MonitorsPublished on Jun 19, 2017
Energy News Monitor | Volume XIV: Issue 1


Oil News Commentary: May – June 2017


India’s diesel demand is expected to rise to record levels again this year as a slew of infrastructure projects boosts use of the transport and industrial fuel, although a government-induced cash shortage will hold growth to its slowest in three years. Increased fuel efficiency, a fall in commercial vehicle sales, and the use of other fuels for power generation are also expected to dent demand growth for diesel, analysts and traders said. The world’s third largest oil consumer consumed 6.955 MT of diesel in April, the highest so far this year and near a record of 6.958 MT hit in May 2016, the latest government data showed. Still, a weak first quarter is expected to hold India’s diesel demand growth at 1.6 to 3 percent this year (1.63 – 1.65 million bpd), analysts from energy consultancies FGE and Wood Mackenzie said. April sales of India’s commercial vehicles, which consume mainly diesel, fell 23 percent year-on-year. Sales of passenger cars and motorcycles, however, mostly powered by gasoline, have started to recover. Woodmac expects India’s diesel growth to moderate at 3.2 percent a year over 2017 to 2025, down from an average annual growth rate of 3.9 percent from 2010 to 2016. Still India’s diesel demand growth in 2017 accounts for one third of Asia’s demand growth for the fuel, Woodmac said.

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 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 LPG 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. 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.

India has for the first time ever signed a contract to import LPG from Iran as it looks at additional sources of cooking fuel to meet rising domestic demand. State-owned oil firms will import one VLGC or 44,000 tonnes/month for an initial six-month period. India imports almost a 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 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 34.5 million LPG connections were given during the fiscal ended March 31, 2017, including 22 million free connections to poor women. This has taken the number of LPG consumers to 200 million. As many as 60 million connections have been given in last three years, taking LPG to 72.84 percent of the population. The government is targeting giving out 30 million connections including 15-20 million under the free LPG connection scheme during the 2017-18 fiscal and another 40 million in the following year. This would help take LPG coverage to 95.49 percent of the population.

Oil companies will have to take a collective hit of about ₹ 250 billion a year after the roll-out of GST since most of their output is outside the ambit of the new system. From July 1, India will roll out GST that includes most goods and services but excludes crude oil, natural gas, petrol, diesel and jet fuel. The exclusion of these goods from GST is part of the trade-off Centre conceded to address states’ fear of losing out on revenue from taxes on oil sales, a key source of their income. Other oil products such as kerosene, LPG and naphtha are included in the GST. This means oil companies will have to comply with both the old and the new tax regimes. But the tax credit can’t be transferred between the two systems. So the GST paid by an oil company on the procurement of plant, machinery and services will not be creditable against the excise duty and value added tax on the output such as crude oil, petrol and diesel not covered by GST. All downstream companies such as IOC, BPCL and HPCL will together have to bear an impact of about ₹ 150 billion. Analysts said higher tax burden for oil companies will have an inflationary impact on the overall economy. Under GST, 5 percent tax rate will apply to subsidised kerosene and LPG used for domestic cooking. At present, most major states have 5 percent tax on kerosene. Many states impose no tax on cooking gas while others levy up to 5 percent.

The Indian basket of crude oils closed below the psychologically important $50/bbl mark as geopolitical tensions in the West Asia raised market concerns. Crude prices continued on their downward spiral following the OPEC cartel’s decision to extend output cuts. The Indian basket, comprising 73 percent sour-grade Dubai and Oman crudes, and the balance in sweet-grade Brent, closed trade at $48.58/bbl. It had previously closed lower at $48.53/bbl. While the OPEC and non-OPEC producers agreed to extend until March 2018 their ongoing oil output cuts, India has reached an understanding with the global oil cartel to establish a joint working group to serve as a forum for “producer-consumer dialogue” to address mutual concerns.

The Aadhaar card has now been made mandatory for government subsidy on purchase of kerosene and benefits of Atal Pension Yojana. Those availing kerosene subsidy or contributing for the pension scheme will now be required to furnish proof of possession of Aadhaar number or undergo the enrolment process to get the benefits. The last date to get the Aadhaar or enrolment for getting it will be September 30, in case of Kerosene subsidy. It has been also decided to link the Aadhaar number with the ration card issued to households availing the benefits or with the bank account for cash transfer benefit. The oil ministry has introduced Direct Benefit Transfer through which subsidy is transferred directly to the bank accounts of the beneficiaries, who purchase the PDS kerosene at non-subsidised rate.

The government will formulate a policy this year to bring private capital and technology to substantially increase crude oil production in major oilfields such as Mumbai High that were given to state-run firms ONGC and OIL without an auction or a production sharing contract. The new policy, in which private companies will be able to bid for EOR contracts in line with best global practices, will be announced in the current fiscal year. All nomination fields will be covered by the policy but ‘a case-by-case evaluation’ would be made to decide which field can gain from private capital and technology. If state-run firms can raise output to a certain level using EOR in some fields, those may not be auctioned. EOR techniques, which require heavy investment, are used to extract more crude from depleting fields by using gas, heat or chemical injections to push up oil from difficult traps. Most of India’s producing fields are ageing and can use EOR methods to boost output. Applying EOR techniques is capital-intensive, time-consuming and requires technological knowhow. A state oil firm executive said different fields require different EOR techniques and methods need to be tested in laboratories before being applied to wells. It can take about three years to take a laboratory solution to wells. In recent times, Cairn India has undertaken these techniques with good results. The government has been pushing state firms to use EOR techniques to raise output.

IOC and its partners are in talks to buy 49 percent stake in Russia’s Vankor cluster oilfields to consolidate their presence in the energy-rich Arctic region. IOC, OIL and BPRL is looking at buying a stake in Suzunskoye, Tagulskoye and Lodochnoye fields, collectively known as Vankor Cluster, sources privy to the development said. OVL, is also interested in the fields. OVL may possibly take 26 percent in proportion of the stake it bought in the main Vankor oilfield. OIL-IOC-BPRL may take 23.9 percent stake in line with its holding in the main Vankor field. Last year, OVL first acquired 15 percent stake in Russia’s second biggest oilfield of Vankor for $1.268 billion and then bought another 11 percent for $930 million. The 26 percent stake would give OVL 7.31 MT of oil. The consortium of OIL-IOC-BPRL acquired 23.9 percent stake in the field at a cost of $2.02 billion, giving them 6.56 MT of oil. Besides, the OIL-IOC-BPRL consortium has taken another 29.9 percent stake in a separate Taas-Yuryakh oilfield in East Siberia for $1.12 billion. The investments have taken the total outlay in Russia this year to $5.46 billion. These investments will give India 15.18 MTOE. The investment made compares to $28.48 billion investment by Indian companies overseas in the past 50 years, giving it about 10 MTOE.

Saudi Aramco is said to be ‘strongly interested’ in a refining project with Indian state refiners. India, one of the world’s largest energy consumers, has sought to diversify its supply of not only crude but also gasoline and other refined products. India, which has repeatedly pressed OPEC members for oil price stability, has offered staff and other technical assistance to Aramco.

Iraq replaced Saudi Arabia as top crude supplier to India in April as refiners moved to boost their processing margins by purchasing the cheaper Basra Heavy oil grade, ship tracking and trade flow data showed. India’s April imports from Iraq topped 1 million bpd for the first time, up by about a third from March and 8 percent from a year ago, according to ship tracking data. Indian refiners in recent years have invested heavily in modernising plants to more efficiently process low-grade crudes into diesel and gasoline, helping to boost operating margins and giving greater flexibility in the oil grades they can buy. India’s crude mix is highly diverse as a result, with just over 15 percent of its flows stemming from Africa in April, nearly 13 percent from Latin America, and most of the rest coming from the Middle East. Saudi Arabia, usually India’s main supplier, shipped about 750,000 bpd to the South Asian nation in April, a decline of about 5 percent from the previous month and 8 percent from a year ago, the data showed.

Rest of the World

Saudi Arabia’s dilemma is shown quite neatly by its decision to raise crude oil prices for Asian refiners even though the kingdom is steadily surrendering market share in China, its biggest customer. Saudi Aramco, the state-owned oil company, lifted the OSP for its benchmark Arab Light grade to Asian refiners by 60 cents a barrel for July shipments. Arab Light cargoes for July will now be sold at a discount of 25 cents a barrel to the Oman-Dubai crude price, up from a discount of 85 cents for June shipments. Saudi Aramco sets the OSP based on recommendations from customers and after calculating the change in the value of its oil over the past month, based on yields and product prices. The Saudis are leading the efforts to lower output by a combined 1.8 million bpd, a move that aims to drain inventories by enough to lift prices over the longer run.

Saudi Arabia has notified at least two Asian refiners of its first cuts in crude allocations for regional buyers since an OPEC 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.

OPEC and non-members led by Russia decided to extend cuts in oil output by nine months to March 2018 as they battle a global glut of crude after seeing prices halve and revenues drop sharply in the past three years. Oil prices dropped more than 4 percent as the market had been hoping oil producers could reach a last-minute deal to deepen the cuts or extend them further, until mid-2018. OPEC’s cuts have helped to push oil back above $50 a barrel this year, giving a fiscal boost to producers, many of which rely heavily on energy revenues and have had to burn through foreign-currency reserves to plug holes in their budgets. Oil’s earlier price decline, which started in 2014, forced Russia and Saudi Arabia to tighten their belts and led to unrest in some producing countries including Venezuela and Nigeria. The price rise this year has spurred growth in the US shale industry, which is not participating in the output deal, thus slowing the market’s rebalancing with global crude stocks still near record highs. OPEC and non-OPEC agreed to extend cuts by the same 1.8 million bpd. The exact split between OPEC and non-members will likely be different after Equatorial Guinea joined the organization, reducing the number of participating non-OPEC nations to 10. Despite the output cut, OPEC kept exports fairly stable in the first half of 2017 as its members sold oil from stocks. OPEC produces a third of the world’s oil. Its production reduction of 1.2 million bpd was made based on October 2016 output of around 31 million bpd, excluding Nigeria and Libya. OPEC has a self-imposed goal of bringing stocks down from a record high of 3 billion barrels to their five-year average of 2.7 billion.

