Petronas weighs sale to exit $27 billion Canada LNG project
Malaysian state oil firm Petroliam Nasional Bhd is considering selling its majority stake in a $27 billion Canadian liquefied natural gas (LNG) plant, three people familiar with the matter said this week. Petronas, as the company is known, said in a statement on Saturday that it “categorically denied” the Reuters report on Friday that the company is considering the stake sale. “Petronas reiterates that, together with the project partners, it will study the conditions that come with the approval and conduct a total review of the project prior to making a decision on the next steps forward,” the company said in a statement on Saturday. Petronas is weighing options for the project as a more than 50 percent slide in crude oil prices since the middle of 2014 has hit the group´s profits and prompted cuts to capital expenditure and jobs. Amid the cost-cutting, the economics of the Canadian project – which took three years to get approval due to environment concerns – have been called into question as LNG prices have fallen more than 70 percent in two years. Petronas was given the go-ahead for the C$36 billion ($27.34 billion) project by the Canadian government earlier this week. It said then that executives would study the 190 conditions imposed by the authorities and conduct a review before deciding on the next steps. The sources said Petronas has been considering a sale for months, after it became apparent that a Canadian approval was possible, but had yet to take a final decision. Other options are also being considered, including putting it on ice. “They are going to be looking at gas prices, costs and returns before they make the final decision,” said one of the sources. “It is a very tough call.” The Canadian project is Petronas´ biggest foreign investment and seen as a sign of Malaysia´s global energy ambitions. An exit would underscore the financial constraints at the state-run firm and also the soft outlook for LNG prices. Last month, Petronas reported an 85 percent slide in second-quarter profit and labelled the industry outlook “gloomy” well into 2017. It has committed to paying 16 billion ringgit to the government coffers this year, down nearly 40 percent from its year-ago contribution. Petronas signed on for the project in 2012 through the acquisition of Canada´s Progress Energy. It has faced several hurdles. Aboriginal and environmental groups have said the project would threaten a salmon habitat. The liquefied natural gas price decline added to concerns, and there is also a growing supply glut as other projects went live. If Petronas goes ahead with a sale, finding a buyer in current market conditions would be difficult, the sources said. Petronas was considering its options as far back as a year ago, a separate industry source said, but he added it would be difficult to sell in the current environment given that Canadian projects are more expensive. If Petronas opts to suspend the Canada project, it would be put on ice until gas prices begin to turn around and Petronas is confident of securing long-term contracts at reasonable prices, said the sources, who declined to be identified as the negotiations are not public. Other liquefied natural gas projects in British Columbia have also faced delays, underlining the market outlook. In July, Royal Dutch Shell and its partners pushed back a decision on building an LNG export terminal, and Chevron has delayed the scheduled 2017 start of its Kitimat liquefied natural gas project. Petronas has minority partners for the project in China, India, Japan and Brunei. Darwin Barney Authentic Jersey
NHPC wants to give BYPL’s share to two other discoms
Trouble seems to be mounting for the BSES discoms. National Hydro Power Corporation (NHPC) has petitioned Delhi Electricity Regulatory Commission (DERC) for reallocation of BSES Yamuna’s share of power (117.04MW) to the other discoms – BSES Rajdhani and Tata Power. If they do not take it, then DERC should declare this power as surplus. The matter was heard weeks ago. “The petitioner, NHPC, submitted that BYPL has not been paying its energy bills. The power purchase agreements have a condition that letter of credit (LC) of 105% of average monthly billing for the preceding 12 months should be provided by the beneficiary. The LC of BYPL was effective till March 31, 2014 after which it did not renew it,” said an official. While the issue was under deliberation in DERC, NHPC on June 22, 2016 proposed that the entire power from NHPC allocated to BYPL may be re-allocated to BRPL. “BYPL, citing financial hardship, allowed temporary reassignment of its allocated power from NHPC to BRPL till March 31, 2018,” said an official. In August, DERC decided that the entire 117.04MW of power will be temporarily reassigned to BRPL from July 13, 2016 till March 31, 2018. Tim Schaller Womens Jersey
Meghalaya to stand guarantor for cash-strapped power company
