MonitorsPublished on Jan 02, 2021
Energy News Monitor | Volume XVII; Issue 26


Monthly Gas News Commentary: November 2020



Oil India Ltd the nation’s second-largest state oil producer has made a natural gas discovery at a well drilled in Tinsukia, Assam. The well Dinjan-1 in Tinsukia petroleum mining lease in the upper Assam basin struck hydrocarbons. On testing, it produced gas at the rate of 115,000 standard cubic meters per day. Oil India whose majority of operations are concentrated in the north-east, did not indicate the reserves the discovery may hold.


The much-delayed Kochi-Mangalore natural gas pipeline project is finally ready for commissioning any day as the GAIL (India) Ltd has completed the final 540-metre treacherous stretch across the Chandragiri river in northern Kerala. The 444-km long natural gas pipeline was launched in 2009 at an estimated cost of ₹29.15 bn and was to be commissioned in 2014. The first phase of the project was commissioned in August 2013 in the Kochi metropolitan area with industrial supplies and domestic supplies from February 2016 by Adani Gas. The pipeline supplies 3.8 mcm of gas every day to industrial and residential customers in Kochi and is set to cross 4 mcm soon in the city itself, while Mangalore has a potential of 2.5 mcm/day. With the commissioning the pipeline, gas demand in the state will touch 80-90 mcm/annum from 60 mcm/annum currently.

The extension of the runway at the Surat airport has run into rough weather with the ONGC yet to submit the report on feasibility survey as its sour gas pipelines passes from close distance to the runway. The Airport Authority of India had proposed the expansion of runway from the current 2,905 metres to 3,705 metres towards the Dumas side. Currently, the 36-inch diameter pipeline of ONGC passes about 250 metres away from the runway and the 42-inch pipeline is 350 metres away. The proposed extension of 800 metres is towards 36-inches diameter pipeline on Dumas side. ONGC had concluded its feasibility survey for gauging the possibilities for constructing a culvert to protect its buried sour gas pipelines, which are the major hindrance in the runway extension project, in November 2019. The culvert will be a concrete structure, which will cover the buried pipeline, and have the capacity to handle more than 140 tonne per square metre weight, which is enough for the wide-bodied aircrafts for landing and take-off. The two pipelines 36-inch and 42-inch South Bassein Hazira Trunk pipelines were laid in the year 1985 and 1996 respectively to transport sour dry natural gas from Bassein Platform A and Bassein Platform B offshore process platforms to the onshore gas processing plant located at Hazira in Surat.


Indian imports of LNG surged in October, shiptracking data from Refinitiv Eikon and data intelligence firm Kpler showed, as the country’s gas demand bounced back to pre-Covid levels. LNG shipments to India in October rose to about 2.5 mt the highest monthly volumes on its record, Refiniv Eikon data showed. Kpler pegged October arrivals at the second highest on record at 2.75 mt just under February’s imports of 2.79 mt. Spot gas imports by the electricity generation sector, which account for over a fifth of India’s total consumption of the fuel, doubled in the June quarter to the highest in at least 14 quarters. India’s natural gas prices fell to their lowest since 2014 for the October-March 2021 period which meant reduced costs for gas for fertilisers, automobiles and households. India has also been receiving at least one LNG cargo a month from Russia’s Yamal LNG plant since September, this year, after the last such flow was seen only in March, Refinitiv data showed. LNG shipments from Oman to India in October were also at a record high, the data showed.

India’s Petronet LNG Ltd has no plans to invest in LNG developers as the market is awash with cheaper fuel and it may shelve plans to invest in Tellurian Inc’s US project. Petronet, the country’s top gas importer, has time until December-end to consider investing $2.5 bn for 5 mtpa of LNG in Tellurian’s Driftwood project to end-2020. India has been scouting for cheap gas for price-sensitive consumers India wants to raise the share of natural gas in the national energy mix to 15 percent by 2030 from the current 6.2 percent to reduce pollution. Petronet has a deal to purchase 7.5 mtpa of LNG from Qatar and 1.44 mtpa from Exxon Mobil Corp’s Gorgon project in Australia. Spot LNG prices are currently high due to the surge in demand during winters, he said, adding that the prices would drop to $4-$6/mmBtu after January. To meet India’s growing gas demand, Petronet is looking at constructing a new LNG terminal on the country’s east coast and also plans to raise annual capacity at its Dahej terminal in western India to 19.5 mt from 17.5 mt today.

Indian companies will spend ₹100 bn ($1.35 bn) over three years on 1,000 LNG stations along main roads and industrial corridors and in mining areas. Use of LNG in heavy vehicles is likely to cut fuel costs by 40 percent compared with diesel and help contain inflation and urged automobile makers to look at producing LNG-compatible vehicles. LNG is suitable for long-haul trucks and buses as its higher energy density can help vehicles travel 700-900 km with one fill compared with about 300 km for a diesel vehicle. Companies will set up LNG fuelling stations along a 6,000 km network of highways linking the four main metropolitan areas. Indian companies are spending billions of dollars to build gas infrastructure including pipelines and import terminals to raise share of gas in energy mix to 15 percent by 2030 from the current 6.2 percent. Use of LNG will also help India in meeting its commitment made under the Paris accord to cut greenhouse gas emission intensity of its gross domestic product by 33 percent to 35 percent below 2005 levels by 2030.

Norway’s Hoegh LNG Holdings, a provider of specialised vessels for importing LNG has entered into a binding commitment to supply India’s H-Energy with a FSRU. This will be the first FSRU to start operations in India, which has six land-based LNG import terminals. Hoegh will supply the Indian natural gas company with the FSRU in Jaigarh, south of Mumbai in Maharashtra state, from as early as first quarter 2021. The final agreement will be for 10 years with annual termination options after the fifth year. Hoegh will allocate one of its available FSRUs currently trading in the LNG carrier market for the project. The FSRU terminal, which has been delayed on several occasions, is planned to be capable of handing 4 mtpa.

