Saudis cancel rare prompt oil offer to Asia after OPEC deal -sources
Top global crude oil exporter Saudi Aramco last week cancelled a rare offering of prompt cargoes to buyers in Asia, five sources with knowledge of the matter said on Friday, pulling back on a private tender after OPEC unexpectedly agreed to an output cut. The state oil giant has excess crude to sell as at least two domestic refineries are scheduled for maintenance in the fourth quarter, while Asian buyers may have opted to lift minimum term volumes next month after official monthly prices rose more than expected, the sources said. In what is sometimes called a private tender, selected buyers across Asia last week were given the option of purchasing Arab Light or Arab Heavy crude cargoes loading at Ras Tanura in October in the tender, the sources said, although few other details were available. But Saudi Aramco subsequently cancelled the tender after the Organisation of Petroleum Exporting Countries (OPEC) reached a deal to cut output on Sept. 28, the sources said. It was not immediately clear if Saudi Aramco sold any cargo before or after cancelling the tender. Saudi Aramco officials did not respond to an emailed request for comment. The company does not comment on its oil sales. The sources talking on the matter asked to remain anonymous due to its sensitivity. Asian buyers have remained cautious following the OPEC supply cut agreement, awaiting the next meeting in November for more details on how the agreed cut might be divvied up between the group’s members. SPOT CRUDE SALES? The crude sales tender may indicate an interest from Saudi Aramco to sell spot cargoes in future, trade sources said, which would be a major change in the producer’s marketing strategy. Saudi Arabia sells its crude oil mainly via annual contracts to customers at designated destinations, meaning that its oil is rarely traded on the open market. Still, the producer has in the past few years shown some flexibility in selling spot cargoes from its storage in Okinawa, Japan, to North Asian buyers. “Spot sales help in price discovery, providing an additional guide for the producer when it sets monthly prices,” an industry source said. Saudi Aramco typically sets its crude prices based on the changes in the Dubai market structure, recommendations from customers, and after calculating the change in the value of its oil over the past month, based on yields and product prices. The official Saudi prices help to set the trend for crude grades from Iran, Kuwait and Iraq, affecting more than 12 million barrels per day (bpd) of oil bound for Asia. Dave Winfield Jersey
GLOBAL LNG-Prices rise to highest in nine months on firm Asian demand
Asian liquefied natural gas (LNG) gas prices reached a nine-month high this week as demand from India, Japan and South Korea underpinned sentiment. LNG for November delivery were about $6.20 per million British thermal units (mmBtu), 10 cents higher than last week, as supply-demand balances for the rest of the year appear tighter, said three traders who participate in the market. That is the highest since the week ending Jan. 8. Higher crude prices are also lending support to LNG values. ICE Brent futures have gained 3.3 percent to above $52 a barrel this week following the Organizations of the Petroleum Exporting Countries announced plans to curb production. LNG demand from North Asia remains firm as nuclear power stations in Japan and South Korea that have been taken offline are expected to stimulate demand for the super-cooled fuel. Japan’s Kyushu Electric Power Co shut the 890-megawatt No. 1 reactor at its Sendai nuclear plant on Thursday for planned maintenance that is expected to last at least two months, although a restart could be hampered by anti-nuclear local authorities. South Korea has also shut multiple nuclear power plants for maintenance and as a precaution after the country suffered its biggest earthquake ever in September. “We expect demand to continue to be strong in Korea and Japan. China is also looking for more cargoes,” a Malaysia-based LNG trader said. The best bids from Asian buyers were pegged at the low-$6 per mmBtu range, while offers were in the mid- to high-$6 per mmBtu range, the traders said. “It is still a buyers’ market, but for November and December cargoes, sellers can decide who they want to sell to,” a Singapore-based trader said, adding that the market may rise due to demand from India and North Asia. Indian gas firm GAIL closed a tender seeking a November and a December cargo early this week. The results were not immediately known, but traders expect the firm to have appetite for more cargoes. Angola LNG, which closed its sell tender for its Oct. 4-6 loading cargo on Wednesday, is likely to have awarded the tender because of its prompt loading dates. The bids are valid until Friday. Despite firm Asian demand, gains in spot prices could be capped by new production from the Australia Pacific LNG (APLNG) project that is due to start-up this quarter, and returning U.S. supplies. Cheniere’s Sabine Pass is scheduled to come back from maintenance around Oct. 17, a source close to the matter said on Thursday. The Australian project is starting up its second production line, an APLNG spokesman said on Thursday, with traders expecting a first shipment to be loaded later this month. Jarvis Jenkins Womens Jersey
Pradhan pitches for subsidy withdrawal on petro products
