Mitsui expects investment decision on Mozambique LNG project in 2018-19
Japanese trading house Mitsui & Co Ltd expects a final investment decision (FID) on a U.S. Anadarko-led offshore liquefied natural gas project in Mozambique in the year to March 31, 2019, its chief executive said on Wednesday. “The FID on the Mozambique Area 1 project during this financial year is in our sights,” Mitsui’s CEO Tatsuo Yasunaga told an analyst meeting. Spending on the 2 trillion yen ($18.3 billion) project will start in the following financial year, he said. The two-train, 12 million-tonnes-per-year project is expected to be completed in 2022-2023, and has secured more than 9 million tonnes a year in total binding and non-binding commitments from buyers, Yasunaga said. Asked whether Mitsui will increase its 10 percent stake in the project if Japan Oil, Gas and Metals National Corporation (JOGMEC) sells its 10 percent stake, Yasunaga said many parties are interested in taking a share in the project. “If JOGMEC decides to sell its stake, we have a basic interest (in buying), but we don’t have a plan to hold a 20 percent stake for a long time,” he said. “Companies that are interested in joining the project are lining up,” he said, adding that Mitsui’s basic policy is to hold a 10 percent stake in the project. Marcel Dionne Authentic Jersey
Petrol, diesel prices remain frozen for 17 straight days, Iran sanctions may intensify worries
Petrol and Diesel prices across the country, which have remained frozen for the past 16 straight days, remained unchanged on Wednesday too. The country’s largest fuel retailer Indian Oil Corp (IOC) had on Tuesday said the rise in global fuel prices is not supported by market fundamentals and, hence, passing on the increase to consumers will only lead to panic. Crude oil prices have surged since April on the back of tightening crude oil market due to Organization of Petroleum Exporting Countries (OPEC) oil production cuts, drop in Venezuela crude output and geo-political tensions in the Middle-East. Oil prices pushed higher on Wednesday after US President Donald Trump walked away from an international nuclear deal with Iran, igniting worries of Iran’s oil exports in an already tightened market. Benchmark Brent crude opened at $76.21 per barrel on Wednesday and US West Texas Intermediate (WTI) opened at $70.24 per barrel, prices last seen in 2014. Iran is the third-largest exporter of crude among OPEC nations and the third-largest supplier to India. For India, the re-introduction of Iran economic sanctions can further disrupt the country’s crude oil import bill and domestic fuel prices. This comes at a time the government-owned refiners have plans to double oil imports from Iran in 2018-2019, drawn by incentives offered by Tehran, news agency reuters had said in a report in April. IOC, Mangalore Refinery and Petrochemicals Ltd (MRPL), Bharat Petroleum (BPCL) and Hindustan Petroleum (HPCL) plan to import 396,000 barrels per day (bpd) of Iranian oil in the current fiscal ending March 2019. All the four refiners imported about 205,600 bpd Iranian oil in the previous fiscal year. Defending the freeze in petrol and diesel prices, IOC Chairman Sanjiv Singh yesterday said at an industry event the rise in international fuel prices are not supported by market fundamentals and the increase will be passed on to the consumers in due time. He did not share the details of the increase or the time frame. Asked whether the government, ahead of the Karnataka elections on May 12, has instructed the Oil Marketing Companies (OMCs) to keep the prices on hold, Singh said, “No instruction has been given to us. It is a company decision.” He also added that the freeze in fuel prices by all the three OMCs was not synchronized nor was it an attempt at cartelization. He explained that OMCs do have discretionary powers when it comes to pricing of fuels. “The change in market fundamentals has been unprecedented, that is why we initiated a freeze. We expect prices to come down in the future and if a situation like this arises again we may put a freeze again, “Singh said. Petrol and Diesel prices at retail pumps operated by IOC, Hindustan Petroleum (HPCL) and Bharat Petroleum (BPCL) across the country have remained unchanged since 24 April even as the benchmark international fuel prices have increased on the back of surge in crude oil prices. Prices of petrol and diesel in India are worked out based on the average of the trailing 15 days of benchmark Arab-Gulf fuel prices which move in tandem with global crude oil rates. An analysis of the historical fuel price changes by IOC shows the company had put a freeze on petrol and diesel prices between 16 January, 2017 and 1 April 2017, too, when the company followed fortnightly revision of fuel prices. Five states including Punjab, Goa, Uttarakhand, Uttar Pradesh and Manipur had elections during the January-April 2017 period. Petrol prices in the national capital on Wednesday remained static at Rs 74.63 per litre – a high last seen in September 2013 and diesel prices stood at Rs 65.93, the highest the country has recorded so far. Finance Secretary Hasmukh Adhia and Economic Affairs Secretary Subhash Garghave have in the past weeks ruled out any immediate reduction in excise duty to ease the burden on consumers. The government has since 2014 increased excise duty on petrol and diesel 10 times taking away the gains arising from falling crude prices. The centre had cut excise duty on petrol and diesel by Rs 2 per litre in October last year for the first time in four years. Sampo Ranta Authentic Jersey
