MonitorsPublished on Oct 10, 2017
Energy News Monitor | Volume XIV; Issue 17


Gas News Commentary: September 2017


The southward movement in global gas prices is benefiting consuming nations such as India, with New Delhi succeeding in negotiating better terms for the Gorgon LNG contract that supplies the fuel to Petronet LNG. The Gorgon contract involving Exxon Mobil’s output in Australia is the second long-term deal to be repriced after RasGas reworked the pricing formula in 2015 in favour of Indian companies. The new prices provide relief to Petronet LNG, BPCL, GAIL (India) Ltd, and IOC. India was among the first countries in Asia to rework its longterm gas contacts when Petronet LNG re-negotiated with Qatar’s Rasgas. India consumed about 19 mtpa of gas in the last fiscal, with half the requirement being met by imports. Under the new gas pricing formula, the Gorgon output will cost 13.9 percent of Brent crude as compared with an earlier ratio of 14.5 percent of JCC -an Asian benchmark for gas. If one assumes Brent at $50/barrel, this means gas prices will come down to $6.95/mmBtu from $7.25/mmBtu. The new prices will include shipping costs, saving Petronet LNG the transportation expenses. Gas pricing with the 14.5 percent JCC ratio has been considered one the most expensive LNG contracts globally. The savings could translate into a decline of $1/mmBtu in gas prices. For the entire contract period of 20 years, this would mean savings of around ₹ 80-10 billion. The delivered price of Gorgon contract will be nearly equivalent to RasGas contract prices at around $7/mmBtu.

Essar Ports is looking to invest around $500 million or over ₹ 25 billion to set up one LNG terminal each on the western and eastern coasts in the next 18 months. The company is looking at a cluster of small ports which will be closer to potential customers. Hazira and Salaya, where it already operates ports, could be the sites where it can set up the LNG terminals. Typically, each terminal will cost between $150-300 million, depending on the amount of work to be carried out, the company said. The capacity will range between 2.5-5 mt. The company is expected to tie up with banks and also put in its own resources as equity. Essar Ports, which delisted in late 2015, will close 2017-18 with a pre-tax profit of about ₹ 10 billion and is targeting to take it up to ₹ 13 billion with the commissioning of new facilities. ONGC plans to relinquish its CBM block in Raniganj, West Bengal, but is on course to produce gas from another CBM block in Bokaro in February. It is reported that it would be difficult to develop the Raniganj North block since an airstrip is coming up on the same land. The company evaluated the feasibility of lateral drilling to tap gas underneath the air strip, but it was found that this was not possible. ONGC has stakes in three other CBM blocks in Bokaro, Jharia and North Karanpura. Of the total nine CBM blocks allocated to ONGC, five have already been relinquished due to poor output potential. It plans to produce first gas from its Bokaro block in February. Land acquisition for the project is in progress with ONGC purchasing or taking land from owners on long lease. A key contract to build gas gathering station has been awarded and is expected to be ready by mid-2019. A peak production of 700,000 cubic meters a day is expected from the field. Recently, the government freed up pricing for CBM. ONGC is finalising a marketing plan for its output from Bokaro.

GAIL has chartered an LNG tanker from French major Total SA for three years to haul gas from the US beginning early 2018. GAIL had through the Shipping Corp of India invited bids for hiring four LNG carrying tankers. Some 30 LNG ships were offered, with Total offering the lowest day rate of $44,900 for a ship with 165,000 cubic meters of storage capacity. The French company had chartered the ship till 2029 but due to turmoil in the country, Yemen LNG project was temporarily shut in 2015. GAIL had resorted to short-term chartering after its $7 billion tender for hiring newly build ships fell due to bidders not agreeing to ‘Make in India’ terms. In the tender, GAIL had sought to time-charter nine newly built LNG ships of cargo capacity of 150,000-180,000 cubic metres to ferry LNG it has tied up from Sabine Pass and Cove Point LNG projects in US.

Sri Lanka has invited Petronet LNG to set up a liquid gas import terminal in that country, marking a major success for the Narendra Modi government’s energy diplomacy and signalling India’s emergence as a gas bridge for South Asia.  The deal has been in the making for over a year to weave a web of energy relationships in the extended neighbourhood — spanning Myanmar in the east to the Gulf in the west — by suitably leveraging India’s position both as a large consumption centre and a major source of petro-products and expertise. For Petronet, the deal paves the way for its first overseas liquid gas project, an area that has traditionally been dominated by global majors such as Shell and BP. The company submitted its bid for building a terminal with a capacity of handling 5 mt of gas shipments a year. India has been a major player in Sri Lanka’s fuel retail business for many years through Lanka IOC, a subsidiary of IndianOil. The LNG terminal will help it straddle the gas sector, the dominant fuel for future economic growth. With rising demand, Sri Lanka and Bangladesh offer an expanded market for large volumes of gas separately tied up by Petronet and GAIL, one of its main promoters, from Qatar, Australia, the United States and Spain’s Fenosa.

India must push for a trans-national deep water gas pipeline from Iran, passing through Oman but by-passing Pakistan, to feedstock the country’s power, fertilizer and steel plants in an environment-friendly and affordable way and for sustainable supply of the fuel, according to an Assocham study. During 2016-17, India consumed 55,534 mscm of natural gas of which 24,686 mscm was imported. India is now the fourth largest natural gas importer, mainly from Qatar. The study said India must take a stronger and more pro-active approach to build a least one trans-national gas pipeline in the next five years.

IGL, IOC-Adani Gas Ltd combine and HPCL-OIL JVs are set to win licences to distribute gas in one city each in the latest round of auction. In the much delayed 8th round city gas bidding, licences for gas distribution in Karnal, Haryana is set to go to IGL. The licenses for Ambala-Kurukshetra, also in Haryana, would go to HPCL-OIL, and South Goa to the JV between IOC and Adani Gas. Actual award of licences will take place probably a month later by when new members are likely to be appointed to the PNGRB the downstream regulator that conducts these auctions. In the latest auction, every bidder submitted a bid of 1 paisa as network tariff, as has become the norm for years, allowing the winner to be decided by the quantum of performance guarantees submitted. IGL submitted highest performance bond of ₹ 3.06 billion for Karnal, higher than HPCL-OIL’s ₹ 2.03 billion. Indian Oil-Adani Gas offered ₹ 4.03 billion performance bond for South Goa. HPCL-OIL was again in the second spot with a bid bond of ₹ 3.24 billion. It, however, furnished the highest performance bond of ₹ 3.03 billion for Ambala-Kurukshetra licence, just ahead of IOC-Adani’s ₹ 3.02 billion bond. The bids for three other cities — Yanam in Puducherry, Bulandshahr and Baghpat in Uttar Pradesh — have not been opened as yet.

Rest of the World

China’s state economic planner, the NDRC, has revived a plan to create a national natural gas pipeline company, aiming to provide gas producers with better access to infrastructure to help increase take-up of the cleaner-burning fuel. NDRC is working with state oil companies including CNPC and Sinopec Group on the proposal. The plan, first raised about five years ago, is part of Beijing’s proposed reforms to make the state-dominated oil and gas sector more efficient and follows a string of smaller steps over the past two years, including cutting down transportation costs and encouraging investment in gas storage. The proposed national pipeline company is expected to oversee China’s trunk line projects such as the West-to-East pipelines operated by CNPC and Sinopec’s project linking gas fields in the southwestern province of Sichuan to the east coast. China is the world’s third-largest gas consumer after the United States and Russia, with imports of the fuel making up about a third of consumption. The world’s top energy user aims to boost the use of natural gas, which emits half of the greenhouse gases produced by that burning coal produces, to about 15 percent of the total energy share by 2030 from just under 6 percent currently. The NDRC said earlier this year it expects the country’s gas pipelines to total 104,000 kilometers by 2020, up from 64,000 kilometers at the end of 2015. CNPC currently operates nearly 80 percent of China’s gas pipelines.

