MonitorsPublished on May 22, 2017
Energy News Monitor | Volume XIII: Issue 49


Gas News Commentary: April – May 2017


CGD through the JHBDPL named Urja Ganga Project started taking shape in the PMs parliamentary constituency Varanasi, with GAIL (India) Ltd starting the pipeline laying work. GAIL is investing ₹ 5.7 billion for laying over 129 km pipelines in four district of Varanasi division under this project. This project is aimed at fulfilling energy requirement for households, industries, hotels, cold storages, dairies and vehicles. It will also help in bringing natural gas based crematoriums at Manikarnika and Harishchandra ghats in Varanasi. The project is likely to benefit a population of 3.65 million in 1535 km2 of Varanasi district. 50,000 families will get PNG connection while 500,000 cylinders will be given in rural area within five years. Besides, 20,000 vehicles will be converted CNG in Varanasi, where 20 CNG stations will be coming up. According to GAIL, the ambitious 2540 km Urja Gnga project for five eastern states will fulfill energy requirement of 40 districts and 2600 villages. The total cost of project is nearly ₹ 130 billion of which the union government has sanctioned ₹ 51.76 billion. CGD is also planned for seven major cities- Varanasi, Patna, Jamshedpur, Kolkata, Ranchi, Bhubaneshwar and Cuttack, all on the pipeline route. One of the co-benefits of the projects is that it will secure millions of votes for the ruling party at no expense to the party as it will be underwritten by public funds.

RIL has become the first buyer of CBM produced from its own block in central India after agreeing to pay the highest price for the fuel. The company bid $4.23/mmBtu outbidding others such as urea maker Deepak Fertilisers & Petrochemicals Corp and GAIL.  RIL will use the entire initial daily volume of 400,000 cubic meters of gas from coal seams at the Sohagpur block in Madhya Pradesh state at three of its petrochemical plants. RIL’s sale to itself is the first test of the marketing and pricing freedom India introduced in March for CBM producers to attract investments and boost production. The price is 71 percent higher than the $2.48/mmBtu price of natural gas from conventional fields in the country. It will also partially replace the costlier imported gas used at the petrochemical plants in the western Indian states of Maharashtra and Gujarat. RIL’s price was higher than the $4.159/mmBtu bid by Deepak Fertilizers and $4.009/mmBtu bid by GAIL. Electricity generators GMR Rajahmundry Energy Ltd and GMR Vemagiri Power Generation Ltd., which quoted a price of $2.48/mmBtu each, were the remaining qualified bidders. RIL, which became the third producer of gas from coal seams after Great Eastern Energy Corp and Essar Oil Ltd, started commercial production in March from the block, known officially as SP(West)–CBM–2001/1. It plans to increase CBM output to 2.5 mcm/day by March 2018. Production will increase in the next 15-18 months as the company plans to drill 600-800 more wells and expand infrastructure in the next phases of development, according to the RIL.

The production from RIL’s Sohagpur CBM fields will gradually ramp-up in the next 15-18 months making RIL among the largest unconventional natural gas producers in India.  RIL has drilled more than 200 wells connected to two gas gathering stations in the first phase of development. The company expects to drill 600-800 wells further and develop associated infrastructure over the next phases of development. Reliance Gas Pipelines Ltd, a wholly owned subsidiary of RIL, laid a 302 km Shahdol Phulpur Gas Pipeline that connects Sohagpur CBM fields from Shahdol to Hazira-Vijaipur-Jagdishpur pipeline network of Gail at Phulpur. With this new pipeline network, these CBM gas fields are now connected with the Indian Gas Grid. RIL holds another CBM block in Sonhat, Chhattisgarh. Initial gas output from RIL block could be around 0.4 mmscmd. Peak output, however, is envisaged at 2.5-3 mmscmd.

India’s production of CBM grew more than 44 percent last financial year to around 565 mmscm as compared to 393 mmscm in 2015-2016. This comes as a major boost for the government’s efforts to cut down India’s import dependence for energy supply. The huge growth in CBM output in FY17 was, however, lower than the government’s projections.  India’s CBM production was pegged to quadruple to 1,449 mmscm at the end of FY17. CBM is likely to contribute to 5 percent of natural gas production by 2017. Data published by PPAC shows that in FY17 domestic production of CBM contributed to 1.78 percent of India’s total natural gas production of over 31,000 mmscm. In a bid to incentivize production, the CCEA had last month approved a new policy allowing marketing and pricing freedom for CBM gas. The new policy allows contractors to sell CBM at arm’s length price in the domestic market. The oil ministry gave multiple reasons for slow production of CBM including overlapping with coal blocks, delay in land acquisition and statutory clearances, water handling problems and lack of gas infrastructure in CBM blocks. Despite the hurdles, the ministry is confident of healthy growth in output going forward that will result in the share of CBM in total gas production rising to 5 percent from the current less than 2 percent.

Indian gas company H-Energy is to begin importing LNG from the third quarter of 2018 via a ship-based terminal leased from French group Engie. India is the world’s fourth biggest LNG importer even though gas accounts for just seven percent of its coal-dominated energy mix, but consumption is growing fast in response to cheap LNG prices as new cities and industry are added to the grid. The government aims to more than double LNG import capacity to 50 mtpa and grow gas’s share in the energy mix to 15 percent by late 2020. Under the deal with Engie, H-Energy will be able to import up to 4 mtpa of LNG from late next year once the terminal, dubbed GDF Suez Cape Ann, is in place. The FSRU, will be berthed at India’s west coast port of Jaigarh, also the starting point for a 635 kilometre coastal pipeline H-Energy is building to open up new gas markets. The FSRU will convert LNG shipped from multiple suppliers back into gas, before transferring it onshore.

ONGC expects to increase gas production by nearly 30% over the next three-four years with an investment of around $11 billion. ONGC will put its blocks in the KG Basin (KG-DWN-98/2) and Ratna and R-Series oilfields in Mumbai offshore into production by 2019. The CBM blocks in Jharkhand will begin production by 2020, while the Daman offshore fields, which have been pressed into production this month, will be ramped up next year.  While KG-DWN-98/2 will be pushed into production by 2019, Daman will begin production shortly and be ramped up by 2018. ONGC currently produces around 23 bcm of gas a year, which is expected to go up to 29-30 bcm in four years. However, gas production at some existing fields is projected to drop to 11.8 bcm in four years from the current 19.73 bcm. The company plans to invest more than $10-11 billion in exploration, a major chunk of which would go towards developing the KG block. ONGC approved the field development plan for fields falling under Cluster II, the first cluster to be developed. The development will involve a capital expenditure of $5.08 billion. Cluster II will produce its first gas by June 2019, according to the ONGC.

Cairn India Ltd, along with its partners is set to invest ₹ 32.40 billion in the Ravva Fields in the KG Basin, to undertake 20 Developmental Wells and for setting up related infrastructure, as the oil and gas production is dwindling from the existing wells. The Ravva field (PKGM-1 Block) located in the shallow offshore area of KG Basin, has completed 21 years of successful operations with, Cairn India as the operator with 22.5 percent participating Interest. Currently, there are eight unmanned offshore platforms and a 225 acre onshore processing facility at Surasaniyanam in East Godavari of Andhra Pradesh which processes the natural gas and crude oil produced from the field.

Conglomerates in India now have a ₹ 170 billion investment theme built around an industrial fuel-LNG. The Essar, Adani and JSW Groups, among others, are setting up LNG terminals along India’s eastern and western water margins as natural extensions to the port infrastructure, reflecting the increasing demand for the gas as an alternative energy source in the country as global prices of the fuel head south. Essar Ports, part of the Essar Group, has won the recent bid for a ₹ 4.5 billion, 1 mtpa LNG import terminal at the Haldia port in West Bengal. The Kolkata Port Trust had called bids for the terminal, for which Petronet LNG and V Energy were also in the race.

Rest of the World

It was advantage Russia this month with the announcement that there will be no disruption to Russian natural gas supply to Germany via the Yamal-Europe Pipeline after Poland ends its own purchases from Russia’s Gazprom according to the Polish energy market regulator URE. The 4,200 km pipeline delivers around 33 bcm of natural gas to Europe. A transit deal with Poland expires in 2019 while Poland’s contract to buy up to 10.2 bcm of gas from Gazprom per year expires in 2022 and Warsaw has said it will not be renewed. Poland’s ruling Law and Justice party aims to switch from Russian gas after 2022 to deliveries from Norway via a new pipeline and to more LNG supplies. Russia plans changes as it looks to double the capacity of the 55 bcm Nord Stream pipeline which crosses the Baltic Sea to Germany.

A new pipeline from Russia’s Arctic fields to Germany will boost Moscow’s share of the European gas market despite competition from Qatar and the United States, and will also mean much less fuel goes via Ukraine, Russian gas monopoly Gazprom said. Supplies via Ukraine would fall after 2020, but not stop entirely as Moscow has previously threatened, when the world’s largest gas firm opens a pipeline under the Baltic Sea. Gazprom’s Western partners agreed to provide half the financing for the €9.5 billion ($10.32 billion) Nord Stream 2 pipeline, removing a big hurdle for a Russian plan to pump more gas to Europe from 2019. Gazprom supplies a third of Europe’s gas needs, with its share rising from a quarter in the past two decades. It believes it could ship more despite the EU’s fears that the bloc is becoming too reliant on Russian energy. Gazprom sold a record 179 bcm of gas to Europe in 2016, helped by a collapse in oil prices on which gas is priced and cold weather on the continent. Customers are requesting more gas this year and Gazprom believes in the next 15 years it can provide the bulk of an additional 100 bcm a year for Europe, which the continent needs by 2035 as domestic output falls. The EU has sought to reduce reliance on Russia after a decade of gas disputes between Moscow and Ukraine over pricing, which led to several supply disruptions during harsh winters.

Gazprom may hold more auctions to sell gas into Europe’s hub markets this year and could lift gas exports above record levels hit in 2016 as it plans to add major new reserves.  Gazprom plans to increase reserves by 470 bcm of gas this year on the back of developments in east Siberia, the Yamal Peninsula and around Sakhalin island. Gazprom held a trial gas auction in late 2015, selling more than 1 bcm for delivery to north-western Europe from 3.2 bcm on offer. Gazprom exports met around 34 percent of European gas demand in 2016, a record high.

