Energy News Monitor | Volume XIV; Issue 47

     Energy Monitor,ENM,May

    INCREASING DIVERSITY IN LNG IMPORT PORTFOLIO

    Gas News Commentary: April 2018

    India

    The first 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 mt of LNG from Gazprom per annum. This comes a few weeks after India’s first LNG cargo from the US 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.

    GAIL plans to buy 0.5 mt or eight cargoes of LNG from Russia’s Gazprom in 2018/19. GAIL renegotiated the terms of a long-term 2.5 mtpa LNG purchase deal with Russia’s Gazprom in January. This was the third such renegotiation by India with LNG suppliers to make the imported fuel more affordable, using its position as one of the world’s biggest energy consumers to strike better bargains for its companies. India has also renegotiated long-term LNG deals with Qatar’s RasGas and Exxon Mobil Corp as spot prices declined substantially amid a supply glut that turned trading of the seaborne gas into a buyers’ market. The much-delayed Kochi-Mangalore natural gas pipeline, which can open up a substantial latent demand in South India, will be ready by November. GAIL is working on implementing a national gas grid that is aimed at connecting the under-served eastern part of the country to the rest of the nation.

    GAIL said it will bring to India only half of the LNG it has contracted from the US as it has either swapped or sold the remaining volumes. GAIL has a deal to buy 3.5 mtpa of LNG for 20 years from Cheniere Energy of the US and has also booked capacity for another 2.3 mt at Dominion Energy's Cove Point liquefaction plant. The first US cargo arrived at the firm's Dabhol LNG import terminal in Maharashtra on March 30. Also, the firm's renegotiated LNG import deal with Russian supplier Gazprom will kick-in from May, with volumes gradually ramping up to fully contracted quantity of 2.5 mt in 5-6 year, GAIL said. GAIL had sold 81-82 mmscmd of gas in 2017-18, which would rise to 91-92 mmscmd because of arrival of US and Russian volumes. The company has swapped half of the 5.8 mtpa of US LNG in a bid to rejig supply portfolio in line with domestic demand. GAIL sold 3.5 mt of the US LNG via time swaps, destination swaps and shipping optimisation.

    India and the US decided to set up a joint task force on natural gas with a view to promote strategic and economic interest of the two nations. As a first step in realising the full potential of the Strategic Energy Partnership, the US and India are pleased to announce the US-India Natural Gas Task Force. The task force provides a team of US and Indian industry experts with a mandate to propose, develop, and convey, innovative policy recommendations to the Government of India in support of its vision for natural gas in the economy of India. The work of the task force is expected to advance the strategic and economic interests of both the US and India.

    India plans to set up a natural gas trading exchange as early as October this year to prepare for a surge in supply from India’s east coast and a slew of LNG terminals. India currently imports LNG at global rates LNG-AS of around $7.50/mmBtu while the government sets domestic gas prices at $3.06/mmBtu. India plans to increase the share of gas in India’s energy mix to 15 percent by 2030 from below 6.5 percent now. India currently produces close to 90 mmscmd of gas and imports another 70 mmscmd as LNG, according to government figures for 2016-17. In the next three to five years, as natural gas projects from India’s ONGC and a partnership involving BP and RIL ramp up, India’s domestic gas output will be in the range of 140 mmscmd. India’s industrial gas consumers such as power plants and fertiliser makers were disappointed in 2010 after promised gas output from the east coast’s Krishna-Godavari basin fell short of expectations. Many facilities that were built in anticipation of more gas production remain stranded without adequate fuel. The RIL-BP partnership plans to develop three assets off India’s east coast, and ONGC is developing another gas field in the same region.

    The PNGRB has sought bids to hire a consultant to help develop a regulatory framework for operationalising the gas trading / exchange hub. Currently, the government fixes the price of the bulk of domestically produced natural gas. The rate, arrived at using price prevalent in gas-surplus nations of US, Canada, UK, and Russia, is $3.06/mmBtu for six month period beginning April 1. In comparison, the cost of imported LNG into India is around $7.5/mmBtu. PNGRB said the oil ministry has asked it to initiate steps for framing of necessary regulatory framework to enable the establishment and operation of a Gas Trading Hub / Exchange. PNGRB would visit USA, UK, and Australia, where the gas trading hub is successfully operating, to decide if there is a need to amend existing regulations. The target for launch of the gas trading hub has been set for October. A hub is used as a central pricing point for a network that could aid better price discovery for domestic as well as imported gas. It isn't clear if the government would abandon fixing the gas price and allow the rates to be discovered on the hub. India is not only country launching trading hub. China plans to launch a natural gas trading hub in Chongqing this year.

    APSEZ said it has entered into a pact with IOC to provide LNG regasification services at its import terminal in Odisha. As per the contract, IOC has booked 3 mtpa regasification capacity spread over 20 years, APSEZ said. IOC plans to supply gas to its refineries in Paradip in Odisha and Haldia in West Bengal. The foundation stone of the project was laid in July 2017 and construction has commenced by infrastructure firm Larsen & Toubro, winning the contract to set up the tankages for gas storage. The terminal is expected to be commissioned during the second half of 2021. APSEZ said the proposed Dhamra LNG import terminal is designed for an initial capacity of 5 mtpa, expandable up to 10 mtpa.

    Opportunities are poised to open for private oil and gas producers in CBM extraction. CIL is likely to float global tenders to appoint service providers on this project. Sources in CIL suggested as the Centre had cleared the grey area which previously stalled CBM extraction by the coal behemoth, it will be on the lookout for service providers which can extract the gas from its mines for commercial sale. However, the tender for this selection will depend on the Centre’s policy decision. In 2015, the Centre had approved CIL exploring and exploiting CBM but required it to apply to the petroleum and natural gas ministry. However, the government amended the rule, permitting CIL to explore and harvest CBM without a licence or grant from the petroleum and natural gas ministry.

    GAIL said the first phase of the 2,655 km gas pipeline from Jagdishpur in Uttar Pradesh to West Bengal and Odisha will be completed before the scheduled target of December 2018. The company said it has placed pipe-laying order for 530 km between Bokaro in Jharkhand and Angul in Odisha, worth ₹ 7.80 billion. The prestigious 2,655 km long Jagdishpur-Haldia & Bokaro-Dhamra Natural Gas Pipeline project, also known as the 'Pradhan Mantri Urja Ganga' project. The project will usher in industrial development in eastern part of India by supplying environmentally clean natural gas to fertilizer and power plant, refineries, steel plants and other industries. It will also provide clean energy to households and transportation in the cities enroute the pipeline. The city gas network laying activity in Varanasi, Bhubaneswar and Cuttack has already commenced. Project activities will start on ground in other cities namely Patna, Ranchi and Jamshedpur by next month, GAIL said. GAIL said the project activities are progressing as per schedule and major contracts for the project have been awarded. GAIL has achieved its annual targeted total capital outlay and has expended around ₹ 40 billion during the fiscal year ending March 2018. The company will be spending its targeted capital outlay of ₹ 64 billion in the current fiscal largely for the 4,000 km of pipeline and city gas projects it is presently executing.

    IGL expects its sales volume to industrial and commercial clients rise 20% in 2018-19, after experiencing a similar gain last fiscal year, following a ban on using polluting pet coke and fuel oil in the National Capital Region on rising green concerns. Delhi has been one of the most polluted cities in the world for years now. With smog-filled winter sky becoming an annual feature, the demand for dramatic steps to cut pollution has grown louder with years. IGL plans to use the restrictions on polluting fuel as an opportunity to add as many as 2,000 industrial and commercial customers in 2018-19 to its current base of 3,000. Since most of these clients are likely to be smaller, the sales volume addition is expected to be just 20% over the current volume of 500,000 standard cubic meters a day. IGL is also planning to rapidly expand sales of CNG, used by cars and buses. To tide over the scarcity of land in cities for setting up fuel stations, IGL has begun appointing dealers to set up CNG stations – so far the company owned and operated all its filling stations. Two dealer-owned, dealer-operated CNG stations have been launched while a dozen more are on the way, IGL said. IGL expanded its piped gas connection to households by a record 150,000 in 2017-18. IGL is waiting for permission to take piped gas to homes in Delhi’s cantonment area, which has 30,000 houses of defence personnel and an equal number of civilian homes. For its expansion, IGL is focusing on congested colonies, which had escaped attention earlier but are now being targeted with enhanced security features.

    BPCL is planning to hive off its gas business into a separate wholly-owned subsidiary. BPCL, which is present in various segments of natural gas sales and supply, has been strengthening its gas business over the past few years. By hiving off this business as a separate subsidiary, the company intends to sharpen its focus and bring all natural gas-related businesses into one fold. The new unit may be christened Bharat Petroleum Natural Gas Company. BPCL is a co-promoter of Petronet LNG Ltd, along with IOC, ONGC and GAIL. Over the next five years, BPCL has set itself an investment target of ₹ 1 trillion to be spent on all its expansion activities including marketing, refining and strengthening of the gas business. BPCL has been importing LNG and supplying it to customers in the fertilizer, power, city gas distribution, steel and other industries across the country. Its own LNG imports help BPCL mark its presence in the LNG market, apart from being economical for use at its refineries. BPCL also markets LNG by tank trucks from Dahej to some customers such as General Motors, Mahindra & Mahindra Ltd, Modern Insulators Ltd and Tetrapak etc.

