Israel, Greece, Cyprus to ink natural gas pipeline deal
Prime Minister Benjamin Netanyahu on Thursday said that Israel, Greece and Cyprus will sign an agreement early next year to build a pipeline to carry natural gas from the eastern Mediterranean to Europe, while the United States pledged its support for the ambitious project. The $7 billion project, expected to take six or seven years to complete, promises to reshape the region as an energy provider and dent Russia’s dominance over the European energy market. It also could curtail Iranian ambitions to use Syria as a gateway to the eastern Mediterranean. Speaking at a summit with the Greek and Cypriot leaders in southern Israel, Netanyahu said the three nations reaffirmed their commitment to the pipeline and discussed “important aspects” of the project. Italy is also a partner in the pipeline’s planning. Cyprus President Nicos Anastasiades said the project is waiting for a green light from the European Union to move forward. “We’re going to sign formally, officially, this agreement in a few months,” he said. In another boost for the project, U.S. Ambassador David Friedman hailed the pipeline as integral to the “stability and prosperity of the Middle East and Europe,” and urged all countries in the region to ensure its success. Washington is eyeing the east Mediterranean with renewed interest. In a meeting with the Greek foreign minister earlier this month, U.S. Secretary of State Mike Pompeio called the region “an important strategic frontier” for Washington, which is working to strengthen its relations with “democratic allies there like Greece and Cyprus and Israel.” Israel has been developing natural gas fields off its Mediterranean coast for the past decade. Its “Tamar” field already is operational, while the larger “Leviathan” field is expected to be operational next year. While most of its gas is used domestically, it has signed export deals with Egypt and Jordan and has its eyes on the larger European market. The proposed pipeline would allow Israel and Cyprus to export their recently discovered offshore reserves to Italy and eventually to the rest of Europe. Greece, which would act as a conduit for the gas to the continent, could also use the pipeline to convey any hydrocarbons potentially found in its own waters. This would potentially transform the countries’ economies while also diversifying Europe’s gas supply and reduce its dependence on Russia. Developing the region’s hydrocarbon reserves would also serve to curb Teheran’s bid to “open a window” to the east Mediterranean through Syria, Assistant Secretary of State Wess Mitchell told Greek language newspaper Kathimerini in an interview published this week. At Thursday’s summit, the leaders offered no details of a construction timeline. The countries also pledged to cooperate in cyber security, while Israel and Cyprus signed a preliminary deal on technical cooperation and Israel and Greece reached a framework agreement on satellite technology.
German regulator removes LNG connection line from grid expansion plan
A line to connect a planned German terminal for liquefied natural gas (LNG) in Brunsbuettel to the bigger gas grid needs to be build by the project company, not the gas grid operator, Germany’s network regulator said on Thursday. The Bundesnetzagentur (BnetzA), following the completion of its 6.9 billion euro ($7.9 billion) gas network expansion plan for 2018-2028, said the move did not preempt a decision on whether the planned terminal was needed or could be realised. German LNG Terminal, a joint venture of gas network operator Gasunie, tank storage provider Oiltanking, and storage tank company Vopak, plans to make an investment decision on the Brunsbuettel terminal next year.
Fuel at your doorstep: Indian Oil launches mobile dispensers in Chennai
Indian Oil Corporation launched its ‘fuel at doorstep’ service in the city on Thursday, wherein fuel is dispensed through mobile dispensers similar to fuel tanks. The scheme was first started in Pune in May in a bid to ensure hassle-free supply of fuel to end users, thereby avoiding unnecessary fuel spillage, unsafe handling of fuel in containers/barrels and pilferage. A fuel delivery vehicle fitted with a mobile dispenser and 6,000 litre fuel tank was flagged off at the inaugural event at Chandini Enterprises, Indian Oil Petrol Pump, Kolathur by Indian Oil Corporation executive director R Sitharthan. At present industrial & bulk customers, who require fuel (diesel) must visit retail pumps to fill containers/barrels. “The customer can place orders through an android mobile application (REPOSE APP). The minimum order would be 200 liters and for quantities exceeding 2,500 liters, the receiver should have PESO license for storage,” a statement said. Once the customer places the order, it reaches the concerned dealer with details including the customer’s name, mobile number, quantity required, address and time of delivery. On receipt of the order, the mobile dispenser would reach the destination and the dispensing would commence through the automated unit only in the designated location. The dispenser would also carry fire extinguishers.
