Energy News Monitor | Volume XI; Issue 4

 

NEWS BRIEF

OIL & GAS

July 4, 2014. Oil India Ltd (OIL), the nation's second largest explorer, said it has completed acquisition of 50 per cent stake in an oil block in Russia for $85 million. OIL bought the stake from Ireland-registered, Russia- focused firm PetroNeft Resources plc in License 61 in Tomsk Oblast in Russia. The deal includes a three-stage payout including $35 million in cash up-front, $45 million in exploration and development spending and a performance bonus of up to $5 million. The acquisition marks OIL's entry into Russia and is a significant addition to the company's overseas E&P portfolio. It had signed an MoU with Russia's Gazprom International BV for joint pursuit of exploration opportunities across the globe as well as collaborate on liquefied natural gas (LNG). License 61 is located on the eastern side of the Ob river in the oil-bearing region of the Tomsk Oblast. The 4,991 sq km licence contains 7 oil fields and over 25 identified prospects and leads. The block started production in 2010. Current production from the licence is around 2,100 barrels of oil per day. According to independent expert Ryder Scott, the block holds 117.68 million barrels of oil reserves. These estimates do not include the new oil find of Sibkrayevskoye. OIL said it had signed definitive agreements with PetroNeft Resources Ltd (PTR) to take 50 per cent non-operating interest in Licence 61 in Tomsk Oblast in Russia. The deal has now been completed. (economictimes.indiatimes.com)

July 4, 2014. Cairn India has signed up Halliburton Company, a US multinational, for a ` 1,200-crore contract to drill 100 wells at the Rajasthan onland block RJ-ON-90/1 over the next 18 months. This will be Halliburton's first drilling contract in India. Halliburton is one of the world's largest oil field services companies with operations in more than 80 countries. After protracted delays, Cairn India won approval to drill exploration wells in the block last year. In FY14, it brought on production a total of 129 wells. Oil and Natural Gas Corporation (ONGC) is Cairn India's 30 per cent joint venture partner in the Rajasthan block. Cairn and ONGC plan to drill 300 wells over the next three years, and 1,000 wells in five years. Cairn plans to up production from the current level of 200,000 barrels a day to 500,000 barrels a day in five years. The oil and gas fields in Rajasthan constitute Cairn India's key assets. The Mangala field - the largest onshore oil discovery in India in the previous two decades - was discovered in January 2004. This was followed by Bhagyam and Aishwariya. To date, 31 discoveries have been made in the Rajasthan block.

Also, after three years of waiting and nearly relinquishing the block, Cairn India with its partners Tata Petrodyne and ONGC have decided to begin drilling shortly in PR-OSN-2004/1 block in Palar basin on the east coast in the Bay of Bengal. According to consortium partners, the Department of Space recently cleared the block, which was awaiting clearance for long. The consortium partners would invest ` 600 crore in drilling the three wells. The block is said to hold recoverable reserves of about 30 million barrels of recoverable oil. (www.business-standard.com)

July 7, 2014. Essar Oil is operating its 400,000 barrels per day (bpd) refinery at Vadinar at half of its capacity due to repair works at a pipeline linked to its crude unit, the company said. The reduced throughput took place and the refinery is expected to resume full operations, the company said. (economictimes.indiatimes.com)

July 2, 2014. State-refiners have taken the unusual step of importing gasoline as maintenance outages at some plants have created shortages of refined products in a number of regions. Hindustan Petroleum Corp Ltd (HPCL) and Indian Oil Corp (IOC) have so far bought a total of around 65,000 tonne of gasoline for prompt July delivery through tenders. The pair aim to import at least another 100,000 tonne for July to August delivery. India is generally self-sufficient in gasoline, but is sometimes forced to import additional due to refinery outages and increased demand over summer. HPCL has bought 35,000 tonne gasoline from Gunvor for July 15-19 deliveries. The refiner has also reissued a tender to import a similar size cargo for July 3-10 delivery on the east coast, as it did not receive any offers in its previous tender. HPCL's imports have been triggered by a cut in supplies from its private joint-venture refinery HPCL-Mittal Energy Ltd (HMEL), which has been operating its 180,000 barrels per day (bpd) Bathinda refinery at a reduced capacity following a fire. HMEL will shut the refinery for four to six weeks from this weekend for planned maintenance. HMEL supplies about 120,000-130,000 tonne of gasoline a month to HPCL for local sales. Fuel supplies from HMEL mainly meet demand in north India, where supplies are already under pressure due to a delay in the start-up of a hydrocracker and continuous catalytic reformer at Indian Oil Corp's (IOC) 300,000 bpd Panipat refinery. (www.business-standard.com)

July 6, 2014. In the wake of Nagaram gas pipeline fire-explosion, the Gas Authority of India Ltd (GAIL) has appointed Engineers India Ltd (EIL) to check the health of its pipeline network of 870 kms from KG Basin on East Coast. All the pipeline maintenance bases of GAIL across the country have been alerted on the parameters of their health and safety, and instructions have been issued for additional surveillance at increased frequency, and any deviation or abnormality to be attended immediately. The mishap occurred in Nagaram village in East Godavari district, about 560 kms from Hyderabad, on June 27 apparently after leaked gas from a GAIL pipeline ignited when a tea vendor lit his stove. Following the explosion, the gigantic flames scorched houses, coconut palms and everything else in a radius of half a kilometre. The GAIL said the restoration work of the damaged pipelines will depend on the study report and clearance from district administration. The company has approximately 870 kms of natural gas pipeline network in the state.

Though the capacity of the network is 15.9 million standard cubic meters per day (mmscmd) of natural gas, only about 5 mmscmd is currently being supplied due to unavailability of gas from KG Basin. Currently, the supplies are further reduced to 3 mmscmd. (economictimes.indiatimes.com)

July 8, 2014. Global ratings agency Fitch said the regular increase in diesel price to align it with market will lead to a 25 per cent fall in fuel under- recoveries this fiscal at about ` 1 trillion (` 1 lakh crore). The price of diesel has increased at average ` 4.1 per litre in the first quarter of the fiscal against ` 8.5 last fiscal. The rating agency said the only risk to this assumption is sharp rise in the global oil prices. The agency said production in Iraq, the second largest producer of crude after Saudi Arabia, will be affected if the ongoing unrest spreads to southern part of the country. Iraq is also the second largest source of crude for India. This apart, the key developments to watch out for are the policies adopted by the new government and any increase in the share of under-recoveries that upstream companies may have to bear, it said. In the run-up to the budget to be presented by Finance Minister Arun Jaitley, analysts have been saying fuel subsidies are on the way down but subsidies on fertilisers and food need to be watched out for.

The rating agency said the government is unlikely to go in for a hike in cooking gas and kerosene prices, fearing stoking inflation. Reinstatement of subsidy transfers through the direct benefit transfer, halted in March, will also reduce the under-recoveries of oil marketing firms and reduce subsidy burden on explorers. Once diesel is fully deregulated, private players like Reliance Industries and Essar Oil will also be interested in its marketing and this will create a level playing field, it said. On the rating impact of the reduction in under recoveries, it said this bodes well for the state-run oil refiners and marketers like IndianOil, Bharat Petroleum and Hindustan Petroleum. In the medium-to long-term, once diesel price is fully deregulated, this grouping faces the threat of competition from private players, it said. (economictimes.indiatimes.com)

July 8, 2014. India is in talks to lease part of its planned strategic storage to United Arab Emirates' (UAE) state oil company Abu Dhabi National Oil Company (ADNOC), as New Delhi moves to protect its economy against crude price shocks and supply disruptions. India, the world's fourth largest oil consumer, imports about 80 percent of its oil needs and is building emergency storage capacity to hedge against energy security risks. India had initially planned to fill the oil storage without overseas participation, but it is now drawn to deals similar to those that the ADNOC struck earlier with Japan and South Korea. Such a deal would take into account India's growing role as a regional refining hub. The South Asian nation imports around 16 million tonnes of crude a month - more than it consumes - and exports about a third of that as refined products. India's planned oil storages sites at Mangalore and Padur in Karnataka on the southwestern coast and Vizag in Andhra Pradesh on the eastern seaboard would together be able to hold 5.3 million tonnes or about 39 million barrels of oil. That would be sufficient to cover about 10 days of domestic Indian consumption. (in.reuters.com)

July 8, 2014. Reliance Industries Ltd's (RIL) bid to push for an early gas price hike through international arbitration may be in for fresh delays. The oil ministry has requested the chairman of the arbitral panel, former Australian judge Michael Hudson McHugh, not to initiate proceedings till the government cross-checks all case documents. The ministry has sought copies of all communication submitted to McHugh by Reliance and its partners in the Andhra offshore gas field — UK energy major BP plc and Canada's Niko Resources — challenging a $1.8 billion penalty slapped by the government for failing to meet gas production target from KG-D6 block. (economictimes.indiatimes.com)

