of the past decade, the U.S. is “dis-inflating,” according to Bill Gross, who used to run the world’s biggest bond fund. A gauge of inflation expectations that closely tracks gold is headed for the biggest annual drop since the recession in 2008. While bullion rebounded from a four-year low last month, Goldman Sachs Group Inc. and Societe Generale SA reiterated their bearish outlooks for prices. The metal’s appeal as an alternative asset is fading as the dollar and U.S. equities rally, and as the Federal Reserve moves closer to raising interest rates to keep the economy from overheating.

Crude-oil futures in New York have tumbled 42 percent this year, dropping below $54 a barrel, as global output surged. The five-year break-even rate is down 33 percent this year, the most since 2008. In November, the cost of living fell 0.3 percent, the most since December 2008, government data show, and economists surveyed predict the annual gain in consumer prices will slow in 2015 to 1.5 percent from an estimated 1.7 percent this year. Cheaper energy means there are no signs that inflation is approaching the Fed’s 2 percent target, Gross, who used to run the world’s largest bond fund at Pacific Investment Management Co. before joining Janus Capital Group Inc. in September, said. (www.bloomberg.com)

December 29, 2014. Russia may consider a rebate program to help service providers replace aging oil and gas rigs as U.S. and European sanctions bar technology imports, according to the government. The Energy Ministry proposed the state offer subsidized loans and cash bonuses for rigs older than 25 years to companies buying domestically manufactured rigs. President Vladimir Putin has called for businesses to replace imports with domestic goods this year as relations with the U.S. and its allies collapse in sanctions and counter sanctions over the separatist conflict in Ukraine. Russia, which depends on oil and gas taxes for about half the federal budget, needs more efficient equipment to develop remote deposits and increasingly challenging geology to maintain production as easy resources, tapped in the Soviet-era, decline. The Energy Ministry has sent a proposal on rigs to the government. (www.bloomberg.com)

December 24, 2014. The tumbling oil prices that have slashed Nigeria’s revenue and roiled currency and stock markets in Africa’s biggest economy may have a silver lining: an excuse for the government to scrap fuel subsidies that cost as much as $7 billion a year. It’s an opportunity President Goodluck Jonathan, concerned that such a move would provoke protests before his bid for re-election in February, may not seize, analysts said.

Nigeria relies on refined fuel imports to meet more than 70 percent of domestic needs and it refunded importers as much as a third of the cost of supply in the past year ending in October, according to the Abuja-based Petroleum Ministry. This ensured the price of gasoline was capped at 97 naira ($0.54) per liter. Jonathan’s attempt to end the subsidies in January 2012 sparked a week of strikes and protests, paralyzing the economy and forcing the government to partially restore them. A 2012 parliamentary probe recommended that 70 gasoline importers, including the state oil company Nigerian National Petroleum Corp., refund 1.1 trillion naira in illegal fuel-subsidy payments, alleging “endemic corruption.” While Nigeria is Africa’s biggest crude oil producer, which pumped 2.1 million barrels per day in November, its four ill-maintained state-owned refineries handle only 16 percent of their capacity for 445,000 barrels per day. (www.bloomberg.com)

December 24, 2014. Iraq’s cabinet approved a smaller 2015 spending plan than the government expected because of the collapse in oil, which provides most government revenue. The budget, based on a $60 a barrel price for oil, stands at 123 trillion dinars ($103 billion). The budget deficit was set at 23 trillion dinars and total revenue at 99.8 trillion dinars, including oil revenue of 84 trillion dinars, the cabinet said. The 2015 budget had initially been set at 141 trillion dinars, and was 138.4 trillion dinars in 2013. (www.bloomberg.com)

 [INTERNATIONAL: POWER]

December 27, 2014. The third unit of the Rostov nuclear power plant was connected to Russia's power grid and started to produce electricity, the state-owned company, Rosenergoatom, said. The third unit is put into operation several months before the scheduled date, the company said. The Rostov nuclear power plant is Russia’s southernmost nuclear power plant and one of the largest energy companies in the south of the country. It is located near the city of Volgodonsk. Two units with the total capacity of 2000 MWt operate at the plant. (itar-tass.com)

