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SUPPLY DRIVING DEMAND: SAYS LAW IN ACTION? Monthly Gas News Commentary: May - June 2017
India
here is optimism on demand for gas that is driving
imports but pessimism on production of domestic
gas. H-Energy, the Mumbai-based oil and gas arm of
Hiranandani Group plans to invest more than ₹ 45 billion
in the natural gas sector in five years to develop LNG re-
gasification units on the west and east coast of India along
with pipeline infrastructure. H-Energy is at an advanced
stage of setting up an LNG re-gasification unit at Jaigarh
port in Maharashtra. As part of its phase-1 plan, the
company in 2017 signed an agreement with France-based
energy company Engie to charter a FSRU. After phase- 1
of the project stabilises, the company will be setting-up a
land based re-gasification plant with an annual capacity of
8 mtpa. Also, the company has already started work on
Jaigarh to Dabhol tie-in pipeline which will carry natural
gas to the gas grid of GAIL (India) Ltd at Dabhol. The
company has also approached PNGRB, for laying a 700
km pipeline to connect the East coast FSRU to major
demand centres in West Bengal.
Fidelity Investments and Morgan Stanley Investment
Management have increased exposure to Indian city-gas
retailers, as the emphasis on clean fuels burnishes the
outlook for the industry. The demand from investors has
been so strong that Indraprastha Gas Ltd, which supplies
to homes and vehicles in New Delhi, raised the cap on
foreign ownership to 30 percent from 24 percent, and
may increase it again to almost half. India’s largest city gas
distributor Gujarat Gas Ltd, where Aberdeen Asset
Management Plc is the biggest non-state investor, and
Mahanagar Gas Ltd. have also seen an increase in
offshore holdings. India’s gas demand is about a fifth of
China’s due to weak domestic supply and poor
infrastructure, though the government is trying to change
this. Measures have been stepped up to improve air
quality in cities by giving priority to distributors such as
Indraprastha Gas for accessing cheaper local gas.
Offshore holdings in Indraprastha Gas climbed to nearly
25 percent as of March 31, from about 21 percent a year
ago, according to data. Aberdeen Asset Management held
about 4.6 percent of outstanding shares in Gujarat Gas as
of end-April. Foreign holdings in the company have
climbed about 3 percentage points to 15.4 percent in the
past year. Mahanagar Gas, which sells the fuel in the
financial capital Mumbai and its suburbs, has seen stock
in the hands of foreign investors increase nearly six times
since listing last year. India’s government wants more
T
June 23, 2017, Volume XIV, Issue 2
Energy News Monitor
QUICK FACT
Solar power today has a share of about 18% to the total renewable power installed capacity
while in terms of the electricity generation the share is about 12%
urban households to use natural gas and LPG for rural
users.
The supply side does not share the optimism of the
demand side. ONGC has said that producing natural gas
is no longer a profitable business for the company as the
government-mandated gas price is significantly below the
cost of production. The oil major has sought a review of
pricing formula from the government. ONGC wants a
floor or minimum price of natural gas be fixed at
$4.2/mmBtu for the business to be viable. With the
current price, it does not make economic or commercial
sense for any company to invest in new fields or in
augmenting production from existing ones. Fresh
investment in unlikely if the price remains below the cost
of production. In October 2014, the government adopted
a new pricing formula using rates prevalent in gas surplus
nations like the US and Canada to determine rates in a
net importing country. Prices have halved to
$2.48/mmBtu since the formula was implemented. India
imports half its natural gas needs and the government is
keen to cut import bill by raising indigenous production
and ‘Make in India’. The price paid to domestic producers
is less than half of the rate paid for import of gas. ONGC
produces 80 percent of the 70 mmscmd which makes it
the biggest gas producer in India. ONGC lost ₹ 50.1
billion in revenue on natural gas business, and about ₹ 30
billion in profit in just last one year.
GAIL said it has drawn up investment plans of ₹ 300
billion for expansion. GAIL is currently executing gas
pipelines worth ₹ 200 billion and another ₹ 100 billion
worth of lines are under various stages of evaluation. The
pipelines under execution include Jagdishpur-Haldia line
that will take the environment friendly fuel to the east.
Current projects will be completed by 2019-20, taking
GAILs pipeline network to 15,000 km from the current
11,000 km. The company has already spent capex of ₹
21.8 billion in FY17 and plans to spend ₹ 42.6 billion in
FY18 and ₹ 77.04 billion in FY19 towards setting up of
pipelines, petrochemical and process plants. GAIL will
get charge of the LNG block, while state-owned power
producer NTPC Ltd would be the largest shareholder in
the power block. The company reported 69 percent drop
in fourth quarter net profit of ₹2.6 billion as it wrote
down the value of its investment in Dabhol power plant.
The company has taken up synchronised development of
seven city gas distribution network projects at Varanasi,
Patna, Jamshedpur, Kolkata, Ranchi, Bhubaneswar and
Cuttack. The first LNG terminal at the east coast is also
coming up in Dhamra in Odisha under a joint venture of
public and private sector companies.
The oil ministry has formed all-powerful review
committees to monitor performance of ONGC and OIL,
and will have power to relinquish any oil and gas field for
auctioning to private firms. Being dubbed as super-
boards, the committees will be headed by the ministry’s
upstream nodal authority DGH, and will review and
monitor performance of areas given to ONGC and OIL
on nomination basis. The two panels, one each for
ONGC and OIL, will review from annual work
programme and budget to declaration of a discovery as
commercial as also reservoir and production
performance, monitoring of development activities and
collaborations with other explorers. The order follows
ministry’s unhappiness with state explorers particularly
on delays in projects linked to output enhancement. It has
already ordered a detailed review of board of directors of
ONGC for a possible revamp of the functional heads.
ONGC produced 86 percent of its 26.13 MT of crude oil
in 2016-17 fiscal from fields given to it on nomination
basis. Natural gas production from nomination fields
accounted for 93 percent of the total output of 25.34 bcm.
The review committee will meet at least once every three
months. Field development plans, feasibility reports of
commercial discoveries in nomination fields and
monitoring of development activities for early
monetisation will also fall within the ambit of the
committees. The visible hand of government
commanding and controlling the oil sector is unlikely to
produce more oil than what the invisible hand of the
market can produce. Even if the invisible hand favours
production, nature’s visible hand that dealt India its
meagre hydrocarbon has set limits on what can be
produced.
The ongoing rupee surge coupled with continuing price
reductions of gas will push fuel cost down by around 5
percent, which in turn will lower the gross margins of
upstream oil and gas players and deter fresh investment
into the sector, Ind-Ra said. For the fifth consecutive
time since implementation of the domestic gas pricing
formula in November 2014, the government in March
lowered domestic gas prices by 0.8 percent to
$2.48/mmBtu. The price will be in force from April 1 to
September 30, 2017. The price ceiling for gas produced
from discoveries in deep-water, ultra-deep water and high
pressure-high temperature areas for the period April-
September 2017 is $ 5.56/mmBtu on gross calorific value
basis, while the domestic prices has been lowered to
$2.48/mmBtu on gross calorific value basis for this
period. However, it will marginally benefit the midstream
entities like GAIL, which will see its trading revenue fall
by ₹ 2.5 billion from domestic sales during in 1H of FY18.
But since GAIL sells its domestic gases on a cost-plus
basis, its gross margins will be protected. GAIL will open
a new energy route for India early next year by beginning
regular imports of shale gas from the US, adding to New
Delhi's bargaining power with its predominantly West
Asian suppliers. GAIL will begin importing gas in ships
under a long-term contract from Dominion Cove Point
LNG project from March 2018 and has floated tender for
chartering ships for transportation. The company has
also made a time-swap deal for 1 MT of US gas for FY19
in an attempt to recast its supply portfolio in line with
domestic demand. GAIL had in 2013 tied up 2.3 MT
LNG supplies for 20 years from Cove Point. It signed
another contract for 3.5 MT of LNG with Cheniere
Energy Inc's Sabine Pass project in Louisiana, the
supplies from which will begin in December 2018. The
company also holds a 20 percent stake in Eagle Ford
Shale of Carrizo Oil & Gas. The contracts with Cheniere
and Dominion make GAIL one of the largest holders of
LNG portfolio linked to Henry Hub, the US gas price
benchmark, and will allow it to market 6 MT of US gas.
Both Cheniere and Dominion projects have US energy
department's permission to export gas to countries such
as India that do not have free trade agreement with
Washington. Regular gas supply from the US at an
affordable rate will underline the impact of a rebound in
the US fracking industry on global energy trade and
widens options for India, giving it leverage against West
Asian suppliers.
Rest of the World
Asian spot LNG prices edged lower as the early restart of
Chevron's Gorgon production facility in Australia
weighed on sentiment, projects offered supply and
demand from Japan stayed weak. Spot prices for July
delivery LNG-AS were assessed at $5.40/mmBtu down
5 cents from earlier. The early restart of Gorgon's first
production line provided an unexpected boost to Asian
supplies after operator Chevron initially estimated the
outage would last until mid-June. Project stakeholder
Exxon Mobil launched a tender to sell one cargo for
delivery in the second half of June days before news of
the facility's restart was made public. The various supply
tenders from Angola, Nigeria and Australia, which
offered June-loading cargoes, came amid muted summer
demand from north Asian buyers. Any downside to Asia
spot prices could be capped by relatively firm European
demand, including in Spain, traders said. Results from the
Nigerian and Angolan sell tender are expected to emerge
in the coming days, but Asian LNG market participants
said it was unlikely that the cargoes would be sold to Asia
given the strength in Atlantic prices.
Japan's Mitsui & Co Ltd plans to expand its LNG trading
operation as demand for the cleaner fuel spurs more spot
transactions in Asia. The move comes amid a big shift in
the market in Asia, which takes in about 70 percent of
global shipments of LNG, with traders and end users
increasing their ability to trade in anticipation of a supply
influx from Australian and US projects. Mitsui traded 2.8
MT of LNG in the year ended March 31, but will receive
more supplies from next year when the Cameron LNG
project in Louisiana starts operations. The Japanese
company has signed up to take 4 MT of LNG annually
from the project, with some of it tied up in term contracts
leaving it with volumes to trade. China currently
imported about 26 MT of LNG in 2016, up by a third
from a year earlier. The company is also looking for
buyers for supplies from an LNG project in Mozambique
led by Anadarko in which Mitsui has a stake.
With a tanker expected to arrive in Taiwan shortly, the
US will increase the number of countries that have
received LNG from the Sabine Pass terminal in Louisiana
to at least 23 of the 35 that can accept the vessels. The
Cadiz Knutsen tanker will go to the Taichung LNG
terminal in Taiwan with a load of super-cooled gas from
Cheniere Energy Inc's Sabine, according Genscape
shipping data. The increase in US deliveries coincides
with the LNG market worries that Qatar, the world's
biggest LNG exporter, could experience problems
delivering fuel to some countries after Saudi Arabia and
a few other Arab nations severed diplomatic and
transport links with the gulf sheikhdom after accusing the
country of sponsoring terrorism.