Meghalaya will stand guarantor for its cash-strapped power company to enable it raise a loan of over Rs 496 crore to pay its outstandings. The Meghalaya Energy Corporation Limited (MeECL) owes the money to the state-owned North Eastern Electric Power Corporation Limited (Neepco). “We have decided to act as a guarantor of the corporation to avail loans of over Rs 496 crore for paying the dues it owes to Neepco. The total amount to be paid is Rs 496.32 crore, including a surcharge amount of Rs 98.44 crore,” Chief Minister Mukul Sangma told journalists on Friday night after the cabinet approved the proposal. The loan would be taken from the Power Finance Corporation (PFC). Moreover, Sangma informed that the cabinet also directed the Finance and Power departments to come up with measures for MeECL to realise its nearly Rs 344 crore outstanding from consumers.”The MeECL is yet to recover outstanding dues worth nearly Rs 344 crore from the consumers in the state,” he said Meghalaya owes Neepco and central generating stations — National Hydro-electric Power Corporation, National Thermal Power Corporation, Power Grid Corporation of India Limited and others, a total due of Rs 767 crore. For Neepco alone, Meghalaya owes a total due, including surcharge, of around Rs 715 crore. However, the Chief Minister said 60 per cent of the surcharge is expected to be waived off. Sangma said the state finance and power departments have been asked to work out plans to ensure that the corporation adopts systems that enable it function in an efficient and effective manner. The state witnesses daily outages after the water level at Umiam reservoir dropped due to scanty rainfall. Meghalaya has vast hydro-potential of around 3,000 MW, but there are delays in planning and execution. The state’s power availability is 358 MW against a demand of over 600 MW. Ben Harpur Jersey
UDAY a success: India’s power distribution system shows clear signs of revival
India’s power distribution system is showing concrete signs of revival and lower operational losses as chronically inefficient states have significantly narrowed the gap between cost and revenue, reduced unmetered supply and are planning large bond issues in 10 days. Officials say of the 16 states part of the Centre’s distribution utility revival scheme-—Ujwal Discom Assurance Yojna (UDAY) —at least eight have a lower gap between their average cost of electricity supply and average cost of realisation. According to one official, Uttar Pradesh distribution companies are set to launch state-government guarantee-backed bond issue worth Rs 5,000 crore starting October 6 to meet operational requirements. Rajasthan distribution utilities are also likely to raise working capital funds through bond issues in the next 10 days. Provisional data shows that the gap in Uttar Pradesh distribution utilities declined by over 65% to Rs 0.41 per unit for the year ended March 16 against Rs 1.17 per unit as on March last year. The difference between cost of supply of electricity in Haryana reduced by half to Rs 0.23 per unit in March from Rs 0.65 per unit a year ago, said the official quoted above. Discoms of Bihar, Andhra Pradesh, Rajasthan, Jharkhand and Uttarakhand have reduced the shortfall in revenue, but distribution companies of Punjab and Karnataka reported an increase in their losses. Twelve of the 16 states showed reduction in aggregate commercial and technical electricity losses that go unmetered. Bihar, Uttar Pradesh, Jharkhand, Chhattisgarh, Goa, Uttarakhand, Rajasthan and Andhra Pradesh are some of the states that showed decline in distribution losses. Preliminary data being compiled by the Union power ministry to launch a mobile application for monitoring implementation of Uday also shows that 13 of the 16 states have filed tariff revision petitions for 2016-17 with their respective state electricity regulatory commissions. The Union Power Ministry’s website and mobile app to monitor progress of UDAY will have data fed by state power distribution companies on 14 operational and financial parameters. The application will also rate the state power distribution system on the progress made by them against commitments made during signing of Uday agreements. As per provisional data available with the power ministry, Haryana, Gujarat, Bihar, Punjab and Rajasthan, have fulfilled 30-45% of the commitments made under UDAY. Uttar Pradesh, Bihar, Jharkhand need improvement with below 30% progress while Jammu & Kashmir lags far behind delivering just 15% of the promises made under UDAY. The 14 parameters on which state distribution companies implementing UDAY are being measured include reduction in technical and commercial losses, reduction in gap between per unit cost of power supply and realisation, household electrification, urban and rural feeder metering, smart metering, profit and loss accounts and the distribution of LED lights. Marshall Faulk Jersey
Bengal’s ‘light-for-all’ project enters the last mile
