Energy News Monitor | Volume XIV; Issue 46

     Energy Monitor,ENM,May

    OIL PRICE INCREASE

    Oil News Commentary: March - April 2018

    India

    India's oil import bill is likely to jump by a quarter to $87.7 billion in the current fiscal year which ends this weekend as international oil prices have surged. India had imported 213.93 mt of crude oil 2016-17 for $70.196 billion or ₹ 4.7 trillion. For 2017-18, the imports are pegged at 219.15 mt for $87.725 billion (₹ 5.65 trillion), according to the latest data available from oil ministry's PPAC. India relies more than 80 percent on imports to meet its oil needs. During first 11 months of current fiscal (April 2017 to February 2018), the country imported 195.7 mt crude oil for $63.5 billion. The basket of crude oil that India imports averaged $55.74 per barrel in the April-February period as compared to $47.56 a barrel in 2016-17 and 46.17 in 2015-16. Every dollar per barrel change in crude oil prices impacts the import bill by ₹ 8.23 billion ($0.13 billion).

    India is aiming to drive harder bargains with global oil producers, including Saudi Arabia, during bilateral meetings at a conference of energy ministers, leveraging its strength as the world’s third-biggest crude importer. Key producers from the OPEC threatened by the rising output from new and non-OPEC countries, are trying to secure a foothold in India where refining capacity is set to surge to 8 million bpd by 2030 from 5 million bpd. Iran has offered to increase a discount on freight prices to Indian state refiners to double its sales to the companies, which control about one-third of India’s refining capacity. Saudi Aramco raised the credit limit for some Indian refiners last year so that they could lift more crude without providing explicit financial guarantees. India’s footprint in global energy markets will increase “materially” from 2018 to 2040, making it the largest growth market for global energy, BP Plc said in its energy outlook report in February. India last year began buying oil from the US to cut its dependence on the Middle East, whose share of overall imports fell to 64.1 percent in the fiscal year of 2016/17 from about 80 percent in the 2007/08 fiscal year, government data showed. India and China, the traditional rivals, plan to jointly leverage their buying power to influence the crude oil pricing. China and India are world’s second- and third-largest oil consumers and heavily dependent on import. India has been raising its voice against the Asian premium, a practice under which Asian refiners pay a higher price for oil than their Western counterparts. This is not the first time that India and China have spoken about leveraging their purchasing power to influence crude prices but previous efforts frittered due to uneasy relations India and China share and the keen competition they experience in business.

    India produced 32,642 mt crude oil in the eleven months between April 2017 and March 2018, a marginal 1 percent decline as compared to the output in the same period last fiscal (April-February 2016-17), and a record seven year low, according to the PPAC data. In February 2018, oil production dipped 2.36 percent to 2,731 tmt. The dismal performance is attributed to lower than expected output from key wells operated by state-run ONGC, OIL and fields operated by private companies. The lower output dampens the prospect of achieving the government’s target of 10 percent reduction in energy import dependence by 2022. India records lowest crude oil production in seven years PPAC data showed February’s oil production dipped due to poor performance of fields under ONGC and under PSCs.

    The foreign acquisition unit of India’s ONGC has filed an arbitration claim against the government of Sudan in a London court, the company said, seeking to recover dues pending for years from a project hit by the breakaway of South Sudan in 2011. ONGC had filed a claim for $98.94 million, in what they said was a first for the South Asian nation’s top oil and gas explorer against any government. At the centre of the dispute is ONGC’s 25 percent stake the company acquired in the GNOP in Sudan in 2003. Other stakeholders include China’s China National Petroleum Corp with a 40 percent stake and Malaysia’s Petronas with a 30 percent share. The current arbitration is only for a part of pending dues that add up to about $425 million. ONGC has sued the government as the contracts were backed by sovereign guarantees. OVL’s stake in the GNOP comprised Blocks 1, 2 and 4, and the firm also agreed to build a 1,500 kilometre pipeline to Port Sudan on the Red Sea. But in 2011 South Sudan broke away from Sudan, after decades of civil war, and took control of blocks 1A, 1B and a part of block 4. Meanwhile, because of years of trade sanctions imposed on Sudan by the US - only lifted in 2017 - Khartoum found it difficult to secure oil for its refineries, and asked foreign companies including OVL to sell their share of oil from the blocks to the African nation. In 2016, OVL signed a separate agreement with Sudan for the sale of its share of GNOP oil. Sudan has not yet paid $90.81 million to ONGC for purchases of oil in 2016 and 2017. OVL had expected Sudan to clear the dues after lifting of the US sanctions last year.

    Demand for diesel in India is set to hit a record in 2018 as the government targets massive infrastructure spending in the fiscal year that starts April 1. Diesel consumption growth in calendar 2018 may be more than double last year, analysts and traders said, aided by an expected regular monsoon this year that should boost demand in the world’s third-largest oil consumer for diesel used in harvesting and other farming, leading to higher rural spending. India’s average monthly diesel consumption was about 6.6 mt or about 1.6 million bpd, in 2017. That was up about 3.1 percent from 2016, when average monthly consumption was 6.4 mt. Meanwhile India’s diesel exports in February were up 32 percent to 2.31 mt year-on-year.

    Over 400,000 poor families in Tripura will be provided free cooking gas or LPG connections under the PMUY to ensure clean energy access to all and to protect the health of rural women, IOC said. 2 million LPG connections would be given to Telangana households by next year under the PMUY. LPG distribution points in the state would be increased to 1000 from the existing 707 for quicker and efficient delivery system of gas cylinders. The overwhelming response to the PMUY initiative coupled with its efficient implementation and monitoring made the centre revise the initial target of releasing five billion connections to eight billion by 2020. 90 million new LPG connections have been distributed in the last four years, including 3.5 billion connections provided under the PMUY. Launched in May 2016, under the scheme government provides LPG connections to BPL families with a support of ₹ 1,600 per connection.

    Ahead of polls, government-owned companies decided to defer recovery of loans that free-LPG connection beneficiaries had taken for buying cooking gas refills. Over 36 million poor women have been given free LPG connections since June 2015. While the ₹ 1,600 cost of LPG connection is borne by the government, the cost of buying LPG stove and refill (gas cylinder) was to be borne by the beneficiaries. To help poor, oil firms provided interest-free loan to fund the cost of LPG stove and refill to beneficiaries. IOC said about 70 percent of the PMUY customers availed interest free loan facility provided by OMCs towards financing LPG stove and/or first LPG cost. To recover the loan, the oil companies were pocketing the subsidy government gives to all LPG consumers. Giving details of the deferment of loan recovery, IOC said the scheme shall be applicable for all the existing PMUY LPG connections who have taken loan for stove and/ or first LPG cost from OMCs. All PMUY customers who have outstanding loan as on March 31, 2018 will have a deferred recovery of the outstanding amount up to 6 LPG refills. The government raised the target of providing free cooking gas connection to poor women households to 80 million from previously stated 50 million.

    India is the world’s second largest importer of LPG after China and remains ahead of Japan as the drive to provide clean cooking fuel to millions of poor families boosted household demand by nearly 8% in 2017-18. India beat Japan in 2016 to become the world’s third-largest consumer of crude oil after the US and China. Both IEA and OPEC see India as the main driver of growth in global oil demand for the next decade. Available data indicate India’s imports of LPG – a byproduct of refining industry – in 2017-18 surpassing 11 million tonne in 2016-17 on the back of the Ujjwala scheme adding volume to overall demand.

    Almost six months after a massive fire broke out at an LPG bottling plant of HPCL at Cherlapally in Hyderabad, the government's decision to give a go-ahead for night shifts at such plants has raised safety concerns in the industry. This decision came after LPG demand increased considerably on the back of government schemes such as the PMUY over the past two years. LPG consumption in India increased 10 percent from 19.62 mt in 2015-16 to 21.54 mt in 2016-17. It is expected to touch 23.5 mt in 2017-18. The higher number of hours has helped bring down waiting time for a refill. It was as high as 15 days earlier in the Northeast and in Kerala but has come down to four or five days.

    HPCL received the environment clearance for setting up of a new LPG plant with bottling and storage facilities in East Champaran, Bihar that will entail an investment of ₹ 1.364 billion. This will be the third LPG plant in the state. Currently, HPCL has only two LPG plants in Bihar at Patna and Purnia with a bottling capacity of 50,000 cylinders per day. As per the proposal, the HPCL wants to construct mounded storage vessels with a capacity of 1,050 tonnes and bottling capacity of 120 tonnes per annum in an area of 30 acres in Panapur and Kubeya villages in East Champaran district. The purpose of the project is to increase rural penetration of bottled LPG cylinders in Bihar in a safe and environmental-friendly way. At present, the HPCL is meeting the demand through sharing filling capacity from other LPG bottling plants/private bottlers. The government's aim is to increase the LPG penetration to 75 percent by addition of 55 million new LPG connections till 2019-20.

    Prices of non-subsidised LPG have been reduced by ₹ 35.50 per cylinder, and that of the subsidised one by a marginal ₹ 1.74, according to OMCs, even as public sector Indraprastha Gas Ltd hiked the rates for piped and CNG supply to cities in the national capital region. As per the revised rates announced by IOC that are effective from April 1, a 14.2 kg non-subsidised cooking gas cylinder now costs ₹ 653.50 in Delhi, as compared to ₹ 689. Similarly, the non-subsidised LPG cylinder now costs ₹ 676 in Kolkata, ₹ 625 in Mumbai and 663.50 in Chennai. The price of the subsidised cylinder, which a consumer has a quota of 12 per year, was also cut marginally by ₹ 1.74. The 14.2 kg cylinder now costs ₹ 491.35 in Delhi as against ₹ 493 earlier. OMCs revise LPG and ATF, or jet fuel, prices on the first of every month. Jet fuel prices have been cut by ₹ 231 in Delhi and now sells at ₹ 61,450 per kilolitre. Prices vary with airports depending on local taxes. Jet fuel per kilolitre now costs ₹ 65,985 in Kolkata, ₹ 61,025 in Mumbai and ₹ 61,615 in Chennai.

    An inclusion of petrol and diesel in the GST framework will help consumers pay a rational price for the fuel, according to the federal government. Following a rapid rise in the international rates to which local prices are linked, diesel is selling at record rates in the country and petrol at four-year peak. Diesel was sold for ₹ 64.69 per litre and petrol for ₹ 73.83 a litre at IOC outlets in Delhi. Petrol and diesel prices have gained ₹ 10.74 and ₹ 11.36 per litre respectively in the last nine months in which crude oil has gained $21.87 per barrel to about $70/barrel. Heavy duties imposed by the Centre and states is key to petrol and diesel being so expensive in the country. In Delhi, petrol bear about 100% and diesel 69% levies comprising excise duty and VAT according to the oil ministry’s PPAC data. The highest rate of tax applicable to products under GST is 28%. Since fuel sale is a major source of revenue for states as well as Centre, it’s difficult to imagine them agreeing to cut rates sharply on petrol and diesel. Petrol, diesel, natural gas, crude oil and jet fuel are currently not included in GST. Experts observed that the federal government support to inclusion of petroleum products under GST is aimed at eliminating state role in influencing retail price of petroleum products and also eliminate a large source of revenue for them.

    India has proposed to build a pipeline from Myanmar’s east coast to deliver oil products, mainly diesel, to Myanmar. A working group has been formed by Myanmar and India to look at issues such as security, land and oil storage, and how to price the fuel and the oil’s specification. Myanmar currently imports about 100,000 bpd of diesel and gasoline mainly from Singapore, and produces only 12,000 bpd of oil locally. The country has invited investors to build refineries but high land cost is one of the main issues to overcome. The country has also held its first round of talks with China and Bangladesh to discuss building an electricity transmission grid across borders to ease power shortages.

