MonitorsPublished on Jul 03, 2015
Energy News Monitor | Volume XII; Issue 3

[Environmental issues persist not because of mining but due to Institutional failure!]

                             “The Indian mining industry contributes significantly to the economic development of the country and more specifically to the advancement of the less developed regions. Therefore mining cannot be singled out as target by environmentalists. The government has given due consideration to environmental problem but it lacks institutional capacity to check compliance of laws. These failures happen due to untargeted subsidies that provide incentives for excessive use of natural resources…”

Energy News


There is nothing unnatural about India, the fastest growing economy also being the fastest growing carbon emitter!                                      


If INR1.2 trillion worth of power capacity cannot translate into electricity access for 1.3 billion people there is something seriously wrong with the country!


A quiet euthanasia may be better for Dabhol than yet another revival plan!      




·          Environmental issues persist not because of mining but due to Institutional failure!


·          Six Myths on Common but Differentiated Responsibilities


·          Natural Gas & Power Sector in India



·          RIL to defer gas field development if price outlook uncertain

·          Rajasthan stakes claim on gas from Cairn India’s Barmer fields


·          India asks refiners to buy dollars, euros to settle Iran oil dues

·          RIL to shut crude unit at Jamnagar refinery for maintenance

Transportation / Trade………………

·          Govt bans oil trade with ISIS-linked organisations

·          TAPI to top Modi talks agenda in Turkmenistan

·          IOC buys spot LNG cargo from Vitol

·          ONGC Hazira sales premium at over 3 month low

Policy / Performance…………………

·          India grants one year extension to Iranian ship insurers

·          India to auction O&G blocks in 2015-2016 fiscal

·          Oil Ministry to invest ` 13 bn in Telangana



·          Jindal eyes acquisitions in power sector

·          Kundankulam nuclear plant shut down for annual maintenance

·          NTPC thermal project’s first unit gets operational

Transmission / Distribution / Trade……

·          RGPPL plans Dabhol power plant revival, inks purchase agreement with Railways

·          Indian power plants find ` 1.2 trillion of capacity has no takers

·          Consumer body seeks privatisation in transmission sector

·          New scheme to supply uninterrupted power to Haryana rural areas

·          PPAs force MP to buy power at high prices

·          DERC-discoms tiff likely over power purchase costs

Policy / Performance…………………

·          AP govt to buy out power projects

·          Kejriwal’s power bill was misinterpreted: AAP govt

·          PM to launch power development scheme in Varanasi

·          MERC allows Tata, Reliance, Mahavitaran to hike power tariff in Mumbai

·          54 percent electricity stolen or lost in Bihar: Govt

·          Cabinet note moved on CBM policy

·          8 coal mines to be auctioned after 10 in round 3: Coal Secretary

·          Bangladesh to receive 1.1 GW of power from India from January



·          US crude oil production for April rises to most since 1971: EIA

·          Mexico's proven and probable oil reserves dip 7 percent in 2014

·          Talks ongoing to restart closed Libyan oilfields, output stable: NOC

·          Indonesia sets oil and gas production targets for 2016


·          Grand opening held for $430 mn oil refinery at Dickinson

Transportation / Trade…………

·          China’s slowing gas demand raises supply concern in Australia

·          Magellan Midstream and LBC to build crude oil pipeline in US

·          OPEC oil output hits 3 year high in June on Iraq

·          New oil bull market in sight as Brazil, Iraq cut output targets

·          Turkey-Russia gas pipeline deal said to stall on price clash

·          Origin Energy expects Chinese LNG buyer to fulfill contract

·          Gazprom plans to launch Nord Stream-2 gas pipeline project in 2019

·          US light oil exports double in May, mostly to Europe

·          China's CNPC signs contract to build second pipeline for Russian crude

·          Anadarko in talks with Jera to supply LNG from Mozambique project

·          Asia oil pricing change to raise trade volumes

·          UAE's ADNOC finalizes July 2015-June 2016 diesel term contract

·          CNOOC plans 4 bcm per year LNG import terminal in Wuhu

·          Saudi Arabia loses spot as top crude supplier to India, China

Policy / Performance………………

·          Russia-Ukraine gas talks focus on price

·          Israel unveils gas plan in move to unblock regulatory logjam

·          BP's chief economist sees US shale weathering oil surplus

·          Nigeria’s APC says govt must scrap oil-industry bill

·          Japan May LNG average import price hits lowest since 2009

·          Polish minister to meet builder Saipem on delayed LNG terminal



·          Summit to build $1 bn power generation facilities in Bangladesh

·          Vattenfall divests its Nordjylland coal-fired power plant in Denmark

·          PLN to build power plants with total capacity of 500 MW in NTB

Transmission / Distribution / Trade……

·          EIB lends €325 mn to Iberdrola to install 3.2 mn smart meters in Spain

·          RP Energy faces transmission problem

·          Elering acquires Gazprom's 37 percent stake in Estonian gas transmission grid

Policy / Performance………………

·          Canada and UK sign MoU to develop nuclear energy projects

·          Germany's oldest remaining nuclear plant shuts down



·          TN govt, Adani likely to sign solar deal

·          Suzlon to focus on domestic market, plans offshore mills in Gujarat

·          India is now world's fastest-growing major polluter

·          Indian Railways to float tenders to procure solar energy

·          NTPC to spend ` 10 bn on research and development in 6 yrs

·          First Solar starts commercial operation of 20 MW solar plant

·          Maharashtra govt to allow wind energy project developers to upgrade tech

·          IICT's waste-to-biogas tech draws good response


·          China promises further pollution limits for UN climate deal

·          New CO2 rules should aid Keystone XL approval, TransCanada says

·          Gurmat signs $720 mn finance agreement for 170 MW geothermal project in Turkey

·          Nobel prize winner Tirole says carbon price needed for climate

·          GE will take part to 240 MW Ararat wind project in Australia

·          Alberta strengthens greenhouse gas strategy

·          SC blocks Obama administration plan on power plant emissions

·          Fossil fuel divestment alone will not halt climate change: Bill Gates

·          DP CleanTech to build three straw-fired biomass power plants in China

·          Japan has added 19 GW of renewable capacities since July 2012

·          EDF acquires 200 MW Salt Fork wind project in Texas

·          District court orders Dutch govt to speed up GHG emissions cuts




Environmental issues persist not because of mining but due to Institutional failure!

Ashish Gupta, Observer Research Foundation


 multi-cultural developing society like India provides enormous challenges in the environmental, cultural, social, political and economic arenas. Even more difficult for India is to strike a balance and harmony between, social, economic and environmental needs of the country. On the policy front, India has a number of legislations covering the entire spectrum of the environmental management.

Environment related legislation is covered in depth under the Environment Protection Act, 1986, the Air (Prevention and Control of Pollution) Act, 1981, the Water Cess Act, 1977 and the Water (Prevention and Control of Pollution) Act, 1981. Whereas the legislative framework for forest management and biodiversity are broadly contained in the Biodiversity Act, 2002, the Forest Conservation Act, 1980, the Wildlife Protection Act, 1972 and the Indian Forest Act, 1927. Apart from these there are many other pieces of legislation and policies that make a valuable contribution to environmental management. These legislative frameworks recognise the need for sustainable development and have led to formulation of desired strategies to give effect to such recognition.

The biggest environmental dilemma for India is the trade-off between reducing environmental degradation and poverty reduction. The main reasons for environment degradation in the country are seen as population growth, poverty, inappropriate technology & consumption choices, unplanned urbanisation, water intensive agriculture and polluting industries that have changed he relationship between people and the ecosystem. Such environmental degradation impacts soil fertility, air quality, forest cover, quality of water, wildlife and fisheries and has an adverse impact on the people particularly the rural poor and tribal population whose livelihood is dependent on these natural resources. Having said that, poverty itself can accelerate environment degradation as long as administrative, and informal institution failure persists. However criticism for environmental degradation is limited to coal mining activities.

Coal mining does have some negative environmental impacts but in terms of cost benefit analysis it contributes much more for the states in terms of material income and employment generation. The only thing that is missing is compliance with environmental laws and monitoring of the ongoing projects.

For instance, as per Jharkhand State Council report, mining and quarrying accounts for 14.3 percent of the State Domestic Product. The industry provides both direct and indirect employment. Indirect employment is provided through ancillary activities which include overburden removal, crushing/grinding, beneficiation and upgradation of ores, sizing and washing, downstream refining, loading/unloading at mines/railway site, truck transportation, waste dump stabilization, rehabilitation, canteens, rest house management, construction of housing for mine workers, maintenance of workshops, watch and ward staff, hospitals/medical facilities, etc.

According to the US-based National Mining Association[1]:

  • Every single job at the mining site created an additional 2.6 jobs in the other sectors of the US economy. More than 250,000 people were employed in the US metals and non-metals mining sector and an additional 650,000 in the other sectors to support the country’s mining activities.
  • Revenue generated from the sector has a multiplier impact on the economic output as one dollar revenue generated from the mining sector has generated additional revenues of USD 2.35 as direct and indirect output. In 2007, US mines produced metals and non-metals worth USD 68.3 billion and this generated USD 161 billion in direct and indirect economic output.

According to the U.S. Bureau of Economic Analysis Industry multiplier data, coal mining has an employment multiplier of 4.4 whereas oil and gas extraction have a multiplier of 6.9[2]. Mining has a proven record of generating economic wealth.

The mining sector has made a substantial contribution in the development of India’s mineral rich states, which would have otherwise fallen off the development path. These include, Chhattisgarh, Jharkhand and Orissa. During the 14 years period (FY94-08), these states have witnessed a robust growth in their GDP on the back of higher activities in the mining and quarrying and manufacturing sectors[3].

  • Chhattisgarh’s overall GDP has increased by more than four times, growing at a CAGR of 13 percent. The mining and quarrying and manufacturing sector’s contribution to the state’s GDP increased by 8 percentage points to reach 36 percent. Increase in activities in these sectors helped in improving the state’s per capita GDP which grew at a CAGR of 11 percent.
  • In the case of Jharkhand, the mining and quarrying and manufacturing sector’s share reached 45 percent, which increased its overall GDP by 329 percent (over the period FY 94-08) and its per capita GDP at a CAGR of 9 percent.
  • Orissa’s GDP increased by 457 percent, growing at a CAGR of 13 percent as the combined share of both sectors which improved from a modest 16 percent to 24 percent. In addition, the state’s per capita GDP grew at an annualized rate of 12 percent.

The Indian mining industry contributes significantly to the economic development of the country and more specifically to the advancement of the less developed regions. Therefore mining cannot be singled out as target by environmentalists. 

The government has given due consideration to environmental problem but it lacks institutional capacity to check compliance of laws. These failures happen due to untargeted subsidies that provide incentives for excessive use of natural resources.

The government must incorporate costs associated with depletion of natural resources so as to change the perception that these resources are free. Post project monitoring at regular intervals is also necessary to keep a check on any loss in biodiversity or environmental degradation. Also enabling Panchayati Raj institutions, local informal bodies and urban local bodies to undertake monitoring of compliance with environmental management plans will be good initiative in this direction.

Views are those of the author                     

Author can be contacted at [email protected]



Six Myths on Common but Differentiated Responsibilities

(6th Session of Intergovernmental Negotiations on Post-2015 Development Agenda Negotiations on Post-2015 Development Agenda June 23, 2015)

Intervention by Mr. Amit Narang, Counsellor, Permanent Mission of India on, Common but Differentiated Responsibilities


irstly, it would be a grave remission not to refer to the World Summit (on Sustainable Development) outcome document of 2005 in this political declaration. It was adopted at the level of our Heads of State and Government exactly a decade ago and is a landmark document. We would request that it be referenced along with other important documents and declarations.

Secondly, we would also find it remiss if through this declaration world leaders do not pronounce themselves on the urgent imperative of reform of global governance, in particular the institutions responsible for maintenance of peace and security. Especially since Peace is one of the five main themes now for this document, it is important that the important ideal of enhancing the legitimacy and representativeness of institutions of global governance, including that of the United Nations Security Council be unequivocally affirmed in the Declaration.

