More green energy shrinks transmission projects’ timeline
In less than a year, the country’s renewable energy capacity has grown 29 per cent, to 50 gigawatt (Gw). Expansion here and the focus on developing wind and solar power is also shrinking the time frame to set up related transmission networks. At present, thermal power contributes 69 per cent to India’s total installed capacity. As the country planned capacity additions in the thermal and hydropower segment, it also allowed transmission companies a longer time frame. This is now changing. “The construction of new lines (for hydro and thermal) might take three to five years, while construction of a new solar photovoltaic (PV) power plant might only take a year or a little more,” said Vivek Sharma, director at CRISIL Infrastructure Advisory. Transmission companies are seeing this translate in the orders being placed by clients. “Almost all our clients are working towards reducing the project timelines,” said Manish Mohnot, managing director, Kalpataru Power Transmission. This has led companies to focus further on technology upgradation and personnel. “Cutting-edge technology and talent are two key elements to overcome the challenges of energy delivery. We are heavily investing in technology to plan and execute transmission projects successfully,” said Pratik Agarwal, chief executive officer, Sterlite Power. In the past one year, India’s renewable energy capacity increased to 50,018 megawatt (Mw) from 38,821.5 Mw. In February, the country doubled its solar park power capacity target to 40 Gw by 2020, from 20 Gw. The 2020 target for wind power is set at 60 Gw. “It is logical, with a centrally planned approach, to commence grid construction some time before the PV power plant. Recent initiatives have endeavoured to add to this approach with more proactive, long-term planning, such as the Green Corridors Report which has identified key renewable pockets. Accordingly, PowerGrid had started the exercise for developing associated transmission infrastructure well in advance to the actual development of solar projects,” said Sharma from CRISIL. Officials from PowerGrid are confident that transmission lines would be ready in time for evacuation of power, as the renewable energy capacity goes onstream. “This is being achieved through two ways. One is the Green Corridor programme, which has planned for transmission lines in advance. Second, by executing projects in a modular system, taking the transmission project phase by phase with the generation project,” said I S Jha, chairman of PowerGrid. However, transmission companies could face challenges beyond their control. “The total time from planning to commission of a transmission project is largely dependent on various external factors such as land acquisition, access to infrastructure needs, financing availability etc. Unless these external challenges are mitigated, the time available to set up transmission lines is unlikely to shrink,” said Sharma. Mukund Sapre, managing director, IL&FS Engineering and Construction, added: “Towards the end of 2015, the ministry of power issued guidelines for uniform compensation (for land acquired). This is still to be adopted at all projects.” Lost in Transmission: * At present, thermal power contributes 69 per cent to India’s total installed capacity * In the past one year, India’s renewable energy capacity increased to 50,018 Mw from 38,821.5 Mw * In February, the country doubled its solar park power capacity target to 40 Gw by 2020, from 20 Gw. The 2020 target for wind power is set at 60 Gw Alex Tuch Jersey
Analysis: India eyes Myanmar’s oil, gas in pursuit of expanding beyond borders
Myanmar’s dramatic growth in consumption of refined oil products and the inability of its aging refineries to meet that incremental demand have whetted the appetite of Indian oil companies to play a bigger role in the Southeast Asian nation’s oil and gas sector — from upstream to retail. Myanmar, one of the oldest oil and gas industries in the region and a country which exported its first crude oil centuries ago, is again emerging as a bright spot for overseas investors after sanctions, which were imposed on the country during a long period of military rule and political unrest, were lifted in 2012. To deepen ties, India’s oil minister Dharmendra Pradhan led a delegation to Myanmar late February looking for opportunities to supply refined oil products to the country, as well as highlight the interest of Indian upstream companies to take part in the forthcoming bid round in Myanmar’s oil and gas blocks. “They invited India to invest in all stream in oil and gas,” Pradhan said in a message following the visit. Myanmar’s demand for oil products has been steadily rising. But its production of oil and gas is expected to be more or less stagnant. While there have been some upgrades at the refineries in recent years through foreign assistance, including help from India, in the short term rising oil products demand is most likely to be met through higher imports. “The prospect of deepening Myanmar-India ties are very interesting and could potentially be quite wide,” said Michal Meidan, Asia Energy Policy Analyst at Energy Aspects. “Indian refiners are increasingly looking to sell products to Myanmar in order to tap a growing market. This makes sense both on the geopolitical level where India is increasingly seeking regional