    Indian state refiners plan to almost double oil imports from Iran in 2018/19, drawn by incentives offered by Tehran, potentially helping Iran increase its share in the world’s third-biggest oil importer. Iran is pushing to retain its oil customers in Asia, offering better terms than other Middle Eastern suppliers including Saudi Arabia, even as the threat looms of potential further US sanctions on the OPEC member. Tehran recently deepened freight discount to firms in India, its second-biggest oil client after China, in return for higher volumes. In the current fiscal year to March 2019, state refiners IOC, MRPL, BPCL and HPCL plan to import 396,000 bpd Iranian oil. All four refiners imported about 205,600 bpd Iranian oil in the previous fiscal year. Iran, which used to be the second-biggest oil supplier to India before sanctions, has been gradually growing back its market share in New Delhi since the lifting of sanctions against the Islamic state in 2016, becoming the No. 3 supplier to India in 2016/17 after Saudi Arabia and Iraq, government data shows. State refiners, which account for two-thirds of India’s 5 million bpd refining capacity, last year curbed imports from Iran in protest at Tehran’s move to grant development rights for the giant Farzad B gas field to others.

    IOC the nation's largest fuel retailer, announced it has acquired Royal Dutch Shell’s entire 17 percent stake in Makhaizna oilfield in Oman for $329 million. The equity of IOC in the oilfield will feed Indian refineries with an additional 1 mt of crude oil. The Mukhaizna oilfield is the single-largest producing oilfield in Oman contributing around 13 percent of the total Omani crude oil production of 120,000 barrels per day. IOCL Singapore Pte Ltd, a wholly-owned subsidiary of IOC has made the acquisition with 1 January 2017 as the effective date of transaction.

    IOC said it plans to invest about ₹ 1.43 trillion to nearly double its oil refining capacity to 150 mt and boost petrochemical production by 2030. The company currently owns and operates 11 out of the country's 23 refineries. Its refineries have a total capacity of 80.7 mtpa. IOC is investing ₹ 166.28 billion in upgrading its refineries to produce Euro-VI emission norm compliant petrol and diesel as against Euro-IV fuel being produced now. This investment cycle would be completed by 2020, the company said. Besides, the company is investing ₹ 156 billion in expansion of petrochemical projects and another ₹ 746 billion in raising the capacity of its existing refineries. The company said another ₹ 365 billion worth of projects are in pipeline but haven't been approved by the company board as yet. India's current refining capacity of 247.6 mtpa exceeds consumption but with demand growing at a compounded annual growth rate of 3.5-4%, it will need to add more capacity to meet the rising fuel needs. IOC plans to raise the capacity of its Panipat refinery in Haryana to 25 mtpa from current 15 mtpa, while Koyali refinery in Gujarat would be expanded to 18 mtpa from 13.7 mtpa. While 3 mt will be added in IOC's Barauni refinery in Bihar, a 1.2-mtpa capacity addition is planned for Uttar Pradesh's Mathura refinery to take its capacity to 9.2 mtpa. IOC is also looking at adding a 9 mtpa capacity to its subsidiary Chennai Petroleum Corp Ltd. India is targeting blending of up to 10 percent ethanol in petrol to cut reliance on imports to meet oil needs.

    The Supreme Court asked the Centre to look into the possibility of rolling out the BS-VI fuel in 13 metro cities by April 2019, besides introducing it in the national capital from the beginning of the next month. The Centre had earlier informed the top court it had advanced by two years the deadline for supply of the Euro-VI petrol and diesel and would start it in Delhi from April 1, considering the "serious pollution levels" in the national capital and adjoining areas. On February 21, the Centre had informed the apex court that it will introduce Euro-VI fuel in Delhi by April 1. The top court had earlier directed the Centre to clear its stand on the availability of Bharat Stage (BS)-VI emission standard compliant fuel in Delhi.

    Rest of the World

    Global oil supply remains a concern amid OPEC and Russian-led output reductions, with production falling from mature oilfields while demand growth remains strong, the International Energy Agency (IEA)’s Executive Director Fatih Birol said. This was despite forecasts of rising oil output from non-OPEC producers, led by the US, which is expected to be able to meet two-third of global oil demand growth over the next five years, he said. First, global oil consumption is still growing strongly, gaining 1.5 million bpd this year, driven by petrochemical, industrial and aviation demand, he said. Second, some older, maturing fields are in decline. Investments in oil and gas exploration remain low, Birol also said, even though global oil prices have returned to 2014 levels. While efforts by the OPEC and Russia to cut output has helped drain excess global supplies, the industry remains wary that growing US shale oil production could cap price gains. Another big worry was the halving of Venezuelan oil production since former President Hugo Chavez took office in 1999, Birol said.

    OPEC and its allies look set to keep their deal on cutting oil supplies for the rest of 2018, although some producers are starting to worry that high prices may be giving too much stimulus to rival output. OPEC, Russia and several other non-OPEC producers have curbed output since January 2017 to erase a global glut of crude that had built up since 2014. They have extended the pact until the end of 2018, and meet on June 22 to review policy. The deal has boosted oil prices LCOc1, which topped $71 a barrel this year for the first time since 2014. They were close to $70. But it has also encouraged a flood of US shale oil, fuelling a debate about how effective the curbs are.

    OPEC members will need to continue coordinating with Russia and other non-OPEC oil-producing countries on supply curbs in 2019 to reduce global oil inventories to desired levels, Saudi Arabian said. OPEC and non-OPEC countries struck a production supply agreement in January 2017 to remove 1.8 million bpd from global markets and end a supply glut. The cuts helped lift oil prices to current levels of around $65 per barrel. The oil producers will convene in June in Vienna to discuss further cooperation. It was unclear what oil supplies would need to be in 2019. OPEC would do better to leave the oil market slightly short of supplies rather than ending too early the output cut deal. Saudi Arabia and Russia have spearheaded efforts to reduce global oil stockpiles to their five-year average, ending years of oversupply sparked by the rapid rise in production from shale oil producers in the United States.

    China is taking its first steps towards paying for imported crude oil in yuan instead of the US dollar, a key development in Beijing’s efforts to establish its currency internationally. Shifting just part of global oil trade into the yuan is potentially huge. Oil is the world’s most traded commodity, with an annual trade value of around $14 trillion, roughly equivalent to China’s gross domestic product last year. A pilot program for yuan payment could be launched as early as the second half of this year. Regulators have informally asked a handful of financial institutions to prepare for pricing China’s crude imports in the yuan. China is the world’s second-largest oil consumer and in 2017 overtook the US as the biggest importer of crude oil. Its demand is a key determinant of global oil prices. Under the plan being discussed, Beijing could possibly start with purchases from Russia and Angola, one of the people said, although the source had no details of anything in the works. Both Russia and Angola, like China, are keen to break the dollar’s global dominance. They are also two of the top suppliers of crude oil to China, along with Saudi Arabia.

    China’s launch of its crude futures exchange will improve the clout of the yuan in financial markets and could threaten the international primacy of the dollar, argues a new from UBS Asset Management. Already, Unipec, the trading arm of Asia’s largest refiner Sinopec, has inked a deal with a western oil major to buy Middle East crude priced against the newly-launched Shanghai crude futures contract. This helps cement the exchange’s viability and challenges the petro-dollar system, in which oil deals are executed in dollars. This would decrease demand for the greenback and boost US inflation. China surpassed the US in 2017 to become the world’s largest oil importer. Nevertheless, the existing price benchmarks - Brent and WTI crude - are both in dollars, and importers across the world must buy dollars in order to conduct oil deals. But the move to trade oil in yuan will diminish the role of the greenback in global financial markets, argues Briscoe. Pricing oil in renminbi and launching a trading hub will raise China’s prominence and integrate it further in global markets.

    Shanghai crude oil futures fell further and were at parity with the US market, as state oil majors and local traders piled on more bearish bets amid concerns about domestic refinery demand. The latest drop takes the fall since the contract’s launch to 10 percent, underperforming the dominant western benchmarks and raising questions that refiners in the world’s top crude importer were pushing to bring down import costs. For a second day, trading volumes were skewed to the overnight session, with more than 50,000 lots, equal to 25 million barrels of oil. Another factor that could limit demand from the teapots for the Shanghai contract is that the teapots still need to apply for crude import quotas for the second half of the year, China-based traders said. Furthermore, selling pressure from China’s large state-owned oil companies, who are the primary crude buyers for the country, could explain the recent decline in prices.

    US shale oil production is expected to increase in May for the fourth consecutive month, US EIA data showed, boosted by record production in the prolific Permian Basin of West Texas and New Mexico. Total oil output is set to rise by 125,000 bpd to 7 million bpd, the EIA said. Production in the Permian Basin is expected to jump by 73,000 bpd to 3.2 million bpd, the largest according to records dating back to 2007. The expanding production there has led to bottlenecks as pipelines transporting the crude have filled more quickly than expected. Bakken output is expected to rise by 15,000 bpd to 1.2 million bpd, the highest since July 2015. In the Eagle Ford shale fields, production is set to rise by 24,000 bpd to 1.3 million bpd, the most since May 2016.

    Russia’s oil output edged up in March to an 11-month high of 10.97 million bpd slightly above a limit agreed under a global supply pact, the energy ministry data showed. It was the first increase in Russian output since December and the highest level since output of 11 million bpd in April 2017. Under an agreement by members of the OPEC and other producers that came into effect last year, Moscow pledged to cut output by 300,000 bpd from a baseline of 11.247 million bpd based on its output in October 2016. The energy ministry said that in March it cut output by around 280,220 bpd from the October 2016 level. Russian output in March rose from 10.95 million bpd in February. Russian oil pipeline exports in March stood at 4.163 million bpd, slightly up from 4.162 million bpd in February. The current global supply deal lasts until the end of 2018. According to the energy ministry data, Russia’s largest oil company Rosneft and No.2 producer Lukoil both increased their output by 0.1 percent last month from February.

    Fourteen companies have expressed interest in oil and natural gas exploration and development contracts to be auctioned by Iraq on April 25, the oil ministry in Baghdad said. The 14 have bought a package containing the bidding documents and terms of the contracts for the 11 exploration blocks to be auctioned, it said. The blocks, located in border areas with Iran and Kuwait, and in offshore Gulf waters, were to be auctioned in June. That date was brought forward to April 15 and then postponed to April 25 to give bidders more time. The oil ministry announced measures to reduce the fees paid to oil companies in the contracts to be auctioned. The new contracts will exclude oil by-products from the companies’ revenue, establish a link between prevailing oil prices and their remuneration, and introduce a royalty element. Oil companies operating in Iraq currently receive a fee from the government linked to production increases, which include crude and oil by-products such as liquefied petroleum gas. The new contracts offered by Baghdad will also set a time limit for companies to end gas flaring from oilfields they develop. Iraq continues to flare some of the gas extracted alongside crude oil at its fields because it lacks the facilities to process it into fuel. Iraq hopes to end gas flaring by 2021. Flaring costs the government nearly $2.5 billion in lost revenue each year and could meet most of its unmet needs for gas‐fired power, according to the World Bank.

    Asian oil traders are stumped by how Saudi Arabia derived its OSP for May after the world’s top oil exporter unexpectedly raised the price for its flagship Arab Light crude sold to Asian refiners. State oil giant Saudi Aramco deviated from its usual pricing formula by increasing Arab Light’s official selling price for May by 10 cents per barrel to a premium of $1.20 a barrel to the average of Oman and Dubai quotes. Market participants were expecting a cut of between 50 cents to 60 cents a barrel in a survey. Some predictability in how producers set their prices allow refiners to plan their purchases. Saudi Aramco typically sets the Arab Light crude price each month based on the price curve between the first-month and third-month cash Dubai prices published by S&P Global Platts.