Half of India will have access to piped natural gas for cooking: Pradhan
Half of India will have access to piped natural gas for cooking and driving after the conclusion of the 9th round of city gas licensing in which bids are being sought for 86 geographical areas covering 174 districts, Oil Minister Dharmendra Pradhan has said. With an aim to turn India into a gas-based economy, the government is seeking to raise the share of natural gas in the country’s primary energy mix from the current 6.5% to 15% by 2030. For this, it has put in place policies to encourage domestic gas production, and is helping ramp up gas import, transport and consumption infrastructure. The current city gas licensing round is the biggest ever in the country covering 20 states and two union territories. “Bid process has been rationalized and investor-friendly parameters evolved to attract serious bidders, encourage competition and unreasonable parameters like amount of Bank Guarantee determining the winner have been removed,” Pradhan said at an investor roadshow for the city gas licensing round. He said city gas regulations needs to be liberal and assured potential investors that Petroleum and Natural Gas regulatory Board (PNGRB), the downstream regulator, will act more as a facilitator than a regulator to ensure easier roll-out of city gas across the country. “Since May 2014, when our Government took over, we have doubled the coverage of city gas distribution networks to 94 geographical areas spread across 130 districts,” Pradhan said. Increased adoption of less-polluting natural gas will help cut carbon emission, he said, adding that rising pollution was a big challenge facing the society. State governments, whose support is critical in setting up city gas infrastructure, have also lately shown excitement about city gas expansion, Pradhan said. Keke Coutee Womens Jersey
India: Much optimism on gas demand; consumption to zoom in the near term
One more terminal for import of liquefied natural gas (LNG) was inaugurated last week. At first glance, one wonders why. For, the country’s demand is currently far behind the capacity to supply. Pipeline utilisation of state-run GAIL India is a mere 40-45 per cent; it is having a problem finding further markets for imported LNG. “A majority of gas-based power plants have got stranded. Between 50 to 60 per cent of the LNG we have contracted from the United States will be sold outside or swapped due to demand shortage,” said a GAIL official, asking for anonymity. Of the 25,329 Mw total of gas-based power plants’ capacity in the country, at least 14,000 Mw is reportedly stranded. Despite this, at least 10 more LNG projects are to come up, with four already operational. Taking the total capacity of terminals to around 72.5 million tons per annum (mtpa). According to a report by the Petroleum Planning and Analysis Cell of the government, against a projected consumption of natural gas of 494 million standard cubic metres a day (mscmd) for 2017-18, the consumption was 144.75 mscmd. Even so, import of LNG rose 6.6 per cent over the previous year. India is now the world’s fourth largest LNG importer. Demand optimism A four-mt Floating Storage Re-gasification Unit-based LNG terminal by H-Energy Gateway (energy venture of the Hiranandani Group) was launched last week at the JSW Jaigarh Port in Ratnagiri district of Maharashtra. The terminal is likely to be operational by the fourth quarter of 2018. “We have 100 districts in India where city gas licenses have been awarded. This June, of the 670 districts in India, another 100 will be awarded. So, demand will double. Total (annual) consumption of gas is now 40 mt and we think it will move to at least 80 mt in the next five to six years. Half of it comes from domestic sources. So, 22 mt we import and 20 mt we produce domestically,” said Darshan Hiranandani, managing director of H-Energy. He adds that all mega terminals might not but all small-scale terminals would do good business. A rise in demand is expected from power, city gas, fertiliser and industrial consumers. According to Petronet LNG, the country’s demand is set to increase by 82 per cent to 654 mscmd by 2026-27. Demand from city gas is set to zoom from 22 mscmd in 2016-17 to 68 mscmd by 2026-27. And, power sector from 157 mscmd to 309 mscmd during the period. “We expect a rise in demand post 2020 and are already in talks with refineries, power plants and petrochemical units near our planned and existing pipelines,” the GAIL official added. India is set to bring its first LNG cargo from Gazprom in May, after the Russian company and GAIL agreed to bring down prices, based on a new formula agreed this January. The company also plans to bring at least 80 cargoes of LNG from America in this financial year. GAIL has already signed a $32-billion supply deal for 20 years with the Dominion Energy Cove Point project in Maryland and Cheniere Energy’s Sabine Pass project in Louisiana. Dion Dawkins Authentic Jersey