influence — and Myanmar will be pleased to hedge against China — and in terms of Indian refiners’ corporate needs to deepen their presence in new markets,” she added. AGING REFINERIES Following the lifting of the sanctions, Myanmar, which lacks advanced road infrastructure, is witnessing a dramatic surge in vehicle imports, triggering massive traffic jams — similar to the ones seen in Jakarta or Bangkok. Myanmar’s three aging state-owned refineries with a total capacity of around 50,000 b/d, are all running substantially below capacity and are only able to supply a part of the country’s daily fuel requirements. According to sources, state-owned Myanma Petrochemical Enterprise, which runs the refineries, has operating rates of around 20,000 b/d. Among other things, the Indian delegation’s agenda during the recent visit to Myanmar included exploring markets for Indian downstream companies for supplying petroleum products, LPG, wax and petrochemicals. B. Ashok, chairman of state-run Indian Oil Corp. has said that the company was exploring options of fuel retailing in Myanmar. In addition, the Numaligarh refinery of India’s state-run Bharat Petroleum Corp. Ltd. is also looking out for opportunities to supply gasoil into Myanmar. Myanmar imported about 75,000 mt of gasoline per month in 2015, with the main suppliers being Singapore, Thailand and China, according to sources. Domestic demand and import data on Myanmar are sketchy and are still not available for 2016. Myanmar’s crude and liquids output was estimated to be around 12,600 b/d in 2016, and production is expected to remain more or less flat over the next five years, according to BMI Research, a Fitch Group company. Refined products production was estimated to be around 7,000 b/d in 2016, and is expected to grow to nearly 9,000 b/d by 2021. “The downstream sector is in dire need of further investment, and we expect the government to pursue positive reforms to attract greater foreign direct investment,” BMI Research said. “The country offers some of the strongest consumption growth potential in the region for both refined fuels and natural gas, on the back of positive economic performance and rapid growth in several energy intensive sectors, such as power, transportation, manufacturing and agriculture,” it added. Nomura has said in an earlier report that it expects Myanmar’s oil products demand to reach 200,000 b/d by 2025 and could cross 350,000 b/d by 2035. GAS OUTLOOK Wood Mackenzie recently said that Myanmar, which holds some of the last remaining frontier acreage in an otherwise mature region and accounts for the bulk of frontier exploration drilling, would be the brightest spot in Asia-Pacific in 2017. During the visit to Myanmar, Pradhan met U Pe Zin Tun, Myanmar’s energy minister, and noted Indian upstream companies’ interest to take part in the forthcoming bid round in Myanmar’s oil and gas blocks. Indian state-owned companies, such as ONGC Videsh and GAIL, have invested in offshore gas producing blocks A1 and A3 in Myanmar. These blocks produce about 16 million cu m/d, with 80% of the output exported to China via a pipeline network in which the two Indian companies are partners in a consortium. “Indian companies are already engaged in upstream gas developments in Myanmar and may now look to tap those resources to supply India,” Meidan of Energy Aspects said. BMI Research said that despite a healthy pipeline of exploration plays, exploration and production activity in Myanmar would remain muted in the short term as volatile oil prices, limited seismic data and a significant deficiency of oil and gas-related infrastructure drive up project costs. Firms would also shift attention to focus on lower-cost, shorter-cycle projects, hitting prospects for frontier areas such as Myanmar. Myanmar exports about 80% of its gas production as per some contracts signed by the previous government with overseas buyers, BMI Research said. Its domestic gas production was estimated at around 18.8 Bcm in 2016, which could fall to around 17.3 Bcm by 2021. But gas consumption is expected to rise from 4.4 Bcm in 2016 to 6.1 Bcm by 2021. “The country’s net gas exports will remain on a structural downtrend, as the need to set aside gas for exports, in light of rising demand, increases the risk of a gas shortfall in Myanmar. This will require the country to resort to LNG imports to meet export
Govt may save over Rs.50 billion in LPG subsidy
The government could save between Rs. 50 billion and Rs. 60 billion in 2016-17 from direct benefit transfer of LPG subsidy savings from LPG subsidy had become a bone of contention last fiscal between the Oil Ministry and the Comptroller & Auditor General of India (CAG) with the latter questioning the process of calculation. Official data show that in the April-December period this fiscal the savings have been Rs. 48.24 billion. Meanwhile, the market price (non-subsidised) of LPG has been constantly increasing since November last year. It has increased by over Rs. 200 from November to March. With effect from March 1, 2017, a consumer in Delhi will have to pay Rs. 737 for a new refill. But, this increase does not impact the subsidised LPG, as the differential between the market price and the government determined subsidised rate is directly transferred to the beneficiaries’ accounts. The prevailing subsidised rate is Rs. 434 a cylinder in Delhi. Indications are that the Ministry is taking an average subsidy between Rs. 100-Rs. 150 for the fiscal. Ozzie Smith Authentic Jersey