    PNGRB released new rules on bidding for obtaining a licence to retail CNG and PNG in cities. Under the fresh parameters, future auctions would be conducted by asking companies to quote the number of CNG stations to be set up, while for PNG it would be the number of domestic cooking gas connections to be given in the first eight years of operation. Bidders quoting higher numbers of these would be given more marks. The previous criteria for winning a licence - the tariff charge for transporting CNG and or PNG within the city - has been given just 10 percent weightage under the new regulations. The number of CNG stations and PNG connections to be released command 70 percent of the bidding weightage. Bidders will also be required to quote the length of pipeline they would lay on winning the licence. Entities having experience of at least one year in operation and maintenance of a CGD network and having sufficient technically qualified personnel would be eligible for bidding, as per the terms of the bid. Companies with net worth of no less than ₹ 1.5 billion can bid for cities with population of 5 million and above, while ₹ 1 billion is the minimum requirement for cities with population of 2-5 million. A company with a ₹ 50 million net worth firm is eligible to bid for cities that have less than 1 million population. According to PNGRB, the successful CGD licence bidder would have to enter into a firm natural gas supply agreement with a natural gas producer or marketer in a transparent manner on the arm's length principle within 180 days of winning a license. The winning company would have eight years of marketing exclusivity in the given city, which is an increase from the current 5-year licences. So far, the petroleum regulator has undertaken eight rounds of bidding. While the last few rounds of CGD have drew lukewarm response, the fourth round was scrapped altogether.

    The oil ministry has asked sector regulator PNGRB to look at unbundling of companies like GAIL to resolve the conflict of interest in being both the transporter and marketer of natural gas. The reference to the PNGRB follows a revival of a plan to split GAIL by hiving off gas marketing business into a separate firm, leaving just pipeline transportation with GAIL. Over a period of time more players have come into gas marketing. Gujarat government entity GSPC is a major player in gas marketing and also in gas transportation. The Government had in 2006 issued the Policy for Development of Natural Gas Pipelines and City for Local Natural Gas Distribution Networks which envisaged that in the long run and with the maturing of gas markets, the authorised entities will have transportation of natural gas as their sole business activity and will not have any business interest in the gas marketing or city or local gas distribution networks. GAIL had in the past resisted the split on grounds that its gas marketing and transmission businesses operate at arm’s length, and hence do not need to be separated. GAIL's marketing business formed 71 percent of its 2016 -17 total sales, and 25 percent pre-tax profit. The government has 54.89 percent stake in GAIL.

    Rest of the World

    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.

    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 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.

    Russian said it was ready to consider using Ukraine as a gas transit route after 2020. Germany said that a gas pipeline planned to run from Russia to Germany through the Baltic Sea could not go ahead without clarity on Ukraine’s role as a transit route for gas, appearing to harden her stance on the scheme. The Russian energy ministry said that Novak and Sefcovic had spoken by telephone and discussed the delivery of Russian gas to European markets. ExxonMobil Corp expects to restart production from its Papua New Guinea LNG project at the start of May after it was shut following an earthquake in February, ExxonMobil LNG Vice President Emma Cochrane said. The $19 billion LNG facility, opened in 2014 in a remote location in one of Asia’s poorest and most politically troubled countries, has been closed since the powerful 7.5 magnitude earthquake. The project is considered one of the world’s best-performing LNG operations, despite the challenge of drilling for gas and building a plant and pipeline in the remote Papua New Guinea jungle. Australia’s Oil Search and Santos are Exxon’s main partners in the project. The LNG export terminal may not be able to produce at full capacity at first and will likely ramp up gradually, Cochrane said. Cochrane said the company has recertified the reserves in its P’nyang field in Papua New Guinea, and the reserves are higher than it previously thought. Exxon is likely to take a final investment decision this year on expanding its Golden Pass LNG terminal in Texas - a joint venture between Qatar Petroleum, ExxonMobil and ConocoPhillips, Cochrane said.

    One of Russia’s European neighbours is fully embracing US 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.

    CNOOC sold cargoes of 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.

    China’s shale gas production will likely reach 17 bcm in 2020, nearly double the 2017 level, as local oil companies make big progress with drilling technology and cost cutting, consultancy Wood Mackenzie said. Nearly 700 new wells will come on-stream between 2018 and 2020 at three key projects - Sinopec’s Fuling, and PetroChina’s Changning-Weiyuan and Zhaotong - all located in the country’s southwest, and at a total cost of $5.5 billion, Woodmac estimated. The forecast 17 bcm of output in 2020 falls short of Beijing’s goal of 30 bcm, which was slashed by more than half from the government’s initial target set in 2012. That means the world’s No.3 gas user will need to keep its imports of LNG at elevated levels. Woodmac has separately forecast China’s LNG imports will increase by a quarter to nearly 49 mt this year, from record highs in 2017. China produced 9 bcm of shale gas last year, or 6 percent of its total gas output. Despite estimates that China is home to the world’s largest recoverable shale gas resource, its shale formations tend to be deeper, more fractured and located in densely populated mountainous terrains, leading to higher costs and complications in drilling. Shell, which pledged billions of dollars of investment in China’s shale sector, pulled out of shale operations in Sichuan several years ago.

    China’s Sinopec group, parent of Sinopec Corp, aims to more than double its receiving capacity of LNG over the next six years and lift domestic shale gas production by two thirds by 2020. The plans are part of the state energy firm’s efforts for clean fuel production to account for half of its total energy supply by 2023. Sinopec will have 60 bcm of natural gas supply capacity, which includes both imports and domestic production, by 2023, the group said. It produced 27 bcm of gas in 2017. The group plans to add new receiving facilities for imported LNG along China’s east coast to a total of 26 mt annually by 2023, up from the current 9 mt including the recently launched terminal in Tianjin.

    China has cut resources tax on shale gas production by 30 percent from April 1, the finance ministry said, as the world’s largest energy consumer aims to lift domestic gas supplies. Resources tax on shale production was reduced to 4.2 percent from the previous 6 percent, according to the ministry. The new tax rate will be effective for three years, the ministry said.

    US natural gas prices could rise in 2018 after utilities pulled the second biggest amount of gas from storage on record over the winter, even though the season was slightly warmer than normal. That left total stockpiles about 20 percent below usual at the end of the heating season on March 31, and will require companies to add 16 percent more gas than usual into storage this summer just to get inventories back to normal levels before next winter. Some analysts think the market is putting too much weight on rising production to refill inventories this year, and is not worried enough about a projected increase in domestic demand and exports. Prices for gas at the Henry Hub benchmark in Louisiana have averaged less than $3/mmBtu since 2015, versus more than $5 over the prior 10 years, and are expected to remain below $3 through at least 2024 based on current futures trading on the New York Mercantile Exchange. US dry gas production is projected to rise to an all-time high of 2.3 bcm per day in 2018, but US consumption is also expected to hit an all-time high of 2.2 bcm per day in 2018. With exports rising to record highs as well, it does not leave a lot of extra gas to go into storage.

    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 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.

    Japan’s Inpex Corp and its partners have bought a cargo of 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.

    Japan’s biggest city gas seller Tokyo Gas Co expects that contracts for LNG cargoes with destination flexibility will spread from the West and Japan to be a common thing worldwide, Tokyo Gas President Takashi Uchida said. Japan’s Fair Trade Commission last June ruled that destination restrictions that prevent the reselling of contracted LNG cargoes breach competition rules. The decision is set to shake up the Asian market for the fuel in the same way as in Europe. LNG exports from the US are also free from destination restrictions. In Japan, only Shizuoka Gas has the capability to re-export fuel by re-loading LNG onto ships. Tokyo Gas and JERA, the world’s top LNG buyer, separately renewed their expiring contracts for the fuel from Malaysia, after decades of jointly procuring gas from the country, due to a difference in procurement strategy, Uchida said. Thanks to the buyer’s market, Tokyo Gas, Japan’s second-biggest buyer of LNG, renewed long-term contract for LNG from Malaysia with destination flexibility “at good terms” last month, he said. Tokyo Gas would increase its ratio of short-term and spot LNG cargoes to long-term contracts out of a total of about 14 million tonnes it buys annually. However, the company would not make a drastic cut in long-term LNG volumes of 50 percent by 2030 as that would be too risky, he said. Tokyo Gas is expected to take the first delivery of LNG from the Cove Point project in the US. state of Maryland some time in April to June. The company has a contract to buy 1.4 mtpa of LNG for 20 years from Cove Point, its first procurement of US shale gas. The company has been arranging with Centrica to exchange a part of its Cove Point offtake with LNG that the British firm procures in Asia Pacific markets, under a location swap deal, to cut transportation costs, but the exact volumes have not been fixed, Uchida said.

    The long-delayed Browse gas project off Western Australia has gained key support, with partners in the North West Shelf 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.

    Chevron Corp will proceed with the second stage of its giant Gorgon LNG export plant off the northwest coast of Western Australia, the company said. Chevron and its joint venture partners plan to sink 11 new wells in the Gorgon and Jansz-Io fields and build offshore pipelines and subsea structures to pipe the gas to the nearby 15.6 mtpa LNG plant on Barrow Island. The $54 billion Gorgon project came on stream in March 2016 but suffered numerous unplanned shutdowns in its early stages. Gorgon Stage Two is part of the original Gorgon development plan which includes the expansion of the subsea gas network required to maintain long-term natural gas supply to Barrow Island. Chevron leads the development of the Wheatstone natural gas project, manages a one-sixth interest in the North West Shelf Venture and operates Australia’s largest onshore oilfield on Barrow Island.

    BP plc announced that, together with its partner Oman Oil Company Exploration & Production, it has approved the development of Ghazeer, the second phase of the giant Khazzan gas field in Oman. The final investment decision for Ghazeer follows the successful start-up of Khazzan’s first phase of development in September 2017. This project, which started production ahead of schedule and under budget, is now producing at design capacity of around 1 billion cubic feet of gas per day and around 35,000 barrels per day of condensate, BP revealed. Ghazeer is expected to come onstream in 2021 and deliver an additional 28.3 million cubic meters of gas and over 15,000 barrels of condensate per day.