Malaysian oil company Petronas is looking to tap new markets to sell LNG, including as fuel for ships. Petronas also sees significant growth potential for LNG in India, Pakistan, Bangladesh and some parts of Southeast Asia. Asian spot LNG prices have dropped by more than 70 percent since 2014, with production growing faster than demand. Spot prices for June delivery stood at about $5.70/mmBtu compared with $20-plus/mmBtu in 2014. Malaysia is the world’s third-biggest LNG exporter behind Qatar and Australia. The top destinations for its LNG are Japan, South Korea and China, but Petronas is broadening its horizons and the first cargo from its floating LNG facility was shipped to India. Petronas is also in preliminary talks with partners over the sale of LNG as shipping fuel. Petronas is working on an oil price assumption of $45-$55/bbl for the next three to four years. Brent crude was trading at about $48/bbl. Like other oil majors, Petronas has taken a hit from lower crude prices. Benchmark Brent crude prices have more than halved since mid-2014. Malaysia relies on its only Fortune 500 company for nearly a third of its oil and gas-related revenue. Though reduced operating expenses helped Petronas to post a 12 percent rise in full-year net profit in March, the company gave a cautious outlook for 2017.

Iran is buying equipment to avert a possible disruption in output at its share of the world’s biggest natural gas field, in the event the US decides to impose additional sanctions on its economy according to the state-run operator Pars Oil & Gas Co. The company is buying ‘essential equipment’ it would need to avert a halt in operations at the offshore South Pars deposit, in case the US imposes new curbs on Iran. Under new sanctions, the company’s purchase of a simple valve for the field would become ‘a most challenging task’. Iran signed a preliminary $4.8 billion deal with Total SA and China National Petroleum Corp in November for the 11th phase of South Pars. It was the country’s first joint venture with international partners since sanctions were eased in January 2016. Total will approve the project if sanctions aren’t modified. The 24 development phases at South Pars have a combined production capacity of 570 mcm/day of gas.

Iran, holder of the world’s biggest natural gas reserves, boosted output by inaugurating six projects at the giant South Pars offshore field. The country raised total production capacity at South Pars to 570 mcm/day of gas, putting it almost on par with neighbouring Qatar, which produces from an adjacent portion of the same deposit. Iran invested $20 billion to complete the six projects.  Even so, Iranians won’t have much gas to export because they are likely to use most of the new production themselves. Half of Iran’s gas goes to warming homes, with the rest used mostly to generate power and for industrial use. New production can barely keep up with domestic demand, and consumption almost doubled to 191.2 bcm in 2015 from 102.7 bcm in 2005, according to BP Plc statistics. Each of the new projects produces 28 mcm/day. They include phases 17 through 21, with phase 19 having two parts. Qatar announced earlier this month that it was ending a 12-year ban on new projects at its section of the shared field. Qataris call their part of the deposit the North Field, which together with South Pars forms the world’s largest reservoir of non-associated gas.  Iran targets exporting 50 mcm/day of gas to neighbouring Iraq once that country can arrange for a letter of credit to finance the purchase.

Mozambique’s glittering future was expected to be transformed by one of the world’s largest LNG projects. But construction has fallen far behind schedule and the town’s fate is uncertain after gas prices fell and the government became engulfed in a $2 billion debt scandal. The discovery of gas reserves in 2010, estimated at about 5 tcm in the surrounding Rovuma Basin, was the biggest natural gas find in recent decades. Experts have predicted that Mozambique could become the world’s third-largest exporter of LNG, and an African version of wealthy Qatar. Initial estimates were that the first LNG would come on stream in 2016 but now it is expected in 2023 — or later. The plunge in global gas prices has led energy companies to slow down capital expenditure.

Turkmenistan has discovered a potentially large natural gas field close to its Caspian coast. Gas exports are the main source of hard currency for the former Soviet republic which is in talks with the European Union about building a pipeline across the Caspian to link its fields to European markets. Turkmenistan, whose reserves include the world’s second-largest gas field, Galkynysh, has faced foreign currency shortages after Russia, one of the biggest customers, stopped buying Turkmen gas last year, leaving China as the main buyer. The Ashgabat government is trying to diversify exports by discussing the Trans-Caspian link to Europe as well as investing in a pipeline through Afghanistan to Pakistan and India Total SA will spend $500 million over three to four years to develop a shale-gas field in Argentina as the country’s government lures investors by pledging a minimum price. The French energy giant has given the go-ahead to develop the first phase of the Aguada Pichana Este license in the Vaca Muerta formation. To spur drilling at Vaca Muerta, one of the largest shale formations outside North America, the Argentine government has extended a program that ensures a minimum price for the gas companies produce until 2021. Total, already enjoying lower drilling costs following crude’s slump, has highlighted the need to get new projects off the ground to avoid a future shortfall in energy supply. The announcement on Vaca Muerta marks the first of 10 large final investment decisions on new oil and gas ventures that Total plans for this year and next. The company is budgeting as much as $17 billion a year in capital expenditure, including resource renewal, through 2020. Gas from the Vaca Muerta project will be treated at the existing Aguada Pichana plant, which will ramp up to its full daily capacity of 16 mcm or 100,000 boe, according to Total. The company produced 78,000 boe/day in Argentina last year.

Chevron Corp is selling its three Bangladesh gas fields, worth an estimated $2 billion, to a Chinese consortium as the US based oil and gas group looks to shed non-core assets this year. The deal, if completed, would mark China’s first major energy investment in the South Asian country, where Beijing is pumping in billions of dollars in a race with New Delhi and Tokyo for influence. The gas fields, which account for more than half of the total gas output in Bangladesh, are being sold to Himalaya Energy. ZhenHua Oil had signed a preliminary deal with Chevron to buy the Bangladesh natural gas fields. Chevron sells its entire output from the Bangladesh fields (16 mtpa of oil equivalent) to state oil company Petrobangla under a production-sharing contract. The gas fields, Bibiyana, Jalalabad and Moulavi Bazar, had average net daily output of 20 mcm of gas and 3,000 barrels of condensate, or liquid hydrocarbon produced with gas. Chevron said that it planned to sell assets worth about $10 billion by 2017, including the Bangladesh gas fields and geothermal projects in Indonesia and the Philippines, amid a prolonged slump in energy prices.

The Australian government said it was ‘encouraged’ on steps taken to avert a gas crisis after meeting with producers and the energy market operator, but it held out the threat of regulatory steps to address any supply shortages. France’s Engie SA and Origin Energy, have sealed deals to ensure gas supply to power plants at peak times, easing some short-term concerns about shortages that have already helped to trigger blackouts. The Australian Energy Market Operator warned in March of a shortage set to hit eastern Australia just as the country becomes the world’s top LNG exporter. At least one of the east coast LNG plants, Gladstone LNG – operated by Australia’s Santos – is drawing gas out of the domestic market to help meet its export contracts.


OIL starts survey to look for presence of hydrocarbons in Manipur

May 16, 2017. Oil India Ltd (OIL) has commenced a survey to check for the presence of hydrocarbons in Manipur. The project manager of the Manipur State Level Convention on Oil Exploration team, Sumit Mahajan, told that they had started conducting the survey two months back, from district Jribam. The survey has reached the Khaidem Village constituency in Imphal West. The expedition survey will take about two more years and is due to get wrapped up by April 2019. Post that, the centre and the Directorate General of Hydrocarbons (DGH) will reflect upon next steps. The Government of India through oil ministry had granted license to Jubiliant Oil and Gas Pvt Ltd (JOGPL), a Netherlands based oil exploration company, for exploring and drilling two oil blocks in Manipur located in the Jiribam, Tamenglong and Churachandpur districts of Manipur, without the acknowledgement and consent of locals. The contracts were awarded under the eighth round of New Exploration Licensing Policy (NELP) of the Government of India. Earlier, as well, without any intimation of the locals, the government had undertaken series of promotions globally in 2003 and 2009 to promote the oil blocks of ‘the jeweled land’, along with others through road-shows in major cities of the world like London, Houston, Calgary and Perth etc, inviting bids to oil companies. The total area granted for oil exploration is 3850 square kilometres and it is estimated that Manipur has nearly 5000 billion cubic feet of oil. The Jubiliant Energy is envisaged to drill oil from 30 oil wells, identified by the Alpha Geo Company based in Hyderabad, which has been conducting seismic studies for Jubiliant Energy.

Source: The Economic Times

Petrol price cut by Rs 2.16, diesel rates slashed by Rs 2.10 per liter

May 16, 2017. The Oil Marketing Companies (OMCs) announced Rs 2.16 per litre cut in petrol prices along with Rs 2.10 per litre cut in diesel rates in order to align the domestic rates of the automobile fuels with global benchmarks. The revisions are in line with the daily revisions taking place in select five cities where a pilot project on dynamic pricing is being undertaken by Indian Oil Corp (IOC). Post the price revision, to be effective from midnight, non-branded petrol will be priced at Rs 65.32 per litre in Delhi while every litre of Diesel will cost Rs 54.90 per liter. IOC has initiated a pilot project under which petrol and diesel prices in five select cities — including Udaipur, Jamshedpur, Chandigarh, Vizag and Puducherry — are being revised daily since May 1. According to the IOC, prices of petrol and diesel in the five cities where the pilot project has been initiated have decreased by approximately Rs 2 per litre and Rs 2.21 per litre respectively since May 1. The price of petrol in Chandigarh as on May 1 stood at Rs 67.65 per litre which has been revised to Rs 65.55 per litre for May 15, a reduction of Rs 2.1 per litre. Similarly, the price of diesel in Chandigarh as on May 1 was Rs 57.74 per litre which has been revised to Rs 55.57 per litre for May 15, a reduction of Rs 2.17 per litre. IOC said the oil marketing company will continue with the pilot project in the five select cities for a few months after which all the state-owned oil marketing companies including Bharat Petroleum and Hindustan Petroleum will take a call on whether daily revisions will be adopted nation-wide. The OMCs increased the selling price of petrol by Rs 0.01 per litre (excluding state levies) and increased the prices of diesel by Rs 0.44 per litre.