Gas transmission by India’s GSPT will rise by about a quarter in the next fiscal year starting from April as it links northern regions to an existing grid in the western state, the company said. The 930 km pipeline linking Mehsana in Gujarat to Bathinda in the northern state of Punjab at a cost of ₹55 bn ($739 mn) will be ready by March. India’s coronavirus lockdown hit construction of the pipeline, with a daily capacity of 30 mmscmd, delaying it past an initial completion date of December. GSPL operates about 2,700 km of gas pipelines with capacity of 43 mmscmd, but in the 2019-20 financial year it supplied 40 mmscmd gas, as one pipeline was commissioned only in November 2019. Two gas import terminals are expected to begin operations in Gujarat’s areas of Jaffrabad and Chhara in 2022. India’s six existing terminals can handle 42.5 mt of gas imports annually, with about 3/4ths of that capacity located in its west. Gujarat’s robust gas infrastructure has led to the fuel accounting for about a quarter of its energy mix, against a national average of 6.2 percent. As India looks to boost that figure to 15 percent by 2030, Indian firms are spending billions of dollars to strengthen gas networks. GSPL will use the new pipeline to supply refineries in the northern cities of Panipat and Bathinda, as well as industries and city gas distributors. It will also be linked to one of its existing pipelines to supply a refinery being built at Barmer in the desert state of Rajasthan.


PNGRB has given up to eight-and-a-half months of extra time to companies such as IOC, GAIL, and Adani Gas to fulfil their city gas project rollout commitments that had been impacted by Covid-19 lockdowns. The PNGRB issued an order granting more time to 41 city gas entities to complete their rollout commitment. The time granted varies from 129 days to 251 days across different geographical areas depending on the duration of the Covid-19 lockdown, the order said. The extra time is to make up for 69 days of the national lockdown imposed to curb the spread of the pandemic and additional restrictions imposed in states. A 60-day restoration period is given on top of the lockdown period. PNGRB has given licences to retail CNG to automobiles and piped natural gas to household kitchens and industries in 230 geographical areas across the country. IOC, GAIL, Adani Gas, Gujarat Gas, Torrent Gas, BPCL, Indraprastha Gas Ltd and HPCL are among the firms that got extra time.

Rest of the World


Sanctions that could hinder one of Moscow’s most important projects in Europe, the Nord Stream 2 natural gas pipeline, have been included in the annual US defense policy bill. The $11 bn Nord Stream 2, led by Russia’s state energy company Gazprom, would double its existing pipeline capacity to take gas undersea to Europe via Germany. It would bypass Ukraine, which depends on lucrative transit fees. Gazprom and Germany say Nord Stream 2 is purely a commercial project. Gas demand in Germany is growing as it cuts dependence on nuclear and coal power.


China Petroleum and Chemical Corp said that it has added 83 bcm of newly proven natural gas reserve at the Chuanxi field in the Sichuan basin. The new reserve, certified by the Ministry of Natural resources, raises the field’s total proven reserve to 114 bcm. Sinopec in October announced some 192 bcm of certified new reserve at its top shale gas project Fuling, China’s first major commercial development of the unconventional resource that sits also in the Sichuan basin. China sees natural gas a key bridge fuel on its long journey to its carbon-neutral target in 2060, with national energy producers vowing to boost the share of the fuel in their oil and gas portfolios over the next 10 to 15 years.

China’s biggest offshore oil and gas producer CNOOC Group will add 1.62 mcm of storage capacity for LNG at its Binhai terminal in the eastern province of Jiangsu. The expansion will consist of six tanks with storage capacity of 270,000 cubic metres each and construction is expected to be completed in 2023, according to a statement from Assets Supervision and Administration Commission of the State Council (SASAC). The government of Henan, a province in central China, will invest in two of the tanks but CNOOC will operate them, in order to meet gas demand from both Henan and Jiangsu. The cooperation between CNOOC and Henan government is the first time in China that a local government has invested in LNG infrastructure outside its administrative region, according to the SASAC. The first phase of CNOOC’s Binhai LNG terminal is designed to receive 3 mt of LNG a year and to have four storage tanks of 220,000 cubic metres each. It is expected to commence operation in 2021.

LNG supply in the southern Chinese region of Guangxi and nearby regions has tightened prompting the firm to source supply from elsewhere as winter approaches. Sinopec, also known as China Petroleum & Chemical Co, said that its Guangxi branch had launched an emergency plan to source LNG from other provinces, without elaborating on the reason for the tight supply situation. The move follows a fire that broke out at the Beihai LNG terminal, which killed six people and forced a temporary closure of Tieshangang port where the terminal – now owned and managed by newly established pipeline company PipeChina – is located. The Guangxi region has two LNG terminals, Beihai and Fangchenggang. There has been no supply disruption in any of its 22 LNG filling stations and 10 natural gas stations in Guangxi.

Other Asia

Japan’s MOL said it has signed a 30-year charter contract with the operator of the Arctic LNG 2 project, led by Novatek, for three ice-breaking carriers for the Russian project. The three vessels will be built by South Korea’s Daewoo Shipbuilding & Marine Engineering Co Ltd, costing about 90 bn yen ($859 mn) in total, and are scheduled for delivery in 2023. The carriers will mainly transport LNG from a loading terminal on the Gydan Peninsula in the Russian Arctic to the floating LNG storage unit to be installed at the transshipment terminals in Kamchatka and Murmansk via the Northern Sea route. Unlike MOL’s existing ice-breaking LNG carriers, which can only sail eastbound in the Northern Sea route during mostly summer and autumn when the ice is thin, the new vessels will have a narrower width, higher ice breaking capability and increased propulsion engine output, which enable them to sail east via the Northern Sea route all year round.