    Iraq is studying the possibility of building crude oil storage facilities in South Korea and Japan as part of a plan to increase sales to Asian clients, Iraqi state-oil marketer SOMO said. SOMO received offers from Exxon Mobil, Total, Japan’s Sumitomo and China’s Unipec, to take part in marketing Iraqi crude, he said. Iraq plans to stop loading crude from its southern port of Basra for three to four days in early April due to maintenance. Iraq has 10 million barrels in oil storage capacity in the southern region, he said. Iraq’s crude output should not exceed 4.360 million barrels per day in compliance with a deal between oil exporting nations to curb supply in order to lift prices. March oil exports won’t exceed 3.426 million bpd. Russia kept its spot as the largest crude oil supplier to China in February, data showed, a role it held in January and for the past two years on an annual basis. Russia supplied 5.052 mt or 1.32 million bpd last month, up 17.8 percent from a year earlier, data from the Chinese General Administration of Customs showed. Saudi Arabia regained its No. 2 ranking after losing out to Angola in January, with February supplies coming in at 4.635 mt or 1.21 million bpd, down 2.9 percent on year but up from 1.01 million bpd in January. The hefty Russian shipments, which gained 21 percent for the January-February period over a year earlier, came after a second East Siberia-Pacific Ocean pipeline started commercial operation in January, along with expanded domestic connections in China.


    ONGC: Oil and Natural Gas Corp, OIL: Oil India Ltd, PSCs: Production Sharing Contracts, GNOP: Greater Nile Oil Project, mt: million tonnes, PPAC: Petroleum Planning and Analysis Cell, OPEC: Organization of the Petroleum Exporting Countries, tmt: thousand metric tonne, OVL: ONGC Videsh Ltd, US: United States, PMUY: Pradhan Mantri Ujjwala Yojana, IOC: Indian Oil Corp, LPG: liquefied petroleum gas,  BPL: below poverty line, OMCs: Oil Marketing Companies, HPCL: Hindustan Petroleum Corp Ltd, CNG: compressed natural gas, ATF: aviation turbine fuel, GST: Goods and Services Tax, VAT: Value Added Tax, bpd: barrels per day, MRPL: Mangalore Refinery and Petrochemicals Ltd, BPCL: Bharat Petroleum Corp Ltd, mtpa: million tonnes per annum, WTI: West Texas Intermediate, EIA: Energy Information Administration, OSP: official selling prices


    NATIONAL: OIL

    Government expects oil import bill to cross $100 bn mark after three years

    24 April. Rising crude oil prices could become a concern for the Indian economy with the government expecting the oil import bill to rise by 20 percent in the current year to $105 billion, up from $88 billion in 2017-18. Crude oil imports would be crossing the $100 billion mark after three years, though it would be still lower than the $140 billion and more for three years continuously starting 2011-12. According to a report by the Petroleum Planning and Analysis Cell (PPAC), the $108 billion is estimated at an average Indian basket crude oil price of $65 a barrel, up from an average of $56.39 a barrel in 2017-18. On a cumulative basis, crude oil imports were 220.8 million tonnes (mt), posting an increase of 3.2 percent during 2017-18 as compared to 2016-17. The Indian basket crude averaged $63.80 a barrel during March 2018 as against $63.54 during the previous month. Though the government has been emphasising on increasing domestic oil production, there was a decrease of 0.9 percent in indigenous crude oil and condensate production in 2017-18. The percentage share of crude oil and condensate production of PSU (Public Sector Undertaking) companies increased to 71.8 percent during 2017-18 from 70.8 percent during the previous year. However, the share of production sharing contract fields declined to 28.2 percent during 2017-18 from 29.2 percent during 2016-17. The price of petrol breached a three-year high at ₹ 74.50 a litre, while the price of diesel was at its highest at ₹ 65.75 a litre. Since pricing of both these products is market-linked, it will not impact the subsidy bill. However, LPG (liquefied petroleum gas) and kerosene are a cause for concern. The total consumption of liquefied petroleum gas (LPG) in the last 55 months has continuously recorded growth. LPG consumption saw cumulative growth of 8 percent over the period April 2017 to March 2018. During the period under review, the eastern region saw the highest growth of 14.7 percent in total LPG consumption. This is mainly owing to the push by the government through Pradhan Mantri Ujjwala Yojana in which the government added 35.6 million new LPG consumers.

    Source: Business Standard

    Crude at $75 per barrel lifts petrol price to 74.63 in Delhi

    24 April. A rise in global crude oil cost to around $75 per barrel lifted the domestic retail petrol price higher for the sixth consecutive day in New Delhi. Consequently, the widely-consumed transportation fuel became dearer by 13 paise to ₹ 74.63 per litre from cost of ₹ 74.50 per litre. As per Indian Oil Corp (IOC) data, motor spirit price level in New Delhi was the highest since September 14, 2013 when it had touched ₹ 76.06 a litre. Besides New Delhi, petrol prices climbed to new multi-year highs in other major metro cities -- Kolkata, Mumbai and Chennai -- at ₹ 77.32, ₹ 82.48 and ₹ 77.43 per litre respectively. The previous highs in these cities were ₹ 78.03 (Kolkata, August 2014), ₹ 83.62 (Mumbai, September 2013) and ₹ 77.48 (Chennai, September 2013). Apart from petrol, diesel prices, too, touched record high levels in Delhi, Kolkata, Mumbai and Chennai. They rose to ₹ 65.93, ₹ 68.63, ₹ 70.20 and ₹ 69.56 per litre respectively. According to analysts, the recent upsurge in the costs of transportation fuel have been triggered due to a rise in global crude oil prices. Brent crude price rose to $75 per barrel due to geo-political tensions in the Middle East, whereas it cost over $100 a barrel in 2013. Currently, prices of transport fuels are changed on a daily basis unlike the previous norm of fortnightly revisions. In the Union Budget 2018-19, the government had reduced the basic excise duty on petrol and diesel by ₹ 2. The government also abolished additional excise duty on fuel. But to compensate the move on the fiscal front, it increased the road cess to ₹ 8 per litre.

    Source: Business Standard

    Finance ministry not for cut in excise duty on petrol, diesel

    23 April. The finance ministry is not in favour of cutting excise duty on petrol and diesel to provide relief to the common man from spike in their prices but wants states to cut sales tax or VAT (Value Added Tax) on fuel. Petrol price hit a 55-month high of ₹ 74.50 a litre, while diesel rates touched a record ₹ 65.75, renewing calls for a cut in excise duty to ease the burden on consumers. The finance ministry said that a reduction in excise duty, which makes up for a quarter of retail fuel price, is not advisable if the government is to stick to the path of reducing budgetary deficit. The government is targeting reducing fiscal deficit to 3.3 percent of the gross domestic product (GDP) in the current fiscal, from 3.5 percent last fiscal. The central government levies ₹ 19.48 a litre of excise duty on petrol and ₹ 15.33 per litre on diesel. State sales tax or VAT vary from state to state. In Delhi, VAT on petrol is ₹ 15.84 and ₹ 9.68 a litre on diesel. State-owned oil firms, which have been since June last year revising auto fuel prices daily, raised petrol and diesel rates by 10 paise per litre each in Delhi, according to a price notification. The hike, necessitated due to firming international oil prices, comes on the back of a 32 paise increase in rates of petrol effected over the last two days. Petrol in the national capital now costs ₹ 74.50 a litre, the highest since 14 September 2013, when rates had hit ₹ 76.06. Diesel price at ₹ 65.75 is the highest ever. India has the highest retail prices of petrol and diesel among South Asian nations as taxes account for half of the pump rates. The government had raised excise duty nine times between November 2014 and January 2016 to shore up finances as global oil prices fell, but then cut the tax just once in October last year by ₹ 2 a litre. Subsequent to that excise duty reduction, the Centre had asked states to also lower VAT, but just four of them - Maharashtra, Gujarat, Madhya Pradesh and Himachal Pradesh - reduced rates while others including BJP-ruled ones ignored the call. In all, duty on petrol rate was hiked by ₹ 11.77 per litre and that on diesel by ₹ 13.47 a litre in those 15 months that helped government’s excise mop up more than double to ₹ 2,42,000 crore in 2016-17 from ₹ 99,000 crore in 2014-15.

    Source: The Hindu

    Centre working on modalities to bring petrol, diesel under GST: Oil Minister

    21 April. Oil Minister Dharmendra Pradhan said the rise in prices of petrol and diesel products in the country is due to international situation and the accompanying sudden increase in crude oil prices caused by disturbances in the Middle East. Pradhan said that the Centre is mulling over bringing petrol and diesel under Goods and Services Tax (GST). Pradhan said the PMUY has been highly successful in bringing down the women’s mortality caused by smoke generated by the use of traditional domestic fuels (like wood, cow dung, coal, weeds, etc) in kitchen, as around 5 lakh women used to die per year in the country, as per the World Health Organisation (WHO) report. He said the LPG (liquefied petroleum gas) use and gas connection has made 58% penetration in Bihar where 90 lakh families still remain to be given gas connections. Earlier, in case of the grant of free gas connection to the family concerned, the Centre used to bear 50% of the cost and the remaining 50% by the family payable in instalments fixed. The family concerned used to get subsidy only after the clearance of the instalment payments, but now they would get subsidy in the natural process, Pradhan said.

    Source: The Economic Times

    Fuel prices hit new heights in Goa

    21 April. With global crude oil prices shooting up, petrol and diesel prices in Goa continue to scale new heights. Petrol has hit an all-time high price of ₹ 68.3 per litre, a 24% increase from 2015, while diesel prices have shot up by 21% to ₹ 66.4 per litre. Fuel petrol prices were raised marginally by 1 paisa per litre, while diesel prices witnessed an increase of 4 paise per litre. With this latest hike, the difference between petrol and diesel has reduced to ₹ 1.8. Interestingly, petrol prices have increased by ₹ 9 per litre since June 2017 while diesel prices have shot up by ₹ 9.8 per litre. State-owned oil companies — Indian Oil Corp, Bharat Petroleum Corp and Hindustan Petroleum Corp — scrapped the 15-year-old practice of fortnightly revision of fuel prices in June 2017. Since then, petrol and diesel prices are revised daily based on the global crude oil rates and currency conversion against the US dollar. This year itself, diesel prices have risen by ₹ 4.84 per litre while petrol prices have risen by ₹ 4.09 per litre.

    Source: The Times of India

    Chidambaram attacks government on fuel prices

    20 April. As fuel prices touched a five-year high, Former Finance Minister P Chidambaram asked the government why prices of petrol and diesel were higher than in May 2014 when the international oil prices were higher than they are now. He said the government was clueless and floundering on the issue.

    Source: The Times of India

    Oil Minister announces free LPG for backward classes in Bihar

    20 April. In a bid to promote Pradhan Mantri Ujwala Yojana (PMUY) scheme, Oil Minister Dharmendra Pradhan announced free gas connections for Dalits and every other backward class in Bihar. Under PMUY, the gas connections cost ₹ 3,200 per connection, out of which half the cost is borne by the government, the rest is paid in instalments. He said that previously, the beneficiaries, who paid through instalments never received the subsidies back in their bank account. He said that in 2014, out of the 2.1 crore households in Bihar only 48 lakh received LPG (liquefied petroleum gas) connection and now the number has increased to 1.2 crores. On April 14, Pradhan launched PMUY scheme in Telangana. PMUY was launched by Prime Minister Narendra Modi on 1 May 2016, with an aim to provide LPG connections to those who are still dependent on wood or coal for cooking their food. Till date, more than five crore LPG connections have been distributed to families under Below Poverty Line (BPL).

    Source: Business Standard

    NATIONAL: GAS

    GAIL to bring Gazprom LNG to India next month at reduced prices

    20 April. The first liquefied natural gas (LNG) cargo from Russian energy major Gazprom will land in India in May, following an agreement in January with India’s state-owned gas supplier and developer GAIL (India) Ltd to bring down prices based on a new formula. The contract for a long-term deal mandates that GAIL will purchase about 2.5 million tonnes (mt) of LNG from Gazprom per annum. This comes a few weeks after India’s first LNG cargo from the US (United States) landed at the Dhabol regasification terminal in Maharashtra. GAIL has already signed a $32 billion deal with the Dominion Energy Cove Point project in Maryland and the Cheniere Energy's Sabine Pass project in Louisiana for a supply for 20 years. GAIL is in talks with new fertiliser plants for the supply of imported LNG and also trying to market it to anchor customers such as refineries, power plants and petrochemical units near its planned and existing pipelines. GAIL has entered into long-term contracts with global companies to bring LNG from various markets, expecting a rise in demand from the power sector.