Contracts offer glimpse of progress on Jafrabad FSRU project
Multiple contracts announced this week provide a progress report of sorts on the first floating storage regasification unit (FSRU) being built explicitly for use in Indian territorial waters. News of supplier and classification contracts for Swan LNG’s Jafrabad FSRU project coincided with the arrival of another FSRU in India – GDF Suez Cape Ann – which will shortly commence operations as India’s first floating LNG receiving facility. Hyundai Heavy Industries (HHI) is currently building the as-yet-unnamed Jafrabad FSRU at its shipyard in South Korea. The 180,000m3 FSRU is set for delivery in December 2019 and expected to begin operating early in 2020 in India’s Gujarat province. The 5 mtpa project’s cost is estimated at more than US$600M. The Indian gas market is expected to be one of the fastest growing in the world over the next two decades with natural gas projected to make up 20% of India’s total energy consumption by 2030. Lloyd’s Register to class Jafrabad FSRU Lloyd’s Register recently signed a contract to class the Jafrabad FSRU, which will be built to LR’s Rules for the Classification of Offshore Units. TMC to equip Swan Energy FSRU TMC Compressors of the Seas has signed two contracts to supply five marine compressors to the Swan LNG FSRU. TMC agreed the contract directly with HHI to provide three service and control air compressors to the South Korean shipyard. The compressors will be delivered in Q3 2018. In addition, TMC has signed a subcontractor deal with another supplier to provide two feed air compressors to a nitrogen system delivery on the FSRU. That compressor delivery will be made in July 2018. TMC’s contract values are undisclosed. Once completed, the FSRU will be moored to a fixed jetty and will regasify imported LNG to enable distribution by pipeline grid and road tanker. Greg Holland Jersey
GAIL sells 90 pct of 2018/19 U.S. LNG volumes through swaps
India’s Gail Ltd’s executive says the company has sold 90 percent of U.S. liquefied natural gas (LNG) volumes through time and destination swap deals for 2018/19. Executive says 65 percent of U.S. LNG volumes for 2019/20 have been sold through destination swap and FOB sales deals. Executive says company has sold 45 percent of U.S. LNG volumes through destination swap and FOB sales deals for 2020/21. GAIL has a contract to buy 90-92 U.S. LNG cargoes annually. GAIL has contracted 5.8 million tons a year of LNG under two long-term contracts. Brandon Crawford Jersey
Government scraps plan to privatise oilfields
The government has shelved the plan to privatize several key aging fields of ONGC and Oil India following strong opposition from the state-run companies and consultations between the oil ministry and the Prime Minister’s Office. The two companies will now draw up their own proposals to boost output from the fields. The oil ministry drew up a detailed plan last year to sell up to 60% participating interest in 11 ageing fields of ONGC and four of Oil India to private companies under the so-called Production Enhancement Contract (PEC) aimed at raising output. The plan also included another 44 older fields of ONGC and Oil India that could take on private technological partners under a process managed by the government. ET was the first to report on May 31 last year that the government planned to privatize some of the ONGC and Oil India fields. Soon after the Directorate General of Hydrocarbons (DGH), the technical arm of the oil ministry, began circulating its draft policy paper on oilfield privatization, ONGC launched a strong protest, triggering a pause among policymakers and exchanges between the oil ministry and the PMO. The government hadn’t finalised a policy on this. It was just a discussion and that discussion has now ended. The government is not going ahead with this,” an official aware of the development said. “The ministry has now asked ONGC and Oil India to prepare their own plan to enhance production from ageing fields.” ONGC had already launched a similar plan independently for two of its ageing fields in Gujarat and Assam. It’s seeking partnerships with oilfield service providers under a long-term contract in which private partners will get a predetermined fee for every unit of oil and gas produced. The government now wants ONGC to use these learnings to attract more private capital and capabilities to ageing fields. Another official with knowledge of the matter said the oil ministry changed its mind on the proposed policy after consultations with the PMO, which had heard all sides and didn’t want to invite controversy over a privatization move in the fifth year of its term. In its strongly-worded letter to the government, state-run ONGC had attacked the proposed policy as unfair to the company and favorable to private players that would have received fiscal concessions while operating these fields. A grouping of its executives sought the Prime Minister’s intervention in this policymaking process that, it said, lacked transparency and objectivity. Dennis Smith Authentic Jersey