China’s technologically recoverable shale gas reserves dropped by 6 percent in 2016, the Ministry of Land and Resources said, with no new volumes of the unconventional resource added last year. Reserves stood at 122.41 bcm at the end of 2016, down from 130.18 bcm a year earlier. Shale gas was the only one of 22 major minerals listed to add zero newly discovered reserves in 2016, although potash was assigned a negative figure, indicating that some previous reserves were written off. The numbers suggest China’s efforts to replicate the North American shale gas revolution and reduce a hefty reliance on energy imports are running out of steam.

Royal Dutch Shell, ConocoPhillips and Santos face curbs on exporting gas from Australia’s east coast in 2018 if they fail to plug a projected local supply shortfall, Prime Minister Malcolm Turnbull warned. To deal with the crisis the government passed a law earlier this year that would allow it to limit exports from any of the three LNG plants on the east coast to beef up local supply. The three LNG exports plants, which were completed between 2014 and 2016, have long-term contracts to sell gas to customers in Asia, but have also been selling spot cargoes overseas instead of locally due to high costs and access issues on pipelines in Australia. Under the terms of the Australia Domestic Gas Security Mechanism, the LNG plant that has been seen most at risk of being forced to divert gas from exports to the domestic market is the Gladstone LNG plant, operated by Santos Ltd.

Trading house Glencore is to buy LNG supplies from Angola LNG over a multi-year period, adding to similar recent deals between the producer and traders including Vitol. Angola LNG said the deal was another step toward building its sales book with the most important players in the LNG market. Last month it sold LNG to Vitol over a multi-year period and also entered a sales deal with the trading arm of Germany’s RWE. Until recently, Angola has been selling all of its LNG via competitive tenders in the spot market, partly because a previous plan to ship LNG to the US fell through because of the US shale gas boom. Concerns over the Angola LNG plant’s reliability as well as limitations on feed gas supplies from offshore fields also prevented the Chevron-led project from previously locking in an LNG sales deal.

Angola’s sole LNG export facility will begin delivering shipments to commodity trader Vitol later this year under a deal announced. Angola LNG, which has steadied output following lengthy outages in recent years, has guaranteed Vitol access to supply for the first time, part of a wider shift in which trading companies are taking a greater share of the LNG market. In a global first, LNG from Angola has been entirely sold via competitive tenders into the spot market, partly because the plant’s original plan of shipping LNG to the US fell through following that country’s shale gas boom. Concerns over the plant’s reliability as well as limitations on feed gas supplies from offshore fields also prevented the Chevron-led project from locking-in a mid-term LNG sales deal immediately. Output from Angola LNG stabilised this year with production on track to hit up to 3.5 mt in 2017 compared with 0.77 mt  in 2016. Though improved, it will still fall short of the plant’s 5mtpa design capacity. Vitol could use its new-found Angolan volumes to help cover a 10-year obligation to supply South Korea’s Korea Midland Power Co. with 400,000 tonnes of LNG annually, or to grow its share of the spot market. A 70-percent drop in spot LNG prices LNG-AS since April 2017 and a growing supply overhang has given trading houses room to manoeuvre as established players from producers to oil majors turned to traders as a flexible source of demand.

Russian oil major Rosneft will invest in gas pipelines in Iraq’s Kurdistan, expanding its commitment to the region ahead of its independence vote to help it become a major exporter of gas to Turkey and Europe. Now Rosneft is widening its investments to gas by agreeing to fund a natural gas pipeline in Kurdistan. The investments would amount to more than $1 billion. The arrival of Rosneft will speed up gas development, which has so far largely been driven by mid-sized companies. For Rosneft, the deal is a major boost to its international gas ambitions. Rosneft has long sought to challenge Gazprom, Russia’s gas export monopoly, in supplying gas to Europe. For Turkey, it means the arrival of new supplies for its energy-hungry economy and the potential to become a major centre for gas supplies to Europe. The pipeline’s capacity is expected to handle up to 30 bcm of gas exports a year, in addition to supplying domestic users. Kurdistan sits on some of the largest untapped gas deposits on Europe’s doorstep. The pipeline will be constructed in 2019 for Kurdish domestic use, with exports due to begin in 2020.

Russian gas giant Gazprom has signed a 12-year deal to supply GNPC with LNG, a subsidiary of Gazprom Marketing & Trading Group said. GGLNG said LNG supplies were due to start in 2019. The agreement is the first stage in a planned series of partnerships between GGLNG and GNPC, with both companies working to develop the infrastructure and services required to manage and market the projected gas flows from the region, Gazprom said.

The Netherlands will receive its second-ever LNG shipment from Cheniere Energy’s Sabine Pass export facility in the US on October 6, according to shipping data. The vessel, with a capacity of 166,031 cubic metres, is currently berthed at Sabine Pass, live ship-tracking data shows.

Bangladesh will sign a 15-year deal with Qatar’s RasGas Co to import LNG  starting in 2018 to bridge the supply gap for power generation. The deal will be signed on September 25 in Qatar. Under the deal, RasGas will supply 1.8 mtpa of LNG for the first five years and 2.5 mtpa for the next 10 after that. The deal is Bangladesh’s first LNG import agreement and will help to cover the country’s domestic natural gas shortfall. The contract with the world’s biggest LNG exporter underscores the rise of South Asia as a new market for the fuel. The deal is for less gas than the 4 mtpa Bangladesh agreed to take in a 2011 memorandum of understanding with state-owned RasGas, since it instead plans to take more spot cargoes amid a supply glut that has lowered prices.  Bangladesh’s first floating storage and regasification unit, supplied by Excelerate Energy of the US, is to be commissioned by April 2018. Its second, supplied by the country’s own Summit LNG of the Summit Group, is due for commissioning by next October. Bangladesh is also looking to add two additional floating LNG terminals next year. Bangladesh, a country of more than 160 million people, could import as much as 17.5 mt of LNG a year by 2025. The country’s own gas reserves are depleting at the same time it is seeking to almost double its power capacity to 24,000 MW by 2021. Bangladesh is planning to tap the currently cheap and plentiful global LNG supplies and invest heavily in importing the fuel. South Asia is emerging as a hotspot for LNG, with Pakistan and Bangladesh set to join India as major consumers and help ease the oversupply that has dogged the market for years.

Iraq’s Kurdistan is poised for a major increase in gas output following the settlement of a court case with developers who are now looking to unlock the full potential of the region’s large resources, investor Dana Gas said. The semi-autonomous region settled a case with the Pearl Consortium by paying $1 billion to its members – Dana, Dana’s biggest shareholder Crescent Petroleum, Austria’s OMV, Hungary’s MOL and Germany’s RWE. The consortium has a 10-year-old deal with Kurdistan’s government to develop the Khor Mor and Chemchemal fields – one of the largest gas deposits in Iraq, with reserves of 400 bcm – enough to supply the whole of Europe for one year – and estimated resources of as much as 75 trillion. Pearl had been claiming against the government of Kurdistan for underpaying for gas liquids production, as well as delays to field development, but reached the settlement after the long-running case in London. Production will be raised from the current 3.3 mcm/day or 8 bcm/year. That volume would be enough to supply the annual gas needs of a country the size of Austria.

The US is proposing to speed up approval of small-scale exports of natural gas, including LNG, the US Department of Energy said. The Energy Department said the proposed rule would “expedite the review and approval of applications to export small amounts of natural gas in the emerging small-scale LNG export market,” which it said includes the Caribbean, Central America and South America. To date, most applications for export approval have been for larger-scale natural gas exports, but Central and South American markets require smaller volumes, the Energy Department said.


