To cut tariff, government wants to link coal bids to lower charges in PPAs
In a move aimed at lowering consumer electricity tariffs, the government has proposed to bid coal from state-run Coal India to those power generators that agree to cut the supply charges quoted in their power purchase agreements (PPAs). PPAs are legal documents signed between power producers and power distribution companies. “The power ministry is consulting electricity regulators whether the proposal to open PPAs is within the purview of the Electricity Act,” a senior government official said. About 10,000 MW of power plants have signed PPAs but do not have coal supplies. Earlier, the government was considering to auction coal to power companies that agree to pay the highest. “The new proposal is in tune with the government’s aim to pass on benefits to consumers and lower electricity tariffs,” another government official said. The policy also proposes that all future coal tie-ups by CIL will be allotted to state distribution companies that in turn will call tariff-based competitive bids from companies on the lines of ultra mega power projects. In July last year, the Cabinet Committee on Economic Affairs had deferred decision on the policy for award of CIL contracts to power firms. The government has already finalised a policy for auction of Coal India contracts to unregulated sectors like steel and cement. According to the policy, private steel and cement firms will have to indicate their coal requirement and end-use projects to the coal ministry before bidding for supply from Coal India. As per the mechanism, approved by the Cabinet Committee on Economic Affairs in February last year, separate bidding will be held for cement, iron & steel, aluminium and fertiliser plants. Coal India will invite bids from companies for supplying a fixed quantity of coal at a floor price. Once the bids are received, the state-run miner will increase the floor price till the demand and supply reach the same level. However, the current fuel supply contracts of steel and cement companies with Coal India will not be prematurely discontinued. The government will wait for the contracts to end and then auction them. Most fuel supply contracts of Coal India are set to lapse this year. DeAndre Hopkins Womens Jersey
Qatar restarts development of world’s biggest gas field
Qatar has lifted a self-imposed moratorium on development of the world’s biggest natural gas field, the chief executive of Qatar Petroleum said on Monday, as the world’s top LNG exporter looks to see off an expected rise in competition. Qatar declared a moratorium in 2005 on the development of the North Field, which it shares with Iran, to give Doha time to study the impact on the reservoir from a rapid rise in output. The vast offshore gas field, which Doha calls the North Field and Iran calls South Pars, accounts for nearly all of Qatar’s gas production and around 60 percent of its export revenue. “We have completed most of our projects and now is a good time to lift the moratorium,” QP Chief Executive Saad al-Kaabi told reporters in Doha. The new development will increase production of the North Field by about 10 percent, adding about 400,000 barrels per day of oil equivalent to Qatar’s output, he said. LNG GLUT Qatar is expected to lose its top exporter position this year to Australia, where new production is due to come on line. The LNG market is undergoing huge changes as the biggest ever flood of new supply is hitting the market, with volumes coming mainly from the United States and Australia. President Vladimir Putin said on Thursday Russia aimed to become the world’s largest LNG producer. The flurry of LNG production has resulted in global installed LNG capacity of over 300 million tonnes a year, while only around 268 million tonnes of LNG were traded in 2016, Thomson Reuters data shows. That has helped pull down Asian spot LNG prices by more than 70 percent from their 2014 peaks to $5.65 per million British thermal units (mmBtu). Qatar’s decision to lift the moratorium on new gas development now could help the Gulf monarchy maintain a competitive edge after 2020, when the global LNG market is expected to tighten. “With global activity levels and costs low, now is a good time to add new capacity, even if the LNG market does presently look over supplied,” said Giles Farrer, research director of Global LNG at Wood Mackenzie. “It’s a signal that Qatar intends to increase its market share, which has been falling as other regions have built new capacity.” An energy advisor to the Qatar government said he saw it as a preemptive step to warn competitors who are considering LNG investments that Qatar would remain an aggressive seller. “It will certainly give rivals something to chew on. It’s like when Saudi develops future oil capacity even when there is a glut – it shows you mean business,” he said, declining to be named as he was not authorised to speak publicly. The announcement coincides with the start of a major LNG industry conference this week in Japan, attended by many of its competitors and potential new customers. Kaabi said low prices would not pressure Qatar. “By the time this project comes online in five years or so it should be a good market for gas,” he said. “We don’t see that the pricing pressure has affected us as much as some.” IRAN NO ENEMY Iran, which suffers severe domestic gas shortages, has made a rapid increase in production from South Pars a top priority and signed a preliminary deal with France’s Total in November to develop its South Pars II project. Total was the first Western energy company to sign a major deal with Tehran since the lifting of international sanctions. Kaabi said the decision to lift the moratorium was not prompted by Iran’s plan to develop its part of the shared field. “What we are doing today is something completely new and we will in future of course … share all this with them (Iran).” The economy of Qatar, a future World Cup host with a population of 2.6 million, has been pressured by the global oil slump and in 2015 QP dismissed thousands of workers and has earmarked a number of assets for divestment. QP is merging two LNG divisions, Qatargas and RasGas, to save hundreds of millions of dollars. In February, Kaabi said Qatar would focus on seeking international opportunities by exploring for oil and gas in Cyprus and Morocco. But the current low LNG price environment may deter investment in new supply projects, bringing tighter supplies and price spikes in the future. New production from Qatar’s North field is seen starting within 5-7 years, targeting gas exports of 2 billion standard cubic feet per day, Kaabi said. Adrian Peterson Jersey
Petronas plans to invest $150 million in India’s lubricant market
Malaysian oil major Petronas plans to invest $150 million, or aboutRs.975 crore, to expand its presence in the country’s lubricant market. Petronas Lubricants International (PLI), manufacturing and marketing arm of the Malaysian national oil corporation, will spend the money to set up a plant with 110 million litres capacity in Patalganga, on the outskirts of Mumbai, and a technology centre for motorcycle engine oil, and invest in branding activity in the country, company officials said. Currently, the 10th largest lubricant brand in the world, India can be a key engine for growth in future for Petronas, said Giuseppe D’Arrigo, group CEO at Petronas Lubricant International. “India can be the engine of global lubricant market growth in future,” he told ET in an interview. Petronas is open to inorganic opportunities arising in the future, as it aims to become a top five player in the world in five years. “We have been amongst the fastest growing brand globally. Even in India we hope to do better than competition,” said D’Arrigo. He said immediate focus is on operationalising the new factory, which is expected to go on stream in the first quarter of 2018, and getting the brand’s ‘route to market’ right. The company may adopt an FMCG-style marketing strategy as it did in China. D’Arrigo said the new plant in India should attain full capacity in three to four years. He said the company would focus on value selling. “India is market for price, but more and more sophistication is taking place, people will look for value in the future and that is where Petronas will play. Better products and better value to customers,” he said. Petronas Lubricant currently sell about 30 million litres a year in the country, accounting for just 3% of its global volumes of about 1 billion litres. D’Arrigo said the firm is eyeing volumes of 1.5-1.7 billion litres globally by 2020-2021 and that by then share from India would cross 5%. Bud Norris Womens Jersey