OPEC is still debating whether to extend oil output cuts by six or nine months, UAE said.  Oil producers agree they need to do whatever is necessary to restore balance to the crude market but any decision on output cuts must satisfy all parties, Kuwait said. But Kuwait stated that it must be an agreement that meets the satisfaction of everybody, and if necessary, it may be possible to increase the quantity that is cut, but it is too early to wade into this subject. Kuwaiti did not expect OPEC oil producers to discuss any deepening of their oil output reduction target as the oil market had already absorbed a rise in shale oil output a nine-month extension to the agreement that has seen 22 oil producers target a reduction of 1.8 million bpd for the first half of 2017.

Iraq agreed with Saudi Arabia on the need for extending OPEC crude output cuts for a further nine months. It also agreed on the need to extend OPEC cuts for a nine-month period. Existing output curbs by OPEC and non-OPEC producers were due to last for the first six months of 2017.

Turkmenistan is likely to join an OPEC -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 bpd for six months from January 1. Oil prices have since gained support but global inventories remain high, pulling crude LCOc1 back toward $50/bbl 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.

US 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 bpd to 5.4 million bpd, according to the US 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 1.4 BCM/day in June. That would be up almost 16 MCM/day 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.

Global oil inventories in floating storage have declined by one-third since the start of the year, the OPEC said. The drop in stockpiles is the latest sign that output cuts by major producers have helped deplete a global glut. Global oil markets will reach a supply-demand balance in late 2017 or early 2018 if a pact to cut output is extended.  OPEC and other producers including Russia pledged to cut output by 1.8 million bpd in the first half of the year to lift oil prices. But global inventories remain high, pulling crude back below $50/bbl 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”. The parameters of the deal to be unchanged, meaning deeper cuts were unlikely. Russia would keep output cuts of 300,000 bpd from the level of October 2016 as stipulated by the December 2016 deal. Russia’s oil output forecast of 549-551 MT for this year remained the same but could change depending on the outcome of oil producer nation talks in Vienna.

Oil pricing agency S&P Global Platts said it will not automatically include Qatari-loading crude in its Middle East benchmark after Saudi Arabia and some other Arab states cut ties with Doha, a move that disrupted traditional shipping routes. Saudi Arabia, the UAE, Egypt and Bahrain said they would sever all ties including transport links with Qatar, escalating past diplomatic disagreements. Platts’ move is unlikely to have a significant impact on the broader oil market because Qatar is one of the smaller producers in the OPEC. Platts said it would continue to assess and publish independent values for other Qatari-loading crudes during the review. It said that the process would not immediately impact existing nominations for cargoes loading in June and July against trades previously reported in the Platts pricing process, known as the market-on-close.

Oil traders and analysts are expecting large volumes of crude to draw from storage tanks across the US in what would be the most tangible sign of an inventory overhang reduction that has punished prices over the last two years. A reduction would show the market is finally reversing course after years of stock builds that left a worldwide overhang of half a billion barrels of crude oil and refined products. Supplies have remained stubbornly high for months, disappointing traders who were expecting OPEC cuts to help rebalance the market. But traders interviewed said seasonally unusual spring drawdowns in the US, record refining runs, and big exports to Asia and Latin America as signals that sharp declines in crude stocks could be coming. Some traders said that they expect as much as 10 million barrel per week in draws soon, although others forecasted three to four million barrels a week. US crude stocks peaked at 533 million barrels in March, and were at 516 million barrels as of last week, according to the US EIA.

US President Donald Trump’s proposal to sell half of the US SPR will likely have little impact on OPEC’s efforts to reduce a global oil glut, Goldman Sachs said. The White House budget, delivered to Congress, aims to start selling SPR oil in fiscal 2018, which begins on October 1. Under the proposal, the sales would generate $500 million in the first year and gradually rise over the following years. Goldman Sachs said such sales would only average around 110,000 bpd annually through 2027, 66,000 bpd between 2018-2020 and just 25,000 bpd this year. Goldman Sachs said the proposed SPR sales would increase the logistical strains on the US Gulf Coast, which is already struggling with higher shale production. The US SPR, the world’s largest, holds about 688 million barrels of crude oil in heavily guarded underground caverns in Louisiana and Texas. Congress created it in 1975 after the Arab oil embargo caused fears of long-term motor fuel price spikes that would harm the US economy.

The plan to sell off half the US emergency crude oil stockpile to help balance the budget faces opposition in Congress, with lawmakers from both parties worried the proposal would undermine the drilling industry and make the country vulnerable to supply shocks. News of the proposal had briefly sent oil prices tumbling on concern it would oversupply the market, but prices recovered and finished slightly higher on hopes that OPEC and other countries would extend supply cuts. US oil imports from the producer group OPEC have fallen to less than 3.2 million bpd in 2016 from more than 5.4 million bpd in 2008, according to the US EIA.

Amid the frenetic activity of American shale oilfields recovering from a two-year recession sit a handful of oil towns that seemed impervious as many producers went into bankruptcy and the economy around them sank. Occidental Petroleum Corp and a few other oil producers with wells near this town on New Mexico’s border with Texas steadily pumped low-cost oil through the downturn, using a technique that has been heralded worldwide as a way to reduce carbon emissions and boost oil output. Such a move could extend by decades the producing life of hundreds more wells, increasing oil supply which would be a drag on prices. To date, the technique has been employed only at conventional oilfields, rather than on shale deposits. Some firms are studying how to put the technique to work in shale drilling, too. The drilling method harnesses the carbon dioxide produced during the extraction of oil or from power plants, and forces it back into the fields. That boosts the pressure underground and drives more oil to the surface. The technique, one of several so-called EOR strategies used to prolong the productive lifespan of oilfields and increase output, underpins around five percent of US oil output, or about 450,000 bpd according to energy consultancy Advanced Resources International. EOR can help firms to produce between 30 percent and 60 percent of all the oil held in a reservoir. That’s far more than the 10 percent usually recovered from initial traditional drilling, according to the Department of Energy.

Statoil has interrupted drilling in the Barents Sea in the Arctic region after a court issued a temporary injunction in a technology dispute with a small Norwegian firm, Statoil said. The Stavanger court has prohibited Statoil from using its Cap-X drilling technology after Norwegian firm NeoDrill said it was based on its patented Conductor Anchor Node technology, which NeoDrill has been developing since 2000. Statoil stepped up exploration efforts this year, focusing on the Barents Sea. According to the Norwegian Petroleum Directorate the area could hold two-thirds of all undiscovered resources off the Norwegian coast. Statoil said it was unclear when Statoil could restart drilling at Blaamann, but the firm expected to complete all five wells in the Barents Sea it had planned for this year. Statoil said it planned to use Cap-X technology to drill all five wells in the Barents Sea, including the Korpfjell well in formerly disputed border area with Russia. When presenting the Cap-X technology to the public in April 2016, Statoil said it started its development in 2013 to help to develop resources in the Barents Sea.

US freight movements have started increasing again, which should help boost consumption of distillate fuel oil in 2017 and 2018. The tonnage of freight moved by road, rail, barge, pipeline and air cargo has been increasing year on year since October, after stagnating for much of 2015/16. Freight movements hit a new record in February, before slipping slightly in March, according to the US Bureau of Transportation Statistics. Most freight is hauled by equipment that uses diesel engines, or jet turbines in the case of air cargo. Freight is therefore the main driver for consumption of fuels refined from the middle of the crude oil barrel, including distillate fuel oil and jet fuel. The US EIA forecasts that distillate consumption will increase by 80,000 bpd in 2017 and a further 90,000 bpd in 2018.

China’s state-owned refiner CNPC has started receiving crude oil through its Myanmar-to-China pipeline. The pipeline starts at Kyauk Phyu in Myanmar’s west and enters China at the border city Ruili and is a joint investment by CNPC and the Myanmar Oil and Gas Enterprise. The oil will supply the new Anning refinery in the Yunnan province. The refinery was built with the capacity to process 13 million tonnes a year (260,000 bpd) of crude.

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 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.


India may face steep increase in crude oil import bill current fiscal

June 13, 2017. India’s crude oil import bill could jump a quarter in 2017-18 on estimates of higher average oil rates after a price collapse sharply brought down payments in the previous two years. The value of crude import could rise to $88 billion this year from $70 billion in 2016-17, according to the oil ministry’s estimate. In rupee terms, it could rise 22% to Rs 5.75 lakh crore. The estimate assumes crude at $55/barrel and an exchange rate of Rs 65 for a dollar for 2017-18. In April and May this year, Indian basket of crude came for $52.49 and $50.57, respectively. Crude import bill had sharply shrunk in 2015-16 to Rs 4.16 lakh crore, the lowest since 2009-10. The average price of Indian basket of crude in 2015-16 was $46.17/barrel, the lowest since 2004-05. The import bill rose to Rs 4.7 lakh crore in 2016-17, when crude had marginally risen to $47.56. In volume terms, the crude import is estimated to rise 2.7% to 219.7 million metric tonnes this fiscal year. In 2016-17, crude import rose 5.4%. The import has been rising for years as local production fails to match expanding consumption. Fuel consumption rose 5.2% in 2016-17. In May, fuel consumption rose 5.4% to 17.79 million tonnes. Demand for diesel, which makes up nearly 40% of total sales, went up 8% and that of petrol 15%. Total consumption had risen 3.3% in April after falling for three months. India imports more than 80% of its crude oil requirement and a price collapse since mid-2014 has been a gift to the exchequer. The share of petroleum in the country’s total import has fallen to 21.1% in 2016-17 from 35.5% in 2013-14. By barely passing on the benefit of lower crude prices to Indian consumers, the government has also gained immensely in terms of higher taxes on oil products. Taxes comprise 55% of the retail prices of petrol and 47% of diesel.

Source: The Economic Times

Discounts at petrol pumps costing OMCs Rs 15 bn every quarter

June 12, 2017. OMCs (oil marketing companies)—Indian Oil Corp (IOC), Bharat Petroleum Corp Ltd (BPCL) and Hindustan Petroleum Corp Ltd (HPCL)—are losing nearly Rs 1,500 crore a quarter in providing discounts to customers using digital modes to buy fuel. The digital discounts scheme that was brought in post demonetisation, was to be implemented till 31 March, but was extended indefinitely. After the withdrawal of high-value currency on 8 November last year led to a cash shortage, the government on 8 December announced a discount of 0.75% for purchase of auto fuel using credit and debit cards and e-wallets at fuel stations run by the OMCs. The discount came into effect on 13 December 2016. The discount is credited to a customer’s account as a cashback within three working days. In addition, the OMCs also bear charges on merchant discount rate (MDR), a fee charged on card usage at swipe machines. The fee is 1% on credit card transactions and 0.25-1% on debit card transactions. MDR is levied at the time of purchase, and paid to the bank. The government waived MDR at fuel stations till 31 December to encourage cashless transactions. Since December, digital volumes or the volumes on digital mode of payment for fuel, has gone up from 10% to 25% currently, BPCL said.