RIL makes first purchase of US crude

October 3, 2017. Reliance Industries Ltd (RIL) has purchased crude oil cargoes from the United States for the first time, drawn by the lower price for US (United States) oil versus global benchmarks. RIL is joining state-run refiners Indian Oil Corp, Bharat Petroleum Corp and Hindustan Petroleum Corp in importing US crude. The purchase illustrates the vast reach of US oil exports since the government rescinded a decades-long ban at the end of 2015. For this purchase, RIL bought 1 million barrels of West Texas Intermediate (WTI) Midland and a similar-sized cargo of Eagle Ford crude, both of which are expected to arrive in November. Opportunities for Indian refiners to import more US crude increased after the discount for West Texas Intermediate, the benchmark for US crude, to global benchmark Brent stretched to its widest since 2015 during September. State-run Indian refiners have bought a total 7.85 million barrels of oil from the US so far. India’s imports of US oil follows Indian Prime Minister Narendra Modi’s visit to Washington in June when President Donald Trump said his country looked forward to exporting more energy products to India. Indian Oil Corp, the country’s top refiner, received its parcel of the US crude at the eastern port of Paradip, the company said. U.S. crude oil shipments to India have the potential to boost bilateral trade by up to $2 billion, the US embassy in India said.

Source: Reuters

Diesel prices soar to all-time high in Delhi on strong demand, refinery shutdown

October 3, 2017. Diesel prices have soared to an all-time high in Delhi and close to their peaks in other cities as strong international demand along with prolonged refinery shutdown due to hurricanes in the United States (US) belied previous expectations of a decline. Rising prices means hardship for diesel vehicle owners as well as farmers and consumers dependent on diesel-generated power. Diesel was sold for Rs 59.07 per litre in Delhi, the highest for the period records are available on the website of Indian Oil Corp (IOC), which has data since 2002. Price of diesel is at a three-year high in Kolkata. Prices are highest since May and January this year in Mumbai and Chennai, respectively. Diesel prices had touched their life-time peak in August 2014 in Kolkata, Mumbai and Chennai. At Rs 79.94/litre, price of petrol was highest in Mumbai since August 2014. Petrol prices in Delhi, Kolkata and Chennai were highest since January this year. Due to local levies, prices of petrol and diesel vary from state to state. In Delhi, prices of petrol and diesel have risen by Rs 7.74/litre and Rs 5.74/litre, respectively since July 1. Most of the rise in a little more than a month was linked to spike in international rates after two successive hurricanes shut significant refinery capacity in the US. After big increases in fuel prices led to public uproar in the country mid-September, Oil Minister Dharmendra Pradhan said he expected prices to ease soon. But prices haven’t dropped. A prolonged refinery shutdown and higher diesel demand have pushed up crude prices. Crude prices jumped nearly 12% between 1st and 25th September to reach $59 a barrel before slipping to $56. Indian consumers have to pay a fuel price that is linked to international rates and topped with heavy central and state taxes. Prices are revised daily and are the average of the preceding 15 days’ international rates.

Source: The Economic Times

ONGC to increase focus on EOR projects after new policy: Shanker

October 3, 2017. In a bid to boost crude oil production from mature fields, India’s state-owned petroleum explorer Oil and Natural Gas Corp (ONGC) plans to increase focus on Enhanced Oil Recovery (EOR) projects after a policy incentivizing the activity is formulated, new Chairman and Managing Director Shashi Shanker has said. The policy is expected to benefit the company which garnered an incremental gain of 7.36 million tonnes (mt) through EOR activities last fiscal year contributing to 35 percent of ONGC’s crude oil production. Also, ONGC spent around Rs 5,195 crore on EOR activities in 2016-17. The new policy is aimed at arresting the declining trend in domestic crude oil production. The upstream regulator of the country Directorate General of Hydrocarbon (DGH) had called for stakeholder consultation for the policy in April this year and appointed consultancy firm Deloitte to undertake a study on the best practices existing worldwide on EOR. ONGC is working on a plan to invest Rs 57,825 crore on 28 EOR projects to tap an additional 194 million tonnes of oil equivalent (mtoe), according to information available on its website. Of the 28 projects, the company has already completed 23 projects at a cost of Rs 47,567 crore helping it tap more than 112 mt of additional crude by the end of 2016-2017. ONGC and Cairn India currently deploy EOR techniques in mature fields. State owned Oil India Ltd had also recently signed a Memorandum of Understanding with the University of Houston to collaborate in the fields of improved oil recovery (IOR) and enhanced oil recovery for production enhancement from mature fields.

Source: The Economic Times

Jet fuel price hiked by 6 percent, LPG gets Rs 1.5 costlier

October 1, 2017. Aviation turbine fuel (ATF) or Jet fuel price was hiked by six percent on firming international rates. This is the third consecutive monthly hike in Jet fuel prices since August. The ATF will now cost Rs 53,045 per kilolitre in Delhi against Rs 50,020 per kilolitre previously. Meanwhile, cooking gas or liquefied petroleum gas (LPG) price was also hiked by Rs 1.50 per cylinder (14.2 kg) in line with the government decision to raise rates every month to eliminate subsidies by March next year. Oil Minister Dharmendra Pradhan earlier ordered state-run oil companies to raise subsidised cooking gas (LPG) prices by Rs 4 per cylinder every month to eliminate all the subsidies by March next year. Every household is entitled to 12 cylinders of 14.2 kg each at subsidised rates in a year. Any requirement beyond that is to be purchased at market price.

Source: Business Standard


Gas price hike will benefit producers by Rs 13 bn: Ind-Ra

October 3, 2017. The increase in natural gas prices from this month would benefit domestic gas producers by around Rs 1,300 crore during the second half of the current fiscal, India Ratings and Research (Ind-Ra) said. The government has increased the price payable for domestic natural gas by around 17 percent to $2.89 per million metric British thermal unit (mmbBtu) for the period October 2017 to March 2018. This is the first price increase after five consecutive domestic gas price reductions, and has been driven by an increase in the average gas prices prevalent at the reference gas hubs over the period July 2016 to June 2017.  The price ceiling for gas from difficult deep-sea and high-pressure high-temperature areas/fields has been raised 13 percent to $6.30 per mmBtu. The gas price for the April-September period was $2.48 per mmBtu, and the ceiling for gas from difficult fields was $5.56. Prices of domestic natural gas are revised twice a year. Last year, the government allowed pricing freedom to producers of gas from difficult areas, with a ceiling linked to a mix of other fuels such as coal, liquefied natural gas, naphtha and fuel oil.

Source: Zee News

DGH refuses commerciality of ONGC’s deepest natural gas discovery

October 2, 2017. Upstream oil regulator DGH (Directorate General of Hydrocarbons) has refused to review the commerciality of India’s deepest gas discovery made by Oil and Natural Gas Corp (ONGC) on grounds that developing the find poses technological challenges. ONGC plans to invest Rs 21,528.10 crore to develop the ultra deepsea UD-1 discovery in its Bay of Bengal block KG- DWN-98/2 (KG-D5) by 2022-23. The find would have helped double the output from the KG block. It had earlier this year submitted to the DGH for approval a Declaration of Commerciality (DoC) of UD-1 find. DGH refused to review the DoC on grounds there was no technology available to produce gas from such water depths. ONGC plans to drill nine wells on the discovery that lies in water depths of 2,400-3,200 metres and will produce a peak output of 19 million standard cubic metres per day.

Source: The Economic Times

Renegotiation of Gorgon LNG contract could pave the way for other deals: ICRA

October 2, 2017. The recent renegotiation of an existing liquefied natural gas (LNG) contract between Petronet LNG Ltd (PLL) and Exxon Mobil would open the doors for similar re-negotiations for companies like GAIL (India) Ltd who are also trying to re-negotiate such contracts, ratings agency ICRA said. ICRA said that similar to PLL, GAIL has also been trying to re-negotiate its contracts and swap the LNG with other marketers in other regions of the world.

