India’s oil minister urges local oil firms to boost overseas funding
India’s oil minister Dharmendra Pradhan said Friday he wants state-owned oil companies to boost their overseas borrowings, replicating the funding success of the country’s renewable industry. With funding from local banks and non-banking financial companies drying up following a bad loan and credibility crisis in the financial sector, top global pension funds, sovereign wealth funds and private equity companies have stepped in to fill the gap, especially in equity capital. Many companies have also raised debt via overseas bonds. Most of the overseas money, however, has gone to private companies, especially in renewable energy, leaving state-owned oil firms such as Indian Oil Corp Ltd, Oil and Natural Gas Corp Ltd companies relying on traditional domestic routes. “India’s growing energy sector is attractive for foreign investment,” Pradhan said at BNEF energy summit being held at New Delhi. With India’s economy expected to grow at 7%, he forecast more funding would flow to energy sector. “Many companies have successfully raised funding through overseas bond market and this funding route is likely to grow many fold going forward,” he said.
LNG traders consider shipping options, betting on winter demand
Traders are starting to make enquiries to book vessels to store or ship liquefied natural gas (LNG) as they bet for winter demand to boost prices for spot cargoes which are trading near record lows, multiple industry sources said on Friday. Enquiries are trickling in for booking vessels on a spot basis, ranging from a period of one month to several months, which is expected to push shipping rates up, the sources said. With Asia LNG spot cargoes trading at below $4 per million British thermal units, traders may take the opportunity to buy the cargoes now for later use, especially as demand typically increases during winter for heating which in turn pushes up prices, the sources said. Storing commodity cargoes on ships to sell at a later date to take advantage of the rising price for later-dated supplies, known as the contango carry trade, is common in oil markets but is considered risky for LNG because of high storage costs and because LNG cargoes evaporate over time. November LNG spot prices are estimated to be about $1 per million British thermal units (mmBtu) higher than October spot prices while October spot prices are likely about 70 to 90 cents higher than September prices, the sources added. A market structure where later-dated prices are higher than prompt supplies is called contango. “At 90 cents contango, floating storage is starting to make sense and at $1.50 people will be jumping on it,” a Singapore-based LNG trader said, adding that the wide price spread signals the temporary storage of LNG on tankers a possibility. At least one Japanese trader has issued a vessel enquiry for 60 days to charter an Australian cargo loading in September, said a second shipbroker. Last year, more than 30 vessels globally were flagged as floating storage ahead of winter as traders bet that demand would increase exponentially like it did the year before. But, spot prices subsequently fell amid a mild winter. This year, an abundance of supply globally from new projects has pushed spot prices to record lows. Still, some traders are adopting a more cautious approach given the uncertain economic outlook. “While the forward curve (suggests floating storage works), I personally do not think (it) works as … the cost of hiring ships will go up when there are too many cargoes,” a second Singapore-based trader said.
ONGC Contracts Shelf Drilling Rigs
Indian multinational oil and gas company, Oil and Natural Gas Corporation (ONGC) awards driller contracts for pair of units off west coast. Dubai-headquartered offshore driller Shelf Drilling has been awarded contracts for two of its jack-up rigs with ONGC for operations in the Mumbai High, offshore India. The offshore drilling contractor said that its C.E. Thornton and F.G. McClintock jack-up rigs had been awarded three-year contracts each. Operations in the Mumbai High offshore India are expected to start in 4Q 2019. ONGC is a Public Sector Undertaking (PSU) of the Government of India, under the administrative control of the Ministry of Petroleum and Natural Gas. Shelf Drilling is an international shallow-water offshore drilling contractor with rig operations across the Middle East, Southeast Asia, India, West Africa, and the Mediterranean.