I would like to turn now to share some thoughts on the issue of common but differentiated responsibilities, the inclusion of which in the zero draft has drawn several comments.

It is time perhaps to de-bunk some of the myths about this principle. I would like to focus on 6 such myths.

In doing so, my intention is to make a constructive contribution to our collective understanding of this key principle and its central role in the development debate.

I am doing so in the spirit of what Joseph Joubert stressed - “The aim of argument or discussion is not victory but progress”.

Myth No. 1: The principle of differentiation is in contradiction to a universal agenda

Famous atomic scientist Neils Bohr said “The opposite of a correct statement is a false statement. But the opposite of a profound truth may well be another profound truth”.

Likewise, universality is not in contradiction to differentiation. Both are important.

The notion of a universal agenda is dear to us too, as for us it signifies that this time around developed countries will join developing countries in taking action, and will also be held accountable for their actions across all goals and targets.

However, universality of relevance does not correspond to uniformity in application. To be meaningful, a universal agenda can and indeed must be a differentiated one.

Myth No. 2: This principle is a historical relic and has no contemporary relevance

It was in September 2013, less than 18 months ago, when the world leaders while mandating the elaboration and adoption of a post-2015 development agenda, unequivocally reaffirmed the validity and application of this principle.

In July 2014, less than a year ago, the international community decided by consensus that the principle of CBDR (Common But Differentiated Responsibilities) will apply to the SDGs (Sustainable Development Goals); a decision that was welcomed and endorsed by the General Assembly.

Also in 2014, the principle of common but differentiated responsibilities was reaffirmed by Ministers participating in the meeting of the High Level Political Forum, an institution that is going to be the home of the new agenda and the SDGs.

The point here is that this principle is neither outdated nor irrelevant. Indeed, it has been reaffirmed and validated multiple times in the last few years, including at the leaders' level.

This issue has in fact a wider implication. There has been a disturbing tendency across several platforms for not honouring agreements and reopening them even before the proverbial ink on the paper dries. We are witnessing this yet again in this process both with this principle and the Introduction to the OWG (Open Working Group) report, which is sought to be jettisoned.

If the new agenda has to succeed, trust would have to be built that agreed commitments will be honoured and they will not be reopened or indeed re-interpreted for political expediency.

Myth No. 3: This principle is only applicable to environmental action

Even when it is sometimes grudgingly accepted that this principle is valid, it is contended that it narrowly applies to the environmental dimension and not to the development agenda as a whole. It is true that Rio principle 7 speaks of historical responsibilities in the context of global environmental degradation and the larger capacity for taking action of those who have over-occupied the environmental space.

However, the hallmark of the new agenda and the SDGs is that environmental action has been effectively mainstreamed across all goals and targets. This is also something which differentiates this agenda from the MDGs (Millennium Development Goals), which primarily addressed the social pillar.

Environmental action is not a silo anymore, it underpins the entire agenda. Ipso facto, it is only natural that this principle is equally valid for the entire agenda too.

Myth No. 4: This is merely a political principle and has little or no professional relevance

Just to take two recent examples, the principle of common but differentiated responsibilities has been reaffirmed at the technical level twice in just the past one year alone.

The Intergovernmental Committee of Experts on Sustainable Development Financing, which had experts from 30 countries including many developed countries, confirmed the continued validity of this principle.

Even more importantly perhaps, the Committee on Development Policy, which is an expert body mandated to provide inputs and independent advice to the ECOSOC (Economic and Social Council) on emerging cross-sectoral development issues and on international cooperation for development, in its report on 'Global governance and global rules for development in the post-2015 era’, identified CBDR as one of the 5 central principles, arguing that it embodies equity in the formulation of international law.

Myth no. 5: North South divide in international cooperation has already vanished and those who invoke this principle are flogging a dead horse

Not quite.

It is a matter of fact not fiction that even today the developed countries continue to over-occupy the global economic, ecological and governance space. We have spoken about the economic dimension earlier to indicate how the Gini coefficient of international inequality has increased from three decades earlier. In the environmental sphere, the case is well known and may not need much elaboration. Taken together, the OECD economies account for almost 40% of global emissions as compared to their 17% population share. While the focus has mostly been on the recent growth of some large developing countries, it needs to be remembered that exceptions do not a rule make.

But it is really international governance where the rhetoric of 'shared responsibilities' meets its waterloo.

And no, I am not talking about the Security Council, where of course the time stopped changing after 1945.

No, I am talking about international governance in development, issues that are at the heart of this agenda.

The most topical example is of course norm-setting on international tax cooperation, which continues to be an exclusive monopoly and this exclusive right is being defended even today in the parallel process of FfD (Financing for Development).

Reform of international financial institutions (IFIs) continues to be stalemated and the notion of equitable geographic representation for selecting the heads of these IFIs continues to be resisted.

Let us also look inwards at this very institution, the United Nations in particular its Funds and Programmes which will ultimately lead the implementation of this agenda. The executive boards of all the funds and programmes of the UN continue to be over-represented by developed countries, and this inequity is defended even today in the name of efficiency.

The share of Western Europe and Others Group in the Governing Bodies of entities engaged in operational activities for development is almost 25% as compared to their share in UN membership of 15%. In the Executive Boards of UNDP, UNICEF, UNAIDS, UNFPA and WFP (World Food Programme) the seat share of WEOG (Western European and Other Group) is as much as 33%.

Not exactly a flat world, is it?

It is obvious therefore that for the rhetoric of shared responsibilities to be taken seriously, its proponents will have to visibly walk the talk.

Words will have to translate into action.

Myth no. 6: The principle of common but differentiated responsibilities means inaction by some on a global agenda

The fact is that the principle of CBDR has never been about action only by developed countries. Developing countries, including my own, have been and are fully committed to contributing to the global objective of ending poverty and achieving sustainable development.

We have all signed up to the SDGs, haven’t we?

The fact is that this principle is not about differentiated responsibilities only. Its main thrust is on common responsibility of all. But common responsibilities must be differentiated due to our different starting points, historical footprints, and development levels.

To conclude 

The principle of common but differentiated responsibilities is a call for action, it is a call for ambition, but above all it is a call for equity, a fundamental principle that underpins the UN Charter and the Millennium Declaration and a fundamental article of faith that cannot be left behind in the Post-2015 Development Agenda.

Views are those of the author                    

Courtesy: Third World Network



Natural Gas & Power Sector in India

Akhilesh Sati, Observer Research Foundation

































Sector-wise Plant Load Factor (April, 2014 - January, 2015) of (Operational) Natural Gas Power Plants

Source: Lok Sabha, Un-starred Question No. 6859.




RIL to defer gas field development if price outlook uncertain

June 29, 2015. Reliance Industries Ltd (RIL) may defer development of R-Series and other satellite gas fields in the eastern offshore KG-D6 block if the gas price outlook was uncertain, its junior partner Niko Resources of Canada said. RIL has made 19 oil and gas discoveries in the KG-DWN-98/3 block in the Bay of Bengal and so far only three - Dhirubhai-1 and 3 gas and MA oil and gas fields, have been brought to production. Multi-billion dollar development plans for five other finds including the significant R-Series have been approved. RIL is the operator Krishna Godavari basin KG-D6 block with 60 percent interest while Niko has 10 percent. BP plc of UK has the remaining 30 percent stake. Niko said on expectations of natural gas prices doubling to USD 8.4 per million British thermal unit from April 1, 2014, the focus in the 2013-14 fiscal shifted to developing and appraising the assets in the KG-D6 Block. (

Rajasthan stakes claim on gas from Cairn India’s Barmer fields

June 28, 2015. The Rajasthan government has laid claim on Cairn India’s Barmer gas, making it difficult for the Anil Agarwal Group company to sell the fuel outside. In fiscal year 2015, average gas production from Raageshwari Deep Gas field in the block was 0.4528 million standard cubic metres a day (mmscmd), which Cairn expects to raise to 0.7075 mmscmd by fiscal 2016. The State has made its claim not only for the existing output but also any incremental gas that Cairn produces from the producing fields. Cairn and ONGC, partners in the Barmer block, have more than doubled their gas production estimates from the Raageshwari fields. According to estimates drawn by the partners, the cumulative gas production till May 2020 will help meet almost 2.5 mmscmd or 90 million standard cubic feet a day (mmscfd) of gas demand — both sales plus internal.

ONGC and Cairn have drawn up a $690 million plan to develop the gas reserves in the Raageshwari Deep Gas field. Of the total, about $243 million is earmarked for drilling and completion of new wells, while $311.20 million is allocated for surface facilities and laying of pipelines. Besides, the gas project depends on Cairn’s proposal to get another 10-year extension as the contract for the Barmer block expires in 2020. According to the Rajasthan contract, the operator can get unconditional extension for five years if it is producing oil, and 10 years in case of expected gas production. Barmer is essentially an oil producing block. Though the production sharing contract — signed between the government and the operators to develop and produce hydrocarbons — for the Barmer block ends in May 2020, the joint venture has prepared a profile till December 2030, indicating cumulative gas production of 358.9 billion cubic feet with a resultant recovery factor of 46.8 percent of initial gas. (


India asks refiners to buy dollars, euros to settle Iran oil dues

June 30, 2015. India has asked refiners that owe about $6.5 billion to Iran for oil imports to build up dollar and euro balances to avoid downward pressure on the rupee if six world powers and Tehran reach a final nuclear deal. Local refiners still owe Iran about 55 percent of the bill for crude bought since February 2013, when a route to pay for Iranian oil through Turkey's Halkbank was stopped under pressure from U.S. and European sanctions. Once an agreement is reached, Iran would likely ask for payment of its oil dues, India's oil ministry said in a letter to refiners. India, despite agreeing to a U.S. request to curb oil imports from Iran to help force a deal, is keen to rebuild its trade relationship with the OPEC member state. The letter was sent to five refiners - Indian Oil Corp, Mangalore Refinery and Petrochemicals Ltd, Essar Oil, Hindustan Petroleum Corp and HPCL-Mittal Energy Ltd. The oil ministry advised refiners to make arrangements and seek approvals from the Reserve Bank of India (RBI) to make the payments.

The companies are depositing 45 percent of their oil payments in a rupee-denominated account at an Indian state bank that Iran is allowed to use to buy non-sanctioned goods such as food and medicines from the South Asian nation. Two refiners confirmed they have approached State Bank of India to open dollar and euro accounts, and SBI has in turn applied to RBI for approval to pay Iran. India's imports of Iranian crude oil rose by 66 percent in May from a year earlier to their highest level since March 2014. Two months earlier India had imported no oil from Iran for the first time in at least a decade. India extended approval to two Iranian insurers to cover container and tanker vessels calling at Indian ports by a year to June 25, in a move that will aid oil imports from Tehran. (

RIL to shut crude unit at Jamnagar refinery for maintenance

June 29, 2015. Reliance Industries Ltd (RIL) will next month shut a crude oil processing unit at its only-for-exports refinery at Jamnagar in Gujarat for 10 days to carry out maintenance work. The SEZ unit of Jamnagar refinery of RIL is planning to shut down one crude distillation unit (CDU) for routine maintenance and inspection activities in the first half of July for about 10 days, the company said. RIL’s 29 million tons a year Jamnagar SEZ refinery has two CDUs of 290,000 barrels per day each. RIL’s 33 million tons a year older refinery adjacent to the SEZ unit and catering to domestic requirements, will however continue to operate normally. All other units at the Jamnagar refinery complex are planned to operate at normal throughput. The two refineries together constitute the single largest refining complex in the world. (

Transportation / Trade…………

Govt bans oil trade with ISIS-linked organisations

June 30, 2015. India banned trade with Islamic State-linked entities in oil and other products, complying with a UN resolution to act against militants active in oil-rich countries such as Iraq, Syria and Libya. Iraq's Prime Minister Haider al-Abadi earlier this month urged the international community to help prevent the group from gleaning profits from oil smuggling. (

TAPI to top Modi talks agenda in Turkmenistan

June 29, 2015. The $10 billion TAPI gas pipeline project will top the agenda of Prime Minister Narendra Modi during his visit to the Central Asian country of Turkmenistan early next month. Modi, who will be in the Turkmen capital of Ashgabat on July 10-11, will hold discussions with President Gurbanguly Berdimuhammadov on the Turkmenistan-Afghanistan-Pakistan-India (TAPI) gas pipeline project, which is gathering speed after many years.

