MonitorsPublished on Sep 04, 2017
Energy News Monitor | Volume XIV; Issue 12


Gas News Commentary: August 2017


GAIL (India) Ltd is seeking to renegotiate price of the LNG it has contracted from the US following a similar one with Australia, to reflect current market realities. GAIL has signed three time-swap deals to sell some of its US LNG as it rejigs the supply portfolio in line with domestic demand. Under the deals, the company will buy LNG from international companies this year and sell equivalent amount of Henry Hub-indexed volumes during 2018-19. It is also seeking destination swaps to cut shipping costs of US LNG. GAIL has a deal to buy 3.5 mtpa of LNG for 20 years from Cheniere Energy of US and has also booked capacity for another 2.3 mtpa at Dominion Energy’s Cove Point liquefaction plant. GAIL had contracted LNG from US to meet the demand of growing Indian economy with power sector being considered as a major buyer. But electricity produced using imported LNG is not finding buyers due to cheaper alternatives including renewables, leading to stranding of significant capacity out of 25,000 MW of installed gas based power plants. Under the agreement, it will get 15 cargoes or about 0.8 mt of LNG from an unnamed trader this year. In return, GAIL will sell 10 cargoes or about 0.6 mt next year from Sabine Pass on the US Gulf coast. GAIL had separately signed a deal with Royal Dutch Shell to sell about 0. 5 mt of its US LNG. The LNG that GAIL will receive this year between April and December under the time-swap deal will be at oil-linked prices. The sale of US gas next year will be at a premium to its pricing formula on a FOB basis. GAIL is trying to market LNG to anchor customers such as refineries, steel plans along planned and existing pipelines. It is also in talks to supply LNG to new fertiliser plans and expect firm agreements in 2017.

GAIL had agreed to pay Cheniere a price of $3/mmBtu plus 115 percent of the final settlement price for the New York Mercantile Exchange Henry Hub natural gas futures contract for the month in which the relevant cargo is scheduled. GAIL wants the fixed portion to be lowered to bring down landed cost of LNG to around $7-8/mmBtu against the present $9.7/mmBtu. LNG in the spot or current market is available for less than $6/mmBtu. GAIL had previously sought reopening of the August 2009 deal for import of 1.44 mtpa of LNG for 20 years from Australia’s Gorgon project. In 2015, India renegotiated price of the long-term deal to import 7.5 mtpa of LNG from Qatar, helping save ₹ 80 billion.

Experts said that GAIL was praised for being one of the first agencies to sign for what was presumed be cheap US gas supplies is now being criticised for being hasty.

The government will seek global investor participation for its ongoing mega oil O&G auction during the international SPE Offshore Europe conference to take place in Aberdeen, UK next month. A special event by the Indian government will show case the OALP, NDR and the latest investment opportunities in the Indian O&G sector. The move by the government has the potential to attract investors in the auction which has already received over 45 EoI in more than a month, according to the DGH. The oil ministry is offering over 85 percent of the country’s 3.14 million km2 of hydrocarbon sedimentary area under the new bidding mechanism of OALP and a revamped exploration policy HELP. The new OALP bidding mechanism under HELP allows investors to bid for acreages throughout the year. The current auction under HELP follows the just-concluded DSF bidding rounds under which 31 blocks were awarded to around two dozen mostly small-sized firms.  Experts were uncertain about the response to the initiative in an environment of low oil prices and declining demand growth for oil.

ONGC plans to double gas production to over 100 mmscmd in the next 5-6 years. Despite tumbling oil prices in the last three years, ONGC not only sustained production from existing fields through incremental inputs but has also taken large meaningful and calculated investment decisions to ensure sustained volumes and financial growth. Government is targeting increase in share of gas in the energy basket from 6.5 percent to 15 percent in the next few years. 17 projects with a combined capex of ₹ 760 billion have been approved in the last three years. Its flagship project includes Cluster-II in Bay of Bengal block KG-DWN-98/2 (KG-D5). The project would produce about 25 mt of oil and 50 bcm of gas over the life of the project with peak production of 4 mt of oil and 5.5 bcm of gas. This would be equivalent to 17 percent and 24 percent of ONGC’s current standalone oil and gas production, respectively. During the last three years, ONGC completed 15 production related projects (including 8 brownfield and 7 greenfield) with capital investment of 540 billion.

The CCI is investigating at least seven cases of alleged abuse of dominance by GAIL in dealing with its customers, the outcome of which could potentially redraw the rules of the gas marketing business in India. The Commission has clubbed for investigation two cases from this year and five from the previous year in which customers – Rathi Steel, Mohan Meakin, Rico Auto, Omax Autos and Rico Castings -have alleged GAIL abused its dominant position by incorporating unfair terms and condition in the GSA and imposing ToP liability. ToP requires customers to pay for 90% of the contracted volume even if it lifts less in a year although the un-lifted amount can be taken later. GAIL has denied allegations by customers. The investigation would examine almost every aspect of GAIL’s procurement, price determination, the way company imposed take-or-pay liability on all customers in 2015, and how it commits ToP liability to its upstream customers. The complainants have alleged that many of the provisions related to the quality of gas or the purchase terms favour GAIL more than customers. The most important dispute is linked to the imposition of the take-or-pay liabilities on customers for the year 2015, when changes in the global market had made long-term gas more expensive than spot, encouraging more consumers to switch to spot where possible.

Rest of the World

China has beaten expectations in its drive to help clear the nation’s notoriously smoggy skies by burning less coal and oil in favor of cleaner natural gas. Gas consumption has risen 15 percent in the first half of the year, including a 27 percent jump in June, as industrial customers shift toward the fuel and as distributors add more residential users. That surge during the traditionally low-demand part of the year raises the possibility that the country may find itself short of gas when winter hits. China’s drive to use more natural gas and renewables has seen coal’s share of the energy mix drop to just below 60 percent during the first half of the year, according to the National Energy Administration. It accounted for 64 percent in 2015, and the government is aiming for 58 percent by 2020. China’s natural gas demand will rise to 620 billion cubic meters a year by 2030, China National Petroleum Corp said. The country used 206 bcm last year, according to the National Development and Reform Commission. China’s gas prices are set by regulators, and they’re among the highest in the world by a major gas consumer.

China is likely to build two shale gas bases in the south of the country and open up tenders for more O&G exploration blocks in the world’s biggest energy producer. China is likely to start commercial production of shale gas in southern city of Anye in Guizhou province and Yichang in Hubei province. The steps come as China ramps up its exploration efforts as crude oil production from ageing wells drops. Beijing is also on a mission to lift natural gas consumption to help combat smog. In the north of the country alone, China’s crude oil and gas exploration efforts cover a vast 500,000 km2, with new natural gas and light crude reserves having already been discovered there. In the shale gas expansion, China is seeking to encourage private firms to take part in a tender for shale gas exploration right in Guizhou.

South Asia, long a backwater for energy markets, is emerging as a hotspot for LNG, with Pakistan and Bangladesh set to join India as major consumers, helping to ease global oversupply that has dogged this market for years. Only India and Pakistan currently import LNG in South Asia, taking in a combined 25 mt or 8 percent of global demand last year. But with a fast growing population, strong economic growth and soaring energy demand, more import projects are being developed, lead by Pakistan and Bangladesh. Pakistan only started importing its first LNG in 2015, and surprised some in the industry by developing its first terminal within schedule and budget. A second is about to become operational and a third is expected to be completed next year.  Bangladesh expects to import around 17.5 mt of the LNG  per year by 2025. The country expects to begin bringing in LNG cargoes via two floating import terminals by July next year. Bangladesh was in talks with Qatar’s RasGas and Indonesia’s Pertamina for long-term supply deals, while it also planned to import significant amounts of its future demand via the freely traded spot market.

Asian spot LNG prices rose as South Korean importers and Taiwan showed appetite amid a flurry of cargo offerings from projects across Asia and the Atlantic. Spot prices for September delivery rose to $5.90/mmBtu 15 cents above. Korea Gas Corp, one of the world’s biggest LNG importers, is expected to seek several cargoes via tender, alongside smaller peer SK E&S. Chevron’s new Wheatstone LNG project is due to export first LNG in September, according to trade sources, while the fourth production line at Cheniere Energy’s Sabine Pass plant appears to have begun liquefying gas, based on higher feed-stock flows.