December 26, 2014. Vietnam has reached a preliminary agreement with Malaysian company Teknik Janakuasa on a build-operate-transfer contract for a 1,200 MW coal-fired power plant, the country's first such facility to use imported coal, Vietnam's industry and trade ministry said. Preparations for the Duyen Hai 2 plant construction in the southern province of Tra Vinh have been going since 2009 and the project still requires an investment licence to go ahead, the ministry said. (www.reuters.com)

December 25, 2014. The reconnection to the grid of a 348 MW unit at Serbia's Kostolac B coal-fired power plant, which went offline for a planned overhaul on Feb. 28, has been delayed again until Dec. 27, the plant said. The upgrade, designed to boost the unit's capacity to 350 MW and extend its life by 30 years, was due to be completed on Dec. 1. Its restart data has been put back three times as testing has taken more time than anticipated. Serbia's energy sector has been under severe strain since major flooding in May inundated a coal mine feeding its top power plant, forcing the country, which produces 70 percent of its power from coal and the rest from hydro, to import electricity and coal to make up for the shortfall. (af.reuters.com)

December 30, 2014. Every winter puts it under low key, but the hibernation this year is going too deep causing concern for the dependent one. The entity in question is Himalayan country Bhutan's Hydropower sector and the dependent one is India. Though highly rich in hydropower, Bhutan's power production goes under near hibernation during every winter due to low hydro logical output. Despite its existing generation of around 6500 million units, much higher than average domestic demand of near 1500 million units, the situation forces Bhutan to import power from India to run its own domestic need and essential services. Total long term average import from India between October-March stands around 40 MW. The same period import in 2013-14 remained around 55 MW- informed from Druk Green Power Corporation (DGPC) that takes care of Bhutan's Hydropower initiatives. But against this, currently Bhutan has to import 80 million units of power during these winter months- Bhutan's Prime Minister Mr. Lyonchhoen Tshering Tobgay informed at a meeting with private enterprises. Not just increased domestic need, diminishing water flow is the major reason behind this negative trend. According to DGPC, Bhutan recorded its lowest overall energy generation in 2014 since 2007- mainly due to poor hydrology and increased domestic consumption. Bhutan is at present on a mission to achieve 10,000 MW additional installed capacity by 2020 in co-operation with the Government of India, Mr. Dasho Tsering Wangda, Consul General of Bhutan in India said. (economictimes.indiatimes.com)

December 30, 2014. After suspending approval of new nuclear power projects following the meltdown at Japan's Fukushima Daiichi plant in 2011, Beijing is finally looking to approve new coastal nuclear power plants in 2015, the final year for the implementation of the country's 12^th Five-Year Economic Development Plan. China's installed nuclear capacity will touch a projected 58 million kilowatts by 2020 and building capacity will cross 30 million KW, according to an energy development plan recently released. Under the plan, China will resume the approval for new nuclear power projects in eastern coastal areas by adopting the highest international safety standards. According to forecasts by experts, China's total investment in the construction of nuclear power plants will touch 300 billion yuan (US$48.3 billion) by 2020, including 150 billion yuan (US$24.1 billion) in investment in equipment and facilities. If 60%-70% of the equipment and facilities are locally produced, domestic manufacturing enterprises will take about a 100 billion yuan (US$16.1 billion) share in the nuclear power facilities and equipment market. According to the International Energy Agency, by 2040, China's nuclear power generation will account for half of the global total, though the country currently accounts for only 2%. At present, China has 21 nuclear power units in operation, with a total installed capacity amounting to 19.02 million KW, while it has 27 nuclear power units under construction, the highest number in the world at a combined capacity of 29.53 million KW. (www.wantchinatimes.com)

December 25, 2014. Russian Prime Minister Dmitry Medvedev has signed an agreement to build Jordan’s first nuclear power plant. It will be a joint project with Russia’s Rosatom nuclear power corporation. The nuclear power plant in Jordan will have two reactors, each with the capacity of 1000 MW. The first is expected to start operating in 2024, and the second in 2026. The area where the plant is to be built is an area with little chance of earthquakes. Jordan announced a tender for the construction of its first nuclear power plant in January 2011. In October 2013 Rosatom was declared a "preferred bidder" for the construction. (rt.com)