Making a case for free market economy to boost investments, Oil Minister Dharmendra Pradhan has said the market price of petroleum products should be commensurate with production rate to augment output and subsidies on such items must be for poor households only. “The market price should be near to production price. We have to adopt a market mechanism. Government should not control prices (of petroleum products),” the minister said at the India Economic Summit here. The minister was also of the view that freeing price of petroleum products is necessary to boost the investors confidence and increase private players participation in energy sector. He suggested that the without removing subsidies India cannot augment production of petroleum products in the country. He also stressed that the subsidies should be targetted and should not be available to everybody for increasing investors confidence. Besides there should be a debate on this. At present, the government still provides subsidy on kerosene and cooking gas (LPG). Government has been trying to persuade consumers to give up their LPG subsidy so that it could be provided to deserving below poverty line or poor families. The minister was of the view that the gas and renewables like solar and wind energy has a future in India in the long term and their proportion will increase in the energy mix in coming days. The Minister also emphasised the need to monetise farm waste by converting it into various forms of energy and said “We are very much focused on the bio-energy. We have to tap the farm bio waste.” Ben Lovejoy Authentic Jersey
Government mulling over ways to boost power demand
Lack of demand for power is a serious concern for the coal industry and the government is examining this conundrum, according to Coal Secretary Anil Swarup, who has suggested a relook on the government’s ambitious one billion tonnes of production target for fossil fuel by 2020. “For me the serious concerns are: Number one, there is hardly any demand for power. What we will do? We are planning to produce one billion tonnes of coal by 2020. What will I do with that coal,” said Coal Secretary Anil Swarup. He suggested that the need to increase this demand for power is very important because, currently, per capita consumption of energy in India is equal to the per capita consumption of the US in the late 90’s. “The demand has to go up,” he said. In fact, in the current financial year, coal production has had to ensure that coal does catch fire at the pit heads, where much of the stock lies unused. “On 31st of March this year India had surplus of 56 million tonnes (MT) as inventory at pitheads and around 32 MT at the power plants, as on March 31, 2016. “I would rather be in this situation than what I was in a couple of years ago, when everyone was running around… to reach out coal to these power plants. I am glad we are where we are,” said Swarup. The government’s focus has now shifted to the quality of coal, he said. State-owned Coal India (CIL) which amounts for over 80% of domestic coal production is eyeing one billion tonnes of coal production by 2020. Colin McDonald Womens Jersey
Power tariff in Rajasthan lower than other states, CM Vasundhara Raje says
The chief minister said tariff for domestic power in Rajasthan was lower than that in Maharashtra, Madhya Pradesh and Karnataka, the chief minister said. The state government hiked power tariff by an average 9.6% last month.Raje said power tariff for agriculture in Rajasthan was lower than that in Chhattisgarh Assam , Meghalaya, Delhi, Madhya Pradesh , Kerala, Odisha, Uttarakhand , Goa and Karnataka. JAIPUR: Chief minister Vasundhara Raje on Wednesday defended her government’s decision to hike electricity rates in the state, saying these were still among the lowest in the country. “Barring for technical snags, the state is maintaining electricity supply for 22 hours to 24 hours every day,” the chief minister said. She said flat rate consumers in Rajasthan were getting electricity for Rs 120 per Horse Power instead of Rs 635 per Horse Power, as the state government was subsidising it. JAIPUR: Chief minister Vasundhara Raje on Wednesday defended her government’s decision to hike electricity rates in the state, saying these were still among the lowest in the country. The state government hiked power tariff by an average 9.6% last month.Raje said power tariff for agriculture in Rajasthan was lower than that in Chhattisgarh Assam , Meghalaya, Delhi, Madhya Pradesh , Kerala, Odisha, Uttarakhand , Goa and Karnataka.”The current rate for agriculture (metered) was Rs 4.75 per unit, of which Rs 3.60 per unit was being subsidized by the state government. We are paying Rs 7200 crore annually to the power companies in lieu of lower rates for agriculture consumers,” Raje while addressing the BJP executive meeting in Udaipur on Wednesday. The chief minister said tariff for domestic power in Rajasthan was lower than that in Maharashtra, Madhya Pradesh and Karnataka, the chief minister said. The tariff for non-domestic power was lower than that in Delhi, Kerala, Punjab, Maharashtra, Uttar Pradesh and Andhra Pradesh Power tariff for small-scale industries too was lower than that in Delhi, Madhya Pradesh, West Bengal, Uttar Pradesh and Punjab, for medium-scale industries was lower than that in Delhi, Maharashtra, Wes Bengal, Uttar Pradesh and Punjab, while tariff for large-scale industries here was lower than that in West Bengal and Maharashtra. “It was the previous Congress government that took a cabinet decision to hike power tariff every year after financially ruining the state Discoms,” the chief minister said.The Congress recently held state-wide demonstrations accusing Raje-government of increasing electricity rates to “cover up” financial mismanagement in Discoms and of failure to add “even a single unit” to state’s power generation in past more than two years. Vonn Bell Jersey