Even as Bengal gives finishing touches to its 100% electrification drive, power department officials have given up on 72 villages. Spread over Burdwan, Nadia and Murshidabad, residents of these villages will continue to live in the dark even as the ‘Sabar Ghare Alo’ (Light in every home) project makes a concerted effort to light up 6 lakh households that are outside the electricity loop. Sources in the power department said the state would miss the 100% electrification target by a whisker as the 72-odd villages located on sand bars in Burdwan, Nadia and Murshidabad were economically unviable to be connected to the grid. “In some cases, it may entail an expense of over Rs 1 crore to provide connection to a few dozen households,” an official of West Bengal State Electricity Distribution Co Ltd (WBSEDCL) said. Sources said a separate programme could be taken up later to provide solar electricity to these mid-river villages. In the rest of the state, the programme will most certainly overshoot the deadline with challenges in connecting remote islands in the Sunderbans in North 24-Parganas and South 24-Parganas and enclaves in Cooch Behar. The 51 enclaves that were exchanged with neighbouring Bangladesh last year pose a challenge. Ryan Anderson Womens Jersey
Power ministry special secretary may get REC’s charge too
Power ministry special secretary BP Pandey is likely to get additional charge of state-run Rural Electrification Corporation (REC), which drives the government’s flagship household electrification programme. Pandey will take over from Rajeev Sharma, who on Saturday became chairman and managing director of Power Finance Corporation. An announcement giving Pandey additional charge of REC is likely to be made on Monday, sources in the power ministry said. The development comes at a time when the government has decided to step up its electrification drive that aims to provide electricity connections to all Indian citizens by December 2018 and make power available 24×7 to all by March 2019, ahead of the earlier target of March 2022. Quinton Spain Authentic Jersey
Adani Gas slashes PNG, CNG prices
A day after the Union ministry of petroleum and natural gas cut prices of domestically-produced natural gas, city gas distribution company Adani Gas Ltd reduced prices of piped natural gas (PNG) and compressed natural gas (CNG) on Saturday. The company slashed prices of PNG for domestic households by Rs 13.81 per metric million british thermal unit (mmbtu) to Rs 510.15 per mmbtu (approx Rs 19.43 per cubic metre). Earlier, the price was Rs 523.96 per mmbtu (Rs 19.96 /cubic metre) excluding VAT. CNG prices have been reduced by Rs 1.10 to Rs 44.70 a kg from Rs 45.80 a kg including all taxes. The new prices are effective from October 1, 2016. Martin Havlat Jersey
Kerala CM promises all support to GAIL project
Kerala Chief Minister Pinarayi Vijayan has pitched for time-bound implementation of the much-delayed GAIL pipeline project in Kerala, saying it was “essential” to ensure “pollution-free” and “sustainable development” in the state. In a Facebook post, he said it was not proper to curtail development in the name of pollution and usage of environment-friendly fuel like CNG was a solution to this. The state should be connected to GAIL’s natural gas grid to get CNG at a cheaper rate, he said. “It is not proper to stop development for controlling pollution. The solution to this is to use green and clean fuel in place of those creating pollution. CNG is one such fuel which has been recognised as environment-friendly the world over,” the chief minister said. Detailing the significance of linking the state to GAIL’s natural gas grid, Vijayan said, “It is essential to connect Kerala with this national natural gas pipeline grid for sustainable development.” The grid will be connected with LNG Petronet at Kochi. The 900-km gas pipeline project of GAIL, passing through Kerala, Karnataka and Tamil Nadu, has been facing a delay due to land acquisition issues in Kerala and Tamil Nadu. In Kerala, of the 550-km stretch, only about 44 km inside Ernakulam city has been completed so far. Tamil Nadu and Karnataka together account for about 384 km of the project. Two pipelines, one from Kochi to Mangaluru passing through the coastal districts of Kerala and another connecting Bengaluru and Kochi, are to be laid. Protests from the residents of the areas through which the pipelines would pass have caused the delay. The 50 lakh tonnes per annum capacity of the Petronet LNG terminal at Puthuvype in Kochi has not been able to fully utilise its capacity due to the delay in laying of the pipelines. Petronet sources said things have picked up after the LDF government came to power in the state. “The GAIL pipeline project has a significant role to ensure pollution-free and sustainable development in the state. So, the state government is promising all support for the completion of the project,” Vijayan added. Demar Dotson Womens Jersey
ONGC, OIL making losses on natural gas production
