The week’s roundup from India’s energy sector.
The government is offering 50 more ‘geographical areas’ for setting up city gas service in 124 districts in 14 states with the aim of expanding the CNG and PNG service coverage to 70 percent of the country’s population. The 50 areas to be offered in upcoming round will cover 24 percent of the country’s population and 18 percent of the area. In the ninth round, 86 areas spread over 174 districts in 22 states and Union Territories were offered to cover 26 percent of the population and 24 percent of area. Bids for the 10th round will close on 5 February and areas will be awarded by the end of February. First CNG station or PNG service in the areas awarded in the previous round will take at least 1-2 years to become operational. The government is targeting raising share of natural gas in the primary energy basket to 15 percent from 6.5 percent in the next few years and the bid rounds are aimed at fulfilling that objective. The areas offered in the 9th and 10th round are close to natural gas pipelines and companies have been given eight years for the completing rollout of city gas infrastructure in their areas.
Oil regulator PNGRB put up for bidding 50 cities including Gwalior in Madhya Pradesh, Mysore in Karnataka, Ajmer in Rajasthan and Howrah in West Bengal for grant of licence to retail CNG and PNG. PNGRB offered 50 GA, carved out by clubbing adjoining districts in 12 states, in the 10th round of bidding for city gas licences. Bids are due by 5 February, according to PNGRB. Bidders have been asked to quote the number of CNG stations to be set up and the number of domestic cooking gas connections to be given in the first eight years of operation. Also, they have to quote the length of pipeline to be laid in the GA and the tariff proposed for city gas and CNG, according to PNGRB. The bid round comes within months of the close of the 9th round, which was the biggest ever city gas distribution licensing round where 86 permits for selling CNG and piped cooking in 174 districts in 22 states and union territories were offered. The government is targeting raising share of natural gas in the primary energy basket to 15 percent from current 6.2 percent, in the next few years and the bid rounds are aimed at fulfilling that objective. PNGRB said any entity with security CGD licence would have to enter into a firm natural gas supply agreement with a natural gas producer or marketer in a transparent manner on the principle of 'at an arm's length' within 180 days of winning a licence. The authorised entity has to achieve financial closure within 270 days from the date of grant of licence. The winning company would have 8 years of marketing exclusivity in the given city. Licences given prior to 9th round provide for 5 years of exclusivity.
In the 9th round, which closed in July, Adani Gas, IOC, BPCL and Torrent Gas were the big winners. Adani Gas won rights to retail CNG to automobiles and piped cooking gas to households and industries in 13 cities on its own and another nine in a joint venture with IOC. IOC on its own won rights to seven cities while Bharat Gas Resources Ltd, a unit of state-owned BPCL, won a licence for 11 cities. Torrent Gas made 10 winning bids. GAIL (India) Ltd's retailing arm, GAIL Gas, managed rights for five cities. Prior to the 9th round, 91 GAs were awarded to firms like Indraprastha Gas and GAIL Gas, which are serving 240 million population, 42 lakh domestic consumers and 3.1 million CNG vehicles. Of these, 56 GAs were awarded through bidding rounds and the rest on government nomination.
Seven GAs covering ten districts in Tamil Nadu have been identified in the 9th CGD bidding round. In the next five years, a sum of nearly ₹21 billion is likely to be invested in these seven GAs with scope to employ around 15,200 direct employment for skilled, semi-skilled and unskilled category. A CGD network is an interconnected network of pipelines for supply of gas to domestic, industrial or commercial premises and CNG stations situation in a specified GA. IOC would cover over 900,000 customers each in Coimbatore and Salem with LNG likely to be imported from Kochi port in future. IOC will use GAIL’s pipeline to take it to the two cities for gas distribution to customers. Energy companies will invest about ₹34.24 billion in CGD projects in seven GAs covering 17 districts in Odisha. The gas distribution companies will make the investments over eight years in Sundargarh, Jharsuguda, Jajpur, Keonjhar, Angul, Dhenkanal, Balasore, Bhadrak, Mayurbhanj, Bargarh, Deogarh, Sambalpur, Ganjam, Nayagarh, Puri, Jagatsinghpur and Kendrapara districts. The PNGRB has offered 86 new GAs covering 174 districts across the country in its 9th CGD Bidding Round.
With GAIL putting its gas pipeline projects on the fast track, the company has gone on an overdrive to get customers, even though the response has been poor in states such as West Bengal. A pipeline that can carry 9 mcm a day of gas is going through West Bengal, but there are not enough takers for this gas yet, which is posing a hurdle for GAIL. GAIL said that WBPDCL could have been a potential buyer and a big beneficiary of the gas pipeline, but they have relented — only signing a city gas distribution supply agreement. While GAIL has approached WBPDCL to put up a gas-based thermal power plant, especially at the Bandel Thermal Power Station, where four units of 60 MW each are being scrapped, the state’s power department has not yet taken any in-principle decision on it. GAIL’s pipeline runs within a kilometre or two from the Bandel.
GAIL said it will commission the first phase of the Pradhan Mantri Urja Ganga project before January, taking natural gas to cities in eastern UP and Bihar. The 2,655 km long gas pipeline worth ₹129.4 billion from Jagdishpur in UP to Haldia in West Bengal, with branch lines to Bokaro in Jharkhand and Dhamra in Odisha, will for the first time take clean environment-friendly gas to the east to fuel its industrial revolution. The project will not just supply CNG to automobiles and cooking gas to household kitchens in cities along the route, but also to industries to meet their feedstock or fuel requirement. Phase-1 of the project involves laying the pipeline to Dobhi, Patna and Barauni in Bihar. The pipeline will be extended from Barauni to Guwahati in Assam, orders for which have been placed. The 750 km pipeline up to Guwahati will cost ₹37-40 billion. The project will usher in industrial development in the eastern part of India by supplying environmentally clean natural gas to fertiliser and power plants, refineries, steel plants, and other industries. The city gas network activities in Varanasi, Bhubaneswar, and Cuttack has already commenced. GAIL in the July-September quarter saw its net profit rise 50 percent to ₹19.63 billion on the back of higher natural gas volumes being sold. Better performance of natural gas transmission segment was supported by an upward revision of tariff by PNGRB of some of the pipeline network. GAIL earned ₹1.94 billion from upward tariff revision for Dahej-Uran-Dabhol-Panvel pipeline, Dukli Maharajganj, Agartala Regional Network and Gujarat Regional Network and a one-time take or pay settlement of ₹1.33 billion with one of the natural gas customers.
GAIL said it has purchased steel pipes worth ₹11 billion for laying the Barauni-Guwahati gas pipeline, putting on fast track the implementation of the project that will connect the north-east with the national gas grid. Work on the 729 km pipeline, which will act as a branch line from the prestigious Pradhan Mantri Urja Ganga pipeline project, will commence from December, the company said. Work across India's single largest pipeline ning 3,400 km under Jagadishpur-Haldia-Bokaro-Dhamra project - also known as Pradhan Mantri Urja Ganga, is in full swing and progressing as per schedule, it said. The Barauni-Guwahati pipeline will connect to the 'Indradhanush' gas grid network, which is being developed by GAIL along with joint venture partners IOC, OIL, Numaligarh Refineries Ltd and ONGC to provide uninterrupted supply of natural gas across all the North Eastern states. GAIL said work on the pipeline originating from Jagadishpur in UP to Haldia in West Bengal and branch lines to Bokaro in Jharkhand and Dhamra in Odisha is in full swing.
Adani Group announced it has listed natural gas distribution arm Adani Gas on the exchanges. The move is expected to help Adani gas, which has plans to invest ₹80 billion over five years, the largest CGD company in the country. As part of the listing process, Adani Gas has allotted equity shares to existing shareholders of Adani Enterprises in 1:1 ratio. Following the listing, Adani Group owners will hold 74.92 percent stake in Adani Gas while retail and institutional investors will hold 3.36 percent and 21.72 percent, respectively. India’s current CGD consumption is about 15-18 percent of domestic gas production and even at peak demand, consumption will be around 25-30 percent. Adani Gas had reported a turnover of ₹13.95 billion last financial year over a 17 percent rise in volumes to 479 mcm. The group currently runs CGD networks in Ahmedabad, Vadodara, Faridabad and Khurja. It has won rights to set up CGD networks in 13 cities.
India's natural gas production will rise by a third provided the output locked in a dozen fields of ONGC and OIL is opened up by giving remunerative market prices. India currently produces about 90 mmscmd of natural gas and has ambitious plans to double output by 2022 to reduce its reliance on imports and replace some of the polluting liquid fuels to cut emissions. ONGC and OIL haven't been able to develop the discoveries or bring them to production as the current gas price of $3.36/mmBtu is way lower than the cost of production. ONGC has about 35 billion cubic meters of recoverable reserves in discoveries in the shallow sea off Andhra Pradesh on the east and off Gujarat and Mumbai on the west coast blocks. The three blocks in Krishna Godavari basin, Gulf of Kutch and Mumbai offshore can produce about 10 mmscmd of gas and an equivalent amount can be produced from its onshore discoveries in blocks like Bantumili, Mandapeta and Bhuvanagiri. About 5 mmscmd of production can be added by making some investment in existing fields like Mumbai High South, Neelam and B-127 Cluster in the Arabian Sea. OIL has an onland discovery in the Krishna Godavari basin in Andhra Pradesh with over 3 bcm of recoverable reserves but needs a higher price to bring it to production. ONGC and OIL want a price of over $6/mmBtu to help them produce the gas without suffering any losses. In the absence of a viable gas price, they will have to mothball $3 billion projects.