Global trader Vitol placed the best offers for four of six cargoes of LNG sought by Pakistan in December, Pakistan’s procurement body said. Vitol offered 16.9720 percent, 16.5513 percent, 15.9759 percent and 15.8761 percent of the price of Brent crude – known as a slope rate – for four deliveries in December. The lowest offers for the two other cargoes were won by Trafigura and Socar which offered Brent crude slope rates of 16.9870 percent and 16.8403 percent respectively. Pakistan invited bids for a record six cargoes of LNG from the spot market for December, with authorities predicting a surge in the gap between demand and supply of gas in the winter. The South Asian country has a 15-year LNG purchase deal with Qatar to buy 3.75 mt of LNG per year for 15 years to 2030, but it regularly taps the spot market. It also has a five-year import deal with commodity trader Gunvor and a 15-year agreement with Eni.


Woodside Petroleum may have to shut one of the five trains, or processing units, at the North West Shelf LNG plant in Australia as early as 2024 if no third party gas supply agreement is reached. North West Shelf LNG, operated by Woodside, is Australia’s oldest and largest LNG project with a capacity of 16.9 MTPA. The project’s owners are aiming to line up deals with other resource owners by the end of 2020 to supply gas as the project’s original fields dry up.

Chevron Corp said it expects LNG production at Train 2 of its Gorgon LNG plant in Western Australia to resume in the second half of November, delaying it a second time. Train 2 at Australia’s second-largest LNG plant has been shut since May for maintenance, which was extended after cracks were found in the production unit’s propane kettles. Chevron will shut Train 1 once Train 2 is back online and will then inspect it and determine if repairs are needed and how long it will be down for. This will be followed by Train 3, added Breber. The Gorgon plant produces 15.6 mt of LNG annually, equating to about 4.5 percent of global LNG trade in 2019.


The TAP, which will bring Azeri gas into Italy, has kicked off commercial operations, more than four years after construction work first began. The pipeline, whose shareholders include Snam and BP, said it had begun to offer capacity along the 878 km line which will be able to carry 10 bcm of gas per year. TAP is the final leg of a $40 bn project named the Southern Gas Corridor, which is a cornerstone of the European Union’s energy security policy to wean the bloc off Russian gas.

Poland’s dominant gas company PGNiG said its biggest supplier, Russia’s Gazprom, had proposed increasing prices for its gas in an existing long-term delivery deal, at a time of heightened tensions between Moscow and Warsaw. PGNiG, which has said it will not renew the deal that runs until 2022, said that the proposal to renegotiate the price was groundless. Gazprom’s exporting arms, Gazprom Export, confirmed it had sent a proposal to PGNiG to review the gas price upwards starting from November 2020. PGNiG, which asked Gazprom to lower the delivery price, imports most of the gas it resells from Gazprom based on the existing long-term deal. Gazprom and PGNiG have had a long-running dispute over gas prices. PGNiG has repeatedly said it pays more than its European peers for Gazprom’s gas. In a flare up of a wider political row, Poland fined Gazprom more than 29 bn zlotys ($7.6 bn) for building the Nord Stream 2 gas pipeline without Warsaw’s approval.

Greek gas grid operator DESFA, 66 percent-owned by a consortium led by Italy’s Snam, signed a deal to buy a stake in an offshore LNG terminal in northern Greece. DESFA took a 20 percent stake in the consortium which is developing the Alexandroupolis LNG project. The floating terminal, dubbed a project of “common interest” by the European Commission, is expected to be operational by 2023. It will have a capacity of around 6 bcm of gas per year and will cost around €380 mn ($445.06 mn). In Greek waters close to the Turkish border, the offshore storage and regasification unit will be able to feed gas into other pipeline systems planned in the area, including the TAP.

ONGC: Oil and Natural Gas Corp, mcm: million cubic meters, LNG: liquefied natural gas, mtpa: million tonnes per annum, mmBtu: million metric British thermal units, mn: million, bn: billion, km: kilometre, FSRU: floating storage and regasification unit, GSPT: Gujarat State Petronet Ltd, mmscmd: million metric standard cubic meter per day, mt: million tonnes, Mining Corp, ICMA: Indonesia Coal Miners Association, PNGRB: Petroleum and Natural Gas Regulatory Board, CGD: city gas distribution, CNG: compressed natural gas, IOC: Indian Oil Corp, HPCL: Hindustan Petroleum Corp Ltd, BPCL: Bharat Petroleum Corp Ltd, bcm: billion cubic meters, CNOOC: China National Offshore Oil Corp, MOL: Mitsui OSK Lines Ltd, TAP: Trans Adriatic Pipeline


LPG subsidy for BPCL consumers to continue post-privatisation: Pradhan

Quick Comment

Continuity of LPG subsidy for BPCL customers is part of social contract!


28 November. LPG (liquefied petroleum gas) or cooking gas customers of Bharat Petroleum Corp Ltd (BPCL) will continue to get cooking gas subsidy post-privatisation of the nation’s second-biggest fuel retailers, Oil Minister Dharmendra Pradhan said. The government gives 12 cooking gas cylinders of 14.2-kg each to households in a year at a subsidised rate. This subsidy is directly paid into the bank accounts of the users. The subsidy is paid in advance and consumers use this to buy LPG refills that are available only at market price from dealers of oil marketing companies — Indian Oil Corp (IOC), BPCL and Hindustan Petroleum Corp Ltd (HPCL). The moment a refill is bought using the subsidy, another installment is transferred into the user bank accounts. Pradhan said the LPG subsidy payment is done digitally to all verified customers.

Source: The Economic Times

Hamsafar ties up with Okara Group for doorstep diesel delivery services

26 November. Humsafar, an app-based doorstep diesel delivery service provider, announced it has tied up with Okara Group to launch doorstep diesel delivery services across cities in Maharashtra including Mumbai, Pune, Nagpur, Thane, Nashik. The company said it has received an order of 120 automated mobile fuel dispensing bowsers for Okara Fuelogics for diesel delivery. It will also provide technical and digital support to the new venture under the strategic alliance. Okara Fuelogics will use the ‘Fuel Humsafar’ app for its orders.