    Finland has approved the construction of the Nord Stream 2 gas pipeline through Finland’s economic zone, the Finnish government and Russian gas exporter Gazprom said. The pipeline between Russia and Germany, which would run for around 375 km across Finland’s economic zone through the Baltic Sea, still requires a construction permit from local Finnish authorities. Nord Stream 2, planned to run from Russia across the bed of the Baltic Sea to Germany, would double the existing Nord Stream pipeline’s current annual capacity of 55 bcm. Eastern European and Baltic states fear the pipeline could increase reliance on Russian gas and undermine Ukraine’s role as a gas transit route, but Germany and other beneficiaries in northern Europe back the project. Germany has approved the pipeline and the project is currently collecting permits from Russia, Sweden and Denmark.

    South Korea expects its natural gas demand to rise to over 40 mt in 2031, driven by higher household and industrial consumption of the fuel, the energy ministry said. The world’s third-largest LNG importer had previously forecast natural gas demand falling to 34.65 mt of LNG equivalent in 2029 from 36.49 mt in 2014 due to lower power generation demand. The increased demand forecast of 40.49 mt of LNG in 2031 from estimated 36.46 mt in 2018 comes as South Korea shifts away from coal and nuclear fuel. Reflecting the country’s growing gas demand over the next 13 years, South Korea also plans to spend about 5.8 trillion Korean won ($5.48 billion) by 2031 on expanding its gas supply infrastructure including storage tanks and pipelines. Household and industrial consumption of LNG is expected to grow by 1.24 percent annually to 23.40 mt in 2031 from 19.94 mt in 2018. For power generation, it is expected to increase to 17.09 mt of LNG in 2031 from 16.52 mt in 2018. To ensure gas supply security, South Korea also seeks to diversify gas supplies and have more flexible LNG contracts that do not include restrictive destination clauses or take-or-pay terms. Most of the long-term LNG contracts include the destination clauses that prevent buyers from reselling excess cargoes to other markets, and Asian LNG buyers have been vocal about the removal of the restrictive clauses. South Korea imports most of its LNG through the country’s sole LNG wholesaler Korea Gas Corp. Last year, South Korea imported 37.55 mt of LNG, mainly from Qatar and Australia.


    LNG: liquefied natural gas, mt: million tonnes, US: United States, mtpa: million tonnes per annum, mmscmd: million metric standard cubic meter per day, mmBtu: million metric British thermal units, RIL: Reliance Industries Ltd, PNGRB: Petroleum and Natural Gas Regulatory Board, UK: United Kingdom, APSEZ: Adani Ports and Special Economic Zone, IOC: Indian Oil Corp, CBM: coal-bed methane, CIL: Coal India Ltd, km: kilometre, IGL: Indraprastha Gas Ltd, CNG: compressed natural gas, BPCL: Bharat Petroleum Corp Ltd, ONGC: Oil and Natural Gas Corp, PNG: piped natural gas, CGD: city gas distribution, GSPC: Gujarat State Petroleum Corp, bcm: billion cubic meters, CNOOC: China National Offshore Oil Corp


    NATIONAL: OIL

    BPCL to shut Bina refinery from mid-September for 45 days

    1 May. Bharat Petroleum Corp Ltd (BPCL) will shut its 120,000 barrels per day (bpd) joint venture (JV) Bina refinery from mid-September for 45 days to expand its capacity by 30 percent, its head of refineries R Ramachandran  said. During the shutdown, the company will carry out modifications at various units to raise capacity of the plant to 156,000 bpd, Ramachandran said. The Bina refinery is operated by Bharat Oman Refineries Ltd (BORL), a 50-50 JV between Oman Oil Company and BPCL.

    Source: Reuters

    'Retrospective' amendment to Rajasthan PSC puts Cairn in a spot

    1 May. A 'retrospective' amendment to the contract for the prolific Rajasthan Oil Block has put its operator Cairn India in a spot, as it has to shell out more to the government to retain it for another 10 years. Cairn India's 25-year contract for exploration and production of Oil And Gas from Barmer block RJ-ON-90/1 is due for renewal on May 14, 2020, but it has to, as per a new policy, apply for a 10-year extension within this month. The government had in March last year approved a new policy for extension of PSCs (Production Sharing Contracts) that provided for an extension beyond the initial 25-year contract period only if companies operating the fields agree to increase the state's share of profit by 10 percent. Oil and Natural Gas Corp (ONGC), which as a government nominee picked up 30 percent stake in the Rajasthan block in 1995, also was of the opinion that PSC provides for an extension on same terms.

    Source: Business Standard

    IOC to lay ₹ 10 bn pipeline to evacuate products from Paradip refinery

    30 April. The IOC (India Oil Corp) board has given the first stage approval for the project, which is likely to be developed in two stages. In the first stage, the detailed engineering will be done. The pipeline project will see an investment of ₹ 10.81 billion and out of it  ₹ 7.22 billion will be invested in Odisha. IOC's 15 million tonnes per annum (mtpa) capacity refinery at Paradip is spread over an area of 3,345 acres with an estimated cost of ₹ 345.55 billion. The refinery can process 100 percent high sulphur and heavy crude oil to produce various petroleum products like petrol and diesel of BS-IV quality, kerosene, aviation turbine fuel, propylene, sulphur and petroleum coke. It is also designed to produce Euro-V premium quality motor spirit and other green auto fuel variants for export. Odisha is set to become the first state in eastern India to have all the pipelines in the hydrocarbon chain ranging from crude oil to petroleum products, liquefied petroleum gas (LPG) and natural gas. On the transportation of LPG, IOC is set to commission its proposed Paradip-Durgapur LPG pipeline latest by August this year. Since 2009, IOC is also running the Paradip — Haldia crude oil pipeline system to transport oil from Paradip to Haldia and Barauni refineries.

    Source: Business Standard

    Government not considering excise duty cut on petrol, diesel for now: DEA Secretary

    30 April. The government is not considering cutting excise duty on petrol and diesel yet as rates have not touched levels that could trigger such an action, Department of Economic Affairs (DEA) Secretary Subhash Chandra Garg said. State oil firms have not revised petrol and diesel price for almost a week now. This after petrol price hit a 55-month high of₹ 74.63 a litre and diesel rates climbed to a record high of ₹ 65.93. Garg said oil prices can impact the government's fiscal maths if they result in a spike in rates of domestic cooking gas or LPG (liquefied petroleum gas) - the only commodity that is subsidised now. Every rupee cut in excise duty on petrol and diesel will result in a revenue loss of ₹ 130 bn. 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. Petrol in the national capital costs ₹ 74.63 a litre, the highest since September 14, 2013, when rates had hit ₹ 76.06. Diesel price at ₹ 65.93 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 (Value Added Tax), but just four of them - Maharashtra, Gujarat, Madhya Pradesh and Himachal Pradesh - reduced rates while others including BJP (Bharatiya Janata Party)-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 trillion in 2016-17 from ₹ 990 bn in 2014-15.

    Source: Business Standard

    In a first, Gujarat to offer PNG subsidy

    30 April. Gujarat is set to emerge as the first state to offer subsidized piped natural gas (PNG) to poor households. If successful, the scheme that promotes cleaner cooking fuel in Prime Minister Narendra Modi’s home state will be rolled out nationally. Gujarat, which has an edge over other states in terms of PNG connections, thanks to its well-developed pipeline infrastructure and easy availability of gas, will launch the new PNG/LPG (liquefied petroleum gas) Sahay Yojana—an extension to the Ujjwala Yojana. Chief minister Vijay Rupani will unveil the new scheme at a function in Bharuch. The scheme is meant for below poverty line households. The scheme for select urban areas will supplement Ujjwala for BPL (below poverty line)-AAY (Antyodaya Anna Yojana) households not covered under Ujjwala to help supply households with clean fuel. As per the scheme, the government will pay ₹ 1,600 as one-time subsidy per connection and ₹ 1,725 as loan to customers opting for a new PNG connection. As a result, a beneficiary will have to pay only ₹ 118 to get a new connection and a refundable security deposit of ₹ 50 per month for a period of 100 months. The state has a good network of gas pipelines which makes it easy for the scheme to cover PNG connected households from Vapi to Dwarka and from Bhuj to Ahmedabad. The state has a pipeline network covering over 25,000 km for city gas distribution. The centre had in 2015 announced an ambitious target of connecting 10 million households with piped gas in the next four years by 2019. On 30 June 2015, the total number of PNG connected households stood at 2.93 million.

    Source: Livemint

    India will network with Asia's major oil buyers to bargain with sellers: Oil Minister

    26 April. India will work to create a network with other major oil buyers in Asia, such as China, South Korea and Japan, to negotiate better terms with sellers, Oil Minister Dharmendra Pradhan said. Crude oil imports by China, India, Japan and South Korea alone make up more than 20 percent of global demand. During the International Energy Forum (IEF) in New Delhi, Pradhan held a meeting with China’s CNPC and expressed hopes that the two countries, along with other Asian major importers, could work together in future to have “responsible pricing” for the region while sourcing crude oil from oil producers. In a speech at the IEF, India’s Prime Minister Narendra Modi also called for a rationalized price for both producers and consumers.