Source: The Economic Times

RIL outbids GAIL to buy entire volume of natural gas from its own coal seam blocks

September 28, 2017. Reliance Industries Ltd (RIL) has outbid rivals, including GAIL (India) Ltd, to buy the entire volume of natural gas from its own coal seam blocks until March 2021. In May, RIL had become the first buyer of gas it produced from its own coal-bed methane (CBM) block in Madhya Pradesh after agreeing to pay the highest price of $4.23 per million metric British thermal unit (mmBtu) for May-June. In the following quarter, it paid an additional 6 percent at $4.50 per mmBtu to take all of the CBM gas from Sohagpur East and Sohagpur West blocks. In the latest bidding for up to 3 million metric standard cubic metres per day (mmscmd) of gas to be produced during October 2017 and March 2021, RIL quoted $6.26 per mmBtu at the current oil price, according to bid documents.  Piramal Glass was the second-highest bidder quoting $4.97 per mmBtu, followed by Gujarat State Petroleum Corp (GPSC) putting in a bid of $4.9. GAIL bid for 1.5 mmscmd of gas at a price of $4.63 per mmBtu while its subsidiary GAIL Gas sought an equivalent quantity at $4.11 per mmBtu price, the bid document showed. RIL plans to use the gas at its petrochemical plants in Gujarat and Maharashtra, which run mostly on expensive imported fuel. Its petrochemical plants at Patalganga and Nagothane in Maharashtra and Vadodara and Jamnagar in Gujarat consumed an average of 4 mmscmd of gas during the last three months. RIL started commercial gas production from the CBM blocks in March and the planned output in October is 0.8 mmscmd, according to the bid document. Output would be ramped up to 2 mmscmd by March 2018 while the peak production of 3 mmscmd would touch in the third quarter of 2018. The rate of CBM gas is 150 percent more than the government mandated $2.48 per mmBtu price of the conventional natural gas produced by firms such as ONGC and RIL from the eastern offshore KG-D6 block. The bidding formula in all the three bid rounds for CBM gas this year has been the same and the process has been conducted by Crisil Risk and Infrastructure Solutions, a unit of Crisil.

Source: The Indian Express


CIL’s Talcher plant faces Indian coal roadblock

October 3, 2017. The operation of Coal India Ltd (CIL)’s Rs 7,700 crore fertiliser plant at Talcher in Odisha has hit a roadblock: Neither the company nor its partners have the technology needed to run it. The plant uses the coal gasification process, and has run into trouble for using Indian coal. Compared to the coal available in the global market, which has a maximum of 25 percent ash content, Indian coal generates 40-46 percent ash. Hence, it brings down the plant output capacity drastically in a gasification project. The Talcher would be the first coal gasification technology-based fertiliser project in the country. CIL said the fertiliser projects are part of the company’s diversification plan. Currently, instead of being a pure coal miner, the company is thinking of expanding its mining arm to metals as well and hopes to emerge as a holistic energy company.

Source: Business Standard

CIL to invest Rs 150 bn in 2017-18 in capex, other projects

October 1, 2017. Coal India Ltd (CIL) is lining up nearly Rs 8,500 crore as capital expenditure and Rs 6,500 crore for various other projects in the ongoing fiscal. The projects include a supercritical thermal power plant, solar energy and coal gasification. The company is planning to pump in Rs 6,500 crore in a host of projects, including a supercritical thermal power plant, solar power, revival of fertiliser plants, coal gasification and coal bed methane during 2017-18. The overall capital expenditure of CIL during 2016-17 stood at Rs 7,700 crore as against Rs 6,123 crore in the previous year. Earlier, the government had said the coal major had taken various steps for full utilisation of capex in 2017-18. CIL, which accounts for over 80 percent of the domestic coal production, is eyeing an output of 1 billion tonnes by 2020.  In 2017-18, the target of coal output has been pegged at 600 million tonnes with an annualised growth of about 8.3 percent.

Source: The Economic Times

Coal shortage hits power supply in Rajasthan

September 30, 2017. The discoms (distribution companies) had announced load shedding as power production in the state has been reduced drastically by 2,700 MW due to severe shortage of coal. The discoms said that station-wise load shedding would continue for next one to two weeks till the power production is stabilized. According to Rajasthan Power Development Corp, out of the total capacity of 1,500 MW of power at Surajgarh Thermal Power Station, only 725 MW power is being produced now while at Kota Super Critical Thermal Power Station only 590 MW of power is produced against the total capacity of 1,240 MW.

Source: The Economic Times

Coal ministry directs for fresh study of underground fire

September 27, 2017. A team of mines and fire experts would conduct fresh study on the status of the underground fire in the Dhanbad-Chandrapur railway line in Dhanbad Division of East Central Railway. Coal ministry has ordered Directorate General of Mines Safety (DGMS) to constitute the joint committee of mine and fire experts of different institutions to probe fresh status of fire under railway track of Dhanbad-Chandrapura (DC) railway line. The ministry has directed Bharat Coking Coal Ltd (BCCL) to bear the cost of study, BCCL said

Source: India Today


Greenko makes $2.1 bn bid for Reliance Infrastructure’s Mumbai power business

October 2, 2017. Greenko, backed by Singapore’s GIC and Abu Dhabi Investment Authority, has sought to acquire Reliance Infrastructure’s flagship Mumbai electricity business for an enterprise value of Rs 13,000-14,000 crore ($2.15 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 an underground network of over 1,000 km. The distribution franchise is nine decades old with the licence valid till August 2036.

Source: The Economic Times

Reliance Energy launches app for complaints on defective street lights

September 28, 2017. In an effort to make Mumbai streets safer after dark, Reliance Energy has launched a new app-based service for lodging complaints on defective street lights. The Geographical Information System (GIS)-based technical innovation ‘StreetlightComp.Reg’ is available on its mobile app to enable Mumbaikars alert Reliance Energy about street light-related issues within the company’s supply jurisdiction. For this, a consumer can simply pin his/her location in the GPS-based feature on the app and select the type of complaint like ‘lamp not working’ or ‘low illumination’ that they would like to make. The street light feature in the app provides instant and accurate registration of complaints without the need to mention details like pole number and hence eliminates any undesired waiting time at call centre. While Reliance Energy has dedicated teams to inspect about 100,000 street lights in its licensed area and repair any defects in suburban Mumbai, the new feature for complaints would help bring down the response time due to accurate location provided by the GIS and help Reliance Energy keep Mumbai’s streets safer for public, particularly for children, women, and senior citizens. The complaints would be automatically forwarded to the field team concerned for prompt resolution on real-time basis. Automated workforce management comprising customer relationship management and GIS enables field team to resolve the complaints and update the status, which can be witnessed by the customer(s) on the mobile app. The power distribution arm of Reliance Infrastructure Ltd, Reliance Energy is India’s leading distribution company serving over 2.96 million consumers spread across 400 in Mumbai suburbs and its surrounding areas.

Source: Business Standard

Crisil forecasts bleak revival prospects for 21 GW stressed assets in power sector

September 28, 2017. A large proportion of coal-based power generation capacities in the private sector, under stress due to multiple factors, will remain depressed for a long time despite a raft of alleviation measures from the government, according to Crisil Research. As of August 2017, about 21 GW of commissioned private sector coal based capacities were under stress for want of long-term power purchase agreements or because of poor offtake. With demand growth expected to remain tepid, the outlook for these capacities is bleak for at least the next few years.