Source: The Economic Times

Petrol, diesel get costlier as Covid vaccine hopes lift crude prices

25 November. Fuel prices have started crawling up after holding steady for two months as international oil markets rebounded in anticipation of an early recovery in demand following news of a third successful Covid vaccine candidate. Since 20 November, state-run fuel retailers began raising pump prices from as the impact of costlier crude reflected in their 15-day rolling average price calculations. Petrol has since become costlier by 53 paise a litre and diesel 95 paise in Delhi. The degree of increase varies in other states due to the impact of prevalent VAT (Value Added Tax) rate. The retailers had held the price of petrol since 22 September and diesel since 2 October. Fuel prices will be northbound in the coming few days if crude does not rise further, held down by the shadow of lockdowns and new waves of Covid infections. But if prices rise, it would be bad news for consumers as well as the government. Both are stretched for cash as they struggle with the pandemic’s economic downside. Costlier crude will jack up India’s oil import bill, shrinking the financial headroom the government enjoyed from the protracted spell of the subdued oil market that followed the historic oil price crash in April.

Source: The Economic Times


CNG stations at petrol pumps not to be opened for third party access

1 December. CNG (compressed natural gas) stations anchored on petrol pumps will not be open to third party hiring, PNGRB (Petroleum and Natural Gas Regulatory Board) has said. Also, oil marketing companies – such as Indian Oil Corp (IOC) – will be barred from setting up their own CNG dispensing units in their petrol pumps that have been let out for CNG supplies to a city gas licensee. PNGRB has notified the final regulations, governing open access for city gas distribution (CGD) networks whose marketing exclusivity period has ended. After the expiry of the exclusivity period, which is of minimum five years, third parties can access pipelines that carry gas within a city as well as district regulatory stations for a fee, PNGRB said in the notification. As per the law, PNGRB gives out licences to entities for the retailing of CNG to automobiles and piped natural gas to household kitchens and industrial users with a specified area. PNGRB, in the notification, detailed the methodology for the determination of transportation rates for the pipelines with a city distribution network. A third party can access pipelines with the city to sell gas to an industry or a domestic consumer. They can also use the same for transporting their own fuel to a CNG station it may set up.

Source: The Economic Times

India’s new pipeline tariffs to boost gas use in far-flung areas

27 November. India will cut gas pipeline tariffs for areas far from gas injection points as the nation seeks a cleaner fuel-led industrial development across the country, an official at the Petroleum and Natural Gas Regulatory Board said. Differential pipeline tariffs is one of the key reasons for uneven gas use in the country, which aims to raise its share in energy consumption to 15 percent by 2030. Gas accounts for about a quarter of energy-mix of the western state of Gujarat, which hosts three liquefied natural gas (LNG) import terminals and is near to gas producing fields, compared to the national average of 6.2 percent. At present, the tariffs are linked to the distance and the number of pipelines used for transportation of gas from the injection points, making the fuel costly for many industries and hurting the development of far flung areas. For an industry taking supplies through a single pipeline and located within 300 km of gas injection point, the new tariff will be about ₹26 per million metric British thermal unit (mmBtu), an increase of up to 30 percent from current rates, he said. For others tariffs would be ₹66/mmBtu compared to over ₹100/mmBtu in some cases, he said, adding a shift to uniform rates would help Oil and Natural Gas Corp (ONGC)’s get better prices of its east coast gas. For pipeline operators like GAIL (India) Ltd and Gujarat State Petronet Ltd the new rules will be revenue neutral while fuel costs for fertiliser plants and others in eastern and southern India will be reduced.

Source: Reuters


Coal imports to increase in third quarter this fiscal: India Ratings

28 November. India’s coal demand will continue to improve year-on-year (yoy) as the end-user industrial activities gradually gain pace with unlocking and inventory levels at power stations being normalized, according to India Ratings, a research agency. The company said in its monthly report on India’s coal sector that coal offtake continued to recover strongly in October 2020 to 54.5 million tonnes (mt), higher by 8.7 percent month-on-month (mom) and 20.1 percent y-o-y. The increased demand was also partially fed by the inventory built at power stations. Also, domestic coal production continued to improve in October 2020 to 50.7 mt, higher by 15.6 percent month-on-month and 13.9 percent y-o-y.

Source: The Economic Times

CBI raids 45 locations in 4 states in illegal mining and theft of coal case

28 November. The CBI carried out a massive search operation at 45 locations in four states after registering a case against alleged coal pilferer Anup Manjhi who was suspected to be acting in collusion with two general managers and three security personnel of Eastern Coalfields Ltd (ECL), said. It is alleged that accused Anup Manjhi alias Lala is involved in the illegal mining and theft of coal from leasehold mines of ECL in Kunustoria and Kajora areas, they said. The departmental raids on 7 August 2020 led to the recovery of over nine million tonnes of stolen coal from the Railway siding of the Pandaveswar area. Similar recoveries were also made from other locations too. The CBI has alleged Anup Manjhi alias Lala is the kingpin of most of the coal pilferage in the area arising out of illegal mining. It appears that illegal coal mining in the ECL leasehold area is going on along with theft of coal from Railway sidings in an organised manner, the CBI said.

Source: The Economic Times

Goa seeks more time to complete coal block process

27 November. Goa Industrial Development Corp (GIDC) has asked the Union coal ministry for additional time to appoint a mine developer-cum-operator and pay the performance guarantee for the Dongri Tal II coal block at Singrauli in Madhya Pradesh. The Dongri Tal II coal block at Singrauli in Madhya Pradesh was allocated to Goa as part of the fifth tranche of the allotment by the coal ministry and the state was supposed to ink the agreement by 30 October 2019.

