PNGRB may allow additional relief period for CGD companies facing delays in execution of projects due to national and state-level lockdowns imposed by the government to curb the spread of Covid-19 pandemic. The downstream regulator had issued a fresh set of guidelines to examine the requests of CGD compressed natural gas players for time extension on account of Force Majeure events. The guidelines list events such as war, riots, natural disasters and restrictions by the central or state governments as conditions that qualify under Force Majeure and can result in time extension to complete MWP obligations. PNGRB may further allow additional restoration period after the determination of the event of Force Majeure for restoration of the activities, ratings agency ICRA said. Over the last few months, while several city gas firms have claimed Force Majeure after work on sites got stalled due to the lockdowns, such claims could not be immediately accepted by the regulator PNGRB in the absence of guidelines listing the events that can trigger Force Majeure. The new guidelines by PNGRB come as a major relief for CGD companies. CGD players have MWP obligations for each year in terms of the length of pipelines, number of CNG stations and number of domestic connections to be completed during each of their initial years after receiving exclusive authorization to market gas in each Geographical Area which generally consists of 1-3 districts. If there is delay in execution, CGD regulations permit imposition of penalties on the entities.
GAIL (India) Ltd sees its gas demand returning to pre-Covid-19 levels by the end of the current quarter as the expansion of the city gas network will offset shrinking consumption. GAIL sold about 113 mmscmd of the fuel before the outbreak of the pandemic. GAIL saw gas demand almost halving when a nationwide lockdown was imposed beginning 25 March to contain the spread of coronavirus. Industries that used gas as feedstock shutdown and CNG-run buses and vehicles went off the road. But with the restarting of economic activity and unlock phases that began in May and June, the demand started coming back. GAIL is currently selling gas at almost 95 percent of pre-Covid-19 levels. The most prolonged reduction in gas demand came from the city gas distribution sector that sells CNG to automobiles, piped cooking gas to households, and provide fuel to hotels and other industries in towns. The reduction in demand in existing city gas networks would be offset by new demand from newer areas where the network is being expanded. City gas networks are mostly concentrated in Delhi, Gujarat, Mumbai and a few other cities and licences have been given to roll out the same in other areas. Gas consumption for the industry as a whole is likely to return to normal by the end of the financial year.
Higher demand from fertilizer plants, refineries and power plants has helped natural gas demand recover to almost pre-Covid levels with consumption in July just 2 percent lower than last year. India consumed 5,333 mmscm of natural gas in July as against 5,433 mmscm in the same month last year, official data showed. This is a sharp recovery from June when the consumption of 4,925 mmscm was 9 percent lower than a year earlier. Increased demand by fertilizer makers, power plants and refineries has led the revival, offsetting poor show by city gas players, which mainly supply to local industries and gas-based city transport. Lower price for imported LNG also helped boost local demand. LNG import rose 6 percent to 2,963 mmscm in July from a year earlier. LNG made up 55.6 percent of the country’s total gas demand in July. India has six LNG import terminals with a combined capacity of 42.5 mtpa. During April-June this year, Shell Energy’s terminal at Hazira in Gujarat clocked the highest capacity utilisation of 87.8 percent while Indian Oil’s new terminal at Ennore operated at the lowest 8 percent utilisation.
CNG sales in Delhi have risen to 85 percent of the pre-lockdown level as the Delhi government progressively opened up markets, allowed businesses and other economic activities to resume after the Centre began lifting curbs since June. Data from IGL, the sole supplier in the capital and most of the towns in neighbouring UP, show CNG sales averaging 2.75 mn kg/day in August against 3.4.5 mn/day in the same month a year ago. Data shows current daily average sales at 3.2 mn kg/day, or 92 percent of the pre-Covid average sales of 3.45 mn kg/day. Sales had slumped by 90 percent to 370,000 kg/day in April as the countrywide lockdown to check coronavirus infections from spreading shuttered nearly all economic activities and all vehicular movements, except emergency services, were halted. This forced IGL to close most of its stations in the NCR, though the company maintained round-the-clock service throughout the lockdown period.
According to Oil India Ltd, in order to reduce the surface level well head pressure of the blowout well number 5 at Assam’s Baghjan, the process of restoration of diversion of the flow of gas from the well head to Baghjan EPS and two flare pits was successfully implemented. On 27 May this year, a blowout occurred after the well suddenly became active while Oil India was carrying out work over operations in the gas-producing well Baghjan-5 under Baghjan Oilfield.
The Gopalpur Port Ltd in Odisha has planned to set up an LNG terminal and an investment of ₹20 bn for setting up fertilizer and petrochemical industries. While there are no restrictions on the loading of trucks from mines of the state for Vishakhapatnam and Gangavaram Ports in Andhra Pradesh, there is a restriction on loading for Gopalpur Port. As a result, the exporters are facing a tough time and stiff competition and there will be a huge loss of foreign exchange earnings to the nation also.
India will soon launch a bid round to give out licences for retailing gas in cities to help extend the coverage of environment-friendly fuel to about 500 cities. During 2018 and 2019, sector regulator PNGRB gave out licences to retail CNG to automobiles and piped cooking gas to household kitchens in 136 geographical areas. This extended coverage of the city gas network to 406 districts and around 70 percent of the country’s population. The push for city gas expansion is part of the government plan for raising the share of natural gas in the country’s energy basket to 15 percent by 2030 from the current 6.3 percent. The 11th bid round is being planned around a new pipeline being constructed from Angul in Odisha to Mumbai in Maharashtra to ferry natural gas between the east and west coast. GAIL has started work on the Angul-Mumbai pipeline. 17,000 km of gas pipelines particularly in the eastern part of the country are being built to connect gas sources with consumption centres. Also, the capacity of LNG import terminals is being raised to meet rising domestic demand. Retail outlets dispensing CNG have risen from 938 in 2014 to 2,307.