London-listed CBM producer Great Eastern Energy Corp Ltd announced a resource upgrade at its Raniganj (South) block in West Bengal saying it has found prospective shale resources with a valuation of over $2.78 billion. The company said that ARI, an independent petroleum evaluator, has conducted the assessment in accordance with the classification guidelines set out in the Society of Petroleum Engineer's Petroleum Resource Management System. According to the assessment, the company’s flagship block holds estimated shale resource of 6.63 tcf under a high estimate, 3.51 tcf under best estimate, and 1.40 tcf under low estimate. The company is currently planning initial exploration programme for exploiting shale in its block and will make a further announcement in due course when it is commenced. The company plans to invest ₹20 billion to complete drilling of the remaining 144 wells at the Raniganj (South) license area.
India’s Petronet LNG and OVL are jointly in talks about buying a stake in Tellurian Inc’s proposed Driftwood project in Louisiana. India is expanding its pipeline network and building new LNG import terminals to boost use of the cleaner fuel in the country. Petronet is India’s top gas importer with no experience of the upstream business, which is why it is tying up with OVL, the overseas investment arm of Indian oil producer ONGC. Petronet was also in talks with several other players about buying a stake in assets ning from drilling to dispensing, saying it was a bold step for the firm.
US LNG company Cheniere Energy Inc officially opened its $15 billion Corpus Christi LNG export facility in Texas. The company, however, would not say when the first cargo will actually leave the facility, which produced its first LNG. Corpus Christi is the third big LNG export terminal to enter service in the lower 48 US states. The first was Cheniere’s Sabine Pass terminal in Louisiana, which sent out its first cargo in February 2016. Since then, Sabine has delivered almost 500 cargoes to 29 countries and regions around the world, the company said. The company has said it expects Corpus 1 and the fifth liquefaction train at its Sabine Pass LNG export terminal in Louisiana to enter commercial service in the first quarter of 2019, followed by Corpus 2 in the second half of 2019 and Corpus 3 in the second half of 2021. Each of Cheniere’s trains is capable of liquefying about 0.7 bcfd of natural gas. One billion cubic feet is enough to fuel about 5 million US homes for a day. US LNG exports have almost quadrupled from 183.9 bcf in 2016 to 706.4 bcf in 2017, worth about $3.3 billion, and are on track to rise to over 1,000 bcf in 2018, making the US one of the world’s biggest exporters of the super-cooled gas.
California energy company Sempra Energy said it signed three non-binding agreements to sell all of the LNG to be produced at its proposed Costa Azul LNG export terminal in Baja California in Mexico. Sempra said it will now work to negotiate final 20-year LNG sales agreements with units of the three companies - Total SA of France and Mitsui & Co and Tokyo Gas Co Ltd of Japan - and has targeted making a final investment decision to build the first phase of the export terminal in late 2019. The first phase of Costa Azul is designed to be a single-train liquefaction facility capable of producing about 2.4 mtpa of LNG, equal to about 0.32 bcfd of natural gas. The facility will be located at Sempra’s existing LNG import terminal, which can process about 1 bcfd of gas. The import facility has been operating since 2008. Sempra said the three companies seeking to buy the LNG from Costa Azul each will potentially buy about 0.8 mtpa.
US LNG company Tellurian Inc said it expects to start construction on its Driftwood LNG export terminal in Louisiana in the first half of 2019 and begin operations in 2023. The company’s third-quarter earnings that Tellurian will announce partners in the $27.5 billion project by the end of 2018. Driftwood is one of dozens LNG export projects under development in the US seeking customers so they can start construction and enter service over the next decade to meet growing global demand for the fuel. US LNG exports have almost quadrupled from 183.9 bcf of natural gas in 2016 to 706.4 bcf in 2017, worth about $3.3 billion, and are on track to top 1,000 bcf in 2018, making the country one of the world’s biggest exporters of the super-cooled form of natural gas. One billion cubic feet of gas is enough to fuel about 5 million US homes for a day. Including plants under construction, US LNG export capacity is expected to jump from 3.8 bcfd now to 5.2 bcfd by the end of the year, 8.9 bcfd by the end of 2019 and 10.3 bcfd by the end of 2020. Tellurian said about 35 customers were interested in partnering with and buying gas from the project. Driftwood will have capacity to produce 27.6 mtpa of LNG or about 4 bcfd of gas.
French energy group Total and Sempra Energy have signed a Memorandum of Understanding on the north American LNG, which could see Total acquire a further stake in the sector. The deal could see Total take a contract for approximately up to 9 mtpa of LNG offtake across Sempra Energy’s LNG export development projects on the US Gulf Coast and West Coast of North America, specifically the Cameron LNG Phase 2 and Energia Costa Azul LNG projects. Total, the second-largest player in the global LNG market, said the relationship with Sempra Energy, will boost its goal to build a diverse portfolio of LNG supply options.
Poland’s gas firm PGNiG will sign another agreement for LNG from the US as the country seeks to reduce dependence on Russian fuel. Poland consumes around 17 bcm of gas annually, more than half of which comes from Russia’s Gazprom under a long-term deal that expires in 2022. PGNiG does not intend to extend the agreement, it has previously said, and has taken steps to secure supplies elsewhere after that date. In October it finalised the terms of a deal to buy LNG from US company Venture Global LNG and a year ago it signed a mid-term deal with UK firm Centrica LNG Co Ltd on nine LNG shipments in 2018-2022.
PetroChina said it has signed a five-year natural gas contract with Kazakhstan’s KazTransGas. KazTransGas was already supplying natural gas to PetroChina and the previous deal expired on 14 October. The two companies started negotiations on the five-year deal at the end of July. The new deal will help relieve tight supplies of natural gas in winter and spring time in China.
An expansion of LNG Canada has a cost advantage over its rivals in the race to build more LNG export capacity, but a go-ahead decision on phase two is likely still a few years away. The first phase of the C$41 billion ($31.3 billion) Royal Dutch Shell-led project was given the go-ahead last month, firing up a race among companies eager to be the next to tap into booming Asian demand for the gas. LNG demand has risen sharply in recent years, led by China, gobbling up an anticipated surplus and fanning fears of a shortage by mid-next decade. This has projects around the world scrambling to secure the long-term deals they need to finance multi-billion dollar builds. Gas prices are so low that Shell has stopped drilling new wells at its massive Groundbirch field in northern British Columbia and will only resume in 2020 to ready for LNG Canada shipments. Crothers sees a first-mover advantage domestically on labor costs, noting that a construction slowdown in Alberta’s oil sands is allowing LNG Canada good access to skilled workers.
Russian gas deliveries to northwest Europe will likely continue to grow in the time ahead, Norwegian oil and gas producer Equinor said. In the third quarter, Russian deliveries to the region expanded to 59 bcm from 50 bcm in the same period of 2017, the company said. South Korean shipyards have boxed out their Japanese rivals from the market for building large ships carrying LNG winning all of the orders for the next three years’ worth more than $9 billion. Three South Korean yards - Daewoo Shipbuilding & Marine Engineering, Hyundai Heavy Industries and Samsung Heavy Industries - have won the more than 50 orders placed for new large-scale LNG tankers for delivery in the next three years, according to data from the companies and two tanker brokers. Including floating LNG storage and support vessels, ship brokerage Braemar estimates South Korean yards have bagged 78 percent of all LNG-related orders this year, with just 14 percent and 8 percent going to Japan and China, respectively. Russian energy producer Gazprom will deliver more gas to its Austrian partner OMV, the two companies said. Deliveries to Austria will be increased by 1 bcm/year.
Woodside Petroleum Ltd, Australia’s biggest listed oil and gas explorer, said it had signed a 20-year gas supply deal with Perdaman Chemicals and Fertilisers Pty Ltd. The agreement follows a Memorandum of Understanding between the companies signed in April. Earlier this year, Woodside defined plans to accelerate and expand its Scarborough gas project off northwestern Australia, now expected to cost $10 billion.
China’s Zhenhua Oil purchased its first LNG cargo from Chevron Corp to supply a South China-receiving terminal that it won access to in a recent auction. The 100 mcm cargo was purchased at about $0.30 per mmBtu discount to Japan Korea Marker quotes on a delivered basis. The cargo, discharged at CNOOC’s Yuedong terminal in Shenzhen, was sourced from the Australian Gorgon project operated by Chevron. Zhenhua and its local partner Longkou agreed in September to pay $26.5 million for the access to use the CNOOC facility, in the first such auction as the world’s second-largest LNG buyer pushes to open up its LNG import business dominated by top three state oil majors.
PetroChina will merge its wholesale natural gas sales unit with retail provider Kunlun Energy to shore up profits though the move worries independent gas sellers that fear the combination will create a monopoly. PetroChina announced the restructuring internally to merge PetroChina Natural Gas Sales Company, the country’s largest natural gas wholesaler, with Kunlun Energy Co Ltd. Hong Kong-listed Kunlun operates PetroChina’s LNG receiving terminals and distributes gas to households and factories. PetroChina Natural Gas Sales Company markets the state-owned company’s domestic gas production, imports of pipeline gas from Turkmenistan and Myanmar, and LNG shipped in from Qatar and Australia. But the firm, which supplies 70 percent of China’s gas, has suffered losses in its import business as the global prices it pays are often above state regulated domestic prices. In the first nine months of 2018, PetroChina booked a net loss of nearly 20 billion yuan ($2.88 billion) on gas imports compared with net losses of 16.99 billion yuan during the same period a year earlier. Nearly 30 provincial wholesale operations of the gas sales company will be merged with the similar number of provincial outlets under Kunlun.