Source: The Economic Times


India signs $133 mn loan agreement with ADB for Meghalaya’s power distribution sector

1 December. The government signed a $133 mn loan agreement with the Asian Development Bank (ADB) to strengthen the power distribution sector in Meghalaya. The loan will be used to modernise Meghalaya’s power distribution network and improve the quality of power supplied to households, industries, and businesses, the finance ministry said. Although Meghalaya has achieved 100 percent electrification, remote villages in the north-eastern state suffer from frequent power cuts due to overloaded distribution networks and substations that use outdated technology, resulting in high aggregate technical and commercial losses, the ministry said. The funds will support the state’s ‘24×7 Power for All’ initiative in conjunction with the central government. The loan will fund projects for constructing 23 substations, renovate and modernise 45 substations and install and upgrade 2,214 km of distribution lines and associated facilities covering three out of the six circles in the state. The installation of smart meters under the project is expected to benefit some 180,000 households, the statement said. The project will also develop a distribution sector road map and a financial road map for the Meghalaya Power Distribution Corp.

Source: The Economic Times

Settlement scheme for power consumers launched by Goa CM

1 December. Goa Chief Minister (CM) Pramod Sawant launched the One-Time Settlement (OTS) scheme, 2020 of the electricity department for consumers who have defaulted on bill payments. An amount of over ₹4 bn has to be recovered, of which delay payment charges (DPC) itself account for around ₹910 mn. Consumers have to apply for OTS within one month from the launch date. Special counters at sub-division offices have been set up to assist people from villages who want to avail the scheme. Similarly, power consumers who pay their outstanding amounts within two months will get a waiver on the delayed payment charge (DPC). Power Minister Nilesh Cabral who was also present at the function said that the scheme would be available till 30 December this year. He also said that consumers can call the department’s helpline if they find difficulties in applying online for the scheme. While appealing to people to avail the scheme, Cabral said that consumers who have not paid their bills during the lockdown can also avail the scheme. The state cabinet had approved OTS scheme, 2020 to give relief to consumers with outstanding bills with the full or part waiver of the charge for delayed payment. The first OTS scheme was launched in 2008 in an attempt to recover large accumulated arrears with the electricity and the Public Works department (PWD). OTS, 2020 is proposed along similar lines to recover outstanding revenue from temporary or permanently disconnected or RCC consumers and also for active consumers of the power department.

Source: The Economic Times

No power tariff hike for 2021-22 in Andhra Pradesh

1 December. In a big relief to electricity consumers in the state, the power utilities have decided not to propose any tariff revision in the coming financial year. The three electricity distribution companies (discoms) in the state — APEPDCL, APCPDCL and APSPDCL — submitted the aggregate revenue requirement (ARRs) and proposed tariffs for retail supply business for 2021-22 to Andhra Pradesh Electricity Regulatory Commission (APERC). All the three discoms put together are purchasing nearly 68,369 mn units of power per year at a cost of ₹302.06 bn. The per unit power purchase cost has been estimated at ₹4.42. Taking the network and other costs into consideration, the discoms estimated they would require ₹440.30 bn to manage the supplies. Since revenues at the proposed tariffs is around ₹321.19 bn, discoms will be left with a revenue deficit of ₹119.11 bn. The discoms have also proposed to remove existing fixed charges of ₹100 per kilowatt per month for function halls to discourage usage of diesel generators.

Source: The Economic Times

Remote Photoksar hamlet of Ladakh gets electricity for first time

QuIck Comment

Power demand surge in New Delhi indicates increase in household consumption not increase in economic activity!


1 December. Sandwiched between two major high altitude passes of the Union Territory of Ladakh, Photoksar village in Leh district got electricity for the first time, triggering lifetime joy and happiness among its residents. As cities across the country adopt the latest technological advancements, residents of this hamlet are celebrating getting electricity for the first time post-Independence. Chairman and Chief Executive Councillor (CEC) Ladakh Autonomous Hill Development Council (LAHDC), Leh Tashi Gyalson inaugurated the NHPC powergrid line for Photoksar village, Power Development Department (PDD) said. A village resident, whose joy knew no bounds, said the electricity supply would help his children do well in their studies. Regarding electrification of remote villages of Leh district, CEC hoped that all other villages of Nubra, Changthang and Sham will also be connected with Northern Grid in the shortest possible time.

Source: The Economic Times

Goa: Power department awarded for successful use of technology

28 November. Amidst the debate over the efficiency of Goa’s power model, the Goa electricity department has been conferred the GCloud and Data Centre Award 2020 for successful implementation of various IT projects. Goa bagged the award for undertaking power reforms and for introducing digital initiatives such as Bharat Bill Payment System and online services and other initiatives. Goa electricity department is the only electrical utility in the country to have received the award, the state government said. Power Minister Nilesh Cabral congratulated the department for receiving the award and expressed happiness over the various IT processes implemented by them under the ‘Ease of Doing Business’ initiative.

Source: The Economic Times

Power demand in New Delhi surges past last year’s peak

25 November. With the temperatures plummeting in the city, the seemingly early onset of winter this year is getting reflected in the power demand in the city. The peak power demand this November has already surpassed that of the same month last year prompting the discoms (distribution companies) to gear up to meet a much higher demand this winter. On 20 November, the season’s peak power demand was 3,678 MW compared with 3,631 MW recorded on 15 November last year, according to sources. But that’s not all. The peak power demand has surpassed the corresponding demand on 12 days till 24 November compared with the same month last year. The power discoms expect the city’s peak power demand to go up to 5,480 MW this winter, surpassing last year’s demand during the season. Last winter, the demand had peaked at 5,343 MW. The peak power demand in Delhi during winter has been going up gradually.

Source: The Economic Times


India needs policy framework for challenges in renewables expansion: MNRE Secretary

QuIck Comment

Renewable energy policy needs to be realistic on the cost it imposes on the system!


29 November. India’s ambitious renewable energy targets will come with their own challenges such as solar waste, and will need a policy framework to guide the industry, MNRE (Ministry of New and Renewable Energy) Secretary Indu Shekhar Chaturvedi said. Currently, India does not yet have any policy on how to discard solar waste such as PV modules. Industry estimates say that the average lifespan of a solar panel is roughly around 20 years. Chaturvedi said that another challenge that the government is already facing is from farmers, and the lack of availability of land for animal husbandry.