The Netherlands is set to receive its first LNG delivery
from Cheniere Energy's Sabine Pass export plant in the
US, according to shipping data. The Arctic Discoverer
vessel, with a carrying capacity of 133,500 cubic metres
of LNG, departed the facility on the Gulf Coast and is
listed as heading for Rotterdam, data shows. Cheniere is
currently the only company able to export large cargoes
of LNG from the continental US but very few have so
far landed on European shores despite analyst
expectations of a surge in supply. According to US
Department of Energy data, the biggest beneficiary of
Sabine Pass volumes has so far been Mexico, followed by
Chile, China, Japan, Jordan, India and Turkey. Currently
Spain, Portugal, Italy and Malta are the only European
countries to have received deliveries. Analysts and some
LNG traders expect European imports to improve from
this summer due to increased LNG production capacity
as markets in Asia and elsewhere struggle to absorb the
growing pool of supply. In February Britain received its
first ever LNG delivery from Peru aboard the Gallina
tanker. Royal Dutch Shell exports LNG from Peru,
mostly to Mexico, but due to contractual issues with
Mexico's CFE the oil major had opted instead to divert
some cargoes into alternate markets, traders said.
Austrian energy group OMV and Russia's Gazprom are
considering reviving a gas pipeline project through the
Black Sea connecting Russia to central and southern
Europe. If realized, the project would likely boost the
importance of OMV's Baumgarten gas hub, which
distributes around 57 bcm a year. The project would be
an extension of the TurkStream pipeline, which Gazprom
plans to finish by the end of 2019. The extended line
could pump Russian gas to Italy, which currently receives
supplies from Baumgarten via the TAG and SOL
pipelines. Alternatively, Russian gas could go from
western Turkey via Greece to Italy. Russia scrapped the
South Stream pipeline project, which would have
supplied Russian gas to southern Europe with an
undersea pipeline to Bulgaria, in late 2014 because of
objections from the European Union on competition
grounds.
The government of Australia's Northern Territory gave
the go-ahead to start building a $600 million gas pipeline
that could help ease a shortage of the commodity in the
country's east. Jemena, owned by State Grid Corp of
China and Singapore Power, was given permission to
build the westernmost portion of the 622 km line
designed to connect gas fields in northern Australia with
the eastern state of Queensland. Australia is the world's
second-largest LNG exporter, but has faced a growing
crisis over local gas supply with prices rocketing over the
past two years as the commodity is shipped abroad. The
company had previously said it planned to begin
construction of a compressor station, for which it has
already won approval, in May, and that it may eventually
extend the pipeline.
ConocoPhillips said that production and exports of LNG
from an investment project in Qatar have not been
affected by growing Middle East diplomatic tensions.
Saudi Arabia, Bahrain, Egypt and the United Arab
Emirates cut ties with Qatar, accusing the country of
supporting extremism. Qatar has denied the allegations.
Concerns have grown that global access to Qatar's LNG
could be cut, especially after some Persian Gulf ports said
they would not accept Qatari-flagged vessels. Houston-
based ConocoPhillips owns a 30 percent stake in an LNG
project operated by Qatargas Operating Co Ltd, part of
the state-controlled energy company. Mitsui & Co Ltd
owns a remaining 1.5 percent stake in the project, which
processes about 3 m/day. ConocoPhillips controls the
Golden Pass LNG facility in the US along with Exxon
Mobil Corp and Qatar Petroleum.
Qatar has no plan to shut the Dolphin pipeline that
transports natural gas to the UAE despite the severing of
diplomatic ties between the two Gulf Arab nations. Saudi
Arabia, the UAE, Egypt and Bahrain said they would cut
all ties including transport links with Qatar, the world's
top seller of LNG, accusing it of supporting terrorism.
Doha denies the accusation. Qatar supplies roughly a
third of global LNG - natural gas that has been converted
into liquid form for export. The pipeline was the first
cross-border gas project in the Gulf Arab region. It
pumps around 2 billion cubic feet of gas per day to the
UAE. Tankers load Qatari crude along with UAE oil as
shipping ban eases. The diplomatic dispute has stoked
concern that any supply disruption could spill over into
global gas markets. Even a partial shutdown would force
the UAE to seek replacement LNG supplies. The UAE
could cope with Qatar suspending its two to three
monthly LNG deliveries by calling on international
markets, but Dolphin piped flows are too large to replace
fully.
The Philippines aims to build a $2 billion receiving and
distribution facility for imported LNG, as it seeks to
replace depleting domestic gas reserves that now produce
a fifth of its power. Construction could be completed by
2020, or four years before the Malampaya natural gas field
is depleted. The Philippines' energy demand will triple by
2040, with electricity requirements anticipated to grow
four times from 2015. Chinese and Japanese companies
are among the foreign investors who want to help build
energy infrastructure, including LNG facilities. Several
firms have expressed interest in building LNG facilities
in the Philippines, including Manila Electric Company,
formerly in talks with Osaka Gas Co Ltd for a joint
venture.
Talks over new routes for gas supplies to China from
Russia have stalled while Beijing rethinks the balance of
its energy needs, including how much LNG it might use.
Gazprom, which is already building a gas pipeline from
Eastern Siberia to Chin, the Power of Siberia, was in talks
over two more routes: the so-called western gas route and
a gas pipeline from the Pacific Island of Sakhalin.
Gazprom said there were no developments on the two
pipelines, whose combined capacity, if built, is seen
adding up to another 40 bcm in possible gas supplies
from Russia to China per year. The Power of Siberia
pipeline, expected to be launched by the end of the
decade or in the early 2020s, should bring 38 bcm to
China per year. Gazprom managed to clinch the Power
of Siberia deal after ten years of painstaking talks with
Beijing. Neither Gazprom nor state-owned CNPC
immediately responded to requests for comment.
According to BP's energy outlook to 2035, the share of
pipeline gas supplies to China, including from Russia, will
remain largely unchanged over the ten years from 2025,
with the share of LNG and China's own gas output
significantly rising.
Oil majors BP and Eni are deepening their foray into
blockchain technology, starting to run blockchain trades
in parallel with their live trading systems, according to
developer BTL Group. The energy traders, together with
Austria's Wien Energie, had previously tested BTL's
Interbit blockchain platform over 12 weeks, carrying out
trades in European natural gas.
Sinopec said it has started building China's largest natural
gas storage and logistics center with the capacity to store
up to 10 bcm of gas in Henan province in the central part
of the country. The world's second-largest economy is
investing in infrastructure from pipelines to storage tanks
as Beijing prepares to switch from coal-fired boilers and
heating systems across 28 of its smoggiest cities to natural
gas or electricity by October. The storage facility is
expected to open in May 2018. The storage facility will be
connected to pipelines and supply gas to central China,
Beijing and Tianjin.
LNG: Liquefied Natural Gas, ONGC: Oil and Natural Gas
Corp, mmBtu: million metric British thermal units, OIL: Oil
India Ltd, FY: Financial Year, mtpa: million tonnes per annum,
bcm: billion cubic meters, mmscmd: million metric standard
cubic meter per day PNGRB: Petroleum & Natural Gas
Regulatory Board, DGH: Directorate General of
Hydrocarbons, MT: Million Tonnes, Ind-Ra: India Ratings and
Research, FSRU: Floating Storage and Regasification Unit, US:
United States, CNPC: China National Petroleum Corp, UAE:
United Arab Emirates
NATIONAL: OIL
BPCL reassessing plan to build oil refinery in
Allahabad
June 20, 2017. Bharat Petroleum Corp Ltd (BPCL) is
revisiting its mothballed plan to build a refinery in
Allahabad to cater to the expanding demand for fuel in
the country. India’s fuel demand rose 5% in 2016-17,
with consumption of diesel and petrol rising about 2%
and 9% respectively. The expansion in fuel demand has
spurred refiners to increase capacity, which the
government expects to go up by 150 million tonnes in the
next 7-8 years from 235 million tonnes today. The
increase is expected to include 50-60 million tonnes of
brownfield expansion. BPCL, along with Indian Oil Corp
(IOC) and Hindustan Petroleum Corp Ltd (BPCL), is
working on setting up the world’s biggest greenfield
refinery in Maharashtra. BPCL holds 25% stake in the
mega project in which Saudi Aramco is said to be keen to
invest.
Source: The Economic Times
Kochi LPG terminal will ease backlog in Kerala: IOC
June 20, 2017. Indian Oil Corp (IOC) said its proposed
LPG (liquefied petroleum gas) import terminal at
Puthuvypeen in Kochi, construction of which has
witnessed violent protest, will help reduce backlog for
cooking gas in Kerala. IOC said the backlog of supplies
in Kerala is 15 days and the new import facility was aimed
at easing the same. Also, the import terminal would
minimise the movement of bulk LPG tankers through
the highways in the state. IOC moves bulk LPG from
Mangalore to various LPG bottling plants in North
Kerala through about 100 bullet trucks every day, which
ply on narrow highways. Besides the import terminal, the
` 2,200 crore project comprises a multi-user liquid
terminal, the Kochi-Salem LPG pipeline and a bulk
terminal at Palakkad. Out of this, about ` 670 crore is
only towards labour cost, the company said. IOC said the
National Green Tribunal (NGT) had in August 2016
permitted the company to continue with the work.
However, a small group of people have been obstructing
the work since February 16. The company said during the
NGT hearing on April 13 this year, the agitators had
committed to the Tribunal not to obstruct work. IOC
said the terminal will store LPG in mounded vessels,
which are considered the safest in the industry worldwide.
Source: The Times of India
7 petrol pumps sealed for tampered meters in
Mumbai
June 20, 2017. Over the past three days, Thane Crime
Branch has raided nine petrol pumps which showed a
false reading to customers while pumping less fuel than
has been paid for. The Thane crime branch has sealed
seven of the nine petrol stations it raided after learning
that they had been operating with rigged dispensers
which show a false reading to customers while pumping
less fuel than has been paid for. The police believe that
the pumps have each pocketed ` 5.5 lakh a month by
dispensing 5–7 percent less for every litre bought. The
tampering doesn’t come as news to motorists in Thane
and the nearby Dombivali and Khopoli, who have lodged
a slew of complaints with local police stations in the past
few months that they had been short-changed by the fuel
stations. When police informants corroborated these
allegations, the crime branch raided the nine pumps. The
searches led to the discovery that the fuel dispensers at
the stations had been fitted out with a chip that makes
the meter run faster than the petrol being pumped out.
In May, the Thane crime branch had arrested Vinay
Shetye from Dombivali, for running a similar ring in
Uttar Pradesh that made the technology for rigging the
pumps available to many stations in the northern state. It
was during his questioning that the names of some of
these nine petrol pumps, which had allegedly bought the
chips from Shetye, surfaced. Investigation of the other
two pumps is underway, but sources have confirmed they
were also manipulating the machines. The managers and
owners of the nine raided pumps have been arrested.
When questioned, they told the police that the petrol
transporters are involved in the racket but the claim is yet
to be verified, a senior investigator said.
Source: The Economic Times
Oil Minister assures people won't suffer due to
daily revision of fuel prices
June 17, 2017. Oil Minister Dharmendra Pradhan said
people won't suffer due to daily revision of fuel prices.
He said that people will daily get a little profit or loss.
State-owned oil companies such as Indian Oil Corp
(IOC), Bharat Petroleum Corp Ltd (BPCL) and
Hindustan Petroleum Corp Ltd (HPCL), decided on a
pan-India implementation of daily price revision of petrol
and diesel. Before the rollout of daily price revision,
Federation of All India Petroleum Traders (FAIPT)
demanded an automated system to reflect price changes
from the state-run oil marketing companies. The main
concern of the dealers is that they will have to stop the
sales every midnight for considerable time to change the
daily rates. However, the IOC successfully rolled out the
daily revision of petrol and diesel prices across the
country through its network of 26,000-plus petrol pumps.