    Source: Reuters


    NATIONAL: GAS

    India seeks Japan's help to build LNG facilities

    1 May. India asked Japan to help build infrastructure needed to boost the usage of liquefied natural gas (LNG) in India and elsewhere in Asia, Oil Minister Dharmendra Pradhan said after a meeting with Japan’s Trade Minister Hiroshige Seko. India wants to increase the share of gas, which is a cleaner fuel than oil, to 15 percent of its energy usage by 2030 from 6.2 percent currently. Seko’s visit to New Delhi has come at a time when India is preparing to create a network with other major oil consumers in Asia, such as China, South Korea and Japan, to negotiate better terms with sellers. The world’s biggest LNG buyers, all in Asia, are increasingly clubbing together to secure more flexible supply contracts in a move that shifts power to importers from producers in an oversupplied market. The world’s three biggest LNG buyers - China, Japan and South Korea - joined together last year in March to secure flexible supply contracts. India was not part of that group. However, in October the Indian cabinet approved a plan allowing New Delhi to work with Japan to make long-term LNG import deals more affordable for its consumers.

    Source: Reuters

    Maharashtra CM inaugurates new LNG terminal in Ratnagiri

    1 May. Maharashtra Chief Minister (CM) Devendra Fadnavis inaugurated India’s first Floating Storage Re-gasification Unit (FSRU)-based terminal at JSW Jaigarh Port in Ratnagiri district. The LNG terminal will provide clean, safe and affordable natural gas. H-Energy Gateway Private Ltd's LNG Terminal is also expected to greatly benefit the state by providing clean fuel for transportation and domestic use. H-Energy Gateway Pvt Ltd will commence commercial operations by the end of the financial year.

    Source: The Times of India

    India aims to split GAIL within a year to open up gas sector

    27 April. India plans to split GAIL (India) Ltd by March next year to create two companies: one marketing gas, and another operating pipelines that can be used by consumers who buy direct from producers, D K Sarraf, Chairman of Petroleum and Natural Gas Regulatory Board (PNGRB) said. GAIL is the country’s biggest gas marketing and trading firm and owns most of the nation’s pipelines, giving it a stranglehold on the market for the fuel. By splitting GAIL, the regulator of India’s oil and gas sector hopes to increase the number of gas consumers and attract the billions of dollars needed to expand the pipeline network and build more liquefied natural gas (LNG) terminals. GAIL already keeps separate accounts for its gas pipeline and marketing businesses, making it easier to split them into two entities before a change of ownership, he said. Sarraf did not say which business GAIL would retain. Oil Minister Dharmendra Pradhan in January said the company should focus on laying pipelines, suggesting it is the marketing side that would be hived off. By unbundling GAIL and opening the sector, the government hopes to increase gas use and meet its objective of raising the share of a cleaner, cheaper fuel as a part of the energy mix to 15 percent, from 6.2 percent, in the next 12 years. The gas regulator hopes by July, however, to draft norms for allowing end-users to bid for using LNG terminals to import gas. India’s gas demand is constrained by low domestic output, a small number of LNG terminals - just four - and a pipeline network that does not reach enough customers. Sarraf estimated an investment of nearly $20 billion would be needed over the next several years for laying pipelines. Only the western state of Gujarat has an extensive city gas distribution network, though some other major cities, including New Delhi and Mumbai have been hooked up to gas.

    Source: Reuters

    Essar to invest ₹ 9 bn in CBM block

    26 April. Ruia family-owned Essar Oil and Gas will invest ₹ 900 crore in drilling 150 more wells on its Raniganj CBM (coal-bed methane) block in West Bengal to more than double gas output to 2.3 million standard cubic metres per day by 2021, its Managing Director and Chief Executive Officer (CEO) Vilas Tawde said. Essar Oil and Gas Exploration and Production Ltd (EOGEPL) has so far drilled 348 wells on the blocks and is producing 1 mmscmd of gas from coal seams. The company is selling entire production of CBM from the block to state-owned GAIL (India) Ltd. GAIL in February outbid Matix Fertilizers and Chemicals Ltd, Graphite India Ltd and Positron Energy Pvt Ltd to buy entire output from Raniganj. CBM is a natural gas stored or absorbed in coal seams and contains 90-95 percent methane. According to the Directorate General of Hydrocarbons, India has the fifth largest proven coal reserves in the world and, therefore, holds significant prospects for exploration and exploitation of CBM. Raniganj East block is India's most prolific CBM block, holding 1 trillion cubic feet of recoverable reserves. Its CBM assets include five blocks, holding an estimated 10 trillion cubic feet of gas reserves spread over 2,700 square kilometres across West Bengal, Jharkhand, Chhattisgarh, Madhya Pradesh and Odisha. Raniganj East in West Bengal is the only block operational till now. Other four blocks are Rajmahal in Jharkhand, Talcher and Ib valley in Odisha and Sohagpur in Madhya Pradesh. Tawde said the company will begin drilling on its Sohagpur CBM block in Madhya Pradesh post monsoon. In all 25 crore holes and three test wells would be drilled.

    Source: Business Standard

    BPCL seeks LNG cargoes for July 2018-March 2019

    25 April. Bharat Petroleum Corp Ltd (BPCL) has issued a tender seeking four liquefied natural gas (LNG) cargoes for July 2018 to March 2019 delivery. The cargoes are for delivery in July, September, December and March into the Dahej terminal. The tender closes on April 26 with offers to remain valid until May 10.

    Source: Reuters


    NATIONAL: COAL

    CIL seeks stakeholders' views on new pricing policy

    30 April. Coal India Ltd (CIL) has sought suggestions from stakeholders on issues related to the proposed new pricing policy for coal which will be linked strictly to quality. During the meeting, CIL had requested the participants from sectors like cement, steel and power for a detailed list of difficulties that they foresee in implementation of gross calorific value (GCV)-based billing system and suggestions for resolving the issues. CIL on April 1 said it is working out the modalities to raise coal sales bills on GCV basis and it will soon intimate the implementation date. In January this year, CIL had informed that sales bills will be raised on GCV basis with effect from April 1, 2018. At present prices are computed based on grade policy. The new mechanism will compute prices on every unit of GCV of coal, doing away with the grade policy at present.

    Source: Business Standard


    NATIONAL: POWER

    71.6k km power cables to be replaced across Bihar in 3 yrs

    1 May. Work on replacement of 71,672 kilometre (km) damaged power cables that transmit electricity across 38 districts of the state is expected to begin by the end of May. Last year, the state government had sanctioned ₹ 2,827.51 crore for the project that is likely to be completed in three years. Tender for the project has already been awarded to various agencies for working in different circles and zones of the state. The power cables usually get damaged due to continuous overloading which means that the demand is increasing.

    Source: The Times of India

    State Bank of India plans recast of stressed power assets

    30 April. State Bank of India (SBI) is preparing a major debt restructuring and takeover plan for stressed power assets, to improve valuations and attract new owners with incentives and a quick resolution process. The country’s largest lender has called all power plant lenders in Mumbai for discussing a proposal that has a direct bearing on loans adding up to ₹ 1.77 lakh crore in 75,000 MW stressed capacity. It has also asked the power ministry to waive transmission penalties and grant early regulatory approvals to help new promoters. The bank proposes to get debt of the stressed assets rated by credit rating agencies. The projects will be offered to the National Investment Fund (NIF). The fund will invite bidders with a base price. Otherwise, NIF will take over the projects and hand them to companies such as NTPC or private firms for operations on contract basis. Power sector financiers Power Finance Corp had also mooted a proposal to float joint venture with companies like Rural Electrification Corp, NTPC Ltd and BHEL to acquire stressed assets. The proposal has however been shelved due to lack of concurrence and stringent RBI (Reserve Bank of India) rules. Currently, more than 75,000 MW generating assets, either operating or under construction are severely stressed due to various reasons like lower availability of coal, lack of power purchase agreements and delays in regulatory clearances. The government is reviewing 34 stressed thermal power projects with an estimated debt of about ₹ 1.77 lakh crore.

    Source: The Economic Times

    All villages in India electrified: PM Modi

    30 April. More than seven decades after independence, India has achieved electrification of all its villages after electricity reached Leisang village in Manipur. The target was achieved 12 days ahead of the deadline set by Prime Minister (PM) Narendra Modi. As many as 18,452 villages were without electricity when the BJP (Bharatiya Janata Party)-led government came to power in May 2014. All of the country's 5,97,464 census villages have been electrified. Electrified means the village is connected to power grid. It essentially does not mean that all its habitants have access to electricity. According to government definition, a village is considered electrified if it has the basic electrical infrastructure and 10 percent of its households and public places have power. Modi had in his Independence Day speech in 2015, spoken of electrifying all villages within 1,000 days. The task, however, took 988 days to complete as an average of 16 and a half villages were electrified every day. When the BJP-led government launched its version of the village electrification scheme -- the ₹ 76,000 crore Deendayal Upadhyaya Gram Jyoti Yojana (DDUGJY) --- there were an estimated 18,452 unelectrified villages. An additional 1,275 villages were added to the list subsequently. About 3.14 crore rural households, or 17 percent of total 17.99 crore rural households, still do not have any access to electricity. The highest number of them are in Bihar, Uttar Pradesh, Assam, Jharkhand and Odisha. To take electricity to all households by end 2018, the government has launched the Pradhan Mantri Sahaj Bijli Har Ghar Yojana or the Saubhagya scheme. Of the ₹ 16,320 crore needed for the task, ₹ 12,320 crore has already been provided in the Union Budget.

