German gas imports rise in first two months of 2019, bill up 12.5 per cent
Germany imported 0.6 percent more gas in the first two months of 2019 than a year earlier and its import bill rose by 12.5 percent, official data showed on Wednesday. The volume of imports in January and February was 787,934 Terajoules (TJ) or 22.4 billion cubic metres (cbm), according to trade statistics office BAFA. German importers paid 4.5 billion euros ($5.09 billion) for gas during the two months compared with 4.0 billion a year earlier, mirroring a rise in oil prices. Gas, power and carbon traders watch gas imports as possible imbalances in supply and demand can change prices and traded volumes in all three markets. There is currently abundant supply as the spring season arrives. German gas stocks were at 54.7 percent of available storage capacity on Monday, the European gas infrastructure group GIE’s website showed. That compared with 16.51 percent a year earlier. Germany mainly imports gas from Russia, Norway, the Netherlands, Britain and Denmark via pipelines. Europe’s imports of liquefied natural gas (LNG) are also increasing. The average BAFA-quoted price on the German border in January/February was 5,744.02 euros per TJ gas, equivalent to 1.99 euro cents per kilowatt hour (kWh), 11.4 percent above the price a year earlier.
OPINION: India should beware of Saudi Aramco’s billions
It’s funny how friendly someone gets when they’re trying to sell you something. Saudi Arabian Oil Co. is doing its best to make nice with one of its biggest customers. With the ink barely dry on the takeover of 70 percent of the country’s chemical giant Saudi Basic Industries Corp. and the issuance of its first-ever corporate bond, Aramco is looking to buy a stake in the world’s biggest oil refinery. Indian billionaire Mukesh Ambani’s Reliance Industries Ltd. is seeking to sell as much as a quarter of its refining business for at least $10 billion and is entertaining offers from Aramco and Abu Dhabi National Oil Co., people with knowledge of the matter told Bloomberg News this week. That represents quite a prize. Reliance’s Jamnagar refinery is about twice the size of the biggest U.S. plant, Aramco-owned Port Arthur, and is so massive that maintenance work occasionally skews India’s entire trade balance. Trade is also the reason India should be cautious of Aramco’s embrace. The country has a dangerous addiction to imported crude, and it should be wary of getting too cozy with its dealer. For more than a century, the rise of major economic powers has been fueled by petroleum. The U.S. is both the world’s biggest oil consumer and its biggest producer. The Soviet Union was built on its oilfields in the Caucasus and Siberia. While China has overtaken America as the biggest oil importer, it’s also the biggest producer outside the Middle East after the U.S., Russia and Canada. India is different. The U.S. produces about 1.8 metric tons of oil a year per capita and even China manages 138 kilograms. India – at a far earlier stage of development than either country – ekes out just 30 kilograms. Production peaked all the way back in 2010, and shows no sign of recovery. Industrialization is an energy-intensive process. If India’s development is going to be powered by crude oil, it’s going to be buying a whole lot more from Aramco and its ilk. Such a future would pose some profound risks. Balance of payments crises are a recurring danger for emerging economies, and even at its current stage of development oil typically accounts for about a quarter of India’s imports. If prices spike higher – as, inevitably, they will from time to time – that’s good news for Riyadh, but potentially devastating for New Delhi. OPINION: India should beware of Saudi Aramco’s billions When crude is averaging $85 a barrel – roughly the level at which Saudi Arabia can balance its budget, according to the International Monetary Fund – oil imports would reduce India’s gross domestic product by about 3.6 percentage points, according to a study this year by the Reserve Bank of India. Higher prices will also push up inflation and weaken the government’s fiscal position, the authors found. At present, that dynamic is somewhat mitigated by the fact that about a third of India’s oil imports are re-exported as petroleum products, giving the country a natural hedge against rising prices. Jamnagar, for instance, produces almost exclusively for export, meaning that it probably makes a modestly positive contribution to the trade balance since oil products are more valuable than the crude they’re made from. Should domestic consumption grow faster than export refinery capacity, though, India’s oil dependence will start taking a deeper bite out of its current account. In a worst-case scenario, a spike in oil prices could drive the country toward a balance of payments crisis like the one it suffered in 1991, when a splurge on oil imports over the previous decade resulted in New Delhi pledging its gold reserves as security for bailouts from multilateral lenders. India is aware that its dependence on imported crude risks constraining growth. The government wants 30 percent of new cars and two-wheelers to be electric by 2030 and is already home to more than 1.5 million electric rickshaws. It’s also adjusted tax policies to encourage that transition. In a country at grave risk from climate change, whose cities are already choking on vehicle smog, reducing the reliance on imported fossil fuels is more than just an issue for the current account. That goal isn’t an unrealistic one given the rock-bottom local cost of wind and solar. Still, no country has managed a low-carbon industrialization on this scale before, so it won’t be easy – and Saudi Arabia will be hoping it proves all but impossible. By promising to buy a chunk of Reliance and help fund a new $44 billion Jamnagar-sized refinery in western India, Aramco is counting on the country being unable to kick its self-destructive oil habit. Indians should hope that it’s wrong.
Kerala: Leak in LNG pipeline of Indian Oil Adani Gas a wake-up call for officials
The liquefied natural gas (LNG) leak from the pipeline of Indian Oil Adani Gas Private Limited (IOAGPL) and the resultant fire at Palachuvadu near Kakkanad have raised safety concerns as agencies like KWA, KSEB and telecom companies dig up roads for laying underground cables without taking precautionary measures. In the wake of this Gas Authority of India Limited (Gail) would convene a meeting of all agencies which used to dig up roads for various purposes. “It was around 4.40am on Tuesday that the fire broke out. We were digging up the road for laying underground cables as part of augmenting the capacity of Kaloor Substation to 220kV from the existing 110kV. We use horizontal directional drilling (HDD) method for trenching. Kochi corporation, Thrikkakara municipality and PWD prefer HDD as the method would avoid the inconveniences caused by open trenching. We had sought the support of IOAGPL officials,” said deputy chief engineer of trans grid south, KSEB, K Santhosh. “IOAGPL informed us that gas pipeline is going through the right side of the road while our trench is on the left side. Moreover, the work was being done under the supervision of IOAGPL official. At the spot in Palachuvadu, where the fire occurred, the IOAGPL pipeline was inclined towards the left, which the officials had not conveyed to us. When we went ahead with the drilling, the pipeline got damaged causing gas leak,” he said. When bubbles appeared in the water in the trench due to LNG leak, KSEB contract workers brought a paraffin lamp to find out the source of the bubble. Soon, the gas leaked out of the pipeline caught fire. IOAGPL officials and fire and rescue services were alerted, and IOAGPL officials turned off the control valve of the pipeline immediately. Fire and rescue personnel doused the fire within a couple of hours. IOAGPL said that there is no reason to panic in such situations as LNG is safer compared to LPG. “LNG is lighter than air and so it would go up within seconds of leakage. If it was LPG, the entire area would have been devastated,” said asset head of IOAGPL, Kerala, Ajay Pillai. However, Gail officials said that they are viewing the incident seriously, though there is less chance of accidents due to LNG leakage. “Many agencies are digging up the roads without taking the underground installations into consideration. Through the meeting, we intend to educate all these agencies about the LNG pipelines passing through each area,” said Gail general manager Tony Mathew.