New US sanctions will make it harder for Russia to build two gas export pipelines to Europe but the projects are unlikely to be stopped. Gazprom’s two big pipeline projects may go ahead, although at a higher price and with some delays. The Kremlin, dependent on oil and gas revenues, sees the pipelines to Germany and Turkey – Nord Stream 2 and TurkStream – as crucial to increasing its market share in Europe. It also fears that Western partners – needed to develop the deepwater, shale and Arctic gas deposits that will fill the pipelines – will be scared off by sanctions.  While some US measures remain discretionary, they may take aim at the planned twin pipeline to the existing Nord Stream 1 link connecting Russia’s gas fields with Germany via the Baltic Sea, which could keep future US shale gas deliveries away. Nord Stream 2 is due to be completed in 2019 with a likelihood of helping Moscow boost its oil and gas revenue and market share in Europe, where gas resources are dwindling. European buyers could compete with those in Asia for LNG if they wanted to secure supply from the world market, where US cargoes were some 50 percent more expensive compared with European references prices. Comparing the full costs of US LNG at the US trading point Henry Hub with gas prices on the Dutch TTF for the coming months US prices are not competitive.  US domestic prices are cheap but it has to add liquefaction, shipping and regasification costs. The German Chancellor described Nord Stream 2 as a purely economic project, while Poland has challenged it in court and is seeking more US LNG to try to break its reliance on Russian supplies.

The US has succeeded in its efforts to keep countries from signing up to Russian gas as the development in Lithuania shows. Lithuania received its first spot shipment of LNG from the United States, the result of a deal aimed at reducing dependence on Russia and consolidating relations with Washington amid increased tension in the region. The government estimates it will import half of its gas consumption in 2017 as LNG, mostly from Norway’s Statoil. The rest will be imported via a gas pipeline from Russia. Gas prices in Lithuania dipped in 2014 as it opened the LNG terminal, ending the gas supply monopoly of Russia’s Gazprom. Polish state-owned trader PGNiG received its first US LNG shipment in July.

The last massive component of Australia’s $180 billion LNG construction boom arrived, stepping up a race between Anglo-Dutch giant Shell and Japan’s Inpex to start chilling gas for export in 2018. Company reputations are at stake, as well as first access to overlapping gas fields and Australia leapfrogging Qatar as the world’s largest exporter of LNG. The Ichthys Venturer, a floating production, storage and offloading facility, travelled 5,600 km from a South Korean shipyard and will be moored 220 km off Western Australia to handle condensate from the Ichthys field. Japan’s top oil and gas explorer, Inpex Corp, is running Ichthys, both the country’s biggest overseas investment and first LNG megaproject. First production, due by March 2018, will be more than a year behind target. Costs have ballooned more than 10 percent to $37 billion since the project’s approval in 2012. Nearby, Royal Dutch Shell’s $12.6 billion Prelude project – the world’s largest FLNG facility – is also behind schedule. Shell lost out on becoming the first producer of FLNG when Malaysia’s Petronas started up a smaller FLNG facility this year.

Egypt is planning to import 80 cargoes of LNG during the 2017-18 financial year that began in July, down from the 118 cargoes imported last year. Egypt has been trying to speed up the development of recent gas discoveries with a view to halting imports by 2019. Egypt expects to increase its LNG production by 28 mcm/day by the end of the current financial year to reach 6about 175 mcm/day. Gas production will get a big boost from Italian national oil company Eni’s Zohr field, discovered in 2015 with an estimated 850 bcm. That field is expected to come into production at the end of 2017 and will save Egypt billions of dollars in hard currency that would otherwise be spent on imports.


New crude oil pipelne from Chennai Port Trust-Manali refinery

August 28, 2017. Chennai Petroleum Corp will lay a new crude oil pipeline from Chennai Port Trust to Manali Refinery at an estimated cost of Rs 258 crore, Indian Oil Corp (IOC) Chairman Sanjiv Singh said. The pipeline with additional safety features would be used as a replacement for the existing 30-inch pipeline, which was more than 45 years old, he said. He said the company has already laid 7.5 km of crude oil pipeline till July 2017. He said that the new project would improve the ‘safety and security aspects of crude transportation’. The project was expected to be completed by September 2019, he said. The company also proposed to revamp the hydrogen generation units, gas turbines and boiler at the Manali refinery at cost of Rs 421 crore to utilise natural gas as feed in hydrogen units and also as fuel, he said. On the Manali Refinery Resid Upgradation work, he said the project has been taken up at an estimated cost of Rs 3,110 crore to increase distillate yield and maximise the processing of high-sulphur crudes and improve profitability.

Source: The Economic Times

Petrol price up by Rs 6 per litre since July

August 28, 2017. Petrol price has been hiked by Rs 6 per litre since the beginning of July and is now priced at its highest rate in three years with rates being revised in small dosages daily. Diesel price has increased by Rs 3.67 a litre and now costs Rs 57.03 a litre in Delhi, the highest in four months, according to data from state-owned oil companies. A litre of petrol costs Rs 69.04 a litre in Delhi, the highest since second-half of August 2014 when it was priced at Rs 70.33. State-owned oil companies in June dumped the 15-year old practice of revising rates on 1st and 16th of every month and instead adopted a dynamic daily price revision to instantaneously reflect changes in cost.

Source: The Times of India

Tax rates for subsidised kerosene & cooking gas rose up to 5 percent: Oil ministry

August 26, 2017. The effective tax rates for subsidised kerosene and cooking gas rose up to 5% but fell on average 10-12% for most other oil products such as fuel oil, naphtha and lubricants under the freshly rolled out Goods and Services Tax (GST), an analysis by the oil ministry showed. For subsidised cooking gas used by households, the effective tax rates went up by 4-5% in several states including Delhi, Rajasthan, Tamil Nadu, Uttar Pradesh, Bihar, West Bengal, Karnataka, J&K, Goa and Chhattisgarh. In many other states, tax rates remained unchanged or rose just a bit. The GST rate is 5% on domestic cooking gas, and 18% on non-domestic gas. In most states, the effective tax rates have fallen 3-6% on non-domestic cooking gas although in some states the rates have marginally risen too. The effective tax rate on subsidised kerosene, which attracts 5% rate under GST, has swelled 3-5% in several states including Rajasthan, West Bengal, Uttarakhand, Odisha, Jharkhand and Haryana. For kerosene used for industrial purpose, which attracts 18% GST, the effective tax rate has shrunk 10-12% in most states. The effective tax rate has substantially fallen in most states for fuel oil, naphtha, light diesel oil, bitumen and lubricants, all of which attract 18% GST. On average, the decline in effective tax rates under GST in most states is 12-13% for fuel oil, naphtha and lubes. The fall varies between 10-20% for light diesel oil. In case of bitumen, the decline is mostly limited to less than 2%.

Source: The Economic Times

91 UP petrol pumps’ licences cancelled

August 23, 2017. State oil companies have cancelled the licences of 91 petrol pump dealers in Uttar Pradesh (UP) that had tampered with their dispensers to cheat fuel buyers. Disciplinary action has also been taken against 10-15 company executives, though no one has been dismissed. A statewide inspection of all 6,000 pumps across UP by state officials and oil company executives began after malpractices were detected at seven pumps four months ago. It revealed ‘critical irregularity’ at 91 pumps, where dealers had tinkered with equipment to dispense lower quantities of fuel to buyers, said an oil ministry official, adding that licences of all these pumps were cancelled after dealers failed to explain their conduct satisfactorily. Indian Oil Corp (IOC) owns 47 of the terminated dealerships, Hindustan Petroleum Corp Ltd (HPCL) has 27 and Bharat Petroleum Corp Ltd (BPCL), 17. IOC alone operates about 3,400 pumps in the state while the balance filling stations are almost equally divided between BPCL and HPCL. Across the country, the number of pumps run by state oil companies stands at about 54,000.

Source: The Economic Times

RIL to boost profit, naphtha exports by using ethane

August 23, 2017. Reliance Industries Ltd (RIL) expects to increase operating profit and naphtha exports as it switches to cheaper ethane at its petrochemical projects, Vipul Shah, chief operating officer for petrochemicals at RIL said. RIL’s annual naphtha exports will rise by 500,000 tonnes this fiscal year, Shah said. Asia is structurally short of naphtha and relies on the West and Middle East to fill most of the gaps. RIL, owner of the world’s biggest refining complex and also a leading petrochemicals player, on average exports more than 200,000 tonnes of naphtha in a month. RIL aims to import 1.4 million tonnes of ethane from North America in 2017/18, rising to 1.6 million tonnes from the next fiscal year, Shah said. RIL has no plans to convert its naphtha-based cracker at Vadodara in Gujarat state to ethane, Shah said.

Source: Reuters


Indian energy companies exploring offshore gas field deals in Israel

August 29, 2017. Indian energy firms are exploring investment opportunity in Israel’s offshore gas fields as well as possibilities of importing some of their advanced technologies as part of a larger effort between the two countries to strengthen energy ties following the recent visit by Prime Minister Narendra Modi to the Middle East nation. Israel is currently seeking bidders for its first offshore exploration bid round that offers 24 blocks with an estimated in-place reserve of 6.6 billion barrels of oil and 2137 billion cubic meters of natural gas. Israel made most of its significant gas discoveries in the past decade and is now hoping to attract foreign capital and competence to explore and develop its reserves. Indian Oil Corp (IOC), Bharat Petroleum Corp Ltd (BPCL), Hindustan Petroleum Corp Ltd (HPCL) are also examining how to adopt some of the smart technologies in automation and other aspects of fuel retailing.

