MonitorsPublished on Sep 19, 2016
Energy News Monitor | Volume XIII; Issue 14

Gas news commentary: August-September 2016


The Minister for Petroleum announced that the share of gas in India will be increased from 6.5 percent to 15 percent when he launched the programme Gas4India. Apparently the motivation was the fact that the share of gas in Gujarat was higher than world average at 26 percent. Gujarat’s gas trajectory has more to do with its industrial base and its proximity to gas production than with the so called Gujarat model as it is often presumed.  City gas is the only hope as driver of gas demand but this will not take off without a significant increase in the length of the pipelines across the country. Power generation does not show much promise as a driver of gas demand growth as the case of NTPC shows. NTPC has apparently decided to terminate a long-term supply contract for imported natural gas in power generation shows as it is unaffordable. NTPC signed a 20-year contract with GAIL (India) Ltd in 2009 to buy 2 mmscmd of gas. NTPC has been taking less than 10 percent of its contracted volume, forcing GAIL to levy so-called take-or-pay penalty charges. India’s 25 GW gas based power generation capacity are reportedly running at less than a 25 percent of their capacity. The cost of power generated from GAIL’s gas is about ₹7/kWh more than twice the price of power in long term contracts and more than three times spot market price of power. The unaffordable policy of affordability is likely to keep India and Indians energy insecure.

But gas use in industry is picking up in India. The 60 percent fall in price of LNG has reportedly pushing IOC to buy two LNG shipments per month in the spot market for six months from October. The country plans to increase its LNG import capacity to 55 MT within five years, from about 21 MT now. Petronet of which 12.5 percent is owned by IOC has expanded the capacity of the Dahej terminal in western India, the nation’s largest LNG import and re-gasification terminal, by 50 percent to 15 MT.


GAIL which has been perennially unlucky on its ventures struck bad luck once again. It appears that gas would be 75 percent more expensive than spot gas prices in GAIL’s two long-term contracts to buy 5.8 MTPA of gas from US suppliers from 2018 at current henry hub prices.  The contract was signed amidst great fanfare of bringing gas prices down to earth in India.

Rest of the world

Oil majors seem to be betting on LNG. Exxon was reportedly taking over InterOil after its bid to take over Oil Search failed to get a larger stake in LNG exports from Papua New Guinea, which is seen as key to LNG trade to China, Japan and Korea in the decades to come.  Royal Dutch Shell was first off the block and Shell is now well on its way to become one of the largest LNG producers in the world with its takeover of BG Group.

The geo-politics of enhancing European energy security appears to be spicing up as efforts to wean Europe away from Russian gas gathered momentum in August. At a news conference in Sweden, the Vice President of the USA commented that the Nord Stream 2 pipeline involving Russia and several European energy companies was a ‘bad deal’ for Europe. Russia’s Gazprom and its European partners agreed to the project last year. The proposed pipeline will run across the Baltic Sea to Germany. Many Eastern European countries and the United States think that the pipeline could limit supply routes and the energy security of the European Union, which gets a third of its gas from Russia.   Four western Balkans nations Croatia, Albania, Bosnia & Herzegovina signed a Memorandum of Understanding with Azerbaijan’s state oil company Socar on co-operation on building the Trans Adriatic Pipeline designed to bring gas from Shah Deniz 2 field in the Caspian Sea to EU through the so-called Southern Gas Corridor after 2020.  Socar’s goal is to connect the Caspian Sea and the Adriatic Sea.

With the realization of the Trans-Anatolian Pipeline — a smaller version of the originally planned Nabucco Pipeline and now a Southern Gas Corridor project gas from Azerbaijan could reach European markets for the first time around 2019. Turkey may also obtain the position of a transit country for European gas imports but with limited influence, since only 10 BCM per year are foreseen for the European market (between 2-3% of total EU gas consumption in 2014.)

In addition to the TANAP project, the recent easing of tensions between Turkey and Russia has revitalised debates about the construction of Turkish Stream, a project that was initiated after a direct pipeline connection between Russia and Bulgaria through the Black Sea (“South Stream”) was cancelled in 2014 due to regulatory conflicts between Gazprom and the European Commission. Turkish Stream would mainly supply the Turkish market, but could also bring gas destined for the EU market to the Turkish-Greek border. A Turkish corridor would also be mandatory for all hypothetical deliveries from Iraq, Iran, or Central Asia.

European gas demand was 11% lower in 2014 than 2004. There was a slight increase in 2015 but it was still second lowest since 1995. In Germany it was down by 14% and in the UK by 9%. Efficiency in energy generation and use, subsidies for renewables and coal are blamed for the fall in gas consumption. However by 2030 EU may have to replace 45 BCM/year of gas supply and this is probably what all potential suppliers are targeting.

ExxonMobil, BP and ConocoPhilips have reportedly decided to move out of the Alaska LNG project following a report by Wood Mackenzie stating the project could struggle to make ‘acceptable returns even under US$70/bbl price’. On shale gas there was the forecast from EIA that China was poised to be the world’s second largest shale gas producer after the US by 2040, when it would account for more than 40 percent of the country’s total natural gas production. China has reportedly drilled more than 600 shale gas wells in the last 5 years, producing 5 BCM of shale gas as of 2015.



ONGC caps uneven flow of gas from its well in East Godavari

September 10: Oil and Natural Gas Corp (ONGC) has succeeded in controlling the uneven flow of gas from its well located in Tadikona of Allavaram mandal in East Godavari district of Andhra Pradesh. ONGC team mapped the physical behaviour of the well minute-by-minute and charted a plan to comprehensively control the well. Executive Director, Asset Manager, Debasis Sanyal, Rajahmundry, has marshalled different teams associated with the well control and executed the well control strategy as per the crisis management guidelines.

Source: The Economic Times

Cairn India, ONGC get 10 year Barmer block extension beyond 2020

September 8: Private explorer Cairn India and its state-run partner Oil and Natural Gas Corp (ONGC) will get a 10-year extension for the Barmer oil and gas block in Rajasthan beyond 2020, when the current production-sharing contract (PSC) ends. The Barmer block is the biggest onshore oil producing project in India and its current output hovers around 166,943 barrels of oil equivalent per day. Cairn India said that the Rajasthan PSC extension till 2030 could mean conversion of an estimated 250 million barrels of oil equivalent into reserves. While the extra investments required to tap these reserves could not be ascertained, gross capital expenditure of more than $800 million is required for Raageshwari Deep Gas and Bhagyam polymer flood, which are part of the asset.

Source: The Financial Express


HPCL targets 60 MT refining capacity by 2030

September 10: Hindustan Petroleum Corp Ltd (HPCL) plans to operate more than 60 million tonne per annum (MTPA) of refining capacity by 2030. Currently, the company has a total refining capacity of 24.8 MT. HPCL is also investing a total capital expenditure (capex) of ₹ 55,815 crore in the next five years. Of the planned capex, around ₹ 25,700 crore is to be spent on expanding refining capacity. At present, the company is expanding capacity at its Mumbai refinery from 6.5 MTPA to 9.5 MTPA, for a project cost of ₹4,200 crore. It is also expanding its Visakh refinery from 8.3 MTPA to 15 MTPA, for a project cost of ₹ 20,800 crore. HPCL will also hold an equity share in the mega refinery planned, as a joint venture (JV) between three state-run oil companies. Bharat Petroleum Corp Ltd (BPCL) and Indian Oil Corp (IOC) are the other two companies to be part of this JV. The mega refinery, planned at 60 MT in two phases, will also help HPCL increase its own exposure to the refining business. India’s current refining capacity is at 230 MTPA and the country is projected to require 329 MTPA of refining capacity by 2030.

Source: Business Standard

IOC’s stake in proposed refinery tied to entry of strategic partner

September 7: Indian Oil Corp (IOC) might hold 50 percent in a refinery being planned on the west coast if Saudi Arabia and Kuwait do not take up the offer of an equity stake. India has offered Saudi Arabia and Kuwait strategic stakes in the refinery being planned by public sector oil companies. IOC’s stake might come down to about 35 percent if a strategic partner comes on board. Oil Minister Dharmendra Pradhan, had recently met the Saudi authorities in this regard. The other partners in the project would be Bharat Petroleum Corporation Ltd, Hindustan Petroleum Corporation Ltd and Engineers India Ltd (EIL). A five percent stake in the project might be offered to EIL, which will also be the project consultant and manager. The refinery project is stuck in land acquisitions, as it might need at least 5,000 acres. The overall investment for the proposed 60 million tonnes per annum refinery is about ` 1.5 lakh crore. The refinery complex might also have a captive port and a petrochemical unit. India has refinery capacity of 230 million tonnes, out of which 80 MT is owned by IOC.

Source: Business Standard

Transportation and trade

India and Russia discuss direct gas delivery line

September 13: In a major boost to their energy ties, India and Russia launched a Working Group for creating an “energy bridge” for a possible direct gas delivery from Russia and also directed their concerned ministries to finalise “concrete outcomes” in key areas of trade and investment by the next month’s summit between Prime Minister Narendra Modi and Russian President Vladimir Putin.