Source: The Economic Times

India offers support to Maldives efforts to develop green energy

29 November. Union Power and Renewable Energy Minister R K Singh assured his Maldives Energy Minister Hussain Rasheed Hassan India’s support the island nation’s efforts in reducing dependence on oil imports by developing renewable energy (RE) projects, even as he announced plans to power Andaman & Nicobar Islands and Lakshadweep fully on green energy. During the country session with the Maldives on the concluding day of global green energy investors meet, RE-Invest 2020, Singh said that the Maldives, being a beautiful country, needs to maintain and enhance its beauty as an attractive tourist destination. Hassan said renewable energy is important for his country, which faces a major threat in terms of adverse climate changes. The government of Maldives has been proactively pursuing renewable energy goals that support strengthening the ecology, as well as the economy. Singh said India is one of the very few countries to have met its commitment to keeping climate change within 2 percent. He said India has installed about 136,000 MW of renewable energy capacity, while another 57000 MW capacity is under implementation. Singh said the target now is to achieve 450 GW, or 4,50,000 MW, renewable energy capacity by 2030. He emphasised that renewable energy is a must not only for island states but also for the world. This realisation has dawned on everybody that we need to reduce our carbon footprints to preserve the planet.

Source: The Economic Times

Pradhan invites investors to join India’s renewable energy journey

29 November. Oil Minister Dharmendra Pradhan has invited investors, developers and businesses to be part of India’s renewable energy journey. During the last six years, over $64 bn investment has been made in renewable energy in India, Pradhan said. Pradhan said that India is in the midst of a major transformative shift in its energy sector, to end energy poverty in India.

Source: The Economic Times

Madhya Pradesh identifies land to develop solar parks in Sagar, Damoh, Ratlam, Morena

28 November. Madhya Pradesh (MP) Chief Minister Shivraj Singh Chouhan said the state has identified land for developing 5,000 MW solar parks in Sagar, Morena, Damoh and Ratlam districts. Inviting investors in the renewable energy space of Madhya Pradesh, the CM said it is an ideal state for investment in this sector. All necessary facilities will be made available to investors. The land has been identified for developing 5,000 MW solar parks in Morena, Sagar, Damoh and Ratlam districts, the CM said. The CM said investment in the renewable energy sector will be encouraged. Renewable energy accounts for 20 percent of the state’s total power generation and it will be expanded continuously. In Gujarat, best work was done in the field of renewable energy by Prime Minister Narendra Modi who took the initiative of setting up a floating plant. Similarly, this innovation will be initiated in Madhya Pradesh by setting up a floating plant at Omkareshwar, the CM said.

Source: The Economic Times

Government plans tenders for storage to smoothen clean energy supply

28 November. In an attempt to address the intermittent problem of wind and solar power, the ministry of new and renewable energy (MNRE) is working on issuing tenders for pure storage capacity, the Solar Energy Corp of India (SECI) said. SECI said that the perceived conflict between solar energy and agriculture will need to be resolved.

Source: The Economic Times

Rajasthan to meet 30 GW solar energy target by 2024-25: CM

27 November. Rajasthan Chief Minister (CM) Ashok Gehlot said the state will meet the target of 30,000 MW solar energy and 7,500 MW wind and hybrid power generation by 2024-25. He said the geographical conditions of the state are favourable for solar power generation. He said that currently, 10,000 MW solar and wind power projects have been installed and 27,000 MW capacity plants are being installed. He said the central government has the capacity to produce 2.7 lakh MW of solar and wind energy in Rajasthan. The state government is also constantly striving to achieve this goal in the long run. He called upon the renewable energy producers, developers and investors present at the investor conference to come to Rajasthan to invest in this sector. He said the state government has announced the Rajasthan Investment Promotion Scheme 2019, Solar Energy Policy 2019, and Wind and Hybrid Energy Policy 2019 to attract investment.

Source: The Economic Times

India’s renewable power capacity is the fourth largest in the world: PM Modi

26 November. Prime Minister (PM) Narendra Modi said that India’s renewable power capacity is the fourth largest in the world and is growing at the fastest speed among all major countries. He said that India’s annual renewable energy capacity addition was exceeding that of coal-based thermal power since 2017. He said that India is becoming a preferred destination for investment in renewables, with nearly ₹5k bn or over $64 bn investment made in the renewable energy sector in the past six years. He wants to make India a global manufacturing hub in the renewable energy sector.

Source: The Economic Times

Government’s plan to set up compressed biogas plants to help boost bamboo production: IBF

26 November. The government’s plan to set up 5,000 compressed bio-gas plants by 2023-24 would give a boost to the country’s bamboo production and promote the industry as the commodity can be used to produce the gas, according to India Bamboo Forum (IBF). The process of generating compressed biogas (CBG) from biomass like bamboo and any agriculture waste is a two-step procedure wherein the waste is treated with a special bacterial solution, which generates a gas, which is then cleaned and compressed for use as fuel in vehicles.

Source: The Economic Times

South Delhi Municipal Corp to install solar plants in 200 buildings

25 November. To save energy, reduce electricity bills and generate revenue from its own resources, South Delhi Municipal Corp (SDMC) plans to tie-up with NTPC Ltd for installing solar plants on over 200 buildings, including maternity centres, zonal offices, parking lots and school buildings. The proposal was approved at a standing committee meeting, which included signing a memorandum of understanding with NTPC for installing solar rooftop PV and solar ground-mounted plants. NTPC Vidyut Vyapar Nigam Ltd will be responsible for the project design, supply, erection, commissioning, operation and maintenance of the project for 25 years.

Source: The Economic Times


Nigeria’s state oil company opens bids for revamp of Port Harcourt refinery

1 December. Nigeria’s state oil company has opened bids for investors to carry out engineering work in a revamp of its refinery in the southern oil city of Port Harcourt, it said. In August, the Nigerian National Petroleum Corp (NNPC) said it was asking investors to bid to fix pipelines and depots serving its four oil refineries. And the following month it said it was holding talks to give up majority stakes in the refineries. The refineries, located at three sites, have run only sporadically and NNPC shut them down earlier this year while they awaited repairs and upgrades. Africa’s top oil exporter has made producing its own fuels a priority for years but efforts in recent years to revamp its refineries have failed, leaving it almost entirely reliant on imports.