 

 [RENEWABLE ENERGY / CLIMATE CHANGE TRENDS]

December 30, 2014. Sutlej Jal Vidyut Nigam (SJVN) along with Hindustan Salt will set up ultra mega hybrid renewable energy park, having up to 5,000 MW power generation capacity in Gujarat. The proposed park would have both solar and wind plants. The park will be developed on the surplus salt pan land of Hindustan Salt. It would have the generation capacity of 4,000-5,000 MW including about 3,500-4,200 MW solar and 600-800 MW wind capacities. Initially, the SJVN will develop all the infrastructure facilities like roads, drainage system, power supply and water supply system, evacuation arrangement from the plot to evacuation sub-station. At present, SJVN operates two hydel projects including India's largest 1,500 MW Nathpa Jhakri station in Himachal Pradesh. SJVN said it is already developing a wind energy project in Maharashtra. (economictimes.indiatimes.com)

December 29, 2014. To provide potable piped water in inaccessible tribal pockets, Koraput district administration has installed 122 solar power-based pumping systems this financial year. The solar-operated submersible pumps, which draw 5,000 to 20,000 litre water everyday, operate automatically and store water in an overhead tank, Executive Engineer (rural supply and sanitation), Koraput, Monaranjan Mali said. A solar array (300-800W) is installed near a borewell and one HP submersible pump is placed inside it. These work on power generated from photo-voltaic solar cells. On a regular day, the pump operates for about 7-8 hours, Mali said. The scheme is being executed by Odisha Renewable Energy Development Agency (OREDA) with the Centre funding the entire project. The solar panel will last for 15-20 years. Both operation and maintenance costs are low. OREDA will maintain the project for first five years, Mali said. Each system has been installed at a cost of ` 4.50 lakh. (economictimes.indiatimes.com)

December 26, 2014. The government's target of achieving 100 GW of solar power capacity by 2022 has made renewable energy the future focus of conventional power generation companies such as Hindustan Powerprojects Private Ltd, which plans to invest ` 12,000 crore over the next two years to install 2 GW of clean electricity. This amount is much more than what the company will invest in thermal generation over the same amount of time. Over the next two years, ` 5,000 crore investment is planned on the conventional side, Hindustan Powerprojects chairman Ratul Puri said. This is because conventional power takes longer to build and so the investment is spread out over a longer period of time. In making huge investments in renewable energy, Puri considers Hindustan Powerprojects to be broadly following the current trend line in India. According to him, over 2017-2022, India can create 100 GW of solar capacity but only 50 GW of coal thermal power. This implies that India will invest over two times more in solar energy. Adding 10-15 GW of wind energy to this, the investment may be 2.5 times more in renewables than in conventional power. As of now Hindustan Power has 500 MW of solar capacity. So far the company has invested ` 14,000-15,000 crore, of which ` 6,500-7,000 crore has gone into solar (over the last 3 years) and ` 7,000 crore has gone towards coal-thermal energy generation. Hindustan Powerprojects is developing thermal plants with a combined generation capacity of about 5,000 MW in the states of Madhya Pradesh & Chhattisgarh. Also the company's 2,520 MW thermal power project at Anuppur in Madhya Pradesh will get commissioned soon. The company is also developing hydro power projects. India has now solar energy installation of 2.8 GW and the government wants to scale it up to 100 GW by 2022. (economictimes.indiatimes.com)

December 25, 2014. As part of the Smart City project, New Delhi Municipal Council (NDMC) plans to become energy-neutral—generating as much power as it consumes—by March 2016. After setting up small-scale waste-to-energy plants in its jurisdiction, the civic agency is planning to set up a big plant that will generate about 100 MW power in a day. The civic agency will soon float a tender for the project that is likely to come up in south Delhi. The civic agency's daily consumption is 160 MW, which increases to 200 MW -250 MW during peak season. NDMC is also setting up solar panels on its buildings to generate power as part of its Solar City project. It is working out a way for solar panels to be installed on private buildings. NDMC areas produce only about 250 metric tonnes of waste daily, so the civic agency will have to take waste from the municipal corporations to become energy- neutral. The project has been approved by the Union urban development department that had sent a team to Indonesia to study similar projects. The biggest problem with waste-to-energy plants in Delhi is that they are unable meet energy targets as waste is not segregated at source and has a low calorific value. The civic agency has set up four small waste-to-energy plants in its parks. It is working on another project to set up similar plants in residential colonies. (economictimes.indiatimes.com)