Source: India Today

India aims to reduce hydrocarbon imports by 10 percent by 2022:  Oil Minister

September 9: India aims to reduce its hydrocarbon imports by 10 percent by 2022 through increasing domestic output, fuel efficiency and the use of alternative energy, Oil Minister Dharmendra Pradhan said. India currently imports 70-75 percent of its energy requirements, Pradhan said. He said there will no cess or duties assessed on new oil and gas exploration projects.

Source: Reuters

IOC to send fuel consignment for Tripura via Bangladesh

September 7: Indian Oil Corp (IOC) will send seven tankers of diesel and kerosene to Tripura via Bangladesh for the first time to avoid fuel crisis in the North Eastern state, as the dilapidated condition of NH-44 in Assam has made the transportation difficult. IOC-AOD, the company’s North East division, will move kerosene and diesel from Betkuchi depot in Guwahati to Dharmanagar depot in Tripura in the first consignment through the neighbouring nation. The Northeast Frontier Railway (NF Railway) has made two trips with oil tankers so far and the company will use this mode only in extreme cases. As per the agreement, IOC will pay 1.02 Bangladeshi Taka per tonne per km along with 200 Bangladeshi Taka for entry and exit charges. The agreement is valid till September this year, but will be reviewed and renewed after examining the success of the process in one month.

Source: Livemint

Policy and performance

India expects higher oil demand growth this year: Oil Minister

September 12: India’s oil demand growth is set to exceed 11 percent this year as the world’s third-largest oil and gas consumer accelerates its economic development, Oil Minister Dharmendra Pradhan said. The growth will be driven by better monsoon rains and an acceleration of economic activity, he said. The minister was speaking in London ahead of a presentation of India’s bid round for discovered small fields which are estimated to hold 625 million barrels of oil and gas. The government plans to launch an exploration licensing round bid in the next financial year as the country seeks to reduce its dependency on imports by 10 percent by 2022, he said.

Source: Reuters

PMUY to be launched in J&K on September 28

September 10: Oil Minister Dharmendra Pradhan and the Chief Minister of Jammu and Kashmir (J&K) Mehbooba Mufti will launch the Pradhan Mantri Ujjwala Yojana (PMUY) in the state on September 28. Separate functions will be organised in Srinagar and Jammu on the same day to distribute free LPG connections under the scheme among the BPL women beneficiaries of the state, Consumer Affairs Minister Chowdhary Zulfkar Ali said. PMUY is a welfare scheme launched by the Prime Minister Narendra Modi this year with an aim to provide 5 crore LPG connections in the name of women for BPL households across the country. Ali has directed the representatives of oil companies and asked them to expedite the process of identifying real beneficiaries in tandem with district administration and to complete all formalities in time so that they can receive the LPG connection documents on the launching ceremony. He also asked the companies to meet the set target of one lakh connections to the beneficiaries of the state in first phase. Ali also reviewed the process of shifting oil depot from Jammu city and directed the concerned officials to expedite the process and asked them to appoint a nodal officer to coordinate with oil companies.

Source: Business Standard

Oil Minister mulls replicating Singapore’s petrochemical complex in Odisha, Haryana

September 10: Oil Minister Dharmendra Pradhan mulled over the possibility of replicating Singapore’s petrochemical complex at two places in India – in Odisha’s Paradip port and Haryana’s Panipat district. Jurong, a reclaimed island in Singapore, hosts ports, three refineries and several petrochemical plants manufacturing the entire value chain of products. Pradhan visited the centralised utilities operations — offering a comprehensive range of energy, water and on-site logistics solutions – of Sembcorp Industries at Jurong island. Oil Minister also visited the Keppel Shipyard, to review the technologies that can be useful for India. Many rigs working in Indian oil sector are developed, he said. The innovative technological work and rig manufacturing at the Keppels can be useful in India. Pradhan is on a visit to Singapore to lead India’s road shows to attract foreign investors for its small oil and gas fields. Road shows were earlier held in July in the US and Canada, for the auction of India’s 67 hydrocarbon discovered small fields (DSF). Bidding opened on July 15 and will be open till October 31. The auction will be under the new Hydrocarbon Exploration Licensing Policy (HELP) round approved in March, based on a revenue-sharing model, as opposed to cost-and-output-based norms earlier. The new model will replace the controversial production sharing contracts — by which oil and gas blocks are awarded to firms which show they will do maximum work on a block — that has governed the bidding under the earlier nine New Exploration Licensing Policy (NELP) rounds. Under the Discovered Small Field Policy, the government is offering for bids 67 discovered small fields in 46 contract areas spread over nine sedimentary basins on land and in shallow and deep water areas. The offered fields hold 625 million barrels of oil and gas reserves. Of the 46 small fields, 26 are on land, 18 offshore in shallow water and two in deep water.

Source: Odisha Sun Times

RIL rated among top 10 global energy firms

September 8: Reliance Industries Ltd (RIL) has been ranked 8th among top 10 global oil companies, according to a new survey by ‘Platts Top 250 Global Energy Company Rankings 2016’. RIL was ranked 8th this year, improving from 14 position a year ago and being among the top 10 of the 250 global energy businesses in a new survey. Refiners Indian Oil Corp (IOC) and Hindustan Petroleum Corp Ltd (HPCL) moved to 14th from 66th and to 48th from 133rd, respectively, lifted by access to cheaper crude. Heavyweight, Oil & Natural Gas Corp (ONGC), however, slipped to 20 position this year from 17 a year ago. Platts attributed the refining sector strength to improved margins. Consumption rose nearly 5%, regaining its share as the dominant fuel in the energy mix at 56%, Platts said.

Source: Livemint

Domestic gas price to drop by a fifth to $2.5 per unit from October: Sarraf

September 8: The domestic natural gas price will likely drop by a fifth to $2.5 per unit or below from October when the government revises gas price, D K Sarraf, the chairman of Oil and Natural Gas Corp (ONGC) has said. Local gas prices are revised every six months based on a formula the government devised in October 2014 that aligns local prices with international ones. Since then, local gas prices have only fallen in every revision as global crude oil and gas prices crashed. The first price, according to the formula, announced in November 2014 was $5.05 per million British thermal unit. The current price is $3.06. ONGC loses ₹ 4200 crore in revenue and ₹ 2400 crore in profit annually for each dollar’s drop in local gas price, Sarraf said. Earlier this year, the government allowed pricing freedom to producers of gas from deep sea and high pressure-high temperature areas, with a ceiling linked to a mix of alternative fuels such as coal, LNG, naphtha and fuel oil.

Source: The Economic Times

National: Power


NTPC posts record output of 866.4 million units in a day

September 12: NTPC Ltd has recorded its highest-ever power generation capacity 866.47 million units in a day from sources like coal, solar, gas and hydro. NTPC has produced 866.47 million units of electricity from various sources like coal, gas, solar and hydro. NTPC, on standalone basis, produced 782.32 million units, including 741.32 million units generated from coal based power plants. Earlier, NTPC had touched its peak power generation on June 3, 2016, at 846.1 million units.

Source: Business Standard

Tata Power, ICICI Venture launch platform to invest in power projects

September 10: Tata Power International, the wholly owned subsidiary of Tata Power, and ICICI Venture announced the launch of a platform to facilitate investment in power projects. The platform will raise an initial capital of $850 million from sponsors and partner investors either directly or through their affiliates. The platform will target acquisition of controlling stakes in power generating companies.

Source: Business Standard

Transmission, distribution and trade

Mohali to get five new power grids, updated transformers

September 13: To address the problem of low voltage and power fluctuations in Mohali, five new grids would be set up by end of next year. Five grids of 66KV capacity would be installed at several locations in town to enable an even and sufficient electricity supply. Besides installation of new grids, more than 250 transformers would be replaced with new equipment. The power department said that the central government has approved a grant for upgrading, replacing the old transformers and installation of new ones under the Accelerated Power Development and Reforms Programme. An amount of ` 40 crore has been approved for Mohali district for upgrading the electrical system and ` 300 crore was approved for improving the basic infrastructure.