    Source: Business Standard

    Government launches Pilot Scheme for Procurement of Aggregate Power of 2.5 GW for 3 yrs

    30 April. The government kicks off a Pilot Scheme for Procurement of Aggregate Power of 2500 MW on competitive basis for 3 years under medium term i.e. from generators with commissioned projects but without Power Purchase Agreement. The power ministry had recently issued the model bid documents, model PAPP and PPSA on 6th April, 2018. The Guidelines for the said scheme were issued on 10th April, 2018. PFC Consulting Ltd has been appointed as Nodal Agency and PTC India Ltd as the Aggregator. PTC India would sign three-year (mid-term) Agreement for Procurement of Power with successful bidders and Power Supply Agreement with the distribution companies (discoms). Under the scheme a single entity can be allotted maximum capacity of 600 MW. The Scheme assures a minimum off-take of 55 percent of contracted capacity. The Tariff will be fixed for three years without any escalation. PFC Consulting Limited is in process of inviting the bids in first week of May, 2018 under the scheme. The bidding will be conducted on the DEEP e-Bidding Portal and with L1 matching for bucket filling without reverse auction. This scheme is expected to revive the power demand which has affected the generators not having Power Purchase Agreements.

    Source: Business Standard

    UP CM's claim of 18 hour power supply ‘blowin in the wind’ in Bijnor

    29 April. UP (Uttar Pradesh) CM (Chief Minister) Yogi Adityanath’s claim of 18-hour power supply ‘blowin in the wind’ in BijnorBijnor: During his recent visit to west UP districts of Amroha and Bulandshahr, CM repeatedly patted his own government’s back by stating that it provided 18-hour power supply to villages. In a cluster of 50 villages in Bijnor, where power is supplied through 50-year-old overhead cables, however, the claim is blowin’ in the wind, literally. These villages are located on the outskirts of the district and the cables pass through a lot of trees. As a result, villagers have to face hours-long outages almost daily. Electricity is supposed to be supplied for 22 hours in a day to urban areas and 18 hours a day to rural areas. However, such old and dilapidated power lines are proving a significant hurdle. According to data provided by circle office of Paschimanchal Vidyut Vitran Nigam Ltd (PVVNL), there over 4,500 kilometre (km) of weak and loose electric wires, which result in accidents causing, on an average, the death of nine people every year and disruption of power supply. Power supply to around 50 villages depends on the velocity of the wind. The two feeders — Kaziwala and Dharamnagari are connected with Bijnor city’s sub power station and from these, power is supplied to around 50 villages where consumers are facing lot of power cut especially at the time when the velocity of the wind increases. As summer season has set in and heat wave has also started lashing the plains, consumers of these villages are facing power cut problems. Villagers said, it will increase with the passage of time.

    Source: The Economic Times

    Up to 98 percent hike in Jharkhand's domestic electricity tariff

    28 April. Jharkhand has hiked the electricity tariff for domestic consumers up to 98 percent and slightly reduced the tariff for commercial industries, the State Regulatory Board said. As per the new rates, domestic consumers will have to pay ₹ 5.50 per unit for 200 units as compared to earlier ₹ 3 per unit, while the tariff has been reduced to ₹ 6 from the existing ₹ 6.80 per unit for the commercial industries. Chief Minister Raghubar Das said that new tariffs were being imposed to improve the state's power system. He said that the poor workers, farmers and small traders would be provided subsidy by the state government and an announcement in this regard would be made soon. In rural areas, the new tariff has been set at ₹ 4.40 from the existing 1.25 per unit. The farmers too have to foot more bills as ₹ 5 per unit will be charged for irrigation from existing 70 paise-₹ 1.25 per unit.

    Source: The Times of India

    Uttar Pradesh power utility to introduce Urja Mitra mobile application on 1 May

    27 April. In bid to provide updates regarding electricity supply to consumers, Uttar Pradesh Power Corp Ltd (UPPCL) will be introducing ‘urja mitra’ mobile application on May 1, 2018. The smartphone application will enable power consumers across the state to get information about their respective power distribution companies about power outages in their areas on their mobile.

    Source: The Economic Times

    Uttar Pradesh to replace 40 lakh conventional power meters with smart ones

    27 April. The Uttar Pradesh Power Corp Ltd (UPPCL) signed an MoU (Memorandum of Understanding) to replace 40 lakh conventional electricity meters with smart ones. This move of UPPCL, in association with Energy Efficiency Services Ltd (EESL), seeks to address the state’s power woes and ensure customer convenience. Implementing the smart meter programme is one of the operational performance parameters of the Centre’s UDAY (Ujwal Discom Assurance Yojana) scheme. UPPCL Chairman Alok Kumar said as per the MoU, EESL will invest ₹ 2,600 crore, enabling discoms to ₹ 8,000 crore in eight years.

    Source: The Financial Express


    NATIONAL: NON-FOSSIL FUELS/ CLIMATE CHANGE TRENDS

    India opting for renewables to cut fossil emissions

    1 May. India is making significant strides towards meeting climate commitments and is on course to surpass its Nationally Determined Contribution (NDC) targets before 2030, an independent study by the Council on Energy, Environment and Water (CEEW) said. Non-fossil fuel energy sources, largely due to the rapid growth of solar energy, will garner a share of at least 48 percent in India's electricity generation capacity by 2030, according to the study. However, India will need to bear the cost of integration which will increase as the share of solar and wind increases. India's economy and power generation sector has changed significantly since 2015. The change has been mainly driven by a rapid ramp-up of solar energy deployment, substantial decline in the costs of solar and wind-based electricity, and multiple developments in the end use-sectors. The study identifies the cost of integrating variable renewable energy into the electricity grid as a key element of India's energy transition to a low-carbon economy.

    Source: Business Standard

    TANGEDCO to add 3 GW solar and wind power

    1 May. Tamil Nadu Electricity Regulatory Commission (TNERC) has given the go ahead for TANGEDCO (Tamil Nadu Generation and Distribution Corp) to float tenders for adding new solar and wind power capacity in the state in 2018. Tenders for adding a total of 3000 MW of solar and wind power capacity will be floated soon, with the upper limit on tariff fixed at ₹ 3 per unit for solar and ₹ 2.65 per unit for wind. As per TNERC nod, the distribution company will be able to launch three separate consecutive tenders for grid-connected solar power capacity, of 500 MW each. The regulator has also given permission for an equal 1500 MW capacity in wind power in multiple phases and tenders, with the minimum capacity per project of at least 25 MW. The wind power tariff has also been on a downhill like solar, with the lower bid for wind power at ₹ 3 per unit last year, but this year fixed at ₹ 2.65 per unit. Tamil Nadu has a total wind capacity of 7,858 MW and more than 1000 MW is in the pipeline after the tenders were finalised last year.

    Source: The Times of India

    BHEL bags ₹ 5.3 bn order for hydro power project in Nepal

    1 May. Bharat Heavy Electricals Ltd (BHEL) said it has secured an order worth ₹ 536 crore for executing 900 MW hydro power project in Nepal. Once completed, this will be the largest hydro power project in the Himalayan Republic, BHEL said. The company bagged the contract for executing 900 MW Arun-3 hydroelectric project from SJVN Arun-3 Power Development Company (SAPDC), Nepal.

    Source: Business Standard

    Now, BSF posts at Indo-Pak border powered by solar energy

    30 April. The front posts of Border Security Force (BSF) in Sri Ganganagar district along the Indo-Pak border in Rajasthan have now been fitted with solar power equipment to help the jawans recharge their communication and safety gear. Gurgaon-based power back-up solutions company Su-Kam announced it has solarized each BSF post along the international border with a 1.5 kilowatt solar system comprising a solar inverter along with 500 watt solar panels and batteries which provide energy to power lights and 2-3 fans in each of these locations. The batteries store electricity to power these posts even after sunset and the jawans, who had to earlier travel 4-5 kilometer to their base camps to get their gadgets charged, can now recharge their wireless systems and mobile phones at their posts. Su-Kam claims it is India’s largest power solutions company and has presence in 90 countries globally. The firm manufactures power solutions products including solar products, UPS, batteries and customized solar solutions.

    Source: The Economic Times

    India should secure its development, remain committed to climate-related actions: Former AEC Chairman

    30 April. India should secure its development at the earliest and remain committed to the goals of climate change, former Atomic Energy Commission (AEC) Chairman Anil Kakodkar said. Terming management of climate change a globally shared responsibility, he said it could succeed only if development aspirations of countries remain "guaranteed". He said as per the draft national electricity plan, electricity required at the end of 2021-22 is projected at 1,600 billion units, after considering demands and management measures. Kakodkar said a significant part, around 20 percent, of domestic energy needs was met by the use of biomass, primarily for cooking in rural areas.

    Source: Business Standard

    MSEDCL floats tenders for buying solar power from new plants

    28 April. Maharashtra State Electricity Distribution Company Ltd (MSEDCL) has given a big boost to solar power in state by deciding to buy 2,000 MW for next 25 years. This power will come from new solar plants. At present, it buys 850 MW against the peak demand of about 20,000 MW. When additional solar power starts flowing in the state grid MSEDCL will meet more than its 10% requirement from solar. State Energy Minister Chandrashekhar Bawankule has announced all farm pumps would run on solar power by 2025. MSEDCL said that 1,000 MW solar power would be purchased at the rate of ₹ 3 per unit or less.

    Source: The Times of India

    Solar-powered cooking system at NCL canteen saves 55 percent LPG

    28 April. Scientists at the National Chemical Laboratory (NCL) have designed a solar-powered kitchen system for their own canteen, which caters to about 700 employees serving them breakfast, lunch and tea. A team from NCL’s Solar Thermal Lab had first conducted a study to understand the washing and cooking needs of the canteen before planning the project. The solar-powered kitchen — which cost about ₹ 6 lakh — has reduced electricity consumption of the canteen by 60-70% and LPG (liquefied petroleum gas) consumption by 55%. The scientists said this cooking system can also be used in other canteens, in schools to cook mid-day meals, at orphanages, old-age homes etc. The system delivers hot water in the range of 45°C-50°C to the washing section of the canteen and in the range of 85°C-95°C to the cooking section separately. The system uses evacuated tube collectors (ETC) and compound parabolic concentrator (CPC) solar technologies along with storage tanks, steam cooking vessels, electric boiler and piping.