Source: The Economic Times

Saudi Arabia may raise Asia crude prices in January

30 November. Top oil exporter Saudi Arabia is expected to raise its official selling prices (OSPs) for Asian buyers in January, tracking stronger benchmark prices as some refiners increase output to meet higher winter demand, survey showed. Six sources at Asian refiners expect the January OSP for Saudi flagship crude grade Arab Light to rise by 65 cents a barrel on average, with their forecasts ranging between an increase of 50 cents and 85 cents. Two of the sources forecasted bigger price increases for Saudi lighter grades than heavier ones, as they contain more middle distillates, gasoil and jet fuel, which were more profitable for refiners this month. Saudi crude OSPs are usually released around the fifth of each month, and set the trend for Iranian, Kuwaiti and Iraqi prices, affecting more than 12 mn barrels per day (bpd) of crude bound for Asia.

Source: Reuters

Venezuela resumes direct oil shipments to China despite US sanctions

27 November. Venezuela has resumed direct shipments of oil to China after US (United States) sanctions sent the trade underground for more than a year, according to Refinitiv Eikon vessel-tracking data and internal documents from state company Petroleos de Venezuela (PDVSA). PDVSA’s customers instead boosted shipments to Malaysia, where transfers of cargoes between vessels at sea have allowed most of Venezuela’s crude to continue flowing to China after changing hands and using trade intermediaries. The first tanker to resume transport of Venezuelan crude directly to China was the Kyoto, identified by shipping monitoring service while loading 1.8 mn barrels of heavy crude at Venezuela’s Jose port in late August.

Source: Reuters


Norway gas plant resumes exports to Europe

29 November. Norway’s Nyhamna gas export terminal has restarted production and is ramping up output following a shutdown triggered by a strike among workers, system operator Gassco said. Output loss was expected to amount to 40 million standard cubic metres (mscm) of gas, less than the 50 mscm loss, while it was not yet clear if the outage would have any residual impact. British gas prices for the coming week had spiked ahead of the strike on fears of a protracted conflict.

Source: Reuters

Asian LNG spot prices rise on oil surge and heating demand

27 November. Asian spot prices for liquefied natural gas (LNG) rose, driven by a surge in oil prices and a potentially colder start to winter and higher heating demand. The average LNG price for January delivery into northeast Asia was estimated at around $7.40 per million metric British thermal units (mmBtu), up $1.00 from the previous week. Brent oil futures, which the majority of Asian LNG contracts are priced against, rose 6 percent to the highest since March as traders were optimistic about oil demand recovering due to developments with various coronavirus vaccines. The amount of gas flowing in the United States (US) to LNG export plants was on track to hit a record high this week, with a good part of them expected to land in Asia. Cheniere Energy’s Corpus Christi plant in Texas has pulled in enough fuel to supply all three of its liquefaction trains. Malaysian state-owned energy giant Petronas, the world’s fourth-biggest LNG exporter, said its Pengerang Integrated Complex (PIC) will be operational by early next year.

Source: Reuters

Exxon and Total in talks over Mozambique LNG resource-sharing deal

26 November. ExxonMobil and Total are in negotiations over their massive LNG (liquefied natural gas) projects in Mozambique, with each seeking to extract more gas from a shared field that straddles the two developments and cut costs. The talks between the energy majors also involve the Mozambican government, as it has to give final approval to any new agreement. The field that straddles the projects happens to contain gas that is thicker and therefore cheaper to extract and convert into LNG than reserves elsewhere in the projects. The volume each project could extract from the shared area was set out in a 2015 “unitisation” – or resource-sharing – agreement. However, both US (United States) major Exxon and France’s Total are now renegotiating that contract with each other. The companies are looking to cut costs wherever they can, bruised by a Covid-19 induced collapse in global oil and gas prices and facing a worsening security situation in Mozambique. Across the industry, most companies have been forced to delay decisions on new LNG projects and write down investments in existing production plants, in stark contrast to last year’s record level of approvals for plants.

Source: Reuters


South Korea to reduce coal plant operations, targeting fine dust in winter

26 November. South Korea will reduce the operations of coal-fuelled power plants this winter to cut fine dust emissions, it said, as it battles unhealthy air. It is resuming a campaign kicked off last winter to rein in fine dust, a combination of domestic coal and automotive emissions as well as pollutants wafted in from neighbouring China and North Korea. The operations of eight of the nation’s 60 coal power plants will be halted during the season, an official at the Ministry of Trade, Industry and Energy said, matching a step taken last year.

Source: Reuters

China and Indonesia sign $1.5 bn thermal coal deal

25 November. China will buy $1.467 bn worth of thermal coal from Indonesia next year, the Indonesian Coal Mining Association (APBI) said. The trade deal was signed between APBI and China Coal Transportation and Distribution, according to APBI. Indonesia, the world’s top exporter of thermal coal, has resorted to diplomatic channels to promote coal sales around Southeast Asia, particularly in Vietnam, as exports to China slowed. China’s imports from Indonesia, the world’s biggest shipper of thermal coal used in power plants, dropped 24.5 percent in the first 10 months of 2020 to 86.88 million tonnes (mt), compared to 115.03 mn during the same period last year, according to Refinitiv data.