Germany will speed up its plans to build a LNG terminal as Europe’s largest economy seeks to diversify its energy supply. Ukraine would remain an important gas transit country once the Nord Stream 2 pipeline that will bring Russian gas to Germany is built.
Israel will tender off 19 new offshore blocks to oil and gas companies, its energy ministry said, hoping to rebound from a disappointing bidding round a year ago. Israel discovered in 2009 that it had large reserves of natural gas off its Mediterranean coast. Last year’s auction elicited bids from only two groups of companies, and the ministry said it expects more to compete this time as conditions have improved. The 19 blocks have been divvied up into four sectors that benefit from more comprehensive geological studies than last time, he said. Israel has also signed major export deals with Jordan and Egypt over the past two years, opening new markets to companies looking to sell gas from Israel. The exploration licenses will be for three years, with options to extend up to four more years, should terms be met.
Jordan aims to increase natural gas imports from Egypt to cover a third of its demand eventually. Jordan began importing natural gas from Egypt two months ago but increasing imports significantly would depend on construction of a pipeline between Jordan and Iraq which has yet to be built. Jordan’s gas demand in 2019 is around 350 million cubic feet per day.
Bangladesh will resume LNG imports after resolving issues with its sole FSRU. Two cargoes, meant to be delivered on 7 November and 15 November, had been cancelled as the FSRU was closed due to problems with a hydraulic line that operates an emergency shutdown valve. The next cargo with 140,000 cubic-metre LNG will arrive on 21 November, Rupantarita Prakritik Gas Company said. Bangladesh has a long-term supply agreement with Qatar’s RasGas Co. The South Asian nation began importing LNG from Qatar on a regular basis in September. The FSRU arrived in April for commissioning in Moheshkhali port by Cox’s Bazar. A second FSRU project, operated by Summit Corp with Japan’s Mitsubishi Corp as a partner, is expected to start operations in March next year, doubling the country’s import capacity to 7.5 mtpa.
Pakistan risks scaring off investment from global energy giants eyeing one of Asia’s fastest-growing energy markets if it pursues renegotiation of contracts for two LNG terminals, an architect of its energy policy said. Pakistan championed a vast LNG infrastructure to ease energy shortages that throttled economic growth and brought hours of darkness every day for nearly a decade. A terminal built by private conglomerate Engro Corp, which the new government said was too costly, and vowed to renegotiate the deals for Pakistan’s two LNG terminals. The second terminal was built by Pakistan’s Associated Group and energy trading firm Trafigura. But such a move will endanger Pakistan’s position as a hot LNG investment destination and deter producers such as Exxon Mobil and traders like Trafigura and Vitol, all hunting for partners to build more terminals. Exxon Mobil returned to Pakistan in May with an investment in an offshore drilling project. It has expressed interest in building an LNG terminal in the country.
Pakistan LNG, a subsidiary of state-owned Government Holdings, said it was seeking three LNG cargoes for delivery in January and February, with bids due by 5 December. The delivery windows are for 21-22 January, 3-4 February and 21-22 February, it said in a tender document. Pakistan LNG has not issued a tender for LNG since late June, when it sought five cargoes for September and October deliveries. It also cancelled a tender for six cargoes for July-August deliveries due to high offers. The tender was launched as Pakistan’s new government slammed the owner of one terminal, Engro, for charging the previous government too much for its construction and operation.
Japan’s Toshiba Corp will exit its US LNG business by paying China’s ENN Ecological Holdings Co more than $800 million to take over the unit as part of a plan to shed money-losing assets. The sale is the disappointing culmination of a venture that puzzled analysts when it was announced in 2013. Asian LNG prices have plunged 42 percent in the past five years and the potential for future losses spurred Toshiba’s exit. Under the deal, Toshiba will sell its Toshiba America LNG Corp unit to ENN Ecological, a unit of ENN Group, for $15 million, the Japanese company said. However, once that sale is complete, Toshiba will then make a one-off payment of $821 million to ENN to pass on its roughly $7 billion commitment, starting in 2020, to purchase 2.2 mtpa of LNG over 20 years from Freeport LNG in Texas.
Cuadrilla extracted its first shale gas from its site in northwest England, it said, after it began fracking operations. Cuadrilla said the gas flows were small but coming at such an early stage of the project were evidence of the potential of the site. Cuadrilla said it plans to fully test flow rates from the current two exploration wells towards the end of 2018 and into the New Year to determine whether full-scale gas extraction would be viable. Fracking is opposed by environmentalists and green groups who say extracting more fossil fuel is at odds with Britain’s commitment to reduce greenhouse gas emissions. But Britain’s government is supportive of the industry and is keen to reduce the country’s reliance on imports of natural gas, which is used to heat around 80 percent of Britain’s homes. The British Geological Survey estimates shale gas resources in northern England alone could contain 1,300 tcf of gas, 10 percent of which could meet the country’s demand for almost 40 years.
| CNG: compressed natural gas, PNG: piped natural gas, PNGRB: Petroleum and Natural Gas Regulatory Board, GA: geographical areas, CGD: city gas distribution, IOC: Indian Oil Corp, BPCL: Bharat Petroleum Corp Ltd, WBPDCL: West Bengal Power Development Corp Ltd, km: kilometre, UP: Uttar Pradesh, mcm: million cubic meters, ONGC: Oil and Natural Gas Corp, OIL: Oil India Ltd, bcm: billion cubic meters, mmscmd: million metric standard cubic meter per day, CBM: coal-bed methane, tcf: trillion cubic feet, OVL: ONGC Videsh Ltd, US: United States, LNG: liquefied natural gas, bcfd: billion cubic feet per day, mtpa: million tonnes per annum, UK: United Kingdom, mmBtu: million metric British thermal units, CNOOC: China National Offshore Oil Corp, FSRU: Floating Storage and Regasification Unit |
27 November. A wave of shutdowns will hit Indian state-owned refineries next year as the country prepares for cleaner fuels from April 2020, in moves that could temporarily dent oil demand and push up imports of refined fuels. India, the world’s third-biggest oil importer and consumer, has surplus refining capacity and rarely imports gasoil and gasoline. State refiners - Indian Oil Corp, Bharat Petroleum Corp, Hindustan Petroleum Corp and Mangalore Refinery and Petrochemicals - account for about 60 percent of the country’s nearly 5 million barrels per day (bpd) capacity. The refiners will have to shut gasoil- and gasoline-making units at their plants for 15 to 45 days to churn out Euro VI-compliant fuels from January 2020 to be able to sell them from April of that year.
Source: Reuters
< style="color: #ffffff">Quick Comment< style="color: #ffffff">The return to firewood by households exposes weakness of DBT of LPG subsidies < style="color: #ffffff">Ugly! |
27 November. Oil Marketing Companies (OMCs) have offered setting up maximum number of fuel retail outlets through dealerships in Uttar Pradesh (9,370), Maharashtra (6,765), Karnataka (5,024), Gujarat (4,450) and Haryana (3,370), according to information provided by the OMCs on Petrol Pump Dealer Chayan website. The website houses the details of state-wise distribution of pumps to be set up under the latest mega drive by the oil firms to expand fuel dispensing facilities. Other states where sizeable number of retail outlets has been offered include Bihar (2,951), Tamil Nadu (2,951), Andhra Pradesh (2,815), Odisha (2,636), West Bengal (2,242), Jharkhand (1,905), Kerala (1,730) and Assam (1,026). In a bid to cement their market leadership and expand their footprint in other geographical areas of the country, the oil firms had invited applications to set-up 55,649 retail outlets in 30 states and Union Territories in the country. Of this, 26,982 have been offered by Indian Oil Corp followed by 15,802 dealerships by Bharat Petroleum Corp and 12,865 dealerships offered by Hindustan Petroleum Corp. India currently has 63,674 petrol and diesel retail outlets. The three government-owned OMCs account for 90 percent of these. Among private players, Nayara Energy tops the list with 4,895 retail outlets followed by Reliance Industries (1,400) and Royal Dutch Shell with 116 retail outlets. According to the oil ministry, most of the petrol and diesel retail outlets are currently present in Uttar Pradesh (7,473), Maharashtra (5,970), Tamil Nadu (5,388), Rajasthan (4,476), Karnataka (4,214), Gujarat (4,025), Madhya Pradesh (3,711), Punjab (3,427), Haryana (2,862), Telangana (2,626), Bihar (2,695), West Bengal (2,333) and Kerala (2,100). India has added around 17,481 petrol and diesel retail outlets in the past six years across the country, growing at an average annual rate rate of 5.61 percent.
Source: The Economic Times
26 November. Sky rocketing liquefied petroleum gas (LPG) prices are leaving a big dent in the monthly budget of households in the city and the beneficiaries under the central government’s visionary Ujjwala scheme are finding it difficult to purchase the cylinders at ₹1,000, which is beyond their affordability. LPG price is a main concern of many during the winter season as consumption is higher than summer months mainly for heating water. M Meenakshi of Anna Nagar, a daily labourer, said that her two sons earn a daily wage of ₹500 and now the LPG cylinder has become too expensive for her family, so they have started cooking on firewood again. Many houses have started rethinking their daily cooking plans to save LPG. Thangaraj, a LPG dealer, said that the Ujjwala scheme is a failure at least as far as Madurai is concerned as the beneficiaries do not buy cylinders even once in three months. Also, under the scheme they get the subsidy only for six months, after which the subsidy is accounted towards the cost of the stove, regulator, gas tube and other accessories, though it is initially made to look like they are given the connection for free, he said. Mix-ups in the bank accounts and Adhaar linking are also affecting these people. Madurai area LPG distributors association’s president, M Suresh Kumar said that they have noticed that the price of the gas is affecting the common public.
