India keen to import more LNG from Australia but wants affordable pricing: Pradhan
India is looking to raise import of liquefied natural gas(LNG) from Australia but wants the fuel at affordable price to meet the energy needs of the world’s fastest-growing economy. Oil Minister Dharmendra Pradhan on Wednesday met with Australian Minister for Resources Matthew Canavan to discuss bilateral energy cooperation, an official press statement said here. “Both ministers stressed on the importance of energy and resources in the bilateral relationship and agreed to expand the scope of cooperation given that India offers a large energy market and Australia is rich in natural resources particularly coal and LNG, apart from uranium,” it said. India already imports 1.44 million tonne per annum of LNG from Australia on a long-term contract. “Given India’s major initiatives to move into a gas-based economy, there is significant scope for expanding LNG imports from Australia,” the statement said. India has set a target of raising the share of natural gas in the overall energy basket to 15 per cent by 2030 from the current 6.2 per cent. This shift would cut down the usage of polluting hydrocarbon fuels. The statement said Pradhan mentioned to the Australian Minister that “Indian consumer is price sensitive, and therefore affordability of LNG imports from Australia will be an important factor in enhancing cooperation in this area.” It did not elaborate. The comment assumes importance as there is a growing chorus for renegotiating pricing of its long-term LNG import contracts from suppliers such as Australia to help reflect falling rates of the spot market. Besides Australia, India imports 8.5 million tonne per annum of LNG from Qatar under two long-term contracts and has tied up 5.8 million tonne a year supplies from the US. It also has a 2.5 million tonne import contract with Gazprom of Russia. While long-term LNG comes for USD 8-9 per million British thermal unit, the same gas is available in the spot market for less than half the price. India has in the past used its status as Asia’s third-largest LNG buyer to renegotiate deals with Qatar, Australia, and Russia. In 2015, it renegotiated the price of the long-term deal to import 7.5 million tonne per year of LNG from Qatar, helping save Rs 8,000 crore. In 2017, it got Exxon Mobil Corp to lower the price of Gorgon LNG to save Rs 4,000 crore in import bill and last year convinced Gazprom to lower rates too. “Minister Canavan underlined Australia’s commitment to expanding its ties with India, and highlighted its position as a reliable partner in meeting India’s energy security needs,” the statement said. “Pradhan called for greater investment flow from Australia to India and sharing of best practices.” The Indian Minister also called for greater cooperation between the two nations on coking coal. There is a need, he said, for coordination between two countries by bringing together ministries responsible for coal, mines, petroleum and natural gas and steel of each side to achieve greater synergy and enhance bilateral energy cooperation. “India being the largest importer of Australian metallurgical coal, a favourable differential pricing mechanism should be worked out,” the statement quoted Pradhan as saying. “Pradhan also pointed out that opportunities for collaboration will continue to expand as India’s energy mix evolves.” The two ministers agreed to build further cooperation on a wide range of energy resources, which have a multiplier effect on the economy, in the coming months so that the energy pillar of bilateral engagement can be strengthened.
Gazprom braces for decline in European gas exports, prices
Kremlin-controlled energy giant Gazprom on Thursday conceded for the first time that its gas exports to Europe, as well as its prices, will decline in 2019 following record-high volumes last year. The decline in volumes and prices augurs badly for Russia and the company, whose sales account for over 5 percent of the country’s $1.6 trillion economy. Gazprom’s gas exports to Europe plus Turkey, where it generates two-third of its income, exceeded the 200 billion cubic metres (bcm) mark for the first time in 2018. It had said the 200 bcm level was the new reality for the company. However, its exports have been steadily declining this year due to a number of factors including sluggish demand. Also, Russian energy sales have become increasingly politicised since 2014 following the annexation of the Crimean peninsula from Ukraine, accusations of meddling in the U.S. presidential election in 2016 and a nerve gas attack in Britain. Mikhail Malgin, an official at Gazprom’s exporting arm Gazprom Export, told a conference call that the company’s gas exports to Europe are seen declining to 192 bcm, while Gazprom’s average export price would fall by 13% this year, to around $215 per 1,000 cubic metres. Moscow has piped gas to Europe from its fields in Siberia and northern Russia for more than 50 years. Gazprom plans to start supplying gas to China in December and it has already started to fill the Power of Siberia pipeline which flows to China, with gas. The company said earlier on Thursday that its second-quarter net income rose by 16% year on year to 300.6 billion roubles ($4.55 billion) thanks to favourable foreign currency rates. Sales in the three months to June 30 edged down to 1.78 trillion roubles from 1.83 trillion roubles in the same period last year. Gazprom also said it has raised a 1 billion euro long-term loan from an undisclosed foreign bank.