Source: The Hindu Business Line

ADB, AIIB to invest $150 mn in Indian power transmission project

September 28, 2017. The Asian Development Bank (ADB), with co-financing from Asian Infrastructure Investment Bank (AIIB), will provide $150 mn in an ongoing power transmission project in India, with an aim to deliver more clean energy. AIIB said that the project is being carried out to enhance energy connectivity in the country by strengthening its electricity transmission system. The new funding from the partners will be used for additional power transmission network components that will connect with the ADB-financed Green Energy Corridor and Grid Strengthening Project. According to the Manila-based ADB, the clean energy project will be expanded further to increase energy transmission to cover more states in the country. The project will include 400 kilovolt transmission components in the southern state of Tamil Nadu to connect at Pugalur with the long-distance grid systems funded by ADB. The development bank will deliver $50 mn, while AIIB will be cofinancing $100 mn for the component, which will be built at a cost of $303.5 mn. India’s state-owned transmission company Power Grid will fund the remainder. India’s new grid system will mainly transmit solar and wind power, aimed at covering more locations.

Source: Energy Business Review

No free power for poor under Saubhagya

September 27, 2017. The government said power will not be provided free of cost to any category of consumer under the recently launched Saubhagya scheme, which aims to provide electricity to all. The scheme is expected to increase the energy requirement by 28,000 MW per year. However, under the scheme the poor families will be provided electricity connections free of cost, said the frequently asked questions (FAQs) on the scheme released by the power ministry. According to the document, other families will pay Rs 500 only, which shall be recovered by the distribution companies/power departments in 10 instalments along with electricity bills. The Pradhan Mantri Sahaj Bijli Har Ghar Yojana (Saubhagya) was launched by Prime Minister Narendra Modi with an ambition of providing electricity connections to all 4 crore left-out families by December 2018. The FAQ said connecting 4 crore left-out families under Saubhagya will increase the electricity requirement by 28,000 MW or 80,000 million units in a year.

Source: Business Today

HC notice to Punjab on PIL to abolish power subsidy to rich farmers

September 27, 2017. The Punjab and Haryana High Court (HC) issued notice to various authorities in Punjab on the electricity subsidy given to rich farmers for their agricultural pump sets. Notices were issued to the Punjab government, the Punjab Electricity Regulatory Commission and the Punjab State Power Corp Ltd (PSPCL) on a PIL (public interest litigation) by advocate H C Arora which seeks to abolish the subsidy to those who are financially well-off. The plea also seeks to identify the creamy layer among farmers on the lines of OBC reservation. Arora has stated before a division bench of Justice A K Mittal and Justice Amit Rawal that Punjab has been providing free electricity for tubewells for several years. The subsidy, which is reimbursed to PSPCL by the state government, was Rs 6,113 crore during 2016-2017. Arora has pleaded that the method of giving subsidy is full of loopholes and some system to measure consumption of electricity should be evolved. According to him, small farmers should be extended the benefit of free electricity on the basis of optimum consumption per acre as excessive use of tubewells is resulting in receding water table, which is not in the interest of the state.

Source: The Times of India

Siemens to implement primary frequency control tech for NTPC

September 27, 2017. Power solutions provider Siemens said it has commissioned India’s first condensate throttling-based primary frequency control solution at National Capital Power Station (NCPS) project of NTPC at Dadri in Uttar Pradesh. The condensate throttling, based on Siemens SPPA-P3000 frequency control solution, commissioned at NTPC Dadri (Stage 2, Unit 6), is used for immediate generation of additional power for frequency control, the company said.

Source: The Hindu Business Line


Wind energy tariff may not drop below Rs 3.2 per unit in second auction

October 2, 2017. Wind power tariff may drop marginally to Rs 3.2 per unit in the second auction for 1 GW capacities scheduled as against Rs 3.46 per unit discovered in the first competitive bidding held earlier this year, an industry source said. Earlier this year, wind power tariff dropped to all-time low of Rs 3.46 per unit in the auction of 1 GW capacities conducted by Solar Energy Corp of India (SECI). Solar power tariff ranged between Rs 2.65-3.36 in an auction conducted by Gujarat Urja Vikas Nigam (GUVNL) for 500 MW capacities. This was slightly up from all-time low rate of Rs 2.44 per unit discovered earlier this year. The SECI is also conducting the second auction for another 1 GW capacities. The second auction assumes significance because India has set an ambitious target of having 60,000 MW of wind power capacity by 2022. India has installed wind power capacity of 32.5 GW as per latest report for the month of August by the Central Electricity Authority. The country needs to add 5-6 GW wind capacity every year to meet the target. Globally, India is at the fourth position after China, the US and Germany, in terms of wind capacity installation.

Source: The Economic Times

India plays major role in nuclear plant in Bangladesh

September 30, 2017. India is playing a substantive role in building a nuclear power plant on foreign soil for the first time ever with the proposed supply of equipment and material for the power station being built by Bangladesh with Russian assistance. Indian firms are working with Russian and Bangladeshi partners on establishing Rooppur Nuclear Power Plant in Bangladesh. India will supply and manufacture equipment, material for the plant near Dhaka. Besides Bangladeshi nuclear scientists are undergoing training at the Kudankulam Nuclear Power Plant, also built with Russian assistance and uses Russian technology.

Source: The Economic Times

Panjab University hostel solar panels lying defunct

September 30, 2017. The solar heater panels in the hostels of Panjab University are already in need of repair within two years of their installation. The student council has raised the issue with the authorities as a number of solar panels owing to technical fault have been lying defunct in the hostel. Punjab Deputy Chief Minister Sukhbir Singh Badal had made an announcement of installation of solar water heater projects in all the hostels of the campus in September 2015 during the oath ceremony of the Panjab University student council. Punjab energy development agency (PEDA) had allotted the work of installation of the solar heater panels in four hostels to four private companies. On the basis of the performance of the companies, the work of the other 13 hostels was allotted to them by the agency. In 2015 solar panel was installed in two boys’ hostels and two girls’ hostels on a pilot basis to check the performance and then was installed in the rest of the hostels.

Source: The Times of India

Engie and Abraaj JV eyeing $1 bn wind power investment in India

September 29, 2017. A joint venture (JV) of French energy firm Engie SA and Dubai-based private equity firm Abraaj Group may invest around $1 billion to build a 1,000 MW wind power platform in India. The strategy ahead for the JV announced involves bidding for new contracts and making acquisitions to reach the targeted capacity. The capital expenditure planned in equity and debt comes in the backdrop of India’s wind sector transitioning from a feed-in tariff regime to tariff-based competitive auctions. While feed-in tariffs ensure a fixed price for power producers, wind power tariffs in India followed the solar route and hit a record low of Rs 3.46 per kilowatt hour (kWh) in a February auction conducted by Solar Energy Corp of India. Prior to this JV, both Abraaj and Engie have had a presence in the Indian solar space. While the Abraaj Group, with $11 billion under management, announced a partnership with the Aditya Birla Group in October 2015 to build a renewable energy platform focused on developing solar power plants, Engie, with €66.6 billion in revenue, has been trying to expand its presence in India’s clean energy space. Foreign investments are crucial for India’s renewable energy industry as the lower cost of foreign capital and the size of the market has helped bring down tariffs. Engie plans to set up 2 GW of capacity in India by 2019, with its subsidiary Solairedirect SA actively bidding for solar projects, and has an 810 MW portfolio. India’s low green energy tariffs have caused disruptions with some states looking to renege on their offtake commitments for projects awarded at comparatively higher tariffs.