Source: The Times of India
25 November. The state government has decided to phase out all diesel autos older than 10 years from Gurgaon as per the directions of the Supreme Court. This was announced by Chief Minister (CM) Manohar Lal Khattar at the monthly district grievances redressal committee meeting in the city. The apex court had in last month ordered the transport departments of Delhi and surrounding NCR cities to act tough against polluting vehicles by prohibiting plying of more than 15-year-old petrol and 10-year-old diesel vehicles. Of all the diesel autos in Gurgaon that provide last-mile connectivity, some 687 are 10 years old.
Source: The Economic Times
22 November. Oil and Natural Gas Corp (ONGC) has been ordered to pay about ₹2.42 billion to the Mumbai Port Trust as wharfage compensation for the transportation of crude oil through the two pipelines the company had laid within the limits of the state-run port. ONGC said it is examining the admissibility of the claim. The Tariff Authority for Major Ports (TAMP) passed an order for wharfage compensation payable by ONGC on 3 October 2018. ONGC said the dispute between the company and Mumbai Port Trust was pending for a long time over payment of wharfage for the supply of crude oil to local refineries in Mumbai through the pipelines and to coastal refineries through tankers loaded from Jawaharlal Nehru Port Trust (JNPT). Also, payment of 'way leave' charges for pipelines passing through port limit was pending.
Source: Business Standard
22 November. Over 60,000 households in six districts of Himachal Pradesh will be supplied liquefied petroleum gas (LPG) through pipeline, Chief Minister (CM) Jai Ram Thakur said. The CM said that Indian Oil-Adani Gas Private Ltd (IOAG) would develop city gas distribution network in Sirmaur, Solan and Shimla districts, while Bharat Gas Resources Limited in Bilaspur, Hamirpur and Una.
Source: Business Standard
21 November. India’s crude oil imports in October rose to their highest level in at least more than seven years, data from the Petroleum Planning and Analysis Cell (PPAC) of the oil ministry showed. Crude imports in October climbed 10.5 percent from a year earlier to 21.02 million tonnes, the highest monthly import figure in PPAC data going back to April 2011. Imports rose as many refiners resumed purchases after maintenance of units. In October, India’s oil imports from Africa surged to more than a three-year high. In India, the world’s third-largest consumer, oil imports typically rise from October due to higher fuel demand in the festival season and as industrial activity picks up after months of monsoon rains. India is among the eight countries to have received a waiver from the United States to continue crude oil imports from Iran without penalty after sanctions were reimposed on Tehran. India’s oil imports from Iran fell by about 12 percent to about 466,000 barrels per day (bpd) in October. The country’s overall purchases from Iran in the April-October period, the first seven months of the current fiscal year, rose 34 percent. Meanwhile, imports of oil products declined nearly 20 percent and exports fell more than 4 percent, the data showed.
Source: Reuters
27 November. With more motorists willing to the adopt vehicles running on compressed natural gas (CNG), public sector oil retailers are planning to set up more CNG filling stations in the city. Indian Oil Corp (IOC) and Bharat Petroleum Corp Ltd (BPCL) said they would commission about 15 CNG bunks in and around the city in the current financial year. IOC the retailer has identified around 10 locations in the city for setting up CNG stations. BPCL will open five CNG filling facilities at its fuel stations at Edappally, Vyttila Mobility Hub, Aluva, Thiruvankulam and Kakkanad. The retailers are in talks with Indian Oil-Adani Gas Private Ltd (IOAGPL), which oversees city gas project. The setting up of new filling stations will depend on the gas project by IOAGPL as the natural gas is supplied through their pipelines. Therefore, all the CNG bunks will be in those areas where the gas pipelines are passing through.
Source: The Economic Times
26 November. Indian Oil Corp (IOC) is seeking two liquefied natural gas (LNG) cargoes for delivery in January. The company is seeking the cargoes on a delivered ex-ship basis into Gujarat between 7 January and 14 January, and from 21 January to 28 January. The tender closes on 27 November, with same-day validity.
< style="color: #ffffff">QuIck Comment< style="color: #ffffff">Delay in supply of domestic coal is an invitation for imported coal! < style="color: #ffffff">Bad! |
Source: Reuters
21 November. Oil and Natural Gas Corp(ONGC)'s natural gas production has hit an all-time high of about 70 million metric standard cubic meter per day (mmscmd) as it doubles up efforts to raise domestic output to curb imports. ONGC produced about 64 mmscmd of gas in November last year and this year the output is close to touching 70 mmscmd. After accounting for internal consumption, gas sales at about 56 mmscmd too are at an all-time high. The output can rise by 24-25 mmscmd in next 1-2 years if the company gets market price, that will make about 35 billion cubic meters of recoverable reserves in discoveries in the shallow sea off Andhra Pradesh on the east and off Gujarat and Mumbai on the west coast blocks economically viable. Natural gas is the fastest growing primary energy source in the world. It is the cleanest burning petroleum-based fuel and has wide applications -- from being used to generate electricity to the running of automobiles (CNG) and firing kitchen stoves. With a view to reducing dependence on imports for meeting energy needs and cutting greenhouse emissions, India is looking at increasing consumption of natural gas by more than doubling its share in energy basket to 15 percent in next few years. ONGC has been constrained by the current $3.36 per million metric British thermal unit price of gas fixed by the government, which is a third of the rate at which India imports gas in its liquid form (LNG). This price is way below the cost of production for block GK-28/42 in Gulf of Kutch, off the Gujarat coast, Mumbai offshore block MB-OSN-2005/1 and Krishna Godavari basin block KG-OSN-2005/1, which cumulatively can produce about 10 mmscmd. First gas from the KG-DWN-98/2 project is targeted for end-2019 and peak output is envisaged at 16.56 mmscmd by 2022.
Source: Business Standard
27 November. Coal India Ltd (CIL) is ready to renew its 5 million tonnes (mt) offer of additional coal to NTPC Ltd, which could not lift any quantity after it was offered the fuel with a 30-day deadline. NTPC said transporting the coal was a big hurdle. However, the company may not be able to keep the offer open for long as the coal that has been made available will deteriorate in quality with time or may catch fire. NTPC was offered coal after its stocks dipped sharply. It was offered 1.5 mt from Central Coalfields, 0.5 mt from Bharat Coking Coal and 0.5 mt from Northern Coalfields among others. NTPC said the company had to arrange for road transportation of the coal from pit head to railways’ loading facilities.
Source: The Economic Times
23 November. Indian Railways allotted at least 4,300 goods trains or rakes in the past 12-15 months on instruction from Coal India Ltd (CIL), for supplying about 17 million tonnes of coal to the state-run miner’s non-power consumers including captive power plants, that were never loaded by CIL and the allotted rakes remain pending. The estimated value of this coal is at least ₹2,200 crore and a portion of this has been already deposited in advance with CIL.
Source: The Economic Times
GSI finds 44 new coal blocks in Eastern India
22 November. The Geological Survey of India (GSI) said it has found 44 new coal blocks in four states of Eastern India. Spread across West Bengal, Jharkhand, Bihar and Odisha, the estimated coal resource of these 44 new blocks is close to 25,000 million tonnes, GSI said. Of these 44, 15 coal blocks belong to West Bengal.
Source: Business Standard
26 November. Trade volumes rose 19 percent at the Indian Energy Exchange (IEX) in the first six months of this financial year. This was aided by a pan-India 6.2 percent increase in electricity generation during the period. In all, 28,584 million units of power were traded between 1 April and 30 September, counting both the day-ahead and term-ahead markets. Total volume trade on IEX went up 34 percent, to 33,705 million units in the period.
Source: Business Standard
26 November. Power sector will be a profitable business again in two years as no fresh capacity is being added to cater to the rising demand, JSW Energy Managing Director (MD) Prashant Jain said. Jain said there is no stressed power plant that the company has not evaluated as it has a huge appetite for acquisitions.
Source: The Economic Times
26 November. Poor electricity supply and internet connectivity have rendered e-learning facilities in many rural schools across the state useless. Almost 50% of the schools — 65,000 odd — have been digitized across the state in three years. Yet, students in several schools have been unable to reap the benefits. Teachers blamed power shutdowns and poor internet facilities. The government should at least provide solar panels to address the power shortage, they said. Unpaid power bills and subsequent electricity disconnections have compounded the problem. The schools do not have a separate provision for electricity bills.
Source: The Economic Times
25 November. In a relief to power consumers ahead of the general elections 2019, power distribution companies in Andhra Pradesh made it clear that there will be no increase in electricity tariff for the next year financial year 2019-20. Farmers will get seven hours of free power supply a day.
Source: The Economic Times
21 November. The high-level committee for revival of stressed power assets has suggested setting up a mechanism to allow public financial institutions like REC and PFC to discount receivables from discoms (distribution companies) and make up front payments to generating companies. Besides, the panel headed by Cabinet Secretary P K Sinha has recommended that power ministry may engage with the power regulators to ensure that late payment surcharge is mandatorily paid in the event of delay in payment by discoms.
