Poland signs deal for long-term deliveries of US gas
Poland’s main gas company has signed a long-term contract to receive deliveries of liquefied natural gas from the United States as part of a larger effort to reduce its energy dependence on Russia. The state company PGNiG signed the 24-year deal with American supplier Cheniere Thursday in Warsaw, in the presence of US Energy Secretary Rick Perry and Polish President Andrzej Duda. The value of the deal was not released, in line with secrecy of such sensitive energy deals. However, Piotr Wozniak, the president of PGNiG’s management board, said the price is 20-30 percent lower than what Poland pays its current supplier “in the East,” a reference to Russia. Polish ruling party leader Jaroslaw Kaczynski said he was “happy that the deal will increase Poland’s energy security.”
Oil set for longest losing run since 2014 as supply fears ease
Oil rose as Opec and its allies were said to plan discussions about fresh production cuts next year, responding to recent increases in oil inventories amid surging US supply. Futures in New York gained 1 per cent. Ministers from the Organization of Petroleum Exporting Countries gathering in Abu Dhabi this weekend will discuss options for 2019 including the scenario of fresh supply cuts, said delegates. That would mark an abrupt end to six months of supply increases, reflecting the prospect that US sanctions on Iran won’t be deep enough to prevent another surge of American shale oil creating a new surplus. Supply concerns that drove crude to a four year high last month faded on speculation the US would soften the blow of its sanctions on Iran to lower pump prices at home. Opec also pledged to offset any supply gaps. The group led by Saudi Arabia will gather in Abu Dhabi this weekend as they face a fresh surge of US shale oil threatening to unleash a new surplus in 2019. The market has “more bearish overtones in terms of supply, with American crude output seen rising this year by the most ever,” said Stephen Innes, Singapore-based head of trading for Asia Pacific at Oanda. West Texas Intermediate crude for December delivery advanced 60 cents to $62.81 a barrel on the New York Mercantile Exchange at 6:05 am local time. Total volume traded was 77 per cent above the 100-day average.
GAIL contracts pipes for Barauni-Guwahati gas pipeline
State-owned gas utility GAIL (India) Ltd on Thursday said it has purchased steel pipes worth Rs 1,100 crore for laying the Barauni-Guwahati gas pipeline, putting on fast track the implementation of the project that will connect the north-east with the national gas grid. Work on the 729-km pipeline, which will act as a branch line from the prestigious Pradhan Mantri Urja Ganga pipeline project, will commence from December, the company said in a statement here. GAIL said it has awarded “contract for the purchase of 616 km of line pipe worth Rs 1,100 crore for the Barauni-Guwahati pipeline, putting on fast-track project execution of the crucial 729 km feeder line linking North East India with the Pradhan Mantri Urja Ganga pipeline network.” Work across India’s single largest pipeline spanning 3,400 km under Jagadishpur-Haldia-Bokaro-Dhamra project – also known as Pradhan Mantri Urja Ganga, is in full swing and progressing as per schedule, it said. GAIL Chairman and Managing Director B C Tripathi said the award of the tenders supports ‘Make in India’ efforts of steel pipe manufacturers and suppliers in the country and marks the completion of mainline ordering for the entire 729 km section. The Barauni-Guwahati pipeline will connect to the ‘Indradhanush’ gas grid network, which is being developed by GAIL along with joint venture partners Indian Oil Corp (IOC), Oil India Ltd, Numaligarh Refineries Ltd (NRL) and Oil and Natural Gas Corp (ONGC) to provide uninterrupted supply of natural gas across all the North Eastern states. “The Pradhan Mantri Urja Ganga project endeavours to connect East and the North East States of India with the existing gas pipeline grid to ensure access of clean energy solutions for household, transport, industrial and commercial applications in the energy deprived region,” the statement said. GAIL said work on the pipeline originating from Jagadishpur in Uttar Pradesh to Haldia in West Bengal and branch lines to Bokaro in Jharkhand and Dhamra in Odisha is in full swing. “Physical progress under phase-1 of the flagship project is 92 per cent complete and it is expected to be completed within next two months, whereas the balance phases including the additional section under Barauni-Guwahati spur lines are lined up for sequential completion by December 2021,” it said. Tripathi said, GAIL is concurrently executing over 5,500 kilometers of gas transmission network at an estimated outlay of Rs 25,000 crore. “In spite of recent impact to on-going project work due to calamitous floods, construction of natural gas pipelines in Kerala and Karnataka are fast-tracked for completion by the end of current fiscal year as more than 85 per cent physical progress has been achieved under the Kochi to Mangalore pipeline project,” he said. The pipelines will not just supply CNG to automobiles and cooking gas to household kitchens in cities along the route, but also to industries to meet their feedstock or fuel requirement. “City gas distribution at Varanasi, Bhubaneshwar, and Cuttack have commenced operations. Given the steady progress achieved so far, the city gas projects could soon be rolled-out at Patna, Ranchi, Jamshedpur, and Kolkata,” he added.