Source: The Times of India

Urja app shows power cuts far graver than suggested by Centre

September 12: Power deficit and theft have long been India’s woes but state-wise data recently put up by the power ministry on Urja app paint an even grimmer picture. On an average, the country goes without power for about 17 hours in a month, with wide disparity among regions: for example, Haryana faces power cuts to the tune of ten times the national average and Uttar Pradesh, 8 times. These figures controvert the power deficit data which the Central Electricity Authority (CEA) puts out. The CEA, for instance, estimates the power deficit in Haryana to be nil and that in UP just 0.3%. Similarly, pan-India power theft is now 22% whereas it is over 35% in Bihar, Jharkhand and Uttar Pradesh, Urja app discloses, indicating that despite focused efforts to cut pilferage, India’s power-sector entities continue to suffer heavily from the scourge of theft. The UDAY scheme for reviving the debt-burdened state-run power distribution entities envisages the aggregate technical and commercial losses, the jargon for theft, at 15% by FY19. Although the power ministry has said it takes no responsibility for the accuracy of the Urja app data provided by state discoms, the divergence of the data with the CEA statistics is a cause for concern. It may be recalled that based on the inputs from the state, the CEA had reported that the country would be power surplus in the current fiscal. Not just Urja app, anecdotal evidences such as reports of widespread load shedding in several cities, including Noida and Gurgaon in the national capital region, also question the CEA claim. The Urja app provides the ranking of states on their performance in the sector on six parameters, including power theft. The other parameters include average power cut per month and pending consumer complaints. Although the data is taken from roughly 1,200 IT-enabled towns covered under the integrated power development scheme, it is fairly representative. The usual suspects namely Bihar, Uttar Pradesh, Haryana, Rajasthan and Jharkhand feature at the bottom of the pile on nearly all parameters. The performance of these states are symptomatic of the large debt accumulated by their discoms over years. However, despite high debt levels and accumulated losses, states like Tamil Nadu, Madhya Pradesh and Punjab fare rather well on most parameters.

Source: The Financial Express


On-Paper electrification does not give power to villages in Hathras

September 7: Nagla Fatela in Hathras district is not the only village in Uttar Pradesh that has been declared as electrified only on paper. The power ministry has found that 20 of the 25 villages in the district have been declared as energised by the power distribution utility but the households do not have connections.

Source: The Economic Times

Policy and performance

India must reduce dependence on coal-based power: Assocham

September 13: The government will have to reduce dependence on coal-based power and work on climate friendly transport and urban planning to comply with its international obligations, industry body Assocham said. According to the paper on ‘Implications for Paris Climate Agreement’, the commitments to mitigate the CO2 emissions may even go beyond 1.5 degree Celsius. It said India is now taken more as a part of the solution than a problem, which implies that there are more obligations on the country which, however, needs to meet its fast growing energy requirements in sync with its status of the fastest expanding economy of the world.

Source: The Economic Times

Andhra Pradesh becomes second state to achieve 100 percent electrification

September 13: Andhra Pradesh has become the second state in the country after Gujarat to achieve 100 percent electrification of households, a latest report has said. Chief Minister N. Chandrababu Naidu said access to electricity was a key socio-economic development indicator, but this was an area where there was still a significant gap in India.

Source: The Times of India

Promise of free power to farmers raises concerns in Punjab

September 13: Experts and social bodies have objected to Aam Aadmi Party (AAP) announcing free electricity to farm sector for 12 hours and have asked the party to review the decision in the larger interests of Punjab. NGO Safal Bharat Guru Parampara has asked AAP not to go for the political populist measure, but to ensure judicious use of groundwater to save it for future generations. The NGO had approached the National Green Tribunal (NGT) in February 2014 to stop the government from releasing tubewell electricity connections to save the groundwater.

Source: The Economic Times

India is on way to boost self-sufficiency in coal: Fitch

September 9: India is on its way to boost self- sufficiency in coal with a 5.1 percent year-on-year output growth in the first half of 2016, Fitch Ratings has said. Demand continues to be weak, with China coal consumption having fallen 4.6 percent y-o-y in the first half of 2016 and India Imports down, it said.

Source: Business Standard

Govt needs four times defence budget to meet 2020 coal target

September 8: The government has estimated that by the year 2020, India will need 1.5 billion tonnes of coal. But an IndiaSpend analysis of a recent report by Brookings India indicates that even by a generous estimate, the country’s need for coal will not exceed 1.2 billion tonnes over the next four years. There is another reason to scale down this target as, to achieve it, the government would have to invest around ₹ 10 lakh crore ($149 billion), according to a June 2016 PricewaterhouseCoopers (PwC) report.

Source: Business Standard

CIL may soon sign pact with South African companies for mines

September 8: Coal India Ltd (CIL) may soon enter into a pact with a South African government-owned company for acquisition of mines in that country. CIL said that the recent strike has some impact on its subsidiary Mahanadi Coalfields Ltd. Coal and Power Minister Piyush Goyal had said that CIL is looking at entering into a pact with a South African government miner to jointly acquire coal mines in that country.

Source: The Economic Times

Nearly 35 percent of rural households still bereft of electricity

September 8: Nearly 35 percent of rural households across the country are still bereft of electricity mainly due to lack of effective monitoring and co-ordination between the Centre and state governments, a recent report has said. While 87 and 71 percent household in Bihar and Uttar Pradesh, respectively, have no reported access, there is universal electricity access in states such as Punjab, Andhra Pradesh and Gujarat, it said. By May 2016, only 25 percent of the 12th Plan’s amount allocated to rural electrification programme has been spent and 81 percent for the 10th-11th Plan has been spent. The Narendra Modi government has launched the Deen Dayal Upadhyaya Gram Jyoti Yojana (DDUGJY) as the flagship rural electrifi cation programme. As per the report, rural electrification, along with the urban T&D development plan, is expected to drive massive spending of ₹ 1.6 trillion ($24 billion) over FY16-22; benefiting companies across the electricity chain. According to the study, five states, including Uttar Pradesh, Bihar, Madhya Pradesh, Odisha and Assam, account for 80 percent of un-electrified households. These states account for 38 percent of total population, are economically weaker (GDP/capita at 55 percent of the national average) and also have inferior power generation infrastructure (18 percent of national installed power capacity).

Source: Firstpost


Power ministry mulling to retire old coal-based plants

September 7: Power ministry is planning to shut coal-fired power plants with capacity of about 8,000 MW that are more than 25 years old, a move that will help curb carbon emissions. These plants are old and running them is not financially viable. Besides, shutting them or replacing them with a better technology will help reduce pollution. India has a total installed power capacity of around 304 GW, of which about 186 GW is coal-fired. In the coal segment, central government PSUs account for 51 GW, states 64 GW and 70 GW is with the private sector. Centre has framed a guideline to replace all old power plants in a phased manner as their production capacity has decreased. Frequent breakdowns, inefficiency and pollution are the main reasons behind the decision to replace old plants with modern and environment-friendly ones in a phased manner.

Source: Business Standard


Reliance Energy says no to govt plan for uniform tariff

September 7: Reliance Energy has refused to accept the proposed uniform tariff plan for residential consumers claiming it would cause them loss, Energy Minister Chandrashekhar Bawankule said. Bawankule said all other electricity providers — BEST, Tata Power and MahaDiscom — have agreed to a uniform tariff plan.

Source: The Times of India

International: Oil and gas


China August crude oil output drops nearly 10 percent to more than six-year low

September 13: China’s crude oil output fell almost 10 percent in August from a year ago to the lowest in more than six years, data from the statistics bureau showed, as low prices continue to plague major producers. China pumped 16.45 million tonnes (3.87 million barrels per day) of crude in August, the least since December 2009 on a daily basis and the second month of sharp decline. Sinopec, one of China’s largest energy conglomerates, forecast its crude output will drop 16 percent to 147 million barrels in the second half of this year from 175 million barrels in the same period last year. At Zhongyuan oilfield in central China, one of Sinopec’s largest crude deposits, the company said it has reduced its workforce to 4000 workers from 10,000. China’s crude output in the first eight months of 2016 was down 5.7 percent to 134.8 million tonnes (4.03 million barrels per day).

Source: Reuters

Anadarko pays Freeport $2 billion for deepwater Gulf assets

September 13: Anadarko Petroleum Corp agreed to buy Gulf of Mexico oil assets from Freeport-McMoRan Inc. for $2 billion and said it will use revenue generated by the offshore wells to develop its US oilfields on land. The deal doubles Anadarko’s existing stake in oil wells in the deepwater Lucius development to approximately 49 percent, adding the equivalent of about 80,000 net barrels of crude a day, the producer said. The acquisition will generate $3 billion of additional free cash flow over the next five years that will help boost production in West Texas’ Delaware Basin and the DJ Basin centered in Colorado, Anadarko said. Anadarko, which had been cutting costs and selling assets to weather the price slump, now plans to boost capital spending to between $2.8 billion and $3 billion this year.

Source: Bloomberg

Murray & Roberts of South Africa mulls US oil and gas deal

September 13: Murray & Roberts Holdings Ltd, the South African engineering and construction-projects company in talks to sell its building and infrastructure units, said it’s evaluating a US oil and gas (O&G) acquisition and will probably seek a larger international deal in years to come. Murray & Roberts, which built landmarks such as Johannesburg’s Carlton Centre, Africa’s tallest building, is working to transform itself into an international operator specialising in underground mining, oil and gas, and power and water projects. The mining-industry division has units operating in Australia, South Africa, Canada and the US, and the next step will be to extend the geographic reach of the oil and gas business, which operates primarily in Australasia, Chief Executive Officer Henry Laas said. The company is doing due diligence on a potential target in the US that would add the ability to construct oil and gas projects in the world’s biggest economy, Laas said.