Source: Business Standard
< style="color: #ffffff">QuIck Comment< style="color: #ffffff">Ban on fossil fuel-based gensets may revive power demand! < style="color: #ffffff">Good! |
27 November. Stressing on tough steps to reform power sector, Niti Aayog CEO (Chief Executive Officer) Amitabh Kant pitched for ban on use of fossil fuel based gensets saying that the government needs to do it before a court order six months down the line. He made case for phasing out more than 25-year-old coal-based thermal power plants, creating of open access power market, commercial coal mining and promoting renewables. About clean energy, he was of the view that the challenge for India is, how the country does sustainable and innovative urbanisation, which means changing energy trajectory towards renewables.
Source: Business Standard
27 November. India has become the largest market globally for auction of new renewable energy generation projects and the second-largest destination attracting clean energy investments. These are the findings of the latest Climatescope 2018 report by Bloomberg NEF (BNEF). India has secured second place in the global ranking driven by its policy thrust towards renewables and increasing investments in the clean energy sector. The country is the second-largest renewable energy investment market among all Climatescope countries, attracting $9.4 billion in new investments in 2017. Renewable energy installations in India exceeded those by coal power plants for the first time in 2017 as the country moved closer towards its target to install 175 GW of renewables by 2022. India’s installed power generating capacity stood at 346 GW in June 2018, with renewables (excluding large hydro) accounting for 71 GW. With coal taking a share of almost 60 percent, challenges with domestic coal supply are resulting in increased coal imports. However, the government has reduced its coal capacity target for 2027 by 11 GW to 238 GW as the country seeks to replace coal with renewables through auctions. The report said India’s renewable auctions market is the largest in the world and auctioned capacity has ramped up by 68 percent since 2017.
Source: The Economic Times
26 November. The government expects to resume work on two of the country’s largest hydroelectric projects, planned by the NHPC at Lower Subansiri and Dibang in Arunachal Pradesh with a combined capacity of 4,800 MW, as the green tribunal has quashed appeals stalling them. The government has filed a caveat in the Supreme Court against stay on the two projects without a hearing. However, the organisations opposing the projects are preparing to approach the Supreme Court, according to people aware of the matter. The National Green Tribunal (NGT) rejected an appeal filed by social activists against the constitution of a three member expert committee to study the 2,000 MW Lower Subansiri hydroelectric project on the border of Assam and Arunachal Pradesh. NGT retained the three-member committee, including Prabhas Pandey, PM Scott and ID Gupta. In the matter of the 2,800 MW Dibang multipurpose project, the NGT had in its judgement on 13 November, dismissed the appeal filed by appellant Pradip Kumar Bhuyan against the government for granting environment clearance to the project. The tribunal upheld the environmental clearance accorded to the project in the lower Dibang valley district.
Source: The Economic Times
26 November. PSPCL (Punjab State Power Corp Ltd) has initiated the process to revive the Jalkheri biomass-based power plant with 1x10 MW capacity on renovate, operate and transfer (ROT) basis. The power plant has been lying idle for 11 years. The technical bids for the project were opened on 22 November, which saw three companies putting up their offer. PSPCL said that once the renovation work is allotted to the lowest bidder, the plant would become operational in about 27 months from the date of signing the lease agreement, which is likely to take 45 days from the issue of letter of award. PSPCL said that an operational plant at Jalkheri would consume about 80,000 metric tonnes of paddy straw per annum for producing electricity and thus help in mitigating the effects of stubble burning in the region.
Source: The Economic Times
26 November. Himachal Pradesh government has allotted the 780MW Jangi-Thopan-Powari hydro electric project in Kinnaur district to SJVN Limited on build, own, operate and transfer (BOOT) basis for a period of 70 years. SJVN Chairman and Managing Director Nand Lal Sharma assured that the company would complete the project on time and would contribute significantly in the overall development of the project affected area. According to him, SJVN has necessary infrastructure and that the current installed generation capacity of SJVN is 2,003.2 MW (comprising of 1,912 MW hydro, 85.6 MW wind power and 5.6 MW solar power). He said that SJVN is in the process of implementing various projects, which are in different stages of development, which on completion would add an additional 4,018 MW of capacity. Projects with a potential of 1,572 MW generation capacity are under construction, 1,848 MW under pre-construction and investment approval and 598 MW capacity is in the investigation stage. SJVN had earlier implemented 1,500 MW Nathpa Jhakri hydro power station in Himachal Pradesh. It is also executing hydro projects in Nepal, Bhutan and Uttarakhand.
Source: The Economic Times
25 November. After the success of a pilot project, the Maharashtra government plans to extend the CM (Chief Minister)'s agricultural solar feeder scheme in the rest of the state. The pilot project of the scheme was introduced last year in two places in Ralegan Siddhi in Ahmednagar and Kolambi in Yawatmal. Under this programme, the farmers are supplied power during the day with the help of solar generation.
Source: Business Standard
25 November. JSW Steel is undertaking a major reorientation of its operations as well as product mix to reduce carbon dioxide emissions and align with the country's climate change priorities. On the portfolio mix, the company is focusing on environment friendly products for packaging, electrical and appliance sectors. On the operational front, it is setting up a 40 tonnes per hour granulated slag crusher to double its current daily slag sand production to replace natural river sand in construction among other initiatives. According to JSW Steel, reducing air emissions is a vital part of JSW Steel's climate change priority alignment. JSW Steel is making considerable investments to control air emissions. The company's Dolvi unit has set-up 13 Dust Extraction systems to control fugitive emission during the material transfer through conveyors. On the product mix front, the company is developing environment-friendly products with focus on packaging and electrical sectors.
Source: Business Standard
24 November. Surat, which aims at becoming the first solar city of the country, will have 25 MW of installed capacity of solar power by February 2019. It already has 15 MW of installed capacity of solar power and tops the chart in the country. In all, 4,000 solar panels of different capacities were installed in the city which produce 15 MW of solar power. The city administration had received 4,500 applications from residents and commercial establishments in the first phase until 24 September. It received another 1,000 applications in the second phase that began from 24 September and ends next year in the same month. The Ministry of New and Renewable Energy (MNRE) has increased subsidy on solar panels to encourage use of clean energy. The Energy and Resources Institute had carried out a survey 18 months ago and it found that Surat had a potential to generate about 418 MW of solar energy from panels installed on rooftops. Rooftops of houses in the city can generate 179 MW, commercial establishments 210 MW, educational and health organizations 23 MW and government offices 6 MW of solar power. Solar panels on SMC buildings already help produce 5 MW of solar power. Surat expects to produced 50 MW of solar power by September 2019.
Source: The Economic Times
23 November. The Punjab State Power Corp Ltd (PSPCL) is going to set up a 60-65 MW paddy straw-based power plant at the cost of ₹150 crore. PSPCL’s Board of Directors (BoD) in a meeting cleared the proposal for the project at the Guru Nanak Dev Thermal Power (GNDTP) plant in Bathinda. It will be one of the largest straw-based plants and around 4 lakh tonne paddy straw would be used annually to generate electricity. So far, straw-based power plants of up to 45 MW capacity are operational. The BoD cleared another proposal to set up 100 MW solar power plant was also cleared. The proposals have been sent to the state government for final approval.
Source: The Economic Times
22 November. Delhi's air quality showed a slight improvement due to increased wind speed and settled in the poor category, authorities said. The overall air quality index was recorded at 282 which falls in poor category, according to data by the Central Pollution Control Board (CPCB). While, eleven areas in Delhi recorded very poor air quality, 24 places recorded poor air quality, according to the data. The level of PM2.5 (particles in the air with a diameter of less than 2.5 micrometres) was recorded at 135 and the PM10 level was recorded at 273, it said. According to the Indian Institute of Tropical Meteorology (IITM), the slight improvement in the air quality was due to increased wind speed. An AQI between 0 and 50 is considered 'good', 51 and 100 'satisfactory', 101 and 200 'moderate', 201 and 300 'poor', 301 and 400 'very poor', and 401 and 500 'severe'. Delhi's air quality has been registered in the very poor category since last week and some areas even recorded severe pollution level.
Source: Business Standard
22 November. Swedish luxury carmaker Volvo said it will do a local assembly of its plug-in hybrid cars in India by end of 2019. This will make India the third country after Sweden and Malaysia to have a local assembly of the brand's plug-in hybrid cars. It will start with the local assembly of one model, the XC90 PHEV, and will add four models over three years to expand the hybrid range. These vehicles allow a user to cover a distance of 40 km using electric power upon full charge after which the vehicle shifts to fossil fuel using the hybrid technology. That makes these vehicles cleaner by 60 percent, compared to a fossil fuel car, it said. The battery in these vehicles can be charged using an external source of power. Volvo globally has decided to phase out conventional fuel powertrains and focus on electrification. The company said it is committed to a goal of featuring some form of electric propulsion in its models from 2019 onwards. The carmaker wants to sell a total of 1 million electrified vehicles globally by 2025. Volvo said it will bring a full electric car to India within months of the global launch sometime in 2019. The luxury carmaker happens to be the fastest-growing luxury brand in the domestic market, though on a lower base. In the first 10 months of 2018 calendar year, the brand sold 2,194 vehicles in India, growing 40 percent year-on-year. It sells a total of 10 models in the domestic market, of which three are assembled.