Toshiba to pay $800 million to exit US LNG business
Japan’s Toshiba said on Thursday it is exiting its US liquefied natural gas (LNG) business and paying an overseas “buyer” it did not identify $800 million to assume its commitment to purchase 2.2 million tonnes per year of the fuel from Freeport LNG in Texas. The Nikkei business daily reported on Thursday, without citing a source for the information, that the buyer is a unit of Chinese gas company ENN Group. However, Toshiba said in its statement that it would only identify the buyer when the final sales contract is signed. An ENN Group spokesman said he was not aware of the deal when contacted by Reuters. The sale would remove a roughly $7 billion commitment to process US shale gas into LNG that the industrial conglomerate signed in 2013 as an incentive for sales of turbines for power plants, one of its major businesses. The company has spent years trying to either sell the gas to power customers or offload the business after signing the 20-year contract to buy LNG from Freeport.
Govt okays EIA of Motihari-Amlekhgunj pipeline
The construction of the Motihari-Amlekhgunj fuel project is expected to go on in full swing following the approval of the project’s Environmental Impact Assessment (EIA) by the government. The Ministry of Forests and Environment recently gave a nod to the EIA of the cross-border pipeline project allowing Nepal Oil Corporation (NOC) to cut down almost 6,000 trees of the conserved areas along the project’s route, informed Sushil Bhattarai, acting deputy managing director of NOC. “This will now ensure that the construction of the project will move ahead uninterruptedly,” said Bhattarai. The project has witnessed 50 per cent progress so far as the pipe laying process along a majority of the routes has been completed. However, the construction works along the project route that falls inside the Parsa Wildlife Reserve and a few community forests (approximately 10km) were delayed following the delay in approval of the EIA. Of the 37.35 km length of the oil project, pipe laying process has been completed across more than 20km of the route, as per NOC. Bhattarai informed that NOC will soon begin the process to mark trees to be cut in the wildlife reserve and community forests and seek approval from the Cabinet to start cutting them down. Once the pipe laying process is completed, works regarding development of fuel pumping stations and injecting fuel tanks, among others will be carried out as per NOC. The construction works of the project began in April. As provisioned in the agreement of the project that Nepal and India inked in 2015, NOC plans to complete the project within 30 months from April. The project involves laying pipeline of 10.75-inch diameter and will have the capacity to supply 200,000 litres of fuel per hour, with fuel pumping facilities in Motihari on Indian side. “Both NOC and Indian Oil Corporation are committed to completing project before the deadline with support from related Nepali government agencies and other related firms in the project,” said Bhattarai. The INR 2.75-billion petroleum pipeline project will be crucial to ensure smooth supply of petroleum products in Nepal and reduce fuel transportation costs. While the Indian government is injecting INR two billion for the project, Nepal will be contributing INR 750 million.
Australia’s APA slumps as govt opposes HK gas pipeline buyout
Shares in Australia’s biggest gas pipeline company APA Group fell 11 percent on Thursday after Australia’s treasurer said he intended to block a A$13 billion ($9.5 billion) buyout by Hong Kong’s CK Group. Treasurer Josh Frydenberg said after market hours on Wednesday that his preliminary view was that the takeover was against the national interest because it would create a concentration of foreign ownership in the sector. Frydenbeg said the move was not a reflection on CK Infrastructure Holdings Ltd, part of the empire founded by Hong Kong tycoon Li Ka-shing. Analysts said the move appeared to be partly aimed at preventing Chinese ownership of a strategic asset. “I don’t think its just the China element, but a combination of important assets, concentration of ownership and China,” said Morningstar analyst Adrian Atkins. “I think the Chinese element maybe had a bit more of an impact than the treasurer’s letting on … it’d probably be unpopular with the electorate to have a major asset go to a Chinese firm,” he said. The rebuff is likely to test an already strained relationship between Australia and its largest trading partner, just as Australia’s foreign minister makes a delayed visit to Beijing. Earlier this year, Australia banned China’s Huawei Technologies Co Ltd from supplying equipment for a 5G mobile network citing national security risks, while Canberra last year accused Beijing of meddling in domestic affairs. APA Group shares, which had never traded at the A$11 offer price, fell back to pre-bid levels at A$8.48, an almost five-month low, wiping A$1.2 billion off its market value. The broader market opened higher. APA said it noted the treasurer’s decision and would update shareholders in due course. CK Infrastructure said in a statement on Wednesday that it had noted the treasurer’s comments.