Norway’s Statkraft, Bharat Light and Power JV commissions 5 mw solar power project
Statkraft BLP Solar Solutions, a joint venture between Norway’s State-owned utility Statkraft and Bharat Light and Power, has started generation at its 5 mw solar power plant in Karnataka, the company said in a statement Thursday. Statkraft BLP is in pact to sell power from this project to three clients in Karnataka, which include a five-star hotel in Bangalore, a subsidiary of a major German industrial conglomerate and a subsidiary of a German automobile parts manufacturer. The clients will be supplied solar power under the open access mechanism, the company said. The company has a strong pipeline of projects in multiple states in India and several clients are in conversation to procure solar solutions, said Statkraft BLP’s CEO Tejpreet Singh Chopra. The joint venture that was set up in 2015 has since then commissioned rooftop projects along with its first 5 mw solar plant. Statkraft also owns about 300 mw hydel capacity in India in a joint venture with Bhilwara Energy. Carlos Santana Authentic Jersey
NTPC to prepare DPR for 1600 MW thermal power project at Margherita
Assam chief minister Sarbanada Sonowal has asked NTPC to prepare a detailed project report (DPR) for the proposed 1600 MW thermal power project at Margherita in Upper Assam. Sonwal held a meeting with Coal India Limited, NTPC and Assam Power Generation Company Limited to assess the modalities to set up the project. The state government also decided to engage NTPC to prepare the DPR for the power project. Coal India Limited would provide coal linkage to the project from North Eastern Coalfields. The 1600 MW power project at Margherita will have two units with an installed capacity of 800 MW each. Tremaine Edmunds Jersey
GAIL signs time-swap deal with Swiss trader Gunvor to sell US LNG
State-run gas company GAILBSE 1.71 % (India) Ltd has signed a time-swap deal with Swiss trader Gunvor to sell some of its U.S. liquefied natural gas (LNG), sources said, as the Indian firm tries to ease the burden of its costly foreign LNG supplies. It is the first time-swap agreement by GAIL, which is trying to juggle its LNG portfolio to cut costs for price-sensitive Indian customers after a sharp fall in Asian spot prices made its U.S. gas unattractive. The deal equates to around 5 percent of India’s 2015/16 LNG imports and will support a government push to promote the use of the cleaner fuel in fertiliser and the power sector, even as India’s local gas production is falling. Under the agreement, Gunvor will supply 15 cargoes or about 0.8 million tonnes of LNG to GAIL on India’s west coast between April and December this year in oil-linked prices on a delivered basis in India, two sources with knowledge of the deal said. In return GAIL will sell 10 cargoes or about 0.6 million tonnes next year from Sabine Pass on the U.S. Gulf coast in 2018 at a premium to its pricing formula on a free-on-board (FOB) basis, they said. The deal, priced at about a 12 percent slope to Brent, means GAIL could get gas from Gunvor at $6.50-$7.00 per million British thermal units (mBtu), the sources said, competitive with Asian spot prices and much cheaper than the cost of shipping its own U.S. gas to India. “We are seeing spot deals (in India) for April deliveries getting finalised at slightly more than $6.50 (mBtu) so GAIL’s deal with Gunvor is at very competitive rates,” said an Asian LNG trader. GAIL is saddled with long-term contracts to take expensive U.S. gas after embarking on a buying spree between 2011 and 2013 when the fuel was scarce and prices kept rising. LNG booked by GAIL under a long-term deal with Cheniere Energy, which owns the Sabine Pass Liquefaction terminal, will cost 115 percent of Henry Hub prices plus a fixed cost of $3 per mBtu. At current prices, this equates to a cost of about $8.50 per mBtu on a delivered basis to India. GAIL was not immediately available for comment. Gunvor declined to comment. The Indian firm has a deal to buy 3.5 million tonnes per annum (mtpa) of LNG for 20 years from Cheniere Energy and has also booked capacity for another 2.3 mtpa at Dominion Energy’s Cove Point liquefaction plant. It has so far sold about 0.5 million tonnes of its LNG from the U.S. projects to Royal Dutch Shell but has not been able to attract Indian customers despite repeated attempts. “GAIL is in talks with more players to sell LNG from its U.S. portfolio,” said one of the sources. New Delhi wants to lift the share of cleaner-burning gas in its energy mix to 15 percent in the next three years from about 6.5 percent at present. GAIL is also in talks with Russia’s Gazprom to delay and renegotiate a 20-year gas purchase deal undercut by low spot prices. Deatrich Wise Jr Authentic Jersey