Source: Business Standard
22 November. Power and Renewable Energy Minister R K Singh reviewed the progress for the 1,302 MW Buxar thermal power project and directed officials to expedite its investment approval. The project, being executed by Satluj Jal Vidyut Nigam (SJVN), is estimated to cost over ₹10,000 crore, the power ministry said. The Power Minister directed the officials concerned to expedite the investment approval for the project so that its foundation laying ceremony can take place by January next year. All tie-ups are in place for the project, it said. Singh was chairing a review meeting of the Buxar project. The meeting was attended by representatives from SJVN, Niti Aayog, Department of Expenditure, Central Electricity Authority and Bihar government. SJVN Chairman informed that the company has all the required clearances and the project can go ahead in plug and play mode. Principal Secretary (Energy), Bihar said that Bihar will take not less than 85 percent power from the project as it has seen a growth of 15 percent in power demand in the recent years. The state has shown tremendous growth in electricity consumption, as its per capita consumption has grown from 145 units in 2012-13 to 360 units in 2017-18, it said.
Source: The Economic Times
21 November. Solar Energy Corp of India (SECI) has decided to continue with the solar panel manufacturing-linked power project tender despite only one bid. It had invited tender for setting up 3 GW of solar panel manufacturing, along with 10 GW of power plant. The bid was submitted by NYSE-listed Azure Power to set up 600 MW of manufacturing as well as 2,000 MW of power project. The bidding happened after being extended for six times, owing to lack of bidders. Major players shied away from the bidding citing lack of funding push from the Centre, thereby reducing viability of solar manufacturing in India. Earlier, the industry had expressed reservations over the tender.
Source: Business Standard
26 November. Saudi Crown Prince Mohammed bin Salman and Bahraini King Hamad bin Isa Al Khalifa opened a new oil pipeline between the two countries. The pipeline connects Saudi oil processing facilities at Abqaiq with the Bahrain Petroleum Company refinery in Bahrain, with a flow that currently reaches 220,000 barrels per day, and a transport capacity of up to 350,000 barrels per day.
Source: Reuters
26 November. Kuwait National Petroleum Company (KNPC) said it aims to raise its refining capacity to 2 million barrels per day (bpd) by 2035, Chief Executive Officer Mohammed Al Mutairi said. KNPC is expected to reach a refining capacity of 1.4 million bpd by 2020 after it starts operations at its clean fuel project and starts operations at its al-Zour refinery, which is currently under construction.
Source: The Economic Times
23 November. BP has started production at the Clair Ridge oil field in the West of Shetlands region of the North Sea, targeting a peak output of 120,000 barrels per day, it said. The Clair Ridge project is the second phase of the Clair field, located 75 kilometre (47 miles) west of Shetlands. Royal Dutch Shell, Chevron and ConocoPhillips also hold stakes in the field. In addition to two bridge-linked platforms, the Clair Ridge project included a new oil and gas pipeline tying it to the Clair export pipeline, which delivers oil to the onshore Sullom Voe terminal, BP said. Clair was first discovered in 1977 and is one of a number of big developments in the West of Shetland area, where other oil companies are investing. The new project is designed to recover 640 million barrels of oil. Clair Ridge is BP’s sixth major project start-up in 2018, after starting up seven in 2017. All these projects will boost the London-based company’s output by 900,000 barrels of oil equivalent per day by 2021.
Source: Reuters
23 November. A top aide to Brazilian president-elect Jair Bolsonaro said the new government would adopt concession contracts for lucrative pre-salt oil auctions, raising concerns that talks to change the regime would drag and derail much-needed investment. Later, however, Roberto Castello Branco, who Bolsonaro has tapped to lead state-led oil company Petroleo Brasileiro SA said there was no final decision yet on what contracts the new administration would offer in the highly prized deep water oil tenders. Investors are eager to win a bigger slice of Brazil’s oil prize, but the shift away from an increasingly successful production sharing auction regime also raises concerns that any changes would require lengthy discussions in Congress, raising uncertainty and causing investment to dry up.
Source: Reuters
23 November. South Africa will invest $1 billion in South Sudan’s oil sector, including in the construction of a refinery. South Sudan exports its crude through a pipeline that goes to a port in neighbouring Sudan to the north. South Sudan is producing 135,000 barrels per day (bpd) from 130,000 bpd in August.
Source: Reuters
22 November. Venezuela’s state-run oil firm PDVSA has begun talks with shipping firms to set up a second ship-to-ship (STS) operation off the country’s eastern coast in an effort to increase sagging crude exports. PDVSA this year began sea-borne oil transfers off its western coast, mainly to move crude and fuel oil to Asia, after its ports clogged with tankers waiting to load and its Caribbean terminals faced seizure. PDVSA’s STS activity has expanded recently, but not enough to expedite operations at its main oil port of Jose, according to Refinitiv Eikon data. The country’s crude exports fell 21 percent to an average 1.126 million barrels per day (bpd) between January and October, according to data. At the end of the first half, PDVSA’s contractual obligations totaled 2.19 million bpd.
Source: Reuters
22 November. Equinor and Global Petro Storage (GPS) have entered into a long-term agreement to build and operate a terminal and storage facility for liquefied petroleum gas (LPG) in Malaysia, the Norwegian company said. Oil and gas firm Equinor will bring LPG to the terminal at Port Klang, expected to start operating in mid-2021, to sell into Malaysia and other Asian markets including Bangladesh, the Philippines, India, Indonesia and Vietnam, it said. Equinor plans to source the LPG from the North Sea, North Africa, the Middle East and Australia. The 135,000 cubic metre-capacity terminal could handle 1.5 million tonnes of LPG per year, the company said. Equinor said its operations already account for around 10 percent of global waterborne LPG volumes. As part of the agreement, Equinor will have an option to acquire a share of the new storage facility and terminal, of which it will be the only user.
Source: Reuters
22 November. Saudi Arabian Energy Minister Khalid al-Falih said that he sees weak oil demand in January and said the kingdom would respond accordingly to cool the global market’s anxiety. The world’s top oil exporter’s crude output in November is above October levels, he said. Falih said the kigdom’s policy has not changed and it will work towards balanced market. Saudi Arabia is discussing a proposal to cut oil output by as much as 1.4 million barrels per day by OPEC (Organization of the Petroleum Exporting Countries) and its allies.
Source: Reuters
27 November. Global independent tank storage company Vopak said it will increase its stake in liquefied natural gas (LNG) infrastructure in Pakistan, as the South Asian country turns to LNG imports to curb energy shortages. Vopak said it will acquire a 44 percent stake in total in Elengy Terminal Pakistan Ltd, whose subsidiary owns the South Asian nation’s first LNG import facility. The acquisition will involve separate transactions with International Finance Corp (IFC) and Engro Corp and includes a 29 percent stake the company said it would buy in July, Vopak said. The purchase is subject to conditions including regulatory and shareholder approvals, and is expected to close in the first quarter of next year, it said. Elengy Terminal Pakistan’s subsidiary Engro Elengy Terminal owns an LNG facility which is located at Port Qasim in Pakistan, adjacent to the Engro Vopak chemical terminal. The facility has been in operation since 2015 and is the first LNG import facility in Pakistan.
Source: Reuters
27 November. Saudi Aramco’s gas expansion strategy needs $150 billion worth of investments over the next decade as the company plans to increase output and become an exporter, its Chief Executive Officer (CEO) Amin Nasser said. Aramco is pushing ahead with its conventional and unconventional gas exploration and production program to feed its fast growing industries, freeing up more crude oil to export or turn into chemicals. The state oil giant plans to boost its gas production to 23 billion standard cubic feet (scf) a day from 14 billion scf, he said.
Source: Reuters
26 November. Venezuela’s oil ministry turned down a proposal by BP to buy Total’s stake in a promising but inactive natural gas project along the maritime border with Trinidad and Tobago. BP owns the rights to the Trinidadian side of the gas play. It could have used the output from the neighbouring area, the Deltana Platform’s fourth block off Venezuela’s eastern coast, to feed its growing operations on the island. The rejection highlights how Venezuela’s socialist government, often hostile to foreign companies, remains an obstacle to investment even as oil majors eye the OPEC nation’s barely tapped gas reserves to expand their liquefied natural gas (LNG) portfolios. Gas investment could help Venezuela, which has the world’s largest crude reserves, compensate for lack of capital for its oil industry, whose production continues plummeting amid a political and economic crisis. Venezuela’s mostly undeveloped gas reserves were 225 trillion cubic feet (tcf) at the end of 2017, compared with Trinidad’s 9.2 tcf, according to BP’s Statistical Review of World Energy. BP and Royal Dutch Shell own stakes in all four of Trinidad’s LNG plants, known as trains. Shell, the world’s largest liquefied gas trader after buying BG Group for $52 billion, is pushing Venezuela to let it produce gas in the offshore Dragon field, close to its Hibiscus platform off Trinidad.
Source: Reuters
23 November. Malaysia’s Petronas said production at the Kebabangan gas field in the eastern state of Sabah was expected to return to full capacity by August 2019 following disruption caused by a gas leak at an associated pipeline. The problem was caused by a leak from the Sabah Sarawak Gas Pipeline in January, the state energy firm said. Repair works on the pipeline have been completed, and integrity assurance tests being conducted on the 500-kilometre pipeline are expected to be finished by July 2019, it said.
Source: Reuters
21 November. Industrial gas demand in North China is showing signs of a sharp slowdown as small manufacturers shut their doors or buy less gas, unable to cope with a drop-off in export orders and costs related to Beijing’s pollution control and reform measures. With spot orders from these users drying up, many dealers are trying to negotiate for lower volumes on existing liquefied natural gas (LNG) contracts with top supplier China National Offshore Oil Corporation (CNOOC). The contract talks come only six months after the deals were done with CNOOC. The unexpected fall-off in demand from hundreds of small factories from a key industrial region could end up forcing Asian LNG spot prices even lower. Among the manufacturers buying less gas this year is a ceramics factory in Yilin in Shandong province.