July 8, 2014. With the government expected to announce a big-bang privatisation programme in the July 10 budget, the loudest pop could come from the sale of a 5-10 per cent stake in ONGC that would raise as much as ` 35,000 crore at current market prices, a record for stake sales in state owned companies. This would make it much bigger than the Coal India initial public offering (IPO) of 2010, in which the government raised ` 15,500 crore. An inter-ministerial Cabinet note has been floated in this regard. In 2012, the sale of a 5 per cent stake in the company had fetched the government around ` 12,000 crore. It's not clear, however, what amount of stake the government will eventually put on sale. (economictimes.indiatimes.com)

July 7, 2014. Oil Minister Dharmendra Pradhan has said prices of gas produced from different sources cannot be the same and the government will strike a balance between the consumer and the producer while announcing new rates. Pradhan also ruled out deregulation of diesel prices and said prices of cooking gas and kerosene would not go up, steps recommended by most economists. While the bulk of domestic gas is sold at $4.20 per unit, rates for gas produced from some fields range between $3.5-5.73 per unit while gas sourced from coal-bed methane (CBM) blocks costs between $5.1-6.79 per unit. The previous government had decided to have the same price for gas from all sources including CBM, without taking into account the cost of production different fields. In December 2013, it approved a pricing formula, which was suggested by the Rangarajan committee which would resulted in a price of about $8.40 per unit for April-June 2014. But, the Election Commission vetoed its move to notify the new rate during the general elections. The Narendra Modi-led Cabinet examined the politically fraught issue of gas pricing, but deferred a decision to announce a new rate as it wanted to thoroughly study the issue. The government will review the Rangarajan formula, consider views of stakeholders and assess the implications of the new rate on the economy before taking a final call. Pradhan said that gas belongs to the country that should be utilised to maximise economic benefit for the people. He also said that India needs investment in the oil and gas sector for which producers should be incentivised with adequate and appropriate pricing. (economictimes.indiatimes.com)

July 7, 2014. The government is revising the domestic gas allocation policy to accord top priority to CNG and PNG services without hurting urea industry. The move is aimed at protecting consumers from price shock and expanding the green fuel network as a means to prune diesel and cooking gas subsidy. A panel of secretaries is slated to discuss changes in the pecking order for allocation of gas from upcoming fields and remove discrepancies in the three allocation systems at present as a prelude to the new gas pricing regime. The government's argument is that CNG service requires small quantities of gas but can yield rich dividend in terms of providing clean and economic fuel for the masses. In February, CNG prices came down by ` 15 per kg and PNG by ` 5 per unit in Delhi and its suburbs when the oil ministry, on Gujarat High Court's order, raised the allocation of domestic gas for all city gas services to 100%. The decision removed the need for service providers such as Delhi's Indraprastha Gas Ltd to import additional gas, which pushed up prices. CNG prices would inevitably rise once the government raises gas prices under a new pricing policy. But with 100% domestic gas, the increase will be less than if demand was to be partially met with imports. (economictimes.indiatimes.com)

July 5, 2014. Ruling out any immediate hike in prices of LPG and kerosene, Oil Minister Dharmendra Pradhan said the new government will continue with the policy of subsidising commonly used cooking fuels. Besides continuing to subsidise LPG and kerosene, the NDA government will also not disrupt the previous UPA government's policy of up to 50 paise a litre increase in diesel price every month. The government heavily subsidises LPG and kerosene. LPG price was last hiked in Jun 2011 when it went up by a steep ` 50 per 14.2-kg cylinder. Two subsequent increases totalling ` 14 were on account of increase in commission paid to dealers. LPG price in Delhi at ` 414, is ` 449.17 short of cost. Price of kerosene, which currently costs ` 14.96 a litre in Delhi, was last hiked in June 2011 when its price was hiked by ` 2. Current subsidy on kerosene is ` 33.07 per litre. Pradhan said Modi government will decide on policies keeping the interests of the country, its poor, youth and women in mind. (economictimes.indiatimes.com)

July 5, 2014. The government has devised an innovative strategy to cut cooking gas subsidy without igniting protests. Well-off people can contribute to fiscal prudence by opting out of the subsidy on a website, which will in effect embarrass the rich who want to hang on to sops. As a first step, the oil ministry has directed state refiners and explorers to urge their employees, about a lakh in all, to volunteer for the "opt out of subsidy" campaign and pay market rates for the fuel. IndianOil and Bharat Petroleum Corporation (BPCL) have promptly initiated the move. Eventually, it is expected to be launched in all state-owned firms, which employ a total of 1.8 million people. The plan, which will go far beyond public sector firms, emanated from the Prime Minister's Office (PMO). To set the ball rolling, BPCL Chairman S Varadarajan has already surrendered cooking gas subsidy. He said the subsidy on LPG cylinders was a mammoth ` 46,000 crore, as a result of which 36% of Indians, especially the poor, did not have access to clean cooking gas at home. According to oil ministry data, Indians on an average use 7.2 LPG cylinders at home. If one signs up for the "opt out of subsidy" scheme and was using seven cylinders, he would have to cough up an additional ` 3,600 a year. If one requires 12 cylinders a year — the maximum number of subsidised cylinder available — he or she would have to pay ` 6,200 a year more. The scheme will soon be launched nationwide. The oil ministry plans to launch a portal that would be called 'mylpg.in', which any citizen could access and opt out of cooking gas subsidy without cumbersome paper-work. The campaign seeks to ensure LPG subsidy for the poor and also to cover parts of the country that are relying on wood and coal for cooking. (economictimes.indiatimes.com)

July 5, 2014. Oil Minister Dharmendra Pradhan indicated that gas price revision may happen well before October 1. The Cabinet Committee on Economic Affairs had deferred a decision on raising gas prices based on a formula approved by the previous UPA government by three months. This was done to hold consultations with all stakeholders keeping public interest in mind. The formula, based on Rangarajan panel recommendation, would have led to prices of gas, which is used mainly for power and fertiliser production, more than doubling to around USD 8.8 per million British thermal unit. Every US dollar increase in gas price will lead to a ` 1,370 per tonne rise in urea production cost and a 45 paise per unit increase in electricity tariff. There would be a minimum ` 2.81 per kg increase in CNG price and a ` 1.89 per standard cubic metre hike in piped cooking gas. Pradhan said the Rangarajan formula had certain anomalies which the new government will look to fix keeping the interest of end-consumers in mind. If the Rangarajan formula would have been implemented, power cost would have gone up by over ` 2 per unit and CNG rates by over ` 12.6 per kg considering a USD 4.5 dollar increase in gas rates. Besides, piped cooking gas price would have gone up by ` 8.50. Pradhan indicated that no new expert committee would be appointed for the purpose of review. The UPA's pricing formulation had been challenged in the Supreme Court and an FIR is pending in Delhi's Anti Corruption Bureau on the issue. Also, the Parliamentary Standing Committee on Finance and the Standing Committee on Petroleum had made adverse comments on the formula. (economictimes.indiatimes.com)

July 4, 2014. The Oil Ministry is likely to move the Cabinet Committee on Political Affairs (CCPA) soon with an expert panel recommendations of raising kerosene price by` 4 a litre and cooking gas (LPG) rates by ` 250 per cylinder. The ministry is preparing a draft note for consideration of the CCPA on pricing of diesel, kerosene and LPG. Endorsing the previous UPA government's monthly 40-50 paisa per litre increase in diesel prices, the ministry is likely to propose that the monthly revisions may continue till the present ` 3.40 a litre loss on the fuel is fully bridged. After the diesel subsidy is eliminated during the course of the year, the ministry wants CCPA to authorise it to decontrol or free price of diesel as was done in case of petrol in June 2010. Since its decontrol, petrol rates are revised on 1<sup>st</sup> and 16<sup>th</sup> of very month based on average cost in the previous fortnight. Barring a few exceptions, petrol prices have moved in tandem with cost since then. The ministry wants the CCPA to consider recommendations of an expert panel headed by former Planning Commission member Kirit S Parikh. The committee had recommended to the government that diesel prices should be hiked by ` 5 per litre, kerosene by ` 4 a litre and domestic LPG rates by ` 250 per cylinder immediately to cut fuel subsidy bill by ` 72,000 crore. But as the monthly increases have led under-recoveries, or the difference between cost and retail price, falling below ` 5, the ministry is unlikely to press for implementation of the panel's recommendation on diesel. Besides diesel, state-owned oil firms at present lose ` 33.07 a litre on kerosene sold through the public distribution system (PDS) and ` 449.17 on LPG, they said. (economictimes.indiatimes.com)

July 4, 2014. The oil ministry has blocked internet access for junior officials, a move that the net-deprived babus say may be aimed at preventing leakage of sensitive information or suspicion of misusing the facility to access objectionable websites. Internet is now a privilege for senior and mid-ranking bureaucrats. Oil ministry said the "competent authority" ordered disconnection of the internet for all officials from under-secretary and below - a move that many find ironical as the government is actively using social media to communicate with people, and is promoting e-governance. Executives of state firms, who regularly deal with the oil ministry, say the snapping of internet is creating communication problems because their emails to top bureaucrats are normally received and acknowledged by the secretarial staff, which is no longer senior enough to have internet access. (economictimes.indiatimes.com)