Gas distributors earn far more than explorers
ity gas distribution companies in India have significantly higher profitability than explorers, according to a February 2017 report from Kotak Institutional Equities. The report notes that both Indraprastha Gas Ltd (IGL) and Mahanagar Gas Ltd (MGL) have “quite high profitability and returns in their city gas distribution businesses. Their profitability has gone up over the past few quarters as they have been able to retain the benefits of the decline in price of domestic gas.” On the other hand, explorers such as ONGC have low profitability and returns in their gas production businesses. The report notes that it is indeed “quite strange” that the net realisation (after royalty) on gas for upstream companies is lower than the gross contribution margin earned by IGL and MGL. According to the report, the realisation per unit for IGL in fiscal 2015-2016 stood at ?25.2/scm (standard cubic metres); correspondingly, ONGC’s realisation was at ?10.6/scm. The report also notes that India needs to encourage more competition in the CGD business. Need for competition It notes that the Petroleum and Natural Gas Regulatory Board (PNGRB) had issued draft guidelines in February 2016 to facilitate more competition. The Kotak report also bats for further liberalising the upstream gas-pricing policy. It argues that it will be logical to link the domestic price of gas with the landed cost of gas (LNG imports), as is the case with just about any other global commodity. Anthony Chickillo Womens Jersey
ONGC said to see spending plans curtailed by potential merger
India’s plan to push its top oil producer to fund a takeover of a state refining company may threaten some near-term investments. These include a plan to revive a long-delayed development project aimed at cutting the nation’s energy imports, according to company officials with knowledge of its finances. Oil & Natural Gas Corp.’s capital expenditure plans, including a $4.5 billion investment in its oil and gas blocks during the year starting in April 1, would be imperiled by the government’s proposal, said the officials, who asked not to be named because the information isn’t public. The administration of Prime Minister Narendra Modi is seeking to push ONGC to purchase the government’s stake in either Hindustan Petroleum, worth $4 billion, or Bharat Petroleum, at $7.7 billion, people with knowledge of the plan said. India is planning to create a state-owned oil giant that could compare with international companies and withstand volatility in oil prices. ONGC hasn’t been approached by the government yet, the company officials said. “For ONGC it will be difficult since exploration and production companies require a lot of cash,” according to Vaibhav Chowdhry, a senior analyst at K.R. Choksey Shares & Securities. “If they buy the full stake in HPCL their cash levels will go down. So funding future exploration will be very difficult.” ONGC has surplus cash of about $1.5 billion USD, according to the officials. Spokesmen for ONGC, HPCL, BPCL and the oil ministry declined to comment Thursday. “HPCL is relatively small and we do not expect that the merger will involve ONGC paying for the government stake in cash,” according to Vikas Halan, vice president for corporate finance group at Moody’s Investors Service. Crucial Plan ONGC, which dominates India’s upstream production, intends to spend 11 trillion rupees by 2030 to raise output. That spending plan is crucial for achieving Modi’s goal of cutting imports by 10% over the next five years. India imports about 80% of its crude oil. ONGC, which was India’s most profitable company in the year ended March 2015, has seen its earnings erode along with the slump in crude oil prices and is headed for its lowest profit in nine years. That hasn’t stopped ONGC from investing in projects. The company will spend $1.2 billion to acquire Gujarat State Petroleum’s stake in a block on India’s east coast. Last year it embarked on a $5 billion development plan, its biggest investment in a single project, in the Krishna-Godavari Basin off India’s east coast. A significant portion of next fiscal year’s capital-expenditure was earmarked for the project. ONGC expects to start gas output from the block in the Bay of Bengal by mid-2019, Chairman Dinesh Kumar Sarraf said in June. It had initially planned to start producing gas from the area in 2013. “It’ll be a daunting task going ahead for ONGC,” according to Dhaval Joshi, an analyst at Emkay Global Financial Services Ltd. “They may have to rely on debt for future investments and curtail dividend payouts. That will be negative.” Andrew Shaw Authentic Jersey