UAE says Qatar’s decision to leave OPEC admission of decline of Doha’s role
The United Arab Emirates said on Monday Doha’s decision to leave OPEC was a reflection of the decline of its influence. “The political aspect of Qatar’s decision to quit OPEC is an admission of the decline of its role and influence in light of its political isolation,” Anwar Gargash, UAE minister of state for foreign affairs, said in a tweet. Doha, one of OPEC’s smallest oil producers but the world’s biggest liquefied natural gas (LNG) exporter, said earlier on Monday it was quitting OPEC from January to focus on its gas ambitions.
GEECL to invest $2bn in Raniganj (South) CBM block in India
India-based coal bed methane (CBM) production firm Great Eastern Energy (GEECL) has announced plans to invest $2bn in its Raniganj (South) block in the state of West Bengal over the next ten years for exploitation of shale reserves. Press Trust of India (PTI) cited GEECL chief executive Prashant Modi as saying that the CBM block is estimated to contain as much as 6.63 trillion cubic feet (tcf) of shale resources, of which about 1.7tcf can be recovered. In addition, the block holds 2.62tcf of coal seam gas or CBM resources, which are claimed to have an undiscounted value of $13.78bn and a discounted value of $4.31bn. GEECL is planning to commence initial shale gas exploration work of drilling core wells at the block in the first half of next year, before undertaking drilling of pilot production wells. Modi was quoted by the news agency as saying: “Depending on the results obtained and analysed from the core wells, we thereafter intend to drill an optimum number of pilot production wells. “Based on further results obtained and analysed from the pilot production wells, the total investment envisaged for the full development of shale resources in our block could be in the region of $2bn.” The investment plan comes after the company upgraded resources at the Raniganj (South) block earlier this month. At that time, GEECL said it found prospective shale resources with potential future net revenues of $2.78bn. According to Modi, the company decided to embark on the exploration of shale reserves in its blocks after the Indian government recently allowed exploration and exploitation of all types of hydrocarbons including shale resources under the existing CBM contracts. He added that GEECL has reached an initial understanding with state-owned oil and gas firm GAIL (India) for signing either a gas offtake deal or a transmission agreement through GAIL’s Jagdishpur-Haldia & Bokaro-Dhamra pipeline. This pipeline is expected to become operational by 2020 and will potentially enable GEECL to have greater market access. India aims to increase the share of gas in its energy mix from the current 6.5% to 15% by 2022.
City gas distribution to see big investments
City gas distribution (CGD) network is turning out to be the next big downstream expansion in India, after fuel retailing, with investments of as much as ?1.1 trillion expected over the next decade, said company executives. CGD refers to transportation or distribution of natural gas to consumers in domestic, commercial or industrial and transport sectors through a network of pipelines. This business has, over the last decade, attracted several companies to lay a network of gas pipelines. “CGD is the next big expansion in the downstream segment with nearly 40 companies operating in the segment. This, against fuel retailing, which is dominated by a few players, including state-run oil marketing companies,” said Rajendra P. Natekar, director, Bharat Gas Resources Ltd (BGRL). “Though in terms of pure numbers, fuel retail stations gain, in terms of coverage of distribution and customers, the impact of CGD will be felt more. Besides, CGD will gain more traction over time.” BGRL will invest Rs.40 billion to build a CGD network in Ahmednagar, Aurangabad, Sangli and Satara districts in Maharashtra. The company won bids for the areas in the ninth edition of the CGD auction. At present, 31 companies are developing CGD networks across 81 geographical locations in 21 states and Union territories, supplying clean cooking fuel in the form of piped natural gas (PNG) to about four million households. The government, which plans to provide 10 million PNG connections, has introduced stringent emission levels for vehicles and plans to develop green corridors to reduce India’s carbon footprint. There are about 60,000 fuel retail stations and around 1,500 CNG stations across India, but it is the sheer reach and loyalty of customers that the CGD companies are banking on. “Once you enrol a customer, he seldom leaves you. So, we see our customer base expanding rapidly. What also works in favour of PNG is that in comparison with LPG, it is a safer fuel and cheaper,” said a senior official at a CGD company operating in Maharashtra. What is also helping the expansion of CGD network across India are various policy initiatives for its expeditious development. CGD has been accorded the highest priority in gas allocation while allocating 100% domestic gas for the domestic PNG and CNG segments. On the regulatory front, recently, the Petroleum and Natural Gas Regulatory Board (PNGRB) has reformed to a large extent the CGD authorization regulations to address the impediments faced in previous bid rounds. Also, some state governments have introduced sector-specific policies/guidelines enabling overall growth of CGD network in India. The only challenge, however, could be the availability of skilled manpower to undertake expansion at this large scale. “In terms of opportunities, there will be a lot for the ecosystem. Demand for engineering and procurement companies, gas mechanics, the labour force will multiply and the industry also has to train resources as trained manpower is a scarcity in this business,” said K Ravichandran, group head for corporate sector ratings at rating agency ICRA Ltd. To tap the growing market, the industry has to tie-up with industrial training institutes or ITIs to develop skilled manpower, said Ravichandran.