India opens biggest city gas licensing round
ndia today opened for bidding the biggest city gas distribution licensing round, offering 86 permits for selling CNG and piped cooking gas in 174 districts in 22 states and union territories. As many as 86 geographical areas (GAs), made by clubbing adjacent districts, are on offer in the 9th city gas distribution (CGD) bidding round, according to oil regulator Petroleum and Natural Gas Regulatory Board (PNGRB). The GAs cover 24 percent of the country’s area and 29 percent of its population, Oil Minister Dharmendra Pradhan said at a roadshow organised here to promote the round. The round is likely to attract an investment of Rs 700 billion, a PNGRB presentation made at the roadshow said. The last day for bidding is July 10. Pradhan said the government is targeting to raise share of natural gas in the primary energy basket to 15 percent from current 6 percent, in next few years. The bid round is also aimed at meeting Prime Minister Narendra Modi’s target of giving piped cooking gas connection to 10 million households, roughly triple the current size, by 2020. CGD licences for Bhopal in Madhya Pradesh, Ahmednagar in Maharashtra, Ludhiana and Jalandhar in Punjab, Barmer, Alwar and Kota in Rajasthan, Coimbatore and Salem in Tamil Nadu, Allahabad, Faizabad, Amethi and Rai Bareli in Uttar Pradesh, Dehradun in Uttarakhand and Burdwan in West Bengal are on offer. Prior to the 9th round, 91 GAs were awarded to firms like Indraprastha Gas Ltd and GAIL Gas Ltd, which are serving 240 million population, 4.2 million domestic consumers and 3.1 million CNG vehicles. Of these, 56 GAs were awarded through bidding rounds and the rest on government nomination. The bid round is being held on changed parameters after ‘one paisa’ bids spoilt the initial auction rounds. Bidders have been asked to quote the number of CNG stations to be set up and number of domestic cooking gas connections to be given in the first eight years of operation. In the previous eight bid rounds, bidders were asked to quote only the tariff for the pipeline that carries gas within the city limits. These bidding criteria did not include the rate at which an entity would sell CNG to automobiles or piped natural gas to households using the same pipeline network, leading to companies offering one paisa as the tariff to win licences. In the new guidelines, maximum weightage of 50 percent has been given to the number of piped gas connections proposed in eight years from the date of authorisation, as compared to 30 percent earlier. The number of CNG dispensing stations proposed to be set up has been assigned 20 percent weightage. Length of the pipeline to be laid in the GA and the tariff proposed for city gas and Compressed Natural Gas (CNG) have been assigned 10 percent weightage each. Also, a floor tariff of Rs 30 for city gas and Rs 2 per kg for CNG has been put in order to deter bidders from quoting unviable tariff of 1 paisa per unit. Companies having a net worth of not less than Rs 1.50 billion can bid for cities with a population of 5 million and more while the same for cities with population of 2 to 5 million has been proposed at Rs 1 billion. The net worth eligibility goes down with population, with a Rs 50 million net worth firm being eligible to bid for cities that have less than 1 million population. PNGRB said any entity security CGD licence would have to enter into a firm natural gas supply agreement with a natural gas producer or marketer in a transparent manner on the principle of ‘at an arm’s length’ within 180 days of winning a licence. The authorised entity has to achieve financial closure within 270 days from date of grant of licence. The winning company would have 8 years of marketing exclusivity in the given city. Current licences provide for 5 years of exclusivity. Last few rounds of CGD have evoked a lukewarm response. The fourth round was altogether cancelled, while the fifth saw a sparse response. The sixth round of bidding for 34 cities in 2015 got bids for only 20. The seventh round of bidding done to set up CGD infrastructure in 11 smart cities under smart city mission received only 1 bid. Seven cities were offered in the 8th round last year but not all cities have been awarded so far. Kevan Miller Womens Jersey