IOC has developed various information modes for the
customers to check the price being charged by the petrol
pumps including the mobile app wherein the customers
will be able to fetch daily updated prices of petrol and
diesel at all cities through IOC's mobile app Fuel@IOC.
It will also enable customers to cross-check the prices
applicable in their cities by sending SMS on various dealer
codes, including various other options.
Source: Business Standard
India's 2017 diesel imports may rise to highest since
at least 2011
June 16, 2017. India's diesel imports this year may rise to
the highest since at least 2011 as refiners shut down to
upgrade their units to meet new fuel standards and as
warmer temperatures spur demand. India's state-owned
refiners are already seeking or have bought up to 967,000
tonnes of diesel through July, according to tender data.
That exceeds then-record imports of 962,000 tonnes in
2016, according to full-year government data going back
to 2011. The upgrades to meet new Euro IV fuel
standards implemented on April 1 and warmer
temperatures are boosting diesel imports into the world's
third-largest oil consumer, Sri Paravaikkarasu, head of
East of Suez Oil for oil consultants FGE, said. While
monsoon rains typically reduce the need for diesel used
in irrigation pumps, the curtailed supply because of the
maintenance shutdowns will likely continue to boost
imports into the country, Paravaikkarasu said. India is a
net exporter of diesel with its refinery production usually
enough to meet domestic demand, limiting imports. But
the change in fuel standards has boosted imports of
cleaner diesel while it has exported more lower sulphur
diesel, traders said. India's diesel demand is expected to
rise to record levels again this year as a slew of
infrastructure projects boosts the use of the fuel,
although a government-induced cash shortage will hold
growth to its slowest in three years. Diesel demand is
expected to grow by 3 percent this year, lower than the
5.1 percent growth in 2016, Paravaikkarasu said.
Source: Reuters
Petrol price cut by ` 1.12 per litre, diesel by ` 1.24
June 15, 2017. Reflecting global crude oil prices, petrol
price was cut by ` 1.12 per litre and diesel by ` 1.24 per
litre. Oil companies made the announcement in the
evening today and the change in price will be effective
from June 16. From June 16, India will switch to a market
dynamic system under which petrol and diesel prices will
be revised on a daily basis. Rates will change at 6 am
everyday depending on movement in cost on the
previous day. Currently, prices are revised on 1st and 16th
of every month based on the fortnightly average of
international oil price and the foreign exchange rate.
Petrol will cost ` 65.48 a litre in Delhi from June 16 as
against ̀ 66.91 per litre currently. A litre of diesel will cost
` 54.49 as compared to ` 55.94 at present. Indian Oil
Corp (IOC) said daily revision of retail selling price of
petrol and diesel on pilot basis was implemented in
Chandigarh, Jamshedpur, Puducherry District, Udaipur
and Visakhapatnam from May 1.
Source: India Today
Oil Minister invites BP and RIL to invest in fuel
retailing
June 15, 2017. A day before India shifts to a market
dynamic system of daily revision of petrol and diesel
prices, Oil Minister Dharmendra Pradhan invited BP plc,
Europe's third-biggest oil company, and Reliance
Industries Ltd (RIL) to invest in fuel retailing. While RIL
already has a fuel retailing license and has some 1,400
petrol pumps on the ground, BP last year got approval to
set up petrol pumps in India. RIL and BP are partners in
oil and gas exploration but have no such collaboration in
downstream fuel retailing business. BP is the tenth player
to enter the lucrative fuel retailing business that is seeing
double digit growth, not seen anywhere in the world. BP
had in January last year won in-principle approval to retail
aviation turbine fuel (ATF) to airlines in India. RIL too
operates aviation fuelling services separately. India
currently has about 59,595 petrol pumps, with public
sector firms operating a majority of them. Private sector
operators are limited to Essar Oil and RIL, which
between them have some 4,900 petrol pumps. Royal
Dutch Shell operates 85 petrol stations. Numaligarh
Refineries Ltd (NRL) and Mangalore Refineries and
Petrochemicals Ltd (MRPL) are late entrants and have six
outlets between them. Indian Oil Corp (IOC) owns
26,212 petrol pumps, Hindustan Petroleum Corp Ltd
(HPCL) 14,412 stations and Bharat Petroleum Corp Ltd
(BPCL) 13,983 outlets. In aviation turbine fuel (ATF) or
jet fuel retailing, there are 211 aviation fuel stations, 104
of which are owned by IOC, 42 by BPCL and 37 by
HPCL. RIL has 27 aviation fuel stations at airports, while
joint venture of Shell and MRPL owns one.
Source: Business Standard
BPCL eyes Bina refinery expansion to 310k bpd in 4-5 yrs
June 14, 2017. Bharat Petroleum Corp Ltd (BPCL) aims
to expand the capacity of its Bina refinery in central India
to about 310,000 barrels per day (bpd) in the next four to
five years from the current 120,000 bpd. India aims to
expand its refining capacity by 35 percent to 6.2 million
bpd to meet the country's rising fuel demand. BPCL
owns a majority stake in Bharat Oman Refineries Ltd
(BORL), which runs the plant. Oman Oil Co owns 26
percent in the refinery. BPCL aims to shut the Bina
refinery for about a month in June-September 2018 as the
refinery is adding some units to raise capacity to 156,000
bpd.
Source: Reuters
NATIONAL: GAS
India asks Qatar to invest in power plants as
condition for LNG deals
June 20, 2017. India said it would sign future long-term
liquefied natural gas (LNG) purchase deals with Qatar if
only Doha agrees to acquire stakes in the South Asian
nation's power plants, Oil Minister Dharmendra Pradhan
said. India is the latest major LNG buyer to seek
concessions from Qatar, the world's biggest LNG
exporter, in order to re-sign long-term supply contracts.
Amid a global glut of LNG and a slump in prices, other
buyers have sought more flexible contracts, including
clauses that would allow them to resell gas they do not
consume. India is suffering from natural gas shortages
that have required power plants with capacity of as much
as 25,000 MW to shut down or run as lower rates. Qatar's
RasGas is India's biggest LNG supplier. India wants to
gradually move to a gas-based economy and has plans to
raise its annual LNG import capacity to 50 million tonnes
in the next few years from 21 million tonnes now. India
is also open to granting stakes to Qatar in local oil and
gas companies and LNG terminals, should the Gulf
emirate make such a proposal, said Pradhan. India's
biggest gas importer Petronet LNG annually buys 8.5
million tonnes under a long-term contract. It also buys
additional volumes from Qatar under spot deals. Prabhat
Singh, chief executive officer of Petronet, said the Gulf
nation needed to decide quickly on the Indian proposal.
He said India could be a stable outlet for Qatar's LNG.
Source: Reuters
RIL’s KG-D6 investment to up its regulatory
exposure: Moody’s
June 20, 2017. Reliance Industries’ planned $6 billion
investment to monetise gas finds in the KG-D6 block will
increase its exposure to the extremely challenging Indian
QUICK COMMENT Mandating gas exporters to invest in power plants will not
change power market fundamentals! Bad!
gas business that is fraught with delays and retrospective
changes in regulation, Moody’s Investor Service said.
Reliance Industries Ltd (RIL) and its partner BP Plc of
the United Kingdom (UK) announced that they are
moving ahead with development of three fields in the
KG-D6 block off the east coast of India. Investment of
` 40,000 crore in the development of the fields is
expected to produce 30-35 million metric standard cubic
meter per day (mmscmd) by the year 2020-2022. It said
given the regulatory environment, the timing of both the
investments and cash flows from the project remains
uncertain. RIL-BP estimate that the fields have 3 trillion
cubic feet of discovered gas resources, which could be
monetised with these investments. The investment is
subject to approval by the government of the
development plans which RIL and BP plan to submit
before the end of 2017. Currently, RIL only gets $2.5 per
million British thermal unit for its current gas production
from the KG-D6 block. But the new fields are entitled to
a higher rate, which is capped at $5.56. RIL-BP plan to
award soon the contracts for development of the first
field — R-Series, deep water gas fields located in water-
depths of more than 2,000 meters, approximately 70 km
offshore. The companies expect to produce up to 12
mmscmd, with first production in 2020.
Source: The Hindu Business Line
ONGC's Bassein gas field to touch record output in
2018
June 18, 2017. India's largest natural gas field Bassein in
the Arabian Sea has seen a remarkable turnaround with
the natural decline that had set in at the 28-year old field
reversed and output slated to rise by a quarter to a record
high in 2018. The field, which had hit a peak of 29 million
metric standard cubic meter per day (mmscmd) in 2011,
had seen output decline thereafter but the same has now
been reversed in last three years. Gas production has
regained the 30 mmscmd mark and will climb to 34
mmscmd in few weeks before touching 37 mmscmd by
December 2018. Crude oil production from the asset has
risen from about 1 million tonnes to 2.5 million tonnes
in last three years, making it the second highest oil
producing asset of Oil and Natural Gas Corp (ONGC).
Projects worth ` 13,181 crore to exploit C-26, Daman,
Bassein and Vasai East discoveries will help ramp up the
output further. Vasai East additional development
project, costing ` 2,476 crore, will help raise crude oil
production from 5,600 barrels per day (bpd) to 17,550
bpd and gas from 1.3 mmscmd to 2.5 mmscmd. The `
6,086 crore Daman development project will give a peak
gas output of 8.3 mmscmd and 9,600 bpd of condensate
while the ` 4,619 crore Bassein integrated development
project will help produce 19.36 billion cubic meters (bcm)
of gas and 1.97 million cubic meters (mcm) of condensate.
C-26 Cluster development project, costing ` 2,592 crore,
would produce 5.94 bcm of gas and 0.644 mcm of
condensate, they said. Bassein field had 393 bcm of initial
gas in place, of which 248 bcm (about 7 trillion cubic feet)
has been produced. It is ONGC's fastest growing asset,
spread over 7,300 square kilometres in Arabian Sea. It
comprises South Bassein field that produces 18 mmscmd
of gas, NBP (D-1) field, B-193 super sour field, Vasai
East field and C-Series and Daman gas field.
Source: The Times of India
Bengaluru gas distribution project inaugurated
June 18, 2017. GAIL (India) Ltd launched the ₹ 6,283
crore Bengaluru City Gas Distribution (CGD) project.
The project is expected to cover 4,395 sq km in urban
and rural Bengaluru, broadly covering eight sectors —
Nelamangala, Dod Ballapur, Devanahalli, Hosakote,
Bengaluru East, Bengaluru North, Bengaluru South and
Anekal. As part of the project, about 60 compressed
natural gas (CNG) stations are to be set up. The project
will provide cheaper fuel for the transport sector and also
facilitate a healthy lifestyle by creating a pollution-free
environment. GAIL launched a mobile app to provide a
one-stop platform for customers to view/pay piped
natural gas (PNG) bills, locate CNG stations, know about
the benefits of CNG/PNG and get emergency
instructions. Oil Minister Dharmendra Pradhan said that
so far, 66 kms of steel and 452 kms of MDPE pipeline
has already been laid in the city.