Source: The Economic Times

HOEC kicks off commercial sale of gas from Assam fields

August 28, 2017. Hindustan Oil Exploration Company (HOEC) has started commercial sale of natural gas from its Assam fields, where production is planned to nearly double by this fiscal, its Chief Executive Officer (CEO) P Elango said. HOEC has started selling 10 million standard cubic feet per day of gas from the Dirok field in Tinsukia district of Assam to Brahmaputra Cracker and Polymer Ltd, he said. The government, in May 2015, had approved a $82 million field development plan (FDP) for Dirok. The FDP envisaged re-entry and completion of three existing wells and drilling of one more well, along with a 25 km pipeline and a gas processing plant. However, the rest of the new wells drilled were encouraging and the company got approval for drilling two additional wells. Production from Dirok will be over 12 percent of total gas production in Assam. About 8 million metric standard cubic meter per day (mmscmd) of gas is produced in Assam currently. Dirok field has been developed in a record 27 months by the joint venture consisting of Oil India Ltd (OIL), Indian Oil Corp (IOC) and HOEC. HOEC is the operator with 28 percent stake. OIL buys the gas at the price fixed by the government while IOC will buy 1,000 barrels per day of condensate to be produced from the field.

Source: The Financial Express

Gadkari wades in to salvage sinking LNG shipbuilding plan

August 27, 2017. The shipping ministry is making a last-ditch attempt to help India enter the liquefied natural gas (LNG) shipbuilding space and join a select list of nations specialising in this business. The floundering plan is being salvaged in the backdrop of two key developments since the beginning of the month. One is the grand success of the IPO of Cochin Shipyard Ltd, the only local yard that has secured the technological capability to build such sophisticated tankers. The other is the exit of Arvind Panagariya from NITI Aayog, which found the plan not feasible. Shipping Minister Nitin Gadkari is now scouting for ideas to make the plan work. The shipping ministry concedes that the high initial cost of constructing LNG tankers in India is a “matter of concern”.

Source: The Hindu Business Line

RIL, BP to use floating system to produce deepest D6 gas find

August 27, 2017. Reliance Industries Ltd (RIL) and its partner BP plc of the UK plan to use a floating production system at high-sea in the Bay of Bengal to bring to production the deepest gas discovery in the flagging KG-D6 block. The MJ-1 gas find is located about 2,000 meters directly below the currently producing Dhirubhai-1 and 3 (D1 and D3) fields in the eastern offshore KG-D6 block and is estimated to hold a minimum of 0.988 trillion cubic feet (Tcf) of contingent resource. In May 2013, RIL, BP and Niko Resources of Canada had struck a 155-metres thick gas condensate column in the exploration well KGD6-MJ1, which was later named as D55 or MJ-1 discovery. MJ-1 is one of the three clusters that the partners are focusing on reviving the flagging output at KG-D6. Besides MJ-1, four deepsea satellite gas discoveries — D?2, 6, 19 and 22 are planned to be developed together with D29 and D30 finds on the block. The third set is the D-34 or R-Series find. RIL and BP had in mid-June this year announced investing Rs 40,000 crore in the three sets of finds to reverse the flagging production in KG-D6 block. The government had in 2012 approved a USD 1.529 billion plan to produce 10.36 million metric standard cubic meter per day (mmscmd) of gas from four satellite fields of block KG-DWN-98/3 (KG?D6) by 2016-17. The four fields have 617 billion cubic feet of reserves and can produce gas for eight years. However, the companies did not begin the investment citing uncertainty over gas pricing. Now that the government has allowed a higher gas price of $5.56 per million metric British thermal unit (mmBtu) for yet-to-be- developed gas finds in difficult areas like the deepsea, RIL and BP have decided to take up their development. This rate compares with $2.48 per mmBtu for currently producing fields. RIL-BP combine does not plan to alter the $3.18 billion investment plan for D-34 or R-Series gas field in the same block, which was approved in August 2013. About 12.9 mmscmd of gas for 13 years can be produced from D-34 discovery, which is estimated to hold recoverable reserves of 1.4 trillion cubic feet.

Source: India Today

India trucking into gas age as government clears norms for LNG stations

August 26, 2017. India appears to be trotting along towards becoming the latest country to run long-distance trucks and buses on liquefied natural gas (LNG), or gas imported in ships, with an eye on reducing air pollution from vehicular emission. After approving the green fuel for automotive use, the government has now notified changes in the gas cylinder norms to pave the way for LNG refuelling stations and help start commercial service by LNG vehicles. The commerce and industry ministry has notified the amendments to rules governing use of cylinders carrying gas under pressure. This will help establish a storage and supply chain for LNG stations through ‘daughter trucks’, just like for CNG stations in cities. India’s smoke-spewing long-haul goods and passenger transport fleet is in for a green makeover as truck and bus manufacturers such as Tata Motors, Ashok Leyland, Mahindra & Mahindra and BharatBenz are stepping on the gas with LNG version of their

vehicles. Some of these manufacturers have already applied for vehicle ‘type approval’, a matter of 2-3 months. The makeover is being driven by Petronet LNG, India’s largest LNG importer. Petronet is setting up 20 LNG stations at petrol pumps on highways along the west coast that connect Delhi with Thiruvananthapuram covering a total distance of 4,500 km via Mumbai and Bengaluru.

Source: The Times of India

IOC, GAIL raise concerns over Assam Gas Company’s NE pipeline proposal

August 25, 2017. Indian Oil Corp (IOC) and GAIL (India) Ltd have expressed concerns over the feasibility of a 750 km gas pipeline proposed to be laid by Assam Gas Company between Barauni in Bihar and Guwahati in Assam. Assam Gas Company had in May submitted an Expression of Interest (EoI) to the downstream regulator PNGRB (Petroleum and Natural Gas Regulatory Board) proposing the Rs 3,500 crore pipeline project that will cater to the rising demand in the North Eastern region. The main pipeline project includes laying of spur lines connecting Arunachal Pradesh, Nagaland, Tripura, Meghalaya and Barak Valley in Assam. As part of the public consultation process initiated by PNGRB subsequently, IOC said the proposed pipeline by Assam Gas Company plans to source the gas from upcoming Jagdishpur-Haldia pipeline which, in turn, will source its gas from Dahej-Uran-Panvel-Dhabol pipeline leading to customers from North-East paying tariff for these multiple pipelines as well as for the proposed Barauni-Guwahati pipeline making it unaffordable for the end customer. The company said that the tariff for the Barauni-Guwahati pipeline is expected to be substantially high considering significant capex requirement for the project.

Source: The Economic Times


First tender for coal utilisation scheme fails with zero bids

August 29, 2017. The Centre’s programme of ensuring coal for stressed power units has failed to generate much interest on the part of power developers. Not a single bid was put in in the first tender called by Gujarat to provide the cheap coal earmarked for the state. Private developers who buy this coal have to sell power at Rs 2.82 per unit or less. They will get coal after they bid for a discount on the notified rate. The reverse auction was held for procuring 1,000 MW. The aim is to reduce the cost of fuel for ailing distribution companies and effectively distribute domestic coal. Officials in Gujarat Urja Vikas Nigam (GUVNL), when contacted, said they had extended the deadline for submitting bids by 20 days. However, they denied there had been any change in the tariff rates. Power developers said the cap was not viable. In May last year, the Cabinet had approved the proposal for allowing flexibility in utilising domestic coal among power-generating stations. Under the new policy, the coal requirements of a state will be clubbed and assigned to the respective state/state-nominated agencies. The state will award coal linkage in accordance with the need, efficiency, and the cost of power to power plants in its jurisdiction.The policy also allowed for coal swaps between inefficient and efficient plants and from plants situated away from coal mines to the pit head to minimise the cost of coal transportation, leading to reduction in the cost of power. For the centrally owned power plants, coal linkages of central generating stations (CGS) will be clubbed and assigned to the company owning the CGS. In the case of state/central generating plants, the deciding criteria will be plant efficiency, coal transportation cost, transmission charges, and the cost of power. Privately owned independent power plants (IPPs) have to bid for coal linkages. The basis of bidding would be the source of coal, quantity, the amount of power generated, and the delivery point for the receipt of power. which they would have to indicate.