July 3, 2014. The public sector oil marketing companies (OMCs) are making profits by selling oil and petroleum products to consumers, contrary to the perception that they are selling oil at a loss. The gain, which could easily have been passed on to retail consumers, has been estimated to be around ` 50,000 crore in five years between 2007 and 2012. This has been the findings of the Comptroller and Auditor General (CAG) in its latest audit report on pricing of petroleum products. The report has already been submitted to the government and likely to be tabled in Parliament in the forthcoming budget session. The estimated gain to the government is at least ` 25,000 crore in profits through the sales at petrol pump prices and another gain of similar amount by way of customs duty and other charges added to the sale price of petrol and diesel. On contrary, the OMCs have been reporting "under recoveries" to the tune of over ` 1.10 lakh crore every year. The government auditor has observed that all these projected losses are notional due to flawed petroleum pricing. The CAG report is believed to have listed reasons how state-owned oil companies adopted a pricing formula that resulted in windfall gains to them and even some private refiners. The CAG, in its report on pricing of petroleum products, has summarised that the public sector oil companies - Indian Oil, HPCL and BPCL — have made profits of over ` 25,000 crore by selling oil to consumers and at least ` 25,000 crore more have been added to the petrol pump prices due to levies and other charges imposed. The profit indicated is for the period between April 2007 and March 2012. The federal auditor has disputed the under-recovery stories of these public sector OMCs and explained in detail how these could have been avoided to give relief to the consumers. The findings are based on a thorough scrutiny of accounts of IOC, HPCL and BPCL. In January 2013, the government had authorised these OMCs to increase retail prices of diesel at ` 0.50 every month to close the gap on their under-recoveries. While the petrol prices have fully been deregulated, the OMCs claim their under-recoveries for 2014-15 for subsidised LPG, kerosene and diesel may exceed ` 1.07 lakh crore. OMCs increased both petrol and diesel prices. IOC said despite increase of ` 0.50 on retail diesel prices, the under recoveries remained to the extent of ` 3.40 per litre. (economictimes.indiatimes.com)

July 3, 2014. Days after the price of non-subsidised cooking gas (LPG) was hiked by ` 16.50 per cylinder, the government said the increase will impact less than 1 per cent of the consumers. The price of non-subsidised LPG, which customers buy after using up their quota of 12 subsidised cylinders, was raised to ` 922.50 per 14.2-kg cylinder in Delhi on July 1, the first hike in six months. While the price of subsidised LPG cylinder remains unchanged at ` 414 per bottle, oil companies revise non-subsidised cooking gas rates every month in step with the cost of production. The Iraq crisis led to oil prices hardening globally and depreciation of the rupee, making imports costlier. Non-subsidised LPG prices had been declining since February, when the rate was cut by ` 107 to ` 1,134 per cylinder. (economictimes.indiatimes.com)

July 2, 2014. Diesel prices are likely to be completely deregulated over the next 12 months as monthly increase in rates bridge the gap between cost and retail price, rating agency Moody's said. Moody's expects the new government to increase the retail selling prices of controlled fuel products - kerosene and liquefied petroleum gas (LPG), to help control its subsidy burden. The government, in it view, is most likely to go for staggered increases, similar to the ongoing 50 paisa per litre hike in diesel prices every month. This is because, while a one-time price increase will have a more immediate impact on reducing the burden, it would also be more challenging to push through, given the need to control inflation. Moody's Investors Service said it expects the new government to reduce fuel subsidies through a gradual process, which would lead in turn to higher product prices and therefore prove credit positive for oil marketing companies (OMC). Moody's expected the loss, or under-recovery, at which diesel, kerosene and LPG are sold to total ` 1,10,000 crore for the fiscal year ending March 2015, if the price of crude oil remains elevated for the rest of the year and the government does not increase the retail selling prices of LPG or kerosene. Currently, the government keeps the prices of these three products at below international market prices and compensates retailers for the losses some three to six months later. (economictimes.indiatimes.com)

POWER

July 8, 2014. NTPC Limited chairman and managing director Arup Roy Choudhury met chief ministers of Telangana and Andhra Pradesh (AP) to get their support for the two 4,000 MW projects it intends to set up in the respective states. The government has promised NTPC it would provide whatever extent of land required to establish the project. The chief minister also gave a commitment that his government would take up the coal linkage issue with the Government of India. The NTPC chairman expressed willingness to set up a plant provided the company got enough land and coal with the help of the state government. NTPC currently operates a power station with an installed capacity of 2,600 MW at Ramagundam in the vicinity of Singareni Coalfields in Karimnagar district. NTPC has been pursuing this proposal with the state authorities for sometime now. It has been asking for land either at Pudimadaka near Anakapalli or at Nakkapalli in Visakhapatnam, away from the location of its existing Simhadri power project, which has a 2,000 MW installed capacity. AP chief minister N Chandrababu Naidu directed the industries department principal secretary to finalise a suitable site for the project within 15 days, according to the AP energy department. (www.business-standard.com)

July 5, 2014. Neyveli Lignite Corporation (NLC) owned New Thermal Power Stations in Tamil Nadu would generate additional 1,500 MW power within five months. NLC said that four new thermal units with a capacity of 1,500 MW will be commissioned within next five months at Neyveli and Tuticorin. (economictimes.indiatimes.com)

July 3, 2014. JSW Energy Ltd, part of the $11-billion Mumbai-based Sajjan Jindal Group, is set to acquire Lanco Infratech's 1,200 MW Udupi Power in coastal Karnataka for about ` 5,700 crore, inclusive of ` 4,500 crore debt and equity value of ` 1,200 crore. This would be the first acquisition of such magnitude in the thermal power space in which a domestic firm is acquiring another fully commissioned power project. (economictimes.indiatimes.com)

July 3, 2014. In the backdrop of power crisis in Uttar Pradesh, the state government asked the Centre to ensure availability of ample amount of coal to generate power. Uttar Pradesh Chief Minister Akhilesh Yadav sought to know from the BJP members that when power would be generated from nuclear plants in the country. The Chief Minister said that investment was coming in the state and the government was serious in ensuring development of Uttar Pradesh. (economictimes.indiatimes.com)

July 8, 2014. Engineering and electronics conglomerate Siemens has bagged an order worth ` 52 crore from NTPC for supply of Distributed Control System to their power plant in Bihar. The order is for supply of state-of-the-art Distributed Control System (DCS) for its 4x210 MW power plant located in Bhagalpur, Bihar and the scope of the project includes the supply, erection and commissioning of control and instrumentation for the complete power plant, the company said. (www.business-standard.com)

July 8, 2014. The government said it will expedite the construction of three critical rail lines to facilitate faster transportation of coal to power plants, thereby helping in bringing nearly 100 million tonnes of incremental traffic to Railways. The announcement comes at a time when the power plants across the country are facing fuel shortages. The three rail corridor projects, entailing about ` 7,500 crore expenditure, are under different phases of development. Coal and Power Minister Piyush Goyal had said that one of the three critical rail links in Chhattisgarh has been brought on track and efforts are on to expedite other two in Jharkhand and Odisha. (www.business-standard.com)

July 8, 2014. Nearly half of India's coal-fired power stations only have enough stocks to last a week, the power minister said, as the country struggles to connect millions to the grid and wrestles with a growing coal import bill. Coal imports equate to about one percent of India's economy as state behemoth Coal India, the world's largest coal miner, has failed to raise output fast enough to meet demand. This leads to frequent blackouts, something new Prime Minister Narendra Modi is keen to fix soon but which will raise coal shipments from countries such as Indonesia, Australia and South Africa. Coal fires more than half of India's electricity. Power Minister Piyush Goyal said out of 100 coal-based power plants in India had "super critical coal stock" - enough to meet requirements for less than four days. A total of 44 plants, including the super critical ones, have "critical coal stocks" sufficient for less than a week, with the majority in the state of Maharashtra, the home of India's financial capital Mumbai. India is already the world's third-largest coal importer despite sitting on the fifth largest reserves, mainly due to delays in securing environmental clearances to add new mines and to build facilities to transport coal from remote mines. Coal-fired power plants are expected to see demand of 551.60 million tonnes this fiscal year ending March 31, but supply will be limited to 466.89 million, Goyal said. (in.reuters.com)

July 7, 2014. Power transmission solutions provider, Sterlite Technologies has entered into an agreement to raise ` 500 crore through equity infusion from Standard Chartered Private Equity for funding its existing as well as new projects, the company said. Sterlite Power Grid Ventures Ltd (SPGVL), a subsidiary of Sterlite, focused on the development and operations of power transmission projects, will issue convertible securities to Standard Chartered Private Equity for a minority share. (economictimes.indiatimes.com)