    Source: Business Standard

    RIL-BP sanction satellite gas field development in KG-D6

    19 April. Reliance Industries Ltd (RIL) and its partner BP plc announced sanctioning of a second project to develop satellite gas fields in the KG-D6 block to help reverse the flagging output at the Bay of Bengal block. The RIL-BP combine would develop a cluster of four gas discoveries in the KG basin block by 2020-22, the two firms said. Previously, the two had made a final investment decision (FID) to develop the R-Series gas field by 2019-20. RIL is the operator of block KG-DWN-98/3 or KG-D6 with 60 percent stake while UK's BP Plc has 30 percent interest, and Niko Resources of Canada the remaining 10 percent. The partners have been focusing on developing R-Series, satellite cluster and MJ (D55) deep discovery to revive the flagging output at the block. RIL has so far made 19 gas discoveries in the KG-D6 block. Of these, D-1 and D-3 -- the largest among the lot -- were brought into production from April 2009, but output has fallen sharply from 54 million metric standard cubic meter per day (mmscmd) in March 2010. They together with MA oil and gas field, the only field in production, currently produce 4.9 mmscmd. India consumes over 5 billion cubic feet a day of natural gas and aspires to double gas consumption by 2022.

    Source: Business Standard

    Adani Gas hikes PNG, CNG prices in Gujarat

    19 April. Piped gas supplier Adani Gas has raised retail prices in Ahmedabad and Vadodara. The CNG (compressed natural gas) prices have been hiked by ₹ 1.9 a kg to ₹ 49.70 per kg from ₹ 47.80 a kg. The PNG (piped natural gas) prices (domestic) has been hiked by ₹ 46.07 per unit/mmBtu (million metric British thermal units) to ₹ 606.72 from ₹ 560.65 per mmBtu (excluding VAT). The revised prices are effective from April 19. Adani Gas serves about 285,000 households and approximately 150,000 CNG users in Ahmedabad and Vadodara. Earlier, Gujarat Gas Ltd (GGL) had raised the retail PNG prices (domestic) by ₹ 1.10 per standard cubic meter (scm) to ₹ 21.95 per scm (excluding taxes) from ₹ 20.85 per scm. It had hiked CNG prices by ₹ 2.15/kg to ₹ 49.65/kg (including taxes) from ₹ 47.50/kg. GGL supplies PNG to about 12 lakh households and CNG to over 6 lakh vehicles across parts of Gujarat.

    Source: The Hindu Business Line

    NATIONAL: COAL

    Coal supply to power plants may remain tight for two years: KPMG

    24 April. Coal supply position for thermal power plants is expected to remain tight for about two years, after which new railway links will help ease the situation. Demand for coal is expected to outpace domestic supplies beyond 2020 keeping supply position tight, Niladri Bhattacharjee, partner, strategy & operations for mining and metals at KPMG in India, said. The government’s push for rural electrification is also expected to add to power demand that will exert supply pressure on coal. Coal India Ltd (CIL) said logistics was the key issue. CIL production target for FY18 was set at 630 million tonnes (mt), later reset to 600 mt and the company ended up producing 567 mt.

    Source: The Economic Times

    No question of coal shortage during monsoon: Coal Secretary

    22 April. Ruling out any possibility of dry coal shortage in the upcoming monsoon season, the coal ministry said it has sufficient stocks to meet the demand of power plants. The ministry, however, stressed that it expects power plants to lift their requirement in time to avoid any shortage which was witnessed last year after the rainy season. The ministry hopes that the electricity producers which faced fuel problem last time would be careful this year and pile up adequate stocks, Coal Secretary Susheel Kumar said. Power plants were hit by coal shortages in the second half of 2017 which affected power production in some states. The ministry said it is fully geared to meet the increased coal demand this time as it has adequate fuel. Moreover, the ministry has also charted out a plan on this year's production and supply. In October last year, the Karnataka government had asked the Centre to ensure adequate supply of coal and early allocation of a coal block in Odisha to meet the severe fuel shortage faced by power units. In the same month, Rajasthan Urja Vikas Nigam had said that power generation at thermal power stations had reduced by 2,700 MW due to shortage of coal, forcing it to resort to load shedding in the state.

    Source: Business Standard

    Coal famine in Chhattisgarh, Madhya Pradesh plunges Kerala into blackouts

    21 April. Shortage of coal at Jindal Tamnar Thermal Station, Chhattisgarh, and Jhabua Thermal Station, Madhya Pradesh, has hit power supply in Kerala. Adding to the woes of Kerala State Electricity Board (KSEB), a technical snag at the Moozhiyar power house of its own Sabarigiri Hydel Station did its bit in snapping blackouts in various parts of the state. However, KSEB does not prefer to call it “load-shedding”.  Kerala Power Minister MM Mani made a promise that there would be no loadshedding during summer this time, because sufficient supply arrangements have been made with IPPs (Independent Power Producers) outside the State. KSEB said that there is shortage of about 300 MW in the power brought through long-term PPAs (Power Purchase Agreements) because of the coal shortage. Meanwhile the technical issues at Moozhiyar power house are getting sorted out. Supply contracts, stretching comfortably to as far ahead as 2040, with Jindal Power (Chattisgarh), Balco (Chattisgarh), Jhabua Power Ltd (Madhya Pradesh), and Jindal India Thermal Power Ltd (Odisha) are its mainstay. This is why the coal availability in these thermal plants have been vital to lighting up Kerala in the South. In desperation, the Kerala government is even considering bidding for its share of coal block through the coal ministry, tying up with Jindal or Balco as the end user. While Coal India Ltd (CIL) maintains that there is no shortage of coal, early this month, Indian Captive Power Producers Association (ICCPA) had been complaining against NTPC Ltd supply pact with Bangladesh that could use up the coal earmarked for Indian consumers. Out of the 40,000 MW generating capacity of Captive Power Producers in India, as much as 30,000 MW is produced out of coal.

    Source: The Financial Express

    NATIONAL: POWER

    Adani Transmission raises funds to buy RInfra's Mumbai power business

    24 April. Adani Transmission has tied up funds for its acquisition of the Mumbai power business from Reliance Infrastructure (RInfra). Adani Transmission has arranged funds for the deal through a 15-year tenure loan, at an interest rate of 9.5 percent. The loan had been extended through a consortium of lenders, including ICICI Bank, State Bank of India, and YES Bank. In December, Adani Transmission and RInfra entered into a Definitive Binding Agreement with Adani for 100 percent stake in the Mumbai power business, which includes integrated business of generation, transmission, and power distribution for Mumbai. The deal was valued at ₹ 132.51 billion, of which business was valued at ₹ 121.01 billion and regulatory assets approved was at ₹ 11.50 billion.

    Source: Business Standard

    Electricity to all MP villages by October: CM

    24 April. Madhya Pradesh (MP) Chief Minister (CM) Shivraj Singh Chouhan claimed all villages in the state will be electrified by October and ₹ 2 lakh crore spent on development of tribals in five years. He said the Prime Minister Narendra Modi wants the panchayats to be enabled and had distributed LPG (liquefied petroleum gas) connections and gas stoves under the Ujjwala Yojana to the poor to save them from diseases.

    Source: Business Standard

    'Power litigation financial burden on Punjab'

    24 April. While raising concern over the prolonged litigation between Punjab State Power Corp Ltd (PSPCL) and Punjab State Electricity Regulatory Commission (PSERC) over cases involving industry, the CII Northern Region chairman Sachit Jain said that the matter would top the agenda during the industry body’s forthcoming meeting with Punjab Chief Minister Amarinder Singh. Jain said that resolution in such cases will avoid financial burden on exchequer and promote additional investments in the state.

    Source: The Economic Times

    Private power companies allowed to sell over 1 MW directly to firms

    22 April. After nearly a decade, the Tamil Nadu government has allowed private power companies based in the state to sell more than 1 MW of power directly to industrial consumers. Energy Department Secretary Vikram Kapur issued an order a few days ago allowing the companies to sell power after paying the wheeling and cross subsidy surcharge to TANGEDCO (Tamil Nadu Generation and Distribution Corp). The decision was taken owing to the availability of surplus power, with supply likely to rise in a few days when the wind season begins. A decision not to allow private companies to sell more than 1 MW power directly to consumers was taken in 2009 as there was a power shortage. The latest government decision to allow open access sale of power is likely to be a boon for private power companies as TANGEDCO is not evacuating power from these companies to the maximum capacity. But private companies want the government to lower the cross subsidy surcharge.

    Source: The Economic Times

    Power lines near RRTS corridor to be shifted soon

    22 April. Shifting of power lines and other utility services along Delhi-Ghaziabad-Meerut Rapid Rail Transit Corridor  (RRTS)  in the city is expected to begin shortly. The National Capital Region Transport Corp (NCRTC) has urged agencies like Paschimanchal Vidyut Vitaran Nigam Ltd (PVVNL) and Ghaziabad Municipal Corp (GMC) to start work on shifting of power transmission lines at the earliest. NCRTC has already released ₹ 11.30 crore for the purpose. The NCRTC is scheduled to take up work on the RRTS corridor in July 2018.

    Source: The Times of India

    To curb power theft, Agra to switch to smart meters

    21 April. In a bid to curb power theft in the city, state government-owned power distribution company, Dakshinanchal Vidyut Vitral Nigam Ltd (DVVNL), is planning to install smart meters in both residential and commercial establishments. Under the new system, through modem (modulator-demodulator) equipped smart meters, data of power consumption by each consumer will be maintained by a central server at the control room. Any theft will immediately be detected and dealt with. Moreover, meter-readers will no longer have to visit each establishment for taking a reading. In the first phase, the power corporation will install the smart meters in those establishments having connections with loads above 10 kilowatt. These include commercial establishments like shopping malls, hospitals and schools besides bulk consumers such as group housing. According to records maintained by the discom (distribution company), in Agra zone, there are about 30,000 electricity connection with loads ranging from 10 KW to 100 KW. Smart meters will also help collect data on real-time or near real-time reading, send power outage notification and monitor power quality like voltage. Smart meters will end the entire work of meter-reading leaving no scope for irregularities on the part of meter-readers and consumers.

    Source: The Times of India

    NTPC to float tenders to meet FY19 capacity addition target

    20 April. To meet its FY19 capacity addition target of 5,000 MW, state-owned power producer NTPC Ltd is coming up with tenders to build for more than 2,900 MW of generation units in this quarter. NTPC said while tenders for two 660 MW units at its Talcher super-critical power plant are almost ready, the company is also planning to begin the tendering process for two 660 MW units at its Singrauli station and two 800 MW units at the Lara power plant. The company’s current installed commercial capacity is 51,391 MW and 21,071 MW is currently under various stages of construction. It added 4,423 MW capacity in FY18.

    Source: The Financial Express

    SJVN signs MoU to target 9.2k million units generation this fiscal

    20 April. Public sector power generator Satluj Jal Vidyut Nigam (SJVN) Ltd has signed an MoU (Memorandum of Understanding) with the power ministry setting a target of generating 9,200 million units of electricity. The ministry said that under the MoU, SJVN has also set a capital expenditure target of ₹ 900 crore and a turnover target of ₹ 2,175 crore along with other targets related to operational efficiency and project monitoring. In fiscal 2017-18, against the target of 8,950 million units, SJVN generated 9,280 million units from its projects under operation with an installed capacity of 1,964 MW, it said. According to the government, SJVN envisages being an over 5,700 MW generating company in the coming years.

    Source: Business Standard

    Power bills set to rise in Punjab, regulator clears about 2 percent hike in tariff

    19 April. Electricity bills of consumers in Punjab are expected to inflate with the Punjab State Electricity Regulatory Commission announcing an average power tariff hike of about 2 percent across all categories for 2018-19. The Commission also decided to marginally increase fixed charges along with an increase of about 2 percent over the existing energy charges. In the new tariff order released, the commission assessed the Aggregate Revenue Requirement (ARR) of power utility PSPCL at ₹ 32,486.63 crore for 2018-19. The combined average cost of supply for 2018-19 worked out to be 655.49 paise per kWh (kilowatt hour).