Source: Business Standard

Salary hikes, arrears to put pressure on CIL profit this year

August 29, 2017. Coal India Ltd (CIL)’s profit may come under pressure this year as the company will have to cough up more than the amounts provisioned for salary increases and arrears. Going by preliminary estimates, the state-owned mining company will have to pay Rs 8,200 crore on account of arrears and salary increases during 2017-18. CIL worker unions and the management agreed on a 20% salary hike and a final accord is scheduled to be signed on August 31. CIL needs to pay arrears for 14 months because the salary increase is effective from July 2016. The unions had initially demanded a 50% salary increase and settled for 20% after year-long negotiations. In 2011, salaries were increased by 25%.

Source: The Economic Times

Adani to start Australian coal mine with own funds

August 28, 2017. India’s Adani Enterprises said it will start work in October on its Carmichael coal project in Australia using A$400 million ($317 million) of its own funds, even as it looks to lock in financing for the controversial mine. Adani, which has said previously it needed to borrow under A$2 billion to get the project off the ground, will target first shipments from March 2020 for the first stage of the project which has been trimmed back to a cost of A$4 billion. Analysts have raised doubts about whether Adani can fund what would be Australia’s biggest coal mine given opposition from green groups and a global backlash to investment in fossil fuels, while Adani insists the project will proceed. Adani, which uses coal to generate electricity for its power business in India, is trying to line up funding for the project by March 2018.

Source: Reuters

Coal to account for 68 percent of total power mix by 2026: BMI Research

August 24, 2017. Coal will remain the foremost fuel preference for India’s power sector and is expected to account for around 68 percent of the total power mix by 2026, BMI Research, a unit of Fitch Group said in a recent report. The Fitch Group company said India’s power sector will expand rapidly over the coming decade, driven by underlying economic growth, electrification efforts and power sector reform implemented by the government. The report said overall, reform in the mining sector since 2015 has drastically improved the availability of coal for the power sector. However, feedstock volatility will remain a downside risk to coal-fired power generation over the coming years. In August, Coal India Ltd (CIL) announced that 62 coal mining projects out of a total of 120 ongoing projects were suffering from delays, stemming from issues related to forest clearing, land acquisition, and rehabilitation and resettlement.

Source: The Hindu Business Line

Yogi Adityanath led UP turns to Piyush Goyal over coal crisis at power plants

August 23, 2017. Uttar Pradesh (UP) Energy Minister Srikant Sharma, in a letter to Union Power Minister Piyush Goyal, has sought the latter’s help so that some private and state-owned power plants can come out of critical coal-stock scenario. Sharma requested Goyal to increase the quantum of coal supply to private power plants such as 1,980 Lalitpur plant and 1,200 MW Roja plant and state utility-owned generating stations such as 665 MW Harduaganj plant and 1,140 MW Parichha power plant. Sharma also asked Goyal to instruct the Central Electricity Authority to include independent power plants in the state in the ‘critical’ category. This would make Coal India Ltd (CIL) supply sufficient coal to such plant so that they have comfortable fuel stock, just the way CEA has included some state utility and NTPC Ltd plants in the list.

Source: The Financial Express


Greenko eyes Reliance Infrastructure’s Mumbai power business for $2 bn

August 29, 2017. India’s leading renewables company Greenko is in talks with Anil Ambani-led Reliance Infrastructure to acquire its Mumbai electricity business for an enterprise value of Rs 10,000-13,000 crore ($1.75-2 billion). The Mumbai business caters to 3 million customers, making it the country’s largest private sector integrated power utility, entailing 1800 MW of distribution along with generation facilities, besides over 1,000 km of underground network. The distribution franchise is nine decades old with the licence valid till August 2036. In November 2015, Reliance Infrastructure entered into a non-binding pact to sell 49% stake in the business to Public Sector Pension Investment Board (PSP Investments) of Canada. The Mumbai circle licence, along with the generation, transmission and distribution assets, will be carved out and transferred to a subsidiary and then sold, explained the official mentioned above.

Source: The Economic Times

Power companies refrain from bidding for Gujarat’s low-cost electricity

August 29, 2017. Power generators stayed away from bidding for Gujarat government’s tender to acquire 1,000 MW of cheap electricity by selling coal at lower rates after the government allowed flexibility in utilisation of domestic coal amongst power generating stations. Gujarat Urja Vikas Nigam had floated a tender for 1,000 MW to be supplied to the state for nine months beginning October 2017, wherein the independent power producers must quote a price lower than the ceiling price of Rs 2.82 a unit and get coal that was originally allocated for the state. But the power producers said the ceiling of Rs 2.82 a unit makes the bid unviable, raising concerns over other such tenders which are in the pipeline. In an attempt to improve availability of cheap coal to power plants which are lying idle or running at low capacity, the government approved flexibility in utilisation of domestic coal among power generating stations. This move allows states to consider the aggregate coal available to it and sell it to more efficient power plants. Maharahstra too has invited bids for similar tender and its ceiling price is even lower at Rs 2.80 a unit.

Source: The Economic Times

In a first, KSEB to use drones for curbing power leakage

August 27, 2017. In order to plug leakages, a recurrent source of power failure and loss in revenue, Kerala State Electricity Board (KSEB) will use drones to identify breakages, loose contact and encroachments in high transmission lines. In a first-of-its-kind initiative in India, the KSEB will buy one drone on a pilot basis fitted with thermal camera and light detection and ranging. KSEB has earmarked Rs 2 crore to purchase the drone and has already invited expression of interest. In the first phase, the drone will be used in an urban area ­ Thiruvananthapuram -and in hilly terrain in Pathanamthitta. Currently, KSEB maintenance workers travel on a vehicle to check damages on transmission lines. They check by looking through binoculars from the ground.

Source: The Economic Times

In MP, power discom to simplify and issue on-spot bill in Hindi language

August 27, 2017. The Madhya Pradesh (MP) Paschim Kshetra Vidyut Vitaran Company Ltd. (MPPKVVCL) has planned to make electricity bill available in Hindi language now for over one lakh consumers in the areas, where spot billing is done. It will also introduce a simplified layout of the existing electricity bill. According to distribution company (discom) managing director Akash Tripathi, a customer will be able to seek the option of getting the electricity bill in Hindi language by logging into the company’s website or via mobile phone. He said that since the region is Hindi speaking, electricity bill in Hindi language would be a great relief for the consumers in rural belts, where the spot billing is done. Discom said that the work for change in layout is in progress and the company might come up with the new layout within a month or so. It also plans to fix bill delivery date before 20th of every month to streamline its distribution work. The agency engaged in generation of bills has been instructed to ensure their delivery before 15th of every month.

Source: The Economic Times

Niti Aayog wants urban kitchens to shift to electric cooking

August 26, 2017. Niti Aayog doesn’t seem to be content with the plan to make India move around in electric cars and buses by 2030. The government’s policy thinktank has now offered the Centre something to chew upon: make kitchens in cities with reliable power supply — think Mumbai, Kolkata and Delhi — switch over to ‘electric cooking’ and free up gas connections for the poor. But it seems to build upon the Narendra Modi’s government’s progress towards fulfilling its promise of 24×7 affordable power supply. However, the truth is that even after assured power supply, even in urban areas, it will be along time before cooking dalchawal on an electric device becomes a common practice. It is a common perception that electric cooking doesn’t work well for Indian dishes. Besides, the appliances/utensils are expensive. That’s why, electric cooking is largely limited to the use of microwave ovens, toasters, grills and fryers in urban kitchens. Besides, uninterrupted 24×7 power supply is still limited to a few cities.

Source: The Times of India

MSEDCL to act against power thieves

August 25, 2017. Maharashtra State Electricity Distribution Company Ltd (MSEDCL) Kolhapur zone will act against Ganesh mandals that are found accessing power supply illegally. Mandals construct temporary pandals at various places during Ganesh festival. These mandals access power illegaly. However, to discourage electricity theft, the state power distribution utility has offered power at Rs 4.31 to temporary subscribers during the festival period.

Source: The Times of India

India’s Sterlite to invest $1 bn annually in Brazil power lines

August 24, 2017. India’s largest power transmission company Sterlite Power Grid Ventures Ltd will invest around $1 billion per year in the next few years to build power lines in Brazil. Sterlite is looking to build a large portfolio of power transmission projects in Brazil as part of a long-term strategy in the country. Sterlite is also a major manufacturer of equipment for the electricity industry.