TAPI is expected to bring Turkmen natural gas from its giant Dauletabad and Galkynysh gas fields to Pakistan and India. The pipeline aims to export up to 33 billion cubic meters of natural gas per year through the 1,800-km pipeline from Turkmenistan to Afghanistan, Pakistan and India. (

IOC buys spot LNG cargo from Vitol

June 26, 2015. Indian Oil Corp (IOC) has awarded a tender to buy a liquefied natural gas (LNG) cargo for delivery in mid-July to trader Vitol. This is the second spot cargo procured directly by the country's biggest refiner that has turned its focus to expanding its gas business. Previously it bought a cargo from Excelerate. The delivered price was just above $7 per million British thermal units (mmBtu). The 3.1 trillion British thermal units cargo will be delivered at Dahej Terminal in Gujarat. Petronet LNG (PLNG) operates the 10 million tonnes a year Dahej terminal and has a long-term deal with Qatar's Rasgas to annually buy 7.5 million tonnes of the super cooled gas. But demand for costly LNG procured under the long-term, oil-linked deal has dwindled as LNG is cheaper in Asian spot markets, trading at about $7.20 per mmBtu. India has for the first time used an option under the deal with Rasgas to take 10 percent less LNG. (

ONGC Hazira sales premium at over 3 month low

June 24, 2015. Oil and Natural Gas Corp (ONGC) sold a July naphtha cargo at $16 a tonne above Middle East quotes on a free-on-board basis, traders said, making this the lowest premium the company has received in more than three months for a naphtha cargo sold out of Hazira.

ONGC sold the 34,500-tonne cargo late to Japan's Petro-Diamond for July 12-13 loading from Hazira. The fresh premium was about 30 percent lower than the average premium of $23 a tonne ONGC got for two cargoes sold out of the same port for June loading. The last time ONGC, which also exports naphtha from Mumbai, received a premium lower than $16 was in January 2015 when it sold a February 8-9 loading cargo to Unipec. Traders said expectation of high volumes of western naphtha coming to Asia in July had hurt sentiment. (

Policy / Performance………

India grants one year extension to Iranian ship insurers

June 29, 2015. India has extended approval to two Iranian insurers to cover container and tanker vessels calling at Indian ports by a year to June 25, a government notification said, in a move that will aid oil imports from Tehran. The extension will help India receive its crude imports from Tehran in Iranian vessels, while exports of non-oil commodities and industrial goods are largely handled by vessels operated by Hafez Darya Arya Shipping Co. India, the world's fourth-biggest oil consumer and Iran's top client after China, shipped in 66 percent more oil from Tehran in May from a year ago. (

India to auction O&G blocks in 2015-2016 fiscal

June 26, 2015. The next round of auction of oil and gas (O&G) blocks under the New Exploration Licensing Policy (NELP) will be held by the end of 2015-16 fiscal, Petroleum and Natural Gas Minister Dharmendra Pradhan said. The minister said that the government is mulling to introduce "open acreage" system and also plans to change the formula for production sharing agreement. NELP-IX auction was conducted in 2012. He said the government is contemplating to make three major changes in the auctioning system that includes abolishing block auctioning by bringing "open acreage" system in which the bidding and award of acreages will be a continuous, demand-based process. The government is also planning to allow the bidder or contractor to extract any unconventional hydrocarbons (other than oil and gas) if found, he said. (

Oil Ministry to invest ` 13 bn in Telangana

June 26, 2015. The Oil Ministry will invest over ` 1,300 crore in Telangana State on the new projects as well as on expansion of the existing ones this year, Union Minister for Petroleum and Natural Gas Dharmendra Pradhan said. The investment would go into setting up two new LPG bottling plants in northern Telangana and doubling the capacity of two plants of IOC with over ` 300 crore, strengthening CNG/PNG supply facilities in Hyderabad so that all two/three/four-wheelers could use the most efficient fuel with ` 100 crore investment, supply of piped gas for domestic needs and supply of natural gas to Ramagundam fertiliser plant. Further, ` 250 crore would be spent in Telangana as part of East-South trunk pipeline from Paradeep port being implemented by the HPCL with an investment of ` 2,500 crore and another pipeline from Western Coast to Hyderabad as part of the “necklace fuel line network” and setting up a product terminal of IOC on the outskirts of Hyderabad, the Minister explained. He assured people of Telangana that the NDA Government was committed to provide clean fuel (cooking gas) to all households in the State in the next two years. On the New Exploration and Licensing Policy-X, the Union Minister said that it would be finalised by the year-end with more transparent provisions including introduction of progressive sharing model, open-acreage policy and permission to explore unconventional hydrocarbons. The Minister said the deregulated policy on petrol and diesel had brought down the fuel subsidy bill to ` 50,000 crore this year from ` 77,000 crore last year. (



Jindal eyes acquisitions in power sector

June 26, 2015. The JSW Group, known for taking over stressed assets and turning them around, is scouting for acquisitions in the power sector. Sajjan Jindal, Chairman, JSW Group, said the power sector is in a consolidation phase and there are some assets available at attractive prices. Last year, JSW Energy acquired two hydro-electric projects of Jaiprakash Power Ventures for 9,700 crore. Under the terms of the deal, JSW Energy will acquire the 300 MW Baspa II hydroelectric project and 1,091 MW Karcham Wangtoo hydro-electric projects in Himachal Pradesh. (

Kundankulam nuclear plant shut down for annual maintenance

June 24, 2015. The first 1,000 MW unit at Kudankulam Nuclear Power Project (KNPP) will be shut down for annual maintenance and refuelling activities, Nuclear Power Corp of India Ltd (NPCIL) said. KNPP said that the first unit will be shut down for a period of 60 days for annual maintenance and refuelling. KNPP said the unit will resume generation of 1,000 MW after these activities. As to the status of second unit at the KNPP, test reports of the hot run have been submitted to the Atomic Energy Regulatory Board (AERB) for review. The NPCIL has set up two 1,000 MW nuclear power plants at Kudankulam in Tirunelveli district in Tamil Nadu. Both the units are supplied by Russian company Rosatom. The first unit was connected to the southern grid in December 2014 and is now operating at around 60 percent capacity. According to NPCIL, the second unit at Kudankulam has achieved a physical progress of 98.23 percent as on May 2015. (

NTPC thermal project’s first unit gets operational

June 24, 2015. After battling a series of ethnic riots and law and order problems that resulted in additional cost and time, the first 250 MW unit of the National Thermal Power Corporation's (NTPC) Bongaigaon Thermal Power Project at Salakati in Kokrajhar district was commissioned. This project is also NTPC's first venture in the NE region. The ` 4735 crore project was awarded to NTPC in 2008, two years after the foundation stone was laid by former Prime Minister Manmohan Singh.

According to the original schedule, two units of the project were slated to be commissioned in 2011-12. The NTPC project replaced the erstwhile 4X60 MW Bongaigaon Thermal Power Station (BTPS), which was shut down in 2002 due to its high fuel cost of generation. The Centre decided not to revive BTPS and instead asked the NTPC to set up a completely new thermal project, which was initially 500 MW (2 x 250 MW) and later enhanced to 750 MW (3 x 250). (

Transmission / Distribution / Trade…

RGPPL plans Dabhol power plant revival, inks purchase agreement with Railways

June 29, 2015. The Ratnagiri Gas Power Project Ltd (RGPPL) has drafted a comprehensive plan for the revival of the debt-ridden Dabhol power plant, which has been lying defunct for years, and is in the process of finalising a power purchase agreement with the Indian Railways. As per the plan, the Indian Railways has agreed to purchase 500 MW power produced by the Dabhol plant, located at Anjanwel, in Maharashtra’s Ratnagiri district. Two hundred of the 500 MW power will be used in Maharashtra, 100 MW in West Bengal, 150 MW in Madhya Pradesh and another 50 MW in Chhattisgarh, Maharashtra government said. The Ministry of Power has already issued a letter earlier this month for temporary allocation of 500 MW from the 1,967 MW Dabhol power plant to the Indian Railways, and a formal power purchase agreement is currently being finalised. The plant recently secured 1.98 million standard cubic feet per day of gas, and has proposed a sale price of ` 6.15 per unit. Of this, it will charge ` 4.70 per unit to the Railways and the rest ` 1.45 per unit is proposed to be bridged through support from the Union government’s Power System Development Fund. The Dabhol project has been in troubled waters ever since work started in 1992 with first the initial developer Enron’s bankruptcy, change in the source of fuel, issues over the power purchase price and so on. The Central Electricity Regulatory Commission and the power regulators of Maharashtra, Chhattisgarh, Madhya Pradesh and West Bengal will waive transmission utility charges and losses. Besides, the states are also expected to give their assent for distribution open access, which allows a consumer to migrate to a service provider of his choice upon payment of a cross-subsidy charge to his existing provider. The Maharashtra State Electricity Distribution Company Ltd (MSEDCL) had terminated its power purchase agreement for the Dabhol plant, saying it could not afford to buy power at ` 5.50 per unit as proposed by RGPPL. (

Indian power plants find ` 1.2 trillion of capacity has no takers

June 29, 2015. At a time when almost a third of India’s 1.3 billion citizens have no access to electricity, power plants worth about ` 1.2 trillion are struggling to find customers. High interest rates and weak industrial demand have coupled with India’s unusually cool summer and unseasonal rains to curtail electricity usage. That’s left some 20 GW of capacity—enough to power New Delhi thrice over—without long-term supply contracts, according to the association of power producers. Power plants sell to electricity retailers, preferably on long dated contracts. And the financial health of those retailers, controlled by state governments and forced to supply power to farmers and the poor at subsidized prices, is worsening. India’s electricity retailers have accumulated losses of ` 2.5 trillion and lose ` 70,000 crore every year, according to the first-year report card of Prime Minister Narendra Modi’s government. Reviving the distribution companies will be crucial to Modi’s election pledge of providing round-the-clock electricity to every household in the country by 2019. India’s installed capacity is 272.5 GW, according to the power ministry. It costs roughly ` 6 crore to set up a megawatt, said PwC India, so 20 GW translates to about ` 1.2 trillion. India’s electricity supply has improved in the three years since a major power failure darkened vast swathes of the country’s north. And the government has approved investment of ` 1.1 trillion to upgrade distribution and transmission infrastructure across the nation. Still, the electricity retailers lose about ` 1 on every kilowatt hour sold, according to the power producers association. And state governments aren’t always assiduous in making their subsidy payments on time, forcing distributors to cut purchases and forcing outages, PwC India said. (

Consumer body seeks privatisation in transmission sector

June 29, 2015. Seeking privatisation of power transmission sector in order to boost efficiencies, Ahmedabad-based Consumer Education Research Society (CERS) has written a letter to Piyush Goyal, Minister of State with Independent Charge for Power, Coal and New & Renewable Energy in the Government of India against the Power Grid Corp of India Ltd (PGCIL)'s monopoly in the sector. An active NGO in the power sector, CERS has alleged that while power generation capacity has increased in the country, PGCIL has failed to its pace in terms of transmission network, thereby creating inefficiencies in the sector. In its letter, CERS has called for a break in PGCIL's monopoly in transmission by allowing privatisation of the sector. The CERS letter mentions that power generation capacity in India has increased by 22,566 MW in 2014-15 but due to bottleneck in transmission sector, electricity consumers of India are deprived of this benefit. The government now plans to invite bids for four major projects worth ` 4,000 crore. Private sector contributes 38 percent to generation capacity of 2,72,000 MW against 3 percent of transmission sector. Private sector participation and competitive bidding promotes and results in lowering tariff for consumers. Of the five major projects won by the private sector which were scheduled to be commissioned between 2012 and 2015; only three have been commissioned. (

New scheme to supply uninterrupted power to Haryana rural areas

June 28, 2015. The Haryana Government said it will launch “MharaGaon-JagmagGaon” scheme, aimed at supplying uninterrupted power to rural consumers besides strengthening distribution network and realising outstanding payments. According to the scheme, to be launched on July 1, out of the 90 constituencies all over the State, 83 with rural domestic supply (RDS) feeder will be benefited. In each constituency, one feeder with least losses has been selected on pilot basis to be given the advantages as per the scheme.