Italy’s Snam, the operator of Europe’s largest natural gas transmission network, is eyeing investment opportunities in the Indian gas pipeline business and has roped in GAIL’s former chairman B C Tripathi as its adviser. Snam top executives have held discussions with the oil minister, officials, regulator and industry executives in India to understand the investment opportunities and regulatory landscape, people familiar with the matter said. The discussions have ranged over several topics including hydrogen fuel, gas storage and small-scale liquefaction technologies but the big thrust has been on pursuing investment opportunities in the gas pipeline business, they said. Niti Aayog proposed hiving off GAIL’s pipeline assets and monetizing it but encountered resistance from the company as well as the petroleum ministry. GAIL owns about 11,000 km of gas pipelines across the country and is currently planning to shift all its pipeline assets to a wholly-owned subsidiary. Snam, which also operates in the UK, France, Austria, Greece and China, expects to leverage its deep knowledge of the gas sector to launch itself in India. Snam can offer technology and equipment for CNG refuelling stations, the company said. Some of India’s small gas fields are unconnected to a pipeline, and a cheap liquefaction facility can help evacuate such gas. India is seeking to expand the use of natural gas in transport and also setting up new LNG regasification terminals. The country has given away more than 100 CGD licenses in the past three years to increase population’s access to CNG.
The amount of regasification capacity, plants that bring LNG back to a gas, currently under construction globally will rise to a 10-year high this year, research and consultancy firm WoodMac said. Regasification capacity being built may rise to 144 mtpa led by projects in China, WoodMac said. This includes 33 new terminals totalling 92.8 mtpa that are under construction and another 51 mtpa of capacity to be adde d to existing terminals, WoodMac said. China, the world’s second largest LNG importer after Japan, accounts for over one-third, or 52.6 mtpa, of the new capacity, including 10 new terminals. India is building five new terminals with a capacity of 20 mtpa while Europe could add 13 mtpa of additional capacity from expansion projects until 2025 across the Netherlands, Poland, France, Greece and the UK. While the coronavirus pandemic has hampered construction and could lead to potential delays of new projects, seven new regas terminals are expected to make a final investment decision this year, WoodMac said.
Israel’s Petroleum Council gave its approval for Chevron Corp to take over Noble Energy’s stakes in Israeli natural gas fields, which are a key component in Chevron’s $5 bn acquisition. Chevron agreed in July to buy the Texas-based oil and gas producer, which operates two large offshore gas fields in the eastern Mediterranean. Upon completion, Chevron will be the first major energy group to enter the Israeli market. The Petroleum Council, which advises on exploration and production licenses, gave its blessing, paving the way for Chevron to become a dominant player in Israel, according to the energy ministry.
Turkey expects its energy imports to fall significantly following a major Black Sea natural gas find and more discoveries could be made in another area now being evaluated. Turkey announced the discovery of a 320 bcm gas field that could come on stream as soon as 2023. Turkey was determined to become a net energy exporter. If the gas can be commercially extracted, it could transform Turkey’s dependence on Russia, Iran and Azerbaijan for energy imports, which cost the country $41 bn last year.
Asian spot LNG prices hovered above $4/mmBtu as cargo loadings from the US were delayed due to a powerful hurricane. The average LNG price for October delivery into northeast Asia LNG-AS was estimated at about $4.05/mmBtu, down five cents from the previous week. Loadings of LNG cargoes from the US have been delayed following Hurricane Laura, which made landfall near the Texas-Louisiana border and is one of the most powerful storms to ever hit the region. US LNG exports were on track to fall to 2.1 bcfd their lowest since February 2019, according to data from Refinitiv. Cheniere Energy Inc’s Sabine Pass and Sempra Energy’s Cameron LNG export plants in Louisiana, which suspended operations, will likely be the last terminals to restart exports in the Gulf, analysts at ClipperData said.
Japanese trading house Sumitomo Corp has sold all its stake in the Marcellus shale gas project in the US for an undisclosed sum. Sumitomo bought a 30 percent stake in the project in 2010 from Rex Energy Corp, which went bankrupt in 2018. The project is 70 percent owned and operated by PennEnergy Resources. Sumitomo had booked an impairment loss on the stake in around 2015 when slumping oil and gas prices forced international energy companies and Japanese trading houses to write down the value of their assets.
The US has set aside $1.5 bn for political risk insurance in the gas-rich northern Mozambique region ravaged by an Islamist insurgency for the past three years. The insurance is poised to cover the construction and operation of an onshore natural gas liquefaction plant and support facilities being developed by energy giants including American firm ExxonMobil, French’s Total and Italian’s Eni. The gas project, one of Africa’s largest investment in recent decades, is situated in the Cabo Delgado which has been the scene of the jihadist attacks since 2017. Although the gas project has not been directly targeted, the extremist attacks pose a serious threat to the success of offshore investment valued at more than $60 bn.
US LNG exports were on track to increase for a second month in a row in September for the first time since hitting a record high in January as rising global gas prices prompted buyers to reverse some cargo cancellations. Gas prices surged over 60 percent in Europe and Asia last month, causing US LNG exports to jump from a 21-month low of 3.1 bcfd in July to 3.7 bcfd in August and an expected 3.8 bcfd in September, according to federal data. Several US LNG export plants stepped up to supply more of the super-cooled fuel even though Cameron LNG’s facility in Louisiana remains shut due to lingering power problems after Hurricane Laura slammed into the Gulf Coast in late August. Energy traders said Cameron has already deferred cargo loadings from September to October.
Units of Glenfarne Group LLC and Kinder Morgan Inc asked federal regulators for five more years to complete the Magnolia LNG export plant and associated gas pipeline expansions. The US Federal Energy Regulatory Commission approved construction of Magnolia LNG and related pipeline expansions in April 2016. That approval required the companies to complete the project within five years, by April 2021. Glenfarne has said it expects to decide late next year whether to build the Magnolia plant and the Texas LNG facility it is developing in Texas. If the company decides to build the projects, they could enter service around 2025. Several developers have put off decisions to build LNG projects in North America over the past year due to uncertainty about demand as the pandemic and other factors have cut energy consumption. Magnolia is designed to produce 8.8 mtpa of LNG or 1.2 bcfd of natural gas. 1 bcf is enough gas to supply about 5 mn US homes for a day.