Source: Livemint

ONGC keen to buy HPCL, may cost about Rs 422.5 bn

June 12, 2017. Oil and Natural Gas Corp (ONGC) is keen to acquire India’s third-biggest fuel retailer HPCL in a Rs 42,254 crore deal after finding Bharat Petroleum Corp Ltd (BPCL) too expensive to buy. Following up on Finance Minister Arun Jaitley’s Budget announcement of creating an integrated oil company, ONGC evaluated options of acquiring either Hindustan Petroleum Corp Ltd (HPCL) or BPCL – the two downstream oil refining and fuel marketing companies. While acquiring either one of them made a lot of business sense, ONGC found the nation’s second-biggest fuel retailer, BPCL too expensive. ONGC already has a refining subsidiary in Mangalore Refinery and Petrochemcials Ltd (MPRL). Some reports have suggested that ONGC buying government stake in HPCL may not trigger an open-offer rule as the government’s holding is being transferred to another state-run firm and the ownership is not going to change. The oil ministry and ONGC may try and seek exemption from the open offer to keep the acquisition cost low. HPCL will add 23.8 million tonnes of annual oil refining capacity to ONGC’s portfolio, making it the third-largest refiner in the country after IOC and Reliance Industries Ltd (RIL). ONGC already is majority owner of MRPL, which has a 15 million tonnes refinery. ONGC buying HPCL will require two sets of Cabinet approval – one where the government approves sale of its all or part of its 51.11 percent stake to ONGC, and the other for allowing ONGC to spend the money on stake buy.

Source: The Times of India

Oil firms set up system for smooth daily fuel price change

June 11, 2017. State-run oil marketing companies (OMCs) have set up a system for the smooth rollout of the daily revision of transport fuel prices across the country, the biggest OMC Indian Oil Corp (IOC) said, even as a petrol pump dealers’ body threatened to go on strike against dynamic fuel pricing. Petrol and diesel prices will be revised daily from June 16 onwards by the three OMCs in sync with global crude oil prices. Daily revision of Retail Selling Prices (RSP) has already been implemented on a pilot basis in Udaipur, Jamshedpur, Visakhapatnam, Chandigarh and Puducherry from May 1. After the success of the experiment, IOC, Hindustan Petroleum Corp Ltd and Bharat Petroleum Corp Ltd have now decided to implement it across the country. Presently, the oil marketing companies review and revise retail fuel prices after every fortnight on the basis of global crude oil prices. IOC said extensive training of dealers would be held to ensure that customers did not face any pricing misinformation or glitches. All 26,000-plus IOC dealers will be given timely information on the effective prices at a pre-designated time — say 8 pm for the next day. At the non-automated petrol pumps, dealers would get the updated price by way of four distinct means: customised SMSes, emails, mobile app and web portal for dealers. Dealers will ensure price update at their fuel stations before start of sale, every day. Updated prices will be immediately exhibited at all petrol pumps for information of the public. For their convenience and assurance, customers would be able to fetch daily updated prices of petrol and diesel at all cities through IOC’s mobile app. Alternatively, customers may cross-check the prices applicable in their cities by sending an SMS. Meanwhile, the Federation of All India Petroleum Traders (FAIPT) has said there will be “no purchase no sale” of petrol and diesel on June 16 to protest the decision.

Source: Business Standard

Indian oil terminal to be dedicated to people of HP in 2018: Oil Minister

June 9, 2017. Oil Minister Dharmendra Pradhan in presence of Himachal Pradesh (HP) Chief Minister Virbhadra Singh laid the foundation stone of Rs 507 crore Indian Oil Terminal at Pekhubella in Una assembly constituency in HP. The Una terminal would be strategic storage point for Indian defence to meet annual winter fuel stocking in Leh and Ladakh and enroute Pathankot to Srinagar besides for Indian defence at Karu, Nima, Upshi, Kyari through the mighty Rohtang. It would cater to 224 retail outlet, 22 superior Kerosene Oil agencies, 125 consumer pumps meeting requirement of 580,000 kilolitre annually in HP. Under advance winter, stocking approximately 90,000 kilolitre petroleum products would be supplied to Ladakh region when road links open through Rohtang and Jojila passes. Pradhan said that opening of the Indian oil terminal will be a new milestone in the history of HP and also from strategic point of view. Pradhan said that two bottling plants of around 90,000 million tonnes capacity would be established in the hilly region of the State for LPG refill. Shri An underground pipeline would also be laid from Jalandhar up-till Una. He said that the terminal would be dedicated to the people of the state in 2018. He said that around 200 trucks will transport the petroleum, oil and lubricants to different parts of HP every day besides giving employment to thousands. A tender in respect of transportation of petroleum products would be invited and opened in Shimla.

Source: The Economic Times

Delhi Petroleum Association bats for automation in daily revision of fuel prices

June 9, 2017. Expressing his concern over daily revision in retail selling prices of petrol and diesel across the country from June 16, President of the Delhi Petroleum Dealers Association Nischal Singhaniya stated that he welcomed the move, but the rates should change automatically and not in any manual intervention. Singhaniya further stated that this should be done on a daily basis as it would cause hassle to the customers. Government said the decision was taken after the success of a pilot project since May in five cities where prices changed daily at fuel stations fed by the three state-run oil marketing companies (OMCs) — Indian Oil Corp (IOC), Hindustan Petroleum Corp Ltd (HPCL) and Bharat Petroleum Corp Ltd (BPCL). Private retailers such as Reliance Industries Ltd (RIL) and Essar are expected to adopt the new pricing mechanism. Petrol prices were freed from government control in June 2010 and diesel in October 2014, allowing OMCs to fix retail prices in tune with global crude prices. A majority of the nearly 58,000 petrol pumps in India are owned and operated by dealers. And 60-70 percent of these pumps are on the highways, the association said. It also sought an automated system to reflect price changes from the state-run oil marketing companies without the intervention of dealers. Technically, oil companies have the freedom to revise rates, but very often they are influenced by political considerations. With daily changes, which are unlikely to be more than a few paise per litre, the political pressures for not allowing significant hikes in oil prices will go. State fuel retailers currently revise rates on the 1st and 16th of every month, based on average international crude price in the preceding fortnight and currency exchange rate. The last revision in fuel prices was on May 31, when petrol was hiked by Rs 1.23 and diesel by 89 paise. The current price of petrol in Delhi is Rs 66.91 and diesel Rs 55.79.

Source: Business Standard


CIL to supply domestic fuel to non-power consumers

June 13, 2017. Coal India Ltd (CIL) will continue to offer domestic coal to non-power sectors in lieu of 50 percent of the import component in the ongoing fiscal. The development assumes significance as the government is working to eliminate coal imports. The coal would be provided from sources like Magadh Amarpali mines of CIL arm Central Coalfields Ltd (CCL) and Eastern Coalfields Ltd and South Eastern Coalfields Ltd (SECL). The government had earlier said that it is aiming to bring down to “zero” thermal coal imports of power PSUs (public sector undertaking) like NTPC in the current fiscal, a move that would reduce the country’s import bill by around Rs 17,000 crore.

Source: India Today

CCI dismisses complaint against SCCL

June 13, 2017. The Competition Commission of India (CCI) has rejected a complaint alleging abuse of dominant position by Singareni Collieries Company Ltd (SCCL) with regard to sale of non-coking coal. The complaint against SCCL, jointly owned by the Centre and Telangana government, was filed by Karnataka Power Corp Ltd (KPCL). KPCL, owned by Karnataka government, purchased coal from SCCL under the distribution system of ‘linkage’ till introduction of the National Coal Distribution Policy in 2007, after which the two entered into Fuel Supply Agreements (FSAs) in 2009 and 2015. It was alleged that various clauses of the FSAs pertaining to grade slippage, sampling procedure, deemed delivery, fixed non-negotiable price of coal, etc were abusive of SCCL’s dominant position. CCI said that Coal India Ltd through its subsidiaries operates independently of market forces and enjoys dominance in the relevant market whereas SCCL produces just a “meagre” amount of non-coking coal in the relevant market. The regulator also observed that as the alleged dispute between the firms appears to be a “commercial” dispute involving no competition concern, the remedies of KPCL would lie elsewhere.

Source: The Financial Express

Curtains for rail operations in Jharia coal belt

June 12, 2017. The raging fire in India’s biggest coalfields in Jharkhand’s Jharia district has taken its toll, with the Railways having decided to suspend movement of freight and passenger operations on the 41 km long Chanderpura-Dhanbad stretch from June 15. Fire has continued to spread at 80 underground locations in the area since 1916, damaging the surface below the train tracks. In 2007, operations in Jharia had to be discontinued for similar reasons. The line has not been restored so far. At several locations on the stretch, including the Bansjora station and the Katrasgarh-Sonardih section, the underground fire is reported to have crossed rail tracks. An estimated 50% of the coal supply in states including Punjab, Haryana, Uttar Pradesh and West Bengal was sourced from the Dhanbad area in past years.

Source: Hindustan Times

Coal ministry sets up GST facilitation cell for stakeholders

June 9, 2017. With barely a month left for GST (Goods and Services Tax) launch from July 1, the coal ministry held a meeting to review preparedness of the stakeholders for the new tax regime and set up a facilitation cell. Besides, GST cells have been made operational in each of the PSUs (public sector undertaking) under the ministry. Coal is a key component in steel making, which has been put in the lowest bracket of 5 percent under GST. The all-powerful GST Council will meet to review some of the rates on which industry has expressed its apprehension.