    Source: The Economic Times

    SECI invites bids for 2 GW hybrid solar and wind projects

    27 April. Solar Energy Corp of India (SECI) is set to launch its second hybrid tender – for projects combining wind and solar energy – in May. It has issued an advertisement alerting developers that it will be inviting sealed bids for “1000 MW of wind power projects in existing solar power projects” as well as “1000 MW of solar power projects in shadow free areas of wind power projects”, the details of which will be available on a particular website from May 14. This is much larger than the first tender for 160 MW issued by SECI in January this year, which envisaged setting up a greenfield hybrid project in Anantapur district of Andhra Pradesh. The results of this bid, which also included a small storage component, are yet to be announced. Hybrid power projects have several advantages over standalone ones, especially saving on land and transmission cost. Solar projects in particular need large swathes of land with a single megawatt of capacity requiring five to seven acres – so if some solar modules can be installed in the spaces between wind turbines, the saving on land costs can be considerable. SECI is hopeful that the saving of costs and increased efficiency of hybrid projects will in turn lead to lowered tariffs. Both solar and wind tariffs fell steeply in the last three years, with solar touching a record ₹ 2.44 per unit at an auction held in May 2017, and wind dropping to ₹ 2.43 per unit at an auction in last December. Since then, however, both tariffs have been rising in subsequent auctions. Only one commercial hybrid project has been commissioned so far, though there have been a few other pilot ones. In mid-April, Hero Future Energies added a 28.8 MW solar plant to its existing 50 MW wind plant in Raichur, Karnataka. The Hero project is a group captive one, supplying power to private buyers at a privately decided tariff. Draft guidelines related to hybrid projects were indeed circulated by the Ministry of New and Renewable Energy (MNRE) in September 2016, but no final ones have been issued.

    Source: The Economic Times

    Karnataka’s renewable energy capacity doubled in 4 yrs: PM Modi

    26 April. Ahead of the upcoming Karnataka assembly polls, Prime Minister Narendra Modi said the state’s renewable energy capacity work has doubled in the past four years. He was interacting with party workers in the state through the NaMo app to motivate their morale.

    Source: The Economic Times

    India’s first industrial solar microgrid commissioned in Gujarat

    26 April. Swedish-Swiss multinational giant ABB announced it has commissioned India’s first industrial solar microgrid at its Vadodara manufacturing facility in Gujarat. Microgrids with integrated battery energy storage allow cutting down of planned and unplanned power outages. When are often connected to renewable energy sources and provide more control to companies on how and when to deploy the stored power. A key benefit is the reduction in overall operational costs and reduced electricity bills. The Vadodara factory is ABB’s largest facility in India with over 3,000 employees and among its biggest manufacturing hubs in the world. The microgrid’s rooftop photovoltaic field and its battery-energy storage system will support the factory’s productivity and enable green power supply. A sophisticated control and automation system serves as the brain of the microgrid which ensures maximizing renewable energy use. The facility’s carbon footprint is expected to be reduced by around 1,400 tons of carbon dioxide per year. ABB India Managing Director Sanjeev Sharma said reliable, resilient and cost-effective power supply through microgrids is key to achieve Make in India targets, speed up industrial development and realize the vision of round-the-clock power for all.

    Source: The Economic Times

    Thermal plant pollution to be controlled by 2022: Government to SC

    26 April. Pollutant spewing coal-based thermal power plants, indispensable because they account for 60% of India’s electricity production, will conform to emission standards by 2022, the Centre informed the Supreme Court (SC). The Centre had fixed emission norms for thermal power plants way back in December 2015 with a deadline of December 2017 for its implementation. Thermal power plants were found to be a major source of air pollution as far back as 1984, when ministry of environment had laid down emission standards.

    Source: The Times of India

    India’s safeguard duty on solar cells faces criticism at WTO

    25 April. India’s decision to impose safeguard duty on imported solar cells drew criticism from the European Union (EU) and Japan at the World Trade Organisation (WTO), with the two trade giants criticising the conduct of investigation and the initial findings even as New Delhi joined seven WTO members to back China in lodging a protest against US (United States) import duty on steel and aluminium products. Safeguard duties are imposed temporarily on products which cause, or threaten to cause, serious injury to the industry. At a meeting of the WTO’s Safeguards Committee, the EU recalled that safeguard measures should only be imposed under exceptional circumstances, particularly if the imports causing problems come from predominantly one source.

    Source: The Times of India


    INTERNATIONAL: OIL

    Iraq oil exports from southern ports average 3.34 mn bpd in April

    1 May. Iraq's crude oil exports from its southern ports averaged 3.340 million barrels per day (bpd) in April, lower than in March, because of maintenance at loading terminals early in the month, the oil ministry said. The March average was 3.45 million bpd. Exports from the south are managed by the central government in Baghdad. The semi-autonomous Kurdistan region exports about 300,000 bpd of crude from northern Iraq through a pipeline across Turkey. There were no exports in March from the Kirkuk fields, located in northern Iraq but under the control of Baghdad, the oil ministry said.

    Source: Rigzone

    Vancouver gasoline hits $4.77 a gallon, tops in North America

    1 May. Vancouver sits less than 750 miles from the Canadian oil sands but it may as well be on another continent for vehicle drivers. Gasoline prices in the Pacific Coast city hit C$1.62 a liter ($4.77 a gallon), the highest in North America, according to Dan McTeague, a senior petroleum analyst at GasBuddy, which collects real-time fuel prices from more than 140,000 gas stations on the continent. Vancouverites are paying about a third more than drivers in Honolulu and more than in the Cayman Islands, which doesn’t have a single refinery and imports fuel on barges. More, in fact, than any other major oil-producing country except Norway, which also heavily taxes fuel. Vancouver is the biggest city in British Columbia. The province imports roughly 60 percent of its refined fuels from oil-rich Alberta, another 10 percent from US (United States) refineries across the border, and constrained transportation capacity has long meant the city pays among the highest fuel prices in the nation.

    Source: Rigzone

    US crude output jumps to record 10.26 mn bpd in February: EIA

    30 April. US (United States) crude oil production jumped 260,000 barrels per day (bpd) to 10.26 million bpd in February, the highest on record, the Energy Information Administration (EIA) said. Production in Texas rose by 106,000 bpd to above 4 million bpd, also a record high based on the data going back to 2005. The Permian basin, which stretches across West Texas and eastern New Mexico, is the largest US oilfield.

    Source: Reuters

    Marathon Petroleum to buy Andeavor in biggest oil refining deal

    30 April. Marathon Petroleum Corp agreed to buy rival Andeavor for $23.3 billion in the biggest-ever deal for an oil refiner that would create the largest independent fuel maker in the United States (US). Growing fuel demand, both in the US and Latin America, and a shale boom that’s expanded access to relatively inexpensive domestic supply have given American refiners a leg up against foreign competitors. Andeavor announced two joint ventures to move crude oil from West Texas to the Gulf Coast. The first venture, a pipeline project majority owned by Phillips 66, would haul as many as 700,000 barrels per day of crude from the Permian Basin to the Corpus Christi, Sweeny and Freeport area. The second is a stake in a new marine terminal under development by Buckeye Partners LP that would connect with the pipeline. Marathon’s Galveston Bay refinery, which currently buys about 200,000 barrels a day of light domestic oil, could benefit from the pipeline connectivity.

    Source: Bloomberg

    Russia sends oil to China at Europe’s expense as trades upended

    30 April. Europe’s oil refineries are increasingly missing out on Russian crude as the world’s biggest energy producer directs more and more barrels by pipeline to China. Russia will ship an average of 19 percent less crude through its main ports on the Baltic and Black Seas in the first five months of 2018 compared with a year earlier. Meanwhile piped flows to China soared 43 percent in the first three months, the most recent data from state operator Transneft PJSC show. For the time being, the cuts to Russian crude flows aren’t showing up in prices -- quite the opposite -- thanks to maintenance work at refineries in Europe that turn the oil into fuels. Russia’s Urals crude has been trading near 4-year lows in Europe thanks to that maintenance, as well as an increase in crude flows from the United States (US). However, the lost Russian cargoes are being felt in tanker markets, which had already been beleaguered by an oversupply of ships and OPEC (Organization of the Petroleum Exporting Countries) supply cuts that reduced the amount of oil transported.

    Source: Bloomberg

    ExxonMobil to launch flow meter system for gasoil bunkering barges in May

    30 April. ExxonMobil is launching a mass flow metering (MFM) system for marine gasoil (MGO) refueling barges in Singapore, with the first deliveries under the system set to start next month, the company said. The meters will enhance the transparency of the marine refueling, or bunkering, process by keeping better track of volumes and reduce refueling times by up to three hours, the company said. ExxonMobil, the world’s largest publicly traded oil producer, said the new system for MGO deliveries will start ahead of a deadline Singapore authorities announced. Singapore’s Maritime Port Authority (MPA) said it would extend the mandatory use of MFMs to bunker barges delivering distillate fuels to large ships from July 1, 2019, ahead of an expected pick-up in the use of distillates to meet caps on sulfur content in marine fuels. New rules by the International Maritime Organization (IMO) will significantly cut the amount of sulfur that ships can burn in their engines from 2020. The new rules will increase gasoil consumption by close to 1 million barrel per day at the expense of the high-sulphur fuel oil that is typically used to power ship engines.