Exxon Mobil Corp is limiting output at its flagship offshore project in Guyana to 100,000 bpd due to more issues with the reinjection of natural gas. Exxon, which operates the Stabroek block in a consortium with Hess Corp and China National Offshore Oil Corp, had initially planned to ramp up output for this first phase of the Liza project to its full capacity of 120,000 bpd in August. But mechanical issues with gas compressing equipment are preventing Exxon from reinjecting all of the natural gas produced alongside the light, sweet Liza crude, prompting the company to limit output so as to not flare an excessive amount of the gas. Natural gas flaring is a significant source of climate-warming greenhouse gas emissions. Guyanese authorities say Exxon should eliminate all flaring except for a “pilot” flame, necessary for safety. Exxon and its partners have discovered more than 8 bn barrels of recoverable oil and gas off Guyana’s coast, which is expected to transform the poor country’s economy.
Brazil’s lower house approved the basic text of a bill to further open up the natural gas market to private competition and break the monopoly held by state-controlled oil company Petrobras. The new legal framework changes natural gas distribution from a regime of concessions by the government to one of authorizations by the country’s oil and gas regulator ANP, thus reducing bureaucracy for building pipelines. The bill, which still needs to pass the Senate, would also open up competition by changing the vertical structure of the gas sector so producers cannot be distributors and vice-versa. Mines and Energy Minister Bento Albuquerque expects the law to unlock 40 bn reais ($7.41 bn) in private investment for the gas sector, while Economy Minister Paulo Guedes said it will bring a “shock of cheap energy” for Brazilian industries.
EEX said it will enable negative prices on its natural gas spot markets from 1 October to cater for any such market movements in the future. This spring, European gas prices slumped due to weak demand amid coronavirus lockdowns and strong renewables output, compounding an already oversupplied market with little available storage space left. China’s Sinopec Corp has awarded a 10-year tender to buy 1 mt of LNG annually from Qatargas. Sinopec has agreed to pay at a slope of 10.19 percent to Brent crude on a delivered ex-ship basis. The Chinese state oil and gas producer issued the tender in July, seeking supplies starting 2023, to take advantage of current low prices after the Covid-19 pandemic hammered global demand for the fuel.
French oil major Total has signed a security pact with the Mozambique government to protect a $20 bn LNG project being developed in the southern African country, the company said. Mozambican security forces have been battling a low-level insurgency against militias suspected of having links to Islamic State in the gas-rich north of the country. Total’s project includes the development of the Golfinho and Atum natural gas fields in the Offshore Area 1 concession, containing more than 60 tcf of gas, and the construction of a liquefaction plant with a capacity of 13.1 mtpa. Initial production is slated by 2024.
Greece and Bulgaria sought to reduce their reliance on Russian gas with the signing of an agreement that will allow Bulgaria to participate in a planned LNG terminal in northeastern Greece. The project, which has strong support from the US is aimed at boosting energy diversification in southeastern Europe, a region largely reliant on Russian natural gas. Bulgaria’s state-controlled Bulgartransgaz will acquire a 20 percent stake in the Greek company, Gastrade, that is developing the LNG terminal outside the Greek city of Alexandroupolis as per the agreement. Bulgarian participation in the venture is tied to a separate pipeline project that will be used to transport the gas northward.
Imports of natural gas to Ukraine from European countries have risen by 30 percent to 12.5 bn cubic meters so far 2020, including 3.4 bn in August, Ukrainian state-run gas transit operator said. It said 65 percent of the volume was supplied by owners for the future transit outside Ukraine. The operator said most of the gas had been imported from Slovakia. Ukraine used to meet its gas needs with imports from Russia but has not bought Russian gas directly since November 2015 after Kiev’s relations with Moscow soured over Russia’s annexation of Crimea. Kiev imports from Europe but transit volumes remain important both as a source of gas which Ukraine can tap into and then replace from its own supplies when it needs and as a source of revenue to buy gas from Europe.
| PNGRB: Petroleum and Natural Gas Regulatory Board, CGD: city gas distribution, MWP: Minimum Work Programme, CNG: compressed natural gas, mmscmd: million metric standard cubic meter per day, mn: million, bn: billion, mt: million tonnes, mmscm: million metric standard cubic meter, LNG: liquefied natural gas, IGL: Indraprastha Gas Ltd, UP: Uttar Pradesh, kg: kilogram, NCR: National Capital Region, km: kilometre, mtpa: million tonnes per annum, UK: United Kingdom, WoodMac: Wood Mackenzie, bcm: billion cubic meters, mmBtu: million metric British thermal units, US: United States, bcfd: billion cubic feet per day, bpd: barrels per day, Petrobras: Petroleo Brasileiro SA, EEX: European Energy Exchange, tcf: trillion cubic feet |
22 September. Indian Oil Corp (IOC), the country’s largest refiner, is reviewing its refinery expansion plans because of a gradual rise in use of cleaner fuels and changing demand patterns in Asia’s third-largest economy, its chairman S M Vaidya said. In 2018 India set a target for a 77 percent jump in refining capacity to about 9 mn barrels per day (bpd) by 2030, with IOC raising capacity to 2.6 mn bpd. However, Petroleum Planning and Analysis Cell, an oil ministry think-tank, is revising the supply and demand scenario for the country. He said that IOC’s focus is on adding higher capacity through expansion of existing units and raising petrochemical capacity to protect margins. IOC will also review expansion of its Paradip refinery when the revised supply and demand figures are available, he said. IOC’s joint venture with other state refiners along with Saudi Aramco and Abu Dhabi National Oil Co to build a 1.2 mn bpd refinery on India’s west coast has also been held up because land has yet to acquired for the project, he said. Fuel demand in India has recovered in the first two weeks of this month, with IOC selling 1 percent more gasoline than a year earlier while diesel remained down by about 9 percent, he said.
Source: The Economic Times
21 September. India saved over ₹50 bn when the country in April-May used two-decade low international oil prices to fill up its three strategic underground crude oil storages, Oil Minister Dharmendra Pradhan said. India, the world’s third-biggest oil importer, has built strategic storages in underground rock caverns at three places to meet any contingency. The average cost of procurement of crude oil was $19 per barrel, as compared to $60 a barrel prevailing during January 2020. While the 5.33 million tonnes (mt) of emergency storage — enough to meet India’s oil needs for 9.5 days — was built in underground rock caverns in Mangalore and Padur in Karnataka and Visakhapatnam in Andhra Pradesh by the government, state-owned oil firms were in April asked to buy crude oil when global rates fell to a two-decade low. The storages at Mangalore and Padur were half-empty and there was some space available in Vizag storage as well. The Strategic Petroleum Reserve entity of India (ISPRL) built the underground storages at Mangalore and Padur in Andhra Pradesh and Visakhapatnam in Andhra Pradesh as insurance against supply and price disruptions. India meets 85 percent of its oil needs through imports. Its refiners maintain 65 days of crude storage, and when added to the storage planned and achieved by ISPRL, the Indian crude storage tally goes up to about 87 days.