Source: Reuters
21 November. Argentina is due to begin exports of liquefied natural gas (LNG) from a part of its vast Vaca Muerta shale gas resource next year through a floating LNG liquefaction (FLNG) vessel provided by Exmar, the Belgian shipping company said. The operations, due to start in the second quarter of 2019, will introduce Argentina into the small club of around 20 countries exporting LNG while the FLNG will be only the world’s fourth and the smallest. The country’s state-controlled oil company YPF signed a 10-year agreement with Exmar to deploy the barge-based FLNG, formerly known as the Caribbean FLNG, at Bahia Blanca on the east coast about 400 miles south of Buenos Aires. Argentina will continue to have the ability to import LNG through the Excelerate Expedient FSRU moored in Escobar, close to Buenos Aires. The new import vessel will now be named Tango FLNG and is expected to ship up to eight cargoes a year.
Source: Reuters
21 November. East Timor has agreed to buy Royal Dutch Shell’s stake in the Greater Sunrise natural gas fields off the northern coast of Australia for $300 million, the government and Shell Australia said. The agreement for Shell’s 26.56 percent stake in the project will allow the tiny nation to push for development of the field. The site, which was discovered in 1974, straddles the maritime border between Australia and East Timor and disputes between the two countries over the border has delayed development. The deal comes after ConocoPhillips sold its 30 percent stake in the project. Remaining partners include Australia’s Woodside Petroleum and Japan’s Osaka Gas. The border issue between Australian and East Timor was settled earlier this year. East Timor wants to develop Greater Sunrise by piping gas to a liquefied natural gas (LNG) plant on its south coast, while the project partners have favored a plant in Darwin in north Australia. The Sunrise and Troubadour gas fields, together known as Greater Sunrise, hold around 5.1 trillion cubic feet of gas and about 226 million barrels of condensate, a light oil produced in association with natural gas.
Source: Reuters
27 November. China’s coal imports are set to slump in December as traders and utilities wind back purchases following signals from Beijing that it will stop clearing shipments until next year, trading companies and utilities said. Coal imports by the world’s top consumer of the material used for heating and steelmaking rose in the first 10 months of 2018 to 252 million tonnes (mt), up 11 percent from a year ago and not far below last year’s total of 279 mt. However, domestic coal prices have eased in recent months, even as China enters its peak demand season over winter, with utilities sitting on record coal stocks amid a slowdown in electricity demand growth. China National Building Materials International (CNBM), a major buyer of Indonesian and Australian coal, will stop buying foreign supplies in December for its utility clients, the company said. China has in the past imposed coal import restrictions, which has had the effect of increasing local prices by lowering competition. Earlier this year it banned smaller ports from receiving coal and it has also carried out strict inspections on low-quality coal.
Source: Reuters
26 November. Australia’s New Hope Corp Ltd will buy a further 10 percent stake in the Bengalla thermal coal mine in Hunter Valley, New South Wales from Japan’s Mitsui & Co Ltd for A$215 million ($155.7 million). New Hope will own up to an 80 percent interest in Bengalla. The mine contributed more than half of the company’s profit last year and is expected to continue producing for more than 20 years. The Mitsui transaction comes three months after Wesfarmers Ltd struck a deal to sell its stake in the Bengalla mine to New Hope, which held a 40 percent stake in the mine at the time. New Hope said Taiwan’s Taipower, which currently holds a 10 percent stake in the mine, will buy another 10 percent from Wesfarmers.
Source: Reuters
26 November. Germany has postponed until February a decision on how fast Europe’s largest economy should phase out brown-coal-fired power plants and whether the government should compensate utilities as well as regions that could face job losses, the coal commission said. With brown coal mines the only truly domestic resource in a country reliant on energy imports, Germany faces wrangling over when to abandon coal-burning to meet ambitious climate goals by 2030, as it also wants to be free of nuclear energy by 2022. The German cabinet has appointed a 24-strong group, the coal commission, to find a compromise deal. It was expected to present an exit plan by the end of the year. Economy Minister Peter Altmaier said the postponement of the decision could increase the chances for a broader acceptance of the coal exit plan.
Source: Reuters
23 November. Britain’s Banks Mining has won a high court challenge to the government’s decision to reject its application to develop a new coal mine in northeastern England, the company said. Northumberland County Council agreed last year that the mine’s developer, Banks Mining, a division of The Banks Group, could extract 3 million tonnes of coal by cutting an open cast, or surface, mine near Druridge Bay, Highthorn. Supporters of the project had said it could bring much-needed jobs to the region, and help to reduce Britain’s reliance on coal imports. Britain plans to close all coal-fired power stations by 2025 unless they are fitted with technology to capture and store carbon dioxide emissions, as part of efforts to cut greenhouse gases by 80 percent from 1990 levels by 2050. Britain’s Energy Mister Claire Perry has spearheaded an international campaign to phase out coal fired power plants across the globe.
Source: Reuters
27 November. Power-hungry Vietnam, one of Asia’s fastest-growing economies and a production hub for global companies such as Samsung Electronics, needs to raise up to $150 billion by 2030 to develop its energy sector, according to World Bank. Vietnam has been struggling to develop its energy industry due to a lack of state funds. The Southeast Asian country’s hydropower potential has almost been fully exploited, oil and gas reserves are running low, and Vietnam recently went from a net exporter to net importer of coal. Electricity demand in Vietnam will grow by about 8 percent a year for the next decade. Vietnam plans to more than triple the amount of electricity it produces from renewable sources and push for a 26 percent increase in household solar energy usage by 2030. Vietnam has not been able to reduce its reliance on coal energy, which will account for 53 percent of all energy generated in the country by 2030, according to its trade ministry.
Source: Reuters
25 November. Trade Bank of Iraq, Standard Chartered and General Electric (GE) closed a $600 million financing agreement to fund a power project in Iraq. Aimed at delivering more than two gigawatts of new power to Iraq, the 'Power up Plan' was part of the country's rebuilding and modernisation scheme. Iraq's government has been striving to close a gap between electricity demand and supply.
Source: The Economic Times
23 November. Kosovo’s power utility KEK said it was facing major power shortages after a 200 MW unit of its Kosova A coal-fired power plant was taken offline on 21 November due to a technical defect. KEK said the unit should resume production on 26 November. Kosovo relies on coal for most of its electricity generation. KEK’s ageing plants can produce a maximum 800 megawatt hours (MWh) of electricity, while domestic demand in winter is up to 1,100 MWh, KEK said.
Source: Reuters
23 November. ABB’s Power Grids business has signed deals that could be worth around $1.9 billion to supply power transmission equipment to utility companies in China. Claudio Facchin, the head of Power Grids, signed Memorandums of Understanding with Chinese companies including State Grid Corp of China and China Southern Power Grid. The China deal includes digital software and components for high voltage direct current systems used to transmit electricity over long distances. Deliveries could include components for a 1,200 kilometre (746 miles) high voltage power line between Inner Mongolia and Shandong province. A decision to sell Power Grids, which makes transformers and substations for transmitting electricity, marks a reversal for ABB after it decided to keep the business two years ago despite calls from some shareholders to sell.
Source: Reuters
27 November. Zambia is seeking proposals from potential developers of solar power projects with a combined 200 MW capacity as it tries to diversify its energy mix away from hydroelectric power. Energy Minister Matthew Nkhuwa said that the 200 MW would be split into small projects, each with a maximum size of 20 MW. Zambia is heavily dependent on hydropower and faced electricity shortages following a drought in 2016, forcing Africa’s No.2 copper producer to ration power to its mines. Enel Green Power’s head of Africa, Asia and Oceania Lamberto Dai Pra said that African countries should invest in technologies other than hydropower. Dai Pra said Enel Green Power had started building five wind power projects in South Africa, which would add 700 MW of electricity to its output when completed in the next few years.
Source: Reuters
27 November. The European Union (EU) regulators approved €600 million ($679 million) worth of French state aid for innovative solar power installations, saying it would support the bloc’s climate ambitions. The European Commission said that the scheme was aimed at adding 350 MW of additional capacity through small installations at ground level or on buildings that would be picked through tenders by the end of this year.
Source: Reuters
27 November. Malaysian state-owned oil and gas firm Petroliam Nasional Berhad (Petronas) has set up a new business within the group to make a push into renewable energy. Petronas has expressed interest over the last year to diversify into renewables amid low oil prices. Petronas will explore new business areas including new energy and that the company will assess opportunities in solar power. Petronas is the latest oil and gas major to look into the renewables space. Top oil companies including Royal Dutch Shell , BP and Total are investing more in cleaner energy sources such as solar and wind power and electric vehicle technology. International Renewable Energy Agency (IRENA) said Southeast Asia is a potential hotspot for renewable energy, yet the region has not met expectations because it lacks policy frameworks that would encourage investment. Global renewable capacity, excluding hydro, has soared from under 100,000 megawatts (MW) in 2000 to more than 1 million MW in 2017, according to IRENA data.