    Source: The Times of India

    UP power clerk embezzles 50 lakh in bills paid by consumers, arrested

    19 April. Inflated electricity bills of around 800 consumers led to the discovery of large-scale embezzlement of public money by a clerk of Uttar Pradesh Paschimanchal Vidyut Vitaran Nigam Ltd (UPPVVNL) in Bijnor, who did not account for the money and allegedly pocketed over ₹ 50 lakh in dues paid by them. According to corporation, the fraud came to light in August last year when consumers came in large numbers with complaints of inflated bills although they had been paying the dues on time. An FIR was lodged against Dharmendra Kumar, a clerk dealing with collection of money, and after investigations, he was arrested. Kumar took 19 receipt books from the electricity department, and issued receipts to consumers after receiving their electricity dues. Between March and June 2017, Kumar, deputed in Noorpur sub-division of Bijnor, allegedly collected ₹ 50 lakh from 800 consumers. The scam came to light in August when the consumers received inflated bills and found that money collected from them had not been recorded in the system. After receiving hundreds of complaints, the power department launched an inquiry. A case was then registered in the matter on August 26 last year. After the probe revealed the role of Kumar in the scam, he was arrested from his house in Noorpur area of Bijnor.

    Source: The Times of India

    Record power transmission in Maharashtra

    18 April. The state government said it had achieved historic capacity of power generation and transmission. A total 23,100 MW was generated and transmitted across the state, which is 100% of the demand raised, Energy Minister Chandrashekhar Bawankule said. Bawankule said this makes Maharashtra the highest generator and transmitter of power in the country. This spells good news for citizens as it means the state is prepared to meet peak consumption demand during the summer. The record transmission will also benefit 30 lakh consumers of Reliance, nearly seven lakh of Tata Power and 10.5 lakh electricity users of BEST in Mumbai. The city requires around 2,500 MW to 3,000 MW of power which peaks to 3,400 MW during summer.

    Source: The Times of India

    Himachal Pradesh to raise issue of its share in BBMB power projects

    18 April. Himachal Pradesh will take up the issue of its 7.19 percent share in electricity generated from power projects run by Bhakra Beas Management Board (BBMB) with the governments of Punjab, Haryana and Rajasthan to get the matter expedited. Himachal Pradesh has been demanding its share in electricity generated from BBMB power projects for long. Himachal Pradesh Chief Minister Jai Ram Thakur said he has already held a meeting with Haryana Chief Minister Manohar Lal Khattar and the state chief secretary in this regard.

    Source: India Today


    NATIONAL: NON-FOSSIL FUELS/ CLIMATE CHANGE TRENDS

    J&K cabinet approves setting up of J&K Renewable Energy Corp

    24 April. The Jammu and Kashmir (J&K) cabinet approved setting up of J&K Renewable Energy Corp. The decision was taken at the cabinet meeting chaired by Chief Minister Mehbooba Mufti. The corporation will be a private limited company wholly owned by the state government with an authorised share capital of ₹ 1 crore fully paid up and subscribed by the J&K government. The cabinet authorised the administrative secretary, Science and Technology Department, to take necessary steps for creation and setting up of the Renewable Energy Corp.

    Source: Business Standard

    Sunsure Energy commissions 20 MW utility solar plants in Karnataka

    23 April. Sunsure Energy finished FY18 with commissioning of their largest turnkey solar plant project - a 20 MW (15 MW + 5 MW) solar power plant. Situated in the Harpanhalli Taluka of Davangeri district, this project is spread over 75 acres of land and will generate enough clean energy to power more than 8,000 urban households in Karnataka every year for the next 25 years. Sunsure led the development of these plants right from the competitive bidding stage through land acquisition and clearances all the way to successfully synchronizing the plants with the Grid. Sunsure is now tasked with ensuring these plants perform optimally. Sunsure will be deploying its operations & maintenance systems at both the sites in FY19. Started in 2014 by a team of IIT-Delhi alumni with a vision to build solar assets to bridge the energy gap in India, Sunsure has commissioned over 40 MW solar plants across 9 Indian states. Sunsure is head quartered in New Delhi and is the preferred solar partner for companies like Merino Industries, Hindware, Mazagaon Dock, Cochin Shipyard, Enrich Agro (Coca Cola Bottlers), Minda Group, Cleantech Solar, Machino Plastics (A Maruti JV Company), Surya Roshni and many others.

    Source: The Economic Times

    Tata Power, Adani, ReNew Power jostle for space in Odisha to set up units

    23 April. Solar energy majors are making a beeline for putting up units in Odisha after Gridco, the state's bulk power trader, invited bids to select 200 MW of grid-connected solar power projects. Companies like Acme, ReNew Power, Tata Power, IBC Solar, Sahara Power, Essel Group and Adani Green Energy have already evinced interest. Witnessing a strong response, Gridco is expecting to garner at least 20 bids. The project will be developed in a non-solar park model, where bidders are given a free hand to choose their land. The capacity may be allotted to bidders with lowest tariffs discovered under the competitive bidding process followed by e-reverse auction. Gridco will enter into a power purchase agreement (PPA) with the successful bidder for 25 years from the date commercial operations begin. The project will help the state achieve the cumulative solar target of 2,378 Mw under the national target of 100 GW of solar power by 2022. The latest tariff rate in Odisha for solar is ₹ 4.5 per MW under a scheme of the new and renewable energy ministry. Recently, Essel Green Energy, part of the Subash Chandra-owned Essel Group, won bulk of the 270-MW tender for solar capacity at Odisha floated by the Solar Energy Corp of India. Essel Green Energy was awarded 240 MW, Jyoti Infrastructure bagged 10 MW and IBC Solar Ventures bagged 20 MW from the tender. Private sector interest in Odisha's solar power sector had not seen enough traction till now as opposed to central PSUs (Public Sector Undertakings) that have been interested in putting up projects in the state. After NTPC, NLC and North Eastern Electric Power Corp (NEEPCO), SJVN, a mini-ratna PSU, has evinced interest in participating in the state's solar park programme. Odisha recently cleared a plan by NEEPCO to invest ₹ 9.44 billion to set up a 200 MW solar power plant. The unit is scheduled to start operations in December 2019. It has also provided in-principle clearance for 250 MW solar power project proposed by NLC at the cost of ₹ 45 million per MW. The government has also offered to sign a PPA with NLC.

    Source: Business Standard

    SC seeks report on compliance of safety features of Kudankulam n-plant

    23 April. The Supreme Court (SC) asked the Nuclear Power Corp of India Ltd (NPCIL) to file an affidavit indicating the progress made on safety features of Kudankulam Nuclear Power Project in Tamil Nadu's Tirunelveli district. A bench of Chief Justice Dipak Misra, Justice A.M. Khanwilkar and Justice D.Y. Chandrachud sought the report from NPCIL, after it was informed that the nuclear plant has advanced safety features. The bench was hearing an application filed by NPCIL seeking an extension of time to complete the away-from-reactor (AFR) facility for spent fuel according to the top court's directions passed in a judgment in May 2013. NPCIL sought extension until April 2022 for the construction of an AFR facility for the Kudankulam plant.

    Source: Business Standard

    Diu Smart City first in India to run on 100 percent renewable energy during daytime

    23 April. The Diu Smart City has become the first city in India that runs on 100 percent renewable energy during the daytime, setting a bench-mark for other cities to follow. Diu had been importing 73 percent of its power from Gujarat till last year. The city has developed a 9-MW solar park spread over 50 hectares rocky barren land, besides installing solar panels on the rooftops on 79 government buildings, generating 1.3 MW annually, the housing and urban affairs ministry said. Diu also offers its residents a subsidy of ₹ 10, 000-50,000 for installing 1-5 KW rooftop solar panels. The city is saving about 13,000 tonnes of carbon emissions every year and due to low-cost solar energy, power tariffs have been cut in residential category by 10 percent last year and 15 percent this year, the ministry said.

    Source: Business Standard

    Mundra Solar eyes to become $1 bn company in 2-3 yrs

    22 April. Mundra Solar PV, the solar photovoltaic manufacturing arm of diversified Adani Group, looks to become a $1 billion company over the next 2-3 years. The company is also hoping to scale up its manufacturing capacity of modules and cells from the current 1,200 MW to around 3,000 MW in the next 2-3 years. Currently, Mundra Solar has a manufacturing facility with a capacity of 1,200 MW in the Special Economic Zone at Mundra in Gujarat.

    Source: The Economic Times

    Collective work needed to mitigate climate change: PM Modi

    22 April. On the occasion of World Earth Day, Prime Minister (PM) Narendra Modi called for collective work to mitigate the menace of climate change. Echoing similar sentiments, Andhra Pradesh Chief Minister Chandrababu Naidu urged the citizens to do their bit for the environment. He also announced that the Andhra Pradesh is taking significant steps to ensure the conservation. On Earth Day, people in several parts of the world take out rallies, sign petitions, plant trees, clean up their towns, and roads in order to send a message to conserve and preserve the environment. This year, the theme of Earth Day is End Plastic Pollution.

    Source: Business Standard

    Waste to energy plant at Moshi gets PCMC green light

    21 April. The general body meeting of Pimpri Chinchwad Municipal Corp (PCMC) approved the waste to energy plant at Moshi garbage depot following a detailed presentation by municipal commissioner Shravan Hardikar. While garbage was processed in every ward earlier, central processing would be carried out at Moshi garbage depot. Around 800 tonnes of garbage are generated in PCMC area every day. Two agencies would construct the waste to energy plant at Moshi garbage depot at a cost of ₹ 208 crore in about 18 months. The plant would have a capacity to process around 1000 tonnes of garbage. PCMC would provide 6.2 acres of land at the garbage depot for construction of the plant. The project would be carried out on the basis of design, build, finance, operate and transfer (DBFOT) basis for a period of 21 years. The scope of work includes segregation and recovery of municipal waste and processing of compost from received biodegradable waste, Hardikar said. A master plan has been prepared with regards to processing of organic waste, dry waste, green waste and construction of debris, Hardikar said. Hardikar said that PCMC consumes 35 MW of power every day. The municipal corporation has asked two agencies to provide power at ₹ 5 per unit for a period of 21 years. Around 11.5 MW of power would be generated everyday by the agencies. Water for the plant would be recycled from sewage treatment plants, Hardikar said.

    Source: The Times of India

    With different ceiling rates, 7.6 GW solar projects on offer across India

    18 April. A batch of solar power projects with a total capacity of 7,670 MW is set to be put out to tender in the next two months where the benchmark tariff will vary according to location. Also, there will be no viability gap funding for bidders, like earlier auctions, to quote lower than the market rate. For a 3,000 MW project cluster (250 MWx12), the maximum tariff payable is set at ₹ 2.93 a unit for 25 years. Bidders will have to quote below the benchmark rate. Location of the projects and sale of power will be managed by Solar Energy Corp of India (SECI), the nodal agency for tendering solar projects. Another tender for a batch of 2,000 MW solar projects (250x8) as well as the Kadapa Solar Park (750 MW) in Andhra Pradesh and the Pavgada Solar Park (200 MW) in Karnataka will also be offered at the same rate, according to tender documents. The tariff of ₹ 2.97 a unit was discovered during bidding for the 750 MW Rewa Solar Park last year. Uttar Pradesh, which will host 1,650 MW of these projects, consisting of six solar parks of 275 MW each, will have a higher ceiling rate of ₹ 3.43 a unit. The same ceiling tariff will apply to a 70 MW solar power project in Assam. Solar power tariffs have been falling constantly and touched a record low of ₹ 2.44 a unit last year, before climbing to ₹ 2.65-3.36 a unit in an auction in Gujarat. As tariffs fell faster than commissioning older projects, states have been reluctant to purchase costlier renewable power, with some even going back on their purchase agreements. Sector experts said the benchmarking had come at a time when players had become unsure of the cost of solar power. Indian solar panel makers have moved the Directorate General of Safeguards (DGS) for a duty on solar imports. The DGS has suggested a preliminary duty of 70 percent. If confirmed, this could increase the cost of solar power to almost ₹ 3 a unit.