Source: The Economic Times

Oil ministry warns against fake websites on free-LPG scheme

May 13, 2017. The oil ministry warned citizens to be wary of fake websites on free-LPG (liquefied petroleum gas) scheme Pradhan Mantri Ujjwala Yojana (PMUY) saying they should not respond to advertisements for dealers being issued by such portals. Attention of oil ministry has been drawn to a number of fake websites which have come up recently in connection with the Pradhan Mantri Ujjwala Yojana. It is to bring to the kind notice of general public that official website of PMUY is This official website contains freely downloadable forms, both in English and Hindi, to be filled by the prospective beneficiaries for new LPG connection.

Source: Business Today

India’s gasoline boom stalls

May 12, 2017. India’s gasoline consumption has flattened out in recent months after tremendous growth between 2014 and 2016. India’s motorists consumed 581,000 barrels of gasoline per day between February and April, according to the Petroleum Planning and Analysis Cell (PPAC). Gasoline consumption rose by 4 percent compared with the same period a year earlier, a sharp slowdown from the 14 percent increase between 2015 and 2016. Gasoline consumption growth has been slowing since the middle of 2016 after surging for the previous two years. Consumption growth for most other fuels used for cooking and transportation has also been slowing for the last nine months. Demand for liquefied petroleum gas and kerosene used for cooking, heating and lighting as well as diesel used for transport all show signs of levelling off or actually falling in the first four months of 2017. The slowdown may have been compounded by the demonetisation of large-denomination bank notes announced at the start of November as part of the government’s anti-corruption campaign. Demonetization resulted in a sharp slowdown in sales of the cheaper motorcycles favoured by first-time buyers in rural areas. Rising crude oil and refined fuel prices over the last year are also likely to have constrained the growth in consumption and other fuels. Retail gasoline prices rose by around 10 percent between January 2016 and January 2017 while diesel prices climbed by almost 8 percent, according to data from the oil ministry. India’s emerging urban and rural middle class is relatively sensitive to increases in the cost of fuel so rising prices have curbed demand growth. Despite the recent slowdown in consumption growth for gasoline and other fuels it is too early to determine whether the deceleration is temporary linked to demonetization and price rises or something more lasting. But India has been one of the most important sources of oil demand growth during the slump so any prolonged slowdown in consumption growth would make the task of global market rebalancing harder.

Source: Reuters

Petrol pumps in Manipur to reopen after daylong shutdown

May 12, 2017. Petrol pump owners in Manipur, protesting against a public statement by the Consumer Affairs, Food and Public Distribution (CAFPD) Director Ranjan Yumnam, agreed to withdraw their “indefinite shutdown” which they had begun earlier in the day. However, the pumps shall reopen only since the pump employees had gone to their homes anticipating a long stand-off. The protest shutdown, called by the All Manipur Petrol Pumps Dealers Association early, came a week after CAFPD Director raided two petrol pumps.

Source: The Economic Times

India’s fuel demand in April up 3 percent from last year

May 12, 2017. India’s fuel demand rose more than 3 percent in April compared with the same month last year. Consumption of fuel, a proxy for oil demand, totalled 16.79 million tonnes (mt), data from the Petroleum Planning and Analysis Cell (PPAC) of the oil ministry showed. Sales of gasoline, or petrol, were 4.5 percent higher from a year earlier at 2.09 mt. Cooking gas or liquefied petroleum gas (LPG) sales increased over 3 percent to 1.65 mt, while naphtha sales rose to 1.19 mt. Sales of bitumen, used for making roads, fell to 0.57 mt. Fuel oil sales also edged lower in April.

Source: The Economic Times

Cairn India calls for oilfield services contracts for flagship Rajasthan block

May 11, 2017. Cairn India Ltd, the oil and gas exploration arm of Vedanta has floated an expression of interest, inviting global Oil Field Services (OFS) companies for integrated development opportunity for its Mangala, Bhagyam and Aishwariya (MBA) fields in Rajasthan. Cairn India has been looking at ramping up production from its ageing fields in the Rajasthan block. Cairn India’s average daily gross production from the Rajasthan block for the full year 2016-2017 reached 1,61,571 barrels per day a decline of approximately five percent from 1,69,609 barrels per day in the preceding year. Overall the company produced 69.32 million barrels per oil equivalent (mboe) in 2016-2017 a decline of seven percent as compared to 74.56 mboe produced in the preceding year. The average gross production for the year 2016-2017 declined primarily due to natural decline in its fields and planned maintenance shutdown in Rajasthan during the year.

Source: The Economic Times

In a first, India to import LPG from Iran to meet rising demand

May 10, 2017. India has for the first time ever signed a contract to import liquefied petroleum gas (LPG) from Iran as it looks at additional sources of cooking fuel to meet rising domestic demand. State-owned oil firms will import one very large gas carrier (VLGC), or 44,000 tonnes, per month for an initial six-month period. India imports almost a million tonnes (mt) of LPG every month to meet rising demand that has been further fuelled by the government drive to give free gas connections to poor women. LPG consumption in 2016-17 rose 9.8 percent to 21.55 mt. Of this, 11 mt came from imports. India mainly imports LPG via term contracts from major Middle Eastern producers Saudi Aramco, Qatar’s Tasweeq, Abu Dhabi National Oil Co and Kuwait Petroleum Corp. LPG imports will rise over the next three years to 16-17 mt as the government pushes for making available cooking gas cylinders to the poor and wean them off polluting fuels. The country is looking to import LPG from Bangladesh. India had imported 8.8 mt of LPG in 2015-16. Imports last year made India the world’s second-largest importer of liquefied petroleum gas (LPG), behind China. It overtook Japan, which imported 10.6 mt. The government launched a programme to provide free cooking gas connection to poor women with a view to cut on use of firewood and polluting fuels like dried cow dung. LPG demand is projected to grow by 9.7 percent to 23.7 mt in the current fiscal and is likely to touch 35 mt by 2031-32. A record 3.45 crore LPG connections were given during the fiscal ended March 31, 2017, including 2.2 crore free connections to poor women. This has taken the number of LPG consumers to 20.08 crore. As many as 6 crore connections have been given in last three years, taking LPG to 72.84 percent of the population. The government is targeting giving out 3 crore connections including 1.5-2 crore under the free LPG connection scheme during the 2017-18 fiscal and another 4 crore in the following year. This would help take LPG coverage to 95.49 percent of the population.

Source: The Economic Times

Over 40 percent LPG coverage in Odisha in 2017

May 10, 2017. LPG (liquefied petroleum gas) coverage in Odisha has increased from 20 percent of the total households in 2014 to 43 percent this year after the launch of Pradhan Mantri Ujjwala Yojana (PMUY). Indian Oil Corp (IOC) said 1,73,276 LPG customers in the state have surrendered their LPG subsidy. IOC said that oil marketing companies are in the process of appointing new LPG distributors so that a distributor is available in every corner of the state.

Source: The Economic Times


Iran wants India to pay more than triple the price of gas for awarding block to OVL

May 15, 2017. In fresh conditions, Iran wants India to pay more than triple the gas price for award of the coveted Farzad-B natural gas block to ONGC Videsh Ltd (OVL). Iran wants India to buy all of the natural gas to be produced from the Persian Gulf block at a price equivalent to the rate Qatar charges for selling liquefied natural gas (LNG) to India under a long-term deal. Qatar, as per a revised formula agreed upon in December 2015, sells 7.5 million tonnes a year of LNG to Petronet LNG Ltd — India’s biggest gas importer — at a price of $7-plus per million British thermal unit (Btu). The rate being sought by Iran is triple of $2.3 per million Btu rate OVL is willing to pay for the gas during low global oil prices. If global rates rise, OVL is willing to pay $4.3 per million Btu. When oil prices move up, rates of LNG from Qatar would also rise. OVL has recently submitted a $5.5 billion master development plan for bringing the gas in Farzad-B to production. The two nations were initially targeting concluding a deal on Farzad-B field development by November 2016 but later mutually agreed to push the timeline to February 2017. Now, the deal is being targeted to be wrapped up by September after the two sides agree on a price and a rate of return for OVL’s investments. In the new master development plan, the company has estimated cost of putting up a facility to convert gas into LNG and shipping it to India at $5-6 billion.

Source: The Economic Times

India to push for an Asian Natural Gas Trading Company in the next G 20 summit

May 12, 2017. The government of India is in talks with major Asian economies including Japan, China, South Korea and Taiwan in order to push for an Asian Natural Gas Trading Company to reduce the impact of oil price volatility on the Asian market, oil ministry’s Joint Secretary-International Cooperation Sunjay Sudhir said. He said that the country will push for a Memorandum of Understanding (MoU) in the next G20 Summit to be held at Germany in June. Sudhir emphasised that the country needs to diversify its liquefied natural gas (LNG) imports for maintaining energy security. India currently sources 60 percent of its total LNG imports from Qatar alone. The country’s total LNG import in 2016-2017 grew by more than 15 percent to 24,608 million standard cubic meter, the highest in four years. India had signed an MoU with Russia at the India-Russia annual summit on construction of the world’s biggest gas pipeline between Siberia and India.

Source: The Economic Times

Government does not intend to take over PNGRB’s responsibility: Petroleum Secretary

May 11, 2017. With oil regulator Petroleum and Natural Gas Regulatory Board (PNGRB) being rendered dysfunctional, the petroleum ministry said it has no intention of taking over its functions like authorising laying of pipelines and giving compressed natural gas (CNG) distribution licenses. Petroleum Secretary K D Tripathi justified the government, and not PNGRB, issuing an authorisation to GAIL (India) Ltd for laying a natural gas pipeline from Jagdishpur in Uttar Pradesh to Haldia in West Bengal to take the environment-friendly fuel to cities like Varanasi – the constituency of Prime Minister Narendra Modi. He said GAIL was given authorisation to lay the Jagdishpur-Haldia/Bokaro-Dhamra gas pipeline before the PNGRB came into being in 2006-07. PNGRB had in a letter dated October 25, 2016, objected to the ministry giving the authorisation instead of the regulator which by an Act of Parliament is the only sole authorising agency. Giving out city gas distribution (CGD) licence is the sole prerogative of the PNGRB and GAIL’s original authorisation from the government for laying the Jagdishpur-Haldia pipeline had no mention of such authorisation. PNGRB gives licenses for CGD but it has since December last year become dysfunctional with the government not filling in vacancies caused by the retirement of the Board chairman and three members. For the Board to function, a quorum of three members is needed. Currently there is only one member. Tripathi said the ministry is not looking at taking over the functioning of PNGRB.