Source: Reuters
27 November. France plans to triple its onshore wind power capacity by 2030 and multiply by five its solar power generation, enabling it to boost the share of renewables in its energy mix to 40 percent, according to the energy plan presented. French President Emmanuel Macron said the government would increase spending on renewables development to €8 billion ($9.05 billion) annually from 5 billion to take total spending to €71 billion between 2019 to 2028. Nuclear-dependent France has lagged behind other European nations with only around 20 percent of electricity consumption coming from renewables. France is on track to meet its target of 15 GW of installed wind power capacity by the end of the year, but installation of solar panels would likely fall short of the 10.2 GW target by the end of the year.
Source: Reuters
26 November. The European Union (EU)’s progress towards increasing the use of renewable energy and improving energy efficiency is slowing, putting its ability to meet its 2020 and 2030 targets at risk, the European Environment Agency (EEA) said. Rising energy consumption, particularly in transport, is to blame for the slowdown, the EEA said in an annual report on EU efforts on its renewables and energy efficiency targets. Renewable energy, such as wind and solar, accounted for a 17.4 percent share of gross final energy consumption in the EU last year, according to the EEA’s preliminary data, up from 17.0 percent in 2016. Preliminary EEA data for 2017 showed 20 member states were on track to reach their individual targets on renewable energy by 2020, a decline from 2016 when 25 countries were on track. On energy efficiency, both primary and final energy consumption were above the trajectory needed towards 2020. By the end of this year, member states must submit the first draft of their national energy and climate plans to help them achieve targets for 2030.
Source: Reuters
26 November. Britain’s Drax has started a pilot project to capture and store carbon dioxide emissions at its biomass plant, the first of its kind in Europe, Drax said. Carbon capture and storage (CCS) involves the capture of emissions from power plants and industry to allow them to be stored underground or compressed in containers to be used for industrial applications such as making drinks fizzy. The technology is also likely to be needed to help limit a rise in global temperatures at 1.5 degrees Celsius, according to a recent UN (United Nations) report. Drax said using the technology at the plant in North Yorkshire, England, that burns biomass - wood pellets, often made from compressed sawdust – could enable the company to operate the world’s first carbon negative power station. When coupled with CCS, the overall process of generating electricity from biomass removes more carbon dioxide from the atmosphere than it releases, the company said. Drax said the CO2 (carbon dioxide) will initially be stored on site but that eventually it will seek to find a use for the gas, such as in the drinks industry which earlier this year was hit with a CO2 shortage. Britain has a target to cut its greenhouse gas emissions by 80 percent compared with 1990 levels by 2050, but has asked its climate change experts to advise on whether it should set a date to meet a net zero emissions target.
Source: Reuters
26 November. Norwegian gas system operator Gassco and Canadian energy firm Enbridge are working on reviving a 350 MW offshore wind project to boost power supply security at Norway’s Nyhamna gas processing plant, they said. The project, which would be the country’s first offshore wind farm, is called Havsul 1 and was fully licensed by Norwegian energy regulators in 2009 before being abandoned in 2012 due to profitability concerns and insufficient subsidies. Initially Havsul 1 was part of a larger plan to construct three offshore wind farms, with around 1,500 MW capacity, but Norway’s regulator rejected the other farms.
Source: Reuters
23 November. Poland’s first nuclear power plant is expected to start operating in 2033 - if the project gets a green light from the government, the energy ministry said. In its draft energy strategy to 2040, a document keenly awaited by market players and analysts, the ministry said the first planned nuclear power plant will have a capacity of 1-1.5 GW. Ultimately the ministry expects Poland to have a total of 6-9 GW of nuclear power by 2043, which will account for around 10 percent of power generation. Poland has considered building a nuclear power plant for years, but the government has yet to take a binding decision on the project. Poland plans to reduce carbon emissions by 30 percent by 2030 as compared to 1990, the ministry said. The most polluting lignite coal will almost disappear by 2040 with a growing share of photovoltaic and wind farms. Poland already has onshore wind farms and its first offshore ones are expected to be built after 2025.
Source: Reuters
22 November. Japan has introduced a new technology to generate electricity by recycling waste food. JFE Engineering Corp has established a new company called "J Bio Food Recycle" with the cooperation of wholly-owned subsidiary, JFE Kankyo Corp, also in joint project with East Japan Railway Company and JR East Environment Access. This project began as food recycling business by converting to biogas beginning in August 2018. In this project, 80 ton per day of food waste will be treated by microbial fermentation, and electric power will be generated by using methane gas created in this process as fuel. Food wastes from food factories and train station buildings will be crushed and separated into category including organic matter and other type of waste items like plastic container and wrapping paper. After that, segregated organic matter will undergo moisture adjustment and will be sent to fermentation tank where organic matter will be fermented by microorganism digestion, and bio-gas will be generated. Then, biogas generated by methane fermentation will be supplied straight to gas holder. It is stored here in order to provide stable power generation. Electricity will be generated by gas energy sent from gas holder and sold as renewable energy.
Source: The Economic Times
22 November. French energy group EDF and Nawah Energy have signed a deal to operate and maintain the delayed Barakah power plant, which will be the first nuclear energy plant in the Arab world. The $24.4 billion Barakah power plant in the United Arab Emirates (UAE) is the world’s largest nuclear project under construction but has been marred by delays related to training issues. The plant was originally expected to begin operations in 2017. EDF and Nawah said that their deal, a 10-year commitment, would help Barakah prepare for operations of the first of its four 1,400 MW units. Earlier this year, the Barakah plant was due to open in 2019.
Source: Reuters
21 November. The Marshall Islands is the first country to submit new, binding climate targets to the United Nations, sending a signal to other countries to commit to more ambitious emissions cuts. In 2015, nearly 200 nations pledged in Paris to limit the rise in global temperatures to well below 2 degrees Celsius, and ideally to 1.5 degrees Celsius, with a sweeping goal of ending the fossil fuel era this century. To achieve that, each country had to submit national targets to reduce emissions and adapt to climate change. However, current government pledges in the Paris Agreement are too weak to limit warming and more ambitious action is needed. Therefore, countries have to submit new or updated pledges by 2020 to the United Nations’ Framework Convention on Climate Change and then every five years after that so that deeper emissions cuts can be achieved. The Marshall Islands, an atoll nation vulnerable to sea level rise from climate change, is the first country to submit two new pledges to reduce emissions by at least 32 percent by 2025 below 2010 levels and by at least 45 percent by 2030. The Marshall Islands has committed to producing a national plan with steps to adapt to climate change impacts by the end of 2019.
Source: Reuters
21 November. The US (United States) Environmental Protection Agency granted oil major Chevron Corp a 2017 hardship waiver from US biofuel laws for its Utah refinery earlier this year, according to a source familiar with the company’s operations. Chevron, which reported a net income of $9.2 billion in 2017, becomes the largest known company to be awarded a hardship waiver from the Renewable Fuel Standard, which requires refiners to blend biofuels like ethanol into their fuel pool or buy compliance credits from competitors that do. The waivers, which have grown significantly under the Trump administration, have angered corn-belt farmers who say it hurts demand for ethanol and other biofuels.
Source: Reuters
As on 30 June 2018
| State | No. of Households (HHs) | No. of HHs Electrified | % HHs to be Electrified |
| Andhra Pradesh | 11374842 | 11374842 | 0 |
| Arunachal Pradesh | 320706 | 242155 | 24.5 |
| Assam | 6458002 | 4138696 | 35.9 |
| Bihar | 13984988 | 12175529 | 12.9 |
| Chhattisgarh | 6260288 | 5951993 | 4.9 |
| Goa | 128208 | 128208 | 0 |
| Gujarat | 11396968 | 11396968 | 0 |
| Haryana | 3428747 | 3415267 | 0.4 |
| Himachal Pradesh | 1842333 | 1829259 | 0.7 |
| Jammu & Kashmir | 1916552 | 1654091 | 13.7 |
| Jharkhand | 6889071 | 4182075 | 39.3 |
| Karnataka | 10656847 | 10211307 | 4.2 |
| Kerala | 9933961 | 9813032 | 1.2 |
| Madhya Pradesh | 12818109 | 12105338 | 5.6 |
| Maharashtra | 24414133 | 24219951 | 0.8 |
| Manipur | 553389 | 476333 | 13.9 |
| Meghalaya | 437691 | 313062 | 28.5 |
| Mizoram | 229067 | 217883 | 4.9 |
| Nagaland | 425798 | 356460 | 16.3 |
| Odisha | 9867140 | 6855845 | 30.5 |
| Puducherry | 95366 | 95366 | 0 |
| Punjab | 3689970 | 3689970 | 0 |
| Rajasthan | 12788403 | 11004928 | 13.9 |
| Sikkim | 37282 | 32946 | 11.6 |
| Tamil Nadu | 10285848 | 10285848 | 0 |
| Telangana | 6776643 | 6443373 | 4.9 |
| Tripura | 733392 | 627886 | 14.4 |
| Uttar Pradesh | 37285767 | 24299071 | 34.8 |
| Uttarakhand | 2372304 | 2070852 | 12.7 |
| West Bengal | 14693319 | 14460462 | 1.6 |
| Total | 222095134 | 194068996 | 12.6 |
Source: Parliament Questions (Rajya Sabha)
This is a weekly publication of the Observer Research Foundation (ORF). It covers current national and international information on energy categorised systematically to add value. The year 2018 is the fifteenth continuous year of publication of the newsletter. The newsletter is registered with the Registrar of News Paper for India under No. DELENG / 2004 / 13485.
Publisher: Baljit Kapoor
Editorial Adviser: Lydia Powell
Editor: Akhilesh Sati
Content Development: Vinod Kumar
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