Source: Bloomberg

Ophir Energy commences oil, gas production in Indonesia, Thailand

September 13: Ophir Energy Plc provided an update on its Southeast Asian operations, with the firm commencing gas production at the Kerendan field in Indonesia, while output from Thailand’s Bualuang oil fields resumed following a debottlenecking project. Gas production from the Kerendan field will rise to 20 million standard cubic feet per day in accordance with the daily contract amount later this year when the full transmission line to Tanjung is expected to be completed. The total contracted volume for the first phase of production at Kerendan is 122 billion cubic feet and Ophir has rights to an additional uncontracted 2C contingent resource at Kerendan of 320 billion cubic feet.

Source: Rigzone

Pemex says discovers six new crude deposits in Gulf of Mexico

September 13: Mexico’s state oil company Pemex said it had discovered six new deposits in the Gulf of Mexico, two of super light crude in deep waters, and four of light crude in shallow waters. Pemex, which has been struggling with declining output for over a decade, also plans to drill 30 exploratory wells in 2017, it said. Pemex said the two wells could eventually deliver 15,000 barrels per day, and could have proven, probable and possible (3P) reserves of between 140 million to 160 million barrels of oil equivalent. Pemex estimates its average production will be 1.9 million barrels per day in 2017, its lowest level since 1980, as a result of the spending cuts.

Source: Reuters

Total said to consider sale of stake in Norway oil and gas field

September 12: Total SA is considering selling down its 51 percent stake in an offshore oil and gas (O&G) field in Norway’s North Sea, as the French oil giant disposes of assets to offset a slump in crude prices. The 51 percent holding is worth about $1 billion, and Total is also offering some smaller producing assets to potential buyers as part of the deal. Total, whose profit fell 30 percent in the second quarter, plans to cut costs by more than $3 billion by 2017 compared with 2014. The Martin Linge field, named after the namesake Norwegian actor and sailor, is scheduled for first production in 2018.

Source: Bloomberg

Russian oil output seen at up to 547 MT in 2016

September 12: Russia’s oil output, the world’s largest, is seen rising 2.2 percent this year, above expectations, to reach almost a 30-year high of 546-547 million tonnes (MT) as companies ramp up drilling, the energy ministry said. Russia has constantly exceeded forecasts for oil production which has been on a steady rise since 2009 when a slump in oil prices dragged down output. Since then, Russian companies have increased drilling by around 10 percent per year. Energy Minister Alexander Novak said that oil production was expected to reach 542-544 million tonnes this year (10.85-10.90 million barrels per day), up from about 534 million tonnes in 2015. Russia’s oil production stood at 10.71 million barrels per day in August, down 1.3 percent from July volumes due to seasonal maintenance. Russia and Saudi Arabia agreed to work towards a possible freeze in oil output volumes to support oil prices. Lukoil, Russia’s No.2 oil producer, is to launch the Pyakyakhinskoye oilfield in the Northern Yamal region later this month and will produce 100,000 tonnes of oil this year. The company is also due to start production at the offshore Filanovskogo deposit in the Caspian Sea in September with a view to extracting up to one million tonnes of oil by the year-end.

Source: Reuters

US shale output drop seen for 11th straight month in October: EIA

September 12: US shale production is expected to fall for an 11th consecutive month in October, according to a US government forecast released, on the back of a two-year global rout in oil markets. October oil production is set to drop by 61,000 barrels per day (bpd) to 4.41 million bpd, according to the US Energy Information Administration (EIA)’s drilling productivity report, the lowest output since March 2014. The biggest decline was in the Eagle Ford in Texas, which saw a fall of 46,000 bpd to nearly 982,000 bpd. In North Dakota, Bakken oil production is set to drop by some 28,000 bpd to 914,000 bpd. Total natural gas production, meanwhile, is forecast to decline for an eighth consecutive month in October to 45.3 billion cubic feet per day, the lowest level since March 2015, the EIA said.

Source: Reuters

Iranian oil output stagnates for third month amid OPEC bargaining

September 9: Iran’s steep oil output growth has stalled in the past three months, new data showed, suggesting Tehran might be struggling to fulfill its plans to raise production to new highs while demanding to be excluded from any deals on supply curbs. Iran’s oil output soared to 3.64 million barrels per day (bpd) in June from an average of 2.84 million bpd in 2015 following the easing of Western sanctions on Tehran in January, adding to a global crude glut which has slashed oil prices. But since June, output has stagnated and reached just 3.63 million bpd in August, according to fresh Organization of the Petroleum Exporting Countries (OPEC) data based on secondary sources. Iran became the main stumbling block to an initiative by OPEC and non-OPEC Russia earlier this year to freeze output globally. Tehran said it needed to first regain market share lost while it was under sanctions. OPEC’s largest producer Saudi Arabia insisted all nations should join and the freeze deal collapsed in April.

Source: Reuters

Kazakhstan to launch Kashagan oil production in November

September 9: Commercial oil production at the giant Kashagan field in Kazakhstan will begin in November, the state oil firm KazMunayGaz said. Previously the start of commercial level production had been expected in October. KazMunayGaz signed a contract with trader Vitol to arrange a prepayment for its share in the Kashagan oil worth $1 billion. Kashagan’s output will be a modest 50,000 to 1 million tonnes this year, 3 million to 5 million tonnes next year and then 7 million tonnes in 2018, Kazakh Energy Minister Kanat Bozumbayev said. The first production phase is designed to produce as much as 20 million tonnes at its peak, and possibly rising to as much as 50 million tonnes if new investment is approved. Kazakhstan holds 16.88 percent in Kashagan via KMG Kashagan, which is a subsidiary of KazMunayGaz. The Kashagan consortium also includes Eni, Exxon Mobil, Royal Dutch Shell, Total, China’s CNPC and Japan’s Inpex.

Source: Reuters

CNPC said to consider oilfield unit listing via Daqing Huake

September 8: China National Petroleum Corp., the country’s biggest oil and gas producer, may use a small-cap company called Daqing Huake Co. as a vehicle to list its oilfield services unit and avoid an initial public offering. CNPC, which owns about 55 percent of Daqing Huake through two subsidiaries, is also considering using the Shenzhen-listed company for its equipment-making unit. CNPC would be the last among China’s big three state-run oil companies to list its oilfield services unit. China Petrochemical Corp merged its oilfield services assets into smaller listed unit Sinopec Yizheng Chemical Fibre Co. in 2014.

Source: Bloomberg

Russia’s oil production hits 25 year high

September 7: Russia’s daily oil production approached 11 million barrels in recent months, hitting a record high since 1991, authorities said. The rising oil production preceded a historic agreement to stabilise oil prices signed by Russia and Saudi Arabia. Under the deal, the two countries will form a working group to monitor the market and draft recommendations to stabilise oil prices and ensure steady investment in the industry. Saudi Arabia and Russia are both major oil exporters and experienced substantial drops in revenues since the oil price slump began in June 2014, when oil was traded at $110 a barrel. Oil hit a 13-year low of less than $27 a barrel at the beginning of 2016.

Source: Business Standard

Iraq sees steady growth in oil output, exports in 2017

September 7: Iraq’s crude oil production and exports are expected to grow at a steady pace in 2017 from current levels. The Organization of the Petroleum Exporting Countries (OPEC) member supports a global freeze initiative if it will help stabilise the market. Iraq’s production was at 4.638 million barrels per day in August, the highest since January. Members of the OPEC will meet on the sidelines of the International Energy Forum (IEF) in Algeria on September 26-28 and are expected to discuss a possible output freeze. Russia, the world’s largest oil producer, also plans to attend the IEF. Alamri, who is also Iraq’s OPEC governor, said‎ his country supports a global output freeze if it would prop up the market. About 70,000 to 100,000 bpd of Kirkuk oil will be exported through the Turkish Mediterranean port of Ceyhan as a 50/50 split between the Kurdish Regional Government and the oil ministry in Baghdad, he said.

Source: Reuters


Shell JV Deer Park gasoline unit overhaul begins

September 12: Royal Dutch Shell Plc’s joint venture (JV) 285,500 barrel per day (bpd) Deer Park, Texas, refinery began a planned overhaul of the gasoline-producing fluidic catalytic cracking unit (FCCU). Shell said planned maintenance was being performed at the Deer Park refinery but declined to identify the units involved. The overhaul of the 70,000 bpd FCCU is expected to last through at least the end of October. The Deer Park refinery is a 50-50 JV between Shell and Petroleos Mexicanos.

Source: Reuters

Japan’s Idemitsu shuts refining units after blackout

September 8: Japanese oil refiner Idemitsu Kosan Co said it conducted an emergency shutdown of its oil refining units at its 175,000 barrels per day (bpd) Aichi refinery in central Japan due to a power blackout. The shutdown led to big flames and black smoke from flare stacks, but there was no fire or oil leaks, the company said.