AG&P investing heavily in India’s gas infra
Philippine global engineering firm AG&P (Atlantic, Gulf and Pacific Co. of Manila) has secured rights to put up facilities in India to make natural gas available to residents and businesses in two areas of the southern state of Tamil Nadu. The grant to AG&P—along with 22 other entities—was part of New Delhi’s ninth bidding round for city gas distribution projects (CGD) that covers 63 geographical areas across India, including seven areas in Tamil Nadu. The Petroleum & Natural Gas Regulatory Board awarded to the homegrown multinational’s unit AG&P LNG Marketing Pte. Ltd. rights to build LNG facilities in the districts of Kanchipuram and Ramanathapuram in Tamil Nadu. Karthik Sathyamoorthy, president of AG&P LNG Marketing, said in a statement this added to AG&P’s portfolio in India. AG&P is also building an LNG terminal in Karaikal, in the union territory of Puducherry. He said AG&P was investing heavily in gas infrastructure to support India’s drive to switch to natural gas as a clean and affordable source of fuel. In Tamil Nadu, AG&P’s CGD networks will deliver natural gas “directly, safely and conveniently” to houses, gas stations, industrial and commercial establishments.” CGD concessions are intended to make natural gas available for use as compressed gas for use as automotive fuel as well as piped gas for households, commercial establishments and industrial businesses. “This landmark CGD project for these two districts [of Tamil Nadu] and others across the region will reduce energy costs, create jobs, trigger economic and social development, and lead to much needed cleaner air, improving the quality of life for the people of Tamil Nadu,” the company president said. So far, India has awarded CGD rights covering 178 districts across the country that together represent about 46 percent of the population and 35 percent of its land area.
Yamal LNG ships one-hundredth cargo
Yamal LNG, a joint venture-owned integrated Liquefied Natural Gas (LNG) project in northern Russia, today announced has offloaded its one-hundredth cargo of LNG, less than a year since the project’s first shipment in December 2017. “The hundredth cargo was loaded onto the Arc7 ice-class LNG carrier “Fedor Litke”, making the Project’s cumulative to-date delivery 7.4 million tons,” PAO Novatek, that owns 50 per cent stake in the project, said in a statement. It added Yamal LNG is constructing a 17.4 million tonne per annum (mtpa) natural gas liquefaction plant comprised three LNG trains of 5.5 mtpa each and one LNG train of 900 thousand tons per annum, utilizing the hydrocarbon resources of the South-Tambeyskoye field in the Russian Arctic. The first LNG train began production in fourth quarter of 2017 and trains 2 and 3 began in July and November 2018, respectively. Apart from PAO Novatek, Yamal LNG shareholders include Total, which holds 20 per cent, CNPC holding 20 per cent and the Silk Road Fund holding 9.9 per cent stake.