Source: The Hindu Business Line
Greka Drilling secures 3 year drilling deal with ONGC
June 16, 2017. Greka Drilling Ltd, an independent oil and
gas driller in Asia, has secured a three year drilling
contract with Oil & Natural Gas Corp (ONGC) for the
Bokaro CBM (coal-bed methane) asset in India. Under
the deal, Greka will deploy one of its purpose-built rigs
in the country. ONGC plans to drill 73 wells over the
next three years using this rig, which has a proven track
record of drilling in similar geological conditions,
according to Greka. The project will entail the provision
of drilling and mud services, along with the provision of
associated equipment, and is estimated to generate total
revenues of $15 million over the three year period.
Source: Rigzone
NATIONAL: COAL
Coal production not affected by ongoing strike: SCCL
June 19, 2017. Singareni Collieries Company Ltd (SCCL)
said the ongoing strike by a few sections of workers'
unions has not impacted coal production. The national
trade unions AITUC, INTUC, CITU, HMS and BMS are
among the unions to have decided to go on indefinite
strike from June 15 demanding implementation of the
revival of the Dependent Employment Scheme (DES) as
promised by the TRS Government during elections. It
further said that the coal production was over 1.71 lakh
tonnes during the past four days against 1.52 tonnes a day
before the beginning of the strike. Meanwhile, CITU in
statement demanded that the management should
immediately call agitating workers for a dialogue. The
trade union held a "round table" on the issue.
Source: The Times of India
JSPL secures coal linkage for a 5 year term in
captive power auctions
June 19, 2017. Jindal Steel and Power Ltd (JSPL) said it
has secured coal linkage in the recently-concluded
auctions for the captive power sub-sector. The captive
power plants of the company are located at Raigarh and
Dongamahuah (Raigarh district) in Chhattisgarh. The
linkages ensure a steady supply of thermal coal to feed
the captive power plant at calorific cost and would further
enhance operational efficiency, the company said. Since
2016, JSPL has secured coal linkages of close to2.3 mtpa
in various sub-sectors for a 5-year timeframe.
Source: The Economic Times
Steel ministry asks CIL to set up more washeries
June 15, 2017. The steel ministry has asked Coal India
Ltd (CIL) to set up more washeries at coal mine pitheads.
According to Union Steel Minister Chaudhary Birender
Singh, the move is expected to help reduce coking coal
imports. According to the Minister, the Centre’s focus on
‘housing for all’ and increased movement of
infrastructure projects are expected to create an
additional demand of around ₹ 40,000 crore worth of
steel in the country.
Source: The Hindu Business Line
NTPC eyes 3 mt coal output this fiscal
June 14, 2017. State-run power giant NTPC which made
its debut in coal mining this fiscal has in a major
development awarded Mine Developer-cum-Operator
contract for its Dulanga coal mine in Odisha, as part of
its plan to produce 3 million tonnes (mt) of the dry fuel
this fiscal. After the start of coal production and dispatch
from Western Quarry of Pakri-Barwadih coal mine in
December 2016, NTPC has now started the same from
Eastern Quarry of this mine, as well. Already 56,352
tonne of coal has been extracted from this quarry. NTPC,
so far, has produced more than 4.6 Lakh tonne of coal
from Pakri-Barwadih mine and successfully despatched
58 coal rakes (2,02,480 tonne of coal) to its Barh power
station. This mine has an estimated mining capacity of 15
million tonnes per annum and has been allotted by the
central government to NTPC as a basket mine to meet
the fuel shortfall of its power stations. Coal mining is
integral to NTPC’s fuel security strategy, which believes
that greater self—reliance on coal will go a long way in
ensuring sustained growth of generation. NTPC has been
allocated eight coal blocks -Pakri— Barwadih, Chatti—
Bariatu & Chatti—Bariatu (South), Kerandari, Dulanga,
Talaipalli, Banai, Bhalumuda and Mandakini—B by
Government of India.
Source: The Hindu
NATIONAL: POWER
Power industry hails ` 5 per unit tariff by Punjab
government
June 20, 2017. The power industry in Punjab has hailed
decision of Congress government led by Chief Minister
(CM) Amarinder Singh to provide power at a uniform
rate of ` 5 per unit in the state. The industry has termed
the action as pro-industry and a step set to accelerate
industrial growth. Confederation of Indian Industry (CII)
hailed the key measures including disbanding truck
unions and the CM’s appeal to the well-to-do farmers to
give up power subsidy voluntarily. CM had announced to
give up the free power while appealing to his Cabinet
colleagues to volunteer for the same.
Source: The Economic Times
Rise in electricity demand to revive stressed power
companies
June 17, 2017. The government expects the demand for
electricity to pick-up in the next couple of years, which
experts believe is critical to revive the power sector
saddled with stressed assets. Experts said transferring the
assets from one developer to the other would not be
enough to revive the stranded assets till the time demand
for electricity does not pick up. The government,
however, feels the problem is of over supply rather than
of lean demand. The demand for power has grown by a
robust 6.4% in the last three years against 6.2% in 2004-
2014, the power ministry said. The government proposes
to set up a special purpose vehicle to hold stressed power
assets and revive them by debt-equity swaps, offering last
mile equity or asking public sector companies like NTPC
to operate them on a contractual basis. Power Minister
Piyush Goyal said the government is close to resolution
of the stressed thermal power projects where developers
are not wilful defaulters or there are no significant
irregularities.
Source: The Economic Times
PFC to launch maiden bonds allowing capital gain
tax exemption
June 16, 2017. Power Finance Corp (PFC), the state-
owned power sector lender, announced it has been
allowed by the government to raise bonds eligible for
capital gain tax exemption under section 54EC of the
Income Tax Act. Section 54EC provides that capital gain
subject to a maximum of ` 50 lakh arising from the
transfer of a long term capital asset will be exempt if the
assesse invests the whole or any part of capital gains in
certain specified bonds within a period of six months. An
investor can save up to a maximum ̀ 10 lakh by investing
maximum permissible amount of ` 50 lakhs in these
bonds. PFC is the lead financier for the Indian power
sector and is the largest infrastructure company in the
country based on net worth. According to a Department
of Public Enterprises survey of March 2017, PFC was
ranked the seventh-highest profit making public sector
undertaking (PSU) among 320 PSUs.
Source: The Economic Times
Power firm struggles to ensure smooth supply
June 14, 2017. The Maharashtra State Electricity
Distribution Company Ltd (MSEDCL) appears to be
struggling to ensure uninterrupted power supply to the
city despite claiming that adequate measures were taken
before the monsoon. Almost the entire city was without
power from 4 pm to 7 pm soon after it started raining.
Power was restored in some areas only late at night.
Consumer activist Raju Gangurde said the MSEDCL
should have restored power supply within a maximum of
three to four hours, but the areas did not receive power
for seven hours. Gangurde said that despite the power
company's tall claims of infrastructure upgradation or
pre-monsoon maintenance, the system is just not being
able to stand the rain.
Source: The Times of India
QUICK COMMENT Increase in electricity demand will not only revive stressed
power companies but also improve quality of life! Good!
NATIONAL: NON-FOSSIL FUELS/ CLIMATE CHANGE
TRENDS
NHPC awards EPC contract for 50 MW Solar
Power project in Tamil Nadu
June 20, 2017. NHPC has awarded an EPC (engineering,
procurement and construction) contract for the
development of 50 MW Solar Power PV Grid connected
project located at Theni and Dindigul districts in Tamil
Nadu to Larsen & Toubro, L&T Construction,
Manapakkam, Chennai for an amount of ` 287.48 crore
with its comprehensive O&M (operating and
maintenance) for 10 years. The project is anticipated to
be completed within 9 months.
Source: Business Standard
Chinese firms inks deal with Adani Group, to invest
$300 mn in Gujarat
June 20, 2017. India's Adani Group inked a deal with
East Hope Group, one of China's largest companies,
which will invest over $300 million to set up a
manufacturing unit for solar power generation equipment
in Gujarat. An estimated investment of more than $300
million is expected to be made by East Hope Group in
India, as part of the proposed cooperation between the
two conglomerates. East Hope Group, a 70 billion yuan
company, is one of the largest corporate houses in China.
Source: Business Standard
Tamil Nadu farmers to get 90 percent subsidy for
solar-powered pump sets
June 19, 2017. Farmers in Tamil Nadu can avail
themselves of 90 percent subsidy for solar-powered
irrigation pump sets if they exit the waiting list for farm
connections. The State government will give 1,000 solar-
powered irrigation pump sets of 5, 7.5 and 10 horsepower
(hp) under a model programme to farmers across the
State. These off grid units will be available with 40
percent State government subsidy, 20 percent from the
Union Ministry of New and Renewable Energy; 30
percent from Tamil Nadu Generation and Distribution
Corporation and the farmer’s share will be 10 percent.
This scheme will be implemented at a cost of ₹ 15 crore,
the Electricity Minister P Thangamani said. To avail this
benefit, farmers will have to apply for irrigation pump
sets under the seniority scheme. The government will also
offer Tatkal scheme in which farmers can get
conventional agriculture connection within six months of
application. They will have to shell out ₹ 2.5 lakh for a 5
hp motor connection; ₹ 2.75 lakh for a 7.5 hp motor
supply; and ₹ 3 lakh for a 10 hp supply. The connection
will be provided within six months for 10,000 applicants,
he said. The government also plans to establish a 500 MW
solar park through a private player; and a mobile app will
also be developed for power consumers to pay their
utility bills, the Minister said.
Source: The Hindu Business Line
Centre removes interstate supply charges on solar
power projects till Dec 2019
June 19, 2017. Solar power projects will be exempted
from interstate transmission charges till the end of
December 2019, making it feasible to compete with
thermal power. The decision was taken by the ministry of
power in consultation with the ministry of new and
renewable energy and other stakeholders since
imposition of charges would have raised cost of using
solar power from another state by ` 1-2.50 per kilowatt
hour (kWh), depending on the distance it is transmitted
and voltage at which it is supplied. Solar tariffs have been
falling steeply in recent years, touching an all-time low of
QUICK COMMENT Subsidising solar-powered pumps today may lead to
complaints over depleting water tables tomorrow! Ugly!
` 2.44 per kWh at Rajasthan’s Bhadla solar park auction
in May, very much on a par with thermal power. But
imposition of interstate transmission charges would have
affected capacity to compete. The Delhi Metro Rail Corp,
for example, signed an agreement in April to draw most
of its daytime power needs from the 750 MW ultra mega
solar power project – three plants of 250 MW each –
being built at the Rewa solar park, Madhya Pradesh.
Source: The Economic Times
Over 12k solar pumps distributed to farmers in
Chhattisgarh
June 19, 2017. Over 12,000 solar pumps have been
distributed so far to the farmers at subsidised rates under
‘Saur Sujala Yojna’ in Chhattisgarh. Chief Minister (CM)
Raman Singh was informed about the development
under the scheme while he was chairing a review meeting
of the energy department. Prime Minister Narendra Modi
had launched the ‘Saur Sujala’ scheme on state’s
foundation day on November 1, 2016 in Raipur. During
the meeting, the CM instructed the officials to focus more
in 85 tribal-dominated development blocks for the
distribution of the solar energy-based irrigation pumps.