    Source: Business Standard

    India, UK governments invest in $711 mn Indian renewable energy fund

    18 April. Lightsource BP and Indian private equity fund Everstone Group announced the creation of a 500 million pound ($711 million) fund to invest in renewable energy and clean technology in India. The fund aims to increase its investment to 500 million pounds which will be raised from institutional investors as well as a “significant investment” from Lightsource and Everstone, Lightsource BP Chief Executive Officer Nick Boyle said. The investments will span across renewables such as solar and wind as well as low-carbon technologies such as electric vehicles charging stations, Boyle said. India is one of the fastest-growing markets for clean energy. India currently has around 60 GW of installed renewable capacity, but plans to add a further 115 GW by 2022 which could cost at least $125 billion.

    Source: Reuters

    Two solar-powered Ro-Ro ferries on the anvil for Goa

    18 April. Goa will soon have two solar-powered Ro-Ro (roll on, roll off) ferry boats along the lines of the Kerala module where such alternate energy ferries are operational, River Navigation Minister Ramkrishna Dhavalikar said. In May 2017, the government is in the process of introducing Ro-Ro ferries, which are bigger sized ferries with two ramps and two engines that can go to-and-fro from one jetty to another without the need to turn around. The total cost of the newly procured ferries is ₹1.9 crore. On an average, there are about 11,000 commuters and over 5,000 two-wheelers travelling on the Panaji-Betim ferry route every day. Dhavalikar said that more ferries cannot be added on the Panaji-Betim route owing to navigational issues due to casinos and other marine traffic.

    Source: The Times of India

    Wind energy capacity addition to increase to 3 GW in FY2019: ICRA

    18 April. The capacity addition in the wind power sector is expected to improve to about 3 GW in FY2019, after witnessing a weak performance in FY2018. The wind energy sector witnessed a capacity addition of only 1.7 GW in FY2018, which is a significant drop from the 5.5 GW capacity added in FY2017, according to rating firm ICRA. ICRA said that the lower capacity addition in FY2018 was due to the transition of the industry to a competitive bid-based power purchase agreement regime. Earlier the practice was a feed-in-tariff regime where rates were fixed by the respective state electricity regulators. ICRA said that since February 2017 Solar Energy Corp of India Ltd and state distribution utilities in Gujarat, Maharashtra and Tamil Nadu had issued bids for wind power capacity of 7.5 GW.

    Source: The Hindu

    Rajasthan aims 3.7 GW solar capacity by April next

    18 April. With 20 projects of 1,500 MW capacity in pipeline, Rajasthan is targeting to increase its solar power generation to 3,780 MW by April next year in order to achieve the goal of 7,000 MW clean energy capacity in the next four years. The current solar power generation is contributing 10 percent to the total power consumption in the state and we are targeting to increase it to 17 percent by 2021, Rajasthan Renewable Energy Corp Managing Director B K Doshi said. He said that solar power installation capacity in the state has reached to 2,280 MW by March this year and 20 projects of total 1500 MW are under pipeline and will be commissioned and start generating power by April next year. Work on various projects is in full swing. The second phase of Bhadla solar park near Jodhpur has been commissioned (680 MW) and its third phase (1000 MW) is under progress. Of the 1000 MW capacity under the third phase of Bhadla park, 500 MW will be commissioned in September this year and 500 MW by April next year. Fourth phase of 500 MW will also be commissioned by April, he said. Of the total 1,500 MW projects, which are scheduled to be commissioned by April next year, 10 are of the capacity of 100 Mw each and 10 of 50 MW each, he said. Other projects which are under the pipeline are Pokran-Phalodi solar park (750 MW), Fatehgarh phase 1B (1500 MW) and Nokh Jaisalmer (1000 MW). The state having huge potential for the solar power generation could add just 496 MW in the last financial year, which is less than the fiscal year of 2016-17 where the state had added 500.55 MW.

    Source: Business Standard


    INTERNATIONAL: OIL

    Russia remains China's top oil supplier for a 13th month in March

    24 April. Russia was China’s largest crude oil supplier in March, data showed, retaining the lead spot for a 13th consecutive month. Last month, Russia supplied 5.79 million tonnes, equal to 1.36 million barrels per day (bpd), up 23.6 percent from the same month a year earlier, data from the General Administration of Customs showed. Russia has been the biggest oil exporter to China since March last year. For the first quarter, Russian shipments rose 22 percent from a year earlier to 16.51 million tonnes, or 1.34 million bpd. Saudi Arabia, China’s second-biggest supplier in March, also ramped up its exports, the data showed. Shipments last month were 4.6 million tonnes, or 1.09 million bpd, up 1.2 percent from a year ago, but down from 1.2 million bpd in February. China’s total crude oil imports in March rose to the second-highest on record at 9.2 million bpd, boosted by ample government quotas and healthy refining margins. At the same time, the country exported a record amount of refined fuel to ease a domestic surplus. March crude oil arrivals from Angola, China’s third-biggest supplier, fell 12.5 percent from a year ago to 4.08 million tonnes, or 961,810 bpd. Supplies for the first quarter fell 2.9 percent to about 1 million bpd, the data showed. Overall, China imported 112.1 million tonnes of crude during the first quarter, or about 9.1 million bpd. The hefty first-quarter purchases caused a backlog of cargoes off the coast of east China in late March. Imports next month may slow as Chinese refineries enter the peak maintenance season starting from April. The United States last month shipped 973,758 tonnes of crude oil, with first quarter volumes amounting to 3.9 million tonnes, or 315,475 bpd.

    Source: Reuters

    Lebanon to prepare for second offshore O&G licensing round: Energy Minister

    24 April. Lebanon’s Energy Minister Cesar Abi Khalil said he had asked the country’s petroleum authority to start preparing for a second oil and gas (O&G) offshore licensing round, but did not give a timeline for when it might happen. Lebanon in February signed its first offshore energy exploration and production agreements for two of Lebanon’s 10 offshore blocks with a consortium of France’s Total, Italy’s Eni and Russia’s Novatek. He had asked the Lebanese Petroleum Administration (LPA) to begin preparations for a second round. The consortium has previously said it plans to drill its first well in 2019.

    Source: Reuters

    UAE's Brooge Petroleum to expand its Fujairah storage capacity

    23 April. Brooge Petroleum and Gas Investment Company (BPGIC) plans to boost storage capacity for crude and oil products in the Fujairah oil hub in the United Arab Emirates (UAE). BPGIC plans to start building the second phase of its storage terminal in the next few months adding 600,000 cubic meters of capacity for crude oil across eight tanks, the company said. The expansion is due to be completed by the fourth quarter of 2019. The firm, one of the largest holders of storage assets in Fujairah, was set up in 2013. The first phase of 400,000 cubic meters of storage across 14 tanks for middle distillates and fuel oil was completed in October and began operations in January. Located on the east coast of the UAE at the entrance to the Strait of Hormuz, Fujairah is one of two major ports in the region along with Oman’s Sohar and is a busy refueling point for tankers taking crude on long voyages out of the Gulf. The emirate is keen to boost its status as a global trading hub by increasing its port storage capacity from 10 million cubic meters to 14 million cubic meters by 2020. Traditionally, it focused on fuel to power tankers and refined oil products.

    Source: Reuters

    Saudi Aramco to lift oil-trading volume to 6 mbpd

    23 April. Saudi Aramco, the world’s biggest oil exporter, plans to trade as much as 6 million barrels per day (mbpd), a jump in volume that would put it in the top tier of companies that buy and sell crude and refined products. The trading arm of the state-run giant known officially as Saudi Arabian Oil Company currently handles between 3.3 million and 3.6 million barrels a day, Ibrahim Al-Buainain, the unit’s chief executive officer, said. Aramco Trading targets 5.5 million to 6 million barrels a day by 2020 as its parent opens new refineries in Malaysia and Saudi Arabia, he said. If it reaches its target, Aramco Trading would rival Vitol Group, the world’s largest independent trader, which trades about 7 million barrels a day of crude and products. Royal Dutch Shell Plc buys and sells about 12 million barrels a day, and BP Plc deals in about 8 million. Shell and BP, like Aramco, are integrated oil companies engaged in production, refining and trading. Aramco Trading dealt only in refined products when it started operating in 2012. Last year it began buying and selling third-party crude -- oil pumped by other producers -- to supply its overseas refineries. Aramco Trading also sells Saudi crude to refineries that lack long-term supply contracts with its parent company, in return for products from those same facilities. Crude-trading volumes are still small, Al-Buainain said.

    Source: Bloomberg

    Britain, South Korea in talks to protect crude oil trade

    23 April. Britain and South Korea are in talks to protect an arrangement of tax breaks for Korean buyers of North Sea crude beyond Britain’s upcoming exit from the European Union (EU). An EU free-trade agreement has been in place since 2012 with South Korea, Asia’s fourth-largest economy and last year’s third-biggest importer of British North Sea crude, which is a significant source of revenue for the United Kingdom. Britain, which is trying to forge new trade relationships beyond Europe, will leave the EU next March and enjoy a status-quo transition until the end of 2020, according to the current plan. The current trade deal allows EU exporters to sell their oil to South Korean refineries tax-free, and Britain has been the biggest beneficiary of this break. Last year, Korea imported 34.11 million barrels of British crude oil, up 83.5 percent from 2016, making up three percent of Korea’s total crude imports, according to data from Korea National Oil Corp. In the first two months of this year, South Korea imported 6.07 million barrels of British crude, down 1.67 percent from a year ago. Britain’s Department for International Trade said its oil exports to South Korea in 2017 earned Britain two billion pounds ($2.81 billion) and made up 14 percent of its total oil exports, the biggest share after the Netherlands and China. In 2016, Britain exported oil to South Korea worth 800 million pounds, or eight percent of Britain’s total oil exports.

    Source: Reuters

    ADNOC sets up oil trading business to help find new markets

    23 April. Abu Dhabi National Oil Company (ADNOC) is setting up a new trading unit to handle its crude oil and refined products, part of the state-run firm’s efforts to expand its international business and secure new markets. The new business will be part of ADNOC’s Marketing, Sales and Trading Directorate, the company said. Middle East oil producers are branching out into trading crude oil and refined products to boost their incomes following a sharp drop in oil prices since mid-2014 which has forced them to become more efficient and commercially focused. ADNOC, regarded as one of the more conservative among Middle East oil producers, began a wide-ranging shake-up under new management appointed in 2016 to become more competitive. The company has listed its fuel retail business, ADNOC Distribution, in an initial public offering last year. It also aims to expand its downstream business abroad and may sell a stake in its refining assets to strategic partners.

    Source: Reuters

    Iraq extends bid deadline for construction of Mosul oil refinery: Oil ministry

    22 April. Iraq has extended the deadline for foreign companies and investors to bid for the construction and operation of a new 100,000 barrel per day (bpd) refinery near Mosul in the northern province of Nineveh, the oil ministry said. Bidding documents provide for two investment models – build-own-operate (BOO) and build-operate-transfer (BOOT), the ministry said. Documents for the bidding process will be now available until May 15 instead of April 1 and the bidding will close on June 14 instead of May 15, it said.

    Source: Reuters

    OPEC and non-OPEC states may ease oil output cuts in 2018: Russian Energy Minister

    20 April. Russian Energy Minister Alexander Novak said that OPEC (Organization of the Petroleum Exporting Countries) and non-OPEC countries may ease oil production cuts as early as this year. He said that it was too early to talk about the format of cooperation between OPEC and non-OPEC countries after 2018, and that cooperation may not necessarily be about extending output quotas, once the deal on oil production curbs expires by the end of this year.

