CNG prices likely to rise by about Rs 1.25/kg
The rates of compressed natural gas (CNG) likely to rise by about Rs 1.25 per kg and domestic piped gas by about 70-80 paise per standard cubic meters (SCM) in Delhi following a 10% rise in domestic natural gas price in the six-monthly revision on Monday, according to people familiar with the matter. Other cities too will see similar price increases. Indraprastha Gas Ltd (IGL), the city gas distributor in Delhi and its satellite cities, is expected to shortly announce new prices. The rate for Noida in Uttar Pradesh will be slightly less due to lower taxes. Mahanagar Gas, Gail Gas and other city gas distributors too are in the process of raising rates in their respective license areas. Higher prices mean costlier drive for CNG vehicle owners and increased kitchen fuel bills. City gas distributors depend on cheaply priced domestic gas for supply to vehicles and homes but source expensive liquefied natural gas (LNG) for their commercial and industrial clients. Domestic gas price, which is revised twice a year and announced at the end of March and September, is calculated by a government-set formula that takes average rates from international trading hubs. Domestic gas price has risen to $3.69 per million metric British thermal units (mmBtu) from $3.36 per MMBtu. The new price will be applicable for the April-September period. The maximum price producers can charge for gas from difficult fields has risen to $9.32 per MMBtu from $7.67 per MMBtu, much higher than the spot liquefied natural gas (LNG) rates that are around $6.5 per MMBtu. Spot rates are subdued these days mainly due to oversupply in the Asian region and weaker demand. The price ceiling, linked to alternative fuels, is based on the average of the preceding 12 months. The ceiling has jumped 40% since it was introduced in April-September 2016. The gas price jump will boost earnings at ONGC, Oil India, RIL and Vedanta but would hurt consumers. The input cost will also rise for power, fertilizer, petrochemicals, refineries and other factories using natural gas as fuel or feedstock.
Total, Tellurian sign deals to develop Driftwood LNG project
French oil and gas major Total SA and U.S. company Tellurian Inc have signed several deals to develop the Driftwood liquefied natural gas (LNG) project in Louisiana, they said on Wednesday. They have signed a non-binding heads of agreement (HOA) where Total will invest in Driftwood Holdings and offtake 2.5 million tonnes per annum (mtpa) of LNG. The HOA will include both companies entering into a binding sales and purchase agreement (SPA) to take 1.5 million tonnes per annum of LNG from Tellurian Marketing’s LNG offtake volumes from the Driftwood project. It will also include a $500 million equity investment by Total in Driftwood LNG and the purchase of an additional 1 mtpa of LNG from the proposed project. The SPA is for the purchase of LNG on a free-on-board (FOB) basis for a minimum of 15 years, at a price based on Platts Japan Korea Marker (JKM). Total will also buy about 20 million shares of Tellurian common stock for $200 million. The agreements are subject to relevant regulatory approvals and to a final investment decision on the Driftwood LNG project, which is expected to be made by Tellurian in the first of this year.
India, China to drive LNG demand in Asia for the next 15 years
Global demand for liquefied natural gas will grow at 2 percent a year for the next 15 years, the chief executive of Qatar Petroleum said at the LNG2019 conference in Shanghai on Tuesday. Growth in developed markets such as Japan and South Korea will be moderate, while there will be some growth in Europe after years of stagnation, said Saad Al-Kaabi, Qatar’s minister of state for energy affairs as well as president and chief executive of Qatar Petroleum. “China, along with India, will continue to lead Asia as the main drivers behind the growth of global LNG demand,” Al-Kaabi said at the conference, according to a press release later issued by Qatar Petroleum. Qatar has shipped more than 50 million tonnes of LNG to China, more than 22 percent of China’s imports of the fuel over the past ten years, he said. Al-Kaabi said demand for gas will continue to rise due to the growing concerns over the environment and climate change, and widespread moves towards using cleaner and more cost-effective fuels. “While some see natural gas as a transition fuel, we believe it is a destination fuel. It is the cleanest of all fossil fuels. It is reliable, affordable, and the fuel of the future,” he said. Qatar Petroleum also said in the press statement that it has awarded a number of contracts related to its LNG expansion project aimed at increasing LNG production capacity from 77 million tonnes a year to 110 million tonnes a year by 2024. Main invitations for the engineering, procurement and construction contracts for the onshore facilities will be issued by the end of the month, according to the statement. Qualified shipyards will be invited to take part in a tender for building the LNG ships that will be required for its fleet for the expansion project, it also said. It has also begun construction at its joint-venture 16 million tonnes-a-year Golden Pass LNG export project in Texas in the United States, along with project partner Exxon Mobil Corp. The project is expected to be in operation by 2024.
SoCalGas to replace 20 per cent of traditional natgas supply with RNG by 2030
Southern California Gas Co on Tuesday said it plans to replace 20 percent of its traditional natural gas supply with renewable natural gas (RNG) by 2030. By 2022, the company aims to replace 5 percent of its natural gas supply with RNG, SoCalGas said in a statement. RNG is an environment friendly renewable fuel produced from food waste, farms, landfill and sewer systems. SoCalGas, a unit of California energy company Sempra Energy , has filed a request with the California Public Utilities Commission (CPUC) to allow customers to purchase renewable natural gas for their homes and expects the approval by the end of the year.
China gas demand to reach 360 bcm in 2020: CNOOC
China’s gas demand will reach 360 billion cubic metres (bcm) in 2020 and rise to 480 bcm by 2025, Li Hui, vice-head of China National Offshore Oil Corp (CNOOC) told a conference here on Wednesday. China has put itself under pressure by signing too many long-term supply contracts at relatively high prices, he added.