Source: India Today

MCL records all time high growth in 2016-17

June 9, 2017. Mahanadi Coalfields Ltd (MCL), a subsidiary of Coal India Ltd, said it has posted about nine percent growth in profit before tax (PBT)at a record Rs 6,853.32 crore in 2016-17 as against Rs 6,283.44 crore profit in previous fiscal. MCL said despite several operational hindrances the company witnessed growth in almost all the fields of operations. With nine percent growth over previous year s profit, MCL has registered the highest profit among CIL subsidiaries, sharing about 48 percent of CIL’s netprofit of Rs 14,000 crore. While coal production from MCL grew to over 139.2 million tonne coal, the company supplied record 142 million tonne dry fuel to the consumers, largely the power plants, during the year ended March 31, 2017. Contribution of MCL to Odisha exchequer also witnessed an increase of 23.81 percent at Rs 3,157.92 crore for 2016-17, as against Rs 2,550.5 paid to the state government during previous fiscal 2016.

Source: The Economic Times

CIL to close down 37 mines this fiscal

June 9, 2017. Coal India Ltd (CIL) will shut down 37 unviable mines in the current fiscal and redeploy surplus manpower from the sites proposed to be shut in nearby mine areas. In a clarification to stock exchanges, CIL said the company and its subsidiaries undertake an exercise every year to assess profit- and loss-making operating mines for a comparative study of performance to list out unviable ones. At a review meeting with the coal major and its subsidiaries, the coal ministry had found out that a sizeable number of mines are unable to recover the salary of workers. CIL achieved an 8.5 percent growth rate in production at 536 million tonnes in 2015-16. It accounts for over 80 percent of domestic coal production.

Source: Business Standard

Government wants power companies to continue mining

June 8, 2017. The government is considering approaching the Supreme Court to deter power companies from surrendering coal mining projects they have won in auctions for captive use. Of the five companies that got producing coal blocks after aggressive bids, two are considering surrendering them, while another two are unable to start production due to the weak financial position. Essar Power, which bagged the Tokisud North coal mine, and the GMR group that won the Talabira coal block approached the Delhi High Court seeking the government decision to cap pass through fixed costs be quashed or they are allowed to surrender the blocks without penalties. They filed the consequential petitions after Monnet Ispat & Energy and Mandakini Exploration & Mining surrendered the non-producing mines they had won, after getting a favourable order from the court on their claim that they were not aware of the government’s plan on fixed costs at the time of bidding. The court has sent notices to ministries of power and coal seeking a response to the petitions. The Centre will approach the Supreme Court against the high court verdict. The coal ministry had earlier issued a show-cause notice to Essar Power seeking reasons for the delay in coal mining. Meanwhile, state-run Durgapur Projects, which bagged the Trans Damodar coal mine, has not been able to start work even as it posted a Rs 800 crore annual loss, the coal ministry said. Jaiprakash Ventures that won Amelia North is also not in a position to start mining operations.

Source: The Economic Times


BJP government responsible for Haryana’s power crisis blames Surjewala

June 13, 2017. Blaming BJP (Bharatiya Janata Party) government for power cuts in Haryana, All India Congress Committee in-charge communication, Randeep Singh Surjewala said that the incumbent BJP government is directly responsible for the crisis as it has stopped five power plants in the state. The Congress leader said the declared and undeclared cuts of electricity in the towns and villages in Haryana have caused sufferings to the people in the state. It was shocking that the state government has closed five power plants with the capacity to produce 1,270 MW electricity, of which three are located in Panipat, one in Yamunanagar and one in Hisar village of Khedar. He said that the electricity was being produced in only one power plant at Yamunanagar, while the 300 MW power plant of Yamunanagar is closed since June 10. Similarly, only one 250 MW power plant is functional in Panipat, while two 210 MW power plants are closed for the past one month and the 250 MW power plant has been closed recently. Only one power plant is functional in Khedar village of Hisar while the second power plant of 300 MW is closed from May 22. Apart from this, the government has refused to take its share of power from the Jharli NTPC power plant, which is a direct treachery with the public. Surjewala said that the government should clarify that on one hand it has stopped five power plants in the name of inadequate demand of power, on the other hand the public was being forced to face power cuts during this scorching summers. He maintained that several power plants were set up in Yamunanagar, Jharli and Khedar during the Congress tenure but this government has stopped the functional power plants and the people are in distress due to power shortage in all parts of the state. In today’s modern life style, life without electricity is very difficult and hard. This situation cannot be accepted at all, he said.

Source: The Economic Times

Government close to resolving some bad power loans: Goyal

June 12, 2017. The government is close to resolving bad loans made in the power industry for companies that owe money and are not avoiding repayment on purpose, Power Minister Piyush Goyal said. Bad loans in the power sector continue to weigh on India’s banks, and the government has been looking for ways to help ease the pain for companies struggling to service their debts. Goyal said the ministry is doing its job to revive stalled and stressed thermal and hydro power projects. The power ministry, which is also working on reviving stalled hydro projects, already had extensive discussions with bankers and stakeholders. The power ministry and the Niti Aayog, Goyal said, are jointly working on a policy for next 25 years to ensure energy security.

Source: Hindustan Times

Karnataka denying right of way to Southern power grid: Goyal

June 12, 2017. The capacity of India’s southern electricity grid has increased 89 percent in the last three years and the Centre plans to double it in the next three years, Power and Coal Minister Piyush Goyal said while blaming the Karnataka government for posing hurdles to these plans. Goyal said there is currently no shortage of power in any state, including Karnataka, and if a state wants to purchase power it is available at a price of Rs 2.40 per unit. Goyal said the Coal India Ltd (CIL) is going to set up 1 GW of solar energy power generation, and will later work towards achieving 10 GW of renewable power capacity addition.

Source: The Economic Times

Government companies may help to rescue stressed private power plants

June 12, 2017. Government companies are poised to play a crucial role in the revival of stressed power plants by acquiring them or enabling their lenders to operate them on contract. Once converted into public assets, the private projects will resolve issues of lack of fuel, funds or even power purchase agreements (PPAs). The National Tariff Policy, amended in January last year, allows state-run power generation companies to sign PPAs with distribution companies (discoms) without tariff bidding. PSUs (public sector undertaking) are also entitled to coal blocks and coal supply from Coal India on nomination basis. The government is considering setting up a holding company for identified stressed assets with the help of NTPC, Power Finance Corp and Rural Electrification Corp besides banks, which will auction such plants or lease them on contract basis after the lenders take management control. The proposal includes converting debt into equity, bringing last mile equity for under-construction projects, or auctioning the power projects once the lenders take over their management. In most cases, the lenders and promoters will have to take a haircut through debt-equity swap. The proposal was made at a meeting held by Power and Coal Minister Piyush Goyal with bankers, officials from financial institutions, department of financial services and central public sector units. Estimates show that of the Rs 9 lakh crore of stressed assets in the country, more than half are in the power generation sector.

Source: The Economic Times

Kerala government allows BHEL to exit from JV with EML

June 12, 2017. The Kerala government allowed Bharat Heavy Electricals Ltd (BHEL) to exit the joint venture (JV) with Electrical Machines Ltd (EML) at Kasaragod. A decision in this regard was taken at a high-level meeting chaired by Chief Minister Pinarayi Vijayan. BHEL-EML was incorporated in 2011, by acquiring the Kasaragod unit of KEL, as a JV with Government of Kerala. BHEL had 51% equity in the JV and the Kerala government holding 49%. However, BHEL was unwilling to invest any amount as per the agreement, and also wanted to exit the JV.

Source: Livemint

India power plants stranded as 50 mn homes left in the dark

June 9, 2017. India is scaling back expectations for power demand growth as it struggles to electrify millions of homes despite a glut in generation capacity. The world’s second-most populous nation is building more power plants than it can utilize as state-level distributors struggle to connect 50 million households, according to the Central Electricity Authority (CEA). As a result, about 25 GW of coal-fired power-generating capacity is “stranded” and unused, CEA said. That’s equivalent to the entire installed capacity of neighbouring Pakistan. Demand growth for power is slowing as state distribution companies, known as discoms, struggle to purchase enough electricity for the populations they serve. Most discoms lose money selling below cost to poor and agricultural customers and through power theft. The CEA defines demand as the amount of electricity that distributors buy, not necessarily how much would be needed for the whole country, helping explain why millions still lack power and several cities face regular blackouts despite the under-utilized capacity. Electricity use is estimated to grow 6.2 percent a year over the six years ending March 2022. Consumption over the previous six years expanded 5.3 percent, missing a 7.6 percent forecast, the CEA said.

Source: Bloomberg

60k employees of UP power corporation threaten indefinite strike

June 9, 2017. Uttar Pradesh (UP) power employees and engineers threatened to hold an indefinite strike if the state power board fails to implement the seventh pay commission. Backed by various employee unions including four-zone distribution companies (discoms), two city discoms, UP power transmission corporation, UP hydro electric power corporation and UP thermal power generation corporation, more than 60,000 chief engineers and below rank employees are gearing up to boycott work across the state. Advance notices have been given to senior officials of corporation, as the union of power employees is going to hold massive protest against the board in Lucknow on June 29 from 10 am to 5pm though to ensure that residents don’t suffer.

Source: The Times of India

AAP punishing Delhi with power outages: BJP

June 8, 2017. BJP (Bharatiya Janata Party) accused the AAP (Aam Aadmi Party) government of punishing Delhiites for its defeat in the municipal elections by doing little to address the problem of power cuts and water shortage. The party plans to hold a protest outside Chief Minister (CM) Arvind Kejriwal’s residence. Shyam Jaju, in-charge of Delhi BJP, said the CM had openly said that if AAP lost (in civic polls), the people of Delhi should be prepared for power tariff hike and a tough summer. BJP said the government was yet to fulfil its promise of imposing a penalty on discoms (distribution companies) for unscheduled power cuts.

Source: The Times of India

Andhra Pradesh wants Telangana to settle all its power dues

June 7, 2017. Andhra Pradesh has demanded around Rs 4,000 crore of long-pending power dues from Telangana and has warned of stalling supplies if dues were not cleared. Telangana needs more power than the residual Andhra Pradesh state owing to high demand from its industrial and agricultural consumers ­ the latter heavily dependent on groundwater for farming and gets free power. Though most power generating stations are geographically located in residual Andhra Pradesh, the states are sharing power 43.11% and 56.89% respectively, based on a formula arrived on past usage. Of 16,465-MW power generation assets of the erstwhile undivided state, the residual Andhra Pradesh owns over 60% in terms of geographical location, while Telangana owns less than 40% of generation capacities. The residual Andhra Pradesh now claims that it was generating power by bearing the production costs and was supplying to Telangana ever since the bifurcation, and dues have piled up over the past three years. Given the high costs involved in power production, residual Andhra Pradesh now views that it was viable to produce only to the extent of its requirements and cut down production by stalling around 375 MW of supplies to Telangana. Admitting receipt of notice from Andhra energy department, D Prabhakar Rao, Chairman of Telangana’s power generation and transmission utilities, however, claimed the decision of AP to stall power supplies would not affect Telangana. Telangana, which has added around 4,100 MW of power generation capacities over the past three years after the state formation, currently has a total installed capacity of around 11,000 MW, said Rao.