    Source: Reuters

    Kazakhstan to slash heavy oil exports as it goes upmarket

    20 April. Kazakhstan will sharply cut exports of heavy oil products, such as fuel oil and vacuum gasoil, as it focuses on higher quality products following a modernisation of its refineries. The Central Asian country’s oil refineries could reduce fuel oil exports by around 35 percent this year, from 2.1 million tonnes in 2017, while vacuum gasoil (VGO) overseas shipments could be halved to 800,000 tonnes. Kazakhstan exports its heavy oil products mainly via Black Sea’s ports in Russia and Georgia. It has been upgrading its three refineries in order to produce better quality products and reduce pollution. Pavlodar refinery has already completed its modernisation programme. Atyrau refinery plans to launch new units by June, while Shymkent is expected to wrap up a modernisation in September. According to the energy ministry, the refineries plan to increase their oil products throughput to 15.3 million tonnes this year, from 14.2 million tonnes last year. Fuel oil production is seen declining to 2.4 million tonnes, from 3.3 million tonnes. It exports virtually all of its VGO output, but will end production of the fuel in the third quarter of this year.

    Source: Reuters

    PDVSA cancels plans to import US crude oil amid cash crunch

    19 April. Petroleos de Venezuela SA (PDVSA), which relies heavily on US (United States) oil to run its refinery in the island of Curacao, canceled plans to import American grades in April and May as sellers demanded payment ahead of delivery. PDVSA typically offers to pay after cargo delivery or makes the payment with oil products and crude. PDVSA was planning to buy 3.5 million barrels of West Texas Intermediate and Domestic Sweet Blend for its Isla refinery in Curacao. As PDVSA refineries are struggling to raise oil-processing due to breakdowns and lack of maintenance, and the country’s oil production fell by a third from a year earlier in March, suppliers are increasingly demanding payment upfront and in cash.

    Source: Bloomberg


    INTERNATIONAL: GAS

    Algeria launches gas pipeline to boost supply to major southern city

    24 April. Algeria launched a 530 kilometre-long gas pipe to supply Tamanrasset, its biggest southern city, with 700,000 cubic metres per day, the chief executive officer of state firm Sonatrach said. Algeria produces 94 billion cubic metres of gas per year, 55 billion cubic metres of which are exported. The new gas pipeline is linked to the In Salah gas field. But growing domestic consumption is challenging Sonatrach, pushing its management to explore more fields and boost the ageing ones to increase output.

    Source: Reuters

    Shell, Inpex near finish line in race to export north Australian LNG

    24 April. Shell and Inpex are on the final stretch of a years-long race to export gas from offshore northern Australia, where both have spent billions of dollars building the world’s biggest maritime vessels to grab a slice of Asia’s booming LNG (liquefied natural gas) market. Anglo-Dutch energy major Royal Dutch Shell and Inpex, Japan’s biggest oil and gas producer, are vying for first gas from two overlapping fields after delays and cost overruns that have plagued both projects. Inpex has the 340 meter-long Ichthys Explorer, a floating LNG production and storage unit, built in South Korea, in parallel with Shell’s Prelude.

    Source: Reuters

    Croatia delays bidding round for LNG terminal capacity to late June

    23 April. Croatia has moved to late June the second round of bidding to use capacity in a planned liquefied natural gas (LNG) terminal in the northern Adriatic, the company that manages the project said. Previously, the process for submitting binding bids was planned to start in May. Few bids were submitted in the first round of bidding, although LNG Hrvatska has not given any official figures. In the meantime, Barbara Doric, who previously ran the state agency for gas and oil exploration, has replaced Goran Francic as head of LNG Hrvatska. The level of demand is likely to determine whether the project for the terminal on the island of Krk will go ahead. LNG Hrvatska is preparing to build the floating terminal, which Croatia hopes will start operations in 2020. With a projected capacity of 2.6 billion cubic metres of gas a year, the terminal is part of European Union (EU) efforts to diversify away from Russian energy imports, most notably for countries in central Europe.

    Source: Reuters

    Australia's Ichthys project to import LNG cargo to cool plant ahead of start-up

    23 April. Japan’s Inpex Corp and its partners have bought a cargo of liquefied natural gas (LNG) to cool their Ichthys LNG plant in Australia ahead of a potential start-up of the much delayed facility. To produce LNG, natural gas is cooled down to around minus 160 degrees Celsius, so facilities must be chilled before production can begin, typically by using fuel from other sites. Taking such a step indicates the plant, in northern Australia’s Darwin, is getting closer to starting output. The LNG tanker ‘Pacific Breeze’ is currently in the Java Sea and expected to reach Darwin on April 26, with a draft of 93 percent, suggesting it is almost full. The ship has the capacity to carry up to 182,000 cubic metres of LNG, according to Inpex. Inpex said the vessel had been chartered to transport LNG bought from another LNG project with the objective of cooling the onshore Ichthys LNG plant ahead of the project’s start-up. Inpex said the vessel’s LNG could also possibly be used as a first export cargo should Ichthys experience further delays in production, but stressed this had not yet been decided. Inpex said in March it had postponed its latest planned start-up to April or May. The start was originally slated for 2016. Exports from new LNG projects including Ichthys are expected to help Australia overtake Qatar to become the world’s largest exporter of the super-chilled fuel by 2019.

    Source: Reuters

    Egypt aims for $10 bn foreign investment in oil, gas in 2018/19

    23 April. Egypt aims for foreign investment in the oil and gas sector to reach about $10 billion in the 2018/19 fiscal year that begins in July, Petroleum Minister Tarek El Molla said. Molla said he expected foreign investments to total the same amount for the current fiscal year, marking a 25 percent increase from the previous year. The 25 percent gain comes as a result of foreign companies investing in major gas projects in the Mediterranean, he said. Egypt aims to increase its gas production from newly discovered fields, which include the mammoth Zohr asset discovered by Italy’s Eni in 2015. Once a gas exporter, Egypt hopes to halt imports by 2019.

    Source: Reuters

    Gazprom seeks termination of Ukraine gas contracts in arbitration

    20 April. Russian gas giant Gazprom said it has lodged a claim to an international arbitration seeking to cancel its supply and transit contracts with Ukraine. It said talks with Kiev over the contracts had ended without concrete results and it had lodged a claim to a Stockholm arbitration court. The contracts are due to expire at the end of 2019. Gazprom appealed against a previous Stockholm arbitration ruling, which obliged the Kremlin-controlled company to pay Ukraine’s Naftogaz $2.65 billion following a long dispute between the companies over gas delivery. Ukraine is a major transit country for Russian gas supplies to Europe where Gazprom accounts for around 35 percent of the gas market. Gazprom said it would terminate its gas contracts with Ukraine after it lost the court case, escalating a dispute which had left Ukraine struggling to stay warm and which the European Union said could threaten gas flows to Europe.

    Source: Reuters

    New gas processing complex launched in Uzbekistan, creates 2k jobs

    20 April. Lukoil has officially opened a gas processing complex at the Kandym fields cluster in Uzbekistan. The Kandym gas processing complex, which was completed eight months ahead of schedule, employed around 10,000 people in its construction phase and has created over 2,000 permanent jobs, according to Lukoil. The new complex is designed to convert gas from the Kandym fields cluster to marketable gas, stable gas condensate, and marketable sulfur. The Kandym fields cluster contains 77 drilled wells and a gas gathering facility.

    Source: Rigzone

    Freeport LNG delays start of Texas export terminal to September 2019

    19 April. Freeport LNG, a privately held US (United States) liquefied natural gas (LNG) company, said it pushed back the projected start date for its $13 billion export terminal under construction in Texas by about nine months to around 1 September 2019. Freeport LNG now expects the first liquefaction train to enter service around 1 September 2019, with the second and third trains seen in service around 1 January and 1 May 2020, respectively. Previously, the three trains under construction had been expected to enter service between the fourth quarter of 2018 and the final quarter of 2019. Each train will have the capacity to liquefy about 0.7 billion cubic feet (bcf) per day of gas. One bcf is enough gas to supply about five million US homes for a day.

    Source: Reuters

    Russia's Lukoil starts up Uzbekistan gas plant for Chinese exports

    19 April. Russia’s No. 2 oil producer Lukoil has started operations at a $3.4 billion gas processing plant at its Kandym gasfield in Uzbekistan, which is seen as central to its efforts to boost gas production and exports to China. The Russian government said that the gas processing complex, with a capacity of 8 billion cubic meters (bcm) per year, had been launched ahead of schedule. Lukoil has not revealed any data on gas exports to China from Uzbekistan. Lukoil said it has raised a $660 million loan to finance part of the cost of building the gas plant in Uzbekistan. Lukoil is working in the country under a production-sharing agreement that accounts for a quarter of all of Uzbekistan’s gas output. The company plans to double gas production in Uzbekistan to 16 bcm per year by 2020 from 8 bcm in 2017. Lukoil’s total gas output reached almost 33 bcm in 2017.

    Source: Reuters

    US LNG gets a big cheer in one of Russia's small neighbours

    19 April. One of Russia’s European neighbours is fully embracing US (United States) liquefied natural gas (LNG). Lithuania, the Baltic state that used to be completely dependent on gas piped in from Russia, is turning to LNG from Norway to the US to help negotiate better prices from its former Soviet ruler. The country of just 2.8 million people is now the biggest European buyer of US LNG after Spain and Portugal. The US has been trying to encourage Europeans to buy more of its gas and vehemently opposes the expansion of a pipeline directly from Russia to Germany that bypasses Ukraine and other eastern European transit nations. Lithuania signed two agreements with the Freeport LNG project in Texas during a meeting with President Donald Trump in Washington earlier this month, deepening its ties with the US and the rivalry with Russian gas.

    Source: Bloomberg

    CNOOC sells LNG in debut Shanghai auction as China aims to boost supplies

    18 April. China National Offshore Oil Corp (CNOOC) sold cargoes of liquefied natural gas (LNG) on a domestic exchange for the first time, the latest step by China to boost supplies of the clean fuel as the nation shifts away from coal. CNOOC sold 60,000 tonnes of LNG for delivery in July at prices between 3,380 yuan ($537.80) to 3,390 yuan per tonne. It sold another 30,000 tonnes for November delivery at between 4,200 yuan and 4,210 yuan per tonne through an auction on the Shanghai Petroleum and Gas Exchange. Buying forward supplies through auctions like the Shanghai Exchange’s would give factories a chance to lock in prices and gas ahead of the winter heating season. More auctions would also help build liquidity on the Shanghai Exchange. CNOOC is likely to hold another auction next month. China is the world’s third-biggest consumer of natural gas. Shanghai launched its electronic platform in 2015 to create a pricing benchmark for China’s burgeoning gas market.

    Source: Reuters

    Woodside sees new momentum on long-delayed Browse gas project

    18 April. The long-delayed Browse gas project off Western Australia has gained key support, with partners in the North West Shelf liquefied natural gas (LNG) plant aiming to agree on a tariff by end-June to handle Browse gas, Woodside Petroleum said. Browse is seen as a key source of growth for Woodside but has been stuck on the drawing board for years as plans for onshore and floating LNG development estimated at $30 billion to $45 billion were scrapped. The plan now is to develop the giant gas field to feed the North West Shelf plant, Australia’s biggest LNG plant, when its current gas source runs dry in the 2020s. Just two years ago, the market had been expected to remain in oversupply until around 2023, but that has changed following a sharp jump in gas demand in China.

    Source: Reuters


    INTERNATIONAL: COAL

    Indonesia's Adaro targets 35 percent growth in coking coal output

    23 April. Indonesian coal miner Adaro Energy is targeting coking coal output of 1 million tonnes this year, up from 740,000 tonnes in 2017. That excludes any increase in Adaro’s coking coal output that may come from its planned purchase of the Kestrel mine in Australia from Rio Tinto. Adaro unit Adaro MetCoal Companies (AMC) has 54 million tonnes of metallurgical coal reserves at one of its seven mine concessions in East and Central Kalimantan provinces, AMC Director Priyadi said. Priyadi said AMC is now exploring its other concessions. Adaro acquired a 75 percent stake in the AMC mine concessions, then known as the IndoMet Coal project, from partner BHP Billiton for $120 million in October 2016, amid a slump in metallurgical coal prices.

    Source: Reuters

    Italy's Generali to sell holdings in coal sector in 6-12 months

    19 April. The chairman of Assicurazioni Generali pledged the Italian insurer would liquidate its investments in the coal sector in 6 to 12 months after Greenpeace activists staged a protest. Generali said in a note its board had approved in February the sale of its equity investments in the coal sector and letting any debt holdings expire unless it sold it ahead of maturity.