Source: The Economic Times


Coal to be India’s energy mainstay for next 30 yrs: NITI Aayog

May 15, 2017. Coal will remain India’s main energy source for the next three decades although its share will gradually fall as the country pushes renewable power generation, according to the NITI Aayog report. The country is the world’s third-largest coal producer and the third-biggest greenhouse gas emitter. It depends on coal for about three-fifths of its energy needs and aims to double its output to 1.5 billion tonnes by 2020. By 2047, however, coal’s share of India’s energy mix would shrink to 42-48 percent, from about 58 percent in 2015, the report showed. India is also the world’s second-largest coal importer and environmentalists worry that despite its commitment to renewable energy, the country’s rising use of coal at a time when many Western nations are rejecting the dirty fossil fuel will hamper the global fight against climate change. India aims to cut thermal coal imports to zero by the end of this fiscal year and use its abundant domestic stockpiles to address its electricity needs. However, it will have to start importing again after its coal production peaks in 2037, according to the report. Imports could rise to as much as 62 percent by 2047 from over 25 percent now if the country does not make its coal mining more efficient, the report said. The country imports nearly three quarters of its energy requirements, but Prime Minister Narendra Modi has set a target of cutting that to two thirds by 2022 and to half by 2030.

Source: Reuters

Adani to begin extracting coal from Australian project in 2020-21

May 14, 2017. Adani Group plans to begin extracting coal from the $16.5 billion Carmichael project in Australia in 2020-21, its Chairman Gautam Adani has said. The Group, which has interests from ports to power, would finalise by June an investment decision for the project, which has been delayed due to protests from environmental groups. It has signed pacts to build two solar farms, each with capacity of 100-200 MW in Queensland and South Australia. Adani said the company has scaled down the coal mine capacity in the first phase. Originally seen producing 60 million tonnes (mt) a year from six open-cut pits and five underground mines, a scaled-down first stage is now planned to produce 25 mt a year of coal and will cost over $4 billion. Other phases will come later. Adani said he is expecting Australian federal and state government nods for the coal project soon.

Source: The Economic Times

Government considering winding up unsafe coal mines: Goyal

May 12, 2017. The government is planning to soon shut some of the mines of the Coal India Ltd (CIL) that are relatively unsafe and produce small quantity of coal. The plan follows announcement of a safety audit of all the 418 mines in the country in the aftermath of one of the worst disasters in Jharkhand that claimed at least 18 lives. Most of the unsafe mines in question are of Coal India (CIL), Coal and Power Minister Piyush Goyal said.

Source: The Indian Express

Coal Mines PF merger with EPF will benefit workers: Goyal

May 12, 2017. Coal and Power Minister Piyush Goyal lent full support to the proposed merger of Coal Mines Provident Fund (PF) with Employees Provident Fund (EPF) saying it will safeguard workers’ interests, even as the unions opposing it prepare to go on a 3-day strike next month. Around five lakh coal workers from different subsidiaries of Coal India Ltd (CIL) and Singareni Collieries Company Ltd have decided to go on a three-day nation-wide strike from June 19-21. He felt that it will require some more engagements with the unions to explain how they stand to benefit from the proposed merger.

Source: The Indian Express

Government power companies may not import coal in current financial year

May 11, 2017. State-owned power plants imported around 12 million tonnes (mt) of coal during 2016-17, less than a quarter of the volume imported in the previous fiscal and far less than the anticipated 25 mt expected during the year. This year, it is expected to turn zero as these companies have decided to stop imports. According to figures compiled by the Central Electricity Authority, the state sector power companies imported around 7 mt during 2016-17 while the central sector generators imported around 5 mt. Nevertheless, the private sector power generators imported substantial volume of coal, around 54 mt during the year, of which around 9 mt by independent power producers were for blending with domestic coal, while the rest at 45 mt were by power plants built to consume imported coal. Bulk of the coal by private power companies was imported by Adani for its Mundra facilities. It imported close to 36 mt last year.

Source: The Economic Times


Goyal wants no hindrance to possession of electricity connections

May 16, 2017. Power Minister Piyush Goyal endorsed the idea of providing electricity connection to consumers other than property owners like tenants and said it does not create any right over ownership. Electricity connection does not prove the ownership of the property. Some states are afraid that providing power connections would lead to claims over properties, Goyal said.

Source: The Economic Times

India jumps 73 spots to 26 rank in World Bank’s power list: Goyal

May 14, 2017. India has climbed up to twenty sixth position in World Bank’s electricity accessibility ranking in the current year from 99th spot in 2014, Power Minister Piyush Goyal has said. He also exuded confidence that by 2019, three years ahead of its original schedule, the government would able to take power to every household. He said that the government was closely working with the states to see that electricity was made available on tap. The government’s rural electrification programme is proceeding swiftly, with over 13,000 villages electrified out of a total of 18,452 and is on track for completion within the targeted 1,000 days.

Source: The Times of India

UDAY has hit state finances, GST will help: RBI study

May 12 2017. Finances of several Indian states are worsening after they took over the debt of their electricity distributors under the central government’s Ujwal Discom Assurance Yojana (UDAY) initiative, the Reserve Bank of India (RBI) study said. Additional provisions states may have to make for UDAY, increased calls for farm loan waivers and potential pay hikes for state government employees are other pressure points on state finances, the report said. In this context, implementation of the Goods and Services Tax (GST) is crucial, given that the centre will compensate states for any loss of revenue in the initial five years after the switch-over to the new tax regime, it said. For fiscal 2016-17, the revised figures for 25 states show that the consolidated fiscal deficit to gross state domestic product ratio (CFD-GSDP) is 3.4%, compared to the budgeted 3%. An increase in capital outlay and loans to power projects under UDAY worsened fiscal indicators. Excluding UDAY, the CFD of these states would have been 2.7% of GSDP, the report said. For FY18, the central bank expects an improvement in the consolidated GFD-GSDP ratio to 2.6% compared to the centre’s budgeted 3.2%. It, however, cautioned that state liabilities may increase going ahead. Apart from UDAY liabilities on their books and farm loan waivers, the RBI study said additional provisions under UDAY to provide working capital for electricity distributors, and state government guarantees towards public sector enterprises, could increase states’ debt.

Source: Livemint

MSEDCL reduces power supply to farmers

May 11, 2017. Maharashtra State Electricity Distribution Company Ltd (MSEDCL) has reduced the duration of power supply to farmers at night. Earlier, the distribution company (discom) used to provide eight hours three-phase supply during the day and ten hours during the night on rotation basis. Now, it is providing eight hours during day as well as night. The company said that the hours of supply would be increased as soon as the power situation normalizes. The company said that Energy Minister Chandrashekhar Bawankule had asked all state-run and private power plants to bring their units under breakdown, online as soon as possible. However, consumer activist Pratap Hogade has alleged that the power cuts in the state off late were completely unwarranted and illegal. Hogade has decided to file a petition before Maharashtra Electricity Regulatory Commission (MERC) and seek action against the discom. Hogade said that as per the petition submitted by MSEDCL before MERC, the discom’s current availability was 33,500 MW.

Source: The Times of India

UP cancels ‘costly’ power agreements inked by SP government

May 11, 2017. The Yogi Adityanath-led Uttar Pradesh (UP) government has cancelled the long-term power purchase agreements (PPAs) for 3,800 MW as the cost of power under these pacts was higher than the spot market prices. The previous Samajwadi Party (SP) government signed the 15-year contracts with Jindal Power, JP-Nigeri, Lanco, Adani Power, GMR and JSW. Against the 3,800 MW demand, the SP government had received bids for 6,652 MW in the price range of Rs 3.9-5.5 a unit. The state was currently procuring 3,882 MW at Rs 4.06 a unit. Of its total power drawn of 9281 MW, UP sources 4,225 MW from inter-state generating stations, 228 MW from long-term agreement, 364 MW from medium-term agreement, 150 MW through bilateral trade, 26 MW as shared agreement.

Source: Business Standard

Every household will have electricity by 2018: Bihar CM

May 11, 2017. Bihar Chief Minister (CM) Nitish Kumar said every household of the State would have power connection by 2018 end. He said the government had now shifted its focus to provide quality power supply. Recently, at the Energy Ministers’ conference in New Delhi, even the Centre had appreciated Bihar Energy department’s initiative to file zero tariff petitions. He laid foundation stone for various schemes of the department. He said the 633 unelectrified villages would be electrified by December 2017.

Source: The Hindu

Adani, Tata Power trim supplies to Gujarat as tariff ruling skews cost

May 11, 2017. The Supreme Court ruling setting aside a decision of the Central Appellate Tribunal for Electricity, effectively denying ‘compensatory tariff’ to Tata Power and Adani Power, has driven the producers to cut back power supply to Gujarat, citing financial unviability. The two companies have suspended electricity supplies to Gujarat Urja Vikas Nigam Ltd (GUVNL) said higher imported fuel costs had skewed their financial viability. Gujarat Energy Minister Chimanbhai Sapariya confirmed that Adani Power and Tata Power had discontinued 1250 MW and about 500 MW supply, respectively. If an order similar to the Supreme Court ruling on Tata Power and Adani Power is passed on the Essar Power Gujarat Ltd petition, the company may face cash-flow issues, which will impair its ability to service its loans. The demand for compensatory tariff arose after a change of law by the Singapore government, which escalated the cost of coal imported by Adani Power and Tata Power. The Supreme Court said the change of law was not a valid reason to hike power tariffs. The producers’ hopes now hinge on a favourable ruling by the Central Electricity Commission, which was directed by the apex court to examine their demands for compensatory tariff.

