Indonesia eyes biodiesel with 40 per cent bio-content during 2021-2022
Indonesia, the world’s largest palm oil producer, plans to implement a biodiesel programme with 40 per cent bio-content (B40) between 2021 and 2022, a government official said on Tuesday. From January, Southeast Asia’s largest economy is set to bring in biodiesel with 30 per cent bio-content through the B30 programme, which sent palm prices higher on concern that it will export less palm oil – a feedstock for the fuel. The government aims to start road tests using B40 next year, Luhut Pandjaitan, coordinating minister for Maritime and Investment Affairs, which oversees the energy ministry, told reporters. President Joko Widodo sees the biodiesel programme as a way of offsetting a current account deficit caused by large energy imports, while also supporting demand for palm oil, one of Indonesia’s main commodity exports. Widodo has asked for further expansion of the biodiesel programme and ordered studies on mixing palm-based fuel with jet fuel. Pandjaitan, however, said the country may not have enough supply of palm oil to go beyond the 50 per cent bio-content. “We may stop at B50 if (palm) yield is not improved, if the replanting is stalling,” he said. In 2017, Indonesia launched a palm replanting scheme to double the productivity from small farmers, and had planned to replace old trees on more than 2.4 million hectares (6 million acres) of palm under cultivation by 2025. However, a government official said in September that the country can only replant 180,000 hectares of plantation area per year, due to difficulties smallholders faced in proving they were eligible for the scheme. This meant it could take at least 12 years to complete the programme of replanting palm-growing areas. Since the launch in 2017, the replanting has only reached around 120,000 hectares.
Gazprom undersea pipeline to provide gas to Pak, India
Russian energy major Gazprom is set to initiate feasibility study in the first quarter of 2020 for laying an undersea pipeline, beginning from the Persian Gulf and extending to Pakistan, India and Bangladesh, and ultimately ending in China, after touching Myanmar and Thailand. The pipeline will pass through the shallow waters of Pakistan, India and Bangladesh, and each of the countries will get gas from the pipeline, The News quoted a senior Petroleum Ministry official as saying. The total cost of the undersea pipeline will be around $20-25 billion when it is extended to China. The most important aspect of the project is that every country will provide transit fee to Pakistan, which will run into billions of dollars. Pakistan will be getting transit fee from India, Bangladesh, Myanmar, Thailand and China. Pakistan’s Navy will provide security for the pipeline. Pakistan and India have already signed MoUs and agreements with Russia separately for the project under which both countries would get gas from the undersea pipeline through the spur pipelines. According to the official, Pakistan will get up to 1 billion cubic feet per day gas from the undersea pipeline. More importantly, a Russia-Pakistan economic corridor will also be set up and Russia will invest in fiber optic link, roads and power projects as ancillary facilities. Russia is already engaged with Pakistan on the North South Gas Pipeline, which will cost $2-2.5 billion. However, Gazprom has also shown interest in building gas storages in Pakistan with investment of $400-500 million, the report said. Russia is also interested in investing in exploration and production activities in Pakistan, and to this effect Gazprom is currently engaged with the top management of Oil and Gas Development Company Limited (OGDCL), a Pakistani multinational oil and gas company. The official said Pakistan and India will share data with the Russian company about the demand for gas with future projections of the next decade. Based on data from the two countries, Gazprom will start the feasibility in the first three months of 2020, and the whole process from sharing the data to completion of feasibility report will be finished in one year’s time. If the project is found feasible, the pipeline will be laid undersea in 3-4 years.
Chinese buyers offer to resell LNG cargoes as they struggle with weak demand
Chinese companies are offering to resell liquefied natural gas (LNG) cargoes in the spot market as they grapple with high inventory amid weak demand due to a slowing economy and a milder than usual winter, several trade sources said on Monday. The world’s second-largest buyer of LNG is currently facing high inventory of the super-chilled fuel in some areas, several sources familiar with the Chinese market told Reuters. “It’s quite warm in China and the demand is very bad,” one of the sources with a state-owned company said, declining to be named as he was not authorised to speak with media. He added that about 5 to 7 LNG cargoes are being offered for resale in a month, though this could not be independently verified. Further details were also not immediately available but sources say the main company to offer cargoes for re-sale has been China National Offshore Oil Corporation (CNOOC). CNOOC did not immediately reply to Reuters request for comment but the sources added that CNOOC has so far sold at least one cargo to a Japanese buyer. A second source added that buyers in northeast China may be facing ‘tank-tops’ which refers to storage tanks being full. China does not release any official information on its LNG storage volumes but shipping data by Refinitiv Eikon shows that the country imported the second highest monthly volumes of LNG for the year in November. The import volumes, however, likely comprise mainly term volumes, which had already been committed for purchase by buyers, or spot volumes purchased earlier in the year, the sources said. Temperature forecasts for Beijing and Shanghai are expected to be warmer than usual until mid-January, according to Refinitiv’s weather data. China’s natural gas demand is expected to expand at half the rate this winter compared to a year earlier, as Beijing slows its gasification push due to a weaker economy and competition from cheaper coal, state oil officials said last month. State-owned companies are also facing additional pressure as their typical customers such as Guangzhou Gas and Guangdong Energy Group are now importing spot cargoes directly from the international market, the sources added.