Strong pipeline of solar projects aided by policy support; but regulatory challenges persist: ICRA
The solar project pipeline in the country remains strong supported by policies but regulatory challenges persist arising out of factors such as non-enforcement of renewable purchase obligations (RPOs) and likelihood of more stringent scheduling and forecasting norms, research agency ICRA said in report. About 6,100 Megawatt capacity of solar projects were awarded during the 8-month period of CY2016 (January – August), supported by policies at both the Central and the state level. “About 2,520 MW capacity of solar PV projects, awarded in CY2016 so far (January till August 2016), have a tariff of less than Rs. 5/kWh, which could face challenges in achieving financial closure. Viability of such tariffs hinges on structuring of debt with longer tenures, competitive funding costs and the ability of the project developers concerned to keep the cost of modules within the budgeted levels,” said Sabyasachi Majumdar, Senior Vice President, ICRA. Simultaneously, however, a fall in solar module prices coupled with aggressive bidding by developers leading to declining solar PV bid level has resulted in an improved tariff competitiveness of solar PV projects. This in turn remains beneficial for the state distribution utilities which are key off-takers. Weighted average competitively bid solar PV tariff has declined to Rs. 5.0/kWh for CY2016 (till August 2016) from Rs. 6.5/kWh for CY2014. ICRA further takes note of the recently reported concerns of solar project developers on the forced back-down by the state utility in Tamil Nadu. While the solar generation project is supposed to operate on the “must run” principle basis under the grid code, any forced back down by the state, on the grounds of inadequate transmission capacity and/or grid stability, remains a concern for solar projects, in ICRA’s view, given the absence of any deemed generation clause in the tariff structure. Notwithstanding a positive demand outlook, the solar sector continues to face several challenges like regulatory challenges arising out of inconsistency in RPO norms; and poor compliance with RPO norms by the obligated entities and weak enforcement of such norms by the State Electricity Regulatory Commissions (SERC). “Despite the revision in solar RPO to 8% from 3% till FY2022 in the National Tariff Policy in January 2016, the SERCs in majority of the states are yet to re-align their solar RPO norms and trajectory in line with the revised target,” Majumdar said. Further, solar PV projects remain exposed to regulatory challenges arising from requirement of scheduling and forecasting framework, which is likely to be approved by SERCs, subsequent to CERC’s framework, which has been effective since August 2015. The Karnataka Electricity Regulatory Commission (KERC) in May 2016 had approved similar regulations and similarly, SERCs in a few other states have put in place draft regulations. For the solar projects in Karnataka, the forecasting framework would thus have a negative impact on cash flows and project IRR, particularly if the actual overall deviation (mix of over-generation and under-injection) exceeds 30% of the scheduled generation, though the extent of the impact for solar energy generation projects is likely to be relatively lower due to lesser variability in solar generation, as compared with that for wind energy projects. Ryan Braun Jersey
Prices of solar energy down by 40%: Piyush Goyal
Power minister Piyush Goyal said that by consistent efforts made by the government the prices of solar energy have come down by 40% in just 18 months. He was speaking at the distinguished gathering of Industry stalwarts from Energy sector at a media event, ‘Energy Conclave, 2016 – Securing India’s Green Future’, organized here. The Minister noted that India has its own developmental imperatives in the near future, hence it cannot shun the use of fossil fuels completely from its energy basket. It is important to strike a balance between the conventional & renewable sources of energy and rapid societal development & environmental concerns, he added. Goyal expressed happiness to see renewable energy taking centre stage in discussions on power sector recently. He noted that it is of prime importance to achieve the goal of ‘One Nation, One Grid, One Price’ at the earliest and create a robust transmission grid network where affordable power is seamlessly available to the common man throughout the Nation, at one price. The minister pointed out that the Government, after taking charge, has made the solar power target five times to 100 GW by 2022. Moreover, concentrating on other sources of renewable energy, this year has been dedicated to hydro and wind energy and talks with international gas suppliers are on, he added. Greg Lloyd Jersey
Social security incomplete without energy security: Goyal
Minister of State (Independent Charge) for Power, Coal, New and Renewable Energy and Mines, Piyush Goyal has noted that India has its own developmental imperatives in the near future; hence it cannot shun the use of fossil fuels completely from its energy basket. Addressing a distinguished gathering of Industry stalwarts from energy sector at a media event, ‘Energy Conclave, 2016 – Securing India’s Green Future’, organized here yesterday, Goyal said it was important to strike a balance between the conventional and renewable sources of energy and rapid societal development and environmental concerns. He also expressed happiness to see renewable energy taking centre stage in discussions on power sector recently.The Minister noted that it is of prime importance to achieve the goal of ‘One Nation, On Grid, One Price’ at the earliest and create a robust transmission grid network where affordable power is seamlessly available to the common man throughout the nation, at one price. Goyal pointed out that the government, after taking charge, has made the solar power target five times to 100 GW by 2022. Mike McGlinchey Womens Jersey