Source: Livemint

PFC to provide Rs 40 bn for 4 GW thermal power plant in Telangana

September 27, 2017. Power Finance Corp (PFC) has committed financial assistance of Rs 4,009 crore to Telangana for setting up a 4,000 MW thermal power plant in Nalgonda district. PFC has sanctioned a term loan of Rs 4,009 crore to TSGENCO (Telangana Power Generation Corp Ltd) for setting up 5X800 MW, coal based Yadadri Thermal Power Plant using super-critical technology in Nalgonda district of Telangana, PFC said. The Yadadri Thermal Power Plant will generate approximately 29,784 million units of energy to meet the future power requirement of Telangana.

Source: India Today


Iraq hopes to resume production from Nineveh oil fields in coming months

October 3, 2017. Iraq hopes to resume production from the Nineveh oil fields in the “next few months” after they were torched by Islamic State during a US (United States)-backed offensive on their stronghold Mosul, the oil ministry said. The ministry instructed North Oil Company to prepare “an urgent plan” to rehabilitate the oil fields the militants had set on fire for smoke to cover their movements from the air. Nineveh’s two main fields, Qayyara and Najma, produced up to 30,000 barrels per day before falling under control of the militants in mid-2014. The site also has a small refinery to process local oil.

Source: Reuters

Petrobras sees Brazil fuel pricing policy key to attract partners

October 2, 2017. A new fuel pricing policy in Brazil that reduces subsidies significantly should help state-controlled oil company Petróleo Brasileiro SA (Petrobras) draw more partners in the segment. Petrobras reaffirmed debt and asset sale goals for the end of next year, noting that it faces “no liquidity concerns” this year.

Source: Reuters

Noble Group expects to sell oil liquids business by end-December

October 2, 2017. Noble Group Ltd (NGL) expects to sell its oil liquids business by the end of December as part of a plan to slim down drastically and focus on its core Asian coal trading business after a crisis-wracked two years. NGL flagged the sale of the capital intensive oil liquids business in July after agreeing to sell its North American gas and power business to rival Mercuria Group.

Source: Reuters

US oil output up to 9.2 mn bpd in July: EIA

September 29, 2017. US crude oil production rose to a 9.24 million barrels per day (bpd) in July, an increase of 141,000 bpd, the US Energy Information Administration (EIA) said. Output increased by 21,000 bpd in Texas, and rose by 14,000 bpd in North Dakota, the EIA said.

Source: Reuters

US shale hinders hopes for oil market rebalancing

September 29, 2017. Oil prices are unlikely to rise much beyond this month’s two-year highs this year, as concern among analysts persists that growing US  (United States) shale output will hamper the rebalancing between global crude supply and demand, a poll showed. Brent crude is expected to average $52.60 a barrel in 2017, a touch higher than last month’s forecast of $52.53. For 2018, the North Sea crude was seen averaging $54.40 a barrel versus the previous month’s forecast of $54.48. The monthly poll of 36 analysts and economists projected Brent to average over $60 a barrel by 2020. Brent hit its highest since July 2015, driven by demand for refined products and views of a quickly balancing oil market following production cuts led by the Organization of the Petroleum Exporting Countries.

Source: Reuters

Exxon Mobil bets on Brazil, buys 10 oil blocks in auction

September 28, 2017. Exxon Mobil Corp vastly expanded its presence in Brazil, winning 10 blocks in the country’s 14th round of bidding for oil exploration and production rights, helping the cash-strapped nation fetch a record 3.8 billion reais ($1.19 billion). Exxon Mobil took six blocks in consortia with state-controlled oil giant Petroleo Brasileiro in the promising offshore Campos basin, after bidding 2.24 billion reais for one block. That was Brazil’s highest-ever such bid.

Source: Reuters

Statoil charters last of the world’s largest oil tankers to hold crude for Asia buyers

September 28, 2017. Norway’s Statoil ASA has chartered the last remaining Ultra-Large Crude Carrier (ULCC), the world’s largest oil tankers, to store oil off of Malaysia for distribution in smaller parcels to its clients in Asia, the company said. Statoil has booked the TI Europe, capable of carrying up to 3 million barrels of oil, more than the daily consumption of South Korea, to reduce the time it takes for customers to ship their crude, Stale Endre Berg, senior vice president of crude and refining at Statoil, said. The time charter of the ship comes despite the market structure for Brent crude futures flipping into backwardation, when spot prices are higher than for later delivery.

Source: Reuters

Kuwait expects to seal new deals to supply oil to Chinese buyers

September 28, 2017. Kuwait expects to seal new deals to supply Chinese buyers with crude amid healthy demand for its exports in Asia. The country plans to export a new light crude grade by January, as well as spending $120 billion over the next five years on expanding both its upstream and downstream businesses, Kuwait Petroleum Corp (KPC) said. Kuwait plans to start selling a new grade of crude called Kuwait Super Light from January, KPC said. Kuwait’s output capacity now stands at 3.2 million bpd, with the company aiming to boost that to around 3.3 million bpd by end of the next fiscal year. Kuwait has been pumping around 2.7 million bpd, sticking to it production target under the OPEC (Organization of the Petroleum Exporting Countries) supply cut pact, KPC said. Kuwait is studying establishing a new firm to market refined oil products.

Source: Reuters

World needs new offshore oil investments to avoid shortages: Hess

September 28, 2017. Higher investments in offshore oil production are critical to avoiding a supply squeeze by 2020, as expanding shale output will not match projected demand increases in the next few years, US (United States) oil producer Hess Corp said. The past four years of low oil prices have major producers pulling back on needed offshore investment, and the gap between supply and demand should help prices rebound, Hess Chief Operating Officer Greg Hill said. US shale production, which is up 29 percent so far this year benefiting from greater efficiencies and lower service costs, has largely frustrated efforts by the Organization of the Petroleum Exporting Countries (OPEC) to tame a global glut that has halved oil prices since 2014. Hess in July posted a bigger than expected second quarter loss as its oil production slipped. It recently suffered some production hits from Hurricane Harvey.

Source: Reuters

Peru crude oil pipeline resumes operation after year of spills

September 27, 2017. A crude oil pipeline operated by Peru’s state-owned oil company Petroperu became fully operational following repairs on a series of ruptures that had partially shuttered it for more than a year. The reopening of a final section of the 687 mile (1,106 km) pipeline allows Petroperu to replace river and ground transportation that had been used as alternatives for moving crude from Amazonian oilfields to the Pacific Coast. The pipeline transported less than 15,000 barrels of oil per day before the spills, but its closure has been a drag on economic growth as it has halted some production.

Source: Reuters


Kazakhstan to sell 5 bcm of gas to China for $1 bn

October 3, 2017. Kazakh firm KazTransGas will ship 5 billion cubic metres (bcm) of natural gas to China’s PetroChina for about $1 billion, the Kazakh company said. Shipments will start on October 15 and will be carried out over the course of one year, KazTransGas said. A gas pipeline completed in 2009 connects all Central Asian energy exporters – Turkmenistan, Uzbekistan and Kazakhstan – to China. But Kazakhstan has until now exported gas only to Russia because additional pipelines were needed to link its fields to the Chinese one. KazTransGas, which operates Kazakh gas pipelines and has no upstream assets, did not name the producers that would supply the gas but said some of it would come from the stocks in its storage.

Source: Reuters

Gas exports up 11.3 percent in January-September: Russia’s Gazprom

October 2, 2017. Russian gas exports to Europe and Turkey increased by 11.3 percent year-on-year to 141.2 billion cubic meters (bcm) in January-September, gas giant Gazprom said. It also said the group’s gas output rose by 19.1 percent to 339.8 bcm in the same period.

Source: Reuters

Robust Chinese demand ensures Asian LNG rally has legs

September 29, 2017. Unexpectedly strong demand from China, along with rising oil and coal prices, should keep Asian liquefied natural gas (LNG) spot levels buoyant this winter. Despite rising supplies from new plants, spot prices have risen by 55 percent from their 2017 lows to $8.40 per million metric British thermal units (mmBtu) as Asian buyers also refilled summer stocks. With the peak demand October-March winter gas season almost underway, further price gains are expected.