Source: Reuters

Rajasthan discoms delaying late payment surcharge to wind power players

August 23, 2017. State-owned distribution companies (discoms) in Rajasthan are delaying late payment surcharge (LPS) to wind power generators even after the state regulator directed them to clear all the dues within three months. The regulator had sent the directions in an order. The discoms have started disbursing payments against the principal amount due to power producers. However, the discoms are looking for a 50% discount on the pending late payment surcharge. In a meeting between the wind industry and distribution company, it was decided that the dues on the principal amount would be cleared within seven working days. Payments of about Rs 100 crore have already been cleared and another Rs 50 crore will be paid in the ongoing week by Jaipur discom. Wind energy producers selling power to Rajasthan discoms had claimed that the latter are forcing them to sign consent for accepting only 50% of the LPS on long pending dues. When such consents are not signed, generators informed the Rajasthan Electricity Regulatory Commission (RERC) that discoms are not releasing the payments of even the principal amount. A segment of the industry had apprised RERC about the situation, stating that Rajasthan discoms have neither paid for the electricity supplied, nor have they paid any late payment surcharge. RERC directed the discoms to clear the dues, including LPS, to renewable electricity generators within three months.

Source: The Financial Express


SPPU shortlists 200 colleges to implement solar energy systems

August 29, 2017. Within just three days, the Savitribai Phule Pune University (SPPU) closed applications meant for the installation of solar projects. The varsity had called for applications from its affiliated colleges, which were earlier supposed to be open till September 25, in order to install rooftop solar panels on their premises. But, they have now been stopped as it received more than 700 applications, out of which 200 have been approved. The university has become the first in the country to provide funds to its affiliated colleges to install rooftop solar photovoltaic systems on their premises. The shortlisted colleges will also have to invest Rs 1.5 lakh each for the installation of the system. In the first phase, 111 colleges are being added for the project this year that will receive funding. The vendor from which the college will decide to get solar panels has to come to an agreement where they will maintain the panels for five years. With solar panels installed all over, the colleges can run their laboratories and media labs.

Source: The Economic Times

SBI led consortium to sell 51 percent stake in Odisha power plant

August 29, 2017. A consortium of lenders led by State Bank of India has invited bids to sell 51 percent stake in Jindal India Thermal Power Ltd (JITPL) located in Odisha. JITPL was formed in 2001 as a special purpose vehicle for development of coal based thermal plant located in Angul district of Odisha. As on June 30, 2017, the consortium of 17 lenders had a total loan exposure of Rs 5,902.43 crore in JITPL, as per the bid document. The consortium of lenders have engaged SBI Capital to find a new promoter. The 1,200 MW coal based thermal power plant built at a total cost of Rs 7,061 crore or Rs 5.88 crore per megawatt has been set up in two phases of 600 MW each. Phase I & II of the power project were commissioned in 2014-15.

Source: The Economic Times

MNRE signs agreement with Germany to improve renewable energy grid Integration

August 28, 2017. The Ministry of New and Renewable Energy (MNRE) signed an agreement on technical cooperation under the “Indo-German Energy Programme – Green Energy Corridors (IGEN-GEC)” with Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ). The two countries began collaboration on the Green Energy Corridors in 2013 following Indo-German Consultations held in Berlin. Power, Coal, Renewable Energy and Mines Minister Piyush Goyal said that MNRE is in the process of implementing the first phase of the Green Energy Corridor. Goyal said that Germany has been supporting India in achieving its goal for sustainable development through bilateral cooperation for almost six decade now.

Source: The Economic Times

NITI Aayog suggests waste to energy plants to clean up solid waste

August 28, 2017. The NITI Aayog has suggested setting up an authority which will take up installation of ‘waste to energy’ plants in public-private partnership (PPP) mode to clean up municipal solid waste, which, it said, has become a “serious threat” to public health. Noting that rapidly rising prosperity has resulted in generation of vast volumes of solid waste in the cities, the Aayog underlined that cities have been “slow to develop effective ways” to dispose municipal waste and called for accelerated action to combat the problem. The Aayog made the recommendations in its ‘Three Year Action Agenda, 2017-18 to 2019-20’, released by Union Finance Minister Arun Jaitley recently. Such an authority can be called ‘Waste to Energy Corp of India (WECI)’ and placed under the housing and urban affairs ministry, the Aayog said. The authority can play a “key role in fast-tracking coverage” of waste to energy plants across 100 smart cities by 2019, the Aayog said, As per the 2011 census, 377 million people living in 7,935 urban centres generate 1,70,000 tonnes of municipal solid waste daily. Urban local bodies spend about Rs 500 to Rs 1,500 per tonne on solid waste management. Out of this, about 60-70 percent is spent on the collection of waste and 20-30 percent on transportation but almost nothing on its treatment and disposal. The NITI Aayog said ‘Waste to Energy’ is the best option to tackle the problem.

Source: The Economic Times

Tata Power Renewable boosts generation capacity by four-fold

August 28, 2017. Tata Power said its renewable energy arm enhanced the generation capacity by over four-fold last fiscal. Tata Power Renewable Energy Ltd (TPREL) generated 1,440 million units from renewable energy sources like wind and solar in 2016-17 as compared to 329 million units in 2015 -16, the company said. TPREL is the primary vehicle through which Tata Power’s investments in renewable energy capacity are driven and it proposes to grow its capacity through organic and inorganic means over the next few years. TPREL completed commissioning of 100 MW wind farm at Nimbagallu, Andhra Pradesh and 50 MW Rojmal phase-II in Gujarat and 15 MW solar plant in Belampally, Telangana in last quarter of FY2016-17.

Source: The Economic Times

In Gujarat, Farmers become solar power producers for irrigation

August 26, 2017. International Water Management Institute (IWMI) managed to fund a pilot project with a view to promote the use of solar power for irrigation purposes. The project which was initiated in Dhundi village in Anand district some two years ago, with a team of six farmers has now managed to generate one lakh kilowatt hour (kWh) of power, some 45% of which they use for irrigation purposes. The six farmers formed a cooperative and later adopted using of solar irrigation pump, as part of the project. According to IWMI, the pumps have a unique capability to pool and inject surplus solar power to electricity grid, and therefore, farmers earn Rs 4.63 for every sold unit. The connection of the pumps to state electricity grid has therefore proven to be a major incentive for the farmers. Till date, these pumps have generated nearly one lakh kWh of green energy of which 43,897 kWh was used for irrigation. Therefore, the cooperative injected more than 52,000 kWh of green energy into the grid and generated an income of around Rs 4 lakh from sale of surplus solar power.

Source: The Times of India

New norms for solar power bids to enhance transparency: MNRE

August 26, 2017. The Ministry of New & Renewable Energy (MNRE) said its guidelines for tariff-based bidding for procuring solar power would reduce risk, enhance transparency and increase affordability. The MNRE had issued the new guidelines for tariff based competitive bidding process on August 3. The guidelines have been issued under the provisions of Section 63 of the Electricity Act, 2003 for long term procurement from grid—connected Solar PV (photovoltaic) Power Projects of 5 MW and above, through competitive bidding. Besides, it said, the move will help protect consumer interests through affordable power. It will also provide standardisation and uniformity in processes and a risk—sharing framework between various stakeholders involved in the solar PV power procurement, it said.

Source: The Hindu Business Line

Mahagenco invites bids for 200 MW solar plant

August 25, 2017. As a part of its plan to set up 2,500 MW solar capacity over the next five years, the Maharashtra State Electricity Generation Company (Mahagenco) has invited tenders to set up 200 MW capacity across Maharashtra. Mahagenco has invited bids of 50 MW each to be developed across the western, western/northern, Vidarbha and the Marathwada regions of the state to in public private partnerships. Under the state government’s 2015 renewable energy policy, 7,500 MW solar power will be developed over the next five years. Of which, 2,500 MW will be developed by Mahagenco. Accordingly, tenders have been floated for 200 MW. As per the tender, Mahagenco has quoted Rs 3 per unit as the base tariff. In May, solar tariffs had hit the lowest at Rs 2.44 per unit in the auctions carried out by Solar Energy Corp of India (SECI) for 500 MW capacity in Bhadla Phase-III solar park in Rajasthan. The earlier lowest tariff of Rs 2.62 per unit was discovered recently in the auctions conducted by SECI for 250 MW Bhadla Phase-IV solar park in Rajasthan. If the bids come at lower than Rs 2.44 per unit, it will be the lowest in the country. The projects are coming up in a number of districts, including Nashik and Dhule in the western/norther region, Ahmednagar and Solapur in western Maharashtra, Amaravati, Yavatmal, Nagpur and Bhandara in Vidarbha and Aurangabad, Latur, Beed, Osmanabad and Jalna in the Marathwada region.

Source: The Hindu Business Line

Britain admires India’s stretching renewable targets

August 24, 2017. Britain “admires” the stretching targets that India has set to bring its renewable energy capacity up to 175 GW by 2022, Britain’s High Commissioner to India Sir Dominic Asquith said. Reaffirming commitment to the Paris Agreement, Asquith said both countries share a common conviction that climate change is one of the biggest threats to global prosperity and stability. Asserting that both India and Britain have a shared purpose on energy and the environment, Asquith said both “recognise the commercial opportunities that can be realised in the low carbon economy”. At the Conclave, Britain-based energy efficiency services firm Cenergist, which recently opened its Indian chapter from Kolkata, has signed a MoU (Memorandum of Understanding) with TERI (The Energy and Resources Institute) to promote greener products and projects. Cenergist will also distribute LED (light emitting diode) bulbs in Britain in collaboration with Energy Efficiency Services Ltd (EESL).