With the launch of the scheme, the power supply of the selected village will be immediately increased from existing 12 hours to 15 hours. With the replacement of defective meters and shifting of existing ones outside the premises of consumers besides replacement of naked wires with Aerial Bunched Cable, the supply would be increased from 15 hours to 18 hours per day. Consequently, with the improvement in the billing and collection efficiency up to 90 percent, the supply time will be increased to 21 hours a day. The scheme will include holding of BijliPanchayats in every constituency for release of new connections, replacement of defective/damaged electro-mechanical meters, correction of erroneous bills and regularisation of unauthorised loads, Uttar Haryana BijliVitran Nigam said. (

PPAs force MP to buy power at high prices

June 27, 2015. Long-term power purchase agreements (PPAs) between private independent power producers (IPPs) and state government coupled with a low demand has put Madhya Pradesh (MP) in a piquant situation. Despite 75% of state-owned thermal power generation units being shut down Madhya Pradesh, is still forced to purchase and sell power to other states leading to heavy losses. Presently, only 20% of state's power requirements are being fulfilled by state-owned thermal plants. Of the average requirement of about 4,000 MW state-owned thermal plants are producing only 850 MW. The PPAs makes it mandatory on the state to purchase power irrespective of demand. Thus government has no option but to sell the surplus power to states and entities needing it. However, since onset of monsoon has been good and other sources including hydro-electric generation picking up demand is less and hence sale price of per unit is lower compared to purchase price. Experts said the problem has been compounded due to faulty projection about demand and advocate prudent power management to stop revenue losses. (

DERC-discoms tiff likely over power purchase costs

June 25, 2015. The Delhi Electricity Regulatory Commission (DERC) and the power distribution utilities are heading for a face-off over power purchase costs. In its recent order on power purchase adjustment surcharge (PPAC), the regulator disallowed power purchase and related generation costs from three central sector plants — Anta, Auraiya and Dadri Gas — for all three discoms, claiming that the discoms did not take DERC's approval before renewing the power purchase agreements (PPAs) and scheduling power from these plants. The discoms said they would approach the Appellate Tribunal of Electricity (APTEL) over the disallowance and claimed it was done only to keep the PPAC surcharge to a minimal amount. The agreements were made as per Central Electricity Regulatory Commission regulations for 25 years with no exit clause, they said. The discoms have also repeatedly proposed surrender of power from these stations and Tata Power Delhi has even proposed to the Delhi government surrender of its entire share from Anta, Auraiya and Dadri Gas forever with immediate effect, DERC has pointed out. (

Policy / Performance………….

AP govt to buy out power projects

June 30, 2015. With the power purchase agreements signed by the state with gas-based private power projects coming to an end in 2016, the Andhra Pradesh (AP) government has decided to buy them out at their terminal value. Recently, the AP government had cleared the proposal of the eastern and southern discoms to buy the 220 MW GVK Power project located at Jegurupadu in East Godavari district. The GVK management had entered into an agreement with the AP government in 1997 for 18 years. With the agreement ending in June 2015, the two discoms have proposed an outright purchase of the project at a terminal value to be determined by Grant Thornton, a third party audit company. According to the terms of the purchase agreement (PPA), the state has two options with regard to gas based projects. One is the buyout option, and the other is, refurbish and upgrade and get into fresh agreements with the private power producer. After GVK Power, the state has now decided to exercise the buyout option in case of three units whose term will end soon. (

Kejriwal’s power bill was misinterpreted: AAP govt

June 30, 2015. Amid uproar over Delhi Chief Minister Arvind Kejriwal’s power bill for April and May coming to ` 91,000, the AAP government said the bill had been misinterpreted. On June 29, an RTI query filed by advocate and activist Vivek Garg revealed that Kejriwal’s Civil Lines residence’s electricity bill for April and May was ` 91,000. The General Administration Department of the Delhi government furnished the copies to Garg. But, the Delhi BJP claimed the bill was over ` 1 lakh. The Delhi government is working to bring down power bills in the city. (

PM to launch power development scheme in Varanasi

June 27, 2015. Prime Minister (PM) Narendra Modi will launch the Integrated Power Development Scheme (IPDS) in his Lok Sabha constituency Varanasi. The scheme, announced in the Union Budget 2014-15, aims at strengthening sub-transmission network, metering, customer care services, IT application, provisioning of solar panels and completion of the ongoing works of Restructured Accelerated Power Development and completion of the Reforms Programme (RAPDRP). Government will provide budgetary support of ` 45,800 crore over the entire implementation period of IPDS. Out of the total amount ` 1,067 crore has been sanctioned for Uttar Pradesh including ` 572 crore for Varanasi. The project envisages converting overhead lines into underground cabling in the areas around the temples and ghats in the Varanasi city. The scheme will help in reduction in Aggregate Technical and Commercial (AT&C) losses, establishment of IT enabled energy accounting/auditing system, improvement in billed energy based on metered consumption and improvement in collection efficiency. (

MERC allows Tata, Reliance, Mahavitaran to hike power tariff in Mumbai

June 27, 2015. The Mumbai electricity regulatory authority has allowed three utilities Tata Power, Reliance Infrastructure and Mahavitaran to increase their tariff with effect from this month. Maharashtra Electricity Regulatory Commission (MERC) has approved an increase in tariff of 2.44% for Mahavitaran, while 5.2% and 3.92% for RInfra and Tata Power, respectively. The new rates will be applicable from June 1. As per the new tariff structure, Below Poverty Line consumers of Rinfra, TPC and Mahavitaran will have to pay per unit ` 2.72, ` 1.41 and 87 paise, respectively. The fixed costs for all the three utilities for this category has been increased to bring it at par to ` 10. It has also increased the fixed cost for all the three utilities for consumers using up to 100 units to ` 50 from the current ` 40. For RInfra, the new tariffs are ` 4.79 (` 4.61) for consumers using up to 100 units, ` 6.54 (` 6.31) for up to 300 units, ` 8.26 (` 7.43) for up to 500 units and ` 10.08 (` 9.25) for residents consuming more than 500 units. MERC has allowed a reduction in tariff of TPC consumers using electricity up to 300 units. For TPC, the revised tariffs are ` 2.05 (` 2.62) for consumers using up to 100 units, ` 4.21 (` 4.56) for up to 300 units, ` 8.42 (` 8.19) for up to 500 units and ` 10.63 (` 10.27) for residents consuming more than 500 units. For Mahavitaran, the new tariffs are ` 3.76 (` 3.86) for consumers using up to 100 units, ` 7.21 (` 7.20) for up to 300 units, ` 9.95 (` 9.50) for up to 500 units and ` 11.31 (` 10.33) for residents consuming more than 500 units. The Commission has, however, reduced the tariff for railway by 10% from ` 9.37 to ` 8.46. The Commission has also directed Mahavitaran to complete the metering plan for conversion of unmetered agriculture connections within a period of three years. (

54 percent electricity stolen or lost in Bihar: Govt

June 26, 2015. Power Minister Piyush Goyal said a whopping 54 percent electricity was either "stolen or lost" in Bihar, which "doesn't produce a single unit from its own power stations." Goyal said the state government recovered the whopping electricity losses from the honest, bill paying customers. The minister was speaking on the occasion of signing of a MoU between NTPC, National Skill Development Corporation (NSDC) and National Skill Development Fund (NSDF) to train 25,000 youths in services and manufacturing sectors over the next five years. Goyal pointed out that Bihar's demand for electricity was assessed at 2,994 MW, low even in comparison to Delhi which was just a city, but had a demand for 5,800 to 6,000 MW. The statistics provided by Goyal punched holes into the claims of Bihar chief minister Nitish Kumar that ample electricity was being supplied to all villages and efforts were on to provide it round-the-clock. In 2012, Kumar had said he would not seek votes in the Assembly polls if he failed to supply power to all villages in the state. (

Cabinet note moved on CBM policy

June 25, 2015. Coal secretary Anil Swarup said a cabinet note has been moved to discuss and decide on the policy for exploration of coal bed methane (CBM) from coal mines. The coal block auction policy of the government has led to the concern about CBM reserve in the mines. As per the global standard practice, globally, methane gas, which is trapped in the pores of coal, is harnessed prior to mining of coal. If it is extracted, it can be used to run industries, power stations among others. He said government always wants Coal India Ltd (CIL) to keep coal prices low for cheaper power tariff. (

8 coal mines to be auctioned after 10 in round 3: Coal Secretary

June 24, 2015. The government will put eight more coal mines up for auction after completing the process for 10 mines in the third phase in mid-August, Coal Secretary Anil Swarup said. Swarup said that in view of the need to step up India's coal production to 1.5 billion tonnes by 2020, there is a plan to hire manpower for mining. The third round of coal mine auctions for 10 blocks will be held from August 11 to 17. Coal and Power Minister Piyush Goyal said that the government will open more than 60 coal mines across the country in the coming days. He had said the new mines were part of the overall plan for state miner Coal India to double its current production of 500 million tonnes per annum in five years to reach the country's total production target of 1,500 million tonnes by 2020. Coal India achieved a record 32 million tonnes increase in production in the last year, which led to a 12 percent increase in power production, the minister said. (

Bangladesh to receive 1.1 GW of power from India from January

June 24, 2015. Bangladesh will begin receiving 100 MW of power from Tripura from early January. This will be in addition to the 500 MW it already receives from West Bengal and a like amount that is on the cards from the state - for a total of 1,100 MW - as the two countries enter a new phase of bilateral cooperation for regional benefit. The power from Tripura will flow with the completion of 65 transmission towers in the northeastern state by December-end. Prime Minister Narendra Modi discussed the power supply from Tripura with his Bangladesh counterpart, Sheikh Hasina. Modi has declared that India would enhance the supply of power to Bangladesh from the existing 500 MW to 1,100 MW. The minister said PGCIL would erect around 20 km of transmission lines in Tripura, while the Power Grid Company of Bangladesh (PGCB) would lay 27 km of transmission line on its side. Both the prime ministers welcomed the steps being taken to augment supply of power through Baharampur in West Bengal and Bheramara in Bangladesh, grid inter-connection from 500 MW to 1,000 MW and to operationalise the supply of 100 MW from southern Tripura's Palatana power plant to Bangladesh. Tripura Power Minister Dey said that Indian and Bangladeshi officials, after a series of meetings, finalised the various technicalities and mechanisms to supply 100 MW of power from Tripura. Tripura Chief Minister Manik Sarkar had earlier said that after the completion of two mega gas-based power projects, at least 200 MW of power would be surplus in Tripura. (



US crude oil production for April rises to most since 1971: EIA

June 30, 2015. U.S. crude oil production rose 9,000 barrels a day to 9.701 million barrels a day in April, the highest since May 1971, the U.S. Energy Information Administration (EIA) said. Technology for tapping shale oil has helped the U.S. unlock vast reserves of crude that were previously inaccessible, boosting production. The modest increase from last month may suggest that a production plateau is approaching, which could deal a blow to U.S. crude prices, which have been generally rallying since March. The flood of oil was one factor contributing to a price rout in the second half of last year, but production has continued at high levels even as drillers have shut in rigs in an attempt to scale back production. The EIA expects that crude production will decline on a monthly basis starting in June. Because U.S. crude production has risen, while regulations limit exports of oil but not fuel, overall petroleum product exports were the highest for April on record at 2.873 million barrels per day, according to the EIA. (