    Source: Reuters


    INTERNATIONAL: POWER

    Statkraft inks 13 year power contract with Finnfjord

    24 April. Statkraft has signed a long-term contract to supply power to Finnfjord’s ferro-alloy plant in Finnsnes. The total volume is 8.5 terawatt hour (TWh) with annual supply of 0.65 TWh. The contract will contribute to supplying power to Finnfjord's ferro-alloy plant in Finnsnes and replaces the contract Statkraft and Finnfjord entered into in 2011. This contract secures a solid economic foundation for Finnfjord for the next 13 years and enables the company to further develop more efficient and environmentally friendly manufacturing solutions.

    Source: Energy Business Review

    Neoenergia revises bid to acquire Brazilian power distributor Eletropaulo

    23 April. Brazil’s power company Neoenergia has raised its bid offer to acquire power distribution company Eletropaulo Metropolitana Eletricidade de São Paulo (Eletropaulo) to BLR29.40 (€7.04) per share. The transaction is expected to further Iberdrola’s expansion into international markets and contribute to its plan to boost its earnings before interest, taxes, depreciation and amortization by more than 20% in 2018. In February, Iberdrola announced its plans to invest €32 bn from 2018 to 2020 to lay foundations for sustainable business growth in the next decade. The Spanish energy company plans to put nearly half of the investment, €15.5 bn in networks. On generation and retail, the Spanish utility will allocate €2.8 bn, which is 9% of the €32 bn investment.

    Source: Energy Business Review

    China plans first spot electricity trading as Beijing reforms power market

    20 April. China will launch its first real-time spot electricity markets in eight regions, the National Energy Administration (NEA) said, as Beijing accelerates efforts to liberalize power prices currently set by the government. In a draft rule, the NEA outlined guidelines for eight regions to set up real-time trading platforms that will set prices for the cash market as well as those for a day ahead, allowing power generators, industrial users and distributors to trade power in real time. The eight regions are Guangdong, western Inner Mongolia, Zhejiang, Shanxi, Shandong, Fujian, Sichuan and Gansu. Their power generation in 2017 was 2.6 trillion kilowatt-hours, 42 percent of China’s total. The move comes after those regions launched electricity markets last year for monthly and quarterly prices.

    Source: Reuters

    Cross Texas Transmission commissions Limestone to Gibbons Creek transmission line in US

    20 April. Cross Texas Transmission has commissioned the Limestone to Gibbons Creek transmission line in the United States (US). Limestone to Gibbons Creek, the northern portion of the larger Houston Import Project, is a 68 mile double circuit 345 kilovolt (kV) transmission line between the Limestone Substation in Limestone County and the Gibbons Creek Substation in Grimes County. The Public Utility Commission of Texas issued a final order approving the project in January 2016 after the Electric Reliability Council of Texas identified that the project was needed by June 2018 to ensure reliability and reduce congestion on the transmission grid.

    Source: Energy Business Review

    Puerto Rico restores power to over 70 percent of customers after blackout

    19 April. Puerto Rico’s power company said it had restored power to over 1.1 million homes and businesses after a transmission line failure cut service to almost all of the island’s 3.4 million residents the day before. The Puerto Rican Electric Power Authority (PREPA) was working to restore power to the less than 30 percent of customers in the United States (US) territory still without power after blackout. The power line failure in southern Puerto Rico was the latest in a string of operational and political headaches for the bankrupt, storm-ravaged power utility. The utility has struggled to escape the headlines since Hurricane Maria wiped out power to all of Puerto Rico on September 20. PREPA said that several power plants were back in service, including units at Central Aguirre, EcoElectrica, Central Costa Sur, Yabucoa and Palo Seco.

    Source: Reuters


    INTERNATIONAL: NON-FOSSIL FUELS/ CLIMATE CHANGE TRENDS

    GE to trial world’s largest wind turbine in Britain

    24 April. US (United States) conglomerate General Electric (GE) will test the world’s largest wind turbine in a facility in northeast England, it said. GE Renewable Energy, the renewable arm of the US firm, and the British government-funded Offshore Renewable Energy Catapult signed a five-year agreement to test GE’s Haliade-X 12 MW turbine in Blyth, Northumberland. Britain is aiming to be a leader in offshore wind technology and its capacity could grow by five times current levels to 30 GW by 2030. The largest wind turbines currently in operation are MHI Vestas’ 9 MW turbines installed at Vattenfall’s windfarm off the coast of Aberdeen, Scotland.

    Source: Reuters

    Cambridge donor BP urges university to keep fossil fuel investments

    24 April. BP chief executive officer Bob Dudley urged Cambridge University not to yield to pressure from hundreds of students and academics to cut its investments in fossil fuels and pointed to BP’s donations to the university. BP did not immediately disclose how much it has been donating to the university. In 2015/16 it gave grants worth around 1.4 million pounds, according to Cambridge, and in 2000 a 22 million pound donation from BP helped to create the BP Institute for Multiphase Flow, which focuses on research in surfaces and particles and fluid dynamics. Cambridge said the University Council will publish its decision on whether it will change its investments after years of campaigning by students and academics after a meeting next month. About 350 Cambridge academics signed a letter to the university and its colleges, which enjoy a certain degree of independence from the university’s central administration, to excise fossil fuel investments from the roughly 6.3 billion pounds ($8.81 billion) at their disposal. Activists in the Cambridge Zero Carbon Society said they received a letter from vice-Chancellor Stephen Toope which stated the university had a leadership role in understanding and tackling climate change. The world’s top oil and gas companies are facing rising pressure from investors to shift to cleaner energy and renewables in order to meet international targets to sharply reduce carbon emissions by the end of the century. Dudley said that BP was going to invest around $500 million per year in renewables in the coming years, but that the world will need oil and gas “for many years to come.”

    Source: Reuters

    Atlantis Resources plans to build 1 GW tidal power project in France

    24 April. Atlantis Resources has submitted a plan to the French government to build 1 GW of tidal power by 2025 in the Raz Blanchard, Normandy. The plan follows a study conducted by Atlantis that concludes that 2 GW of tidal energy can be harnessed in the Raz Blanchard, which is touted to be one of the best tidal energy resources in the world. The study found that after the construction of the first 1 GW, the site has potential for further capacity expansion for up to 2 GW by 2027. Atlantis said that its proposed tidal project would allow for a significant reduction in the levelized cost of energy (LCOE) for tidal energy compared to the cost of offshore wind farms currently under construction in France or in the United Kingdom (UK), once the proposed 1 GW project is fully commissioned.

    Source: Energy Business Review

    US researches develop new control strategy to increase power output from wind farms

    24 April. Researchers from the University of Texas at Dallas (UT Dallas) have developed a new way to extract more power from the wind farms, using supercomputers at the Texas Advanced Computing Center (TACC). According to the researchers, the new method has the potential to generate $600 mn in added wind power in the United States (US). Several years ago, UT Dallas mechanical engineering associate professor Stefano Leonardi and his team created models capable of integrating physical behaviour across a wide range of length scales from 100m-long turbine rotors to centimeters-thick tips of blades. The models are intended to predict wind power with accuracy using supercomputers. However, in order to model the variability of wind for a given region at a specific time, the team integrated their code with the Weather Research and Forecasting Model (WRF), a weather prediction model developed at the National Center for Atmospheric Research. The team applied the method to a single turbine at the National Renewable Energy Laboratory (NREL).

    Source: Energy Business Review

    GE Renewable Energy inaugurates 50 MW Hawa wind farm in Pakistan

    23 April. GE Renewable Energy and Hawa Energy have inaugurated the Hawa Power Project, a 50 MW wind farm in the Gharo-Keti Bandar Wind Corridor in Jhimpir in the Pakistani province of Sindh. The project is installed with 29, 1.7-103 wind turbines, with implementation of the project undertaken by Power China, as the engineering, procurement and construction (EPC) contractor. The 50 MW project is the fourth in Pakistan to feature GE's advanced wind turbines. In addition to the provision of wind turbines, GE will also provide 10 years of operations and maintenance services as part of the contract, making it a one-stop shop for Hawa Power Project. GE Renewable Energy is one of the world's leading wind turbine suppliers, with more than 35,000 wind turbines installed globally. GE is focused on supporting Pakistan’s socio-economic growth, with technologies that generate more than 1/3 of the country’s electricity. The Government of Pakistan has tasked the Alternative Energy Development Board (AEDB) to ensure 5 percent of total national power generation capacity to be generated through renewable energy technologies by the year 2030, following the United States Agency for International Development and the National Renewable Energy Laboratory estimates that Pakistan has over 132 GW of wind energy capacity.

    Source: Energy Business Review

    IDB Invest finances construction of 1.5 GW combined cycle thermoelectric plant in Brazil

    20 April. IDB Invest, the private sector institution of the IDB Group, finances the construction and operation of Porto do Sergipe, a 1,516 MW combined cycle thermoelectric plant and its associated infrastructure in the state of Sergipe, in Brazil. The project is developed by Centrais Elétricas de Sergipe SA (CELSE), a company run by EBRASIL of Brazil and Golar Power Ltd. Once operational in 2020, CELSE will sell electricity to 26 distribution companies in Brazil, becoming the largest and most efficient thermoelectric plant in Latin America and the Caribbean. Sergipe will use natural gas as fuel, the fossil fuel with the lowest carbon emissions. Brazil can benefit from the abundance and historically low prices of this fuel internationally. The installed power of this plant will help the country increase its energy security while continuing to expand in renewable energy, such as solar and wind.

    Source: Energy Business Review

    IRENA lays out renewable energy road map to curb global warming

    18 April. Increasing the speed of global renewable energy adoption by at least a factor of six — critical to meeting energy-related emission reduction needs of the Paris Climate Agreement — can limit global temperature rise to two degrees centigrade, according to the International Renewable Energy Agency (IRENA). The road map currently anticipates up to $11 trillion of stranded energy assets by 2050. The value could double if action is delayed. It said India is advancing towards its target of achieving 175 GW of renewable power capacity by 2022. In 2015, renewables accounted for 36 percent of India’s final energy use, one of the highest shares in the G20 countries. According to IRENA, in order to decarbonise global energy fast enough to avoid the most severe impacts of climate change, renewables must account for at least two-thirds of total energy by 2050. Current government plans fall short of emission reduction needs.

    Source: Business Standard

    DATA INSIGHT

    State-wise Electricity Generation from Solar

    Million Units

    State/Utility2016-172017-18% Change
    Andaman & Nicobar6.173.55-42.5
    Andhra Pradesh1599.781936.5421.1
    Arunachal Pradesh0.140.07-50.0
    Assam2.693.5230.9
    Bihar109.1878.07-28.5
    Chandigarh13.165.09-61.3
    Chhattisgarh120.9165.68-45.7
    Dadra and Nagar Haveli1.312.73108.4
    Daman & Diu14.4310.61-26.5
    Delhi5.688.4248.2
    Gujarat1738.281110-36.1
    Haryana19.738.394.4
    J & K0.770-100.0
    Jharkhand38.4711.15-71.0
    Karnataka524.67874.2566.6
    Kerala26.5228.336.8
    Lakshadweep1.591.06-33.3
    Madhya Pradesh1366.1920.41-32.6
    Maharashtra577.83518.04-10.3
    Manipur0.010.03200.0
    Odisha210.81124.37-41.0
    Punducherry0.340.9164.7
    Punjab909.2919.071.1
    Rajasthan2131.611895.92-11.1
    Tamil Nadu1898.341574.45-17.1
    Telangana1337.91677.8425.4
    Uttar Pradesh230.95298.8729.4
    Uttarakhand37.77147.95291.7
    West Bengal14.9611.15-25.5
    Central Utilities560.13707.2126.3
    Total13499.412973.6-3.9

    Source: Press Information Bureau


    Publisher: Baljit Kapoor

    Editorial Adviser: Lydia Powell

    Editor: Akhilesh Sati

    Content Development: Vinod Kumar Toma

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