Source: Business Standard

Gurgaon to get 50 new green-fuel stations in 3 yrs to cut pollution

August 24, 2017. The Gurugram district administration has decided to sanction 50 new green-fuel stations in Millennium City in the next three years to control rising air pollution, the pollution control department said. The initiative has been taken after considering that the city has several factories and industries. The Haryana City Gas Distribution Ltd (HCGDL), an authorised dealer to sell compressed natural gas (CNG) in Gurgaon, has been given the responsibility construct the 50 stations.

Source: The Economic Times

Odisha launches grid connected roof top solar projects

August 23, 2017. With an aim to promote renewable energy in Odisha, Chief Minister Naveen Patnaik launched grid connected rooftop solar projects. The Chief Minister launched a web platform on the occasion that will facilitate different stake holders such as Odisha Renewable Energy Development Agency, distribution companies and vendors. Science and Technology Minister Badri Narayan Patra said through the system a consumer can reduce his/her consumption of utility power and reduce the electricity bill. While the investment on a rooftop solar system is about Rs 70,000 per KW, the government provides subsidy to the tune of 30 percent to consumers both for residential and institutional purposes. Under the Odisha Renewable Energy Policy announced in November 2016, the state government aims to generate 2750 MW of renewable energy by 2022 of which 2200 MW is expected to generate from solar sources.

Source: The Times of India

Tower companies can cut energy cost by 40 percent using green technology

August 23, 2017. Tower companies can see reduction of 30-40 percent in energy cost with the adoption of green technologies which involves energy efficiency initiatives coupled with better storage solutions. According to the Indus Towers data, in 2011, 330,000 towers with tenancy ratio of 1.7 generated 12 million tonnes of CO2 where 58 percent were grid sites and 42 percent were diesel-run sites. In 2017, 450,000 sites with a tenancy ratio of 1.9 generated 18 million tonnes of CO2 where 60 percent were grid sites and 40 percent were dieselrun sites. Indus Towers said that due to the massive shift happening from voice-centric network to data-centric network, the cell sites are only expected to grow in future as the networks will get denser.

Source: The Economic Times


Libya’s Zawiya oil refinery operating at half capacity due to Sharara outage

August 29, 2017. Libya’s 120,000 barrels per day (bpd) Zawiya oil refinery, the largest operating plant in the country, was working at only half its capacity due to the shutdown at the Sharara oilfield. Zawiya, located to the west of the capital Tripoli, is fed crude from Sharara but the oilfield is shut due to a pipeline blockade. The refinery underwent a maintenance shutdown on one of its two 60,000 barrels per day crude distillation towers that lasted from August 10 to August 25. Sharara, which at 280,000 bpd is the OPEC member’s largest, has been shut down for around a week due to militia blocking a pipeline linking it to the Zawiya oil terminal. A force majeure is in place on Sharara crude oil exports from the port. Libya’s 90,000 bpd El Feel field was also shut down over the weekend due to a pipeline blockade and the National Oil Corp (NOC) has declared force majeure on Mellitah grade exports from the Mellitah oil terminal. The shutdown of Sharara has also led NOC subsidiary Agoco to shut down the 10,000 bpd Hamada oilfield, which shares export infrastructure with Sharara, a Libyan oil source told Reuters.

Source: Reuters

Norway’s Arctic oil ambitions suffer setback as most promising well yields none

August 29, 2017. Norway’s hope of discovering a large oilfield in the Barents Sea has suffered a major setback after the far north Arctic’s most promising reservoir turned out to contain only small amounts of natural gas. Statoil, the country’s top oil and gas producer, has stepped up drilling in the Barents Sea this year as the government seeks to attract more explorers to its Arctic waters to make up for declining North Sea output. But Statoil said that after drilling the northernmost exploration well in the highly anticipated Korpfjell prospect it had found only non-commercial quantities of gas and no oil. Statoil, which is majority government-owned, had ranked the Korpfjell well as “high-impact”, meaning that it could contain upwards of 250 million barrels of oil equivalents (boe) gross or 100 million boe for Statoil alone, while its partner Lundin Petroleum had said it could hold more than a billion barrels.

Source: Reuters

Iraq faces resistance from Asian buyers on “ambitious” oil price change

August 29, 2017. Iraq’s proposal to change the way it prices crude oil in Asia faces resistance from refiners who fear that longer lead times between pricing and deliveries will expose them to more risk. Iraq’s state oil marketer SOMO surprised traders this week by seeking feedback on plans to switch its Basra crude benchmark in Asia to pricing based off the Dubai Mercantile Exchange from January 2018, dropping quotes based on assessments by oil pricing agency S&P Global Platts. The move would affect the price of about 2 million barrels per day (bpd) of crude oil supplies to Asia, mainly shipped to India, China and South Korea. Some buyers were concerned that almost 80 percent of the crude used to price DME Oman futures goes to China, reflecting the economics and fundamentals of just one Asian buyer.

Source: Reuters

Egypt signs O&G exploration deals with Shell, Apex

August 29, 2017. Egyptian Oil Minister Tarek El Molla has signed three oil and gas (O&G) exploration deals for 16 new fields in the Western Desert worth at least $81.4 million in total with Royal Dutch Shell and the United States (US)-based Apex Oil Company. The oil ministry said that the first deal would see Shell invest $35.5 million, and the other two would see Apex, which is operating in Egypt for the first time, invest a combined $45.9 million on two projects. Egypt, which used to be a net energy exporter, has become a net importer in recent years as consumption has increased while production has fallen. In December, Egypt accepted six bids for O&G exploration worth up to $200 million

Source: Reuters

EOG Resources resumes oil production in some areas of Eagle Ford

August 29, 2017. Oil producer EOG Resources Inc said that it is resuming drilling operations where it is safe to do so in the Eagle Ford shale area of South Texas. EOG, one of the nation’s largest shale oil and gas producers, had suspended production in the region as winds and rains from Tropical Storm Harvey raked the area. The company did not say how much production it had shut.

Source: Reuters

China to penalize refineries for crude reselling, unauthorized expansion

August 28, 2017. Chinese refineries newly allowed to import crude oil will be penalized for reselling crude oil or expanding capacities without approvals, according to the National Development & Reform Commission (NDRC). Qualifications will be stripped and trade permits revoked for the refineries that recently were allowed to use or import crude oil if they are caught in these violations, the NDRC said. Experts said the policy to crackdown on these violations is not new but the government was reaffirming the penalties amid growing concerns that abuses are getting more widespread. China has since late 2015 allowed about 31 companies, mostly privately-run refineries, to import crude oil in an unprecedented liberalization of China’s oil market, the world’s second-largest after the United States.

Source: Reuters

Harvey hits US fuel supplies to Latin America

August 28, 2017. Tropical Storm Harvey could cause fuel shortages in Latin America after it shut in around 1 million barrels per day of US (United States) gasoline and diesel exports typically destined for countries such as Mexico. Harvey barreled into Texas as the strongest hurricane to hit the state at the heart of the US oil and gas industry in over 50 years. The US is the world’s largest net fuel exporter, and most of those shipments sail from ports in Texas and Louisiana. Harvey shut down the ports of Corpus Christi and Houston in Texas, and both are major fuel export ports. Latin American countries such as Mexico and Venezuela have become increasingly reliant on imports because they have failed to invest in expanding refineries to keep up with rising demand. The US exported 2.49 million barrels per day (bpd) of refined products and 100,000 bpd of crude to Latin America in the first quarter, according to the Energy Information Administration. Over 950,000 bpd ended up in Mexico – the biggest overseas market for American-made fuel. Mexico depends on US fuel to meet nearly three quarters of its domestic gasoline demand.

Source: Reuters

No need to release emergency oil supplies due to Harvey: IEA

August 28, 2017. The International Energy Agency (IEA) said that there was no need for now to release fuel from emergency stockpiles to compensate for disruption caused by Hurricane Harvey because global oil markets were well supplied. Several refineries in the United States (US) state of Texas have shut because of the storm, halting fuel production and causing gasoline prices to rise. The shutdowns affect international as well as domestic fuel supplies because the US ships exports from the region. The IEA said it was closely monitoring the storm and would be ready to respond to major oil supply disruptions through its emergency response system.