Singh expressed satisfaction that the department had
distributed more solar pumps than the set target and
congratulated the officials. The CM further stressed on
the need to cover 20,000 farmers under this scheme by
the end of this year pointing that farmers belonging to
remote areas and inaccessible regions, should be given
priority while distribution. Notably, farmers are being
provided solar-irrigation pumps of 5 horsepower (hp)
and 3 hp at heavily subsidized rates in the state. Solar
irrigation pump worth ` 3.5 lakh (3 hp) is being given to
Scheduled Caste and Scheduled Tribe classes at the cost
of ` 7,000, to Other Backward Class (OBC) at ` 12,000
and general category farmers at ` 18,000. The remaining
amount is borne by the state government, he said. Besides,
the chief minister also directed the officials to complete
electrification of all villages and hamlets by March next
year. Similarly, he also asked to complete the installation
of 32 power substations being established in different
parts of the state, by March next year.
Source: The Financial Express
Cheaper loans, lower registration fee for green
homes soon
June 19, 2017. The government is working on a scheme
to promote energy efficient homes by offering cheaper
loans and lower registration fee for green residential units
as it ramps up efforts to mitigate climate change by
moving towards a net zero-energy building regime.
Government said the proposal is part of ongoing
discussions on framing the ‘Energy Conservation
Building Code for Residential Sector (ECBC-R)’ on the
lines of such a code for government and commercial
buildings framed in 2007. Power, Coal, New and
Renewable Energy and Mines Minister Piyush Goyal is
scheduled to release the refreshed version of the code,
ECBC-2017, outlining a quantum leap towards a greener
outlook for Indian realty. The Bureau of Energy
Efficiency is working on a scheme to incentivise new
homes that are more energy efficient and make lower
demand on utilities for lighting and cooling energy.
ECBC-R will be a booster for the government’s ‘Make in
India’ campaign as it is expected to raise the demand for
energy efficient household equipment as well as other
services. Seen in the backdrop of climate change and
expanding cities, ECBC-R will strengthen the
government’s efforts at reducing the carbon footprint of
a growing segment of energy consumers. It will also add
green jobs in the real estate sector.
Source: The Economic Times
Delhi power department opens registration for
rooftop solar power plants
June 18, 2017. The Delhi government’s power
department said it has opened registration process for
installation of rooftop solar power plants in the city, as it
aims to tap 1 GW of green energy by the year 2020.
Under the scheme, 30 percent central finance assistance
will be given by the ministry of new and renewable energy
on the cost of solar photovoltaic plant. The generation
based incentive of ` 2 per unit is also there for residential
category. The Indraprastha Power Generation Company
Ltd has empanelled vendors for solar photovoltaic
installations. Lt Governor Anil Baijal had directed the
power department to prepare a standard operating
procedure and a roadmap for promoting installation of
solar power panels in the city. The Delhi Solar Policy,
which aims at mass adoption of solar power in the city,
was notified on September 27, 2016. The highlights of
the policy includes a generation-based incentive for three
years.
Source: The Financial Express
Tamil Nadu interested on low floor electric vehicle
buses: Ashok Leyland
June 16, 2017. Tamil Nadu Government has shown
interest to purchase low floor, air conditioned electric
vehicle CIRCUIT provided by Hinduja Group flagship
Ashok Leyland. Ashok Leyland, Head-Global Bus, T
Venkataraman said the company introduced the electric
vehicle in October last year and has been talking to
various governments for providing the service. Asked on
the company's overseas operations in Electric Vehicle
business, he said Ashok Leyland already operates such
buses in London under "Optare" brand. The buses can
be produced on multiple platforms depending upon the
customer's requirement, he said. Ashok Leyland
showcased the electric vehicle CIRCUIT in October 2016.
The buses equipped with fire detection and suppression
system can travel upto 120 kilometrs on a single charge
under standard test conditions.
Source: The Economic Times
Tesla plans electric car factory in India
June 16, 2017. Tesla Motors is planning to set up a
factory in India to cater to the local demand for electric
cars, at a time when the Modi government has launched
an ambitious plan of moving to 100 percent electric
mobility by 2030. The United States (US) carmaker is
looking to enter India as a retailer and is in talks with the
government for waiver of restrictions on imports of its
high-end electric cars until its factory is built. The import
penalties or restrictions that Elon Musk, chief executive
officer, Tesla, referred to are most likely the norms for
multinationals to set up single-brand retail in India, which
mandate them to source at least 30 percent locally. Unlike
traditional automakers, Tesla sells and services its vehicles
on its own rather than through local dealers. Over the
past couple of years, this policy has largely worked, with
brands such as Mercedes-Benz, Audi, BMW, JLR and
Volvo having units in India. Experts believe that the
government should do the same even for electric vehicles
as it will help boost the local industry.
Source: The Economic Times
India ranks 75th in environmental impact survey
June 16, 2017. Mozambique, the southern African
country rated as one of the poorest, has topped a survey
of nations with the lowest global environmental impact
while India has ranked a dismal 75th in the report.
Mozambique topped the list because almost all its energy
use comes from green sources. India, on the other hand,
was placed 75th, with renewable energy making up only
15.2 percent of all energy used; only 2.2 percent of waste
water being recycled, and municipal waste of 0.34 kg per
person being generated daily.
Source: The Economic Times
Azure Power receives $10.5 mn solar rooftop
funding from World Bank
June 16, 2017. Azure Power, an independent solar power
producer in India, announced it has been granted ` 67.83
crore ($10.5 million) of low-cost debt financing through
the State Bank of India (SBI)-World Bank Grid
Connected Rooftop Solar PV Program. The loan is
granted for 15 years with an interest rate of 8.35 percent
per annum, among the lowest interest rates availed by
solar power developers in India, according to the
company. The World Bank and the International Bank
for Reconstruction and Development (IBRD) approved
a line of credit of $625 million to support the
government’s goal to expand rooftop solar capacity to
40,000 MW. The company said its Azure Roof Power
platform has over 1,000 MW capacity projects across 18
states. Its customers include commercial real estate
companies, a chain of premium hotels, distribution
companies in smart cities, warehouses, Delhi Metro Rail
Corp (DMRC) and Indian Railways.
Source: The Economic Times
GUVNL invites bids to procure 1 GW renewable
energy
June 16, 2017. Gujarat Urja Vikas Nigam Ltd (GUVNL)
has decided to buy 1,000 MW of renewable power
through competitive bidding, which will be followed by
an e-auction for the lowest price. The company floated
two separate tenders for procuring 500 MW each from
solar and wind power projects. According to the request
for selection (RFS) document, GUVNL has invited bids
to procure solar and wind power to fulfil renewable
purchase obligations (RPOs) and to meet the future
needs of its distribution companies. The RPO mandates
that distribution company buy electricity from renewable
sources for a defined minimum percentage of the total
consumption of its consumers. The last date for
submission of bids is July 10, 2017 and a pre-bid meeting
for the tenders will be held on June 30. After opening the
technical bids on July 11, the reverse auction will take
place on July 17 and 18 for wind and solar tenders
respectively. The bidders selected by GUVNL based on
this RFS, shall set up wind and solar power projects in
accordance with provisions of the RFS document and
standard power purchase agreement.
Source: The Economic Times
Bihar eyes ` 200 bn investment in renewable energy
in 5 yrs
June 16, 2017. Bihar is eyeing an investment of ` 20,000
crore in the renewable energy sector in the next five years
to generate over 3,000 MW of clean energy. The plan is
part of the new renewable energy policy that aims to tap
the potential of new and renewable sources of energy in
the state. Bihar Renewable Energy Development Agency
director R. Lakshmanan said that with Bihar's increasing
population and rapidly growing economy, the state needs
access to clean, cheap and reliable sources of energy.
Lakshmanan said the new renewable policy target is for
installed capacity of 2,969 MW solar, 244 MW biomass
and 220 MW small hydropower in the next five years so
as to meet the growing demand of power in an
environmentally sustainable manner. The Centre for
Environment and Energy Development (CEED) chief
executive officer Ramapati Kumar said with a well
defined target, fixed timeline, emphasis on solar rooftops
and decentralised renewable energy systems, the
agriculture sector will be transformed. Most of the
expected ` 20,000 crore investment is likely to flow into
setting up new manufacturing capacity in the state, for
solar panels and other renewable energy equipments, skill
developments, and research and development for
sustainable clean energy, Ramapati said. State's Energy
Minister Bijendra Prasad Yadav said it is time for
organisations to invest in Bihar to accelerate the state's
development.
Source: The Economic Times
KSEB upbeat over normal monsoon forecast
June 15, 2017. Catchment areas of the hydroelectric
power projects in Kerala are yet to receive copious
southwest monsoon rains, keeping the storage levels well
below normal. With the storage as, 514 million units of
power can be generated. Normally, at the end of June, the
storage used to be enough to generate 795 million units,
the Kerala State Electricity Board (KSEB) said. The
current daily demand is at 62 million units and it is met
by hydel generation and imports from various sources.
Currently, 8 million units are generated daily from the
hydel sources, 27.8 million units come from the Central
grid and 21.3 million units from purchases. With
purchases from power exchange and deviations, the total
comes to 59.43 million units. The gap of 3.5 million units
is filled by wind mills and small hydro-electric projects in
the private sector, the KSEB said. The KSEB is in a
comfortable position and would avoid costly thermal
power from NTPC Kayamkulam and BSES Ernakulalm
this year.
Source: The Hindu Business Line
Rajasthan invites Japanese firms in solar energy
sector
June 15, 2017. Rajasthan Chief Minister Vasundhara Raje
invited Japanese companies to invest in solar energy
sector in the state. In her meeting with a delegation of
Japan External Trade Organization, she said solar energy
is the power of the future and Rajasthan is the ideal
destination for investment in Solar Energy.
Source: Business Standard
IOC set to foray into energy storage business
June 14, 2017. Indian Oil Corp (IOC) is planning to foray
into energy storage business. The firm is weighing the
option of launch of an improved version of lead-acid
battery for low cost mobility and industrial applications.
IOC’s foray into the energy storage market comes at a
time the government is working on an ambitious target
to ramp up renewable energy generation capacity to 175
GW by 2022 and also completely shift to e-vehicles by
2030. India added 5,526 MW of solar capacity during
2016-2017, a growth of 85 percent, and 5,400 MW of
wind capacity, 63 percent more than the capacity added
previous year. Analysts said IOC’s entry in the energy
storage market may invoke interest from the booming
renewable energy sector which is in need of indigenous
battery solutions but demand from the auto industry may
still take time to catch up. Currently, Mahindra Electric is
the only company manufacturing electric cars in India in
the passenger vehicle segment. The company
manufactures only 100 units per month due to low
demand but plans to ramp up production to over 1,000
units in the soon. In the two-wheeler space, Hero Electric,
Ather Energy and Lohia Auto are the few mainstream
players manufacturing electric vehicles. IOC is not the
only company diversifying its portfolio to enter into the
energy storage business. IOC has so far commissioned
167 MW of wind-power projects in Gujarat, Andhra
Pradesh and Rajasthan. The company's total installed
solar photovoltaic (PV) capacity stands at 20 MW. In
addition, the fuel retailer operates 6,170 fuel stations on
solar power with a cumulative capacity of 24 MW. The
energy storage market for rooftop and off-grid renewable
energy applications in India is likely to be worth ` 16,500
crore by 2022, Delhi-based Council for Energy
Environment and Water (CEEW) said.
Source: The Economic Times
India's renewable energy capacity crosses 57 GW
June 14, 2017. India is staying true to its ambitious
renewable energy targets by showing a steady growth in
renewable energy installations in India, which as of April
2017 account for 17.5 percent of the total energy source.