    Source: Reuters

    PDVSA ordered to pay Conoco $2 bn after Venezuela oil nationalization

    26 April. An international arbitration court has ordered Venezuela’s oil company PDVSA to pay ConocoPhillips $2.04 billion for early dissolution of two joint ventures for producing oil in the OPEC-member country, the United States (US) firm said. Conoco’s assets in Venezuela were expropriated in 2007 following a nationalization of the country’s oil industry led by late President Hugo Chavez. The firm left the nation after it could not reach a deal to convert its projects into joint ventures controlled by PDVSA. Conoco had sought up to $22 billion from PDVSA for the broken contracts and loss of future profits from the Hamaca and Petrozuata oil projects.

    Source: Reuters

    Kenya picks Britain's Wood Group for oil pipeline design

    26 April. Kenya has picked Wood Group Plc to design an estimated $2 billion oil pipeline to pump crude from fields in the north of the East African nation to an Indian Ocean port. Kenya discovered commercial oil reserves in its Lokichar basin in 2012 and the 800 kilometre (500 mile) pipeline is expected to be built before production is due to start in 2021/22. The petroleum and mining ministry said the design work would take eight months.

    Source: Reuters

    Total interested in exploring Saudi petrol station market with Aramco

    25 April. French oil and gas major Total said it was interested in Saudi Arabia’s petrol station market and had signed a Memorandum of Understanding (MoU) with state energy giant Saudi Aramco to look at options. Total and Aramco are considering the joint acquisition of petrol station operators in Saudi Arabia. Abu Dhabi National Oil Co acquired a license to operate petrol stations in Saudi Arabia, the company’s retail fuel unit said. Dubai’s Emirates National Oil Co also operates petrol stations in Saudi Arabia.

    Source: Reuters

    Sinopec plans to extend cuts in Saudi crude oil imports to June, July

    25 April. China’s Sinopec, Asia’s largest refiner, plans to continue to cut their Saudi Arabian crude oil purchases for June and July loadings, after slashing May shipments by 40 percent, the company’s trading arm Unipec said. Unipec said the reductions in May followed state oil company Saudi Aramco’s decision to raise its official selling prices (OSP) for Arab Light crude which made the grade uncompetitive against other crudes. The unexpected price increase prompted some Asian refiners to trim imports and seek substitutes in the spot market.

    Source: Reuters


    INTERNATIONAL: GAS

    Chevron to idle Gorgon LNG unit in May, considers boosting Australian output

    30 April. Chevron will idle the second production unit at its Gorgon liquefied natural gas (LNG) project in May to carry out modifications already implemented at the other two units. Pat Yarrington, Chevron’s vice president and chief financial officer, said that Gorgon Train 2 in Australia has a planned “pit stop” in May for crews to replicate performance improvement modifications. Traders said the maintenance is expected to last 30 days. Meanwhile, work on Chevron’s second Australian LNG mega-project in Australia, at Wheatstone, is progressing, Yarrington said. LNG production at Wheatstone’s first train started in October 2017. The company expects to start LNG production from the second train this quarter, Yarrington said, bringing the facility to its annual target output of 8.9 million tonnes.

    Source: Reuters

    Brazil's Petrobras close to deciding on gas pipeline network sale

    28 April. Brazil’s state-controlled oil company Petroleo Brasileiro SA (Petrobras) is close to deciding the next phase in the hotly contested sale of its gas pipeline network TAG. Petrobras will likely decide whether to call a second round with the highest bidders, or enter exclusive talks with the single highest bidder. According to the rules set forth by Brazil’s federal audit court, a second round is mandatory if the bids are within 10 percent of each other. A second round is also required if Petrobras, after choosing to negotiate just with one bidder, agrees to any change in the acquisition contract that involves a financial impact.

    Source: Reuters

    Eni starts second production unit at Zohr gas project offshore Egypt

    27 April. Eni and partners have commenced production from the second production unit (T-1) of the Zohr gas project in the Shorouk Block, offshore Egypt. The commissioning of the second production unit is expected to boost the installed capacity of the Zohr development by 400 million metric standard cubic feet per day (mmscfd). Currently, the offshore Egyptian gas field has a capacity of 800 mmscfd, equivalent to 150,000 barrels of oil equivalent per day (boed), said Eni whose share out of that will be 46,000 boed. Discovered in August 2015, Zohr is considered to be the largest gas discovery in Egyptian and Mediterranean Sea history. The Zohr gas field, which has been put into production in last December, is expected to meet a part of Egypt’s natural gas demand for years to come.

    Source: Energy Business Review

    China will not prepay for gas supplies: Russia's Gazprom

    27 April. Russian gas giant Gazprom said that China will not provide the company with advance payments for gas supplies. The company added that the efficiency of its gas supplies to China will be on par with that of its exports to Europe.

    Source: Reuters

    NGN to upgrade gas distribution network in Halifax, England

    26 April. Northern Gas Networks (NGN), a North of England’s gas distributor is investing over £400k to upgrade the ageing gas distribution network in and around Dudwell Lane in Halifax, England. The major project is part of NGN’s ongoing development of infrastructure and will involve replacing around 1,100m of existing metal gas pipes with more durable plastic ones. This will ensure the continued, safe and reliable supply of gas to customers in the area for years to come.

    Source: Energy Business Review

    Shell writes off Groningen gas field on Dutch phase-out

    26 April. Royal Dutch Shell said it would write down its reserves in the Groningen gas field, one of Europe’s largest, following the Dutch government’s decision to phase out production by 2030. The Anglo-Dutch company holds a 50 percent stake in the field, which has seen production reduced in recent years following a series of damaging earthquakes.

    Source: Reuters

    Kuwait Energy starts producing natural gas from field in southern Iraq

    25 April. Kuwait Energy PLC started producing natural gas from Siba, the first gas field to be brought on stream in the south of Iraq. Siba began producing gas at an initial rate of 25 million cubic feet a day (mcf/d), which should rise gradually to 100 mcf/d by the end of the year, Kareem Abd Oda, the director general of the joint venture established by Iraq and Kuwait Energy to develop the field, said. Siba, south of the city of Basra, is producing natural gas and gas condensates, he said. The other hydrocarbon reservoirs of southern Iraq that are already in operation produce natural gas alongside crude oil. The gas extracted in several of these fields is burnt off instead of being captured, as the country lacks the capacity to process it into fuel for local consumption or exports. The semi-autonomous Kurdistan Regional Government has started producing natural gas from fields in northern Iraq. Iraq hopes by 2021 to end gas flaring, which costs nearly $2.5 billion in lost revenue for the government and would be sufficient to meet most of its unmet needs for gas-based power generation, according to the World Bank. Iraq holds an auction of oil and gas exploration contracts in 11 blocks alongside the border with Iran and Kuwait and in offshore Gulf waters. The new contracts set a time limit for companies to end gas flaring from oilfields they develop.

    Source: Reuters


    INTERNATIONAL: COAL

    Virginia's Ports continue to lead US in surging coal exports

    27 April. Virginia's Hampton Roads region continues to export the most amount of coal from the United States (US) through its ports. And the numbers continue to soar. The Virginian-Pilot said that the region's coal exports have jumped 16 percent this year compared to first-quarter 2017. The US Energy Department said in February that coal consumption has decreased domestically. But higher demand in Asia and Europe has led to greater coal production in the US and therefore more exports. Much of what moves through the Port of Virginia is coal from America's central Appalachia region. It's hauled in by train before being loaded on to ships. Between 2016 and 2017, coal exports out of Hampton Roads increased by nearly 60 percent.

    Source: The New York Times

    China's coking coal imports are starting to rebound

    26 April. China’s imports of coking coal staged a strong comeback in March after a weak start to the year, and may be poised for further strength as steel output rises. Imports of coking coal, used to make steel, jumped to 4.02 million tonnes in March, up 38 percent from the 2.91 million tonnes recorded in February, according to customs data. However, the robust outcome in March went only some way to reversing the weaker trend so far this year. Imports for the first quarter as a whole totalled 12.05 million tonnes, a drop of 28 percent on the same period last year. In some ways the decline in first-quarter coking coal imports isn’t that surprising, given the winter restrictions placed on steel production as part of the authorities’ efforts to limit air pollution. China’s total coal production, including both thermal and coking grades, fell to the lowest in five months in March, totalling 290 million tonnes. Coking coal prices in the first quarter certainly wouldn’t have been encouraging additional buying beyond what was absolutely necessary to sustain operations. Both of China’s largest providers of coking coal, Australia and Mongolia, have the capacity to supply more and competition between the two is somewhat limited, given they largely supply different steel-making regions.

    Source: Reuters

    American Resources acquires metallurgical coal mining operations in Kentucky

    25 April. American Resources, through its subsidiary Quest Energy, and McCoy Elkhorn Coal has agreed to acquire certain coal assets from Empire Coal Processing, including the currently operating PointRock Surface Mine in Kentucky, US (United States). Under the agreement, McCoy Elkhorn Coal will immediately assume operational control of the PointRock Mine Phelps, Pike County as well as the associated leases, permits, government approvals, reclamation bonds, and equipment. American Resources Corp will integrate the PointRock Surface Mine into its McCoy Elkhorn Coal subsidiary to be managed by Quest Energy's Surface Operations Team, utilizing their operational expertise and core operating principles focused on safety, quality, efficiency, and low-cost.