Source: Reuters

Transportation and trade

Novum Energy completes Mexico’s first private diesel import

September 13: Houston-based trading firm Novum Energy has completed Mexico’s first private import of diesel fuel, the company said, after the government authorised purchases earlier this year. Mexico, which buys some 750,000 barrels per day (bpd) of US gasoline and other fuels to satisfy its domestic market’s demand, is encouraging private imports of refined products as part of its deep energy reform.

Source: Reuters

Qatar considers joining Exxon’s Mozambique gas move

September 12: Qatar Petroleum is interested in the Mozambique gas business of Italian energy group Eni and could opt to join Exxon Mobil in buying a multibillion-dollar stake. State-controlled Eni is looking to reduce a 50 percent stake in its giant Mozambique gas acreage as part of plans to sell 5 billion euros of assets over the next two years. Exxon had reached a deal that could give it an operating stake in the onshore liquefied natural gas (LNG) export plant, while leaving Eni in control of the Area 4 gas fields feeding it. Qatar Petroleum is in talks with Exxon and Eni on some kind of involvement in Mozambique which could involve a joint investment with the US major.

Source: Reuters

Oil prices fall on profit taking, eyes on China data

September 12: Oil prices fell in early trade on concerns over increased drilling in the United States and as investors took profits after oil prices rose close to 1 percent in the previous session. Markets will also be keeping a close eye on Chinese activity data due for release later in the day for clues on the demand strength for crude. Traders said the price falls were an indication that increasing oil drilling activity in the United States was still a concern even as crude prices closed higher because of a weaker dollar. China is due to release August monthly industrial output and retail sales data, as well fixed-asset investment figures. China’s state oil refiners are readying to export more diesel and gasoline in coming months as a bleak outlook for what is typically the nation’s period of greatest consumption sends shivers through an already saturated global market.

Source: Reuters

Russia says to sign TurkStream pipeline deal with Turkey in October

September 10: Russia plans to sign an agreement with Turkey next month on the implementation of the Turkish Stream gas export pipeline project, Russian Energy Minister Alexander Novak said. Turkish President Tayyip Erdogan said that building the gas pipeline quickly was a priority. Russian state gas producer Gazprom, the project operator, said it had received first regulatory approvals from Turkey, allowing the project to move into implementation phase.

Source: Reuters

New Caspian oil fields to add to glutted global market

September 8: Two new Caspian Sea oil fields are due by the end of this year to add significant volumes of crude to a world market already in glut, possibly depressing prices just as producers including Russia talk about reviving them. The Kashagan field in Kazakhstan’s sector and Lukoil’s Filanovsky field in the Russian sector – both of which are scheduled to come on stream soon – will together produce at least 200,000 barrels of crude per day (bpd) by the end of 2016. By the end of next year, Kashagan and Filanovsky will between them produce about 500,000 bpd, equivalent to about 0.5 percent of global production. Faced with world oil prices languishing at around $50 per barrel, Saudi Arabia and Russia – the world’s two biggest crude exporters – agreed to cooperate in world oil markets. Though they will not act immediately, they said they could limit output in the future.

Source: Reuters

Colombia’s largest oil union to vote on possible strike

September 7:  Members of Colombia’s largest oil workers union will vote on whether to strike in protest of privatisations at state-run oil company Ecopetrol, the union president Cesar Loza said. Most of the 21,000 members of the Workers Union for the Petroleum Industry (USO) work at Ecopetrol, which has sold several major non-oil related assets in an effort to refocus its operations after the slump in crude prices. Privatisations, the sale of subsidiaries and oil fields and delays in modernisation work at the Barrancabermeja refinery were the reasons for a potential strike, Loza said. The union would work with Ecopetrol to prevent the strike affecting oil supply in the country, Loza said.

Source: The Economic Times

Policy and performance

Dutch see demand for Groningen gas down sharply from 2020

September 13: Demand for gas from Groningen will “fall sharply from 2020” as production at the northern Dutch field is reduced, Economy Minister Henk Kamp said. The Netherlands has been forced to scale back production by roughly half at Groningen, which once met 10 percent of European Union gas requirements, to 24 billion cubic meters per year due to damage from earthquakes.

Source: Reuters

Pakistan to offer 32 blocks for oil, gas exploration soon

September 13: Pakistan’s Ministry of Petroleum and Natural Resources plans to offer 32 exploration blocks to oil and gas companies operating in the country. The ministry is understood to have awarded 70 Supplemental Agreements (SAs) for conversion to Petroleum Concessions Agreements (PCAs), a move that seeks to speed up local exploration activities. The Pakistani Government attached high priority to the petroleum gas sector as oil and gas provide over 80 percent of the South Asian country’s energy mix. According to the ministry, the government has provided incentives to oil and gas companies to increase exploration activities in the country, with the latest introduced in 2012. Minister of Petroleum and Natural Resources Shahid Khaqan Abbasi said that the country’s oil and gas sector has received investment of around $15.3 billion (PKR 1.6 trillion) although the time frame for this was not given. He also revealed that Pakistan has made 82 oil and gas discoveries during the last 3 fiscal years.

Source: Rigzone

Russia to stop oil product export via foreign Baltic ports by 2018

September 12: Russia plans to halt exports of oil products from foreign ports on the Baltic Sea by 2018, the head of oil pipeline monopoly Nikolai Tokarev told President Vladimir Putin. Tokarev said exports of crude products through non-Russian ports will fall to 5 million tonnes this year from 9 million tonnes in 2015 and by 2018 will stop completely. The giant Primorsk terminal and neighbouring Ust-Luga allowed Russia more than a decade ago to suspend exports of crude via non-Russian Baltic ports. Since then, Russia has been gradually cutting exports of oil products via foreign ports, such as Latvia’s Ventspils. If product flows are suspended it would deal a blow to the transit revenues of Latvia, Estonia and Lithuania and hit the world’s largest oil trader Vitol, which controls Ventspils. But the move would boost several Russian ports. Ust-Luga, which has a capacity of more than 30 million tonnes a year, is 74 percent controlled by billionaire Andrei Bokarev.

Source: Reuters

Algerian Energy Minister sees consensus on need to steady oil price

September 11: Algeria’s Energy Minister Noureddine Bouterfa has said there is a consensus among Organization of the Petroleum Exporting Countries (OPEC) and non-OPEC members about the need to stabilise the oil market to support prices. Bouterfa said Algeria would submit a proposal to steady prices at the meeting. Algeria is hosting a meeting of the International Energy Forum alongside the OPEC meeting, and Bouterfa said he had discussed both sessions with Falih and Barkindo in Paris. Algeria is among the oil producers to have taken a heavy hit from the halving of oil prices over the past two years.

Source: Reuters

Brazil oil law change key to attracting investment: Statoil

September 8: Norway’s Statoil sees changes to Brazil’s oil industry laws, including the end of mandatory participation by Petrobras in all subsalt blocs, as key for attracting foreign investment, Chief Executive Officer Eldar Saetre said. Brazil’s Congress is evaluating proposed changes to the country’s oil legislation, particularly in relation to the vast offshore oil blocs in a region known as the subsalt. Under current laws, state-controlled oil company Petroleo Brasileiro SA (Petrobras), is obliged to hold a minimum share of 30 percent of any subsalt bloc. Petrobras has been tangled for two years in a vast corruption scandal and its debt load is the largest in the global oil industry, which many see as an obstacle to future licensing rounds.

Source: Reuters

US advances oil reserve revamp plan, potential crude sale

September 7: The Obama administration has sent Congress a plan to modernise the country’s emergency oil reserve, a step that could set in motion a sale of about 8 million barrels from the stash later this year to help pay for the revamp, the Energy Department said. Under the $1.5-$2 billion revamp plan, three dedicated marine terminals would be added to the Strategic Petroleum Reserve (SPR), a string of 60 heavily-guarded underground caverns on the Texas and Louisiana coasts. Congress created the SPR in 1975, after the Arab oil embargo spiked oil prices and spurred shortage panics. It now holds 695 million barrels of crude, the amount the country burns in about five weeks. It is the world’s largest government-owned emergency oil reserve. Congress would need to approve a series of oil sales worth $2 billion from fiscal 2017 to 2020 to pay for the modernisation. Those would be in addition to the 124 million barrels in SPR sales from 2018 to 2025 Congress recently authorised to pay for highway projects and balance the budget. The Obama administration is eager to start fixing the reserve after a roof collapsed at a tank in 2015 and a water pipe burst this year. In April, President Barack Obama requested from Congress $375 million in sales, more than 8 million barrels at current prices, in fiscal 2017 to pay for the modernisation. Congress could approve that initial sale in a spending or energy bill later this year.