The latest data, which is provided by the ministry of new
and renewable energy, has been analyzed by Mercom
Capital Group. India's overall installed capacity has
reached 329.4 GW, with renewables accounting for
57.472 GW. The figures show a significant rise on the
data released by the ministry in February when the figure
stood at around 50 GW. In April 2017, solar reached 3.8
percent of total installed capacity up from 2.23 percent in
April 2016. Country's coal-fired fleet remains strong with
a 59 percent share in the total energy mix, although
NTPC has showed itself to be the principle supporter of
the government's green energy agenda. India has set a
target of reaching 170 GW of renewable energy capacity
by 2022, out of which 100 GW is to come from solar.
Source: The Economic Times
INTERNATIONAL: OIL
Alaska field hits 40 yrs of production
June 20, 2017. The BP-operated Prudhoe Bay oil field in
Alaska has reached 40 years of production, generating
more than 12.5 billion barrels of oil in the process. The
field continues to support more than 16,000 Alaska jobs
and supplies 55 percent of all Alaska oil output, BP
revealed. The original estimated recovery for Prudhoe
Bay was 9.6 billion barrels. However, an additional 3
billion barrels so far have been unlocked through
innovations in oilfield technology. While production has
fallen from historic peaks due to natural decline, Prudhoe
Bay remains the third-largest oil field in the US by proved
reserves, behind the Eagle Ford Shale and Spraberry
fields in Texas.
Source: Rigzone
Italy's Eni signs deal with Iran on oil and gas field
studies
June 20, 2017. Italian oil major Eni signed an agreement
with Iran for feasibility studies to develop an oil field and
a gas field, signaling a possible return to Iran's upstream
sector. Eni had signed a Memorandum of Understanding
with the National Iranian Oil Company for studies on the
Kish gas field and the third phase of the Darkhovin oil
field in southern Iran. Eni has six months to present the
results of its studies.
Source: Reuters
China's 2017 crude oil quotas exceed last year's,
teapots take a cut
June 19, 2017. China issued a second batch of crude oil
import quotas under the so-called "non-state trade" that
is higher than for all of the allowances in 2016, but
allotments to independent refineries were lower than a
year earlier. The lower grants to the independents dealt
the new group of crude oil buyers another blow because
they were already barred from exporting refined fuel,
squeezing margins in an oversupplied domestic fuel
market. The commerce ministry approved 22.92 million
tonnes to 32 companies, against 29 recipients in the first
issue for 2017. The 32 companies included mostly
independent oil refineries, also known as teapots, and
some state-run companies. That latest quotas take the
total issued this year to 91.73 million tonnes, compared
with 87.6 million tonnes in 2016. The second batch will
be valid until year-end. Volumes for the 19 independent
oil plants that make up two thirds of the total issues for
2017 dropped by 12.36 million tonnes, or nearly 17
percent, from last 2016.
Source: Reuters
Mexico auctions two-thirds of blocks in shallow
water oil tender
June 19, 2017. Mexico auctioned two-thirds of the
shallow water oil and gas blocks up for grabs in the latest
round of its energy market opening, surpassing the
cautious estimates officials made. Italy's Eni, Colombia's
Ecopetrol and Capricorn Energy, a unit of Edinburgh-
based Cairn Energy, were among the companies at the
forefront of the bidding for 15 blocks in the southern
Gulf of Mexico. Ten of the 15 blocks were taken up in
the auction. The potential output from the blocks
auctioned could total 170,000 barrels per day of crude
equivalent, and investments could eventually reach $8.2
billion, Energy Minister Pedro Joaquin Coldwell said.
Mexico hopes opening the energy sector will help reverse
years of declining crude output. Total crude production
in Mexico has fallen to 2.01 million barrels per day from
a peak of 3.38 million in 2004.
Source: Reuters
Oil market fundamentals heading in right direction:
Saudi Energy Minister
June 19, 2017. Saudi Energy Minister Khalid al-Falih said
the oil market is heading in the right direction but still
needs time to rebalance. Oil prices dipped, weighed down
by a continuing expansion in US (United States) drilling
that has helped to maintain high global supplies despite
an OPEC (Organization of the Petroleum Exporting
Countries) -led initiative to tighten the market by cutting
production. The price of oil is down around 14 percent
since late May, when producers led by the OPEC
extended their pledge to cut output by 1.8 million barrels
per day (bpd) by an extra nine months. Falih said there
was a relatively big draw of around 50 million barrels
from floating storage and a drop in industrialised nations'
onshore storage of 65 million barrels compared to July
last year. Compliance in April and May with the OPEC-
led output deal was above 100 percent, he said. Falih also
said he expects Libya's production to return to normal
levels. OPEC members Libya and Nigeria were exempted
from the supply cuts because unrest had curbed their
output.
Source: Reuters
Qatar won't cut gas to UAE: Qatar Petroleum CEO
June 18, 2017. Qatar will not cut off gas to the United
Arab Emirates (UAE) despite a diplomatic dispute and a
"force majeure" clause in its contract, the Qatar
Petroleum chief executive officer (CEO) Saad al-Kaabi
said. CEO said that although there was a "force majeure"
clause in the agreement on the Dolphin gas pipeline,
which links Qatar's giant North Field with the UAE,
Qatar would not stop supplies for other reasons. The
Dolphin gas pipeline links Qatar with the UAE and
Oman and pumps around 2 billion cubic feet of gas per
day to the UAE.
Source: Reuters
Russia's Rosneft finds first oilfield offshore eastern
Arctic
June 18, 2017. Russia's largest oil producer Rosneft said
it had found its first oilfield in the Laptev Sea in the
eastern Arctic, making a breakthrough in the search for
hydrocarbons in the harsh and far-flung region despite
Western sanctions. Rosneft and its partners plan to invest
480 billion roubles (6.57 billion pounds) in developing
Russia's offshore energy industry in the next five years,
part of a drive to boost output from new areas. The
company has sought tie-ups with several global oil players
to develop Russia's offshore regions. But a deal to work
in the Kara Sea in the western Arctic with U.S. company
Exxon Mobil was suspended in 2014 after the imposition
of Western sanctions against Moscow. The Arctic
offshore area is expected to account for between 20 and
30 percent of Russian production, one of the world's
largest, by 2050. Rosneft owns 28 blocks in the Arctic
offshore area with combined estimated resources of 34
billion tonnes of oil equivalent. There is only one
offshore platform in the Russian Arctic, Prirazlomnoye,
operated by Gazprom Neft, which plans to produce 2.6
million tonnes (52,000 barrels per day) this year. Analysts
said oil production in the region - apart from
Prirazlomnoye - is years away and may start only in the
mid-2020s Rosneft has been working in the Laptev Sea
since 2014. It values the hydrocarbon resources of the sea
at around 9.5 billion tonnes of oil equivalent.
Source: Reuters
UAE Energy Minister sees no need for extraordinary
OPEC talks
June 17, 2017. The United Arab Emirates (UAE) Energy
Minister Suhail bin Mohammed al-Mazrouei said he saw
no need for an extraordinary meeting of the Organization
of the Petroleum Exporting Countries (OPEC) ahead of
regular talks in November. OPEC holds its next regular
meeting in Vienna on November 30. OPEC and non-
members led by Russia decided on May 25 to extend cuts
in oil output by nine months to March 2018 as they battle
a global glut of crude. Mazrouei also said he expected
demand for oil to pick up in the third quarter of the year.
Source: Reuters
Exxon, partners set $4.4 bn for mega oil project in
Guyana
June 16, 2017. Exxon Mobil Corp said it and partners
would spend $4.4 billion to develop part of the Liza
oilfield off the coast of Guyana, approving a megaproject
at a time when the oil industry has grown obsessed with
lower-cost shale. Exxon's decision shows that oil
companies remain interested in large projects, especially
offshore, even in an era of belt-tightening after two years
of low crude prices. The Guyana announcement from
Exxon and partners Hess Corp and CNOOC was the
fifth deepwater project to gain approvals this year. BP Plc
and Reliance Industries Ltd (RIL) said they would spend
$6 billion to develop natural gas reserves off the Indian
coast. Exxon, which spent nearly $7 billion to more than
double its holdings in the Permian shale formation in the
United States, said the Guyana project was approved due
in part to its low cost of production. Phase One of the
Liza development project should tap about 450 million
barrels of oil and pump about 120,000 barrels per day
when it comes online in 2020, Exxon said.
Source: Reuters
Uganda to finalise oil exploration deal with
Nigerian firm
June 14, 2017. Uganda is set to sign two oil production
sharing agreements (PSAs) with a Nigerian firm, enabling
the company to begin exploration work, the government
said. The firm, Oranto Petroleum International, was
among a number of companies that bid in the country's
first competitive oil exploration licensing round last year,
with two other Nigerian firms and Australia's Armour
Energy also getting through to final negotiations for the
award of the PSAs. The ministry of energy and mineral
development said the deal with Oranto covers the Ngassa
Shallow Play and Ngassa Deep Play exploration blocks
located near the southern part of Lake Albert. Uganda
discovered oil in 2006 in the Albertine rift basin along its
border with the Democratic Republic of Congo. Gross
crude reserves are estimated by government geologists at
6.5 billion barrels of which between 1.4 to 1.7 billion
barrels are considered recoverable. Production is
expected to start in 2020. The first batch of licences that
Uganda awarded in the early 2000s were given on a first-
come, first-served basis. But after the discovery of
commercially recoverable reserves the country enacted
new laws to manage the sector and under those laws
exploration licences must be granted on a competitive
basis.
Source: Reuters
China's May oil output lowest on record
June 14, 2017. China's crude oil production fell to its
lowest on record in May, even as refineries in the world's
top buyer of crude churned out product at their fastest
pace in nearly two years, data showed. Crude output fell
3.7 percent in May from a year earlier to 16.26 million
tonnes, or 3.83 million barrels per day, data from the
National Bureau of Statistics showed. The figure is the
lowest since the bureau began publishing records in 2011.
The drop in China's crude oil output has slowed as major
oil producers raised spending to boost production as oil
prices have stabilized in a range between $48 to $55 per
barrel. Analysts are forecasting flat or positive production
growth for calendar 2017. PetroChina, the owner of
China's largest oilfield Daqing, said in December that it
would slash capital spending on the field this year by 20
percent from a year earlier.
Source: Reuters
Brazil's Petrobras cuts gasoline and diesel prices
June 14, 2017. Brazil's state-controlled oil company
Petroleo Brasileiro SA (Petrobras) reduced its average
prices at refineries by 2.3 percent for gasoline and 5.8
percent for diesel, the company said. The gasoline prices
for consumers may drop up to 0.9 percent and diesel
prices, up to 3.5 percent, the company said.
Source: Reuters
INTERNATIONAL: GAS
Shell Nigeria considering investment in gas project
in Niger Delta
June 20, 2017. Shell is considering whether to invest in a
gas project in Nigeria's southern Niger Delta energy hub.
Shell Petroleum Development Company of Nigeria
(SPDC) said the project under consideration would have
a capacity of 300 million cubic feet and would be located
in the city of Asa.