India moving to the centre stage of global energy market: IEA
India is moving to the centre stage of global energy market and by the early 2020s it will replace Russia as the world’s third largest refiner, a top official of the International Energy Agency said. “That India is moving to the centre stage of global oil and energy markets. It is not only oil. It is coal. It is solar. It is out of the strong growth in the economy and the population growth,” Dr Fatih Birol, Executive Director of IEA yesterday told reporters at a news conference on the sidelines of the international oil and gas meet CERAWeek here. Being attended by top world leaders including those from the corporate sector and oil ministers of countries like Saudi Arabia, Russia, the United Arab Emirates and Canada, the Indian delegation is led by the Union Petroleum Minister Dharmendra Pradhan. Birol, who met Pradhan on the sidelines of the CERAWeek which kicked off yesterday, told reporters that the leadership of Prime Minister Narendra Modi has provided a strong impetus to Indian economy, particularly in terms of boosting oil and gas production. Praising the plans of the Union government for development of hydrocarbon assets in the country, Birol said there is tremendous growth potential in the country and in the coming years it will be the centre stage of global energy. Indian oil and energy sector will continue to grow, he asserted. In its annual report released during the conference, IEA said on the demand side, there is less uncertainty: growth will continue, driven mainly by Asia. “India overtakes China as the main driver of demand growth, as was foreseen by the IEA some time ago,” Birol said. India, according to the report, is gradually becoming the focus of attention as Chinese demand growth slows. Noting that Indian per capita oil consumption is just 1.2 barrels per year today, the report said the number is expected to reach 1.5 barrels per year by 2022. This compares to China’s three barrels per capita per year today, a figure expected to be 2. 5 by 2022. Although, a direct comparison between India and China does not take into account societal and economic differences, the overall point is valid; there is clearly still plenty of growth to come from India, the report said. Indian refineries have some of the highest utilisation rates in the world, churning out products for both domestic and export markets. In the next five years, capacity additions totalling 860 thousand barrels per day (kb/d) will be made, but as a sign of the relative maturity of its downstream industry, all of these are expansion projects at existing refineries, it noted. Even so, the additions will lag behind refined product demand growth as export volumes will be halved. “By the early 2020s India will replace Russia as the world’s third largest refiner. This could explain the interest of Russian companies in the Indian downstream as Rosneft finalised the purchase of Essar Oil, India’s second-largest private refiner. “Indian Oil Company floated its 1.2 mb/d mega-refinery project in Maharashtra, but we do not assume it will be constructed and launched before 2022,” it said. Mel Blount Womens Jersey
Solar energy helps boost power generation to 10GW
Green power is driving the growth in India’s electricity generation as total installed solar capacity , including rooftop and off-grid projects, has crossed 10 gigawatts (gW), latest government and market data show. Generation from conventional sources showed an annual growth rate of over 5 per cent in the 11-month period of 2016-2017 financial year, while output from renewable power projects rose more than 26 per cent during this period. Together, the total growth in generation is in excess of 6 per cent from a year-ago period, government data show. Power ministry officials say the net growth figure will be higher as generation data from renewable power projects come with a time lag, and therefore, does not reflect in the Central Electricity Authority’s latest report The officials said the total generation this February showed marginal decline than the year-ago period due to the effect of 2016 being a leap year. A day’s extra generation in February 2016 affected the February 2017 figure by 3.57 per cent. Had February 2017 also had one extra day, the increase in electricity generation from conventional sources would have been 3.52 per cent, the officials said. Market watchers see renewables continuing to carve a bigger space in the country’s generation sphere on the back of the Narendra Modi government’s funding push. After coming to power in 2014, the government revised the target for renewables from 20 gW to 175 gW, including 100 gW of grid-connected solar projects, by 2022. Last month, the government announced an ambitious scheme to double solar power generation capacity under the solar parks scheme to 40,000 mega watts (mW) by 2020, with Rs 8,100 crore assistance to fund 30 per cent of the initial project cost of developers. India is expected to add new solar capacity of 5.1 gW this year, which is a growth of 137 per cent over last year, a recent report by Bridge To India, a green energy-focused consultant, said. It expected an annual capacity addition of about 8-10 gW in 2017. “India is expected to become the world’s third biggest solar market from next year onwards after China and the US,” it said. Tamil Nadu has the highest installed solar energy capacity , followed by Rajasthan, Andhra Pradesh, Guj arat, Telangana, Madhya Pradesh and Punjab. These seven states collectively accounted for more than 80 per cent of total installed capacity as of mid-November. Marko Dano Authentic Jersey