December 25, 2014. Oil India Ltd (OIL) has commissioned its first 5 MW solar power plant in Rajasthan. OIL, which has so far built only small solar power plants for captive use, built and commissioned its first grid connected 5 MW unit at village Raghwa in Ramgarh district of Rajasthan, the company said. OIL plans to expand this unit by another 9 MW. The 9 MW solar power plant expansion will be completed by next year. The 5 MW solar power plant with Polycrystalline Technology was set up at a total cost of ` 41.49 crore. The plant consists of 20,408 solar modules, each having a capacity of 245 watts. An overhead transmission line of 11.49 km has been constructed to feed in the generated power to the grid. (economictimes.indiatimes.com)

December 30, 2014. United Photovoltaics Group Ltd. said China’s largest energy equity investment fund agreed to acquire 1 billion yuan ($161 million) worth of convertible bonds to fund the joint purchase of a 300 MW solar power project. Chinastone Capital Management Ltd., founded by Ping An Insurance Group Co. and San Shan Ltd., will buy the 7.5 percent three-year bonds at a conversion price of HK$1.03, Hong Kong-based United PV said. Proceeds of the sale will be used to buy the unnamed 300 MW solar power plant. The solar-farm operator said it would cut back its original 10 billion-yuan plan to acquire 1,000 MW of solar plants because of competing bids for the projects. The company will focus on projects in the country’s northwest and in Jiangsu, Shandong and Hebei provinces, it said. (www.bloomberg.com)

December 29, 2014. Enel SpA’s renewables unit connected two new solar farms to Chile’s power grid and completed work on a third. The $110 million Lalackama project is the company’s largest solar farm, with installed capacity of 60MW, Rome-based Enel Green Power said. The $70 million Chanares solar plant is capable of generating 40 MW. Enel also brought online the last 4 MW at its Diego de Almagro solar plant, making it fully operational. The park has a total installed capacity of 36 MW. (www.bloomberg.com)

December 29, 2014. China’s government said it merged Beijing Energy Investment Holding Co. and Jingmei Group into a new 200 billion yuan ($32 billion) business in line with its policy to improve efficiency in the energy industry and reduce pollution. The merger of Beijing Energy and Jingmei, a coal supplier based in the capital, will improve electricity supply, Beijing’s Assets Supervision and Administration Commission said. The new company, Beijing Energy Group Co., will manage coal-fired power plants, renewable energy projects, heating supply and coal mine development. China, the world’s biggest energy consumer, has said it will fight pollution amid record smog levels in cities, including Beijing and Shanghai, mostly from coal-fired power plants. President Xi Jinping in a pact with U.S. President Barack Obama agreed to cap China’s carbon emissions by 2030 and use renewable sources for 20 percent of the country’s energy. (www.bloomberg.com)

December 24, 2014. Germany will loan more than € 654 million ($796 million) for two solar-thermal power projects in Morocco that are among the world’s largest. KfW, the German state-owned bank, will become the biggest lender financing the 300 MW Noor II and III plants near Ouarzazate in southeastern Morocco. The two solar thermal-power plants will be the second and third phases of the project. The loans are part of € 1.4 billion in funds that have been committed for what will be Africa’s largest solar plant. The project has also gotten loans from the World Bank, the African Development Bank, European Investment Bank and the Agence Francaise de Developpement. Construction on the two projects is expected to begin in April. The first 160 MW phase, which is already under construction, is set to come online in October. The entire three-plant solar complex is expected to cost € 2.2 billion and will supply electricity to 1.3 million people once its completed, KfW said. (www.bloomberg.com)

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