Source: The Economic Times
21 September. Fitch Solutions has made a further downward revision to India refined fuels demand forecast for 2020 from minus 9.4 percent to minus 11.5 percent in line with further deterioration in the country’s economic outlook. In response to the pandemic, the government has introduced a number of stimulus measures and, according to Fitch country risk analysts, will likely continue to boost spending in the face of a persistent revenue shortfall. Demand weakness is spread across the board, with both consumer and industrial fuels set for steep declines. With a nationwide lockdown in place over March to May, domestic demand plummeted, reaching its nadir in April at minus 48.7 percent year-on-year growth for total fuels consumption. Industrial demand as a whole has declined sharply due to restrictions in place on business activities, labour and supply shortages and credit constraints. The one bright spot was LPG (liquefied petroleum gas) demand for which rose by 4.3 percent. Social distancing measures have increased residential demand as a whole while the government’s policy to offer free cylinder refills to low-income households offered an additional boost.
Source: The Economic Times
20 September. Diesel prices continued to decline for the fourth consecutive day on the back of falling global crude prices. In the national capital, diesel was priced at ₹71.58 per litre, down from ₹71.82. Similarly in the other metros of Mumbai, Chennai and Kolkata, the fuel was sold for ₹78.02, ₹76.99 and ₹75.09, respectively, against the previous levels of ₹78.27, ₹77.21 and ₹75.32 per litre. The recent fall in transport fuel prices comes in the wake of softening of global oil prices as an extended run of Covid-19 has depressed demand and created a glut in the market. Prices of petrol, however, remained unchanged for the second straight day at ₹81.14, ₹87.82, ₹84.21 and ₹82.67 per litre across Delhi, Mumbai, Chennai and Kolkata, respectively.
Source: The Economic Times
20 September. The issue of continuation of cooking gas or LPG (liquefied petroleum gas) subsidy will be considered before inviting financial bids for BPCL (Bharat Petroleum Corp Ltd) privatisation, Parliament was informed. However, the interest of LPG customers of BPCL would be taken into consideration while deciding on the subsidy issue, Minister of State for Finance Anurag Singh Thakur said. The government is selling its entire 52.98 percent stake in India’s second largest fuel retailer and third biggest oil refiner.
Source: The Economic Times
QuIck CommentFalling price of petrol and diesel will provide some respite to consumers! Good! |
17 September. Petrol and diesel prices in the country have fallen again in the wake of softening of global oil prices as an extended run of Covid-19 has depressed demand and created a glut in the market. The pump price of petrol and diesel fell by 15 and 19 paisa per litre respectively in the national capital. Accordingly, petrol is now being retailed at ₹81.40 a litre and diesel at ₹72.37 a litre in Delhi. According to the Indian Oil Corp (IOC), petrol price has now reduced to ₹81.40, ₹82.92, ₹88.07 and ₹84.44 a litre in Delhi, Kolkata, Mumbai and Chennai respectively. Similarly the price of diesel in these metros in the same order stands at ₹72.37, ₹75.87, ₹78.85 and ₹77.73 per litre respectively. The price of fuel may remain steady or fall in the coming days due to the current movement in the international oil prices.
Source: The Economic Times
16 September. Oil imports by India’s Reliance Industries Ltd (RIL), the operator of the world’s biggest refining complex, surged in August after over a decade low in July, as the company has resumed normal operation at its export-focused plant after weeks of maintenance shutdown, shipping data showed. RIL’s oil imports in August rose about 58 percent from July to 1.22 mn barrels per day (bpd), data showed. The refiner received Venezuelan oil in August after a gap of two months as it took authorisation from Washington to exchange the oil for fuels.
Source: Business Standard
16 September. Petrol sales have fully recovered to pre-Covid level and diesel is down just about 6 percent in the first half of September from a year earlier, signalling people and industry were eager to get on with their lives despite a record jump in infection rates. In the first fortnight of September, petrol sales rose 2 percent from a year earlier and 7 percent compared to August. Diesel sales were down 5.5 percent year on year but rose 20 percent month on month, as per sales data from state-run fuel retailers who control nearly 90 percent of the domestic market.
Source: The Economic Times
16 September. India’s oil imports from Africa jumped to their highest in 10 months in August as refiners switched out more expensive crude from the Middle East, shipping data showed. The world’s third biggest oil importer shipped in about 3.95 mn barrels per day (bpd) of oil in August, the highest volume since April, with African nations accounting for about 17.5 percent, or an eleven month high of 688,000 bpd, the data showed.
Source: Reuters
QuIck CommentLNG imports growing at the cost of domestic production is not good for Aatmanirbhar! Ugly! |
22 September. LNG (liquefied petroleum gas) imports have shot past domestic supplies for the first time in India, creating ground for decontrolling the market even as local producers feel hamstrung by below-cost prices dictated by government formula. Domestic gas met 47 percent of demand in 2019-20, while a spurt in import of cheap cargos pushed up the share of LNG to 53 percent from 31 percent in 2017. Market is projected to be equally divided between LNG and domestic gas in the next two years. Domestic gas price has been falling for a year and is expected to slip below $2 per unit in the latest six-monthly review on October 1 against $4.5 for spot LNG projected by a report. LNG entails additional costs on regasification and transportation. Over 80 percent of domestic gas comes from fields that do not have pricing or marketing freedom undeer the 2014 gas pricing policy. Gas from technologically/geologically difficult fields have pricing freedom but with a ceiling.
Source: The Economic Times
16 September. Country’s most prolific Barmer oilfield operated by Cairn Oil and Gas has been reduced to operate on temporary permission from the government which has denied full 10-year extension to the company’s production sharing contract claiming higher share of profit petroleum. After prolonged delays, the government had in October 2018 agreed to extend by 10 years the contract for Barmer fields after the expiry of the initial 25-year contract period on 14 May 2020. The Barmer block, otherwise known as the Rajasthan block, comprises Mangala, Bhagyam, Aishwariya and Raageshwari O&G fields. It is the biggest onshore oil producing project in India and its current output hovers around 166,943 barrels of oil equivalent per day. While oil recovery from the block would deplete, Cairn would use the extended period to increase gas production.