GSPC scraps plans for stake sale in 20 onshore E&P blocks
Gujarat State Petroleum Corp. Ltd (GSPC) has scrapped a plan to sell a stake in 20 of its onshore exploration and production (E&P) blocks, two officials aware of the development said. The firm had decided to sell stakes in these blocks last year because of financial difficulties. The Gujarat state-owned GSPC had hired consulting firm EY to prepare a report on the blocks for the stake sale. “GSPC has scrapped the process of selling stakes in the 20 onshore blocks. With our key asset, the Deen Dayal Block in the KG-basin, going to ONGC (Oil and Natural Gas Corp. Ltd), we need to keep some blocks to maintain our upstream status,” said the first GSPC executive aware of the development. He spoke on the condition of anonymity. He added GSPC is performing better than expected and is confident of meeting its funding plan with regard to these blocks. GSPC did not reply to an email seeking comment sent on 3 March. GSPC is the flagship company of the GSPC Group, primarily engaged in E&P of oil and gas. The government of Gujarat owns 87% of the company’s equity capital. EY was hired by GSPC last year to re-evaluate the prospects of the onshore exploration and production blocks held by the firm. GSPC holds a participating interest in 24 blocks of which 20 are onshore and four are offshore. Seventeen onshore blocks are producing properties. Of the 24 blocks held, GSPC is an operator in six blocks and a non-operating partner in 18. “With the earlier stake sale plan, GSPC wanted to evaluate if it can induct a strategic or technical partner by selling a part of the stake held by it and use the proceeds to meet financial obligations,” said the second official aware of the development. He spoke on the condition of anonymity. State-run ONGC agreed to pay $1.2 billion to GSPC for the purchase of its 80% stake in Deen Dayal block located in Krishna Godavari (KG) basin offshore. “The deadline for the deal to close is 31 March, but it is conditional to GSPC getting a no-objection certificate from the bank for the debt GSPC has,” said the first official cited above. GSPC had invested $3.5 billion (approximately Rs 200 billion) in its Deen Dayal block, which saddled the company with debt. The sales proceeds from the block will be used to cut debt, the first official cited above added. Gordie Howe Authentic Jersey
India’s oil boom: Growing into role as No. 1 in global demand
India is moving into position to be the biggest driver of global oil demand growth, and it is seeking new investment in its own energy industry. India’s energy minister announced a new round of bidding for upstream and downstream investments on Monday. “We want to increase our production. We want to invite investment,” said Dharmendra Pradhan, the country’s minister of petroleum and natural gas, speaking at the annual CERAWeek conference in Houston. “I must tell you there was never a better time to be in India. I encourage both existing and new players to come forward and avail the opportunity,” he said in prepared remarks. Just before the minister addressed media, Fatih Birol, International Energy Agency executive director, told reporters that India and China would be responsible for about half of oil demand growth. He said India has just become first in oil demand growth, but not yet natural gas. “India is the third-largest oil consumer in the world, which is a clear indication of the importance of petroleum products in our daily lives,” Pradhan said. “Also, according to the International Energy Agency, we are likely to contribute the most to the rise in global energy demand over the coming decades.” Pradhan said India’s focus will be on four pillars, based on Prime Minister Narendra Modi’s goals: • Providing affordable energy to consumers by developing oil infrastructure and expanding the natural gas grid network. • Achieving energy sufficiency by increasing capital investment in rails and waterways. • Achieving energy sustainability with increased production of renewable energy and cleaner fuels. • Achieving energy security through increased upstream production and overseas acquisitions. Pradhan said the government is also contemplating a policy for enhancing production of mature fields currently being operated by national oil companies. It hopes to encourage partners to bring in state-of-the-art exploration and production technologies. The latest bidding round is being unveiled with much fanfare at CERAWeek as part of India’s new Hydrocarbon Exploration Licensing Policy. India is hosting a major dinner where a number of officials will speak. The new program follows on the bidding of the Discovered Small Fields, which Pradhan had brought to Houston in a roadshow last July. He said that went well with 31 of 46 contract areas being allocated even with low oil prices. “We are looking at investments in technology given that we are present here in Houston, a city known for its capital intensive and technical know-how,” he said in prepared remarks. Bartolo Colon Jersey