July 7, 2014. Tata Power Company is trading higher by 2.5% at ` 110 on BSE after the company said it has signed an option deal to sell a 5% in coal miner PT Kaltim Prima Coal (KPC) to get additional cash flow as well as to reduce its consolidated debt. Tata Power said the 5% stake in the Indonesian coal miner is valued at about $250 million (` 1,500 crore), adding that if the option is exercised it would still hold a 25% stake in PT Kaltim Prima Coal. Tata Power also signed an option deal to sell its entire 30% stake in power infrastructure companies related to KPC to the Bakrie Group, the company said. (www.business-standard.com)

July 4, 2014. Uttar Pradesh (UP) withdrew 1,000 MW power from the northern grid, bringing back the spectre of a grid collapse that happened twice in 2012 and had plunged north, west and eastern parts of India into darkness. The move came a day after Uttar Pradesh Chief Minister Akhilesh Yadav blamed the Centre for not allocating enough power from the Central pool to the state. (economictimes.indiatimes.com)

July 4, 2014. About 50 per cent of electricity generated in India is transmitted by Power Grid, the state-owned electricity transmission utility. The company had outlined an ambitious expansion plan for the 12^th Five Year Plan (FY13-17), under which it seeks to increase its transmission and distribution network even further. The company has increased its capex plan from` 1,00,000 crore to ` 1,10,000 crore. Analysts claim the company has also identified 27 transmission projects that it intends to complete this year. The company has already raised ` 5,400 crore for the additional capital expenditure it is expected to incur. (www.business-standard.com)

July 3, 2014. Alstom T&D India said it has bagged a contract worth ` 27.7 crore from Himachal Pradesh Power Transmission Company to supply a 66 kV gas-insulated substation (GIS) for evacuating power from new generation sources to Kinnar district in the state. The company has been localising GIS manufacturing activity in India since 2009 in Padappai near Chennai, and currently leads the GIS market in the country. So far, Alstom has supplied around 700 GIS substations in the country, covering a range of voltages from 66kV to 400kV. (www.business-standard.com)

July 2, 2014. CG Lucy Switchgear Ltd, a joint venture company between Avantha Group company CG and the UK-based W Lucy & Co Ltd, has inaugurated its new Ring Main Unit (RMU) production facility at Nashik, Maharashtra. The facility offers RMUs for enhancing the efficiency of power distribution networks, preventing transformer burnouts and is equipped with a partial discharge testing facility up to 33kV. (www.business-standard.com)

July 8, 2014. After accusing the Centre of not providing adequate power from its pool, the UP government has decided to go on its own to meet the crisis. In what may be termed as a big leap in power generation, the Akhilesh Yadav government has asked the state-owned power generation company UP Rajya Vidyut Utpadan Nigam Limited (UPRVUNL) to set up four power units of 660 MW each in the state. This, in a way, would increase the generation capacity of state-owned power plants by nearly 50%. While one 660 MW unit is proposed to be installed in Panki and Harduaganj each, two units each of 600 MW will be installed in Karchana in Allahabad. UPRVUNL confirmed that the proposal for a 600MW in Panki and two units of 660 MW in Karchana is scheduled to be put forth before the state cabinet for approval soon. The move to hand over Karchhana to the state-owned UPRVUNL has come months after the Jaypee group backed out of the proposal following problems in land acquisition. The company, although, would be setting up a power plant in Bara block of Allahabad. (timesofindia.indiatimes.com)

July 8, 2014. Madhya Pradesh (MP) energy minister Rajendra Shukla admitted that state owned power management company purchased power to meet the demand in the state. Shukla informed that the state had purchased power during 2012-13, 2013-14 and during April 2014. A total of 15,951.68 million units were purchased from National Thermal Power Corporation (NTPC) at ` 2.38 per unit during 2012-13 while 1,570 million units through independent power purchased agreement during the same year at ` 4.67 per unit. The total power production of the state, the minister informed, stood at 19,994.92 million units during 2012-13, 19869.78 million units during 2013-14 and 1729.53 million units during April 2014. The state purchased power through its utility MP Power Management company during these years. (www.business-standard.com)

July 7, 2014. The world's largest miner Coal India Ltd (CIL) is set to take up 118 projects envisaging 354 million tonnes per annum (mtpa) output in three years. Coal and Power Minister Piyush Goyal said these projects would be taken by seven subsidiaries of CIL. Besides, he said Singareni Collieries Company Limited (SCCL) will also take up nine projects for an ultimate capacity of 13 mtpa during the 12^th plan. CIL, which accounts for over 80 per cent of the domestic coal production, has seven coal producing subsidiaries - Eastern Coalfields, Bharat Coking Coal, Central Coalfields, South Eastern Coalfields, Western Coalfields, Northern Coalfields and Mahanadi Coalfields. Goyal said as per the report of the Working Group on Coal & Lignite for formulation of the Twelfth Five Year Plan (2012-17) production of coal, as per optimistic estimates was projected to reach 795 mt by the end of the Plan. The group as per another estimate, i.e. "Business as Usual Scenario," projected production to reach 715 mt by 2016-17 including 100 mt from captive blocks, he said. (economictimes.indiatimes.com)

July 7, 2014. As construction of mega dams in Arunachal Pradesh is viewed as a threat to downstream Assam, the Assam government has asked the Centre that the state be consulted before execution of any hydro power project in the neighbouring state in future. Assam Chief Minister Tarun Gogoi met Prime Minister Narendra Modi and took up the issue of hydro power project construction in Arunachal Pradesh. The 2,000 MW Lower Subansiri Hydro Electric Project, which is being implemented by NHPC Ltd., is under suspension since 2011 after anti-dam activists lay a siege of the dam site and imposed a road blockade. The Arunachal Pradesh government had signed around 150 memorandums of understanding (MoU) with various private and public companies for implementation of hydro power projects in the state. As per estimates, the state has the potential to generate around 50,000 MW of hydro power. On the Lower Subansiri Project, Gogoi said that the Assam government had all along emphasised on dam safety measures and downstream impact of the project. Gogoi has requested the Prime Minister for allocation of the entire quantum of power from 750MW Bongaigaon Thermal Power Project, which is being implemented by NTPC Ltd, to Assam. Gogoi also called for increased power access corridor to the region by increasing the minimum Availability Transfer Capacity for short term open access, round the clock to at least 400 MW on a permanent basis. (www.business-standard.com)

July 7, 2014. The government has advised power utilities to increase coal imports to meet fuel shortages and those that have fuel supply pacts with Coal India Ltd (CIL) to lift coal under "as is where is" scheme by arranging their own logistics. Further, CIL has offered all power producers drawing coal under Fuel Supply Agreements (FSAs), to lift the coal on "as is where is" basis with the stipulation that they will make their own evacuation arrangements. This scheme, earlier implemented by the coal companies, has been extended for 2014-15 also, Coal and Power Minister Piyush Goyal said. CIL has also offered one million tonne coal from cost plus mines of Western Coalfields Ltd, a CIL subsidiary, through short term MoU, Goyal said. (economictimes.indiatimes.com)

July 6, 2014. Power & Coal Minister Piyush Goyal has favoured expediting Comptroller and Auditor General of India (CAG) audit of private electricity distribution companies in Delhi so as to help make "better" decisions on issues like tariff. He was asked if he favours the Comptroller and Auditor General of India (CAG) auditing books of private firms. The 49-day AAP government led by Arvind Kejriwal had ordered CAG to audit private distribution companies or discoms in Delhi over hike in power tariffs. The CAG is auditing two Anil Ambani Group-controlled distribution companies (discoms)- BSES Rajdhani Power Ltd and BSES Yamuna Power Ltd -- and Tata Power Delhi Distribution Ltd that provide electricity to Delhi. (economictimes.indiatimes.com)

July 6, 2014. The Coal Ministry has turned down the Jharkhand government's request to revoke deallocation of four mines which were taken back for delays in development, stating that the matter is sub-judice. The four mines -- Rabodih, Patratu, Pindra-Debipur- Khaowatand and Latehar -- were allocated to Jharkhand State Mineral Development Corporation (JSMDC). Earlier, the Coal Ministry had rejected a plea of the Power Ministry for reconsidering the decision on deallocation of eight coal blocks of power producers like Essar Power, Hindalco and Tata Power. While Pindra-Debipur-Khaowatand and Latehar coal mines were alloted in 2006, Rabodih and Patratu coal blocks were alloted in 2007. The ministry further said that the inter-ministerial group (IMG) on coal blocks had in 2012 recommended deallocation of all the mines. The Jharkhand government had written a letter on April 7, 2014 to the coal ministry requesting it to revoke deallocation of the mines allocated to JSMDC. IMG set up to review the progress of development of captive coal blocks allotted to private companies had members from various ministries including steel and power. (www.business-standard.com)