India nudges Russia to get OPEC to price oil at reasonable rates
India has nudged Russia to use its influence on oil suppliers cartel OPEC to balance the global oil market, ensuring adequate supply with responsible and reasonable price. Oil Minister Dharmendra Pradhan, on a three-day visit to Moscow, met his Russian counterpart Alexander Valentinovich Novak to review “the entire spectrum of oil and gas cooperation,” Pradhan said in a tweet after the meeting. India, the world’s third-biggest oil consumer, has been pressing the Organisation of Petroleum Exporting Countries (OPEC) for responsible pricing of oil and gas, saying the volatility in rates are far detached from market fundamentals and are hurting importing nations. Russia is collaborating with the OPEC in fixing oil production quota with a view to controlling the prices. “Discussed with Minister Novak about the price volatility in the global oil market that is hurting the interests of both consuming and producing nations,” Pradhan said in another tweet. “Also conveyed our expectation that Russia, as a member of the OPEC Plus, can play an important role in balancing global oil market both in terms of ensuring adequate supply as well as in having a responsible and reasonable price.” India imports over 83 per cent of its crude oil needs. Of the total crude oil imported, about 85 per cent of comes from OPEC nations. Also, 80 per cent of gas imports come from those countries. India believes OPEC has a major role in shaping oil prices and availability, and the current high oil prices dent economic development of many countries as well as threaten already fragile world economic growth. Pradhan also discussed with Novak interest of Indian firms in investing more in Russian oil and gas fields. He also sought Russian investment in Indian oil and gas exploration and production (E&P), oil refining, petrochemicals and LNG import facilities. “Minister Novak and I met with over 20 CEOs and senior representatives of Indian and Russian oil & gas companies both in public and private sector,” he said. “Discussions recognized that there are still enormous opportunities for investments in oil and gas assets in Russia, and Russian investments in new initiatives launched to transform India into a gas-based economy through CGD, LNG terminals and use of natural gas in transportation, and expanding E&P opportunities and also refining capacities.” CGD is city gas distribution network that retail CNG to automobiles and piped cooking gas to households. Liquefied natural gas (LNG) is super-cooled natural gas that turns into liquid for ease of transportation in ships. “We agreed to propose concrete recommendations including a roadmap and action plan for cooperation in the oil & gas sector to the Eastern Economic Forum and 20th Annual Bilateral Summit between Hon. Prime Minister Shri @narendramodi and President Putin,” Pradhan said in another tweet. Pradhan had on Thursday met officials of Russian oil firm Rosneft to discuss collaboration between the two nations. A Rosneft-led consortium had in 2017 bought Essar Oil that operates 20 million tonne refinery at Vadinar and over 5,500 petrol pumps in the country, for USD 12.9 billion. Essar Oil has since been renamed Nayara Energy. Pradhan is in Moscow ahead of Prime Minister Narendra Modi’s visit to Russia. Modi will be the chief guest at this year’s Eastern Economic Forum in Vladivostok between September 4 and 6. Modi would also meet the Russian President for the annual summit. Energy-hungry India is keen on sourcing one million barrels per day of oil and oil-equivalent gas from Russia and had identified Sakhalin-3 in the Far East, Vankor in East Siberia, and Terbs and Titov oilfields in Timan Pechora region as fields for potential collaboration. But, it has so far been unsuccessful in its attempts. OVL already has 20 per cent stake in Sakhalin-1 oil and gas field in Far East Russia, and in 2009 acquired Imperial Energy, which has fields in Siberia for USD 2.1 billion. Russia is wooing Indian investments in its Far East region ahead of Modi’s Vladivostok visit to balance China’s expanding presence in the resource-rich region.
Bengaluru to have mega tower powered by electricity generated using natural gas
Bloom Energy, Atelier Global, GAIL (India) Ltd, IOC, and representatives of the US-India Strategic Partnership Forum, on Thursday announced a commercial real estate development here that will be powered by clean reliable electricity generated using natural gas. Atelier, a real estate developer, has conceptualised Whitefield Tower, a business-hospitality development with 6.9 lakh square feet of premium offices housing “business checks in,” 2 levels of “shoppable entertainment,” 60-room boutique hotel, high-end co-working spaces among others. Upon its completion, the Whitefield Tower will be a first-of-its-kind development with 87,000 sq. ft. floor plates, large spans measuring 15 metres, fresh air architecture, central core design, 4.5-meter heights and 100 per cent daylight harvesting, a Bloom Energy release said. Developed in Silicon Valley, the Bloom Energy Server is the world’s most efficient commercially available electricity generation device, the release claimed. It produces power without combustion through an electrochemical process which generates virtually no smog-forming emissions. Bloom Energy Servers can operate using natural gas, biogas from landfills, food or animal waste, or hydrogen as fuel, it was stated. The Bloom Energy Server development at Whitefield Tower is the first natural gas-powered solid oxide fuel cell project in India since the launch of the US-India Gas Task Force, the release said. The task force was established by Minister of Petroleum and Natural Gas Dhamendra Pradhan and US. Department of Energy (DOE) Secretary Rick Perry in April 2018 to support the Indian government’s goal to increase the share of natural gas in India’s energy mix from 6.5 per cent to 15 per cent by 2030, it said. “The Whitefield Tower development is a fine example of the potential of natural gas power to transform electricity generation in India,” said Bhuwan Chandra Tripathi, former Chairman and Managing Director of GAIL, in the statement. “GAIL gas has developed a robust infrastructure to deliver reliable power to customers that will support the growth of Bloom Energy in Bengaluru and neighboring areas,” said A K Jana, CEO of GAIL Gas.