    Source: Energy Business Review


    INTERNATIONAL: POWER

    Croatian, Slovenian spot power bourses to merge on June 19

    26 April. Croatia’s spot power exchange CROPEX said it would merge with its Slovenian counterpart BSP SouthPool on June 19 after a successful completion of testing activities. The merger, initially planned for 2017, was delayed for regulatory and technical reasons. CROPEX said the go live date is subject to final approval by the regulatory authorities. The aim is to join the rest of Europe through the so-called Multi-Regional Coupling (MRC) project which includes 19 countries that account for about 85 percent of European power demand. Electricity traders expect the link-up to push Croatian trading prices up because of its connection with the more expensive Italian market. Power markets coupling is designed to optimise the allocation process of cross-border capacities through a coordinated calculation of prices and flows between countries. It uses so-called implicit auctions in which players do not actually receive allocations of cross-border capacity themselves but just bid for electricity in their exchange. The exchanges then use the available cross-border transmission capacity to minimize the price difference between two or more areas.

    Source: Reuters

    CELSE secures financing for 1.5 GW Porto de Sergipe I power plant in Brazil

    26 April. Centrais Elétricas de Sergipe (CELSE) has reached a BRL3.2 bn ($918 mn) financing deal with Goldman Sachs (GS) to fund the construction of the 1.5 GW Porto de Sergipe I power plant project in Brazil. Planned to be built in the municipality of Barra dos Coqueiros, approximately 10 kilometre (km) from Aracaju, Sergipe, the power plant is intended to meet the increasing demand for power in the region. The Sergipe I project, which is planned to be commissioned in 2020, is also supported by power purchase agreements (PPAs) signed with undisclosed customers.

    Source: Energy Business Review

    Vietnam building more power plants as economic growth accelerates

    26 April. PetroVietnam Power Corp has been granted government approval to build two gas-fired power plants in southern Vietnam at a total cost of nearly $1.5 billion, its parent company said. The Southeast Asian country is developing a wave of new power plants to support economic growth that is among the strongest in Asia. Vietnam’s gross domestic product grew 6.81 percent last year, faster than an expansion of 6.21 percent a year earlier. Vietnamese Prime Minister Nguyen Xuan Phuc has given the go-ahead for the two facilities in the province of Dong Nai, state oil firm PetroVietnam, which holds a 51 percent stake in PetroVietnam. The Nhon Trach 3 and Nhon Trach 4 plants will have a combined capacity of 1,500 MW and will cost 33.3 trillion dong ($1.46 billion) to build, PetroVietnam said. They are scheduled to start generating in 2020 and 2021 respectively.

    Source: Reuters


    INTERNATIONAL: NON-FOSSIL FUELS/ CLIMATE CHANGE TRENDS

    Iberdrola wins rights to build 486 MW offshore wind projects in Germany

    1 May. Iberdrola has bagged rights to build two offshore wind farms in the German part of the Baltic Sea with a combined capacity of 486 MW. The projects – 476 MW Baltic Eagle and the 10 MW Wikinger Süd offshore wind farms - were awarded by the Federal Network Agency (Bundesnetzagentur) to the Spanish energy company during Germany’s second public tender for offshore wind energy. Both the offshore wind farms will be developed simultaneously by Iberdrola to maximize cost efficiency. The Baltic Eagle and the Wikinger Süd wind farms along with the 350 MW Wikinger offshore wind farm, located in front of Rügen island, will constitute an offshore wind complex of nearly 850 MW capacity. It is also claimed to become the largest offshore wind power project in the Baltic Sea. Overall, Iberdrola said that its renewable power capacity as on 31 March 2018 is more than 29,000 MW with two thirds of its total generation capacity being entirely emission-free.

    Source: Energy Business Review

    US researchers develop water-based battery to store wind and solar energy

    1 May. Researchers from the Stanford University in the United States (US) have developed a water-based battery that could provide a cheap way to store wind or solar energy. The prototype manganese-hydrogen battery, which stands just three inches tall, is designed to generate 20 milliwatt hours of electricity. However, the researchers expects to scale up the technology to an industrial-grade system that could charge and recharge up to 10,000 times, creating a grid-scale battery with a lifespan exceeding a decade. The battery will be able to store wind or solar energy, which can later be fed back into the electric grid and be redistributed when demand is high. Stanford materials science professor Yi Cui said that the manganese-hydrogen battery technology has potential to store unpredictable wind or solar energy which in turn reduces the need to burn reliable carbon-emitting fossil fuels in the absence of renewable sources.

    Source: Energy Business Review

    US EPA grants biofuels waiver to billionaire Icahn's oil refinery

    30 April. The United States (US) Environmental Protection Agency (EPA) has granted a financial hardship waiver to an oil refinery owned by billionaire Carl Icahn, a former adviser to President Donald Trump, exempting the Oklahoma facility from requirements under a federal biofuels law. The waiver enables Icahn’s CVR Energy Inc to avoid tens of millions of dollars in costs related to the US Renewable Fuel Standard (RFS) program. The regulation is meant to cut air pollution, reduce petroleum imports and support corn farmers by requiring refiners to mix billions of gallons of biofuels into the nation’s gasoline and diesel each year. The Small Refiners Coalition said the EPA is required by law to help small refineries struggling with these regulations and that such exemptions are crucial to their financial well-being. It applauded EPA Administrator Scott Pruitt for protecting small refineries, regardless of ownership, from the RFS requirements. Icahn is currently under investigation by the US Justice Department for his role in influencing biofuels policy while serving as Trump’s adviser.

    Source: Reuters

    Germany approves offshore wind parks able to generate 1.6 GW

    27 April. Germany has granted approval for offshore wind parks capable of generating 1,610 MW of power at contract prices above the unexpectedly low bids in an auction a year ago. The total amount of electricity that could be produced by the parks approved equates to the power generated by one large nuclear power station, or two big coal- or gas-fired power plants. This auction wraps up two rounds for a total 3,100 MW of projects applied for before August 1, 2016, after which new projects became subject to reforms to the offshore subsidy scheme. While the industry has cut costs sharply in recent years, last year’s results were widely viewed as overly optimistic. German thermal operators currently obtain 3.8 cents a kWh (kilowatt hour) in the wholesale market for power delivery next year while end-users of electricity pay around 30 cents/kWh, due to a high share of taxes and fees.

    Source: Reuters

    China solar power growth to slow this year

    27 April. Demand for new solar capacity is expected to slow this year from the record growth achieved in 2017, putting manufacturers under mounting pressure at a time when government subsidies are in decline. The China Photovoltaic Industry Association said that installed solar generation capacity was forecast to rise by about 40 GW in 2018, against last year’s 53 GW increase. China’s total solar capacity hit 130 GW in 2017, accounting for 32.4 percent of the global total. Manufacturers have ramped up production over the past two years as governments commissioned hundreds of new projects to meet targets for clean energy, but the industry might now be suffering from overcapacity. The rapid growth in China’s solar sector has relied on generous state subsidies, including higher tariffs paid to renewables companies for each kilowatt-hour they supply to the grid. But with solar power costs cut by 90 percent from 2007 to 2017, and the government struggling to find the funds required to pay the subsidies it owes to vast numbers of new projects, China is switching to other forms of support. China is considering a quota system that will force grids to source a stipulated percentage of power from local renewable generators.

    Source: Reuters

    Acciona to invest $600 mn to build four renewable power projects in Chile

    25 April. Spanish infrastructure group Acciona has announced its plans to build 400 MW of wind and solar projects in Chile. The firm intends to invest $600 mn for the construction of two new photovoltaic (PV) plants in the regions of Atacama and Antofagasta, and two wind farms in La Araucanía. Acciona said it plans to commence construction work on the 62 megawatt peak (MWp) Almeyda solar PV plant in the locality of Diego de Almagro in the region of Atacama, in early 2019. The project will comprise solar modules with horizontal tracker technology. Work on the facility will be completed at the end of the year. The company intends to begin the construction of the 64MWp Usya solar PV plant in Calama, Antofagasta, in the third trimester of 2019. The project will comprise solar modules mounted on fixed structures.

    Source: Energy Business Review

    Global wind capacity to rise by more than half in next five years

    25 April. Global wind energy capacity could increase by more than half over the next five years, as costs continue to fall and the market returns to growth at the end of this decade, a report by the Global Wind Energy Council (GWEC) shows. The GWEC said cumulative wind energy capacity stood at 539 GW at the end of last year, 11 percent higher than the previous year. Around 52.5 GW of new wind power capacity was added worldwide last year, down slightly from 54.6 GW in 2016. The GWEC expects the market to be flat this year but start growing again from 2019. Wind power has become more competitive over the past few years, with a move from government subsidies to auctions which has brought costs down further. China continues to be the biggest wind market in the world, adding nearly 19.7 GW of new capacity in 2017, though this was 15.9 percent lower than the previous year. The pace of China’s wind development is gradually slowing down and growth is expected to be flat to 2020. India experienced record wind installations last year, adding over 4 GW, but GWEC expects this to slow this year due to a transition period between old market incentives and moving towards an auction-based system, the GWEC said.

    Source: Reuters

    DATA INSIGHT

    State-wise Electricity Generation from Solar

    Million Units

    State/Utility2016-172017-18% Change
    Andhra Pradesh3187.854715.1847.9
    Gujarat7720.016664.99-13.7
    Karnataka6058.655478.39-9.6
    Kerala72.5971.24-1.9
    Madhya Pradesh3563.173060.41-14.1
    Maharashtra7490.755336.74-28.8
    Rajasthan5562.524219.33-24.1
    Tamil Nadu11935.310080.9-15.5
    Telangana211.93137.89-34.9
    Central Utilities201.61174.02-13.7
    Total46004.339939.1-13.2

    Trends in All India Wind Electricity Generation

    Source: Press Information Bureau


    Publisher: Baljit Kapoor

    Editorial Adviser: Lydia Powell

    Editor: Akhilesh Sati

    Content Development: Vinod Kumar Toma

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