Source: Reuters

International: Power


Eskom has synchronised 800 MW Medupi Unit 5

September 13: The South African power utility Eskom has synchronised Unit 5 at its Medupi super critical coal-fired power plant, while commercial operations are scheduled in March 2018. It is the second unit of 800 MW to come on stream after Unit 6 that was commissioned in 2015. When fully operational the Medupi power plant will have a generating capacity of 4,800 MW.

Source: Enerdata

China achieved 150 MT coal production capacity reduction end-August

September 12: China has made quick progress in August 2016 achieving its target to reduce over-capacities in its domestic coal sector. Indeed, the country has reduced its coal production capacity by 150 million tonnes (MT) between January and the end of August 2016, which represents around 60% of its 2016 capacity reduction target of 250 MT. The updated numbers show quick progress achieving the target since the National Development and Reform Commission (NDRC) reported only 95 MT of capacity reduction at end of July 2016 (38%), and 45 MT at end of June (29%).

Source: Enerdata

Ivory Coast targets doubling its power generating capacity by 2020

September 12: The Council of Ministers of Ivory Coast has adopted the target to double the current electricity production capacity of 1,850 MW to around 4,000 MW by 2020 to face the growing domestic demand for electricity.

Source: Enerdata

Iran starts construction of Bushehr-2 power-generating unit 

September 10: The execution operations on the construction of the second unit at the site of the Bushehr nuclear power plant, known as the Bushehr-2 project, has begun with Iran’s first Vice Preisdent Es’hagh Jahangiri in attendance. The units utilise unique technology and a new concept of safety, with higher efficiency and lower fuel consumption. The predicted time for the completion of the second unit is nine years, and the construction of the third unit will begin 18 months afterwards. Once all the three power-generating units at the Bushehr site come on stream, about 5 to 6 percent of the country’s power generating capacity will be supplied by nuclear energy.

Source: Mehr News Agency

Transmission, distribution and trade

Australian coal soars to premium of more than $10 over Europe

September 11: A 40-percent rally since June in prices for Australian thermal coal due to a jump in Chinese imports has pushed its premium over Europe to more than $10, offering miners with easy access to the Atlantic and Pacific basins opportunities for arbitrage. Australian cargoes from its Newcastle terminal, a benchmark for Asia/Pacific, currently cost $70 per tonne, levels last seen over a year ago. At the same time, European import prices into Amsterdam, Rotterdam or Antwerp (ARA) are at just $58 a tonne due to strong competition from renewables and cheap natural gas. Traders said that the huge price spread between Europe and the Pacific meant that exporters with access to both basins could benefit from arbitrage opportunities.

Source: Reuters

Turkmenistan increasing electricity supply to Afghanistan

September 10: Turkmenistan is increasing the electricity supply to neighbouring Afghanistan, Turkmenistan’s President Gurbanguly Berdimuhamedov said. The power transmission line of 220 kilovolts between Turkmenistan’s Iolatan and Tagtabazar has made it possible to double the volume of electricity supply to Afghanistan via the Imamnazar-Andkhoy route. Turkmenistan supplies electricity on preferential terms. Under the intergovernmental agreements, the country supplies electricity via the Imamnazar-Andkhoy power transmission line with the capacity of 300 million kilowatt hours and Serhetabat-Herat-Turgundi power transmission line with the capacity of 200 million kilowatt hours. For the present, opportunities have been created to increase the volume of electricity supply to Afghanistan via the Serhetabat-Herat-Turgundi route from 200 million kilowatt hours to 400 million kilowatt hours.

Source: Trend News Agency

Glencore, Origin put Chile hydropower business up for sale

September 8: Glencore Plc and Australia’s Origin Energy have put their hydropower business Energia Austral in Chile on the block, with Standard Chartered advising on the sale. Energia Austral includes three hydropower projects with a capacity of 1,000 MW, the biggest being the Cuervo asset at 550 MW, which will be the third-largest hydropower source in Chile. Energia Austral is 66 percent-owned by Glencore and 34 percent-owned by Origin Energy, which is also seeking to pay down debt. While Glencore is on track to raise up to $5 billion through asset sales this year, Origin is aiming for A$800 million ($617 million) by June 2017.

Source: Reuters

Policy and performance

Federal Govt of Nigeria gives update on current power generation

September 13: The Nigeria Electricity System Operator (SO) said that the power producers at 06.00 hours generated 3,277 MW. Its power performance production shows that the peak generation for the day under consideration was 3,886.50 MW, while lowest power generation was 3,009 MW. Total energy it sent out to the 11 distribution companies was 3,402 MW. Similarly, the Nigerian Electricity Supply Industry (NESI) had said that the SO at the beginning of the week supplied 3,422 MW to the 11 DisCos.

Source: Daily Post

China seen targeting ‘comfortable’ coal price by managing miners

September 9: China is targeting a price range for thermal coal after output cuts led to a sharp increase in imports and prices, according to analysts from Citigroup Inc and UOB-Kay Hian Ltd. An agreement between regulators and miners to coordinate production shows that China’s “comfortable range” for Bohai-Rim coal is 450 to 500 yuan a ton ($67 to $75), Citigroup analysts including Jack Shang said in a report. The plan will see miners cut or boost output to keep prices within the desired range, according to UOB-Kay Hian. The Bohai-Rim index, which tracks thermal coal prices across six northern ports in China, was at 515 yuan, while spot Newcastle coal advanced above $70 for the first time since March 2015.

Source: Bloomberg

Global coal power plans fall in 2016, led by China, India

September 7 : The amount of coal-fired power generation under development worldwide has shrunk by 14 percent this year, driven down by China as it struggles with oversupply and tries to promote cleaner energy, a study showed. India also introduced policies in the first half of 2016 curbing plans for coal-fired plants, partly due to under-utilisation of existing plants, according to a Global Coal Plant Tracker run by non-government and anti-coal group CoalSwarm. Overall, the amount of coal-fired generating capacity in pre-construction planning fell 14 percent to an estimated 932 GW in July from 1,090 GW at the start of the year, it said. The overall decline, of 158 GW, was almost equal to the coal generating capacity of the European Union, at 162 GW, it said. China had the biggest drop in its pre-construction pipeline by far, of 114 GW to a total 406 GW proposed, followed by India with a decline of 40 GW, it estimated. The Philippines and Indonesia had also curbed coal, while countries such as Egypt and Mongolia raised their planning. China vowed in February to close 500 million tonnes of coal production in the next three to five years to reduce oversupply. Profits also shrank in the first half because of sagging power demand and higher coal prices.

Source: Reuters

Renewable energy and climate change trends


India takes US renewable energy dispute to the WTO

September 12: India has complained to the World Trade Organization (WTO) about support given to the renewable energy industry in eight US states, the WTO said. The complaint alleges the states of Washington, California, Montana, Massachusetts, Connecticut, Michigan, Delaware and Minnesota prop up their renewables sector with illegal subsidies and domestic content requirements – an obligation to buy local goods rather than imports. India lost a case at the WTO earlier this year after the United States complained about New Delhi’s national solar program. In 2013, India filed questions at the WTO about suspected subsidies in solar programs in four US states – Delaware, Minnesota, Massachusetts and Connecticut – as well as local content requirements in Michigan and California’s renewable energy programs. By filing the complaint, India has triggered a 60-day window for the United States to settle the dispute, after which India could ask the WTO to adjudicate.

Source: Reuters

Modi government looks at ashrams to harness solar power

September 12: The sun may be nature’s measureless bounty, but the government feels a little help from spiritual gurus can go a long way in making mortals realise its value. In a bid to promote its target of creating 40,000 MW of rooftop solar power capacity, the Union new and renewable energy ministry is roping in religious and interfaith gurus to demonstrate the virtues of green energy and set an example by ensuring that their ashrams are solar powered. According to new and renewable energy secretary Upendra Tripathi, the gurus will act as spiritual partners of International Solar Alliance, a global grouping of over 100 ‘sunshine countries’ between the tropics of Cancer and Capricorn that was launched by Prime Minister Narendra Modi at the Paris climate summit last December. According to the government, in May, Radha Soami Dera in Amritsar became the world’s largest single rooftop solar power facility. The dera’s ₹140 crore solar energy system, spread over more than 80 acres of rooftops, can generate an estimated 19MW of power. Not all ashrams are as large or resourceful, but even smaller ones with a few acres of land can use practical solar energy applications. Besides, solar power projects require open spaces for making best use of photovoltaic panels, which convert sunlight into electricity. No wonder a data bank of at least 100 large ashrams is being drawn up for seeking their cooperation and commitment for setting up solar power projects in return for a ‘commitment certificate’ that will recognise their contribution to the solar cause. A global conference of interfaith leaders is also on the anvil to showcase the commitment. The launch of the ‘International Interfaith Solar Alliance’ during the World Culture Festival organised by Sri Sri Ravi Shankar’s Art of Living in Delhi in March is a step in this direction. The alliance pledged to cooperate among interfaith organisations globally and promote solar energy in their institutions as well as create awareness about renewable energy. The government has set an ambitious target of creating 175GW of solar energy capacity by 2022, including 40,000 MW rooftop solar power capacity, as part of the strategy to reduce the country’s carbon footprint.