Mexico's proven and probable oil reserves dip 7 percent in 2014

June 30, 2015. Total Mexican oil and gas reserves fell last year as state-owned oil company Pemex was unable to certify enough new discoveries to compensate for current production, the country's oil regulator CNH said. Mexico's total proven and probable (2P) oil reserves slid 7.4 percent from the previous year to 22.983 billion barrels of oil equivalent (boe). Proven, probable and possible (3P) reserves fell 11.3 percent to 37.404 billion boe. In March, the CNH announced that Mexico's proven (1P) reserves fell 3.1 percent to total 13.071 billion boe. While Pemex remains the country's only oil and gas producer, a sweeping energy overhaul finalized last year ended the company's nearly 80-year-old monopoly. A so-called Round One tender is set to begin with initial contract awards next month and will mark the first time in decades that private and foreign oil companies will be able to develop fields on their own or in a consortium. (

Talks ongoing to restart closed Libyan oilfields, output stable: NOC

June 29, 2015. Negotiations to reopen Libyan oilfields are ongoing and the level of the country's production remains stable, the National Oil Corporation (NOC) said. Libyan authorities said they were trying to reopen pipelines for the El Feel and El Sharara oilfields and the port of Zueitina, blocked for weeks by protests and disputes. The OPEC country is caught in a dispute between two rival governments, one internationally recognized in the east and a self-declared one that controls Tripoli, since a group called Libyan Dawn took over the capital last year. Before the 2011 civil war that ousted Muammar Gaddafi, Libya produced 1.6 million barrels per day (bpd). Officials rarely release national production figures, but one recent estimate put it at 500,000 bpd. Negotiations to reopen oilfields and ports in Libya often drag on as the oil industry is constantly under siege from protesters seeking jobs or armed factions trying to pressure their rivals or central authorities. (

Indonesia sets oil and gas production targets for 2016

June 24, 2015. Indonesia sets the country's 2016 gas production target at 1.1 million to 1.3 million barrels of oil equivalent per day (boepd) following a meeting on the state's budget plan between the Ministry of Energy and Mineral Resources (MEMR) and the energy sector-focused Commission VII of the House of Representatives. The government proposed that Indonesian gas production in 2016 be pegged at 1.1 million to 1.2 million boepd, while legislators suggested 1.05 million to 1.3 million boepd. Both parties agreed to set Indonesia's oil production in 2016 at 800,000 to 830,000 barrels of oil per day (bopd) following extensive discussions with 10 Cooperation Contract Contractors, according to the MEMR. The 2016 oil production goal for Southeast Asia's largest country is quite in line with the target set for the current year at 825,000 bopd, which was 3.9 percent more than the 794,000 bopd in 2014. (


Grand opening held for $430 mn oil refinery at Dickinson

June 29, 2015. Officials have formally dedicated a new oil refinery in western North Dakota. Bismarck-based MDU Resources Group and Indianapolis-based Calumet Specialty Products Partners built the $430 million Dakota Prairie Refinery near Dickinson.Officials held a grand opening celebration. Gov. Jack Dalrymple and U.S. Sens. John Hoeven and Heidi Heitkamp were on hand. Crews broke ground on the refinery in March 2013. It can process 20,000 barrels of oil each day into diesel fuel and other products. It began selling the fuel in May. (

Transportation / Trade……….

China’s slowing gas demand raises supply concern in Australia

June 30, 2015. China’s weakening appetite for super-cooled natural gas is raising concerns that the industry is facing a glut as global supply grows. Lower demand for gas in China and more supply moving into the country from Russia and Central Asia, on top of a downturn in the oil market, are weighing on LNG prices. The weaker-than-expected outlook hurts suppliers in countries such as Australia and Papua New Guinea. Chinese LNG buyers will probably struggle to digest all the fuel that they have agreed to purchase, according to a Citigroup Inc. report. Proposed LNG export developments face the risk of delays, the analysts wrote. China’s imports in the first three months of 2015 fell from a year earlier for the first time since 2006, the Australian government said. Competition from pipeline supplies and rising coal and renewable energy capacity will probably squeeze LNG, according to the report. Origin Energy Ltd and ConocoPhillips, developing a A$24.7 billion ($19 billion) LNG project in Australia, have faced speculation that customer China Petrochemical Corp. may seek to resell gas amid delays to an import terminal. Origin said that it expects the Chinese buyer known as Sinopec Group to fulfill its obligations. Although China’s long-term natural gas demand is forecast to rise at least threefold to more than 60 million metric tons per year by 2025 from last year’s level, “a slowdown in economic activity and higher domestic gas pricing has limited demand,” Citigroup said. (

Magellan Midstream and LBC to build crude oil pipeline in US

June 30, 2015. Magellan Midstream Partners has formed a 50/50 joint venture (JV) with LBC Tank Terminals, to operate crude oil storage and pipeline in the Houston Gulf Coast area in the US. Called Seabrook Logistics, the JV will construct assets, including over 700,000 barrels of new crude oil storage and other distribution infrastructure adjacent to LBC's existing terminal in Seabrook, Texas, US. The new company will also build new $95 mn pipeline, to transport crude oil to a Houston-area refinery. The pipeline will connect the new storage to an existing third party pipeline. Magellan will commission the new pipeline, while LBC will manage construction and operations of the new storage tanks and other terminal assets. The storage facility and pipeline infrastructure are scheduled to be commissioned in the first quarter of 2017. (

OPEC oil output hits 3 year high in June on Iraq

June 30, 2015. OPEC oil supply in June has climbed to a three-year high due to record or near-record output from Iraq and Saudi Arabia, a survey found, underlining the focus of the group's top exporters on market share. The boost from the Organization of the Petroleum Exporting Countries (OPEC) puts output further above its target of 30 million barrels per day (bpd) and comes despite outages in Libya and Nigeria that curbed supplies. OPEC supply has risen in June to 31.60 million bpd from a revised 31.30 million bpd in May, according to the survey, based on shipping data and information from sources at oil companies, OPEC and consultants.

The group has raised output by more than 1.3 million bpd since it decided in November 2014 to defend market share rather than prices. A final deal between world powers and Iran over Tehran's nuclear work could add to supplies. OPEC at a meeting kept its policy unchanged, amid signs that the near-halving of oil prices since June 2014 was boosting demand and putting a dampener on the U.S. shale boom. If the total remains unrevised, June's supply would be OPEC's highest since it pumped 31.63 million bpd in June 2012, based on surveys. The biggest increase in June has come from Iraq, which has helped push OPEC output higher this year. Exports from southern Iraq have jumped to 3 million bpd after Iraq split the crude stream into two grades, Basra Heavy and Basra Light, to resolve quality issues. Some companies have increased production following the move. (

New oil bull market in sight as Brazil, Iraq cut output targets

June 30, 2015. Massive downward revisions to oil output in Brazil and Iraq have increased the risks for oil markets of going from the current feast to famine within just a few years, leading to a price spike that would give a new boost to the U.S. shale industry. Brazil and Iraq had been expected to add over 2 million barrels per day to global supply by 2020 and another 2.5 million by 2025, becoming the two biggest contributors to help meet rising global demand, according to the long-term forecast of the International Energy Agency (IEA). To put the Petrobras revision in prospective - the 1.4 million bpd figure almost equates to the current global oversupply, which arose due to a U.S. shale oil boom and a decision by OPEC to keep its taps fully open to battle for market share with rival producers. With 2015 global oil demand surprising on the upside and likely to exceed its average growth of around 1 million bpd a year over the past decade, the glut is expected to clear by the middle or the end of 2016. Beyond 2016, the balanced market may not last long. Only a year ago, the IEA saw Brazil pumping 3.7 million bpd by 2020 and Iraq some 4.6 million. Petrobras, responsible for most of the country's output, said it will pump only 2.8 million by 2020. The IEA's long-term outlook sees the need for OPEC crude to rise by 6 million bpd in the 2020s and by the same amount again by 2030 - effectively meaning the world needs to add another Saudi Arabia to its supply. (

Turkey-Russia gas pipeline deal said to stall on price clash

June 30, 2015. Russia’s plan to build a new $15 billion pipeline to Turkey is at risk of delay because of a fight over gas prices. State-run OAO Gazprom and its Turkish counterpart Botas had a six-month period to agree on prices for gas supplies between the two countries. The Ankara-based company has the right to take the matter to international arbitration. The dispute over prices means there’s no immediate prospect of signing a binding pact for the new pipeline, the second between Russia and Turkey. An agreement could be delayed until at least October. The delay is a blow to President Vladimir Putin’s plan to use the new link to ship gas to Turkey and onto Europe, bypassing existing pipelines in Ukraine. He proposed the project last year after the European Union (EU), which gets about 30 percent of its gas from Russia, blocked a similar link through Bulgaria. Gazprom doesn’t plan to extend a gas-transit contract with Ukraine after 2019 and the EU would have to accept the new route, Russian Energy Minister Alexander Novak said. (

Origin Energy expects Chinese LNG buyer to fulfill contract

June 29, 2015. Origin Energy Ltd expects China Petrochemical Corp to fulfill its agreement to purchase liquefied natural gas (LNG) from a A$24.7 billion ($19 billion) export project in Australia. Origin sought to reassure investors amid concern the Chinese company known as Sinopec Group may not want all the gas it agreed to buy under a long-term contract with the Australia Pacific LNG project. Sinopec Group also owns 25 percent of the venture. The development with ConocoPhillips has begun offering the initial LNG production under short-term contracts, Sydney-based Origin said. Origin said there’s flexibility over when to begin supply to Sinopec Group, which has agreed to purchase 7.6 million metric tons annually. The Australia Pacific LNG project remains on track for “sustained” production from the first unit in the second quarter of the 2016 financial year, Origin said. (

Gazprom plans to launch Nord Stream-2 gas pipeline project in 2019

June 29, 2015. Russian gas giant Gazprom plans to commission the Nord Stream II gas pipeline from Russia to Germany by the end of 2019. Earlier in June 2015, the group reached an agreement with Shell, E.ON and OMV on the expansion of the Nord Stream gas pipeline, linking Vyborg in Russia to Lubmin in Germany. Two new lines (stages 3 and 4), with a combined capacity of 55 billion cubic meters (bcm) per year, would double the capacity of the existing interconnection. (

US light oil exports double in May, mostly to Europe

June 29, 2015. The United States (US) exports of ultra-light crude, also known as condensate, have doubled since the start of the year, with most shipments headed to Europe, according to traders and data from an energy consultant. The United States exported between 120,000 and 140,000 barrels per day (bpd) of condensate last month, according to traders and ClipperData, which tracks ships and terminal loadings, up from about 60,000 bpd at the start of the year. The condensate is lightly processed through stabilizers due to rules banning crude exports in the United States, now the world's third-largest oil producer. The rise comes as more companies look to take advantage of the ability to ship the oil overseas, including to places like the Netherlands, France, South Korea and Brazil. Traders have also said that the oil's quality deterred some Asian refiners. Enterprise Products Partners led the pack with 1.8 million barrels of exports per month, or 60,000 bpd. It sold a year's supply to Mitsubishi Corp and Vitol at the start of this year. BHP Billiton has been selling a 700,000-barrel cargo every month, though has delayed a plan to double exports to two cargoes a month due to production issues, traders said. BP started exports in February and also shipped out a cargo in April, said a trader who tracks the movement of U.S. condensate. It had another cargo due to load at the end of June which will head to Europe. (

China's CNPC signs contract to build second pipeline for Russian crude

June 26, 2015. Chinese state energy giant China National Petroleum Corporation (CNPC) has signed a construction contract for a second domestic pipeline to carry Russian crude oil from Mohe to Daqing. While giving no further details about the pipeline or the timeline of its construction, the contract was signed on June 19. Since 2011, Russia has been supplying China with around 300,000 barrels per day (bpd) of crude oil via a spur of the Eastern Siberia-Pacific Ocean (ESPO) oil pipeline running from Skovorodino in Russia to Mohe, from where an existing pipeline carries the oil to Daqing. In June 2013, CNPC and Russia's Rosneft agreed to double flows of ESPO crude to China by 2018. (

Anadarko in talks with Jera to supply LNG from Mozambique project

June 26, 2015. US-based oil and gas exploration company Anadarko Petroleum is negotiating a deal to supply natural gas from its LNG export project in Mozambique, to a Japanese joint venture (JV), Jera. The companies are in talks over a long-term gas import deal. Anadarko plans to source the initial ten million tons per annum (mtpa) for export from its finds in Area 1 of Rovuma Basin in the African country. The $23 bn project is planned to be commissioned by 2021. Japanese utility Toho Gas had also signed a deal with Anadarko for 0.3 mtpa of Mozambican LNG last year.