Source: Reuters
Snam in exclusive talks to buy LNG terminal stake
from Edison
June 20, 2017. Italian gas group Snam is in exclusive talks
with EDF's Italian unit Edison to buy a stake in a
liquefied natural gas (LNG) terminal in northern Italy as
part of plans to develop its LNG business. Snam is
looking to buy Edison's 7.3 percent stake in Terminale
LNG Adriatico and the gas pipeline that connects it to
Italy's gas transmission backbone. Adriatic LNG, which
has a capacity of 8 billion cubic metres per year, is 70.7
percent owned by ExxonMobil and 22 percent by Qatar
Petroleum. Exxon and Qatar have a pre-emption right on
Edison's stake. Snam, which makes most of its money
from gas transmission, is looking to play a leading role in
integrating Europe's grids and making Italy a European
gas hub.
Source: Reuters
Private producer aims to ship Baltic's first Russian
LNG before Gazprom
June 20, 2017. LNG Gorskaya, a privately-owned
Russian liquefied natural gas (LNG) producer, has
launched a €340 million ($379 million) project to become
the first LNG exporter from Russia's European coast.
Russia expects to send LNG to Europe by the end of
2017 from its distant Arctic peninsula of Yamal but a
plant on its Baltic coast could establish the country as a
more immediate supplier of LNG in a region already
dependent on piped Russian gas. The company will build
a floating LNG plant off the port of Gorskaya, not far
from Saint Petersburg, which will be fed by a 12 km
pipeline from Gazprom. The company had agreed to
build floating bunkering stations and storage facilities at
the Baltic ports that will be able to supply LNG-fueled
vessels with mostly Russian LNG by 2020. The company
said it had the acquired the necessary gas export permits
from Gazprom. The project means LNG Gorskaya could
deliver the Baltic's first large-scale, locally produced
Russian LNG three years ahead of Gazprom's Baltic
LNG project, a much delayed plan the state-owned gas
giant now expects to be running by 2023.
Source: Reuters
Qatargas, Shell sign LNG supply deal
June 20, 2017. Qatargas has agreed to supply up to 1.1
million tonnes of liquefied natural gas (LNG) per annum
to Royal Dutch Shell for five years. A new sale and
purchase agreement (SPA) signed by the parties will come
into effect from January 2019. LNG will be supplied from
Qatar Liquefied Gas Company 4 (Qatargas 4) which is a
joint venture (JV) of Qatar Petroleum and Shell. In the
JV, Qatar Petroleum holds 70% stake while Shell holds
30%, which was incorporated in 2007. The LNG is likely
to be delivered to the Dragon LNG Terminal located in
the UK or the Netherlands-based Gate LNG Terminal.
In March, Qatargas entered into an agreement to boost
the volume of its currently supplied LNG to PGNiG to
two million tonnes per annum. The agreement is slated
to come into effect on 1 January 2018 and will expire in
June 2034.
Source: Energy Business Review
Tunisia gas field protesters reach deal, production
to restart
June 16, 2017. Protesters blockading oil and gas fields in
southern Tunisia have reached an agreement with the
government to end a sit-in and allow production to
restart immediately, the government and protesters said.
Protests over jobs in southern Tataouine and Kebili
provinces hit oil and gas production in a region where
French company Perenco and Austrian producer OMV
operate. The deal calls for jobs in oil companies and
development projects. Protesters were pressing demands
for jobs and a share of the country's energy wealth and
forced the closure of two oil and gas pumping stations in
Kamour in Tatatouine and in Kebili.
Source: Reuters
JX Nippon starts gas production offshore Malaysia
June 15, 2017. JX Nippon Oil & Gas Exploration
(Malaysia) Ltd revealed that it has commenced
commercial gas production from the Layang field,
offshore Sarawak in Malaysia. The initial production of
natural gas and condensate from Layang, which is
situated in the JX Nippon operated Block SK10, is
estimated at around 12,000 barrels of oil equivalent per
day. Natural gas produced from Layang field, together
with natural gas from the Helang gas field, will be
supplied through subsea pipelines to the MLNG Tiga
Sdn. Bhd. liquefaction plant in Bintulu, Sarawak, which is
partly owned by JXTG Nippon Oil & Energy
Corporation. The natural gas will be sold as LNG after
liquefaction to its customers, including buyers in Japan.
Source: Rigzone
INTERNATIONAL: COAL
Rio Tinto recommends Yancoal coal offer over
Glencore
June 20, 2017. Rio Tinto selected Yancoal to buy its Coal
& Allied division in Australia for $2.45 billion, surprising
commodities trading giant Glencore, which had put in a
higher bid. Glencore offered $2.55 billion cash this
month for Rio's coal mines in the Hunter Valley region
of New South Wales, beating a previous offer from
Yancoal, which is based in Australia and owned by
China's Yanzhou Coal Mining Company. Glencore has
long sought Rio's high-quality thermal coal assets in the
Hunter Valley. Despite environmental concerns about
the carbon-intensive fossil fuel, Glencore expects
continued demand, especially in Asia, as coal can still be
the cheapest form of baseload power. Rio Tinto said
Yancoal had agreed to accelerate payments it had said it
would defer when it made its original offer in January.
Yancoal will also pay a royalty linked to coal prices.
Glencore said it had received clearance from Japan,
which would be the destination for much of the coal
involved.
Source: Reuters
China's coal futures forward curve turns bullish as
mercury rises
June 16, 2017. China's thermal coal futures rallied to a
record high, lifting September futures to a premium over
October, as a prolonged hot spell spurred power demand
and low water levels dented hopes of higher hydro output.
The buying lifted futures for delivery in September to a
premium of 6 yuan ($0.88) per tonne over October, in a
structure known as a backwardation, when prompt prices
are higher than those for later months, that reflects
tightening supplies. At the start of the month, the spread
had been in a 4 yuan contango. The new curve suggests a
brighter outlook for prices of the fuel most used to
generate power in China even as Beijing has tried to boost
supplies to avoid another crunch in supply that triggered
a historic rally in prices last year. Data showed miners in
May produced coal at their fastest pace in years ahead of
peak summer demand. Prompt coal prices for cargoes
from Australia's Newcastle export terminal, Asia's
benchmark, have shot up 18 percent since mid-May to
$84 per tonne. Total daily consumption from six of the
largest coal power plants rose to 622,400 tonnes per day
by June 16, up from 592,000 tonnes a month ago,
according to China Sublime Information Group.
Source: Reuters
Nippon Steel gives up coking coal pricing role as
influence wanes
June 16, 2017. Nippon Steel & Sumitomo Metal, Japan's
top steelmaker, has given up its decades-old role in setting
global coking coal prices because the rise of Chinese and
Indian rivals has weakened its influence over the market.
Nippon Steel stepped down as top negotiator on the
coking coal benchmark, also because wild swings in the
spot market played havoc with its profits, with gaps
between the benchmark and spot prices making it less
responsive to the market than rivals using index-linked
pricing. Japan bought 61.5 million tonnes of coking coal
in 2008, more than double India's 26.5 million and nearly
20 times China's 3.2 million. Last year, though, Japan
imported 53.4 million tonnes against India's 46.7 million
tonnes and China's 35.7 million, according to Clarksons
Research. Nippon Steel and other Japanese steelmakers
have long resisted the idea of more flexible pricing for
coking coal, preferring the stable supply and steady prices
of quarterly term contracts. Using the new pricing
formula - which sets prices based the spot price indexes
provided by S&P Global Platts, Argus Media and The
Steel Index - coking coal for the April-June quarter will
likely be set at around $190-195 a tonne, Nippon Steel
said.
Source: Reuters
China allows coal mines to increase capacity amid
price rally
June 16, 2017. China will allow some coal mines to
increase capacity, the National Development and Reform
Commission (NDRC) said, as Beijing ramps up efforts to
boost supply for summer. Both open pit and
underground mines will be able to apply to increase
production capacity as long as they haven't reported
major accidents, are efficient mines and follow strict
safety measures, the NDRC said. Producers in regions
that have complex geological conditions, are vulnerable
to firedamp accidents or have been required by the
government to cut capacity will not be eligible to apply.
NDRC's latest move came as China's coal futures prices
rose to a record high as warm weather leading into the
summer season raised investors' expectations for
increased demand. China's coal production rose 12
percent in May from a year ago, notching the fastest
growth pace in years, data showed. The NDRC said
producers granted quota increases would need to shut
down some old inefficient coal mines in exchange.
Source: Reuters
INTERNATIONAL: POWER
Southern California power supply at risk this
summer: FERC
June 15, 2017. Natural gas constraints in Southern
California could pose a risk to the region's power supply
this summer, while New England and Texas could face
tight electricity supplies, the United States (US) Federal
Energy Regulatory Commission (FERC) said. The
anticipated reserve margin in ISO New England, the
regional power grid operator, is forecast at 14.9 percent,
slightly below the target of 15.1 percent. The operator
could be forced to import additional power from
neighbouring regions in case peak summer conditions
materialize, as forecast, since the commissioning of about
700 MW of new resources could be delayed, FERC said.
In Texas, FERC forecast that reserve margins in the
Electric Reliability Council of Texas, which operates the
power grid for about 75 percent of the state, would
continue to be tight when compared to other regions,
even though the operator expects to have adequate
generating capacity to meet peak demand.
Source: Reuters
Australia faces potential summer power crunch,
market operator warns
June 14, 2017. Eastern Australia's power grid will be
stretched again if fierce heatwaves hit over the next two
summers, despite recent government steps to beef up
supply, the Australian Energy Market Operator (AEMO)
said. The latest outlook from the AEMO comes three
months after it warned that Australia's most populous
states face a gas shortfall from the end of 2018 that could
spark power or gas cuts to homes and businesses. The
AEMO said power supply should be adequate in normal
summer weather, assuming 140 MW of energy storage
backed by the South Australian and Victorian state
governments is in place, there are no planned generator
outages and three gas-fired generators return to service as
promised. The market will need more coal-fired power in
the state of New South Wales, more renewable power
and higher output from gas-fired generators to replace a
1,600 MW plant shut by France's Engie SA in
neighbouring Victoria in March. The grid would be most
vulnerable in extreme heat on weekday afternoons and
evenings when people switch on air conditioners, with
the risk rising if the wind drops and the sun is down or
other generation is disrupted at the same time, the
AEMO said.
Source: Reuters
INTERNATIONAL: NON-FOSSIL FUELS/ CLIMATE CHANGE
TRENDS
Wind, solar energy have not harmed US power grid
June 20, 2017. With the Trump administration expected
to publish an analysis that could undermine the United
States (US) wind and solar industries, two renewable
energy lobbying groups released their own study saying
new energy sources pose no threat to the country's power
grid. Wind and solar advocates have said the government
study's outcome appeared to be pre-determined to favor
fossil fuel industries. The new report, commissioned by
the American Wind Energy Association and Advanced
Energy Economy, said cheap natural gas is behind most
of the decline in the numbers of US coal-fired power
plants in recent years, not government subsidies that have
bolstered the growth of wind and solar power. It also said
there is no evidence to show that wind and solar energy
are threatening the reliability of the electric grid. The
groups commissioned the report shortly after Energy
Secretary Rick Perry in April ordered a 60-day study of
the reliability of the grid and said Obama-era policies
offering incentives for the deployment of renewable
energy had come at the expense of energy sources like
coal and nuclear.