India mulls building natural gas reserves
India is considering building emergency stockpiles of natural gas, on the lines of strategic oil reserves, to deal with supply disruption amid the country’s growing dependence on fuel and its import. The government wants domestic consumption of natural gas, a cleaner fossil fuel, to rise two-and-a-half times by 2030 and is encouraging big public and private investments in gas production, import, transport and distribution infrastructure. Local demand increased 5.5% between April and October to 35.1 billion cubic meters, increasing dependence on imports to 47% of total consumption from 44% a year earlier. “Today, we consume very little gas but once new import terminals and pipelines are in place and new city gas licensees have rolled out their services across the country, there would be a sharp jump in the consumer base. Any supply disruption can have a huge impact,” said a person, explaining the rationale for building emergency gas storage in the country. India mulls building natural gas reserves The person is part of a panel formed by the petroleum and natural gas ministry to evaluate the need for strategic gas storage and prepare a plan to go about building and managing these. The panel has representatives from ONGC, GAIL and Oil Industry Development Board. “We would need to answer two key questions: First, how do we build the storage, and second, what would be the right business model to operate it,” the person said. The panel plans to hire consultants soon and hopes to finalise a report in about six months, he said. Most heavy gas consuming countries already have natural gas storage in place, primarily for supply security. About 30% of gas storage capacity is in the US, a major producer and consumer of natural gas. Russia, Ukraine, Canada and Germany together account for another 40%. China, a late entrant to the game, too is fast building gas storage facilities. About three-fourths of underground gas storage is in depleted gas and oil fields while the balance is distributed between salt caverns and aquifers. “The simplest way to start would be to launch a depleted field storage as it would be cheaper and less time-consuming than a salt cavern or rock cavern,” said the person quoted earlier. Salt cavern storage is expensive but allows high injection and withdrawal rates, as well as the ability to cycle working gas several times a year, he said. The first storage in India could come up at a site connected to a pipeline, the person said, adding that the reserve would store imported gas, which could be released when needed in the domestic market.
India’s crude oil imports from Iran declined 21% in November, 37% jump in shipments from Saudi and Iraq
India’s crude oil imports from Iran declined 21 per cent to 1.26 Million Tonne (MT) in November this year as compared to 1.59 MT imported in the same last year. This was the first decline in India’s oil imports from Iran in 2018-2019. In value terms, Iranian imports in November stood at over $0.69 billion as against $0.70 billion in the corresponding month a year ago. Cumulatively, crude oil imports from Iran during the April-November period of 2018-2019 rose 32 per cent to 18.8 MT. In value terms, oil imports from Iran during the eight months period increased to $9.86 billion from $5.26 billion worth in the corresponding period last year. Making good of the US sanctions on Iran, oil exports to India by Saudi Arabia and Iraq – two of the biggest producers from Organization of Petroleum Exporting Countries — jumped by around 37 per cent each to 4.30 MT and 3.90 MT, respectively in November. Oil imports from Iraq jumped 7.89 per cent to 30.46 MT during the April-November period this year. Similarly, oil imports from Saudi Arabia rose 9.46 per cent to 26.37 MT. The decline in India’s crude oil imports from Iran in November come at the same time as US’ secondary sanctions targeting Iran’s energy sector. Despite maintaining a hard stance against granting waivers for most part of the year, US last month announced granting waivers to eight countries including India. However, US has still maintained that the countries given temporary waivers will still have to reduce crude oil imports from Iran in the coming six months. India will use escrow accounts of five Iranian banks held with UCO Bank Ltd to deposit money for oil purchases from the Middle East producer to overcome US sanctions, news agency Bloomberg said in a news report today. The report added Iran will use part of the deposits for purchasing essential goods from India and to meet expenditure incurred by its diplomatic missions in the South Asian nation. Indian Oil Corporation (IOC), the country’s largest fuel retailer and one of the biggest buyers of Iranian crude in India, has said it intends to lift its full contracted volumes in the present financial year. The company has a deal to buy 180,000 barrels per day of Iranian crude this financial year, Reuters reported.