Source: The Economic Times
20 September. Coal India Ltd (CIL) may witness de-growth in production during the current fiscal as its output is likely to fall below 600 million tonnes (mt) amid subdued demand, analysts said. The miner could end the current year with the production of around 580 mt of coal as against its revised target of 650-660 mt, they said. Analysts of brokerage firm Motilal Oswal projected production of 582 mt for CIL and off-take of 565 mt in FY2021 while ICICI Securities had estimated an output of 580 mt and sales of 550 mt this year. However, the miner is hopeful of achieving a 10 per cent growth in 2020-21 over 602 mt of coal produced last year, notwithstanding the disruptions caused by the Covid-19 pandemic, CIL said. The brokerage firms projected a lower EBITDA (earnings before interest, taxes, depreciation, and amortisation) of 17-18 percent for CIL in the current fiscal.
Source: The Economic Times
22 September. The UP (Uttar Pradesh) energy department set the target of increasing its power generation capacity by four times — from the existing 3,200 MW to 12,734 MW — by 2022. State Power Minister Shrikant Sharma said UP would add 1,320 MW by the end of this year. A 660 MW unit in Meja was fired up in April last year. Sharma claimed that two units of 660 MW each in Obra-C are expected to start wheeling out power by March 2022. Two units of 660 MW capacity in Jawaharpur will also become functional, he said. A 660 MW unit in Panki, being constructed at an estimated cost of ₹58.16 bn, would also start generating power by December 2021 while the Ghatampur power project is expected to become functional by May 2022, he said.
Source: The Economic Times
22 September. More than 28,000 government schools in Uttar Pradesh (UP) do not still have power connections and the main reason for which is the “distance of electricity poles from these schools”. This was brought to fore by a review of the details submitted by state-run schools to the government authorities. The authorities have, meanwhile, directed the schools to make use of the unused funds provided by the Election Commission for the electrification during the 2019 Lok Sabha elections. The schools that did not have the 2019 funds left with them should provide the details of the money required by 30 September.
Source: The Economic Times
18 September. Power consumption rose 0.9 percent on a yearly basis in the first fortnight of September, indicating spurt in commercial and industrial demand for electricity, Parliament was informed. Power consumption had declined following the Covid-19 outbreak as economic activity came to a standstill due to the lockdown. The government had imposed the lockdown on 25 March 2020 to contain the spread of coronavirus infections. Power Minister R K Singh said power consumption has increased by 0.9 percent at 53.17 bn units during 1 September to 14 September, compared to 52.68 bn units in same period last year. Power consumption had declined by 8.7 percent in March, 23.2 percent April, 14.9 percent in May, 10.9 percent in June, 3.7 percent in July and 1.7 percent in August compared to the same months last year. According to the power ministry data, electricity consumption had grown by 11.73 percent in February. Thus, the Covid-19 situation affected power consumption for six months in a row since March this year.
Source: The Economic Times
18 September. The number of un-electrified households stood at 3,20,422 till August-end this year under the Saubhagya Scheme, which is meant for achieving 100 percent universal electrification of homes in the country, Parliament was informed. These un-electrified households are in Chhattisgarh, Assam, Uttar Pradesh (UP) and Jharkhand. Power Minister R K Singh said that the number of un-electrified households identified under the Saubhagya scheme was 3,20,422 as on 31 August 2020. Among the four states with un-electrified households, UP tops the chart with 2,53,785 households followed by Jharkhand at 60,925, Chhattisgarh at 3,519 and Assam at 2,193 as on 31 August 2020. As per the reply, as many as 2,62,84,350 families were provided electricity connection under the Saubhagya scheme. The Minister said that all the states had declared on Saubhagya portal that all the willing un-electrified households had been electrified as on 31 March 2019, except 18,734 households in LWE (left wing extremist) affected areas of Chhattisgarh. The government had launched Pradhan Mantri Sahaj Bijli Har Ghar Yojana — Saubhagya in October 2017 with an outlay of ₹163.20 bn with the aim to achieve universal household electrification by providing last mile connectivity and electricity connections to all households in rural and all poor households in urban areas across the country.
Source: The Economic Times
16 September. Despite protests by the UT (Union Territory) electricity powermen union, the Chandigarh administration, on the directions of the Union government, has put privatisation of the UT electricity department on fast track. The administration has now fixed a new deadline to complete the privatisation plan by December 2020. Moving further, the UT administration has also appointed Pawan Kumar Sharma, executive engineer, UT electricity department, as the nodal officer to take action for all activities relating to privatization, including tendering, coordination with various departments, ministry and transaction advisor. Recently, the Power Finance Corp (PFC) had appointed Deloitte as the consultant to help with the privatisation of the department. Meanwhile, the UT power department employees continued with their protest against the privatisation move. They have even sought help from city residents and various political parties. The Joint Electricity Regulatory Commission (JERC), in the past too, had issued directions to the UT administration for restructuring and reformation of the department, which is mandatory as per the Electricity Act, 2003. As Chandigarh does not have its own power generation, the state transmission utility will be responsible for ensuring smooth transmission of power in the city. State load dispatch centre will be the apex body to ensure integrated operation of the power system.
Source: The Economic Times
16 September. The Uttarakhand Power Corp Ltd (UPCL) has informed the Uttarakhand High Court (HC) – through a compliance affidavit that it has installed and ledgerised meters at the residences of most of its employees. The counsel appearing for the UPCL informed the court that the corporation has started charging money from the employees and placed several bills on the record as well. The PIL (Public Interest Litigation) had alleged that around 12,000 employees of the UPCL and their relatives have been using an unlimited amount of electricity virtually free of cost. The electricity bills of several high ranking officials of the UPCL ran into lakhs.
Source: The Economic Times
16 September. The Telangana legislative assembly unanimously passed a resolution against the new Electricity (Amendment) Bill, 2020 and asked the Centre to withdraw it. Terming the proposed new Electricity (Amendment) Bill, 2020 by the Centre as ‘draconian law’ and aimed at taking away the powers of the states, Telangana Chief Minister K Chandrasekhar Rao launched a scathing attack on the NDA government. He said Prime Minister Narendra Modi was working towards complete centralisation of power instead of decentralisation. Earlier the UPA government also centralised the powers in some sectors, he said. If the Bill is passed, the distribution system goes into the hands of the private persons and Telangana distribution companies, Transco and Genco’s existence would become a big question and thousands of people, working in the power utilities, may have to lose their jobs.