Source: The Economic Times


Adani Enterprises rises after group commissions 50 MW solar plant in UP

June 13, 2017. Adani Enterprises rose after the company said it commissioned 50 MW solar plant in Mahoba, Uttar Pradesh (UP). Adani Group announced commissioning of 50 MW solar PV (photovoltaic) plant in Mahoba, Uttar Pradesh, under the National Solar Mission Scheme, with an investment of Rs 315 crore. The technology used for setting up this plant includes string inverter technology which is first of its kind in UP with crystalline silicon modules that allows miniature level control of solar power generation.

Source: Business Standard

Time for India to build an ecosystem of electric vehicles: Sinha

June 13, 2017. Minister of State for Civil Aviation Jayant Sinha posed three sets of challenges that businesses and research agencies could surmount in the next few years. He wondered if India’s huge motorcycle population could be run on electricity instead of petrol. In what should strike as a wake-up call for one of city’s most ignored and perennial problems, Sinha called on the scientific community to build compact waste management unit that will solve the issue of solid waste and unattended plastic waste locally. He said that members of Parliament will be very happy to share funds if someone could come up with a cost effective way to distribute water to households using solar energy (instead of pumps powered by diesel).

Source: The Economic Times

Vikram Solar planning to double manufacturing capacity in over 3 yrs

June 13, 2017. Vikram Solar, the Delhi-based solar energy solutions provider, announced it will double manufacturing capacity to 2,000 MW by 2020. The 11 year-old company, which has just achieved a domestic capacity of 1,000 MW, claimed it is well-equipped to cater to both Indian and international solar industry. The company’s revenue grew 89 percent to Rs 1,700 crore last financial year (2016-17) as compared to Rs 900 crore in the previous fiscal.

Source: The Economic Times

Russia’s Rosatom may acquire wind power projects in India

June 12, 2017. Attracted by the opportunities in India’s green energy space, Rosatom State Atomic Energy Corp. is planning to enter the country’s renewable energy sector. To start with, the Moscow-based Rosatom, through its unit JSC OTEK, may acquire wind energy projects in India. Rosatom, which has a partnership with state-run Nuclear Power Corp of India Ltd (NPCIL) for the Kudankulam nuclear plant in Tamil Nadu, is also planning to set up small hydropower projects in the country. Rosatom’s India strategy follows US (United States)’s withdrawal from the Paris climate agreement on grounds the deal favoured India and China and was unfair to the US. Driven by India’s ambitious clean energy target of adding 175 GW by 2022, a host of overseas firms have set up operations in the country. Of the total capacity targeted, 60 GW is to come from wind power. Wind power is the major component of India’s renewable sector. Of India’s 57.26 GW of installed renewable energy capacity, wind power accounts for over 56% or 32.27 GW. India’s wind energy space has also become intensely competitive with tariffs falling to a record low of Rs 3.46 per kilowatt hour in a 1 GW tender by state-run Solar Energy Corp of India Ltd (SECI). Having control over the supply chain will help Rosatom in reining in costs and offering competitive tariffs as India’s wind energy sector moves away from feed-in tariffs to an auction-based market. SECI plans to auction 4,000 MW of wind energy power-purchase contracts every year. With the disruption caused by India’s low clean energy tariffs playing out, rating agency Crisil cautioned that the risk profile of wind projects will increase.

Source: Livemint

Gaushalas to have their own bio-gasification equipment: Goyal

June 12, 2017. All large ‘Gaushalas’ across the country will soon have their own bio-gasification equipment and bottling unit to make good use of bio waste, Power, Coal, New and Renewable Energy and Mines Minister Piyush Goyal said. He said bio waste has huge potential, which can generate biogas usable for cooking food. It can also help Gaushalas earn some money, he said. He said that if Rajasthan government waives of intra-state transmission charges, solar energy sector can attract investment in Rajasthan, which will generate income and employment and benefit other states as well.

Source: The Economic Times

Haryana finalises additional FAR for projects with solar, waste plant

June 12, 2017. The Haryana government said additional floor area ratio (FAR) will be granted to builders who install solar units and solid waste management plants in their projects. A provision has been made in the Haryana Building Code, 2017, with respect to grant of benefit of additional FAR in case the applicant proposes to install solar photovoltaic power plant (SPPP) and solid waste management plant (SWMP), the town and country planning department said. However, no procedure for availing the benefit in terms of installation of SPPP or SWMP has been given. The department said that as per the procedure, the coloniser would submit the joint venture agreement duly notarised on stamp paper, with the company who deals in installation of SWMP or installation of SPPP, which would also be responsible for execution of the said plant. The coloniser must also submit a project report indicating details of the building structure to be used for SWMP or SPPP, along with its functioning and management.

Source: The Economic Times

CIL will set up 1 GW solar power generation capacity: Goyal

June 12, 2017. Power, Coal, New and Renewable Energy and Mines Minister Piyush Goyal has announced that Coal India Ltd (CIL) will set up 1,000 MW solar power generation capacity in a bid to reduce its carbon footprint. Goyal said that India crossed major milestones in its mission of achieving 175 GW of renewable power by 2022 in the previous financial year. According to the ministry, 2016-17 also marked the first year when net capacity addition of renewable energy was higher than that of conventional energy.

Source: The Economic Times

Finance Minister hints at no review of GST rate on hybrid cars

June 11, 2017. Finance Minister Arun Jaitley hinted that the tax rate on hybrid cars will not be reviewed, saying the industry demands were not in sync with a study conducted by tax officers. As per the proposed rates under the GST (Goods and Services Tax) regime, hybrid vehicles have been put in the same category as big petrol and diesel luxury cars attracting 28 percent rate with a cess of 15 percent. The tax incidence on hybrid vehicles will go up to 43 percent from the current effective tax rate of 30.3 percent. At present, hybrid vehicles attract excise duty of 12.5 percent, similar to entry-level small cars such as Tata Nano or Maruti Alto.

Source: The Economic Times

295 thermal power plants get more time to meet emission norms

June 10, 2017. As many as 295 coal-based power plants have got more time of two to four years to meet strict new environment norms which were to be implemented by December 2017. In November, the environment ministry brought in tougher norms relating to consumption of water, particulate matter, sulphur dioxide (SO2), oxides of nitrogen (NOx) and mercury for coal-based thermal power plants. However, the environment ministry has not amended its regulation for giving more time to these coal fired thermal power plants to meet new stricter regulation. The FGD (Flue-gas desulfurisation) is a set of technologies used to remove sulphur dioxide from exhaust flue gases of fossil-fuel power plants, and from the emissions of other sulphur oxide emitting processes. Power, Coal, New and Renewable Energy and Mines Minister Piyush Goyal had clearly indicated that the environment ministry was on board to consider extension of December 2017 deadline for coal-based thermal power plants to meet stricter emission norms.

Source: The Economic Times

India announces mounting of a National Mission on advanced ultra supercritical technologies for cleaner coal utilization

June 9, 2017. India announces mounting a National Mission on advanced ultra supercritical technologies for cleaner coal utilisation at a total cost of $ 238 million and setting up of two Centres of Excellence on Clean Coal Technologies at $5 million each. In its quest for cleaner fuels, a National Mission on methanol and di-methyl ether is being mounted. A new centre on solar photovoltaic, thermal storage and solar fuels research has been approved ~ $5 million. Funding opportunities have been announced in the area of energy storage, clean coal, waste water treatment amounting to $10 million. India announced its plan for hosting a MI Sustainable Biofuel Innovation Challenge Workshop in December, 2017 in New Delhi, India in collaboration with Biofuture platform. The increased focus on Innovation by both public and private sectors is expected to give rise to new and advanced technologies, performance breakthroughs, and significant cost reductions. These, in turn, will create opportunities for new industries and jobs and expand markets for reliable and clean energy – for both production and demand. The lower costs will spur economic growth and accelerate market uptake, enabling the realization of the benefits of accessible, reliable and affordable clean energy worldwide.

Source: Business Standard

Tamil Nadu loses 600 MW more from North Chennai thermal unit

June 8, 2017. Tamil Nadu Generation and Distribution Corporation (TANGEDCO) became poorer by 600 MW after its thermal unit in North Chennai had to be shut down due to a problem in the boiler tube. With Kudankulam Unit 1 shut down for maintenance, TANGEDCO’s power supply from various thermal and nuclear sources is down by 1500 MW. This year’s summer peak demand has not crossed 15,000 MW due to poor drawal of power by farmers. This has come a blessing in disguise for TANGEDCO which is depending on wind power in the absence of thermal and nuclear units.

Source: The Times of India

India’s first solar satellite television service brings ‘magic’ to villages

June 8, 2017. An Indian social business has launched the country’s first solar satellite television service, bringing clean energy powered entertainment to households and businesses through a pay-as-you-go payment scheme. Simpa Networks, which began operations in 2011, is one of thousands of social enterprises in India tapping into the renewable energy market in a country where one-fifth of the 1.3 billion population has no access to electricity. With the majority of those without power from poor communities in countryside, the company focuses on selling solar powered products such as LED (light emitting diode) lights, phone charging points and fans on financing to rural homes and shops in northern India. The system, which includes an 80 W solar panel, 20″ energy efficient LED television, battery, solar charge controller, is available on a repayment plan of up to 36 months. Interest applies but the company declined to provide approximate rates. Customers make an initial payment to have the system installed then use a pay-as-you-go model for the electricity. The payments contribute to total cost and, once fully paid, the customer owns the system and the electricity is free. The service, which was launched, has around 350 customers so far in the northern state of Uttar Pradesh. Simpa uses its “SmartPanel” technology which enables remote monitoring and control of the rooftop solar panel. Customers prepay for the energy and the SmartPanel delivers power until the prepaid credits expire and the customer must then recharge. The company said the payment plan is effective as such technology would be unaffordable for most rural families. With no credit history, most are considered “unbankable” and would not be able to access loans easily, it said. Given solar television service is new and few know how to use and maintain it, the company said, Simpa has trained rural solar technicians who are responsible for installation, after sale services and monthly collection of payments.