Source: The Hindu Business Line


RaysExperts adds 30 MW solar capacity in January-March

May 16, 2017. Solar farm maker RaysExperts has commissioned projects that contributed an additional 30 MW to Rays Solar Parks at Kolayat in Bikaner during January and March. According to the company, all the projects of the 30 MW capacity were commissioned before March 31, 2017, which enabled the developers to reap maximum accelerated depreciation benefits and 100 percent tax gains in the first year itself. The plant is located in the Bikaner district of Rajasthan, one of the highest solar radiation zones in India.

Source: India Today

Monsoon rains to arrive on India’s southern coast on May 30

May 16, 2017. India’s monsoon rains are expected to arrive on the southern Kerala coast on May 30, two days ahead of schedule, the India Meteorological Department (IMD) said. India looks likely to receive higher monsoon rainfall than previously forecast as concern over the El Nino weather condition has eased, the IMD said.

Source: Reuters

IFC may invest $40 mn in TCCL to promote renewable energy projects

May 16, 2017. International Finance Corp (IFC) may invest up to $40 million in Tata Cleantech Capital Ltd (TCCL)’s green bond issue to help the company expand long-term environment-friendly infrastructure funding. Money raised through green bonds are earmarked towards financing environment-friendly projects and TCCL would use the proceeds of IFC investment to finance the wind, solar and other climate-related projects.  IFC said it would subscribe to TCCL’s green bonds in one or more tranches. The increased use of renewable resources is expected to reduce India’s dependence on expensive imported fossil fuels. India has set a target to reduce ’emissions intensity’ of its gross domestic product (GDP) by 33-35 percent by 2030 from the 2005 level.

Source: The Economic Times

Andhra Pradesh must set the pace in solar race: Civil Aviation Minister

May 15, 2017. Andhra Pradesh must set the pace in the solar race and set an example for other states to follow, Civil Aviation Minister P Ashok Gajapathi Raju said. The Minister said Kurnool alone produces 1,000 MW of solar power out of the total 1 lakh MW produced all over the country.

Source: The Times of India

Tata Power Solar, Dell India build India’s largest vertical solar farm

May 15, 2017. Tata Power Solar and Dell International Services India have jointly put up India’s largest vertical solar farm of 120 KW. According to the Tata Power Solar, the south-facing vertical solar farm is a “very complex” project since it was to be integrated on the facade of the building without compromising on aesthetics.

Source: The Economic Times

Ramdev’s Patanjali bets on bulls to create electricity for farmers

May 15, 2017. In a bid to make India ‘economically independent’, Yoga guru Ramdev and his associate Acharya Balkrishna of the home-grown FMCG company, Patanjali Ayuveda, are now working on a unique renewable source of energy — Bull Power. Detailed research, conducted over a period of one and a half years, on the idea of generating electricity utilising a bull’s pulling power has yielded initial success. The aim is to prevent the animals from being sent to slaughter. Till now, the design, which involves a turbine, has managed to yield nearly 2.5 KW of power. Balkrishna confirmed the existence of this ongoing research at Haridwar, which aimed at finding out how many watts of power could be produced in order to light a household by a farmer. Clarifying that this move aims at helping the poor who cannot afford electricity by using the bulls they already have, he said. A bullock’s strength goes unutilised after about 90 days’ work in the fields, which can be used to generate power. The energy thus generated can also be easily stored, according to Balkrishna. A detailed cost-benefit analysis will be required to ensure that cost of fodder required by the bull is less than the cost of electricity produced.

Source: Business Standard

India, Sweden to further use of renewables to fight climate change

May 14, 2017. Sweden, one of the top 20 investors in India, is keen to partner Delhi to further the goal of use of renewables to combat challenges of climate change in keeping with the Paris Accord. Eva Svedling, State Secretary for Climate Policy, Sweden was recently in India with an aim to strengthen ties in the area of climate change. Svedling said she explored areas for collaboration under bilateral Memorandum of Understanding (MoU) on environment, MoU on renewable energy cooperation and the MoU on sustainable urban development. The main aim of her visit was to discuss climate policy and potential collaboration with Maharashtra on climate change and sustainable environmental solutions.

Source: The Economic Times

EPCA wants Tughlaqabad power plant ready by 2018

May 13, 2017. The Environment Pollution Control Authority (EPCA) asked for a month-by-month update on work progress of the Tughlaqabad sub-station. During the EPCA meeting, power department and National Thermal Power Corp (NTPC) officials submitted that the Tughlaqabad 400/220 kilovolt station will be operational by July 2018. EPCA members said NCR thermal plants should consider a gradual shift towards natural gas.

Source: The Times of India

Yet another record low for solar power tariffs in India at Rs 2.44 per unit

May 12, 2017. Solar power tariffs in India have fallen to a new record low of Rs 2.44 per unit in the just concluded bidding for Bhadla Phase-III Solar Park in Rajasthan, Power, Coal, Renewable Energy and Mines Minister Piyush Goyal said. Solar Energy Corp of India (SECI) is developing the 500 MW solar park at Bhadla with Saurya Urja Co. of Rajasthan Renewable Energy Corp Ltd.

Source: The Economic Times

Goyal emphasises on promoting indigenous solar equipment manufacturing

May 12, 2017. As India is looking forward to increase the capacity of renewable energy in the power sector to 225 GW by 2022, the government’s main thrust would be to promote indigenous manufacturing of high quality solar equipments, Power, Coal, New and Renewable Energy and Mines Minister Piyush Goyal said. In order to reduce carbon footprint in India, Goyal said the government was working on alternative modules to keep less dependency on coal in the upcoming years.

Source: The Economic Times

NTPC invites tenders for battery storage for 8 MW solar capacity in Andaman and Nicobar

May 10, 2017. NTPC Ltd has invited bids for battery energy storage system for 8 MW solar project at Chidiyatapu in Andaman and Nicobar islands. It had floated two tenders on South Andaman, one of 8 MW at Chidiyatapu and another 17 MW photovoltaic (PV) project located at Manglutan with storage capacity in both the projects.

Source: The Economic Times


Elliott steps up pressure on BHP to ditch petroleum

May 16, 2017. Activist investor Elliott Management upped the pressure for strategic changes at BHP, calling for an independent review of the mining giant’s petroleum business. Elliott, which has built up a 4.1 percent stake in BHP’s UK (United Kingdom)-listed arm and is urging changes to boost shareholder value, said there were clear signs that the market was receptive to a new strategy for BHP. Elliott has been pushing for BHP to collapse its dual-listed structure, spin off its US oil and gas assets, and boost returns to shareholders since tabling its proposals on April 10 – all of which BHP has rejected. Analysts at Deutsche Bank and Citi have said BHP could unleash billions of dollars by selling part or all of its petroleum business, although Citi cautioned this would bring only a one-off benefit to shareholders and the company should focus on how to grow value for shareholders.

Source: Reuters

US shale oil output to rise for sixth straight month in June

May 15, 2017. US (United States) shale production is expected to rise for the sixth consecutive month in June, government data showed, as producers continued to increase drilling activity because of higher oil prices. June output is set to rise by 122,000 barrels per day (bpd) to 5.4 million bpd, according to the US Energy Information Administration (EIA)’s drilling productivity report. That would be the highest production since May 2015. In the June figures, the EIA revised its December numbers up to 4.79 million bpd. That would mean the December to June production in US shale gained by nearly 617,000 bpd. In the Permian play located in West Texas and New Mexico, oil production is expected to rise by 71,000 bpd to a record 2.49 million bpd. In the Eagle Ford region, located in South Texas, output is set to rise by 36,000 bpd to 1.28 million bpd, the most since April 2016. Production in the Bakken play in North Dakota is forecast to rise 5,800 bpd to 1.03 million bpd, its second monthly rise. US natural gas production was projected to increase to a record 51.3 billion cubic feet per day (bcfd) in June. That would be up almost 0.6 bcfd from May and be the eighth monthly increase in a row. The EIA projected gas output would increase in all of the big shale basins in June.

Source: Reuters

Colombia’s Ecopetrol output falls at big oil field amid protests

May 15, 2017. Colombia’s state oil company Ecopetrol said it reduced output in one of its key production areas due to protests by residents who reject changes to the company’s hiring policy for local labor. The protest forced the closure of 92 wells producing about 10,000 barrels of oil daily near the municipality of Acacias, in central Meta province, and affected the Castilla and Chichimene fields. The company condemned the torching of a vehicle, threats to workers and acts that prevented a supply helicopter landing to leave food at one of the oil fields. The government issued a decree that allows Ecopetrol to hire workers from anywhere in the municipality of Acacias, while protesters want jobs given only to residents in the area immediately next to the fields. Social protests, legal insecurity and guerrilla attacks are frequent headaches for oil companies in Colombia. They have also faced a sharp drop in oil prices in recent years. Ecopetrol is the largest producer of crude in Colombia, pumping 712,000 barrels of oil equivalent per day at the end of the first quarter.

Source: Reuters

Start-up of Vietnam’s Nghi Son oil refinery delayed to 2018

May 15, 2017. The commercial start-up of Vietnam’s new $7.5 billion Nghi Son oil refinery will be delayed to 2018, from an initial expected start-up in the third quarter of this year. The 200,000 barrels per day (bpd) oil refinery is now planning to start commercial operations in the first quarter of 2018. Trouble with a mechanical test on some of the refinery’s components set back test runs at the plant, causing the delay. Vietnam’s imports of oil products were expected to fall after Nghi Son began operations. The delay of additional fuel supplies in Asia could be good news for refiners, a trader with a North Asian refinery said. Still, it could weigh on the crude oil market, a Singapore-based crude trader said. The refinery was expected to take delivery of its first crude oil in May and send out its first oil products by the third quarter of the year, the company said. The plant is Vietnam’s second refinery and will process Kuwaiti crude oil to produce liquefied petroleum gases, gasoline, diesel, kerosene and jet fuel, mainly for the domestic markets. Nghi Son Refinery sent out requests to shipbrokers earlier this month to charter 27 very large crude carriers, ships capable of carrying 2 million barrels of oil each, over July 2017 to June 2018 to transport crude from Kuwait to the refinery, according to a tender document.

Source: Reuters

China aims to complete O&G pipelines to Russia by late 2018

May 15, 2017. China National Petroleum Corp (CNPC) aims to complete the domestic sections of two majors oil and gas pipelines with Russia by the end of 2018. CNPC is currently building the second string of the East Siberia Pacific Ocean pipeline (ESPO) oil pipeline project, that will deliver 15 million tonnes (mt) per year of Russian crude oil to China and double the existing ESPO line, also rated 15 mt per year.