Source: Reuters

Australia’s Beach Energy snares Origin gas assets for $1.2 bn

September 28, 2017. Australia’s Beach Energy has agreed to buy gas assets from Origin Energy Ltd for $1.25 billion in a deal that will more than double the oil and gas producer’s output and step up its exposure to a tight energy market in eastern Australia. At the same time, it has locked in gas sales to Origin from the Lattice Energy business it is acquiring at higher prices than it averaged in the year to June 2017, serving a market that is likely to see gas demand soar for power plants. Beach said that besides expanding the company’s output and reserves, the deal offered certainty of cashflow from the gas sales agreements, which stretch out to 2033.

Source: Reuters

Philippines to explore for O&G with China near disputed waters

September 28, 2017. The Philippines said it was pursuing a long-delayed oil and gas (O&G) exploration project with Chinese state-owned entity CNOOC Ltd and a Canada-listed company in an area near disputed waters in the South China Sea. Energy Secretary Alfonso Cusi said the Philippine government was also looking for a “win-win solution” with other South China Sea claimants, including China, to pave the way for O&G exploration within contested waters.

Source: Reuters

Australia’s east coast LNG producers avert export curbs

September 27, 2017. Australia’s three east coast LNG (liquefied natural gas) plants have staved off threatened export curbs after promising to plug a projected domestic gas supply shortfall in 2018, Australian Prime Minister Malcolm Turnbull said. The agreement follows six months of government pressure on the producers of LNG, led by Royal Dutch Shell, ConocoPhillips, Origin Energy and Santos Ltd, who have been blamed for sapping the local market of gas and driving up prices. The Australian Energy Market Operator (AEMO) projected there would be a gas shortfall of between 54 and 107 petajoules in 2018, or up to 17 percent of demand, which the companies have now vowed to supply. The threat of export controls on the three LNG plants had raised alarm about sovereign risk, especially for the investors in those plants and their Chinese, Japanese, Korean and Malaysian customers. Gas has become a hot political issue as soaring prices are hurting households and threatening jobs at manufacturers like food, building materials and chemical producers, as well as driving up electricity prices, as gas-fired power is needed to back up wind and solar energy. To deal with the crisis the government passed a law earlier this year that would allow it to limit exports from any of the three LNG plants on the east coast to beef up local supply in any year that it deems there will be a shortfall. For 2018, the export controls will now not be invoked. Shell said it had set up an Australian trading business because it saw an opportunity to sell gas from Queensland to customers in the country’s southeast, where there is little competition among suppliers. The Australian Competition and Consumer Commission flagged that producers were offering gas at A$10-$16 a gigajoule to industrial users, well above the forecast Asian LNG price for 2018 netted back to Australia plus local pipeline costs, which worked out to A$7.77.

Source: Reuters


Russia takes advantage of China’s North Korea coal ban

October 3, 2017. China’s coal import data for August flung up an interesting anomaly in the form of renewed imports from North Korea, but of far more interest is the surge in cargoes from Russia. Customs data showed that China imported 1.6 million tonnes from North Korea in August, the first allowed since February when Beijing tightened sanctions against its neighbour as part of international efforts to restrict the isolated dictatorship’s nuclear weapons programme. What is more interesting is how Russia has effectively supplanted North Korea as a supplier of relatively good quality coal to China. North Korean coal is classified by Chinese customs as anthracite, a grade of coal that doesn’t have quite enough energy content to be coking coal, used for steel making, but is generally of higher quality than most types of thermal coal used for power generation. China generally used North Korean coal for industrial applications and for blending with lower quality coals for power generation.

Source: Reuters

In Pakistan’s coal rush, some women drivers break cultural barriers

September 29, 2017. As Pakistan bets on cheap coal in the Thar desert to resolve its energy crisis, a select group of women is eyeing a road out of poverty by snapping up truck-driving jobs that once only went to men. Such work is seen as life-changing in this dusty southern region bordering India, where sand dunes cover estimated coal reserves of 175 billion tonnes and yellow dumper trucks swarm like bees around Pakistan’s largest open-pit mine.

Source: Reuters

Washington State denies key permit for US-Asia coal export terminal

September 27, 2017. Washington State rejected a key permit needed for a proposed terminal to export coal to Asia, another blow to companies eager to sell Wyoming and Montana coal to Asian markets and to the Trump administration’s policy of global energy dominance. Washington’s Department of Ecology rejected a water quality permit for the Millennium Coal Terminal, one of several permits sought by the company to build what would be the largest coal export terminal in the United States (US). Millennium said it would appeal the decision, and accused the state agency of being biased against the project. The terminal would export up to 44 million tonnes of coal mined in Wyoming and Montana’s Powder River Basin each year from companies such as Cloud Peak Energy and the coal-producing Crow tribe of southeastern Montana. The proposed terminal would offer coal mining companies an alternative to exporting coal through the Westshore terminal in Vancouver, British Columbia. It is the last of six proposed coal terminals in the Pacific Northwest that have been denied approval by state regulators or the Army Corps of Engineers amid opposition from states and the Lummi Tribe, who argued that coal terminals interfered with their fishing rights. The US has been in a trade spat with Canada over exports of softwood. In response, British Columbia threatened to halt exports of US coal through Canada. US coal exports have jumped more than 60 percent this year because of soaring demand from Europe and Asia, according to a Reuters review of government data in the first half of the year. Some analysts said the trend may be temporary, depending on coal price trends in Asia.

Source: Reuters

China-backed Yancoal Australia exercises option to up stake in coal mine

September 27, 2017. China-backed coal miner Yancoal Australia Ltd said it had exercised its option to buy a 29 percent stake in the Warkworth operation from Japan’s Mitsubishi Corp for $230 million. The agreement brings Yancoal’s stake in the Warkworth project to about 85 percent, it said. The project, which was part of a bidding war between Yancoal and commodity trader Glencore PLC, was snatched up by Yancoal earlier this year as part of its acquisition of Rio Tinto’s Coal & Allied unit.

Source: Reuters


China commences construction of world’s highest power pylon

October 3, 2017. Construction recently began work on a giant power supply pylon, believed to be the world’s tallest in east China’s Zhejiang Province, State Grid Zhejiang Electric Power Company announced. A pylon is a large vertical steel tower-like structure that supports high-tension electric cables. At an impressive 380 metres tall, the pylon will be four times the height of London’s Big Ben. According to the power company, the new pylon is a part of a new ultra-high voltage power line project between cities of Zhoushan and Ningbo.

Source: Premium Times

RWE moves two Frimmersdorf brown power blocks into reserve

September 29, 2017. German utility RWE said it will take offline its Frimmersdorf P and Q brown coal-fired power-generation units from October 1, as agreed under a national brown coal reserve scheme. The move, mostly relevant for supply in the wholesale power market, follows a 2015 plan to mothball highly carbon polluting power plants in order to try and meet Germany’s climate targets. Germany is due to miss its self-imposed goal to cut CO2 emissions by 40 percent by 2020 from 1990 levels, having achieved around 27 percent. The two western German units of 300 MW each will be retained as reserve in case of emergencies for four years, after which they will be closed permanently, RWE said. The reserve scheme encompasses a total 2,700 MW. RWE is due to shut two more units at Niederaussem in 2018, one at Neurath in 2019, while east German mining firm Mibrag already put its Buschhaus plant into reserve last year.