Source: Reuters

US oil inventories drop by 3.3 mn barrels: EIA

August 23, 2017. US (United States) crude stocks fell last week and gasoline stocks were down as well, the Energy Information Administration (EIA) said. Crude inventories fell by 3.3 million barrels in the week ending August 18, compared with analyst expectations for an decrease of 3.5 million barrels. Crude stocks at the Cushing, Oklahoma, delivery hub fell by 503,000 barrels, EIA said. Refinery crude runs fell by 104,000 barrels per day, EIA data showed. Refinery utilization rates fell by 0.7 percentage points. Gasoline stocks fell by 1.2 million barrels, compared with expectations in a poll for a 643,000 barrel drop. Distillate stockpiles, which include diesel and heating oil, rose by 28,000 barrels, versus expectations for a 93,000 barrel increase, the EIA data showed. US crude imports rose last week by 605,000 barrels per day.

Source: Reuters

Cambodia, KrisEnergy sign deal to develop offshore oil field, first oil expected in 2019

August 23, 2017. Cambodia signed an agreement with Singapore-listed KrisEnergy Ltd to develop an offshore oil field that could finally see Cambodia produce its own oil after years of delays. Cambodia has struggled to develop oil fields in the Gulf of Thailand, as few companies are willing to invest in the area following the 2014 global oil price slump. The agreement between Cambodia and KrisEnergy covers 3,083 square kilometre (1,190 square miles) of the Khmer basin in the Gulf of Thailand known as Block A, the company said. Oil will be produced from the Apsara field within the block and output is expected within 24 months of the official launch of the project. Cambodia’s Finance Minister Aun Pornmoniroth said the area is estimated to yield over 30 million barrels over a nine-year period and that Cambodia was ready to learn from other countries’ lessons and would not become oil-dependent. According to the agreement, KrisEnergy will own a 95 percent interest in the field while the Cambodian government will own the rest. The first phase of development of the Apsara field will start with a single production platform and could potentially expand to 10 platforms depending on a final oil output determination, KrisEnergy said.

Source: Reuters

China’s July gasoline exports rose to third-highest level since 2000

August 23, 2017. China’s gasoline exports in July rose 5.9 percent from a year ago to the third-highest monthly level since at least 2000 while diesel exports remained high, customs data showed. China’s July gasoline exports rose to 1.02 million tonnes, according to data from the General Administration of Customs. That is a third higher than exports in June and near to the 1.1 million tonnes exported in June 2016 that was the highest since at least 2000. China’s diesel exports in July fell 8.8 percent from a year ago to 1.4 million tonnes, the data showed, but they increased from 1.31 million tonnes in June. Kerosene exports last month fell 3.1 percent to 1.06 million tonnes, the data showed. Chinese refineries in July operated at their lowest daily rates since September 2016 to cope with brimming stocks and as state refiners faced off against independents in an unprecedented price war at retail fuel stations.

Source: Reuters


Japan to buy up to 50.5k tonnes LPG for national stockpile

August 28, 2017. Japan Oil, Gas and Metals National Corp (JOGMEC) has issued a tender to buy 50,000 to 50,500 tonnes of liquefied petroleum gas (LPG) for national stockpile. The tender was in line with expectations. Reuters reported in May that Japan will likely conduct a tender in the autumn to buy up to 100,000 tonnes of LPG for national stockpiles. Japan is aiming to build up government LPG stockpile to around 50 days’ worth of national imports to reduce the impact from any supply disruptions in the Middle East, which it most relies on for supplies of the fuel, commonly used in heaters or stoves. Japan had a total of 1.35 million tonnes, or 49.5 days worth of national imports, in five LPG stockpiling bases in June with a total capacity of 1.5 million tonnes, government data showed.

Source: Reuters

Cheniere reports minor damage from Harvey at Texas LNG facility

August 28, 2017. US (United States) natural gas exporter Cheniere Energy reported only “minor cosmetic impacts” from Tropical Storm Harvey at its Corpus Christi, Texas LNG facility and no interruption of production at its Sabine Pass facility in Louisiana. The company said it has activated its emergency office location in Dallas to support its gas supply, trading division and other essential functions to ensure continuing production of LNG at Sabine Pass.

Source: Reuters

Pavilion Gas clinches two-year LNG storage capacity deal in Singapore

August 24, 2017. Singapore’s Pavilion Gas has won the right to use storage facilities at the city-state’s Singapore LNG Corp (SLNG) liquefied natural gas (LNG) terminal, the companies said. The agreement will allow Pavilion Gas the “rights to access tank capacity on a segregated basis” for storage and reload operations over the next two years. Pavilion has recently announced a number of LNG deals in Singapore, which has designs on becoming Asia’s trading hub for the fuel. Pavilion Gas, along with Shell Eastern Petroleum, won the rights to supply Singapore with LNG in 2016, and is due to begin first imports under the contracts this year. Pavilion Energy, the parent company of Pavilion Gas, also performed Southeast Asia’s first truck-to-ship transfer of LNG in May, demonstrating that the city-state was ready to begin LNG bunkering operations. SLNG’s terminal, located on Jurong Island in western Singapore, is the country’s sole LNG import terminal. The terminal currently has three 188,000-cubic metre storage tanks and a regasification capacity of around 6 million tonnes per year. A fourth storage tank, which will add around 260,000 cubic meters of storage capacity, will be ready in 2018.

Source: Reuters

Malaysia’s Petronas considering pipeline investments to monetize Canada gas assets

August 23, 2017. Malaysia’s Petroliam Nasional Berhad (Petronas) is considering investing in a pipeline to market its Canadian gas assets after scrapping plans for a liquefied natural gas (LNG) project in Canada. Petronas scrapped its proposed $29 billion LNG export terminal in western Canada last month due to weak global prices, in a blow to its ambitions to expand its LNG portfolio beyond Malaysia. Industry analysts said the decision was expected and would bring the company long-term benefits, as it frees up funds for other domestic projects such as its Refinery and Petrochemical Integrated Development (RAPID) project in Malaysia’s southern state of Johor. Petronas is looking at buying a 15 percent stake in the LNG Canada project that is led by Royal Dutch Shell and located in British Columbia. Petronas is also exploring the viability of transporting natural gas through existing pipelines to the United States Gulf Coast.

Source: Reuters


China issues draft rules for utilities to boost coal stocks

August 28, 2017. China’s state planner, the National Development and Reform Commission (NDRC), said it will force power companies to beef up stockpiles of coal during peak demand seasons as part of draft rules setting out the government’s new inventory system. During winter and summer, power companies’ coal inventories must be five to 10 days above normal levels, the NDRC said as it outlined the draft policy. The policy is the latest effort by Beijing to ensure sufficient supplies of coal during periods of high demand, and comes after the government had to scramble last year to avert a national power crisis following government-enforced cutbacks in coal output. The NDRC will now seek feedback from the industry until September 10.

Source: Reuters

Glencore puts second coal mine on block amid corporate rethink

August 28, 2017. Glencore said it was looking to sell a second Australian coal mine, part of the Swiss-based resource giant’s rethink on how it deploys capital as its reins in debt and commodities prices rise. Together with its Japanese joint venture partners, Itochu Corp and Sumitomo Corp, Glencore said it would start a “sales process” for its Rolleston mine, which produces thermal coal used for making electricity. The mine, though, is geographically removed from Glencore’s main collieries, leaving it less economic from a shipping standpoint. Merrill Lynch has been appointed as sole financial adviser on any deal, Glencore said. In May, Glencore also put its wholly-owned Tahmoor coking coal mine in Australia up for sale, citing a desire to concentrate on mining thermal coal. Glencore isn’t the only Australia seller of coal mines.

Source: Reuters

China to shut 6k non-coal mines by 2020 to improve safety

August 26, 2017. China will shut 6,000 non-coal mines in an effort to reduce mining accidents and deaths by 2020, the State Administration of Work Safety said in a five-year plan. Beijing will seek to reduce major accidents by 15 percent by 2020 from 2015 levels in the non-coal mining sector. More than 500 people died in non-coal mining accidents in 2015. The toll has fallen by more than 50 percent since 2010. Under the plan, China will improve safety legislation and intensify mine inspections. China has vowed to accelerate closing small-scale coal mines with an annual production capacity of 90,000 tonnes or less.

Source: Reuters

China July trade with North Korea slows from June as coal ban bites

August 23, 2017. China’s trade with North Korea fell in July from a month earlier, data showed, as a ban on coal purchases from its isolated neighbour slowed imports amid growing pressure from the United States to rein in Pyongyang’s missile program. The world’s second-largest economy imported and exported goods worth $456 million in July, down from $489 million in June, according to data from China’s General Administration of Customs. The data indicates that China’s move to halt North Korean coal imports in February has crimped Pyongyang’s ability to raise hard currency through exports.