Source: Enerdata

Extending oil output cut will deliver stable prices: Russian President

May 15, 2017. Russian President Vladimir Putin said that extending oil output cuts for a further nine months was the right thing to do to ensure stable oil prices. Saudi Arabia and Russia, the world’s two top oil producers, agreed on the need to extend the cuts for a further nine months until March 2018 to rein in a global crude glut.

Source: Reuters

Qatar to sell al-Shaheen crude through JV with Total from July

May 15, 2017. Qatar Petroleum will sell al-Shaheen crude through a joint venture with Total from July, as a new concession with the French oil company begins, a tender document showed. The joint venture (JV), North Oil Company (NOC), will sell three cargoes of al-Shaheen in a tender to close, with loading on July 17-18, 23-24 and 28-29. Qatar Petroleum will directly sell another cargo of the crude for July 1-2 loading. NOC, 70 percent owned by QP and 30 percent by Total, will operate the al-Shaheen oil field from July 14 for 25 years, it said. Al-Shaheen is Qatar’s largest oil field with a production of 300,000 barrels per day.

Source: Reuters

Japan oil firms lift annual spending on refineries, cut exploration

May 15, 2017. Some Japanese oil companies have raised their capital investment plans for the year that started on April 1, putting money into refineries and other downstream projects, while others have focused on cutting spending on exploration and production. Adjustments to oil plants to meet those domestic market realities look to be driving some of investments. And while Japan’s biggest refiner, JXTG Holdings, is curbing investment by about 30 percent over the next three fiscal years to around a total of 1 trillion-1.1 trillion yen, it is prioritizing the mid to downstream, or refining, sectors. Globally, an oil price slump that began in mid-2014 has caused top oil companies to curb upstream investments and drastically cut costs.

Source: Reuters

Centrica to boost production from Chestnut oilfield in North Sea

May 15, 2017. Centrica said it will drill a new production well at its Chestnut oilfield in the North Sea, which was going to be shut later this year. The Chestnut oilfield is off the coast of Aberdeen in Scotland and has been producing oil since 2008 but was only expected to do so for three years. The field produces 4,000 barrels of oil equivalent a day and the additional production well should bring a further 10,000 barrels a day on stream, bringing total daily production to nearly 14,000 barrels a day, Centrica said. The 35 million pound investment will extend the life of the field by at least three years.

Source: Reuters

Floating oil storage has dropped by one-third in 2017: OPEC

May 14, 2017. Global oil inventories in floating storage have declined by one-third since the start of the year, the Organization of the Petroleum Exporting Countries (OPEC) said. The drop in stockpiles is the latest sign that output cuts by major producers have helped deplete a global glut.

Source: Reuters

Russia sees oil market balance in winter if cuts deal extended

May 13, 2017. Global oil markets will reach a supply-demand balance in late 2017 or early 2018 if a pact to cut output is extended, Russia’s energy minister Alexander Novak said. The Organization of the Petroleum Exporting Countries (OPEC) and other producers including Russia pledged to cut output by 1.8 million barrels per day (bpd) in the first half of the year to lift oil prices. But global inventories remain high, pulling crude back below $50 per barrel earlier this month and putting pressure on OPEC to extend the cuts to the rest of the year. Novak told the agencies that OPEC countries and other leading oil producers would discuss extending the deal in the second half of the year or “maybe further than that”. He said that he expected the parameters of the deal to be unchanged, meaning deeper cuts were unlikely. Novak said that Russia would keep output cuts of 300,000 barrels per day from the level of October 2016 as stipulated by the December 2016 deal, he said. He said that Russia’s oil output forecast of 549-551 million tonnes for this year remained the same but could change depending on the outcome of oil producer nation talks in Vienna.

Source: Reuters

Turkmenistan expected to join OPEC-led oil supply cut

May 11, 2017. Turkmenistan is likely to join an OPEC (Organization of the Petroleum Exporting Countries)-led cut in oil supply aimed at supporting prices, sources in OPEC and the industry said, potentially enlarging the output reduction slightly. The OPEC, Russia and other producers agreed last year to curb production by 1.8 million barrels per day (bpd) for six months from January 1. Oil prices have since gained support but global inventories remain high, pulling crude LCOc1 back toward $50 a barrel and putting pressure on OPEC to extend or possibly add to the cuts at least until the end of 2017. Turkmenistan is a small producer, pumping about 250,000 bpd.

Source: Reuters

Mercuria warns of undue impact of derivatives on dated Brent oil price

May 11, 2017. Trading in the North Sea crude oil physical market has seen a boost from a growing number of participants, but trader Mercuria warned that more financial players meant derivatives could have an unduly large impact on the setting of the dated Brent benchmark price. Dated Brent, which governs around two-thirds of the world’s oil trades, is set using prices of physical barrels of four streams of North Sea crude, Brent itself, Forties, Ekofisk and Oseberg (BFOE) and a series of derivative rates. The pool of market players in the North Sea ranges from oil producers such as BP, Shell or Total, to traders such as Mercuria itself or Trafigura, as well as a range of more pure financial traders. Mercuria is one of the world’s largest traders of physical commodities. The company, which is based in Switzerland, traded 2.1 million barrels of oil equivalent per day in 2016.

Source: Reuters

Canada’s Suncor prepares oil sands growth as global majors exit

May 11, 2017. Even as the world’s largest energy companies exit Canada’s high-cost oil sands the country’s top producer Suncor Energy is lining up its next phase of growth in the world’s third largest crude reserves. The preliminary plans for new projects in remote northern Alberta follow a stream of multi-billion dollar deals in which international oil majors sold off oil sands assets to Canadian producers, who are betting technology and economies of scale will make the region competitive with other plays globally. Suncor said it will file a regulatory application for its 160,000 barrel per day (bpd) Lewis project later this year, and in March received approval for the 80,000 bpd Meadow Creek East plant. It also plans to file an application for the 40,000 bpd Meadow Creek West project later this year. The company has not yet taken a final investment decision on any of the projects but if sanctioned they would boost the company’s current output of 680,000-720,000 bpd by more than a third. In total, Canada produces around 4 million bpd.

Source: Reuters

Saudi signals first cut in crude supplies to Asian customers

May 10, 2017. Saudi Arabia has notified at least two Asian refiners of its first cuts in crude allocations for regional buyers since an OPEC (Organization of the Petroleum Exporting Countries) output reduction took effect in January. Saudi Aramco has told Asian buyers it is curtailing supplies for June to meet its commitments for the output cut. The notification of the reductions in June allocations signals added urgency among members of the OPEC as evidence mounts that the output cut has so far failed to rein in a global glut in crude. OPEC has previously kept supplies to clients in high-growth Asian markets steady, while cutting allocations to Europe and the United States. Saudi Aramco will reduce oil supplies to Asian customers by about 7 million barrels in June, as it keeps to the production agreement and trims exports to meet rising domestic demand for power during the summer. Seven million barrels is roughly two days of oil imports into Japan, the world’s fourth-biggest importer. Aramco and other producers typically issue monthly notices to refineries and other buyers with contracted supplies outlining their intended allocations to each customer. Usually they keep volumes at previously agreed levels but sometimes will reduce or increase the supplies depending on market conditions.

Source: Reuters

Russia suspends oil loadings from Novorossiisk due to storm

May 10, 2017. Russia has halted oil loadings from the Black Sea port of Novorossiisk due to a storm, Russian oil pipeline monopoly Transneft said. It also said that other ports were working according to their schedule.

Source: Reuters

Venezuelan crude sales to the US bounced in April

May 10, 2017. Venezuelan crude sales to the United States (US) recovered in April compared to previous months to reach 741,000 barrels per day (bpd), its highest level since November, due to a larger supply of diluted and upgraded oil, according to trade flows data. Oil upgraders capable of converting Orinoco Belt’s extra heavy crude into exportable grades have increased processing in recent weeks after working partially earlier this year, allowing more exports. Sales of Zuata 30, Venezuela’s lightest upgraded crude, to the US almost doubled to 178,000 bpd in April compared with the previous month, according to the data. Exports of diluted crude oil made with extra heavy oil and heavy naphtha increased 17 percent compared to March.

Source: Reuters


Chevron’s $54 bn LNG plant hits new snag in Australia

May 16, 2017. Chevron Corp’s Gorgon liquefied natural gas (LNG) plant shut a production train for about a month, at least the eighth outage since operations started 14 months ago at the most-expensive project in the company’s history. Train 1 at the $54 billion project on Barrow Island off northwest Australia shut to replace a failed flow-measurement device. Other routine maintenance will be performed during the shutdown and the plant’s other two production trains are operating normally. LNG import prices in Japan, the world’s biggest buyer, averaged about $9 per million British thermal units in 2009 when the project was sanctioned, then shot up as high as $18 during construction before sliding back below $6 after it started production amid a global glut, according to data from LNG Japan Corp. The outage is the latest setback for the largest resource development in Australia’s history, which faced delays, cost overruns and labor unrest during construction. Gorgon LNG, which started in March 2016, suffered its first shutdown just two weeks after shipping its maiden cargo. The terminal is also partly owned by Exxon Mobil Corp and Royal Dutch Shell Plc.

Source: Bloomberg

Eni starts gas production from Jangkrik Development Project

May 15, 2017. Italian energy firm Eni revealed that it has started gas production from the Jangkrik Development Project, located in deepwater offshore Indonesia, ahead of schedule. Production from ten deepwater subsea wells, connected to the newly built Floating Production Unit (FPU) Jangkrik, will gradually reach 450 million standard cubic feet per day, equivalent to 83,000 barrels of oil equivalent per day. The gas, once processed onboard the FPU, will flow via a dedicated 79 km pipeline to the Onshore Receiving Facility, both built by Eni, and then through the East Kalimantan Transportation System, finally reaching the Bontang gas liquefaction plant.