Source: Reuters
Tesla close to agreement on first production plant
in China
June 20, 2017. Tesla Inc is close to an agreement to
produce vehicles in China for the first time, giving the
electric-car maker better access to the world’s largest auto
market. The agreement with the city of Shanghai would
allow Tesla to build facilities in its Lingang development
zone and could come as soon. Details are being finalized
and the timing of the announcement could change. Tesla
would need to set up a joint venture with at least one local
partner under existing rules and it is not immediately clear
who that would be. Setting up local production is key for
Chief Executive Officer Elon Musk to continue growing
in China, where Tesla’s revenue tripled to more than $1
billion last year. Assembling vehicles locally would allow
the company to avoid a 25 percent tax that renders Model
S sedans and Model X sport utility vehicles more
expensive than in the United States (US). China has
identified new-energy vehicles as a strategic emerging
industry and aims to boost annual sales of plug-in hybrids
and fully electric cars 10-fold in the next decade.
Government support helped China surpass the US in
2015 to become the world’s biggest market for the non-
emission autos. Tesla, which made roughly 80,000 cars in
2016 and aims to boost it by about 7-fold to 500,000
annually by 2018. The automaker also plans to finalize
locations of up to three battery Gigafactories this year.
Source: Bloomberg
Carbon capture needed in climate change fight: IEA
June 19, 2017. Carbon capture and storage is gradually
gaining government attention after being overtaken by
investment in wind and solar energy, with the
International Energy Agency (IEA) saying the technology
will be crucial to limiting global warming. The IEA
estimates carbon capture and storage (CCS) will be
needed to cut 14 percent of the emissions that have to be
abated by 2060 to limit the global rise in temperature to
less than 2 degrees Celsius (3.6 degrees Fahrenheit). By
one estimate, $80 billion has been invested in renewable
energy compared with $20 billion in CCS, Australia's
ambassador for the environment, Patrick Suckling, said.
Efforts to expand carbon capture and storage include a
Japanese project to bury carbon dioxide below the seabed
off Hokkaido island and construction of China's first
large-scale carbon capture, utilisation and storage (CCUS)
project at a coal-to-chemicals plant run by Yanchang
Petroleum in Xian.
Source: Reuters
US Supreme Court hands Chevron victory in
Ecuador pollution case
June 19, 2017. The United States (US) Supreme Court
handed a victory to Chevron Corp by preventing
Ecuadorean villagers and their American lawyer from
trying to collect on an $8.65 billion pollution judgment
issued against the oil company by a court in Ecuador. The
justices turned away an appeal by New York-based lawyer
Steven Donziger, who has spent more than two decades
trying to hold Chevron responsible for pollution in the
Ecuadorean rain forest, of lower court rulings blocking
enforcement in the US of the 2011 judgment. While not
disputing that pollution occurred, San Ramon, California-
based Chevron has said it is not liable and that Donziger
and his associates orchestrated the writing of a key
environmental report and bribed the presiding judge in
Ecuador.
Source: Reuters
Sterling and Wilson bags solar project in Abu Dhabi
June 19, 2017. Sterling and Wilson said it has bagged
turnkey engineering procurement and construction along
with operation and maintenance contract for the world's
largest single location solar photovoltaic (PV) plant in
Sweihan, Emirates of Abu Dhabi. According to the
company, with construction already underway, the
prodigious plant, which is spread over a desert area of 7.8
sq km, is scheduled to be fully integrated with the grid in
a record timeline of just 23 months. The project was
awarded at the lowest ever recorded bid in the history of
PV solar. The plant is jointly developed by Marubeni, a
Japanese integrated trading and investment giant, along
with Jinko, a global leader in the solar industry, and Abu
Dhabi Water and Electricity Authority. The consortium
has successfully bid a tariff of $2.42 cents per kilowatt
hour, marking the lowest cost ever for solar power. The
plant, once commissioned, would save around 7 million
tonnes of carbon emissions every year, a number that
would be a national landmark.
Source: The Times of India
Stanford scientists develop wireless charger for cell
phones, electric cars
June 18, 2017. Scientists at Stanford University in the
United States (US) have developed a device that can
wirelessly charge a moving object at close range. The
technology could one day be used to charge electric cars
on the highway, or medical implants and cellphones as
you walk nearby. According to the study, published in the
journal Nature, wireless charging would address a major
drawback of plug-in electric cars -- their limited driving
range. A charge-as-you-drive system would overcome
these limitations. Professor Shanhui Fan said that a coil
in the bottom of the vehicle could receive electricity from
a series of coils connected to an electric current
embedded in the road. Mid-range wireless power transfer
is based on magnetic resonance coupling. The team
transmitted electricity wirelessly to a moving light
emitting diode (LED) light bulb but the demonstration
only involved a one milliwatt charge, far less than what
electric cars require. The scientists are now working on
greatly increasing the amount of electricity that can be
transferred, and tweaking the system to extend the
transfer distance and improve efficiency.
Source: Business Standard
South Korea retires oldest nuclear reactor on its 40th
birthday
June 16, 2017. South Korea's oldest nuclear reactor, the
40-year-old Kori No. 1, will halt operations, becoming
the country's first nuclear plant to close permanently
amid plans for a shift towards natural gas and renewables.
South Korea is the world's fifth-biggest consumer of
nuclear energy, and one of few countries to export its
technology, having won an order to build reactors in the
United Arab Emirates. But a scandal over forged
certificates for spare parts in 2012 and the 2011
Fukushima meltdown in neighbouring Japan have
undermined public support for nuclear power, while the
new left-leaning government aims to speed up plans to
move away from both coal and nuclear. Another 11 of
South Korea's 25 reactors are set to shut down by 2030
as they reach the end of their operating lives, although
some may push to have their operating licenses renewed.
With the country still setting its long-term energy plans,
it is unclear how many will be replaced by new reactors.
Since Kori No.1 began operations on June 19, 1977, the
587 MW reactor has generated enough electricity to meet
the entire country's current demand for around 100 days,
according to data from the Nuclear Safety and Security
Commission. The energy ministry estimated it will take at
least 15 years to fully dismantle Kori No. 1, at a cost of
about 644 billion won ($571 million). Some experts hope
that shutting the reactor may help South Korea catch up
to the United States, Japan and Germany in
decommissioning plants. The global decommissioning
market is expected to grow to about $980 billion by 2050,
according to a report by the Korea Atomic Energy
Research Institute.
Source: Reuters
Bulgaria accused of illegal aid to fossil fuel power
providers
June 15, 2017. Bulgaria has given €1.3 billion ($1.5 billion)
in illegal aid to coal-fired and other power plants,
according to a complaint filed with the European
Commission by London-based ClientEarth lawyer Sam
Bright. European Union (EU) state aid rules are designed
to support a shift towards a lower carbon economy,
though they allow some support for fossil fuel if it is
needed to prevent blackouts or if it cuts emissions by
improving efficiency. Bright said the activist lawyers had
spent more than a year investigating Bulgaria's practice of
requiring public power provider NEK and distribution
companies to buy all the electricity produced by plants
classified as "high-efficiency co-generation" that produce
heat as well as power. These operators are paid a
surcharge, which comes from a levy on consumer bills.
ClientEarth, whose campaigning successes include
exposing Britain's breach of EU air quality legislation,
said its research found the aid flouted EU rules and the
plants did not qualify for such help. In that complaint,
ClientEarth alleges four power plants, which will receive
permits to pollute worth €197 million between January
2013 and December 2020, had not met all the criteria to
qualify.
Source: Reuters
Global power sector emissions to peak in 2026
June 15, 2017. Global emissions of greenhouse gases
from the power sector are expected to peak in 2026, but
will still be some way above levels needed to limit
temperature rises in line with the Paris climate agreement,
research showed. Overall, $10.2 trillion will be invested
in new global power generation between 2017 and 2040,
with renewable power sources such as wind and solar
accounting for almost three quarters of that, a report by
Bloomberg New Energy Finance (BNEF) said. By 2040,
global emissions are expected to be 4 percent below
2016's levels, but an additional $5.3 trillion investment in
renewable power would be needed by 2040 to keep rising
global temperatures below 2 degrees Celsius (3.6 degrees
Fahrenheit). Under the 2015 Paris deal, more than 190
countries pledged to curb greenhouse gas emissions to
keep planet-warming well below 2 degrees to stave off
the worst effects of climate change. The report said the
costs of renewable power were expected to continue to
fall, with the cost of solar tipped to fall by 66 percent by
2040.
Source: Reuters
Nevada reinstates key solar energy policy
June 15, 2017. Nevada Governor Brian Sandoval signed
a bill to reinstate a key rooftop solar policy and bring
national residential installers Tesla Inc's solar division and
Sunrun Inc back to the state after an 18-month absence.
State legislators passed the bill, which requires utilities to
purchase excess power generated from rooftop solar
panels at near the full retail rate.
Source: Reuters
Trump administration to suspend rule on natural
gas waste
June 14, 2017. The Trump administration will suspend
compliance dates on a rule limiting methane emissions
from oil and gas companies working on public lands as
soon as, according to an Interior Department document.
The move is part of an effort by President Donald Trump,
a Republican, to roll back the environmental regulations
of former President Barack Obama, a Democrat. The
Environmental Protection Agency said it would propose
a two-year stay on another Obama methane rule requiring
companies to detect and capture leaking emissions.
Compliance dates on the rule on methane on public lands,
which the Obama administration issued in November
2016, will be suspended until a federal court in Wyoming
considers litigation on the regulation, the document said.
Source: Reuters
DATA INSIGHT Scenario of Solar Power Capacity vis-a-vis Total Renewables Generating
Capacity
Year Solar Power Capacity Addition Solar Power Cumulative Capacity
(MW)
Upto 2010 -- 11
2010-11 25 36
2011-12 994 1030
2012-13 656 1686
2013-14 946 2632
2014-15 1112 3744
2015-16 3019 6763
2016-17 (As on October 2016) 1965 8728
Trends in Solar and Total Renewable Generating Capacity
Source: Compiled from Central Electricity Authority & Press Information Bureau
15,52118,455
24,50327,542
31,702
35,777
42,849
50,745
11 36 1,030 1,686 2,632 3,7446,763
9,235
0
10000
20000
30000
40000
50000
60000
Upto 2010 2010-11 2011-12 2012-13 2013-14 2014-15 2015-16 2016-17 (Ason
31.01.2017)
MW
Renewable Capacity Solar Capacity
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 2017 is the fourteenth
continuous year of publication of the newsletter. The newsletter is registered with the Registrar of News Paper
for India under No. DELENG / 2004 / 13485.
Disclaimer: Information in this newsletter is for educational purposes only and has been compiled, adapted
and edited from reliable sources. ORF does not accept any liability for errors therein. News material belongs
to respective owners and is provided here for wider dissemination only. Opinions are those of the authors
(ORF Energy Team).
Publisher: Baljit Kapoor Editorial Adviser: Lydia Powell
Editor: Akhilesh Sati
Content Development: Vinod Kumar Tomar
FACT FILE
The international crude oil price of Indian Basket as computed/published by Petroleum Planning
and Analysis Cell (PPAC) under the Ministry of Petroleum and Natural Gas was US$ 43.85 per
barrel (bbl) on 22.06.2017. This was lower than the price of US$ 44.45 per bbl on previous
publishing day of 21.06.2017. In rupee terms, the price of Indian Basket decreased to ` 2828.16 per
bbl on 22.06.2017 as compared to ` 2871.41 per bbl on 21.06.2017. Rupee closed stronger at ` 64.50
per US$ on 22.06.2017 as compared to ` 64.60 per US$ on 21.06.2017. (PIB)
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