Source: Reuters

Ola joins WWF-India to support renewable energy project

June 8, 2017. Cab aggregator Ola and World Wide Fund for Nature-India (WWF-India) joined hands to support ‘Sahasra Jyoti’, a renewable energy project in the Sundarbans. The ‘Sahasra Jyoti’ initiative is aimed at bringing sustainable development to the Sundarbans by enabling energy access to 1,000 households through solar energy. The ‘Sahasra Jyoti’ project is aimed at setting up individual micro solar power stations for 15-20 hamlets in the Satjelia Island which is a forest-fringe island, sharing its boundary with the Sundarban Tiger Reserve and has an approximate population of 40,000 people.

Source: The Financial Express

CIL looks to diversify operations for green push

June 8, 2017. Coal India Ltd (CIL) is looking to diversify its operations in the face of long-term uncertainty for coal because of the government’s thrust on renewable energy and considering entering mining of metals and minerals. A May 10 tender inviting consultants for Coal India’s ‘Vision 2030’ said the Indian coal sector is at crossroads today with the government’s effort to push renewable energy due to international conventions on climate change, increase in carbon cess and other initiatives for the lesser use of coal. This requires ‘Vision 2030’ for the coal sector that takes into account environmental factors such as reduction of carbon footprint and abatement of global warming.

Source: The Economic Times

Cabinet approves plan for IREDA to go public

June 7, 2017. The cabinet approved a plan to publicly list state-owned Indian Renewable Energy Development Agency (IREDA) to fund its ambitious renewable energy development programmes. India, one of the world’s largest greenhouse gas emitters, targets to raise its renewable energy generating capacity to 175 GW by 2022, and has reinforced its commitment to fight climate change even after President Donald Trump pulled the United States out of the Paris accord. IREDA will issue 13.9 million shares at Rs 10 each in an initial public offering, the government said, without giving a time frame. It will also issue shares to its employees at a 5 percent discount, the government said, without specifying the number of shares to be issued to them. IREDA is a non-banking financial institution which provides loans for the development of renewable energy projects, with interest from such loans accounting for over 80 percent of its revenue. India’s Cabinet, chaired by Prime Minister Narendra Modi, approved a plan last month to raise Rs 23.6 billion in bonds through IREDA for developing additional capacity in the renewable energy sector.

Source: Reuters

KERC expediting solar projects as demand surges in Karnataka

June 7, 2017. Taking cue from Prime Minster Narendra Modi’s ardent appeal in Paris Climate Conference in 2015 to make India a solar-powered nation, the Karnataka Electricity Regulatory Commission (KERC) has taken an initiative to provide a predictable long-tem tariff for renewable energy projects. During the Conference, India set an ambitious target of achieving 100 GW solar power by 2022, hence the state governments are working in tandem to fulfil this vision. In lieu of this, the KERC organised hearings, during which The Green Power Market Development Group, proposed a long term policy framework that provides for fixed wheeling charges. Apart from this, the KERC has included cross-subsidy charges on solar power from solar farms. Additionally, it has given a 10-year waiver of key grid charges, for solar power projects commissioned before March 2018.

Source: The Economic Times


Faroe Petroleum hits oil in Norwegian North Sea

June 13, 2017. Independent oil and gas company Faroe Petroleum has hit oil in a ‘sand rich reservoir of very good quality’ in the Norwegian North Sea, according to the company. The Brasse appraisal well, operated by Faroe, was drilled to a total depth of 8,038 feet, targeting a seismic anomaly approximately 1.2 miles to the southeast of the main discovery well (31/7-1). Preliminary analysis was said to confirm the same oil-water contact as in the 31/7-1 discovery well and side-track and indicated good pressure communication within the reservoir.

Source: Rigzone

North Dakota’s oil output rises 2 percent in April

June 13, 2017. North Dakota’s daily oil production rose 2 percent in April as rising crude prices encouraged companies to pump more, complicating OPEC (Organization of the Petroleum Exporting Countries)’s attempts to stabilize global markets. The state pumped 1.05 million barrels of oil per day in April, up from 1.03 million barrels of oil per day in March, according to data from North Dakota’s Department of Mineral Resources. North Dakota’s oil well count hit 13,717 in April, an all-time high. The state’s drilling rig count has been steadily rising, with the count on Friday at 55, 10 percent higher than in April. North Dakota regulators said they expect oil prices to be weak through at least October. OPEC members last month agreed to maintain their own production cuts, though rising output in states like North Dakota has been offsetting the cartel’s moves.

Source: Reuters

China issues third set of fuel export quotas under processing scheme

June 13, 2017. China has issued 9.06 million tonnes of refined fuel export quotas under so-called processing trade terms in its third batch of quotas, traders said. The current round of quotas is 49 percent higher than last year’s batch, which were all issued under the processing category, of 6.085 million tonnes. The new quotas increased the total number of processing permits to 24.76 million tonnes granted so far in 2017. The quotas will be valid till the end of this year and were assigned to China National Petroleum Corp (CNPC), Sinopec Corp, China National Offshore Oil Corp (CNOOC) and Sinochem Group, traders said. The government issued 6.29 million tonnes of exports under the separate general trade category in May, taking the total under that scheme to 7.605 million tonnes for the year. Combined by category, China has granted 32.365 million tonnes of fuel export quotas this year, and all to the same four state oil companies. The third round of export quotas rose to accommodate a growing surplus of refined fuel as overall Chinese refinery throughput is set to increase even with possible run cuts by Sinopec, as peak maintenance season ends and new capacity additions are expected later this year, oil analyst Nevyn Nah of consultancy Energy Aspects said. For the latest batch of processing quotas, also called tolling quotas, Sinopec won 5.05 million tonnes, followed by CNPC at 2.7 million tonnes, Sinochem at 700,000 tonnes and CNOOC at 610,000 tonnes. China earlier this year barred the country’s independent oil plants from exporting fuel. Under the general trade category, refiners get tax refunds after exports are completed or get a tax waiver on fuel exports, a policy that Beijing granted in 2016. Under the processing rules, refiners are exempted from import taxes on crude oil and export taxes for oil products, but have fixed volumes and time slots to export, both under the tight scrutiny of Chinese customs. China’s demand for oil products will grow by 360,000 bpd this year, down from the annual demand growth of 550,000 bpd in 2016, Energy Aspect’s Nah said.

Source: Reuters

US shale firms more exposed to falling oil prices as hedges expire

June 13, 2017. Cash-strapped US (United States) shale firms scaled back their hedging programs in the first quarter, leaving them more vulnerable to tumbling spot market prices just after OPEC (Organization of the Petroleum Exporting Countries) reached a landmark deal to curb global supply. The pullback in hedging was driven by rising service costs and expectations that prices would continue to rally after the OPEC extended those cuts in May, analysts said. However, rising US production has stymied OPEC’s efforts to rebalance markets. Analysts expect US oil drilling to taper off as old hedge positions wind down, leaving smaller producers exposed to market prices at below break-even levels.

Source: Reuters

Statoil aims to more than triple Brazil output

June 12, 2017. Norwegian oil and gas company Statoil aims to more than triple its production in Brazil and wants to become the sole operator for the entire Carcara discovery, among the world’s biggest in recent years. Statoil has invested more than $10 billion in Brazil, making it the country’s largest foreign offshore operator. The Peregrino heavy oilfield 85 km off the coast of Rio de Janeiro is the biggest it operates outside Norway. With Peregrino producing 80,000-90,000 barrels of oil equivalents per day, Statoil’s 60 percent equity stake in the field currently leaves the company with 48,000-54,000 barrels in daily output from the South American country. Statoil has approved the Peregrino phase 2 development, which is expected to add 250 million barrels of reserves at a break-even price of below $45 a barrel, down from an original estimate of $70 a barrel.

Source: Reuters

Saudi to limit July oil volumes to Asia, slash US volumes

June 12, 2017. Saudi Arabia, the world’s top oil exporter, will limit volumes of crude to some Asian buyers in July and deepen cuts in allocations to the United States (US). State-run oil firm Saudi Aramco would supply full contracted crude volumes to at least five Asian buyers mainly in North Asia and lower volumes for some customers in India, China and South Korea. Cuts in crude allocations to Asia in July would total about 300,000 barrels per day (bpd), deeper than in June. Aramco notified Asian refiners that it would reduce oil supplies to Asia by about 7 million barrels in June, its first cuts for that region since Organization of the Petroleum Exporting Countries (OPEC)-led output reductions took effect in January. Elsewhere, crude allocations to the US have been lowered significantly and Aramco continued to curtail supply to Europe. Volumes to the US would be cut by about 35 percent in July, while Europe supplies will be reduced by about 11 percent compared to June. According to the July plans, Aramco would cut supplies to India by close to 200,000 bpd and China by about 110,000 bpd, while supplying full volumes to buyers in Japan and Taiwan. Supplies to one South Korean refiner were also reduced.

Source: Reuters

China’s Unipec to ship jet fuel from Asia to Europe in rare move

June 12, 2017. China’s Unipec, the trading arm of state oil major Sinopec, is planning to ship jet fuel from Asia to Europe for the first time in several years. The company has provisionally booked a long-range 2 vessel to ship jet fuel from Singapore to the United Kingdom-Continent and is looking to fix another vessel on a similar route. The last time Unipec did a similar voyage for jet fuel was a few years ago.

Source: Reuters

Oil inventory drawdown to accelerate in coming three to four months: Saudi Arabian Energy Minister

June 11, 2017. A drawdown in crude oil inventories will accelerate in the next three to four months, Saudi Arabian Energy Minister Khalid al-Falih said. Falih said Saudi Arabia planned to grow exports to the United States in the long-term.

Source: Reuters

Oil majors submit surveys to develop Iran’s Azadegan

June 10, 2017. International energy companies including Total, Petronas and Inpex, have presented technical surveys for the development of the Azadegan oilfield. Tehran is looking to ramp up its crude output and with 37 billion barrels of oil, the Azadegan field is Iran’s largest, shared with its neighbour Iraq. It is located in southern Iran, 80 km west of the Khuzestan provincial city of Ahvaz. Iran’s Petroleum Engineering and Development Company (PEDEC) said that France’s Total, Malaysia’s Petronas, and Japan’s Inpex Corp have offered their surveys on the field. PEDEC said that some other companies like Royal Dutch Shell, Italy’s oil and gas group Eni, and China National Petroleum Corp are also interested in the tender for development of the oilfield.