Other parties in talks with Anadarko include China's National Offshore Oil, Indonesia-based Pertamina, Thailand's PTT, the UAE and Singapore. Formed by a consortium of Tokyo Electric Power (Tepco) and Chubu Electric, Jera intends to become cheapest liquefied natural gas buyer in the region. The JV manages long-term fuel purchases for Tepco and Chubu, and is preparing to oversee LNG supply contracts and purchases from 2016. (

Asia oil pricing change to raise trade volumes

June 26, 2015. Oil pricing agency Platts is changing how it assesses oil product values in Asian trade from July 1 in a move traders expect to boost volumes and encourage the use of regional oil storage facilities built at a cost of billions of dollars. The change in how fuel oil, diesel, jet fuel and gasoline are assessed for loadings out of Singapore and Malaysia takes a borderless approach similar to that in the world's largest oil storage hub Amsterdam-Rotterdam-Antwerp (ARA). The main change is that from July in Platts' free-on-board (FOB) Singapore price assessments - the basis for most contract and spot deals done in Asia - traders at the time of making a bid or offer for a cargo will no longer specify a loading point in Singapore or southern Malaysia. (

UAE's ADNOC finalizes July 2015-June 2016 diesel term contract

June 26, 2015. Abu Dhabi National Oil Co (ADNOC) has finalised its July 2015 to June 2016 diesel term contract with several buyers, traders said. The United Arab Emirates (UAE) company has finalised the term contracts at a premium of $2.35 a barrel over Middle East quotes, traders said. Overall volumes were not certain but buyers include Total, BP, Shell, Vitol, Petrobas and Swiss Singapore, traders said. (

CNOOC plans 4 bcm per year LNG import terminal in Wuhu

June 25, 2015. Chinese oil and gas company China National Offshore Oil Corporation (CNOOC) has signed an agreement with Huainan Mining Industry to establish a joint venture and jointly develop a 3 Mt/year (4.1 bcm/year) LNG regasification terminal in Wuhu, in the Anhui province of China. The project would be developed in three phases, with the first 1 Mt/year (1.4 bcm/year) stage commissioned as soon as 2017. The second phase of 0.5 Mt/year (0.7 bcm/year) would follow in 2020 and full capacity of 3 Mt/year would be reached in 2030. ( 

Saudi Arabia loses spot as top crude supplier to India, China

June 24, 2015. Saudi Arabia lost its spot last month as India's top oil supplier to Nigeria for the first time in at least four years, according to ship tracking data, as the world's top crude exporter struggles to maintain market share in Asia. The OPEC kingpin fell behind Russia and Angola as the biggest crude supplier to China last month, data showed. The Middle East country's failure to maintain its position in some markets comes despite it leading a strategy by the Organization of the Petroleum Exporting Countries (OPEC) to keep output high to drive out competitors. In India, refiners have been switching out of long-term contracts with Middle East suppliers in favour of spot purchases, often African oil. A glut of African cargoes has emerged as the U.S. shale boom cuts American demand and accelerated as OPEC keeps output high. The share of African oil, mainly from Nigeria and Angola, jumped to 26 percent of India's total imports in May, up from around 15.5 percent in April and the highest in more than four years, according to tracking data on tanker arrivals. At the same time, the Middle East share fell to 54 percent in May from 61 percent, with Saudi Arabia supplying some 732,400 barrels per day (bpd) compared with Nigeria's 745,200 bpd. The shift comes as the gap between the international benchmark Brent and the Middle East price marker narrows. The premium for Nigerian crude over Brent has plummeted in recent months, making it more attractive. Reliance Industries got about a quarter of its oil in May from Africa, the highest in at least three years. Indian Oil Corp aims to get 70 percent of its oil needs through term volumes compared to 80 percent last year, including a deal with Kuwait halved to 100,000 bpd. Another refiner, Bharat Petroleum Corp, plans to cut its dependence on term contracts to 75 percent this fiscal year from 82 percent a year ago. Hindustan Petroleum Corp said purchases of West African oil make sense when Brent's premium over the Middle East price marker, known as Dubai swaps, is less than $2 per barrel. The spread DUB-EFS-1M has mostly hovered below that since oil prices crashed in the second half of last year and hit its lowest in two months this week at $1.32. KBC Energy's Haq estimates West African oil's share to India could average as much as 25 percent this year. (

Policy / Performance…………

Russia-Ukraine gas talks focus on price

June 30, 2015. Russia is parrying Ukraine’s demands for a natural-gas accord with the European Union (EU) through the heating season as it maintains an offer to temporarily hold prices unchanged from July 1. Russia sees no need for new accords as it will bill Ukraine using the third-quarter price set, Russian Energy Minister Alexander Novak said before the talks with his Ukrainian counterpart, Volodymyr Demchyshyn, and the European Commission’s vice president for energy union, Maros Sefcovic. Russia is reducing the discount it offers Ukraine by 60 percent for the three months starting, after the current accord expires. That will leave gas prices, which have dropped in Europe, at the same level as this quarter.

Russia has rejected Ukraine’s call for an intergovernmental accord, Interfax reported, citing an unidentified person in Ukraine’s delegation. The goal for Ukraine and the EU is to reach a bridging deal that would stay in place until an arbitration court decision on a dispute between OAO Gazprom and NAK Naftogaz Ukrainy, or at least through next winter. The court in Stockholm is expected to issue its verdict in late 2016 or in 2017. Naftogaz has insisted Ukraine, Russia and the EU sign a trilateral protocol that confirms the gas agreements. Naftogaz also wants Gazprom to sign an addendum to their gas accord, according the Ukrainian company. Talks on a new package are mired in politics amid a deadly, more than a year-long conflict with pro-Russian separatists in eastern Ukraine. The Moscow-based company said that Naftogaz owes it $212 million for 704 million cubic meters of gas supplied to eastern Ukraine. Ukraine rejects demands to pay for gas delivered to rebel-held territories, saying it cannot control how much they imported. The government in Moscow agreed to lower the contract rate by about $40 per 1,000 cubic meters during the third quarter, down from $100. That would leave the price, which is linked to oil prices, unchanged against the current quarter at about $247. While Ukraine can cope without Russian gas in the summer months starting in June, it must increase imports and spend at least two months refilling underground storage before the next cold season. The cost for Ukraine of adding about 7 billion cubic meters of gas to its current stockpiles is equal to $1.7 billion using the Russian gas price. (

Israel unveils gas plan in move to unblock regulatory logjam

June 30, 2015. Israel’s energy minister presented proposed guidelines for regulating the country’s offshore natural gas reserves that may unlock development of one of the largest deepwater discoveries in recent years. The proposals, set out five years after the discovery of the Leviathan field, prompted the resignation of the antitrust commissioner and generated street protests amid claims the policy fails to break up a monopoly and will result in high prices for Israeli consumers. The plan unveiled for the first time requires Israel’s Delek Group Ltd and Houston-based Noble Energy Inc. to sell stakes in smaller fields while maintaining their grip on the larger Leviathan field. The plan would also require companies to cap prices for a number of years until competition matures, promising investors and explorers regulatory quiet for the next decade in an effort to attract new players. The Movement for Quality Government in Israel petitioned the High Court of Justice to block the plan and the State Comptroller asked the government to wait with its decision until he publishes his report on the matter. (

BP's chief economist sees US shale weathering oil surplus

June 30, 2015. Shale output in the United States (US) will prove resilient to low oil prices likely to be prolonged by the prospect of half a million barrels per day of Iranian crude making its way back to the market, BP's chief economist Spencer Dale said. Talks in Vienna between world powers trying to end sanctions on Tehran in return for limits on Iran's most sensitive nuclear activities could bring a significant increase in Iranian oil exports. BP's Spencer Dale said that it would probably take time for any easing of sanctions to filter through to oil markets if an Iran deal is agreed. U.S. and European Union sanctions ban their companies from buying Iranian oil. Of the 1 million barrels per day (bpd) of Iranian supplies that left the market since sanctions were imposed, Dale said the consensus view is that about half of that could be brought back over three to four months. With Brent crude trading around only $62 a barrel, the U.S. rig count has fallen by roughly 60 percent from a peak last October, Dale said, but that does not mean that U.S. shale would not retain a role as the most flexible form of supply. The trigger price for any cut-off in more expensive unconventional oil is "a moving target", given the amount of hedging and the rapid increases in productivity and cost reductions being achieved, Dale said. Dale said that neither $100-plus highs that followed the Arab Spring nor current levels around $60 -- reflecting output decisions by the Organization of the Petroleum Exporting Countries -- are "the natural resting place" for the oil market. (

Nigeria’s APC says govt must scrap oil-industry bill

June 29, 2015. Nigeria’s ruling party recommended the government discard a long-delayed oil-industry bill, review fuel subsidies and sell off some units of the state petroleum company. The Petroleum Industry Bill should be scrapped and replaced by a new reform bill that’s based on discussions with international oil companies to “ensure all perspectives are adequately considered,” the All Progressives Congress said in a report. The bill has been delayed in parliament for six years due to political wrangling and opposition by international energy companies against proposed tax and royalty terms, deterring investment into Africa’s top oil producer. The report recommends a review of audits and corruption allegations against the Nigerian National Petroleum Corp (NNPC) in the government’s first 100 days in office. After 18 months, the government should seek to commercialize the NNPC, possibly partially listing the entity and selling off its fuel-retailing and refining business, the APC said.

The APC report recommends that all top oil executives, senior NNPC staff and government officials must declare their assets. It also calls for the state oil company’s board to meet more regularly and legislation governing the NNPC to be amended to ensure that the petroleum minister is no longer chairman of the company. The government should review fuel subsidies to reduce costs of about 600 billion naira ($3 billion) spent annually on the payments, according to the report. A lack of oil refining capacity means Africa’s largest economy subsidizes gasoline imports and suffers frequent fuel shortages even though it produces about 1.9 million barrels a day. Nigeria’s crude production is hindered by the NNPC’s inability to pay its share in joint ventures with companies including Exxon Mobil Corp., Royal Dutch Shell Plc and Total SA, according to the report. (

Japan May LNG average import price hits lowest since 2009

June 29, 2015. Japan's average price for imported liquefied natural gas (LNG) fell to its lowest since September 2009, dragged down by declining oil markets, offering relief to the countries' utilities which had been burning record amounts of the fuel after the Fukushima disaster. LNG import prices averaged $8.84 per million British thermal units (mmBtu) in May, the lowest since $8.28 in September 2009, finance ministry data showed.