Source: Reuters

Nigeria to diversify power supply, then focus on transmission system repairs

September 28, 2017. Nigeria is focused on diversifying power supply and ensuring its stability before pouring money into a creaking transmission system, Minister of Information Lai Mohammed said. Mohammed said that while Nigeria had already increased power generation to the point that its transmission system could not handle all of it, it was crucial to increase the mix of power sources and ensure reliability. Frequent power outages and unreliable supply are a brake on growth in Africa’s largest economy, although He said recent increases in power generation had helped to pull the country out of a recession caused by lower oil prices. He said the government expected power generation to reach 7,000 MW this year, up from 2,690 MW in 2015. Transmission capacity is 6,700 MW, up from roughly 5,000 MW in 2015, but still not enough to handle the power generated. He said 1.2 trillion naira ($3.9 billion) of investments in infrastructure last year, 20 billion of which was focused on power, showed the government’s commitment to improving supplies for a country of around 186 million people.

Source: Reuters

TCN and WAPP will set up a 330 kV transmission line between Nigeria and Benin

September 27, 2017. The Transmission Company of Nigeria (TCN) and the West African Power Pool (WAPP) will build a 330 kilovolt (kV) transmission line that will link Nigeria and Benin. The planned infrastructure is scheduled for completion by 2021 and will link Ikeja (Nigeria) with Sakété (Benin). The project will be built under the framework of the WAPP and will be supported by New Partnership for Africa’s Development (NEPAD) and the African Development Bank (ADB). Besides, Nigerian authorities plan to transfer its current bilateral power supply deal with the Communauté Électrique du Bénin (CEB), and Société Nigérienne d’Electricité (NIGELEC), to Nigeria Bulk Electricity Trading Plc in order to regularise the current power purchase agreements (PPAs). Transmission is the weak point of Nigeria’s power network, which currently produces 6,600 MW of electricity and distributes only 4,600 MW to subscribers. The rationale behind the construction of the new line is to export the electricity surplus generated through WAPP to neighbouring countries.

Source: Enerdata


France wins EU approval for four renewable energy schemes

September 29, 2017. EU (European Union) state aid regulators approved four French schemes that will allow the country to produce more than 7.5 GW in energy from onshore wind and solar, saying the projects were in line with EU competition rules. France aims to produce 23 percent of its energy from renewable sources by 2020. The European Commission said France will evaluate the schemes and brief regulators on the impact with an interim report in 2018 and a final one in 2022.

Source: Reuters

US offers Vogtle nuclear plant $3.7 bn in loan guarantees

September 29, 2017. The United States (US) Department of Energy (DOE) said it has offered an additional loan guarantee of up to $3.7 billion to companies building two nuclear reactors at the Vogtle plant in the state of Georgia. The conditional loan guarantees were in the amounts of $1.67 billion to Georgia Power Company, a subsidiary of Southern Co, $1.6 billion to Oglethorpe Power Corp and $415 million to three subsidiaries of the Municipal Electric Authority of Georgia. US Energy Secretary Rick Perry, who has remarked he wants to make nuclear power “cool again,” said that the “future of nuclear energy in the US is bright” and that he looks forward to “expanding American leadership in innovative nuclear technologies.” US nuclear power has been struggling in the face of competing power plants that burn plentiful, low-cost natural gas and stagnant electricity demand. The 2011 Fukushima disaster in Japan has also dimmed interest in nuclear power. The Vogtle project is the first new US nuclear power plant to be built since the Three Mile Island accident in 1979. And billions of dollars in cost overruns at Vogtle helped push its main contractor, Westinghouse Electric Co LLC, a subsidiary of Toshiba Corp of Japan, into bankruptcy in March. The DOE has already guaranteed $8.3 billion in loans to the companies to support construction of Vogtle reactors. Vogtle had initially been expected to begin generating power in 2016, but now the reactors are expected to be completed around the end of 2022.

Source: Reuters

US EPA mulls counting ethanol exports against mandates

September 28, 2017. The Environmental Protection Agency is considering a change to US (United States) biofuels policy that would allow exports of ethanol to count toward the country’s annual biofuels volumes mandates. The proposal would represent a significant shift from the original mandate of the 2005 renewable fuel program, designed to increase the amount ethanol and biodiesel in the country’s fuel pool while boosting the US agricultural sector. The move would benefit US merchant refiners like Valero and PBF Energy, who are required under the US Renewable Fuel Standard to blend increasing volumes of ethanol and other biofuels into the country’s gasoline and diesel every year, at a cost of hundreds of millions of dollars. Currently, US biofuels policy only counts fuels blended in the US toward the annual volumes mandates and does not count ethanol that is produced in the US and exported for use abroad. By counting the exports, it would increase the amount of available credits by the equivalent of as much 1 billion gallons of biofuel and push down prices. The EPA proposed a requirement that refiners and importers blend in 15 billion gallons of corn-based ethanol and other conventional renewable fuels next year.

Source: Reuters

Fiat Chrysler to engage in settlement talks over diesel emissions

September 28, 2017. Fiat Chrysler Automobiles NV will engage in settlement talks with lawyers representing vehicle owners suing the automaker over excess diesel emissions in Washington on October 12, a court-appointed settlement adviser said. In May, the United States (US) Justice Department sued Fiat Chrysler, accusing the company of illegally using software that led to excess emissions in nearly 104,000 US diesel vehicles sold since 2014. It also faces numerous lawsuits from owners of those vehicles. German auto supplier Robert Bosch GmbH, which develops diesel vehicle systems, has also been sued by US vehicle owners and will take part in the settlement talks next month, settlement master Ken Feinberg said in court. The government will not participate in the talks, Feinberg said. In July, Fiat Chrysler won approval from federal and California regulators sell 2017 diesel vehicles after it came under scrutiny for alleged excess emissions in older diesel models. A Fiat Chrysler lawyer, Robert Giuffra, said in court the company was confident of being able to use updated emissions software in the 2017 vehicles as the basis of a fix to address agencies’ concerns over 2014-2016 Fiat Chrysler diesel vehicles. Giuffra said the engine and emissions controls were identical in the older vehicles to those in the 2017 models. Fiat Chrysler’s emissions case came after Volkswagen AG’s diesel emissions scandal prompted increased industry scrutiny. The German automaker pleaded guilty in March to having intentionally cheated on emissions tests for vehicles it sold since 2009. Volkswagen has agreed to spend up to $25 billion to address claims from US owners, environmental regulators, states and dealers, and offered to buy back about 500,000 polluting US vehicles.

Source: Reuters

Anesco unveils UK’s first subsidy-free solar power plant

September 27, 2017. British renewable energy developer Anesco has unveiled the country’s first subsidy-free solar farm and energy storage facility – Clayhill – near Flitwick in the southern English county of Bedfordshire. Clayhill is a 10 MW solar farm combined with a 6 MW energy storage facility. Spread on a land of 45 acre, the Clayhill solar farm is capable of meeting the electricity needs of about 2,500 homes while offsetting 4,452 tons of carbon. The Clayhill project, which was constructed and installed in 12 weeks, comprises five battery storage units. The five battery storage units will help in maximising the usable output from renewable electricity sources like solar, which produces different amounts of energy based on the weather conditions. The United Kingdom (UK) government anticipates more subsidy-free sites to be installed and connected by other developers during the course of the year.

Source: Energy Business Review


India’s Imports of Hydrocarbons from China

US$ Millions

Type of Fuel 2014‐15 2015‐16  2016‐17

2017‐18 (P)

(April‐ May, 2017)

Coal, Coke and Briquettes 423.63 364.40 402.79 100.23
Petroleum Products 315.82 243.08 213.11 35.53
Petroleum: Crude 0.00 63.26 0.00 0.00
Total Hydrocarbon Imports from China 739.45 670.74 615.90 135.76

Share of Hydrocarbons Imports in Total Merchandise Imports from China

(P): Provisional figures

Source: Compiled from Lok Sabha Questions

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

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