State-owned ONGC and Oil India are making losses on natural gas production after government cut rates for the fourth consecutive time to bring down selling price to below the cost of production. Price of natural gas produced by Oil and Natural Gas Corp (ONGC), OIL and Reliance Industries locally was cut by 18 per cent to USD 2.5 per million British thermal unit (mmBtu) based on its gross heat value for six month period beginning October 1. On net heat value basis, the price will be USD 2.78. “Our average cost of production is about USD 5.14 per mmBtu. It comes to about USD 3.59 per mmBtu without taking into account return on capital,” said a senior ONGC official. For Oil India Ltd, the cost of production, without taking into account the return on capital, comes to about USD 3.06. “Gas production is now a loss making business as irrespective of cost of production we have to continue paying royalty and other taxes,” the official said. As per a new mechanism approved by the government in October 2014, the price of domestically produced natural gas is to be revised every six months — April 1 and October 1 — using weighted average or rates prevalent in gas-surplus economies of US/Mexico, Canada and Russia. For October 1, 2016 to March 31, 2017, the rate was on Friday announced to be USD 2.5 per mmBtu compared to USD 3.06 per mmBtu previously. The price of gas between October 1, 2015 and March 31, 2016 was USD 3.81 per mmBtu and USD 4.66 in the prior six month period. Next change is due on April 1. The reduction in natural gas prices would mean lower raw material cost for compressed natural gas (CNG) and natural gas piped to households (PNG) and would translate into reduction in retail prices. It would also mean lower feedstock cost for power generation and manufacturing of fertilisers. But for producers, it means lower revenue. Every dollar dip in gas price results in Rs 4,000 crore hit in revenue of ONGC on an annual basis. The current price reduction would hit its revenue by about Rs 1,000 crore. Alongside the price cut, the government also announced a sharp reduction in cap price based on alternate fuels for undeveloped gas finds in difficult areas like deepsea which are unviable to develop as per the existing pricing formula. The cap for October 1, 2016 top March 31, 2017 will be USD 5.3 per mmBtu, down from USD 6.61 in April 1 to September 30 period. The official said ONGC had used this flexibility to sell about 1.4 million standard cubic meters per day of gas from a Mumbai offshore field. “We sold the gas at USD 5.05 per mmBtu to (state gas utility) GAIL India Ltd. Fortunately, that price remains under the lower cap,” he said. Indian gas prices are calculated by taking weighted average price at Henry Hub of the US, National Balancing Point of the UK, rates in Alberta (Canada) and Russia with a lag of one quarter. So, the rates for October 1, 2016 to March 31, 2017 period were based on average price at the international hubs during July 1, 2015 to June 30, 2016. Ty Sambrailo Womens Jersey
CNG, PNG prices cut in Delhi NCR by IGL
City gas distributor Indraprastha Gas Ltd (IGL) has cut prices of automobile fuel Compressed Natural Gas (CNG) and household Piped Natural Gas (PNG) in Delhi-National Capital Region (NCR). The third price cut in less than a year follows the centre’s latest move to reduce domestic natural gas prices 20 per cent to $2.50 per unit for six months effective 1 October. The revision in prices would result in a decrease of Rs 1.40 per kg in the consumer price of CNG in Delhi and Rs 1.60 per kg in the consumer price of CNG in Noida, Greater Noida and Ghaziabad. The new consumer price of Rs. 35.45 per kg in Delhi and Rs 40.60 per kg in Noida, Greater Noida & Ghaziabad would be effective from tonight. The price of CNG in Delhi remains the lowest in the entire country. “With the objective to boost CNG refuelling during non-peak hours, IGL will continue to offer a discount of Rs 1.50 per kg in the selling prices of CNG for filling between 12 am to 5 am at select outlets. Thus, the consumer price of CNG would be Rs.33.95 per kg in Delhi and Rs 39.10 per kg in Noida, Greater Noida & Ghaziabad during 12 am to 5 am at the select CNG stations across the region,” the gas supplier said in a statement today. The company has also reduced domestic PNG prices from tomorrow. The consumer price of PNG to Delhi households is being reduced by Re 1 per standard cubic meter (scm) from Rs 24 per scm to Rs 23 per scm. Due to differential tax structure in Uttar Pradesh, the applicable price of domestic PNG to households in Noida, Greater Noida and Ghaziabad would be Rs 24.35 per scm. It is being reduced by Rs 1.15 per scm from the existing Rs 25.50 per scm. IGL — a joint venture of GAIL (India) Ltd, Bharat Ptroleum Corp (BPCL) and the Delhi Government — currently supplies PNG to nearly 480,000 households in Delhi and over 190,000 households in Noida, Greater Noida and Ghaziabad. “The revision in retail prices of CNG and domestic PNG has been effected after taking into account the overall impact on the cost as a result of the reduction in prices of domestically produced natural gas notified by the government,” the company said. It also claimed that with the revised price, CNG would offer over 60 per cent savings towards the running cost when compared to petrol-driven vehicles at the current level of prices. When compared to diesel driven vehicles, the economics in favour of CNG at revised price would be over 32 per cent, it said. IGL currently caters to over 850,000 CNG vehicles in the capital, which include nearly 550,000 private cars. The company is also augmenting its CNG refuelling infrastructure to meet the rapidly growing demand as a result of increased number of vehicles switching to CNG mode. Dale Hawerchuk Authentic Jersey