July 4, 2014. Delhi's Lt Governor Najeeb Jung lifted the restrictions imposed on supply of power in malls, offices and on high mast halogen lights during nights. With the national capital witnessing long outages following the damage caused to towers and lines due to devastating storm which struck the city on May 30, Jung had issued directives to control the current power problem which included snapping power supply to malls after 10 pm. The city was also reeling under the blistering heat with the mercury crossing the 45 degrees Celsius mark. Jung had also directed switching off high mast halogen lights in the streets during the night hours and Government establishments, including Delhi Secretariat and other government offices, universities, colleges were advised to switch off air conditioning between 3.30 to 4.30 pm to conserve power during day peak hours. Jung had also urged citizens to come forward and help conserve energy by running their air-conditioners at 25 degree centigrade or above and take all measures at home and offices to save electricity. The Lt Governor reviewed the power situation. (economictimes.indiatimes.com)

July 4, 2014. Prime Minister Narendra Modi favoured Public Private Partnership (PPP) model in power sector and described renewable sources of energy as the answer to the country's growing power needs. Inaugurating the 240 MW Uri-II Hydro Electric Project (HEP) located near the Line of Control in Baramulla district of Kashmir, he said renewable energy, including hydro power, is fast developing as an alternative to thermal power. Modi also supported the PPP model to improve the power infrastructure of the country. The Prime Minister dedicated the power project to the nation in the presence of Jammu and Kashmir Governor N N Vohra, Chief Minister Omar Abdullah and top officials of National Hydroelectric Power Corporation (NHPC). This is the second power project on Jhelum river in Uri area and is located downstream of 480-MW Uri-I HEP, which is already operational. The Uri-II HEP has a concrete gravity dam which is 52-metre high and 157-metre long with four spillways of nine metres each. The 4.23-km head race tunnel carries water from the dam to the powerhouse, which has four units of 60 MW each designed to generate 1,124 million units of electricity in a year. (www.business-standard.com)

July 3, 2014. Power and Coal Minister Piyush Goyal said the government is working on innovative methods that can help more than double electricity generation to 2 trillion units without raising tariffs. India faced a peak power shortfall of 6,103 MW, or 4.5 per cent of the requirement of 1,35,918 MW last fiscal, he said, adding that rationalising fuel linkages and sorting out transmission and distribution issues can solve the problem. Goyal said the demand for power is legitimate and good quality electricity at reasonable prices should be made available to the end consumer. (economictimes.indiatimes.com)

July 3, 2014. The Manila-based Asian Development Bank (ADB) has approved a $300 million loan to boost Assam's power sector and help the state continue its drive to eliminate power sector inefficiencies. The multi-tranche loan facility, which is part of a broader 10-year, $3.5 billion state investment program, will fund generation and distribution upgrades, including the construction of a 120 MW hydropower plant. It will also finance new energy efficient generating equipment at existing plants, new distribution lines and substations, and financial management training and other support for staff of the state power companies, Assam Power Generation Corporation and Assam Power Distribution Company. The new loan will continue past efforts to build up the capacity of power companies and regulatory agencies, and to further cut distribution losses, which have decreased from 40 per cent in the fiscal year to the end of March 2002 to 24 per cent in financial year 2012.The funds are to be disbursed in three tranches with the project set to be completed by the end of 2023. (www.business-standard.com)

July 3, 2014. In the coming week, Delhi Electricity Regulatory Commission (DERC) is expected to announce new power tariffs. While political parties are gearing up to protest in the eventuality of a rise, the commission says tariff announcements are in line with the Appellate Tribunal for Electricity's directions to maintain regular power supply in the city. The regulator also clarified that the ongoing CAG audit will have no bearing on the tariff announcement. (economictimes.indiatimes.com)

July 3, 2014. The Supreme Court (SC) directed BSES Yamuna Pvt Ltd to pay its outstanding dues for the January to June period to power generating and transmission companies before July 15. The apex court said the company shall also continue to pay the recurring monthly demand to power generating and transmitting companies on the same basis of figure indicated in its order of May 6, 2014. (www.business-standard.com)

July 3, 2014. Environment minister Prakash Javadekar has assured the Arunachal Pradesh government that forest clearance for the 3,000 MW Dibang Hydropower Project in the state will be expedited. Javadekar gave the assurance when Arunachal Pradesh CM Nabam Tuki met him in Delhi. (economictimes.indiatimes.com)

July 3, 2014. Uttar Pradesh Chief Minister (CM) Akhilesh Yadav has now written to Prime Minister (PM) Narendra Modi seeking more electricity from the central pool. Energy crisis, especially during summers, spills over as law and order problem in the state, while the opposition seizes the opportunity to attack the government. Yadav’s letter alleged discrimination against UP in allocating power from central pool despite mammoth population base and burgeoning energy demand. Under the Gadgil formula, the states are allocated power based on population, of which 85 per cent power is definite, while 15 per cent is supplied during emergencies. Yadav said while Delhi’s population was less than half of UP, Delhi had been allocated 70 per cent of UP’s allocation of 5,788 MW. Similarly, Maharashtra, whose population was also less than half of UP, had been allocated 6,396 MW, which was more than UP’s share. Yadav has suggested that factors as rise in demand, weather, irrigation needs etc should be considered for allocating power. In another letter, the CM has urged for adequate coal supply for the state power plants, so that they operated at optimum level. (www.business-standard.com)

OIL & GAS

July 8, 2014. Royal Dutch Shell is ending investments in a gas development project in Saudi Arabia, complicating the top oil exporter's efforts to exploit its huge gas reserves. The search for gas has been a priority for Saudi Arabia as it struggles to keep pace with rapidly rising domestic demand. But the emergence of the shale gas industry has opened up more lucrative opportunities for energy companies elsewhere. At least three foreign firms - Italy's ENI, Spain's Repsol and France's Total - have already abandoned the search for commercially viable gas deposits in that part of Saudi Arabia. Shell has stuck it out longer in its South Rub al-Khali Co project with state-run Saudi Aramco after finding small quantities of gas. (www.arabianbusiness.com)

July 6, 2014. Algerian state energy group Sonatrach expects to start production from six gas fields with a total capacity of 74 million cubic metres per day in the next three years. Oil and gas exporter Algeria, a major supplier to European gas markets, has been struggling to increase its energy output, on which it relies heavily for state spending to finance development and social programmes. Energy output has been declining since 2010 due to a fall in exploration activities and a lack of investment from foreign companies which have been wary of Algeria's contract terms and also security since a 2013 militant attack on a gas plant. But Algeria expects production to grow when gas flows start from the Tinhert field with an output of 14 million cubic metres per day before reaching 24 million cubic metres in 2017. (www.rigzone.com)

July 5, 2014. Move over Saudi Arabia and Russia as the US has turned the world’s biggest oil producer this year extracting energy from shale rock that is spurring the US’s economic recovery. The US’ daily output at over 11 million barrels of crude in the first quarter along with liquids separated from natural gas, surpassed all other countries this year and is only set to increase. This output is expected to increase to 13.1 million barrels a day in 2019. (www.asianage.com)

July 3, 2014. Austrian oil and gas firm OMV has made a small oil discovery in the Norwegian Arctic, boosting hopes there is more oil to be found in the area. The find, which is estimated to hold between 20 and 50 million barrels of oil recoverable oil, was made seven kilometres (4.3 miles) away from an oil discovery OMV made last year, called Wisting Central. That discovery is estimated to contain between 63 million and 164 million barrels of recoverable oil. (www.rigzone.com)

July 3, 2014. Repsol has discovered an oil reserve estimated at 40 million barrels of oil equivalent in the waters off the Caribbean islands of Trinidad and Tobago, to the west of the island of Trinidad, the company said. The reserve has produced 1,200 barrels of high quality oil in tests and is ready for commercial production. Repsol has been exploring in Trinidad and Tobago for nearly 20 years. It has rights on seven offshore sites in the region. The Spanish company's oil reserves around the islands totalled 325.3 million barrels of oil equivalent at the end of 2013. (www.rigzone.com)

July 3, 2014. GeoPark, the Latin American oil and gas explorer, has discovered a new oil field in the Campanario Block in Tierra del Fuego, Chile. The company uncovered oil field at the Primavera Sur 1 well on the newly-acquired Campanario Block, which is operated by GeoPark. The Primavera Sur 1 well has been drilled to a total depth of 8,025ft while a production rate of approximately 215 gross barrels of oil per day (bopd) of 39.9° API is the result of a test conducted in the Tobifera formation, at approximately 7,750ft. (drillingandproduction.energy-business-review.com)

July 2, 2014. France's Total is in talks with PetroChina to sell its stake in a Chinese refinery after nearly two decades of investment, in what could be the latest foreign energy firm giving up on a vast but tightly regulated oil market in China. Early this year, BP was dropping plans to invest in another PetroChina refinery in southern China, mirroring the moves of several other projects that worried about a slowdown in growth in the world's second-largest economy. Total was the first foreign firm to get a toehold in China's refining business, as an investor in the 200,000 barrels-per-day West Pacific Petrochemical Corp (WEPEC) in the northeastern port city of Dalian in the mid-1990s. The plant was then designated as the country's first and only export-oriented refinery. The French firm has decided to divest the refinery stake due to years of losses the plant incurred, and also due to lack of access to the local Chinese market. PetroChina has held talks with Total on the potential purchase of the latter's stake in WEPEC, PetroChina's parent company China National Petroleum Corp (CNPC) said. (www.downstreamtoday.com)