Pune to get new greenfield international airport at Purandar
Chief minister Devendra Fadnavis has approved land at Purandar for a new greenfield international airport for Pune. The proposed airport will be spread over 2,400 hectares and the site has already been approved by the Airports Authority of India (AAI), Fadnavis told reporters in Mumbai on Thursday after attending a meeting of the Maharashtra Airport Development Corporation (MADC). The airport would commence in three years, he said. Fadnavis announced that the new airport would be named after Chhatrapati Sambhaji Raje as Purandar was his birthplace. “We decided to grant permissions for carry ing out a detailed project report (DPR) as well as an obstacle limitation surface survey for the proposed site,“ the chief minister said. “The site is around 15-20 km away from Pune city . Located on the south of the city, the proposed airport will be connected with six different routes including national highways 4 and 17. There will be a special ring-road connecting major industrial establishments with the proposed airport from Hadapsar. The proposed airport will have two airstrips, each having a length of 4 km. It will handle cargo along with passenger traffic,“ Fadnavis said. Asked about earlier proposed sites like Chakan and Rajgurunagar, Fadnavis said except Purandar, no other site has been approved by the AAI.“Most of the farmers have expressed their willingness for the project (at Purandar). The farmers whose land will be acquired for the project will become partners in the airport developing company which will ensure some steady inco me source for them. This model has been used in the state earlier for land acquisition of the (proposed) Navi Mumbai International Airport,“ Fadnavis said. Asked about the proposed airport in Kolhapur, Fadnavis said “The state government is spending Rs 40 crore for this airport and it will be a domestic one.“ A new airport for Pune was proposed more than a decade ago but the project has been delayed for want of suitable land. Two weeks back, a 15-member team comprising revenue officials and representatives from the Airports Authority of India (AAI) and MADC had conducted a review of the Purandar site in villages Pargaon Memane, Ikhatpur, Rajewadi and Waghapur. The team had found the site most appropriate for the airport. The AAI has since given its in-principle approval to the site and the state now has to initiate the process for land acquisition. Keanu Neal Jersey
India to set up LNG terminal, City Gas network in Sri Lanka
India is working on a slew of proposals aimed at strengthening bilateral energy engagement with Sri Lanka including setting up an Liquefied Natural Gas (LNG) terminal and a dedicated City Gas Distribution (CGD) network in the neighbouring nation. Petroleum minister Dharmendra Pradhan today met his Sri Lankan counterpart Chandima Weerakkody here and discussed the Indian proposals, the oil ministry said in a statement. “During the meeting, both the ministers discussed various Indian proposals including joint development of Upper Tank Farm by Lanka IOC (LIOC) in Trincomalee; setting up of LNG terminal at Kerawalapitiya, near Colombo by Petronet LNG Ltd; setting up of CGD network by GAIL and use of CNG in the automotive sector of Sri Lanka,” the ministry said. The Sri Lankan government is trying to promote the use of clean fuel in that nation, including for power generation. Pradhan also said the Indian oil ministry has offered to work with the Lankan government for developing gas infrastructure there. He added Indian companies had engaged a reputed consultant for assessing LNG demand and are developing related infrastructure in Sri Lanka. The consultant’s report would be shared shortly. Weerakkody welcomed India’s cooperation and said though India’s gas-based business and infrastructure is only 20 years-old, it has the requisite experience and expertise in the sector which is ready to be shared with Sri Lanka. Pradhan also discussed LIOC activities in Sri Lanka including increasing the number of its retail outlets and bunkering operations and granting license to LIOC for marketing Aviation Turbine Fuel (ATF) and LPG. Both the sides also discussed refurbishment of Sapugaskanda refinery and possibility of setting up of a refinery in Sri Lanka as a joint venture to address the local needs. India also offered to assist Sri Lanka in building oil and gas pipeline networks. During the meeting, the two ministers also exchanged notes on the exploration and production activities in the Sri Lankan Mannar basin. Pradhan said ONGC Videsh Ltd (OVL) and its parent company ONGC had the expertise and knowledge of the geological conditions that exist in the Cauvery basin. “These conditions are similar to Mannar basin in Sri Lanka and, hence, OVL could be a natural partner in carrying out exploration and production activities in this area,” he said. Pradhan also expressed India’s commitment to work with Sri Lanka to develop Trincomalee as a regional energy hub. The petroleum ministers also discussed the possibility of creating South Asian Association of Regional Cooperation (SAARC) Energy Initiative to create sub-regional hydrocarbon infrastructure, particularly gas network, to fuel the two economies. The ministers also discussed cooperation in bio-fuel sector including training of Sri Lankan energy professionals in India. Anthony Davis Jersey