Source: Reuters

Nigeria plans to raise $1.2 bn for refineries: Oil Minister

June 8, 2017. Nigeria plans to raise $1.2 billion to upgrade its oil refineries, aiming to end a reliance on oil product imports by 2019, Oil Minister Ibe Kachikwu said. Although Nigeria is an exporter of oil, it is mainly dependent on imports for refined products. That drains the supply of foreign exchange in the country, making it harder for other businesses dependent on imports to succeed. Nigeria’s daily domestic refining capacity is now at 6 million litres, while the country’s daily consumption stands at 35 million litres, Kachikwu said.

Source: Reuters

Libya’s Sharara oil field reopens after strike: NOC

June 8, 2017. Libya’s major Sharara oil field has reopened after a workers’ protest and should return to normal production within three days, the National Oil Corp (NOC) said. Sharara was producing nearly a third of Libya’s national output of 835,000 barrels per day (bpd). Libya is trying to boost production to 1.25 million bpd before the end of the year.

Source: Reuters

China’s crude imports hit second highest on record in May

June 8, 2017. China’s crude oil imports rebounded to the second highest on record in May, making China the world’s top buyer for the month amid concerns over tightening crude supply to Asia and an extension of producer cuts to March next year. China imported 37.2 million tonnes or 8.76 million barrels per day of crude oil last month, up 15 percent from a year earlier and nearly 8 percent from April, the General Administration of Customs data showed.

Source: Reuters

Woodside faces delay on Senegal oil project over ownership row

June 7, 2017. A dispute between two Australian energy companies escalated, potentially delaying a promising oil project off Senegal which was due to start producing as early as 2021. The deepwater SNE project is being closely watched as it would be the first oil development in the West African nation, in an offshore area that has recently attracted oil giants BP Plc, Total SA and China’s CNOOC Ltd. Woodside Petroleum, Australia’s biggest independent oil and gas producer, bought a 35 percent stake in the project from ConocoPhillips last year and as part of the deal was due to become the operator later this year.

Source: Reuters

Abu Dhabi petroleum port eases limits on oil tankers sailing to and from Qatar

June 7, 2017. Abu Dhabi petroleum port authorities have eased restrictions on oil tankers going to and from Qatar. Abu Dhabi Petroleum Ports Authority issued a new circular removing previous restrictions on non-Qatar owned, flagged or operated vessels sailing to and from Qatar. This effectively allows co-loading of crude cargoes, a Singapore-based shipbroker said. The ban on vessels carrying the Qatari flag and vessels owned or operated by Qatar is still in place, according to the circular.

Source: Reuters

Vitol, Gunvor eye Mozambique fuel distributor privatization

June 7, 2017. Global oil traders Vitol and Gunvor are interested in buying Mozambique’s struggling state-owned fuel distributor Petromac. Petromac has struggled to reliably supply Mozambique with fuel due to cash shortages and the government has warned it is among the state institutions that pose a risk to the southeast African country’s financial stability. Fuel distributors operating in Mozambique include France’s Total, Portugal’s Galp and BP. Petromac holds around 40 percent of the distribution market.

Source: Reuters


OMV, Gazprom may revive Black Sea gas pipeline extension

June 13, 2017. Austrian energy group OMV and Russia’s Gazprom are considering reviving a gas pipeline project through the Black Sea connecting Russia to central and southern Europe, an Austrian newspaper Der Standard said. Austrian Chancellor Christian Kern and Russian President Vladimir Putin discussed the issue during Kern’s visit to an economic forum in St Petersburg this month, Der Standard said. It was too early to talk about project costs and investments. If realized, the project would likely boost the importance of OMV’s Baumgarten gas hub, which distributes around 57 billion cubic meters a year. Der Standard said the project would be an extension of the TurkStream pipeline, which Gazprom plans to finish by the end of 2019. The extended line could pump Russian gas to Italy, which currently receives supplies from Baumgarten via the TAG and SOL pipelines. Alternatively, Russian gas could go from western Turkey via Greece to Italy. Russia scrapped the South Stream pipeline project, which would have supplied Russian gas to southern Europe with an undersea pipeline to Bulgaria, in late 2014 because of objections from the European Union on competition grounds.

Source: Reuters

Taiwan to get first LNG shipment from US Sabine Pass

June 12, 2017. With a tanker expected to arrive in Taiwan within a day, the United States (US) will increase the number of countries that have received liquefied natural gas from the Sabine Pass terminal in Louisiana to at least 23 of the 35 that can accept the vessels. The Cadiz Knutsen tanker will go to the Taichung LNG (liquefied natural gas) terminal in Taiwan with a load of supercooled gas from Cheniere Energy Inc’s Sabine, according Genscape shipping data. The increase in US deliveries coincides with the LNG market worries that Qatar, the world’s biggest LNG exporter, could experience problems delivering fuel to some countries after Saudi Arabia and a few other Arab nations severed diplomatic and transport links with the gulf sheikhdom after accusing the country of sponsoring terrorism.

Source: Reuters

To open Ghana O&G field three months early: ENI

June 9, 2017. Italy’s ENI will start commercial oil and gas (O&G) production at its Sankofa field off the coast of Ghana in July, three months ahead of schedule, project partners said. The Sankofa field, which will pump 45,000 barrels per day, is phase one of the $7.9 billion Offshore Cape Three Points (OCTP) project that will also produce up to 180 million standard cubic feet of gas daily from nearby Gye Nyame reserve by the end of next year. The gas is fuelling the production vessel and the excess will be reinjected as output rises after commissioning, ENI said. Upstream trader Vitol holds 35.56 percent while state oil company Ghana National Petroleum Corp (GNPC) has a combined carried and participating interest of 20 percent. The project could raise Ghana’s oil output to around 200,000 barrels per day and gas production to more than 300 million standard cubic feet, GNPC said.

Source: Reuters

Centrica sells Canadian gas assets for $305 mn

June 9, 2017. Britain’s largest energy supplier, Centrica Plc, said it would sell its 60 percent stake in its Canadian oil and gas exploration and production joint venture to a consortium for about 240 million pounds ($305 million). The sale, to Hong Kong-listed oil and gas producer MIE Holdings Corp, The Can-China Global Resource Fund and Swiss commodity trading firm Mercuria, is part of Centrica’s drive to focus its oil and gas exploration and production activity to Europe. Analysts at Jefferies, who rate Centrica as “underperform”, said the price tag was in line with their estimate of 267 million pounds. The deal, subject to regulatory approvals, is expected to close in the second half of 2017. Last year, Centrica agreed to sell its gas assets in Trinidad and Tobago for $30 million to Royal Dutch Shell.

Source: Reuters

Australia provincial government approves start of $600 mn gas pipeline

June 8, 2017. The government of Australia’s Northern Territory gave the go-ahead to start building an A$800 million ($600 million) gas pipeline that could help ease a shortage of the commodity in the country’s east. Jemena, owned by State Grid Corp of China and Singapore Power, was given permission to build the westernmost portion of the 622 km (386 mile) line designed to join gasfields in northern Australia with the eastern state of Queensland. Australia is the world’s second-largest liquefied natural gas (LNG) exporter, but has faced a growing crisis over local gas supply with prices rocketing over the past two years as the commodity is shipped abroad. The company had previously said it planned to begin construction of a compressor station, for which it has already won approval, in May, and that it may eventually extend the pipeline.

Source: Reuters

Philippines eyes $2 bn storage facility for LNG imports

June 8, 2017. The Philippines aims to build a $2 billion receiving and distribution facility for imported liquefied natural gas (LNG), as it seeks to replace depleting domestic gas reserves that now produce a fifth of its power, the energy department said. Construction could be completed by 2020, or four years before the Malampaya natural gas field is depleted, Energy Secretary Alfonso Cusi said. The Philippines’ energy demand will triple by 2040, with electricity requirements anticipated to grow four times from 2015, Cusi said. Chinese and Japanese companies are among the foreign investors who want to help build energy infrastructure, including LNG facilities, Cusi said.

Source: Reuters

Qatar LNG project not affected by Arab tension: ConocoPhillips

June 8, 2017. ConocoPhillips said that production and exports of liquefied natural gas (LNG) from an investment project in Qatar have not been affected by growing Middle East diplomatic tensions. Saudi Arabia, Bahrain, Egypt and the United Arab Emirates cut ties with Qatar, accusing the country of supporting extremism. Qatar has denied the allegations. Concerns have grown that global access to Qatar’s LNG could be cut, especially after some Persian Gulf ports said they would not accept Qatari-flagged vessels. Houston-based ConocoPhillips owns a 30 percent stake in an LNG project operated by Qatargas Operating Co Ltd, part of the state-controlled energy company. Mitsui & Co Ltd owns a remaining 1.5 percent stake in the project, which processes about 1.4 billion cubic feet of gas per day. ConocoPhillips controls the Golden Pass LNG facility in the United States along with Exxon Mobil Corp and Qatar Petroleum.

Source: Reuters

Russia-China talks over new gas routes stalled

June 7, 2017. Talks over new routes for gas supplies to China from Russia have stalled while Beijing rethinks the balance of its energy needs, including how much liquefied natural gas (LNG) it might use. Gazprom, which is already building a gas pipeline from Eastern Siberia to China – the Power of Siberia – was in talks over two more routes: the so-called western gas route and a gas pipeline from the Pacific Island of Sakhalin. Gazprom said there were no developments on the two pipelines, whose combined capacity, if built, is seen adding up to another 40 billion cubic meters (bcm) in possible gas supplies from Russia to China per year. The Power of Siberia pipeline, expected to be launched by the end of the decade or in the early 2020s, should bring 38 bcm to China per year. Gazprom managed to clinch the Power of Siberia deal after ten years of painstaking talks with Beijing. Neither Gazprom nor state-owned China National Petroleum Corp (CNPC) immediately responded to requests for comment. According to BP’s energy outlook to 2035, the share of pipeline gas supplies to China, including from Russia, will remain largely unchanged over the ten years from 2025, with the share of LNG and China’s own gas output significantly rising.