July 8, 2014. Chile's state oil company ENAP has signed long-term deal with British Gas to import shale gas from the United States at the end of next year. Shipments will leave from a U.S. port, Chilean Energy Minister Maximo Pacheco said. The deal's volumes and prices were not revealed. (www.downstreamtoday.com)

July 5, 2014. When Aurora Mayor Tom Weisner sees rail cars full of crude oil rumble down the tracks that criss-cross his Chicago-area town, he often thinks about the derailment that killed 47 people almost a year ago in Canada. The disaster focused attention on the design of the oil tankers, yet two-thirds of the tank cars in use are still older models that safety experts say are vulnerable to puncture. The July 6 derailment last year in Quebec and seven other major ones in the U.S. and Canada since then have spilled more than 3 million gallons of oil, with some cars catching fire or exploding. Tank car owners like GATX Corp. disagree with some of the proposals to strengthen or phase out the cars quickly while railroads including BNSF Railway Co. balk at slowing train speeds. That means the trains keep barreling ahead, hauling the booming production of North Dakota -- where daily output has surged in eight years to 937,000 barrels from 4,300 barrels -- through Aurora and other cities. (www.bloomberg.com)

July 3, 2014. Enterprise Products Partners LP and Enbridge Inc. said the 512-mile expansion of their Seaway oil pipeline is mechanically complete, with commissioning work remaining before it starts to move oil south from the delivery point for West Texas Intermediate futures in Cushing, Oklahoma. Enterprise looped the existing Seaway line with a parallel pipe, increasing capacity to the Houston area to 850,000 barrels a day, the companies said. (www.bloomberg.com)

July 3, 2014. Front-month Brent crude futures traded at a discount to the second month, marking the first appearance since April of a condition known as contango, which signals diminished oil-supply concerns as Libya prepares to revive exports. Brent futures for August settlement were as much as 10 cents cheaper than September contracts on the London-based ICE Futures Europe exchange. The front-month hasn’t settled at a discount to the second, an indicator that immediate supplies exceed demand, since April 15. Libya is reopening two crude-export terminals in the country’s east after making a deal with rebels who have blocked oil shipments for the past year. (www.bloomberg.com)

July 3, 2014. Siemens AG Chief Executive Officer Joe Kaeser said he’s prepared to make acquisitions to exploit a boom in the U.S. natural-gas industry that will eclipse demand in Europe, where the economy is still struggling to rebound. As more facilities spring up across the U.S. to extract, transport and store shale oil and gas won from hydraulic fracturing, or fracking, Siemens must keep up to expand its own offering, Kaeser said. Supplying more gas and oil equipment would give the company a lock on lucrative, long-term service contracts, he said. Siemens displayed its drive to participate in the natural-gas frenzy when the company sought to outbid General Electric Co. last month for energy assets of Alstom SA before the U.S. rival prevailed with a bid favored by the French government and Alstom’s board. Kaeser predicted that the U.S. will buy more gas-powered turbines in a single year than Europe in a decade, and that consolidation in the industry will benefit all players. (www.bloomberg.com)

July 3, 2014. Targeting Iranian crude exports to force cuts in the nation’s nuclear program is becoming a riskier strategy for oil markets as violence erupts in neighboring Iraq and supply disruptions persist in Libya. Negotiators from the U.S., Russia, China, Germany, France and the U.K. return to talks with Iranian officials in Vienna to discuss a deal that would lift sanctions on energy, banking, shipping and other areas of trade in return for Iran ensuring its nuclear program is peaceful. Last year, Iran agreed to scale back the program and got limited relief from bans on petrochemicals, gold and auto trade. (www.bloomberg.com)

July 6, 2014. Norway’s Industri Energi union and the oil and gas producer lobby reached an agreement on pay, averting a strike at companies including Halliburton Co., Schlumberger Ltd. and Baker Hughes Inc. The deal, negotiated with the Norwegian Oil and Gas Association overnight, includes increasing the compensation for Industri Energi 6,700 members working in the oil services industry by 24,000 kroner ($3,877) by Jan. 1, Industri Energi and the producer lobby said. The union will now ask its members to approve the terms, it said. A failure to reach an agreement would have resulted in a strike by 78 Industri Energi members working at oil-service companies, which deliver services and products ranging from well maintenance to engineering. The settlement follows both Industri Energi and the Norwegian Union of Energy Workers Safe breaking off talks in May, opting instead for mediation at a later date. Safe will discuss the same agreement on Aug. 15-16. (www.bloomberg.com)

July 4, 2014. Germany plans to adopt regulation that will rule out shale fracking for the foreseeable future. The government wants to ban hydraulic fracturing in shale rocks and coal beds at depths less than 3 kilometers (1.8 miles) and prohibit all types of fracking in water protection areas, Economy Minister Sigmar Gabriel and Environment Minister Barbara Hendricks said. The government will start drafting legislation and seek to adopt it in the second half, Hendricks said. The rules will be re-evaluated in 2021. (www.bloomberg.com)

July 4, 2014. Ukraine's parliament gave preliminary approval to a draft law that would allow the Kiev government to exert tighter control over the energy sector in the face of dwindling natural gas supplies after Russia cut off exports. The parliament also approved, in a first reading, a bill that would allow consortiums with European or U.S. companies to operate Ukraine's ageing gas distribution system and storage facilities. Russia, Ukraine's main supplier of gas as well as of natural gas for Europe via Ukraine, cut off supplies to the ex-Soviet republic on June 16 in a dispute over unpaid bills. It has also hinted it will take retaliatory trade measures against Ukraine over its signature last month of a free trade deal with the European Union. Ukraine's state energy company Naftogaz said that the legislation proposed by the government could help Ukraine get through the winter without Russian gas by reducing consumption by around 20 percent. (www.downstreamtoday.com)

July 4, 2014. French energy major Total plans to drill the first test wells for shale gas in Denmark no sooner than in December or January, with the drilling campaign expected to last for three months, the company said. The Frederikshavn municipality in northern Denmark gave the green light for Total to drill the first test wells for shale gas in the Nordic country, where conventional gas output is dropping. (www.rigzone.com)

July 4, 2014. Layers of shale in the U.K. that may meet decades of domestic gas demand when drilled are well below water aquifers, minimizing the risk of contamination. A study by the British Geological Survey (BGS) and Environment Agency found that 92 percent of the shale in the Bowland basin is 800 meters (2,600 feet) under the principal water sources. In the Weald in southern England, the rock lies 650 meters below the water table. The U.K. government is offering tax breaks to shale drillers to spur development of a resource that may meet domestic gas demand for a half-century even if 10 percent is extracted. The Bowland basin in northern England may hold as much as 1,300 trillion cubic feet of gas, the BGS said. (www.bloomberg.com)

July 3, 2014. Libya is ready to reopen two oil ports in the country’s east and will resume exports as fast as possible after taking back control from rebels who blocked crude shipments for the past year. Es Sider and Ras Lanuf, which have combined capacity of 560,000 barrels a day, will open after an agreement was reached with rebels. The nation’s biggest and third-largest export facilities were handed over in a gesture of support for the newly elected parliament. (www.bloomberg.com)

July 3, 2014. Colombia is looking to extend a decade-long oil expansion by improving Ecopetrol SA’s community relations and environmental permitting as shares of the state-run producer slump to a four-year low. Ecopetrol is creating regional operational centers run by a vice president with managerial and decision-making powers, Mines and Energy Minister Amylkar Acosta said. The changes include strengthening the company’s VP office with environmental responsibilities, partially aimed at speeding up permitting, Acosta said. Colombia’s oil output has been rising since 2005 as companies such as Ecopetrol and Pacific Rubiales Energy Corp. tap areas once overrun by guerrillas. Now an increase in rebel attacks on infrastructure, community protests and permitting bottlenecks threaten to crimp production. (www.bloomberg.com)

July 2, 2014. North Dakota, the second-largest U.S. oil-producing state amid booming output from shale, plans to punish crude explorers that fail to curtail the burning of natural gas as waste. Energy companies that don’t curb so-called gas flaring will face limits on the amount of oil they can pump from the Bakken shale formation, the North Dakota Industrial Commission said. (www.bloomberg.com)

POWER

July 8, 2014. An Indonesia-Japan consortium has declared force majeure over the construction of a controversial thermal power plant project in Central Java Province following opposition from local villagers. Construction of the power plant, one of the biggest of its kind in Southeast Asia, was initially slated to start in 2012, with commercial operation expected by 2016. (www.globalpost.com)