Japan, which takes in about a third of global LNG shipments, spent a record 7.78 trillion yen ($63.25 billion) purchasing a historically high 89.07 million tonnes of the fuel in the last fiscal year ended March 31, to offset the shutdowns of nuclear reactors following the metldowns at Fukushima in 2011. A flood of new supply coming on stream later this year in Australia and the United States is capping the price of LNG. Japan's May import price is only about $1.50 higher than spot prices in Asia. Asian LNG spot prices for August delivery were $7.30 per mmBtu. Energy Aspects revised its northeast Asia LNG third-quarter price forecast to $7 from $8. The majority of LNG imports in Japan are oil-linked long-term contracts that respond to falling oil prices with a time lag of several months. (

Polish minister to meet builder Saipem on delayed LNG terminal

June 29, 2015. Polish treasury minister Andrzej Czerwinski said he would meet Italian construction firm Saipem to ensure a liquefied gas terminal on the Baltic Sea opens in 2015 after numerous delays. Saipem is leading the consortium building the terminal aimed at cutting Poland's dependence on Russian gas imports. After missing an originally planned completion data of 2014, the company said it would finish construction of the terminal at Swinoujscie this summer only if it received further payment. (



Summit to build $1 bn power generation facilities in Bangladesh

June 29, 2015. Bangladesh-based Summit Group is planning to build five power plants with an investment of at least $1 bn. The power facilities, which will use fuel oil and gas, are expected to generate 1,310 MW by 2020. The company intends to add at least 300 MW power plants by 2016. The company will commission the biggest plant, which will have a capacity of 660 MW, by 2020.

Summit intends to increase its share in Bangladesh power market to 16% this year from the current 12%. Demand for electricity in the country is estimated to rise 7% annually. Bangladesh currently has power generation capacity of 7,000 MW, meeting the needs of around 65% of the population. (

Vattenfall divests its Nordjylland coal-fired power plant in Denmark

June 25, 2015. Swedish power utility Vattenfall has decided to divest its Nordjylland coal-fired power plant in Denmark, selling the 660 MW facility to district heating company Aalborg Forsyning for about DKK 823 mn (€110 mn). The Nordjylland power plant has two coal-fired units; 250 MW unit-2 was commissioned in 1977 and is mainly used during peak-load periods and the 410 MW unit 3 was commissioned in 1998. (

PLN to build power plants with total capacity of 500 MW in NTB

June 24 2015. The Nusa Tenggara unit of state electricity company PLN said it would build a number of power generating plants with a total capacity of 500 MW in the region by 2018. The power plants would be needed to keep up with growing requirements for power in West and East Nusa Tenggara, director of the unit Suradji said in Mataram, West Nusa Tenggara (NTB). Suradji said the projects would be part of the government's plan to build power plants with a total capacity of 35,000 MW by 2019. Two of the projects in NTB will be steam-powered electricity plants in Lombok with a capacity of 100 MW and another steam-powered plant with the same capacity in the district of Sambalia, East Lombok. (

Transmission / Distribution / Trade…

EIB lends €325 mn to Iberdrola to install 3.2 mn smart meters in Spain

June 29, 2015. The European Investment Bank (EIB) has approved a €325 mn loan to Spanish energy group Iberdrola to modernise its electricity distribution network in Spain and to install 3.2 million of smart meters. Iberdrola plans to reach the meter replacement target of 57% by the end of 2015. According to the Spanish energy regulator CNMC, nearly 10 million Spanish households (9.89 million) have already installed smart meters, corresponding to a roll-out rate of 36% (out of 26.9 million users). At the end of 2014, 35% of the meters had been replaced. (

RP Energy faces transmission problem

June 29, 2015. The planned 600 MW coal-fired power plant of RP Energy inside the Subic Bay Freeport Zone in Zambales faces yet another challenge – a major transmission problem. As such, the plant would have to initially run at just 300 MW instead of the original 600 MW until the issue is resolved, the Manila Electric Co. (Meralco) said. Meralco, through its power generation arm MGen, is part of RP Energy, the company behind the controversial coal-fired project in Subic. Other members are Aboitiz Power Corp. and Taiwan Cogeneration International Corp. As such, Meralco said RP Energy would focus first on an initial 300 MW, with the second 300 MW to follow when the transmission problem has been resolved. MGen said the company is in talks with the National Grid Corp. of the Philippines (NGCP), the grid operator on how to resolve the problem, which involves right-of-way issues. (

Elering acquires Gazprom's 37 percent stake in Estonian gas transmission grid

June 24, 2015. Elering, the operator of the Estonian electricity transmission grid and owner of a 51.38% stake in Võrguteenus Valdus, the operator of the Estonian gas transmission system, has reached an agreement with Gazprom, under the terms of which Elering will take over Gazprom's 37.03% stake in Võrguteenus Valdus. With this acquisition, Elering's stake will reach 88.4%. Elering aims to increase its interest to 100%. (

Policy / Performance…………

Canada and UK sign MoU to develop nuclear energy projects

June 30, 2015. The Natural Resources Canada (NRCan) and the UK Department for Energy and Climate Change (DECC) have signed a memorandum of understanding (MoU) for cooperation on civil nuclear energy projects. The MoU will facilitate collaboration between laboratories and university research networks in the two countries and help Canada tap the UK nuclear energy market. Through an annual work plan, the nuclear energy stakeholders will collaborate on various aspects of the projects. NRCan and DECC will be able to exchange policy related information. The UK currently meets 18% of its electricity needs through 16 nuclear reactors. By 2023, expect one all of these power plants are likely to be retired. The country has set a target to generate 16,000 MW by 2030, and plans to construct at least 12 new nuclear power plants to meet the demand. (

Germany's oldest remaining nuclear plant shuts down

June 28, 2015. Germany's oldest remaining nuclear reactor has been shut down, part of a move initiated four years ago to switch off all its nuclear plants by the end of 2022. The Grafenrheinfeld reactor in the southern state of Bavaria was taken offline as scheduled overnight, authorities and operator E.ON said. Grafenrheinfeld went into service in 1981. It is the first reactor to close since Germany switched off the oldest eight of its 17 nuclear reactors in 2011, just after Japan's Fukushima nuclear plant disaster. The next to close will be one of two reactors at the Gundremmingen plant in Bavaria, which is set to shut by the end of 2017. The rest will be closed by the end of 2022. Germany aims to generate 80 percent of its electricity from renewable sources by 2050. (



TN govt, Adani likely to sign solar deal

June 30, 2015. The state government is likely to sign the agreement for the 648 MW solar power plant to be set up by the Adani group at Kamuthi in Ramanathapuram district. An Adani group representative will fly down to Chennai to sign the power purchase agreement with chief minister J Jayalalithaa at the secretariat. The project is expected to give a major boost to solar power initiative in Tamil Nadu (TN). While Tangedco has managed to reduce power shortage and augmented its power generation by 4,991 MW in the last four years, solar power plants of private players are expected to bridge the deficit in the coming years. The 2012 solar power policy of the state envisaged rolling out 3,000 MW by 2015 with an addition of 1,000 MW every year. A 1,000 MW solar project might require 5,000 acres of land. (

Suzlon to focus on domestic market, plans offshore mills in Gujarat

June 28, 2015. Suzlon group, which had recently sold its German arm Senvion to pare debt in January, has said it will focus on the domestic market in the short—to medium—term while it comes out of the debt burden. There is also a plan to enter the offshore market in the country and the first such project will come up in Gujarat, Suzlon group Chairman and Managing Director Tulsi Tanti said. Suzlon is in the process of increasing its production capacity at its wind park in Kutch, he said. Tanti claimed that once the installation is complete, the park would become world’s largest wind mill park having capacity of 2,000 MW production at single location. The country’s total wind power production stood at 23,000 MW and Suzlon alone produces around 40 percent of this, he claimed. (

India is now world's fastest-growing major polluter

June 27, 2015. For the first time ever, the year 2014 saw India’s carbon dioxide emissions growth accounting for the largest share of global emissions growth, according to a new global report. India’s CO2 emissions from energy use had increased by 8.1% during the year, making it the world’s fastest-growing major polluter. It was the single-most significant trend revealed in the latest edition of British Petroleum’s comprehensive Statistical Review of World Energy, but the Indian media got the story upside down. Most coverage celebrated India’s sky-high energy-consumption figures, while glossing over its record-breaking emissions growth, a historical milestone with serious implications. (

Indian Railways to float tenders to procure solar energy

June 26, 2015. Indian Railways will float tenders to procure at least 200 MW of solar energy in the next two months, a step which will promote use of non-conventional energy in its daily functioning. Union Minister of State for Railways Manoj Kumar Sinha said the Centre is presently working out details of the plan. The tender is part of Railways’ plan to procure 1000 MW of solar energy over the next five years. The Ministry has commissioned one mega watt solar power plant – the largest such project in the country till now – at Katra Railway station in Jammu and Kashmir on March 30 this year. Railways proposes to harness solar energy by utilising rooftop space through public private partnership (PPP) mode as per feasibility, the modalities of which are being worked out. According to the plan, Railways plans to install solar power plants of about 8.8 MW capacity at railway stations, railway office buildings and level crossing gates throughout the country under railway funding. These include provision of 10 KWp solar PV modules each at 200 stations under various Zonal Railways, provision of total 4.05 MWp Solar Photo Voltaic (SPV) at roof top of 21 railway office buildings and provision of total 1.3 MWp capacity Solar Photo Voltaic (SPV) plants at 2000 Level Crossing gates on Indian railways. The generation of solar supply will help railways supply power at remote locations and save in diesel due to reduced running of diesel generators. Recently, the Railways rolled out a non-AC coach of Rewari-Sitapur passenger train lit by solar panels installed on its roof. (

NTPC to spend ` 10 bn on research and development in 6 yrs

June 25, 2015. NTPC, India's largest power producer and consumer of coal, has embarked on a near ` 1,000 crore research and development exercise that will involve groundbreaking work in areas of new and renewable energy, waste management, efficiency improvement and cost reduction. The company, which recently announced big plans for entering the solar energy sector, has decided to work on developing power generation technologies that will use lesser volumes of coal and thus reduce greenhouse gas emissions. Last year NTPC spent about ` 129 crore or nearly 1.2% of its profit after tax on R&D, NTPC said. The project has been granted a budget of ` 1,554 crore, of which about ` 1,100 crore will be provided by the Centre. NTPC Energy Technology Research Alliance (NETRA) is networked with institutes and organisations for research related to development of cost economic technologies in climate change, new and renewable energy, efficiency and reliability enhancement of thermal power generation and CO2 mitigation and fixation. (

First Solar starts commercial operation of 20 MW solar plant

June 25, 2015. US-headquartered solar power developer First Solar said that it started commercial operation of its 20 MW solar plant in Telangana. The 20 MW PV project "is part of a larger 200 MW projects portfolio which is wholly-owned by First Solar and is in various stages of construction in India," the company said. The project is contracted under a 20-year power purchase agreement (PPA) to sell power to the Southern Power Distribution Corporation of Telangana at a tariff of ` 6.49/kwhr, it said. First Solar Inc had earlier said it plans to build 45 MW capacity of solar power generation in Telangana. (

Maharashtra govt to allow wind energy project developers to upgrade tech

June 24, 2015. To ensure better capacity utilisation of wind energy projects and help them generate power at higher efficiency, the state government is planning to allow these project developers to upgrade their technologies. Maharashtra has 4,442.05 MW installed capacity in the wind energy sector, which forms a bulk of its 6,702.93 MW renewable energy capacity. Many of these wind energy projects were around 10-15 years old and, hence, were using outdated technologies. The state will facilitate re-powering of installed projects and installation of new capacity. The state's new and renewable energy policy, which was approved by the cabinet recently, aims at creating 14,400 MW of fresh grid-connected installed capacity in the sector by 2019-20. This includes 7,500 MW from solar energy; wind energy and baggase-based co-generation will contribute 5,000 MW and 1,000 MW, respectively. Maharashtra accounts for 13,500 MW of India's assessed renewable energy potential of 89,411 MW, including 9,400 MW from wind. (