Source: The Economic Times
16 September. The Power Ministry has begun the process to set up a ₹2,000 crore joint venture (JV) for providing a common backend infrastructure facility (CBIF) to power distribution companies (discoms) for faster roll-out of smart electricity metres in the country. The joint venture would have four promoters, NTPC Ltd, REC Ltd, Power Grid Corp of India Ltd (PGCIL) and Power Finance Corp (PFC). The CBIF will enable the fast-track implementation of smart meters across the country. It will simplify smart meter rollout for discoms by offering a plug and play architecture with standardized, pre-configured, pre-integrated, scalable back-end infra for rollout of smart meters. Discoms would be required to pay only for use of the asset without incurring additional capex, along with features of built in upgrades, which would lead to cost reductions and savings to discoms. The CBIF will also enable centralized MIS or reporting of metering data. The facility will be offered to discoms on a software or solution as a service approach and charge only usage fees.
Source: The Economic Times
16 September. The power ministry has prepared draft rules providing for rights of electricity consumers for the first time. The objective is to provide consumers better services and facilities, it said. Electricity consumers are the most important stakeholders in the power sector and the sector exists because of them. Having provided access to electricity to all citizens, it is now important to focus on consumer satisfaction and for this, it is imperative to identify the key services, prescribe minimum service levels and standards with respect to these services and recognize them as rights of consumers, it noted. The draft rules propose a Consumer Grievance Redressal Forum with 2-3 representatives of consumers at various levels starting from sub-division. The draft pertains to timely and simplified procedure for connection. A person would require only two documents for connection up to a load of 10 kW (kilowatt), and no estimation of demand charges for load up to 150 kW to expedite giving connection. It also fixes the time period for providing connection. The time period will not exceed 7 days in metro cities, 15 days in other municipal areas and 30 days in rural areas, to provide new connections and modify existing connections. As per the draft, State Electricity Regulatory Commission will fix the average number and duration of outages per consumer per year for discoms (distribution companies). For making payments, there is an option to pay bills in cash, cheque, debit cards, net banking etc but bills of ₹1000 or more would be paid online.
Source: The Economic Times
20 September. Railways has decided to ensure green mode of transportation and maintain zero carbon emission by switching over to solar energy at its all vital establishments and offices under the ‘save energy’ mission. Railways has also taken various initiatives to ensure uninterrupted power supply with the help of solar energy plants in all its five divisions – Danapur, Pt Deendayal Upadhyaya, Dhanabd, Sonepur and Samastipur. East Central Railway (ECR) chief public relations officer Rajesh Kumar said the railways has at least 1,370 kilowatt (kW) solar energy power capacity in Danapur division alone.
Source: The Economic Times
18 September. The Uttar Pradesh (UP) government said it plans to install 8,000 solar-powered borewells in coming days and 35 percent of them would come up in the Purvanchal districts of the state. The districts set to benefit from the initiative include Balrampur, Shravasti, Siddharthnagar and Kushinagar where suitable locations would be identified for installations, it said.
Source: The Economic Times
18 September. In an attempt to convert variable renewable energy sources into round-the-clock power and attract investments to the State, the New and Renewable Energy Development Corp of Andhra Pradesh (NREDCAP) has laid its focus on creating pumped hydro-storage (PHS) facility. The NREDCAP has short-listed seven of the 29 feasible locations identified last year to set up solar parks and has floated tenders for preparation of Preliminary Feasibility Report (PFR) and Detailed Project Report (DPR). The plan is to produce more renewable energy and integrate it with the grid. The locations to set up solar parks have been identified and transmission and sub-station works have started. To integrate 18,000 MW of renewable energy with the grid, the State will need a pumped hydro storage facility.
Source: The Hindu
18 September. Despite government bailout packages, three south Indian states Andhra Pradesh, Tamil Nadu, and Telangana together account for nearly two-thirds of the total ₹103 bn worth of dues to renewable energy generators, research firm JMK Research said. The PRAAPTI (Payment Ratification and Analysis in Power procurement for bringing Transparency in Invoicing of generators) dashboard collates the outstanding dues of distribution companies to power generators. Various bodies such as the Confederation of Indian Industry (CII) and the National Solar Energy Federation of India (NSEFI), the apex body of solar stakeholders in the country, wrote the ministry of new and renewable energy ministry, requesting intervention as Andhra Pradesh (AP) had still not cleared the dues to the private developers, despite an interim AP High Court order instructing them to do so.
Source: The Economic Times
17 September. Coal India Ltd (CIL)’s arm Central Coalfields Ltd (CCL) is planning to install 80 megawatt peak (MWp) ground-mounted solar power plant in the ongoing fiscal year. CCL said that action has also been taken for installation of solar plants on rooftops as green energy will reduce day-time demand. Till date, CCL has generated more than 7.2 lakh units of solar power with the installed solar power plants. The company said that one kWh (kilowatt hour) solar energy generation reduces 0.932 kilogram (kg) carbon dioxide emission. CIL and NLC India Ltd recently signed a pact for solar power generation of 3,000 MW across the subsidiaries of the coal behemoth. Solar power projects will be set up in the identified barren and reclaimed free land.
Source: The Economic Times
17 September. As India looks to expand its renewable energy capacity, a new report from IEEFA found that Rajasthan can play a key leadership role in the country’s transition to a low-cost, low-emission, profitable electricity system. Rajasthan’s installed renewable energy capacity reached 9.6 GW at the end of fiscal 2019-20. It also added more solar power capacity (1.7 GW) in 2019-20 than any other Indian state, ahead of Karnataka (1.4 GW), the state with the highest installed solar capacity, and Tamil Nadu (1.3 GW). Rajasthan has high solar radiation and wind speeds and an abundance of barren land that make it suitable for utility-scale solar parks. And it is already home to the world’s largest solar park — the 2.25 GW Bhadla Solar Park, located in Jodhpur district.