July 8, 2014. Pakistan Electric Power Company (Pepco) data shows that power situation worsened over the past one year as the power generation is now stuck at exactly where it was a year ago (around 14,500 MW), but the demand increased by around 800 MW, widening the gap between demand and supply which has caused an increase in load shedding. Demand-supply data prepared by Pepco, the country on an average generated 14,424 MW in July last year against the demand of 18,884 MW, showing a gap of 4,460 MW. (www.paktribune.com)

July 7, 2014. Calpine Corp. has completed a deal to divest more than $1.57 billion-worth of power plants across the Southeastern U.S., the company said. New York-based LS Power was the buyer. With the purchase, the company will gain natural gas-fired plants in Oklahoma, Louisiana, Florida and South Carolina, and two plants in Alabama, representing 3,498 MW of combined energy. (www.bizjournals.com)

July 3, 2014. South Korea's largest builder, Hyundai Engineering and Construction Co. (Hyundai E&C), said it has won a US$987.9 million power generation and desalination plant order from the United Arab Emirates (UAE). (english.yonhapnews.co.kr)

July 8, 2014. A coordinated and simultaneous attack on the nation's electricity grid could have “crippling” effects including widespread extended blackouts and “serious economic and social consequences,” according to a federal report on the physical security of high-voltage transformer substations. The Congressional Research Service (CRS) report said Congress “may” want to consider several issues related to oversight of grid security, including the adequacy of current protections in place, and whether voluntary, company-specific security measures are appropriate. (www.bloomberg.com)

July 7, 2014. Statnett has selected ABB’s mobile integrated gas-insulated switchgear (GIS) for 420kV transmission line in northern Norway. ABB's GIS will be deployed in two substations that will provide temporary power supply to the transmission line, which is about 500km in length. The transmission line will run from Ofoten to Balsfjord, and from Balsfjord to Skaidi in Hammerfest. (utilitiesnetwork.energy-business-review.com)

July 7, 2014. Dubai-based contractor Drake & Scull International (DSI) has secured a AED304m ($82.7 mn) contract for the electrical transmission line of the Uttarakhand Power Sector Investment Program-Project in India. Under the deal, DSI will build a new 400kV double circuit transmission line for the hydropower project, which will run from Srinagar to Kashipur in Kumaon to improve the hydropower development in Uttarakhand. DSI will build a 152km transmission line on quadruple bundled Bersimis conductor and carry out the survey, design, fabrication. The deal requires DSI to deliver 400 kV DC transmission line towers, conductors and insulators, erect towers and other related materials, and test as well as commission the entire transmission line. DSI said the construction of the power transmission line will help supply up to 2,500 MW of electricity to the North India grid which is underdeveloped and overstretched at present. (utilitiesnetwork.energy-business-review.com)

July 8, 2014. The Asian Development Bank (ADB) has approved a $180 mn loan to help Nepal tackle power shortages and rural supply gaps. The loan, from the bank's concessional resources, will be complemented by a co-financing loan of $120 mn from the European Investment Bank, a $60 mn grant from the Government of Norway, and a $11.2 mn grant from the ADB-administered Strategic Climate Fund. ADB said the loan will help the Nepal Electricity Authority finance a substantial upgrade and expansion of transmission and distribution lines and substations. About 2,000 MW of electricity will be transferred to main load centres in the Kathmandu valley. The network expansion will give the ability to export around 1,200MW of electricity to India, upon completion of a second 400 kv cross-border transmission line from Bardaghat to Gorakhpur. The projects are anticipated to be finished by the end of 2021. (utilitiesretail.energy-business-review.com)

July 7, 2014. Part of the funds for construction of the new nuclear power plant in Armenia worth $4.5 billion will be provided by Russia in form of products and equipment, Armenia’s minister of energy and natural resources Yervand Zakharyan said. The other part is expected to be received as financial assistance from other countries, the minister said. (arka.am)

July 4, 2014. Nigeria’s plan to develop a nuclear power plant was capable of lifting its electricity supply base to a new level, the International Atomic Energy Agency (IAEA) said. IAEA said that the desired nuclear power project was achievable, although complex. The IAEA will assist Nigeria in ensuring a smooth and adequate preparation for the project construction. (nuclear.energy-business-review.com)

July 8, 2014. In a major push to the clean energy sector and energy management by the Indian railways, one of the country’s largest power consumers, government is looking up to the sun now. The railways is planning to source 20% of its energy demand through renewable sources, major being solar. Around 500 MW of power would be sourced from rooftop solar applications on stations, administration buildings and vacant lands. The timeline for the execution is 2 to 3 years. The annual power demand of the railways is 4,000 MW. The total entailed expenditure would be ` 4,000 crore. Surplus power produced by the solar power plants would be traded by the Railways, which hopes to save on its electricity bill totalling ` 9,000 crore annually. The first phase of the program would be implemented in Delhi and Katra, taking a cue out from PM Narendra Modi’s speech in Katra, talking about utilising solar power in premises of railway stations. Modi while flagging off the new ‘Shri Mata Vaishno Devi Katra-Udhampur railway line’ said that the Katra railway station could be a model solar station. Apart from solar, railways will also start using ‘Bio-Diesel’ up to 5% of the total fuel consumption in diesel locomotives. (www.business-standard.com)

July 8, 2014. NTPC will set up a 300 MW solar park in Andhra Pradesh's Guntur district through competitive bidding so that the state is able to get solar energy at a low tariff. NTPC informed this to Chief Minister N Chandrababu Naidu during a meeting. The Chief Minister also requested the 'Maharatna' company to build up 15-day coal stock at NTPC's thermal plant at Simhadri in Visakhapatnam. (economictimes.indiatimes.com)

July 7, 2014. The World Bank plans to invest $775 million in clean-energy projects across India, even as it expects that the new government's plan to give fiscal and policy support to the sector will galvanise further investment in renewable energy. Minister for Power, Coal and Renewable Energy Piyush Goyal recently said that the potential and scope of renewable sources were a part of the government's vision for ensuring energy security. India's clean-energy sector has attracted interest of international investors. Recently, companies such as Welspun Energy and Renew Power saw investment from General Electric, Asian Development Bank and Goldman Sachs. (economictimes.indiatimes.com)

July 6, 2014. The UK government will share new technologies in clean and renewable energy to help India in addressing climate change in a way that its growth will not be affected, UK's Minister of the Department of Energy and Climate Change Baroness Verma said. Disagreeing with the contention that reducing carbon emissions would affect India's growth, the Indian-origin British politician said that there is no conflict between growth and addressing the challenges of climate change as the two could work hand in hand with the help of technology. Environment minister Prakash Javadekar had recently said that developing countries like India had a right to grow and in the process net emission might increase. Verma also suggested that India should consider a Green Investment Bank (GIB) like in Edinburgh. (timesofindia.indiatimes.com)

July 6, 2014. In line with its project to earn the tag of 'solar city' for the New Delhi area of the national capital, NDMC has now drawn up a detailed plan for rooftop solar energy generation. New Delhi Municipal Council (NDMC) has identified 40 buildings in the area under its jurisdiction for installation of rooftop solar panels. The buildings belong to the civic agency and range from NDMC schools, sub-stations, inquiry offices, hospitals, etc. According to a proposal, NDMC will appoint an operator to identify, design, erect, install, test, and commission rooftop solar units as defined by the Union Ministry of New and Renewable Energy. (www.business-standard.com)

July 5, 2014. Solar power gear makers have rejected the argument put forth by developers that imposition of antidumping duty on imported solar power equipment will double the cost of solar power in the country, saying the cost escalation will not be even 10 per cent. With imposition of antidumping duty, the price of solar power is expected to rise by only 6-8 per cent, Indian Solar Manufacturers' Association (ISMA) said. The price of unsubsidised solar power is in the range of ` 7.5-8.5 per unit. The statement came after developers opposed a commerce ministry move to levy anti-dumping duty on solar cells imported from the US, Malaysia, China and Taiwan to protect domestic manufacturers. Following representations by developers, the ministry of new and renewable energy has asked the commerce ministry to review its proposal. Union minister for power, coal and renewable energy, Piyush Goyal had recently said that domestic equipment capacity is inadequate to meet the demands of the country's ambitious solar power mission. He, however, added that India needs to promote its own manufacturing capabilities. ISMA says the government's target to raise solar power capacity to 20,000 MW by 2022 from the current 1,200 MW will attract investments worth `1.50 lakh crore. Companies such as Tata Power Solar Systems, Moser Baer Solar, Jupiter Solar Power and Indosolar are members of ISMA. ISMA says imposition of antidumping duty on imported gear will not affect the ongoing 975 MW capacity addition as claimed by the developers. (economictimes.indiatimes.com)