Source: The Times of India

Indian scientists recycle fish bio-waste into green energy

September 12: A team of researchers at Jadavpur University has developed a biodegradable energy harvester – from raw fish scales – which could be tapped as a sustainable green energy source for next generation self-powered implantable medical devices. Fish scales — a by-product that is usually thrown away — contain collagen fibres that possess a piezoelectric property, which means that an electric charge is generated in them in response to mechanical stress. The researchers have synthesised flexible bio-piezoelectric nanogenerator (BPNG) from this bio-waste. The recycling of the fish by-products into the BPNG via one step process is a promising solution for the development of value-added products and also to reduce the e-waste. The nanogenerator also scavenges several types of ambient mechanical energies such as body movements, machine and sound vibrations, and wind flow which are abundant in living environment, and even repeated tapping with a finger. Repeatedly touching the BPNG with a finger can turn on more than 50 blue LEDs. The team’s work is the first known demonstration of the direct piezoelectric effect of fish scales from electricity generated by a bio-piezoelectric nanogenerator under mechanical stimuli — without the need for any post-electrical poling treatments.

Source: The Economic Times

India, Canada agree to combat climate change as per Paris pact

September 12: Maintaining that the world is changing with increasing energy demand, shifting energy markets and the effects of climate change, India and Canada have agreed take action to combat climate change through innovation and deployment of low-carbon solutions, as per provisions of the 2015 Paris Agreement under the United Nations Framework Convention on Climate Change (UNFCCC). A joint statement issued by the India and Canada said that while both nations recognise the significant scope and wide-ranging potential for cooperation in the field of energy cooperation between governments, the private sector, research organisations and regulators, both nations also agreed to explore ways to further strengthen the institutional framework for this cooperation. Asserting that India and Canada have shared and complementary interests in oil and gas, the statement said that an expanded Energy Dialogue and action plan will also facilitate greater collaboration between Indian and Canadian entities associated with oil and gas. The statement also said that by working together on shared priorities, both nations can meet their international obligations on climate change, enhance energy security and ensure continued growth and prosperity for the middle class.

Source: The Indian Express

NTPC to support Andhra Pradesh tree plantation drive

September 12: NTPC Ltd, presented a cheque of ₹ 1.87 crore to AP Forest Department recently in the presence of N. Chandrababu Naidu, Chief Minister of Andhra Pradesh towards tree plantation at the locations identified by the Forest Department during 2016-2017. NTPC had entered into a long term Memorandum of Understanding (MoU) with the Forest Department of Andhra Pradesh for undertaking afforestation to give further fillip to “Vanam Manam”, a flagship programme of Andhra Pradesh Government, which envisages to increase the tree cover in the State. The power company would also contribute towards tree plantation in AP through Environment and Forest Department at the locations identified by the Forest Department. NTPC has planted over 20 million trees till date in and around its projects. In tune with the recently announced mitigation measures pertaining to climate change, the Intended Nationally Determined Contribution (INDC-2030) of creating an additional carbon sink of 2.5 to 3 billion tonnes of CO2 equivalent through forest and tree cover by 2030, NTPC plans to create additional sink by planting 10 million more trees across the country.

Source: The Hindu Business Line

Power generated by solar panels atop institutions go waste

September 11: The state government’s drive to encourage roof-top solar power installations has hit a roadblock in the absence of tariff fixation and net metering to evacuate the power into the grid. Many institutions that have invested heavily on solar panels are restricting their generation, thereby underutilising the installed capacity. State government is hoping to have at least 3,500 MW of solar roof top power generation by 2020. At present Tamil Nadu has around 700MW of roof top solar power installations. As per the Tamil Nadu Energy Development Agency, the problem for the educational institutions as well as temples is that there is no fixed tariff under which they can sell solar power to Tamil Nadu Generation and Distribution Company.

Source: The Times of India

French companies to contribute to India’s renewable energy targets

September 9: French companies are looking for partnerships in India to contribute to the country’s renewable energy targets through innovative solutions and technology cooperation. A French delegation, specialising in the renewable energy sector, wrapped up their week-long visit to India and pledged to contribute the country’s energy targets with cutting-edge technologies. The delegation, comprising of leading technology companies and representatives of associations and federations of the French renewable energy sector visited India. India has ambitions in renewable energy as attested by the creation of the International Solar Alliance. The country aims to generate 40 percent of its energy from non-fossil fuel sources in its energy mix by 2030 and for deploying 175GW of renewable energy by 2022.

Source: Business Standard

Coal will continue to be main fuel source in 2040

September 9: Coal will remain the main source of power generation in 2040 although renewable energy will be a significant contributor by then. According to NTPC, coal will account for at least 60 percent of energy source till 2040. The rest would be renewable and nuclear. The rise in demand would be catered by incremental renewable sources while thermal power capacities would also be added albeit at a slower pace than thermal.

Source: The Economic Times

‘Opening up India’s solar mission good idea’

September 8: Rolling out the red carpet to foreign companies in joining India’s 100 GW solar mission is a smart move, as it can cut costs and bring cutting-edge technology, says Helena Li, President of China’s Trina Solar, which has 20 percent share in India’s solar panels’ market. Trina Solar, established in China in 1997, and listed on the New York Stock Exchange since 2006, is a global leader that has installed 19 GW of photovoltaic modules worldwide. In India, Trina, which, Li said, in Chinese signifies bringing together nature and humans in a harmonious way, has already sold 1.5 GW of solar PVs and will have done business of 2 GW by the end of the year. Total solar panels capacity installed in India is around 8 GW. Trina’s clients in India include energy majors like Wellspun, Hero Future Energies, ACME and Renew Power. It has, in 2014, supplied 600,000 solar panels for India’s largest solar project of 151 MW at Neemuch in Madhya Pradesh. With the Narendra Modi government’s major thrust on renewables — that resulted in the formation of the International Solar Alliance this year with its secretariat in Gurgaon — private players are entering the solar space in a big way.

Source: The Economic Times

Students design solar-powered robot to plough the fields

September 7: To reduce dependency on animals and manual labour to plough small farms, the final year mechanical engineering students of Don Bosco Engineering College, Margao, have designed a solar-powered robot to complete the task. The students have developed a prototype machine, which can be operated using a cell phone using Bluetooth and SMS, to plough small land holdings, typically found in the Indian agriculture landscape. The robot, equipped with three sensors to detect incoming obstructions, can plough 200-400 sq m to a depth of 7cm. A 14W capacity solar panel converts the solar radiations into electricity which is stored.

Source: The Economic Times

Durg plant to churn out cooking gas from food waste

September 7: To provide bio-gas connection facility to vendors and small food-joints based at Choupati area of Durg district, the civic body is planning to lay a gas pipeline in the area to connect it with bio-gas plant in Durg. The bio-gas plant is located at zero waste centre in Chaupati area. Bio-gas would be prepared from food waste collected from hostels, marriage palaces, hotels and community centres of the city. To make optimum use of kitchen-left overs for making bio-cooking-gas, the Durg Municipal Corp would start the supply of bio-gas to hotels in future. It’s for the first time that Durg Municipal Corp has installed a bio-gas plant, which is operating on left-over of food material, collected from hotels, marriage palaces and other places.

Source: The Times of India

Auction for wind power on the anvil: Goyal

September 7: After tasting success in solar energy auctions which helped bring down tariffs, the government is looking to soon start bidding for the wind power sector, Power Minister Piyush Goyal said. Fortunately, the success of solar power tariffs has brought solar power prices down by 40 percent in the last 12 to 17 months. It has become the benchmark for wind power, he said. On increasing share of renewable energy in India’s energy mix, the Minister said government has set a target achieving 40 percent of installed capacity through renewables and reduce the carbon intensity of the GDP by 30-35 percent by 2030. On climate change and India’s role in it, Goyal said the country has its own development imperatives like bringing around 40 percent of its population out of poverty, feeding the hungry, creating jobs and physical infrastructure. Government of India is committed to achieving its target of replacing all the 77 crore inefficient bulbs in India with LEDs. This will result in reduction of 20,000 MW load, energy savings of 100 billion kWh and Green House Gas (GHG) reduction of 80 million tonnes every year.

Source: The Indian Express

MNRE to approach Cabinet for doubling solar parks capacity

September 7: The Ministry of New and Renewable Energy (MNRE) will soon seek approval from the Cabinet to scale up the capacity of solar parks in the country to 40,000 MW from 20,000 MW at present, New and Renewable Energy Secretary Upendra Tripathy said. Tripathy said the government would tender out 20,000 MW of solar capacity in the current year. Last year, the government had tendered out around 21,000 MW solar capacity.