Source: Rigzone

Canada LNG developer Pieridae seeking natural gas acquisitions: CEO

May 15, 2017. Pieridae Energy Ltd, the company behind a proposed liquefied natural gas (LNG) terminal on Canada’s east coast, is looking to buy producing assets in western Canada or in the Marcellus shale play in the United States, its Chief Executive Officer (CEO) Alfred Sorensen said. Sorensen said that Calgary-based Pieridae wanted to buy about 200 million cubic feet a day of natural gas production to supply its terminal and would consider buying a company or just assets. Privately held Pieridae is developing the Goldboro LNG project in Nova Scotia, with a targeted in-service date of 2021 and capacity of 10 million metric tonnes a year. He said Pieridae would look for acquisitions later this year. Companies with western Canadian natural gas assets on the block include Husky Energy, while Cenovus Energy also said it may sell some of its gas production. He expressed interest in assets from the Marcellus shale play, the most prolific natural gas field in the United States. Pieridae expects to make a final investment decision on the Goldboro terminal later this year, and currently estimates the project will cost around $7.3 billion.

Source: Reuters

Australia’s gas supply crunch may turn this export loser into a winner

May 15, 2017. Missing out on Australia’s natural gas export boom may be the best thing that happened to Arrow Energy Ltd. The decision by the Royal Dutch Shell Plc and PetroChina Co. joint-venture to scrap a A$20 billion project to ship Arrow’s fuel overseas as liquefied natural gas (LNG) looks like a blessing in disguise. Arrow, owner of the largest uncontracted gas reserves in eastern Australia and supplier of about 20 percent of Queensland’s gas, has begun engineering and design work on an expansion of its Tipton project in the state’s Surat Basin that will more than double output, the company announced. The gas, which is extracted from coal beds, will be for both domestic consumption and available for use in export projects, it said. The decision to build three separate east coast export projects, including Shell’s Queensland Curtis LNG, rather than collaborate resulted in $10 billion of unnecessary spending, according to consultant RISC Operations Pty. Arrow could cash in on buoyant domestic prices by keeping supplies at home. Spot LNG in Asia has fallen by about two-thirds since early 2014, according to World Gas Intelligence. Meanwhile, Australian wholesale prices have tripled in the last two years, a February report from the Australian Industry Group found.

Source: Bloomberg

South Africa may award first shale gas exploration licenses by end-September

May 15, 2017. South Africa’s government may award its first shale gas exploration licenses by the end of September, after environmental objections delayed the process. The five license applications under review are for exploration in the semi-arid Karoo basin. South Africa’s recoverable gas reserves from onshore shale and offshore gas fields was estimated in 2015 at about 19.5 trillion cubic feet.

Source: Reuters

Gazprom hopes to agree in 2017 main terms of gas exports to China from Russian Far East

May 14, 2017. Gazprom hopes to agree in 2017 the main terms of natural gas exports to China from the Russian Far East, the Chief Executive Officer (CEO) of Russia’s state gas giant Alexei Miller said. The gas supplies from the Russian Far East are considered to be an extension of an already signed 30-year contract on exporting of 38 billion cubic meters of natural gas to China from Siberian deposits, Miller said.

Source: Reuters

Romania to start gas production at new Caragele field in 2019

May 12, 2017. Romanian state-owned gas producer Romgaz will start production in 2019 at a newly discovered gas field, its biggest find in three decades, the government said. The 35 km-long Caragele field, in the central Romanian county of Buzau, has an estimated 25-27 billion cubic meters of gas, which could ensure the country’s entire consumption for up to three years. That estimate could rise with further exploration work and Romgaz has plans to drill six more wells this year, the government said. Production will require overall investment of €140 million ($153 million), with 40 million to be spent this year. A Bulgarian-Romanian gas pipeline partially funded with European Union funds and linking the two states to Austria would be finalised in 2019, the government said, meaning Romania could become a net gas exporter.

Source: Reuters

Cyprus gas search spurred on by Egypt find: Cypriot Energy Minister

May 12, 2017. Cyprus has stepped up its search for offshore gas and hopes that drilling by Total in July will confirm that the geology of a huge discovery in Egypt extends into Cypriot waters, the Energy Minister Yiorgos Lakkotrypis said  The east Mediterranean island has one, relatively small natural gas find that was made in 2011 and remains untapped. But the discovery of Egypt’s huge Zohr offshore reservoir in 2015 has stoked renewed interest in adjacent Cypriot waters. It has also drawn criticism from Turkey, which backs the breakaway northern Turkish Cypriot state. Ankara says Nicosia has no right to exploit the gas alone but the internationally recognized Greek Cypriot government dismisses this. Cyprus completed its third licensing round for three exploration blocks this year, issuing licenses to Italy’s ENI, France’s Total, United States firm ExxonMobil and Qatar Petroleum.

Source: Reuters

Trump’s China deal boosts US LNG without rule change

May 12, 2017. America’s shale gas could soon head to China under long-term contracts for the first time, bolstered by a new trade deal that may not even change existing rules. Cheniere Energy Inc., the first exporter of natural gas from the lower 48 states, sees the agreement as “amplifying and accelerating conversations about new long-term contracts” with China, the Houston-based company said. While the deal announced by President Donald Trump’s administration does not appear to alter access for Chinese companies to US (United States) gas cargoes, it welcomes China to receive shipments and engage in long-term contracts with American suppliers. Fifteen months after Cheniere shipped its first cargo of shale gas, putting the US on course to become a net exporter of the fuel by next year, the agreement between the world’s two largest economies may unleash even more American supply on a glutted global market. The deal could pave the way for a second wave of investment in US LNG terminals, connecting the fastest-growing supplier with the biggest growth market, according to Wood Mackenzie Ltd. US LNG export terminal developers will now be able to target Chinese buyers directly, potentially helping the projects to secure financing, Massimo Di-Odoardo, an analyst at Wood Mackenzie, said. The deal could also support direct Chinese investment in the terminals, he said. American supplies accounted for almost 7 percent of China’s total imports in March, customs data shows. Chinese companies already have long-term contracts with non-US suppliers for more LNG than domestic demand requires through at least 2023.

Source: Bloomberg

US drilling ban unlikely to delay Ohio gas pipeline: ETP

May 11, 2017. Completion of the Rover pipeline, the biggest natural gas pipe under construction in the United States (US), is not expected to be delayed by a US federal order to stop new drilling to install pipe, Energy Transfer Partners LP (ETP) said. The company spilled more than 2 million gallons of drilling fluid – mostly water and clay – in Ohio wetlands in April during construction of Rover, prompting regulators to halt drilling in certain areas. The line, once finished, will have the ability to carry enough gas to supply 15 million US and Canadian homes. The drilling ban will remain in place until US Federal Energy Regulatory Commission (FERC) staff authorizes the company to start again. It does not prevent ETP from finishing drilling activities already started or other non-drilling construction. ETP said it does not expect FERC’s action to affect the project timeline. ETP has said the $4.2 billion pipeline, which stretches from Pennsylvania to Ontario, Canada, will have the capacity to transport 3.25 billion cubic feet of gas. It was scheduled to enter service in two phases in July and November. One billion cubic feet is enough gas for about 5 million US homes.

Source: Reuters

BP begins gas production at two Egypt fields

May 11, 2017. BP has started gas production from two fields in its West Nile Delta development offshore Egypt. The Taurus and Libra fields, commissioned eight months ahead of schedule and under budget, are currently producing 700 million cubic feet a day of gas to the Egyptian national gas grid. With five gas fields across the North Alexandria and West Mediterranean Deepwater offshore concession blocks, the West Nile Delta development is being developed as two separate projects. Once fully operational in 2019, both projects can generate up to 1.5 billion cubic feet a day, which is equal to around 30% of current gas production in the country. All the generated gas will be connected to the national gas grid.

Source: Energy Business Review


Colombia coal output up 3 percent in first quarter

May 16, 2017. Colombia’s coal output rose 3 percent to 22.2 million tonnes (mt) in the first quarter of this year, compared with the same period in 2016, the national mining agency said. The Andean nation, the world’s fifth-largest coal exporter, produced 21.5 mt in the same period a year ago. The sector is seeking to produce 95 mt this year.

Source: Reuters

China April coal output up 9.9 percent year-on-year at 294.5 mt

May 15, 2017. China’s coal output rose 9.9 percent in April from a year earlier to 294.5 million tonnes (mt), the National Bureau of Statistics said. It is the second straight month that output has registered a year-on-year increase as mines have scrambled to reverse the government-enforced cuts last year to take advantage of soaring prices. For the first four months of the year, coal production rose 2.5 percent to 1.11 billion tonnes, data showed.

Source: Reuters

China suspends new coal-fired power plants in 29 provinces

May 12, 2017. China will suspend approvals for new coal-fired power plants in 29 provinces to reduce overcapacity in the sector. The National Energy Administration (NEA) has put as many as 25 provinces on “red alert”, meaning that new projects would create severe overcapacity or environmental risks, while another four regions were put on “orange alert”. The NEA said that utilization rates at coal-fired power plants were falling as a result of slowing growth in power consumption, and it established the warning system to identify regions that need to curb overcapacity. The China Electricity Council said that utilization rates had dipped further in some regions in the first quarter of 2017, especially in the northeast and northwest, putting margins at power plants under further pressure. The NEA’s new warning system also takes into account the resources and pollution levels of each region, with some coal-dependent provinces facing extreme water shortages or pressure to control smog, including the capital Beijing and the surrounding province of Hebei. Of China’s 32 provinces and regions, only Tibet was not subject to a capacity warning while two were given “green” status. China’s total coal-fired power generation capacity was likely to reach 1,300 GW by the end of 2020, much higher than the 1,100 GW target in China’s 2016-2020 five-year plan. Total coal-fired capacity stood at 940 GW at the end of 2016.

Source: Reuters

South32 warns of decline in Illawarra Metallurgical Coal output

May 11, 2017. South32 said production of metallurgical coal at its Illawarra operation in Australia will be hit by a suspension in work because of elevated gas concentrations. The company said production at the site would be at least 10% lower than the previously estimated figure of 7.9 million tonnes (mt) for the current fiscal year. It had also notified the resources regulator at the New South Wales Department of Planning and Environment about the incident following which a prohibition notice was issued. Mining was suspended at the Area 7 and Area 9 longwalls until the company carries out an investigation to find out the cause of the incident. The two longwalls are part of the operations at the Illawarra Metallurgical Coal. Located in the southern coalfields of New South Wales, Illawarra Metallurgical Coal is wholly owned by South32. The coal company operates Appin and Dendrobium underground metallurgical coal mines and has coal preparation plants at Dendrobium and West Cliff.