Source: Reuters


Glencore outbids Yancoal for Rio Tinto’s Hunter Valley coal mines

June 9, 2017. Miner-trader Glencore said it had offered $2.55 billion cash for coal mines owned by Rio Tinto in Hunter Valley, Australia, outbidding a previous offer from Chinese-owned Yancoal. The large-scale, long-life assets are next to mines already owned by Glencore, which has predicted continued demand for coal, especially in Asia, despite environmental opposition to the most polluting form of fossil fuel. In January, Rio said it was selling its interest in Coal & Allied Industries Ltd to Yancoal Australia Ltd for $2.45 billion. Glencore’s proposal is $100 million higher and fully funded, but Rio Tinto has to give Yancoal the chance to make a counter offer, opening the way for a bidding war. Following a deal, Glencore’s combined portfolio would have production capacity of 81 million tonnes per year of high-energy coal, which would meet Asian demand, Glencore said.

Source: Reuters

CalSTRS agrees to divest non-US thermal coal assets

June 7, 2017. The California State Teachers’ Retirement System (CalSTRS) board voted unanimously to divest from non-United States (US) thermal coal, affecting a very small fraction of the public pension fund’s portfolio. The fund estimates that $8.3 million of its roughly $206.5 billion portfolio is exposed to non-US thermal coal. The exposure is invested in three companies – PT Adaro Energy in Indonesia, Exxaro Resources Ltd of South Africa, and Whitehaven Coal Ltd of Australia.

Source: Reuters


In Pakistan, China presses built-in advantage for ‘Silk Road’ contracts

June 13, 2017. Last year, Pakistan held informal talks with General Electric, Siemens and Switzerland’s ABB to build the country’s first high-voltage transmission line. Chinese power giant State Grid committed to building the $1.7 billion project in half the time of its European counterparts – and clinched the deal. In Pakistan, whose geographical position makes it central to Beijing’s “Silk Road” plans, contracts have been awarded for projects worth more than $28 billion – all by Chinese companies working together with local firms. More than $20 billion in new investment is likely in the next few years, Pakistan’s Planning Minister Ahsan Iqbal said. In the transmission line project deal, for example, General Electric estimated it could make one key part of the line – the converter stations – for about 25 percent less than what State Grid was charging. By awarding the contract to State Grid, Islamabad paid a higher price. The edge of Chinese companies in Pakistan is likely to continue. Under the Silk Road plan, China and Pakistan are planning to build $57 billion worth of power plants, port facilities, railway lines and roads in Pakistan. The transmission line project was conceived as a government-to-government contract to build a 878 km (545 mile) connection between soon-to-built power plants near the coastal town of Matiari and Pakistan’s industrial heartland by the eastern city of Lahore. Despite the lower cost, the problem for Prime Minister Nawaz Sharif’s government was speed. Sharif has staked his political credibility on ending Pakistan’s frequent power blackouts before the next general election are held by August 2018. Pakistan’s Energy Minister Khawaja Asif defended charges that Pakistan was favoring the Chinese or overpaying for power infrastructure.

Source: Reuters

African countries break ground on 1,303 km cross-border electricity link

June 7, 2017. Four Western African countries have broken ground for a new 1,303 km electricity interconnector project built with an investment of €370 mn. The four countries include Liberia, Guinea, Cote d’Ivoire and Sierra Leone, which are all part of the Mano River Union with the interconnectivity project expected to help them out with access to reliable and affordable energy.

Source: Energy Business Review


US withdrawal from Paris climate deal unlikely to impact emissions

June 13, 2017. The withdrawal of the United States (US) from the Paris climate pact is unlikely to have a direct impact on the expected decline in global carbon emissions, BP’s chief economist Spencer Dale said. The reduction in US greenhouse gas emissions in recent years has been a result of cheaper natural gas pushing out more polluting coal rather than regulations, he said.

Source: Reuters

Japan court denies injunction against Genkai nuclear plant

June 13, 2017. A local district court in southwestern Japan denied a request by local residents for an injunction to halt the restart of Kyushu Electric Power Co’s Genkai No. 3 and No.4 nuclear reactors, in a move that supports the utility’s plan to restart the plant by next March. The ruling by the Saga District Court is a relief for Japan’s nuclear operators at a time when they face the risk of further delays in firing up mostly idled generators from local residents worried about safety.

Source: Reuters

Copper demand for electric cars to rise nine-fold by 2027: ICA

June 13, 2017. The growing number of electric vehicles hitting roads is set to fuel a nine-fold increase in copper demand from the sector over the coming decade, according to a report by consultancy IDTechEx, commissioned by the International Copper Association (ICA). Electric or hybrid cars and buses are expected to reach 27 million by 2027, up from 3 million this year, the report said. Electric vehicles use a substantial amount of copper in their batteries and in the windings and copper rotors used in electric motors. A single car can have up to six kilometers of copper wiring, according to the ICA. That suggests electric vehicles could account for about 6 percent of global copper demand in ten years, according to analyst estimates, rising from less than 1 percent this year. The electric car market is still concentrated in a limited number of countries, according to a report by the International Energy Agency (IEA). Globally, 95 percent of electric car sales take place in just ten countries – China, the United States, Japan, Canada, Norway, Britain, France, Germany, the Netherlands and Sweden – the IEA said. Still, the IEA expects there is a “good chance” that electric vehicles in use globally could reach carmaker estimates of between 9 million and 20 million by 2020 and between 40 million and 70 million by 2025.

Source: Reuters

US EPA extends delay of oil, gas rules to 2 yrs

June 13, 2017. The US Environmental Protection Agency it would propose a two-year stay of the previous administration’s oil and gas industry methane emissions standards while the agency reconsiders the regulation. The move would extend the 90-day administrative stay announced on May 31 of the 2016 New Source Performance Standards for the oil and gas industry, which require companies to capture leaking emissions, obtain engineer certifications and install leak detention devices that the EPA had announced. The agency said it received several petitions to reconsider “certain aspects of the rule.”

Source: Reuters

TTC Group plans 1 GW of solar projects in Vietnam

June 12, 2017. Vietnamese industrial conglomerate TTC Group plans to invest up to $1 bn in developing ten to twenty solar parks with a cumulated capacity of up to 1 GW by 2018. Its sugar subsidiary TTC Sugar would develop 200 MW of solar projects, while another subsidiary, Gia Lai Electricity, would develop another 800 MW. Vietnam’s new feed-in tariff and draft power purchase agreement templates are raising interest for solar projects, especially in a context of rapidly increasing electricity demand: power consumption could double by 2025 and up to $74 bn could be invested in new coal-fired, gas-fired, wind, solar and hydropower plants by this date.

Source: Enerdata

Germany to repay nuclear tax to utilities in coming weeks

June 8, 2017. Germany’s finance ministry said it would start the process of repaying billions to local utility companies “in the coming weeks” after the country’s highest court this week ruled that a nuclear fuel tax was illegal. Companies can expect € 6.3 billion in repaid taxes and up to 1.5 billion euros in interest payments, the finance ministry said. Germany’s top court ruled the country’s nuclear fuel tax to be illegal. Germany’s nuclear fuel storage tax was imposed in the wake of German Chancellor Angela Merkel’s decision to exit nuclear power by 2022.

Source: Reuters

US solar market to fall 16 percent in 2017

June 8, 2017. US (United States) solar installations will fall 16 percent this year, according to a report by GTM Research and the Solar Energy Industries Association, as utilities slow procurement of projects to meet state mandates and residential systems become harder to sell. Following a banner 2016 driven by expectations that a key federal tax credit would expire at the end of that year, the utility-scale market is expected to drop to 8 GW this year from more than 10 GW last year, the report said. The utility market, which accounts for about half of all solar systems, is expected to resume growth in 2019 as utilities seek to procure projects before the 30 percent federal tax credit for solar projects begins to step down in 2020. Prices on solar systems dropped further during the first quarter, falling below $1 per watt for the first time, the report said. Residential solar is expected to rise 2 percent for the year, well below the 19 percent growth it logged last year. California is experiencing a major decline in adoption of home installations that contributed to a 17 percent first-quarter drop in the nationwide market. Large national installers that make up close to half the market, like Tesla Inc’s SolarCity and Vivint Solar Inc, have slowed growth to focus on profitability. The market for non-residential solar, which includes commercial and community solar installations, rose 30 percent in the first quarter thanks in part to a robust community solar market in Minnesota and growth in New York.

Source: Reuters

Japan’s TEPCO, Chubu eye $910 mn cost cut from merging fossil businesses

June 8, 2017. Tokyo Electric Power Company Holdings (TEPCO) and Chubu Electric Power Co said they aim to cut costs by more than 100 billion yen ($910 million) a year within five years after combining their fossil fuel power plants under their JERA Co joint venture. The two companies, which had agreed on the integration in March, signed a contract for this. The biggest and the third-biggest of Japan’s regional power utilities aim to combine the businesses in April-September 2019 to form a company that will oversee 68 GW of capacity in the country and account for nearly half of domestic power generation.

Source: Reuters

Dominion weighs future of Connecticut Millstone nuclear power plant

June 8, 2017. Dominion Energy Inc said that it will “continue assessing” its investments in Connecticut after the state’s House did not pass a bill that would allow the state to buy electricity from Dominion’s Millstone nuclear power plant. Millstone is one of several nuclear plants in the United States (US) Northeast and Midwest that could close before their licenses expire, industry analysts said. They have said weak power prices have made it uneconomical to operate some plants without state support. Connecticut’s Senate passed a bill allowing the state to buy power from the 2,088 MW Millstone plant. However, that evening, the House withdrew the measure hours before the legislative session ended.

Source: Reuters


All India Piped Cooking Gas (PNG) Connections

Name of the State


No. of Domestic Connections

% Change previous year

March 31, 2016 March 1, 2017
Haryana 31042 52599 169
Andhra Pradesh 3143 3534 112
Telangana 1127 2321 206
Assam 29000 29965 103
Gujarat 1507580 1641340 109
Madhya Pradesh 6000 10560 176
Maharashtra 892956 986010 110
Delhi/NCR 636318 723251 114
Rajasthan 189 157 83
Tripura 22615 28176 125
Karnataka 0 2117
Uttar Pradesh 33618 45790 136
Dadar & Nagar Haveli 52
All India 3163588 3525872 111

Industrial PNG as on March 1, 2017

Source: Compiled from Rajya Sabha Unstarred Questions

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

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