Source: The Economic Times


Brazil mulling tax breaks for low-carbon projects

September 13: Brazil is developing a plan to pay for its fight against global warming. The country expects to present the plan at a November climate conference in Morocco, according to Secretary for Climate Change Everton Lucero. The effort may include incentives for low-carbon activities needed to meet Brazil’s climate pledges under the global pact signed in Paris in December. Brazil’s President Michel Temer ratified the United Nations climate pact, becoming the third nation among the world’s top 10 polluters to sign up. Brazil pledged to reducing carbon emissions 37 percent by 2025 compared to 2005. The country’s proposal will focus on farming, energy and forestry, which account for 80 percent of Brazil’s emissions, according to Lucero. The proposal will be opened for public consultation for about six months and the final plan will be ready in the second half of next year.

Source: Bloomberg

Scotland unveils world’s largest stream tidal power project

September 13: Scotland has unveiled world’s largest free stream tidal power project MeyGen in the Pentland Firth, marking a significant step ahead in the development of the country’s marine energy industry. Owned by tidal power generation company Atlantis Resources, the 400 MW MeyGen project is being developed in phases and is supported by Scottish Government’s Renewable Energy Investment Fund (REIF), which is administered by Scottish Enterprise. Scotland has earlier provided £23 mn funding to the first phase of the MeyGen project. The projects will feature up to 269 turbines to generate clean electricity required to power 175,000 homes.

Source: Energy Business Review

UK could save $6.6 billion a year by 2050 using carbon capture

September 12: Britain could save 5 billion pounds ($6.64 billion) a year by 2050 if it invests now in technology to capture and store emissions underground, a government advisory body report said. Carbon Capture and Storage (CCS), which traps emissions blamed for global warming during the burning of fossil fuels and stores them underground, had been regarded as too expensive by the government, which last year canceled plans to spend up to 1 billion pounds to help commercialise the technology. But the report, by the Parliamentary Advisory Group on CCS, said that with government backing CCS could be deployed on power plants at a cost of 85 pounds per megawatt hour (MWh), cheaper than the 92.50 MWh price guarantee given by the government to EDF’s Hinkley C nuclear project. Britain has a legally binding target to cut emissions by 80 percent on 1990 levels by 2050.

Source: Reuters

EU to decide on its carbon market for airlines after ICAO deal

September 12: The European Union (EU) will decide about the exact emission-reduction rules for airlines only after the United Nations’ aviation panel reaches a historic agreement on how to limit pollution from the industry next month. It is possible that the European cap-and-trade emissions program, which includes aviation, will continue along the planned post-2020 global offsetting system, according to the EU. The UN’s International Civil Aviation Organization (ICAO) is aiming to strike the first global deal to put a lid on pollution from airlines when its 191 states meet in Montreal on September 27-October 7. The goal is to agree on a system where greenhouse gases related to the growth of the industry are offset by investment in emission-reduction projects in other sectors of the global economy. The 28-nation EU, which wants to be the leader in the fight against climate change, has a different emission reduction program for utilities, manufacturers and airlines, where companies are subject to caps on pollution and can trade their allowances. The bloc will look at the interaction of its Emissions Trading System with the global offsetting program after ICAO agrees the details of its plan, the EU official said. Under a draft resolution to be considered in Montreal, the first phase of the worldwide offsetting mechanism for aviation will begin in 2021, with a possibility for some poorer, developing nations to opt out of the system for the initial six years. Nations with a very small aviation sector and least developed countries will be exempted from the program.

Source: Bloomberg

US utility solar enjoys building boom in second quarter but residential slows

September 12: The United States (US) solar installations rose 43 percent in the second quarter, according to a new report, as sharp gains in large projects for utilities offset slowing growth in residential systems in top solar market California. The US installed 2,051 MW of photovoltaic solar in the second quarter, according to a report by research firm GTM Research and the Solar Energy Industries Association trade group. Systems for utilities made up 53 percent of the market in the first half of this year thanks to sharply lower system prices that are competitive with fossil fuels and state mandates to source more electricity from renewable sources.

Source: Reuters

NRG Energy wins auction for SunEdison wind and solar projects

September 12: Houston-based NRG Energy Inc has won the auction for bankrupt renewable power plant developer SunEdison Inc’s wind and solar projects in Texas and other states with a $144 million bid. The sale is one of several that SunEdison, once the fastest-growing US renewable energy company, is holding since filing for Chapter 11 bankruptcy protection in April after an unsuccessful debt-backed acquisition drive.

Source: Reuters

IDB funds $103.4 million to develop geothermal energy in Nicaragua

September 12: The Inter-American Development Bank (IDB) has granted $103.4 mn financing to Nicaragua to enhance its geothermal energy generation capacity while improving power transmission system. According to estimates, Nicaragua generated 50.6% of its power from renewable sources, of which 30% was geothermal in 2015. Nicaragua is estimated to have 1,500 MW of geothermal potential. IDB will fund $51.4 million for the development of the geothermal energy in the country while a further $25 million will come from the Korea Infrastructure Development Co-financing Facility in Latin America and the Caribbean, which is managed by IDB. Nicaragua will use a portion of the funds for site investigation and determine the technical viability of exploiting the geothermal potential of the Cosiguina field in north-western part of the country.

Source: Energy Business Review

EU regulators poised to seek deeper cut in energy use

September 9: The European Union (EU) regulators are poised to propose a binding target to cut energy use by 30 percent by 2030, a more ambitious goal than previously discussed, according to a draft document. The draft law, which the European Commission is expected to publish next month, is part of a set of proposals to implement 2030 goals on cutting emissions, increasing renewable energy use and preventing energy waste. Climate and Energy Commissioner Miguel Arias Canete has said every 1 percent improvement in energy efficiency could lift 7 million people out of energy poverty because their homes would be better insulated with lower energy bills. Non-governmental organisations have pushed for an efficiency goal of 40 percent, which is supported by the building insulation industry and efficiency campaigners.

Source: Reuters

US refiners revamp operations as renewable fuel costs surge

September 9: The United States (US) oil refiners, beset by the weakest profit margins in six years, have been laying off workers, revamping operations and ratcheting up pressure on regulators and lawmakers to tweak the renewable fuel program, whose costs have ballooned. The top 10 US independent refiners look set to take a record hit on renewable fuel credits this year. They spent $1.1 billion on the credits in the first half of the year, just short of a record $1.3 billion in all of 2013. Refiners without operations dedicated to selling blended fuels to consumers, must purchase credits to prove compliance with US clean-fuel mandates. Biofuels advocates and the EPA have said refiners ultimately recoup Renewable Identification Number (RIN) costs by including them in the price of the products they sell. Refiners are pressuring lawmakers back from August recess to consider reforming the renewable fuel program. More than a decade old, the program has been a battleground between entrenched oil and corn interests. The US Environmental Protection Agency has a November 30 deadline to finalise next year’s biofuels targets.

Source: Reuters

UK may delay release of plan to reach carbon goals until 2017

September 7: The UK government may need to delay until next year the release of a plan on how the country will meet carbon reduction targets for 2030, Climate Change Minister Nick Hurd said. The fifth carbon-reduction plan had been expected by the end of this year, and the June vote to exit the European Union has complicated environmental policy. The plan must balance the need to fight climate change while meeting the country’s emissions targets at the lowest cost. It’s expected to provide a signal to investors on how the nation will meet its environmental goals by 2030, as well as reach a long-term objective of curbing emissions 80 percent by 2050. The UK currently spews about 500 million tons of carbon into the atmosphere each year, mainly from power plants, cars and industry. Hurd also said the UK would ratify the Paris climate change deal “as soon as possible.”

Source: Bloomberg


State-wise Coal Power Capacities and CO2 Emissions from Coal Capacities


Installed Capacity of Coal Based Power MW

(as on 31/03/2015)

Net Generation Billion Units (TWh)


Absolute Emissions
Million Tonnes CO2 (MtCO2)

Andhra Pradesh 12,852.5 71.80 70.31
Bihar 4,895.0 16.47 16.17
Chhattisgarh 17,183.0 74.09 73.15
Delhi 840.0 3.30 3.89
Gujarat 14,400.0 78.30 73.68
Haryana 5,980.0 25.23 24.27
Jharkhand 5,727.5 21.40 23.20
Karnataka 4,780.0 28.26 27.63
Madhya Pradesh 15,005.0 62.55 62.91
Maharashtra 20,486.0 79.10 83.39
Orissa 8,530.0 40.61 39.86
Punjab 4,680.0 17.46 17.93
Rajasthan 5,660.0 29.81 31.49
Tamil Nadu 7,670.0 32.49 34.36
Uttar Pradesh 16,083.0 95.06 96.34
West Bengal 12,906.0 58.71 63.22

Trends in Specific CO2 Emissions by Installed Coal Capacities


Source: Central Electricity Authority


Publisher: Baljit Kapoor
Editorial advisor: Lydia Powell
Editor: Akhilesh Sati
Content development: Vinod Kumar Tomar

The views expressed above belong to the author(s). ORF research and analyses now available on Telegram! Click here to access our curated content — blogs, longforms and interviews.