IICT's waste-to-biogas tech draws good response

June 24, 2015. The Indian Institute of Chemical Technology (IICT)-developed organic waste-to-biogas system is witnessing significant interest from various quarters. Developed by the IICT Bioengineering & Environmental Sciences (BEES) division, the one-tonne capacity organic waste anaerobic gas lift reactor (AGR), has been licensed to Hyderabad-based Ahuja Engineering Services, which has installed the first plant at social foundation AkshayaPatra's Bellary kitchen that serves around 150,000 meals every day. The IICT-patented green technology is capable of generating 120-150 cubic metres of biogas (equivalent to around 30 kg of LPG) by using vegetable and food waste as the feedstock. Ahuja Engineering Services director and business head for renewable energy Shruti Ahuja said they would complete the installation of the second plant with a higher capacity at the foundation’s kitchen in Ahmedabad this year. The company is actively working on scaling the licensed technology to higher capacities, starting with 1.5-2 tonne, and take it even higher to 5-10 tonne in the future. (


China promises further pollution limits for UN climate deal

June 30, 2015. China vowed to step up its program to cut fossil-fuel pollution, spelling out its broadest commitments yet, boosting a United Nations (UN) effort to reach a landmark deal on climate change in December. Premier Li Keqiang promised China will cut the amount of heat-trapping carbon-dioxide it emits for every dollar of economic output, augmenting existing pledges to boost renewables and for total emissions to stop rising by 2030. The details, set out in a briefing note to reporters during Li’s visit to France, highlight a formal pledge China is making to the UN. China’s willingness to limit its pollution is crucial to the success of the UN climate talks. Its emissions have surged since the last deal was signed in 1997 making China the biggest greenhouse-gas polluter with more than a quarter of the global total. Li’s pledge puts pressure on other developing nations such as India, Brazil and Indonesia to follow, as well as industrialized nations such as Australia and Japan that have yet to spell out their efforts. The U.S. and 28-nation European Union have already submitted pledges to the UN. Li said China will cut carbon emissions per unit of gross domestic product buy 60 percent to 65 percent by 2030. China has also pledged to “peak” its emissions “around” 2030, by which time it’s targeting getting 20 percent of all energy from renewables and nuclear power. Even so, China’s intention to peak its emissions by 2030 has been described as conservative by environmentalists and envoys who say it can probably reach the milestone earlier. China submitted its pledge, known as an Intended Nationally Determined Contribution, or INDC in UN jargon, to the UN climate secretariat in Bonn. The four main elements were the carbon intensity goal, the emissions peak and forestry and clean energy targets outlined in November by Chinese President Xi Jinping in a joint announcement with Obama. (

New CO2 rules should aid Keystone XL approval, TransCanada says

June 30, 2015. TransCanada Corp said that tightening climate-change rules from the governments of Canada and the province of Alberta help justify the construction of the controversial Keystone XL pipeline project. The company, Canada's No.2 pipeline operator, released a letter sent to U.S. Secretary of State John Kerry and other department officials saying that increased carbon levies for Alberta oil sands producers and new Canadian targets for greenhouse-gas emission cuts should serve to help assuage U.S. concerns that approving the C$8 billion ($6.41 billion) project would increase climate change. TransCanada has waited more than six years for the Obama administration to make a decision on whether it would allow the embattled project to proceed, frustrating Canadian oil producers and governments eager to see the country's oil reach the high-paying refinery hub on Texas' gulf coast. However, Obama has said he will only permit the project, bitterly opposed by environmental groups in both the U.S. and Canada, when he is certain it will not significantly exacerbate climate change. (

Gurmat signs $720 mn finance agreement for 170 MW geothermal project in Turkey

June 30, 2015. Gurmat Electric Generation, a unit of Guris Group, has signed $720 mn finance agreement with a consortium of banks, to fund for the construction of Turkey’s largest and Europe’s second largest geothermal power plant. The 15-year financing package for the 170 MW project includes $200 mn from European Bank for Reconstruction and Development (EBRD) and $325mn from Turkiye Is Bankasi. Turkiye Sinai Kalkinma Bankasi and the Black Sea Trade and Development Bank will provide $130 mn and $65 mn financing for the project, respectively. Located near the western town of Germencik, in the Buyuk Menderes Graben, the Efeler geothermal plant features five units, of which three have been already commissioned. The Efeler facility, which is planned to be completed by the end of this year, will increase Turkey's installed geothermal capacity by around 30%. By 2023, Turkey has set a target to add 34,000 MW hydropower, 20,000 MW wind energy, 5,000 MW solar energy, 1,000 MW biomass and 1,000 MW geothermal to its energy mix. Turkey has so far developed 427 MW of geothermal capacity. (

Nobel prize winner Tirole says carbon price needed for climate

June 30, 2015. Putting a price on carbon is the only effective way to curb emissions to combat climate change, according to a Nobel prize-winning economist Jean Tirole. Tirole was speaking in Paris as negotiators from almost 200 nations are aiming for a deal at the end of the year to reduce heat-trapping greenhouse gases. Last month, business leaders met in Paris to call for a price on carbon as an incentive for industry to move toward cleaner transport and energy production. Economists are divided over whether the best method for pricing carbon is through a tax or a market mechanism such as a cap-and-trade program, Tirole said. The debate is “relatively minor” compared with the risks for the climate. Countries’ carbon emissions can be monitored using satellite imagery so each nation can then be charged with putting in place rules to curb them, he said. (

GE will take part to 240 MW Ararat wind project in Australia

June 29, 2015. Renewable Energy Systems (RES) Australia has announced a wind turbine order for the 240 MW Ararat wind project in south-west Victoria (Australia), reviving the $450 mn project. This is the first major contract to be signed since the restoration of the Renewable Energy Target (RET) in May 2015, mandating 33 TWh of renewable power generation by 2020. The 240 MW project is developed by RES, Partners Group, OPTrust and GE. It received approval in 2010 and was expected by 2015 was delayed and suspended due to regulatory uncertainties. Construction is expected to start in 2015 and to span two years. The project will be commissioned in April 2017. (            

Alberta strengthens greenhouse gas strategy

June 29, 2015. The government of Alberta (Canada) has decided to renew and extend its expiring regulations on CO2 emissions (expiring at the end of June 2015) to the end of 2017. Alberta's Greenhouse Gas Reduction Programme includes targets to reduce greenhouse gas (GHG) emissions for facilities emitting at least 100,000 t/year of GHG; the current 12% target in emissions reduction will be raised to 15% as of 1 January 2016 and to 20% as of 1 January 2017. Facilities will have to improve their operations to reduce emissions, or to use Emission Performance Credits, purchase Alberta-based carbon offset credits and contribute to the Climate Change and Emissions Management Fund. Facilities choosing to pay into the Fund will have to pay C$20 (US$16.26) for every tonne over their reduction target, compared to the current level of C$15/t (US$12.2); the price will be raised to $30/t (US$24.4) in 2017. (               

SC blocks Obama administration plan on power plant emissions

June 29, 2015. The Supreme Court (SC) has ruled against an Obama administration effort to limit toxic mercury emissions from power plants, saying the costs of compliance should be taken into account at the very earliest stages of the regulatory process. In a 5-4 decision, the court sided with industry and 23 states that challenged the Environmental Protection Agency (EPA) over the rules for oil- and coal-fired utilities, which the EPA estimated would cost $9.6 billion annually. The states and industry groups said the cost estimate far outweighed the benefits the rules would produce, estimated at $4 million to $6 million per year. It's unclear what the practical effect of the court's ruling will be. The regulations date back to 2012, and as this case has been winding its way through the court system, many if not most of the affected power plant operators have installed the scrubbers and other controls needed to cut the mercury and other emissions. (

Fossil fuel divestment alone will not halt climate change: Bill Gates

June 27, 2015. Fossil fuel divestment would be ineffective on its own as a means of halting global warming, software billionaire and philanthropist Bill Gates said. Pulling money out of carbon-heavy industry must be coupled with large spending on alternative technologies to make any difference, said the Microsoft mogul who is under fire for his charitable Bill and Melinda Gates Foundation`s reported $1.4 billion (€1.3 billion) investment in carbon-spewing companies like BP. He will invest $2 billion in green energy, but would not pull his money out of companies that pump out carbon emissions blamed for the planet-warming greenhouse effect. Gates, who speaks of climate change as a major threat to the planet, said he was "not really against divestment", as long as it was coupled with "some serious investments in breakthrough technology." Norway`s parliament voted to pull its sovereign wealth fund -- the world`s biggest -- out of coal, and French energy group Total has said it plans to end its coal activities. The world`s nations are negotiating a new, global pact, which must be inked in Paris in December, to curb climate change through greenhouse gas emission cuts. The goal is to limit average global warming to two degrees Celsius (3.6 degrees Fahrenheit) over pre-Industrial Revolution levels. According to the UN`s Intergovernmental Panel on Climate Change (IPCC), this would require annual greenhouse gas cuts of 40-70 percent by 2050, compared to levels in 2010 -- and to zero or below by 2100. (

DP CleanTech to build three straw-fired biomass power plants in China

June 26, 2015. DP CleanTech has secured contracts with China Everbright International to build three 30 MW straw-fired biomass power plants in China. The Everbright International's biomass plants will also be optimized to handle additional fuel types including rice husk, cornstalk, wood chip, and cotton and bean residues. DP CleanTech announced the signing of 3 contracts with China Everbright International Limited to build 3 x 30MW straw-fired biomass power plants in China. The projects located in Dingyuan, Huaiyuan and Lingbi, in Anhui province, will feature DP's unique High Pressure, High Temperature boiler technology which has already been successfully demonstrated in more than 50 plants in China.  DP has successfully implemented and adapted its patented, European technology to establish a leading position in the Chinese biomass market.  In addition to success in Europe and China, DP is rapidly developing projects in Southeast Asia, South America and Africa. (

Japan has added 19 GW of renewable capacities since July 2012

June 25, 2015. According to data released by the Japanese Ministry of Economy, Trade and Industry (METI), Japan installed 18,757 MW of renewable capacities since the start of its feed-in tariff programme in July 2012 (until March 2015). The bulk of the new capacities consisted in solar parks (18,108 MW). Renewable capacities additions have accelerated, from 1,758 MW between July 2012 and March 2013 (mainly residential solar projects with 969 MW and commercial solar projects with 704 MW), to 7,139 MW in 2013-2014 (including 5,735 MW of commercial solar projects and 1,307 MW of residential projects) and 9,860 MW in 2014-2015 (including 8,572 MW of commercial solar projects, 821 MW of residential solar projects, 221 MW of wind power and 158 MW of small-hydropower projects). In the 2014-2015 fiscal year, renewables accounted for 3.2% of power generation (not including hydropower, 9%). Over this July 2012-March 2015 period, the ministry approved a total of 87,680 MW of renewable projects, mainly commercial solar projects (78,840 MW) and residential solar projects to a lesser extent (3,790 MW). In addition, 2,290 MW of wind projects, 2,030 MW of biomass and 660 MW of small hydropower projects have been approved. (     

EDF acquires 200 MW Salt Fork wind project in Texas

June 25, 2015. EDF Energies Nouvelles, the renewable arm of French energy group EDF, has acquired the 200 MW Salt Fork wind park project in Donley and Gray counties in northern Texas (United States) from Cielo Wind Power. The project is expected to be commissioned in late 2016. The first 150 MW of power will be sold to Garland Power & Light under a long-term Power Purchase Agreement (PPA). With this acquisition, EDF Energies Nouvelles holds a wind project portfolio of more than 1 GW. (                               

District court orders Dutch govt to speed up GHG emissions cuts

June 25, 2015. A district court of The Hague (Netherlands) has ordered the Dutch government to accelerate its efforts to cut greenhouse gas (GHG) emissions, after 900 citizens filed a lawsuit, claiming that the government had a legal obligation to protect its citizens from the dangers of climate change. The court ordered the government to cut GHG emissions by at least 25% between 1990 and 2020, a target above that adopted by the government (17% by 2020) but in line with those of developed countries (25%-40% reduction). The government can appeal to a higher court. The European Union has set a target to cut emissions by 20% between 1990 and 2020 and by 40% by 2030. (        





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