Source: The Economic Times
17 September. The central government told the Lok Sabha (LS) that it has no plan to allow non-governmental/private sector into nuclear power generation. The Centre said that it had given administrative approval and financial sanction for building 12 nuclear power reactors in the country with an aggregate generation capacity of 9,000 MW. Of these, 10 will be indigenous 700 MW pressurised heavy water reactors (PHWR) and two light water reactors (LWRs) with Russian cooperation, Minister of State for Atomic Energy Jitendra Singh said. The 10 PHWRs will come up in Chutka in Madhya Pradesh (2×700 MW), Kaiga in Karnataka (2×700 MW), Mahi Banswara in Rajasthan (4×700 MW), and Gorakhpur in Haryana (2×700 MW). The two 1,000 MW LWRs will come up in Kudankulam in Tamil Nadu. Singh said India currently has 22 nuclear power reactors with a total capacity of 6,780 MW.
Source: The Economic Times
QuIck CommentLow solar tariff will increase financial woes of solar operators! Bad! |
16 September. Solar energy could contribute to manufacturing competitiveness due to its low tariff, which would ultimately help achieve the goal of Aatmanirbhar Bharat, Parliament was informed. Low cost power is an essential requirement for competitive manufacturing. Since solar tariffs have been declining, use of solar energy could contribute to manufacturing competitiveness, and thus to achieving the goal of Aatmanirbhar Bharat, Renewable Energy Minister R K Singh said. India has set an ambitious target of having 100 GW of solar energy by 2022. As of 31 August 2020, the total installed solar power generation capacity stood at 35.73 GW in the country out of the total renewable energy of 88.79 GW. As per the reply, Karnataka tops the chart with 7.29 GW installed solar power generation capacity followed by Rajasthan (5.31 GW) and Tamil Nadu (4.17GW). As far as renewable energy generation capacity is concerned Karnataka again tops the chart with 15.26 GW followed by Tamil Nadu (14.64 GW) and Gujarat (11.11 GW). Tamil Nadu tops the wind energy generation capacity chart at 9.32 GW followed by Gujarat (7.77 GW) and Maharashtra (5 GW). Total installed wind power generation capacity in the country is at around 38 GW.
Source: The Economic Times
16 September. Large green energy deals in Andhra Pradesh are hanging fire, with prospective buyers introducing a condition precedent; wherein a significant agreed upon amount will only be paid once the issue of reopening of power purchase agreements (PPAs) by the state government gets resolved. Not only has this impacted the deals’ value, it is also playing out on the payout schedule, with the dispute currently before the Andhra Pradesh High Court. Green energy developers have been caught in a bind due to Y S Jagan Mohan Reddy-led Andhra Pradesh government’s decision to reopen renewable energy contracts inked under the previous N Chandrababu Naidu government. Andhra Pradesh has around 7.7 GW of solar and wind projects and is home to India’s second-largest installed capacity of clean energy, accounting for around 10 percent of the country’s green energy capacity, with investments of ₹600 bn. Also, the state government is expediting efforts to float India’s largest solar tender for setting up 10 GW capacity to supply electricity to the farmers requiring an investment of around ₹350 bn. India is seeking additional clean energy investment of around $80 bn till 2022, growing more than threefold to $250 bn during 2023-30.
Source: Livemint
22 September. Chinese customs said it will amend the way it supervises crude oil imports as part of a broader effort to boost efficiency, allowing cargoes to clear customs before quality inspections have been finalised. Key import oil terminals along China’s coast, including the provinces of Shandong, Zhejiang and Guangdong, suffered severe congestion between May and August as record crude purchases arrived in the country. Effective from 1 October, importers will be allowed to start offloading oil once customs officers have collected key information and a sample of oil, the General Administration of Customs said. Importers will still only be allowed to use or sell the oil once subsequent laboratory tests are completed.
Source: Reuters
22 September. Venezuela’s state-run oil company PDVSA has begun loading an Iran flagged large tanker with Venezuelan heavy crude for export, as ties have deepened between the two OPEC nations. Venezuela and Iran are under sanctions imposed by the United States (US), hurting their oil industries and hitting crude exports by shrinking the pool of customers and shipping companies willing to send vessels to their ports. Washington has sought to disrupt the deepening bilateral trade between the two countries. The US seized over 1 mn barrels of Iranian fuel bound for Venezuela in July. The Iranian-flagged very large crude carrier (VLCC) arrived in Venezuela’s main oil port of Jose this month carrying 2.1 mn barrels of Iranian condensate to be used as diluent for Venezuela’s extra heavy oil production, according to company documents. The tanker is due to transport up to 2 mn barrels of Venezuela’s heavy Merey 16 crude on its way back, in a sale agreed by PDVSA and the National Iranian Oil Company (NIOC).
Source: Reuters
21 September. Indonesia will shorten a planned shutdown at its Banyu Urip field and accelerate drilling at the Rokan block in a bid to reach its target for oil and gas lifting this year, the country’s upstream regulator SKK Migas said. These are among the several measures SKK Migas said it would do in the remainder of 2020, aimed at increasing average crude oil lifting for the year by 3,900 barrels per day (bpd) and gas by 70 million standard cubic feet per day (mmscfd). The Banyu Urip field, operated by a unit of Exxon Mobil, is situated in Cepu, the biggest oil-producing block in Indonesia. The regulator is ramping up talks with a Chevron unit for an agreement about drilling of 11 wells at the Rokan block in the fourth quarter. Indonesia’s national crude oil lifting in January-August was 706,900 bpd, above the government’s revised target of 705,000 bpd for 2020, but slowing from the year’s first half, while its gas lifting in the same period was 5,516 mmscfd, below this year’s revised target of 5,556 mmscfd.
Source: The Economic Times
17 September. Saudi Arabia’s crude oil exports rebounded in July to 5.73 mn barrels per day (bpd) from a record low in June, according to the Joint Organizations Data Initiative data showed. At 4.98 mn bpd, crude exports in June were the weakest on record, according to data. Output from the Organization of the Petroleum Exporting Countries (OPEC) rose by more than 1 mn bpd in July as Saudi Arabia and other Gulf members ended voluntary supply cuts, on top of an OPEC-led deal to curb production. An easing of lockdowns and lower supply helped benchmark Brent crude hold above $40 a barrel throughout July after plunging to a 21-year low of $15.98 in April, though gains were kept in check by fears of a second wave of Covid-19.