July 4, 2014. Current storage status of important reservoirs of the country shows bright picture for the capacity augmentation initiative in Indian renewable energy sector. As a major step in improving green energy harnessing capacity, the small scale but multi point capacity augmentation initiative can come as a significantly 'green' contributor to the nation's 12^th five year period power planning. As per the report prepared by Central Water Commission(CWC), as of 3^rd July, live storage available in 85 important reservoirs of the country is 36.873 billion cubic meter. Though a bit less than what they had in 2013 during same period, the storage is 112 per cent of last ten years corresponding period average. (economictimes.indiatimes.com)

July 4, 2014. Delhi Metro Rail Corporation (DMRC) is going to install three more roof-top solar power plants in its premises, as a continuation of its policy to encourage eco-friendly work practices and technologies. These three plants, with a joint power generation capacity of 250 KWP (kilowatts peak), will come up at the Anand Vihar ISBT and Pragati Maidan Metro stations along with DMRC's residential complex at Pushp Vihar. The individual production capacity of these plants will be 115 kwp at Anand Vihar ISBT, Pragati Maidan 85 KWP and Metro Enclave, Saket with 50 KWP. The Power Purchase Agreement for installation of these plants was signed between DMRC and Noida-based private developer Jakson Engineers Ltd and approved by the Solar Energy Corporation of India (SECI). The plants are expected to start production within next six months. Like DMRC's first solar power plant at Dwarka Sector 21, these plants will also come up as per the RESCO model. Under this model, DMRC will pay for the units generated by the plants and the capital investment shall be provided by the developer. The power generated by these plants will be used for DMRC's operational requirements, which include station lighting and other loads. Delhi Metro has already taken up a slew of measures oriented towards the conservation of environment and the use of renewable means of energy. All the stations to be constructed as part of Delhi Metro's Phase 3 are being designed as 'green buildings'. In 2011, DMRC was certified by the United Nations (UN) as the first Metro Rail and Rail based system in the world to get Carbon Credits for reducing Greenhouse Gas Emissions as it has helped to reduce pollution levels in the city by 6.3 lakh tons every year, thus, helping in reducing global warming. (economictimes.indiatimes.com)

July 3, 2014. India’s ambition to skip a generation of electricity technology starting with solar panels on telecommunications towers is being hampered by dust and urban sprawl. Just 1 percent of the nation’s 400,000 mobile telephone masts are using photovoltaics with mixed results two years after a government directive ordered a switch away from diesel fuel. Congestion in cities, a rural insurgency and pollution make only a fraction of sites suitable. The findings by the consulting firm PricewaterhouseCoopers LLP and telecommunication companies such as Vodafone Group Plc and Bharti Airtel Ltd show the limits of Prime Minister Narendra Modi’s goal of harnessing the sun to reduce $155 billion in annual crude and oil product imports. With a quarter of the population living out of reach of traditional power grids, Modi is depending on renewables to end India’s blackouts and close its power gaps. The goal set out by the government in January 2012 was for three-quarters of telecom towers in rural areas and a third of them in cities to run on solar by 2020. Power Minister Piyush Goyal has said his top priority is to deliver around-the-clock electricity to every customer. The program for telecommunications towers is a small part of the government’s goal to produce 10 GW of solar power by 2017. Already, the country has 2.8 GW of the technology installed, enough for 6 million homes in the nation of 1.2 billion people. That makes India the world’s sixth-biggest market for photovoltaics. (www.bloomberg.com)

July 3, 2014. ReNew Power Ventures Pvt Ltd has raised $140 million from three investors, including a private equity fund managed by Goldman Sachs, the renewable energy firm said. Asian Development Bank invested $50 million, while Global Environment Fund, a leading alternative asset investment firm focused on energy, environment and natural resources, invested $20 million, ReNew Power said. Goldman Sachs, which had previously invested $250 million in the company in 2011, pumped in the remaining $70 million. ReNew Power owns and operates 460 MW of renewable energy assets in five states across India and has another 500 MW projects in the pipeline, including a 50 MW solar project in Madhya Pradesh. The latest fund infusion will enable ReNew Power to scale up as the company aims to double its clean energy portfolio to 1,000 MW by 2015. (economictimes.indiatimes.com)

July 8, 2014. The United Nations (UN) left open the option for rich and poor nations to remain divided in their obligations on climate change, setting up a conflict over exactly who should cut greenhouse gases. In a policy paper setting out possible language to include in a global warming agreement envoys from 190 nations are drawing up for next year, the UN set out an option for maintaining a divide between developed and developing nations. Under current rules, industrial nations have targets for reducing fossil fuel emissions while developing countries need only take steps that they volunteer. The U.S. and European Union want all nations on an equal footing in the next climate deal, which the UN intends to conclude next year. Developing nations including China, the biggest polluter, say it’s up to the richer nations to act first. The U.S. and European nations say the division was broken down at a round of talks in Durban, South Africa in 2011, where the mandate for the deal was established. China and India have contended that the Durban agreement didn’t change the nature of commitments to be made by developed and developing nations. The document posted on the website of the UN Framework Convention on Climate Change outlines ways to bridge the difference between the two groups in building a replacement for the 1997 Kyoto Protocol, which limits emissions in industrial nations only. (www.bloomberg.com)

July 8, 2014. Deutsche Bank AG plans to lend about $1 billion for Japan solar projects, joining Goldman Sachs Group Inc. in funding cleaner energy as the government struggles to restart nuclear power plants after the Fukushima disaster. The bank is ready to provide financing for three to six projects in the next 12 to 18 months. The Frankfurt-based lender agreed to provide a 11.1 billion yen ($109 million) loan for a solar power project on a former golf course north of Tokyo to be operated by a unit of Spain’s Gestamp Renewables Corp. (www.bloomberg.com)

July 7, 2014. International Business Machines Corp. (IBM) started a project to support China in managing air quality and energy consumption as well as forecasting renewable-energy supplies. Under the project, the Armonk, New York-based company is cooperating with the Beijing municipal government on a system to determine the type, source and level of emissions and predict air quality in the capital, IBM said. The project will enable utilities to estimate the amount of renewable energy that will be available for grid transmission or storage, IBM said. The company is also developing a new system to manage energy consumption of industrial companies that represent more than 70 percent of China’s total energy consumption. (www.bloomberg.com)

July 7, 2014. The UK's climate change policies have not damaged business competitiveness, leading economists will say. A new report by Samuela Bassi and Dimitri Zenghelis of the Grantham Research Institute will argue that climate change policies have not hampered the performance of the UK's economy, and that these same policies can increase the competitiveness of the UK in the long term by encouraging greater innovation and efficiency. The authors examined a range of studies suggesting that climate change policies could lead to some companies leaving the UK in favour of countries with less stringent emissions-reduction policies. But it found recent papers documenting the actual impact of climate policies show that carbon prices have not been high enough to prompt "any detectable" re-location of carbon-intensive firms. As such, the papers challenge warnings that climate policies are leading to so-called "carbon leakage", whereby carbon-intensive firms respond to emissions-reduction initiatives by migrating overseas. As a result, the new study says there is no reason to weaken the scale of ambition in the UK's fourth carbon budget, which sets out emissions reduction targets for the period from 2023 to 2027. (www.theguardian.com)

July 4, 2014. The Department of Defense (DOD) has made strides in assessing the impact of rising sea level, declines in sea ice, and other climate-related impacts on its more than 7,500 installations around the world but has yet to develop firm timetables for ensuring the work can prepare it for future adaptation efforts, the Government Accountability Office (GAO) said in a report. The DOD should set firm “milestones” for completing climate change vulnerability assessments of its installations and incorporate potential climate impacts in better prioritizing which military construction projects should get funding, the GAO said in the report. (www.bloomberg.com)

July 4, 2014. Powering vehicles with natural gas, a cleaner alternative to diesel fuel and gasoline, is catching on faster in China than in any other nation as President Xi Jinping seeks to reduce smog. About 3.8 million cars, trucks and buses in China, the world’s biggest energy consumer and emitter of greenhouse gases, will be filling up with compressed or liquefied natural gas by 2020. That’s almost double the current number, making Asia’s largest economy the fastest-growing market. (www.bloomberg.com)

July 2, 2014. The world’s 14 billion television set-top boxes, printers, game consoles and other electronic devices waste $80 billion of power a year due to inefficient technology, according to the International Energy Agency (IEA). By 2020, an estimated $120 billion will be wasted as many devices use about the same amount of power even on standby. (www.bloomberg.com)

July 2, 2014. Making the electricity grid greener is boosting its vulnerability to computer hacking, increasing the risk that spies or criminals can cause blackouts. Adding wind farms, solar panels and smart meters to the power distribution system opens additional portals through which hackers can attack the grid, according to computer security experts advising governments and utilities. Where traditionally the grid took power from a few sources, it’s now absorbing it from thousands. The communication networks and software that link green energy sources to the grid as well as the electronic meters that send real time power usage to consumers and utilities are providing new back-door entry paths for computer hackers to raise havoc with the grid. The disclosure that hackers known as “Dragonfly” and “Energetic Bear” gained access to power networks across the U.S. and Europe in the past 15 months is a reminder of how vulnerable the system has become. (www.bloomberg.com)

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