Source: Reuters


Northern Cyprus to receive power from mainland Turkey by end-2017

August 28, 2017. The Turkish Republic of Northern Cyprus (KKTC) reported that works on a subsea electricity cable between the island and mainland Turkey via an underwater cable system are close to completion. The project is now scheduled to be commissioned by the end of 2017. The KKTC reported that it would be cheaper to buy electricity from Turkey than to produce its own power on the island. The agreement between Turkey and KKTC regarding the underwater cable was signed in October 2016.

Source: Enerdata

Eletrobras plan poses no risk for Brazil power supply: CEO

August 23, 2017. The Brazilian government’s decision to relinquish voting control of Centrais Elétricas Brasileiras SA (Eletrobras) poses no risk to electricity generation in the country, Chief Executive Officer (CEO) Wilson Ferreira Jr said.

Source: Reuters


Brazil cancels 25 wind, solar power projects at request of firms

August 29, 2017. Brazil’s government cancelled the construction of 25 wind farms and solar parks in the country after companies behind the projects requested to return construction licenses. These companies took part in the first so-called “cancellation round” for power projects, as the government moved to allow firms struggling to develop the projects to return the licenses at a fee. At the end of the round, companies paid a combined fee of 105.9 million reais ($33.43 million) for the cancellations. Besides the fines, they will be bared for two years from participating in any new round for new projects. Construction licenses for 16 wind farms and 9 solar parks were scraped. But new rounds are scheduled for December, the first ones since 2015, as the government sees the beginning of a recovery in power demand.

Source: Reuters

Australian leader hints at a clean energy target by year’s end

August 28, 2017. Australia could adopt a clean energy target by the end of the year, heeding the call of national energy providers and scientists as a means to cut carbon emissions and cap soaring power prices. Australian Prime Minister Malcolm Turnbull said the government was “carefully considering” the recommendation by the nation’s chief scientist Alan Finkel as a way to ensure affordable, reliable and cleaner power. Finkel in June led a list of recommendations presented to the government aimed at ending a decade of political warfare over climate policy, meaning coal-fired power generation using carbon-capture technology could potentially be used alongside gas and renewable sources such as wind and solar. Energy companies argue they need long-term policy certainty to invest in new power generation and bring down electricity bills – and the key to unlocking that was to roll out a national clean energy target. The government is awaiting a report from the Australian Energy Market Operator, which Turnbull labeled “a critical thing” before moving to decide on a target.

Source: Reuters

US EPA lifts some fuel rules for Texas to reduce storm shortages

August 26, 2017. The United States (US) Environmental Protection Agency (EPA) said it had lifted some gasoline requirements for Texas to address potential shortages resulting from Hurricane Harvey. The waiver allows for the sale of gasoline that does not comply with regular environmental guidelines until September 15.

Source: Reuters

Saudi Arabia signs cooperation deals with China on nuclear energy

August 25, 2017. Saudi Arabia and China are to cooperate on nuclear energy projects following discussions between the two countries on ways to support the kingdom’s nuclear energy programme. In addition to that programme, Riyadh is in the early stages of feasibility and design studies for its first two commercial nuclear reactors, which will total 2.8 GW. China’s leading state nuclear project developer China National Nuclear Corp (CNNC) has now signed a Memorandum of Understanding (MoU) with the Saudi Geological Survey (SGS) to promote further existing cooperation between the two sides to explore and assess uranium and thorium resources. Nuclear energy will help Saudi Arabia to develop water desalination plants, of which it is a leading producer.

Source: Reuters

Canada to consider indirect emissions for TransCanada Energy East pipe

August 24, 2017. The review of TransCanada Corp’s proposed Energy East pipeline will consider its indirect greenhouse gas contributions, Canada’s National Energy Board (NEB) regulator said. The NEB will weigh the emissions from extracting and refining the oil shipped on the pipeline, the regulator said. Considering Energy East’s associated emissions makes the upcoming regulatory review for the pipeline more onerous and had been opposed by TransCanada, which had called it “completely redundant and unnecessary.” The Canadian Energy Pipeline Association industry lobby group said it does not support the NEB’s decision to consider indirect emissions because the government already deals with them on other fronts. The environmental group Greenpeace said it is still unclear what impact the NEB’s expanded scope will have on Energy East’s fate. Last year, the review stalled amid protests by environmentalists and after revelations that review panel members met privately with a TransCanada consultant.

Source: Reuters

Saudi Arabia aims to exceed renewable energy target

August 24, 2017. Saudi Arabia aims to exceed its target to generate 9.5 GW of electricity from renewable energy annually, to highlight its long-term commitment to green energy. The government has said it plans to generate 9.5 GW of electricity from renewable sources a year by 2023 through 60 projects, involving an estimated investment of between $30 billion and $50 billion.

Source: Reuters

US duties will halt exports: Argentine biodiesel industry

August 23, 2017. Argentine biodiesel exports will be priced out of the US market, its leading industry body said, after Washington decided to impose steep duties on imports that it said were unfairly subsidized. The countervailing duties on soy-based Argentina biodiesel could be as much as 64.17 percent, according to the US Commerce Department. Duties of up to 68.28 percent will be imposed on palm oil biodiesel imports from Indonesia. Argentina accounts for two-thirds of U.S. biodiesel imports, which totaled 916 million gallons (3.5 billion liters) in 2016, according to US government data. Total US biodiesel consumption is about 2 billion gallons. The Commerce Department’s decision comes after the US National Biodiesel Board (NBB) asked the government in March to impose duties, claiming the imports were below market value and undercutting US biodiesel producers. Argentine biodiesel association Carbio, which represents producers including Cargill Inc and Louis Dreyfus Co, denied there were subsidies on the country’s biodiesel exports and called the duties protectionist.

Source: Reuters

Audi to develop solar-embedded panoramic roof with China’s Hanergy

August 23, 2017. Audi, Volkswagen’s main profit driver, said it was working with China’s Hanergy Thin Film Power Group to integrate solar cells into panoramic glass roofs for an upcoming Audi electric vehicle (EV). Alta Devices, a unit of the Chinese solar cell firm Hanergy, will design the solar-embedded vehicle roof that will eventually help increase the range of EVs by feeding solar energy into internal electrical systems, such as air conditioning and other appliances, Audi said in a statement. The prototype of the vehicle with a solar roof will be built by end-2017, the automaker added, without giving any details on investment and estimated time frame for mass-production. Audi, which has been grappling with car recalls, prosecutor investigations and persistent criticism from unions and managers over an emissions scandal and its performance post-dieselgate, is currently looking to shift its focus to EVs.

Source: Reuters

Victoria looks to lock in renewable energy target

August 23, 2017. Australia’s second most populous state has proposed passing laws to lock in a renewable power target of 40 percent by 2025, looking to spur investment in electricity sources such as solar and wind even as the national government wrangles over energy policy beyond 2020. Victoria State Premier Daniel Andrews will introduce legislation to the state parliament to cement renewable energy targets, including 25 percent by 2020. The 1,600 MW Hazelwood plant had provided a quarter of Victoria’s power supply, and its closure has raised demand for gas-fired power at a time when east coast gas supply has been strained, fuelling rises in gas and power prices.

Source: Reuters


State-wise Domestic LPG Customers: Active & Registered


(as on July 1, 2017)

No. of Domestic LPG Customers/Connections- (in Lakhs)
Registered Active
Chandigarh 4.3 2.71
Delhi 65.3 48.09
Haryana 66.1 55.46
Himachal Pradesh 21.1 14.31
Jammu & Kashmir 28.5 21.00
Punjab 89.5 70.19
Rajasthan 125.4 113.82
Uttar Pradesh 333.4 281.78
Uttarakhand 29.1 21.58
Arunachal Pradesh 2.8 1.99
Assam 44.2 33.97
Manipur 4.6 3.48
Meghalaya 2.1 1.46
Mizoram 3.2 2.47
Nagaland 2.6 1.83
Sikkim 1.8 1.18
Tripura 5.6 4.48
Andaman & Nicobar Islands 1.0 0.77
Bihar 120.4 110.24
Jharkhand 32.3 27.60
Odisha 55.4 48.36
West Bengal 171.5 159.18
Chhattisgarh 38.4 33.71
Dadra & Nagar Haveli 0.9 0.83
Daman & Diu 0.8 0.65
Goa 5.9 4.60
Gujarat 99.3 80.33
Madhya Pradesh 115.1 97.75
Maharashtra 263.1 228.36
Andhra Pradesh 155.8 127.56
Karnataka 133.3 117.95
Kerala 91.9 80.80
Lakshadweep 0.0 0.04
Puducherry 4.0 3.47
Tamil Nadu 197.3 174.30
Telangana 112.0 90.98
All India 2428.2 2067.26

Source: Petroleum Planning and Analysis Cell

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

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