Source: Reuters

Poland should scrap coal and energy plan: Environmentalists

25 November. Poland should scrap a plan to merge energy groups after they have shifted coal assets into a separate entity because it won’t deliver on EU (European Union) climate targets, Environmentalist group ClientEarth and think tank Instrat report said. The chief executive of utility PGE said that merging PGE with peers Tauron and Enea after offloading their coal assets into a separate state entity would boost the companies’ investment potential. The plan has been approved by the state assets ministry, which is working on details. The report showed that if the plan is implemented, in 2030 Poland will generate 92.2 terrawatt hour (TWh) of electricity from coal, or more than five times more than it should if it followed EU climate policies. It also said that while PGE would gain 31 bn zlotys ($8.3 bn) from offloading coal assets, the state would lose 26.5 bn zlotys, as it would also take over the debt of PGE’s coal unit. PGE has said it has no other choice than discarding coal to be able to attract financing for investment. ClientEarth and Instrat also said coal assets should be part of a portfolio of a listed company, which would guarantee that the process of phasing out coal is transparent.

Source: Reuters


Electricity grid collapses in Nigeria, Africa’s largest economy

29 November. Nigeria’s national electricity grid collapsed, the Transmission Company of Nigeria (TCN) said. Power outages in Nigeria, the most-populous nation in Africa, are common, but a system collapse is unusual. The nation’s sclerotic power grid, along with the resulting precarious energy supply, is a key issue hindering growth in the continent’s largest economy. Nigeria recently implemented its first power tariff increase in state-controlled prices since 2015. That doubled prices for some consumers, but the government and industry said it was needed to allow distribution companies to recoup costs and pay generating companies.

Source: Reuters

Dubai cuts fuel surcharge to bring down customer power, water bills

29 November. Dubai will reduce a fuel surcharge on customer electricity and water bills from 1 December, citing savings made by including renewable sources in its energy mix. The fuel surcharge for electricity will be 5 fils per kilowatt hour, down from 6.5 fils. The surcharge for water will become 0.4 fils per gallon, instead of 0.6 fils previously.

Source: Reuters

Japan power derivatives electrify market as foreigners plug in

27 November. Trading of a Japanese power market derivative offered by the European Energy Exchange (EEX) has surged in the six months since its launch as overseas traders and investors pile into the world’s fourth-biggest electricity market. EEX Japan power swaps amounting to 111.5 mn kilowatt hour (kWh) were traded in October, 10 times the volume in the first month of trading in May. Once a backwater in the energy sector, the Japan Electric Power Exchange (JEPX) has become the locus of action in a deregulated market, with volumes of the bourse’s spot power contract accounting for more than 40 percent of sales in June in the roughly $140 bn electricity market. Before the market was almost fully liberalized in 2016, when the government allowed any supplier to sell electricity to households, trading on JEPX accounted for less than 2 percent of the market. Germany’s biggest electricity producer, RWE, also recently set up a Japanese subsidiary to trade power and offer risk management products to local companies.

Source: Reuter


EU set to meet two of its three 2020 climate goals

1 December. A four-percent drop in greenhouse gas emissions in 2019 and the green effects of the pandemic will help the EU (European Union) meet two of its three 2020 climate goals. Outlined in 2007 and adopted in 2009, the three goals include a reduction of greenhouse gas emissions by at least 20 percent from 1990 levels, a share of at least 20 percent for renewables in energy consumption, and a 20-percent improvement in energy efficiency. According to the European Environment Agency report, the two first goals will be met in 2020, while the third one, on energy efficiency, is not expected to be reached.

Source: The Economic Times

Biden plan to end US fossil fuel subsidies faces big challenges

1 December. President-elect Joe Biden’s promise to end US (United States) fossil fuel subsidies worth billions of dollars a year for drillers and miners could be hard to keep due to resistance from lawmakers in a narrowly divided Congress, including from within his own party. The challenge reflects just one of the obstacles that Biden will need to overcome as he seeks to usher in sweeping measures to combat climate change and transform the nation’s economy to net-zero emissions within three decades. Biden has said axing fossil fuel subsidies will generate money to help pay for his broader $2 tn climate plan. While Biden can take executive action to reverse President Donald Trump’s rollbacks of rules meant to reduce greenhouse gas emissions, reforming tax breaks that allow companies to produce oil, gas and coal more cheaply will require Congress to pass legislation.

Source: Reuters

Poland sees cost of building 6-9 GW of nuclear energy at $30 bn

27 November. Poland sees the total costs of building six nuclear reactors of 6-9 GW capacity over 20 years at around $30 bn. Poland generates most of its electricity from burning coal and sees nuclear energy as a way to help it reduce emissions as required by the European Union. The country wants to build 6-9 GW of nuclear energy capacity and plans to build its first nuclear power plant by 2033, but has not yet worked out a financing scheme.

Source: Reuters

SSE, Equinor to invest $8 bn in Britain’s Dogger Bank giant wind project

26 November. British utility SSE and Norwegian oil company Equinor have agreed to invest 6 bn pounds ($8.03 bn) to construct the first two phases of the Dogger Bank offshore wind power project, the two companies said. The project will become the world’s largest offshore wind farm, helping both companies to achieve their climate targets. The construction of 2.4 GW of capacity in the British part of the North Sea will be financed by a group of 29 banks and three credit export agencies. The first phase, of 1.2 GW, is expected to start operations in 2023, with the second following about a year later. Each phase will generate around 6 terawatt hours (TWh) of electricity annually. A third phase is planned for completion by 2026, by which time Dogger Bank would produce enough electricity to supply 5 percent of British demand, equivalent to powering 6 mn British homes each year, the companies said.

Source: Reuters

China’s CO2 emissions will be higher in 2020 than in 2019: IEA’s Birol

25 November. China’s greenhouse gas emissions will increase in 2020 compared to 2019 as they have rebounded after the Covid-19 outbreak, IEA (International Energy Agency) executive director Fatih Birol said. On the United States (US), Birol said he expected President-elect Joe Biden to give a “big push” for clean energy innovations, ranging from carbon capture and storage to small nuclear reactors and battery storage.

Source: Reuters


Source: World Energy Outlook 2020, International Energy Agency
Source: World Energy Outlook 2020, International Energy Agency             

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 2020 is the seventeenth continuous year of publication of the newsletter. The newsletter is registered with the Registrar of News Paper for India under No. DELENG / 2004 / 13485.

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