Three bio-CNG plants to treat 300 tonnes of bio-waste in Chennai
Greater Chennai Corporation will bring down the quantum of organic and food waste entering its landfills by 300 tonnes by next month by setting up three bio-CNG plants that will bottle compressed natural gas produced from bio waste. Corporation commissioner G Prakash said his office would call for tenders next week. The plants will be set up in a private-public partnership where the private company will be in charge of manufacturing and maintenance of the facility. They will be set up at Pallikaranai, Sholinganallur and the abandoned asphalt complex in Anna Nagar at ₹9.3 crore. Addressing the state assembly last month, rural and municipal administration minister S P Velumani had announced setting up of one such plant. The civic body has now decided to make it three. Corporation deputy commissioner (health) Madhusudhan Reddy said similar plants were set up at Mahindra World City. “There is another at Tirupati. The plants will be expandable to handle up to 100 tonnes in the future,” he said. The civic body processes 384 tonnes of wet waste under various projects including 33 bio-mechanization plants. Though raw biogas cannot be used as fuel, its compressed and purified form finds use as an automotive fuel. At Mahindra World City, the bio-CNG plant converts eight tonnes of food and kitchen waste into 1000 cubic metres of raw biogas. This raw biogas is enriched to yield 400 kg of purified CNG grade fuel every day (which is equivalent to a 200kW power plant). Four tonnes of organic fertilizer is produced as a byproduct each day. Bio-CNG can replace CNG as an automotive fuel (for CNG buses and tractors) and LPG for cooking purposes, as well as to power street lights. According to a report by Citizen Consumer and Civic Action Group’s Jeya Kumar R and Vamsi Sankar Kapilavai there are 17 operational bio-CNG plants in nine states, Maharashtra having the largest number. The combined capacity of all these plants is 46,178 kg per day. For dry waste, the corporation has planned incinerators at Manali, Mandhavaram and Thiruvotriyur. Out of the 5,500 tonnes generated every day, 55% is wet waste. About 450 tonnes to 500 tonnes wet waste is processed through composting and 250 tonnes of dry waste is sold every day. The city corporation is also planning to convert up to15%of wet waste generated by bulk waste generators into compost. Satyarupa Shekhar, of Civic Action Group, said the corporation should set up decentralized units close to Amma canteens, anganwadis and on roofs of a restaurant where kitchens exist. “It can also be set up at the existing bio-methanisation plants where the readily generated bio-gas can be compressed and used as bio-CNG. It will reduce the cost to transport food waste and bring down carbon emissions,” she said.
India to attract Rs 6 lakh crore investment in natural gas sector in 8 yrs: Pradhan
India’s oil and steel minister Dharmendra Pradhan today said the country is expected to witness more than Rs 6 lakh crore worth of investment in its natural gas sector over the next 8 years. While replying to a question on whether the government’s ambition to increase the share of natural gas in the overall energy basket will lead to increased reliance on LNG imports, Pradhan said: “As the natural gas market matures we expect prices to go down. We are not exactly worried about LNG imports because our policies are aligned toward augmenting domestic natural gas production and investing in other complementary technologies like Coal Bed Methane, Bio-gas etc.” He added that it is the right time to think of options like blending electricity generated from gas power plants with renewable energy as a means to further aid the process of emission reduction. “This option has the merits of balancing the grid and optimum utilization of the transmission infrastructure by complementing the un-certain nature of renewable energy generation with gas-based power. This will also aid in optimum utilization of our gas power plants,” Pradhan said. The minister said the country, in order to meet its energy demand, will continue to rely on traditional energy from coal-fired plants and oil and gas besides focussing on new cleaner technologies. “We will promote electric vehicles but it will be holistic and integrated planning where, and I have mentioned in my recent statements, all forms of transportation which are clean and affordable will be considered in our Energy Policy,” he said. Talking about the state of natural gas infrastructure in the country, Pradhan said the recently concluded City Gas Distribution (CGD) rounds would attract close to Rs 1.20 lakh crore of investments across the country. “When we assumed power in 2014, only 20 percent of the population was covered under city gas network. However, with the success of the 10th CGD bid round, CGD network will expand to nearly 70 percent of our population. CGD would be available in 228 geographical areas comprising 402 districts spread over 27 states and union territories covering 53 percent of the country,” the minister said. He added that the government is also promoting the use of Compressed Natural Gas (CNG), bio-CNG and natural gas in the transportation sector in order to boost economic development through clean fuel options.