Source: Energy Business Review

China authorities, power firms discuss curbing low-quality coal imports

May 10, 2017. Chinese authorities met with the country’s leading power companies to discuss measures to curb low-quality coal imports and fight overcapacity in the world’s top coal consumer. Leading power firms including Huaneng Group and Datang Group were also invited to the meeting, the document showed. The two companies mainly import Indonesia coal, considered low quality by the Chinese government because of its high sulphur and ash content and low heat value. Zhang Min, an analyst with Sublime China Information Group, said was not surprised by the restrictions on low-grade coal imports which could hit Chinese purchases of Indonesian coal.

Source: Reuters


Siemens to provide service upgrades for two Argentinean power plants

May 16, 2017. Siemens has agreed to provide service, maintenance and performance upgrades for Genelba and Genelba 21 power plants in Argentina. The agreements with Pampa Energia cover spare parts, repairs, logistics support, field services as well as Siemens Power Diagnostics. One deal covers the SGT5-2000E gas turbine operating at the Genelba 21 simple cycle power plant for a 10-year period. Under the second deal, Siemens will provide service and maintenance services for eight-years for the two SGT5-4000F gas turbines and the SST-5000 steam turbine that are operating at the Genelba combined cycle power plant. The plants are located in Marcos Paz, Province of Buenos Aires in Argentina. Together, they produce about 825 MW of electricity, which is enough to power about 83,000 homes.

Source: Energy Business Review

PGE will buy EDF’s power and heating assets in Poland

May 15, 2017. Poland’s largest power utility PGE has signed a conditional agreement with French energy group EDF to buy EDF Polska’s power and CHP assets in Poland. The final transaction is expected to be signed by late July 2017. PGE will purchase EDF’s 50% stake in Kogeneracja, which owns another four CHP plants in Poland.

Source: Enerdata

Enel interested in grid network acquisitions, including Brazil: CFO

May 12, 2017. Europe’s biggest utility Enel is not interested in large acquisitions but is looking for opportunities to buy grid networks around the world, including in South America, Chief Financial Officer (CFO) Alberto De Paoli said. Enel, which recently bought Brazilian power distribution company Celg-D, already owns generation and distribution assets in Brazil and is the biggest private energy player in South America. Enel is looking to its grids and green power businesses to drive growth, especially in emerging markets and North America. Enel, which became Europe’s biggest utility last year when it re-absorbed its green energy unit, controls Spanish utility Endesa.

Source: Reuters

Nigeria’s TCN gets $1.5 bn to finance power transmission projects

May 11, 2017. Nigeria’s power grid operator Transmission Company of Nigeria (TCN) has secured a US$1.5 bn financing package from donor agencies for power transmission projects in Ogun State and other parts of Nigeria. TCN will focus on the Lukosi area in Abeokuta, the Lagos-Ibadan Expressway corridor and Ajegunle. Nigeria is considering options for TCN in the framework of its Electric Power Sector Reform Act, including full privatization, concessions and management contract. The company could also be split up into various entities that would be privatised. In another option, TCN could be managed through a public private partnership, while a third option would be a 20 to 30-year concession model.

Source: Enerdata


US energy company DTE to shut coal plants, cut carbon emissions by 80 percent by 2050

May 16, 2017. United States (US) energy company DTE Energy Co said it will build more natural gas and renewable power plants and shut all of its coal units by 2040, reducing carbon emissions by more than 80 percent from 2005 levels by 2050. DTE said its efforts to cut carbon emissions will result in a 30 percent reduction by the early 2020s, 45 percent by 2030, 75 percent by 2040 and more than 80 percent by 2050. The company said it will achieve these reductions by adding more renewable energy, transitioning its 24/7 power sources from coal to gas and continuing to operate its zero-emission Fermi 2 nuclear power plant. DTE said it would retire its last two Michigan coal plants, the 1,270 MW Belle River in 2030 and the 3,066 MW Monroe in 2040. DTE said it plans to build an additional 6,000 MW of renewable energy capacity – enough to supply nearly 2 million homes – supplementing the 1,000 MW of renewable energy it has built since 2009.

Source: Reuters

US nuclear capacity may drop by 25 percent by 2050

May 15, 2017. According to the United States (US) Energy Information Administration (EIA), the nuclear power capacity in the US could decrease by more than 20 GW between 2018 and 2050, as 9.1 GW of new capacities are expected over this period, while the retirements of 29.9 GW of nuclear capacity are scheduled over the period. Nearly all operational nuclear plants started operation between 1970 and 1990 and would then require a subsequent license renewal before 2050 to operate beyond the 60-year period covered by their original 40-year operating license and the 20-year license extension that nearly 90% of plants currently operating have either already received or have applied for. According to the EIA’s 2017 Annual Energy Outlook, only four reactors currently under construction and some uprates at existing plants are projected to come online by 2050.

Source: Enerdata

Bulgaria seeks private investors to revive Belene nuclear project

May 15, 2017. The Bulgarian government is seeking private investors to revive the Belene nuclear power project that was cancelled in 2012. The government, which had to pay €620 mn in December 2016 to Russian nuclear group Rosatom as a compensation for having cancelled the €10 bn project, is now considering privatising the nuclear project. The project could be built without state guarantees or mandatory long-term power purchase contracts. China National Nuclear Corp (CNNC) has expressed its interest in investing in the project and the Industrial and Commercial Bank of China (ICBC) has announced that it could finance Belene. The construction of the Belene power plant started in 1987 but was stopped in 1991 under the pressure of ecological movements and neighbouring countries. In June 2016, an international arbitration court ruled that Bulgaria should pay compensation for nuclear equipment it ordered from the Russian company before cancelling the project. The dispute was settled in December 2016.

Source: Enerdata

Southern Co to manage construction of Georgia nuclear plant

May 13, 2017. Southern Co’s Georgia Power and Toshiba Corp’s Westinghouse have reached a tentative deal to transfer project management of the expansion of a Georgia nuclear power plant to units of Southern Co, Georgia Power said. The interim agreement until June 3 will allow construction of the Vogtle plant expansion to continue, it said. Westinghouse Electric Co filed for bankruptcy in March, hit by billions of dollars of cost overruns at four nuclear reactors under construction, including at the Georgia project and another in South Carolina.

Source: Reuters

UK’s REA calls for strength and stability for renewables

May 12, 2017. The United Kingdom (UK)’s Renewable Energy Association (REA) has called on the government to provide a strong and stable direction for the industry post-Brexit. The renewables trade body launched its Manifesto for Growth at the All-Energy conference held at Glasgow. The REA wants the next UK government to give confidence to businesses to invest for the long-term by recommitting its support to the Climate Change Act and the upcoming Carbon Budgets. It wants the next government to assure the industry that it will come up with a clear growth plan for clean energy by this year’s Autumn Statement. The trade body wants the published plan to give clear directions to ensure that the country meets the 4th and 5th Carbon Budgets. This, it says will give clarity to renewable energy and clean technology businesses and investors for building low-carbon infrastructure in the near future. The renewables trade body asks the next UK government to commit to the shifting of all European Union (EU) energy and environmental regulations into UK law during the country’s EU exit. It wants the government to secure a reasonable price for carbon to ensure alignment with the internal energy market while sustaining economic stability.

Source: Energy Business Review

Japan’s TEPCO to seek partners for nuclear business

May 11, 2017. Japan’s Tokyo Electric Power Co (TEPCO) said it will seek partners for its nuclear business as part of a recovery plan after the Fukushima disaster of six years ago brought the utility to its knees and put it under state control. TEPCO is trying to place itself on a sounder financial footing after the government in December almost doubled its estimate for the costs related to the Fukushima disaster to 21.5 trillion yen ($188 billion). It is the third attempt to boost its finances in the six years since the disaster, after the targets in previous plans proved to be unattainable. Central to its efforts to boost profits and pay for the costs of the disaster is the restart of its Kashiwazaki-Kariwa (KK) nuclear plant in northern Japan, the world’s biggest power station not including hydroelectric dams. TEPCO estimates it can cut costs by between 40 billion and 90 billion yen a year for each reactor it restarts at the seven-unit station. It is now aiming for a restart of the first unit at the power station during the year through March 2020. However, the governor of Japan’s Niigata prefecture, where KK is located, is opposed to a restart without a review of its safety plans, which could take several years. It also must resubmit applications with the national atomic regulator. TEPCO submitted the revised business plan to the government, which is expected to give its approval after providing its own input over the last few months. TEPCO plans to allocate 500 billion yen annually in the coming decades to pay for decommissioning at Fukushima and compensation.

Source: Reuters

Bangladesh considers introducing a carbon tax

May 10, 2017. The government of Bangladesh is considering introducing a carbon tax in the next fiscal year (2017-2018), that would be levied on the carbon content of fuels. The measure, supported by the World Bank, could be included in the next budget, that will be presented in Parliament in June. Bangladesh’s CO2 emissions have trippled over the 2000-2015 period, soaring from 25 million tonnes (mt) in 2000 to nearly 75 mt in 2015. The introduction of a carbon tax in a context of low oil prices would enable the government to boost its revenue collections while promoting objectives of climate change policy.

Source: Enerdata


Status of Coal Bed Methane & Shale Gas in India

Total number of CBM Blocks awarded: 33

Total Coal Bearing Area: 26, 000 Sq. Km.

Particulars Reserves/Production (in BCM)
Total Prognosticated CBM Resource
(for 33 awarded blocks)
Total Established (as Gas in Place) Reserves 280.36
Production (from 4 CBM blocks) 1.637 MSCMD

Shale Gas: State-wise details of Identified Blocks

State/UT Number of Blocks
Andhra Pradesh 10
Arunachal Pradesh 2
Assam 6
Gujarat 28
Tamil Nadu 9
Rajasthan 1
Total 56

BCM: Billion Cubic Meters      MSCMD: Million Standard Cubic Meters Per Day

Source: Press Information Bureau

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

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