Oil companies in Colombia see 2019 investment around $5 bn, up 14%
Oil companies operating in Colombia plan to invest almost $5 billion next year, up 14 percent from this year but still far from what the Andean nation needs to bolster its production and reserves, the Colombian Petroleum Association (ACP) said. Oil companies invested $4.35 billion in 2018, most of which went into production and some $800 million into exploration, the association, which represents private oil companies, said on Thursday. Francisco Jose Lloreda, head of the association, told reporters that exploration needs to be increased since investment remains at historically low levels with only 1,100 square kilometers (424 square miles) of seismic tests undertaken. “We have to sound the alarm, today’s exploration is the production of tomorrow,” Lloreda said in Bogota, adding that companies are not investing in seismic testing because of opposition from local communities to exploration. The government has not awarded new areas for exploration in the last four years. Colombia’s proven oil reserves were 1.78 billion barrels at the end of 2017, equivalent to 5.7 years of consumption. Lloreda projected production of 890,000 barrels per day of oil equivalent for 2019, more than the 865,000 barrels of oil equivalent per day expected this year. Next year’s investment projections, which include the drilling of between 65 and 70 wells and 3,200 square kilometers (1,236 square miles) of seismic testing, were made with expectations that the price of Brent crude remains at around $60 per barrel, Lloreda said. “There’s greater volatility than expected and that leads companies to be more cautious in investment because the price panorama is not clear,” he said. Despite better security since a peace agreement with the Revolutionary Armed Forces of Colombia (FARC) rebel group, the oil sector continues to be concerned about social protests against exploration, legal instability and attacks by rebels of the National Liberation Army (ELN), Lloreda said.
ExxonMobil shelves WCC LNG export terminal project in Canada
U.S. oil major Exxon Mobil Corp has withdrawn its WCC liquefied natural gas (LNG) export terminal in Canada from the environmental assessment process, it said on Thursday, signalling that the project has been shelved. The decision to pare its LNG project portfolio follows the go-ahead of a giant Royal Dutch Shell-led project in British Columbia, and Exxon’s focus on LNG projects in Asia, the Middle East and the United States. Global LNG demand is expected to double to 550 million tonnes per annum (mtpa) by 2030, as countries like China move away from coal to cleaner fuels. The top import market for LNG is northeast Asia. Exxon’s West Coast Canada (WCC) LNG export project, located in northern British Columbia, was expected to produce around 15 million tonnes per year of LNG to serve Asian buyers, with plans for further expansion up to 30 million tonnes per year. The project was being jointly reviewed by the province and Canadian environmental regulators, an assessment that had been underway since 2015, though no major documents have been filed since 2016. Exxon formally withdrew from the process in a Dec. 5 letter to the British Columbia Environmental Assessment Office, posted on the regulator’s website. “After careful review, ExxonMobil and Imperial (Oil Resources Ltd) have withdrawn the WCC LNG project from the environmental assessment process,” a spokeswoman for ExxonMobil confirmed in an email. Exxon’s decision signalled it is concentrating on LNG projects with Qatar Petroleum and a proposed expansion of its chilled-gas operation in Papua New Guinea, said Jason Feer, head of business intelligence at Poten & Partners, LNG tanker brokers and consultants. “They have got a pretty robust pipeline of liquefaction projects globally. It would be natural to review that and see which would be competitive,” he said. Exxon has been “taking advantage of opportunities as they become available to invest, restructure or divest assets to strengthen our long-term competitive position and provide the highest return to shareholders,” said spokeswoman Julie King. LNG demand is growing but environmental groups say exports will boost carbon emissions in Canada, both through gas extraction and the liquefaction process. The WCC LNG export project planned to have liquefaction and storage facilities for natural gas, loading facilities and a third-party pipeline. Exxon’s shares were off 3.12 percent at $68.57 apiece, the lowest since August 2015.