Source: Reuters
16 September. US (United States) oil output from seven major shale formations is expected to decline by about 68,000 barrels per day (bpd) in October to 7.64 mn bpd, the US Energy Information Administration (EIA) said. Output at every formation is expected to fall in October, except the Permian basin of Texas and New Mexico, where production is expected to rise by about 23,000 bpd to 4.17 mn bpd. That would be the smallest increase since production declined in May. The biggest decline is expected to come from the Eagle Ford basin in South Texas, where output is expected to fall by nearly 28,000 bpd to 1.13 mn bpd. US oil prices are still down about 40 percent from the peak at the start of the year, due to coronavirus demand destruction. However, US crude futures have gained almost 100 percent over the past five months to around $37 a barrel, mostly on hopes global economies and energy demand will snap back as governments lift lockdowns.
Source: Reuters
21 September. Gas contributes only a fraction of Germany’s energy consumption, and Russian gas only a fraction of that, so it is wrong to say that the Nord Stream 2 pipeline will make Germany dependent on Russian energy, Finance Minister Olaf Scholz said. Asked about the flagship Kremlin project, which has been heavily criticised by the United States (US) and some European countries, Scholz restated the German government’s position that the pipeline was a private investment and should not be the target of US sanctions.
Source: Reuters
16 September. Australia’s government set out a strategy to boost gas supplies and drive down energy prices, including a possible state-funded gas-fired power plant, as part of an effort to drive economic recovery after Covid-19. The proposals follow pressure from parts of the manufacturing sector to increase gas supply and lower prices, but were criticised by the power industry and green groups as heading in the wrong direction. The conservative government hopes to develop new gas basins in northern Australia and has set up a panel to map out pipelines that would bring that gas to market, with construction by the private sector or state backing.
Source: Reuters
16 September. The number of ships fuelled by liquefied natural gas (LNG) is expected to more than double by 2030, driven by the shipping industry’s desire to cut emissions, Malaysia’s Petroliam Nasional Bhd (Petronas) said. Currently, less than 400 out of a total of more than 80,000 registered ships, run on LNG as fuel source. This number could increase to 1,000 vessels globally by 2030, Mohd Rafe Mohamed Ramli, head of global LNG bunkering at Petronas Marine, said. The shipping industry has been under pressure to reduce carbon emissions, after also introducing new rules this year to cut the sulphur content in marine fuels, also know as bunker fuels. This in turn is prompting demand for LNG as a bunker fuel by tanker operators and cruise liners. While Europe is the main consumption region for LNG as a bunker fuel, demand in Singapore and Malaysia, already global oil bunker fuel hubs, is also expected to increase, Ramli said.
Source: Reuters
16 September. Turkey expects gas suppliers to offer more competitive pricing and flexibility if they want to renew long-term contracts totaling 16 billion cubic meters (bcm) a year, the energy ministry said. More than a quarter of Turkey’s long-term gas contracts expire next year, including imports via pipeline from Russia’s Gazprom and Azerbaijan’s SOCAR and a liquefied natural gas (LNG)deal with Nigeria.
Source: Reuters
16 September. The British government has refused to allow an open cast coal mine to be built in northeastern England, the Minister for Housing, Communities and Local Government Robert Jenrick said. Northumberland County Council agreed in 2016 that developer The Banks Group could extract 3 million tonnes (mt) 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 imported around 6.5 mt of coal in 2019, government data showed, with more than a third of this coming from Russia.
Source: Reuters
22 September. British and Dutch grid operators will explore the feasibility of building an electricity interconnector between the two countries, linking offshore wind assets, they said. Britain has sub-sea electricity interconnectors linking to France, Ireland and an existing link with the Netherlands, but plans to build several more to increase its supply options as older coal and nuclear plants close. Both countries also plan to significantly increase their offshore wind capacity, to help meet their climate targets. If successful, TenneT and National Grid said the project could be operational by 2029.
Source: Reuters
21 September. Australia plans to invest A$18 bn ($13 bn) over the next 10 years in technologies to cut carbon emissions in the fight against climate change, Energy Minister Angus Taylor said. The technology investment roadmap is the latest attempt by Australia, the world’s top coal and gas exporter, to come up with a climate and energy policy after 13 years of wrangling over carbon prices and emissions targets. Instead, the government will focus on investing in hydrogen, energy storage, low carbon steel and aluminium, carbon capture and storage, and carbon sequestration in soil, with cost targets for those technologies, Taylor said.
Source: Reuters
17 September. Britain is looking at funding options for the 17-18 bn pound ($22-$23 bn) Sizewell C nuclear plant that France’s EDF is scheduled to build in eastern England. Britain is phasing out coal plants and investing in renewables to help meet its climate targets. But many of its nuclear plants – another source of low-carbon electricity – also need replacing, and progress so far has been mixed. Japan’s Hitachi dropped its plans to build a new nuclear plant in Britain, while Japan’s Toshiba Corp, scrapped its British NuGen project in 2018 after its US reactor unit Westinghouse went bankrupt.
Source: Reuters
16 September. A subsidiary of France’s Total and Singapore LNG Corp (SLNG) have signed a deal for a rooftop solar power system at the Singapore liquefied natural gas (LNG) terminal, the companies said. Total Solar Distributed Generation, a wholly-owned subsidiary of Total, will finance, build and operate the 600 kilowatts peak (kWp) system, which will be installed on the rooftops of several buildings in the terminal, they said. The terminal is owned and operated by SLNG. The installation of solar panels is expected to be completed by the fourth quarter of this year, they said. The system will generate around 800 megawatt hour (MWh) of renewable energy and has the potential to avoid an estimated 300 tonnes of carbon dioxide emissions a year, the companies said. Singapore, one of the sunniest cities in the world, generates about 95 percent of its power from imported natural gas with solar energy being its most viable renewable energy option.
Source: Reuters
16 September. Achieving net zero emissions by mid-century would cost an estimated $1 tn-$2 tn a year of additional investments, or 1-1.5 percent of global gross domestic product, the Energy Transitions Commission (ETC) report said. To limit global warming to 1.5 degrees Celsius this century, global greenhouse gas emissions will need to reach net zero.
Source: Reuters
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