How the drive against industrial pollution is set to boost natural gas consumption in India
A strong push by the National Green Tribunal (NGT) to curb the usage of dirty and polluting industrial fuels including coal, petcoke and fuel oil is set to boost consumption of natural gas in India. The trend will benefit companies like Petronet LNG and GAIL apart from City Gas Distribution (CGD) entities. The NGT has taken a serious view on curbing industrial pollution and has called for strict action against the Pollution Control Boards (PCBs). “Our broad calculation suggests that replacement of dirty fuels could easily result in incremental demand of 100 million standard cubic metre per day (mmscmd) for natural gas,” equity research firm Motilal Oswal said in a note. In its July 2019 order, the tribunal had asked PCBs to evaluate the cost of damage caused by the critically and severely polluted industrial clusters to the environment for the past five years. It had also asked that the report in that respect be submitted within 3 months of the order. However, discontented with inaction on part of the PCBs, the NGT in an order last month called for “…replacement of persons heading such PCBs/PCCs…or direction for stopping their salaries..deterrent compensation to be recovered from state PCBs/PCCs.” India consumed 896 million tonne (MT) coal in 2017-18. Of this, 71 per cent was used for electricity generation and in steel industry while around 241 MT was used in “others”. Even if 10 per cent of this is replaced by natural gas, it would generate 76 mmscmd of incremental gas demand. Of the total fuel oil consumption of 6.6 MT in 2017-18, manufacturing and miscellaneous applications accounted for 74 per cent. Even if metallurgical applications are excluded, replacement of 4 MT of fuel oil could generate around 11 mmscmd of incremental gas demand. Similarly, 6.8 MT of petcoke could be replaced out of total estimated consumption of 22 MT in the current financial year, generating incremental 14 mmscmd of demand. India imports around 54 per cent of its total consumption of natural gas. Additional import capacity of 105 mmscmd is expected to become operational over the next five years through new LNG terminals. The incremental demand from replacement of dirty fuels would address concerns surrounding the utilization of the additional capacity. The implementation of the NGT order would help address three main concerns of Petronet LNG – competition, cash usage and long-term growth and also drive higher transmission and trading volumes for GAIL. The benefit to CGD entities could be limited as they can only supply to companies that consume volume less than 50,000 standard cubic metre per day.
Pavilion Energy, Total sign binding deal to develop LNG bunkering in Singapore
Pavilion Energy Singapore and a unit of French oil major Total said on Friday they have signed a 10-year deal to develop a liquefied natural gas (LNG) bunker supply chain in the port of Singapore. The binding agreement between Pavilion, which is owned by Singapore’s Temasek Holdings, and Total Marine Fuels Global Solutions follows an initial non-binding one in June last year. The cooperation includes the shared long-term use of the newly built 12,000-cubic metres GTT Mark III LNG bunker vessel that will allow each party to supply LNG bunker to its customers. Singapore aims to position itself as an LNG trading hub for Asia to capitalise on an expected rise in LNG imports in the region, driven by depleting gas production and growing electricity demand. Shipowners are looking at fuelling vessels with LNG as part of a number of options to comply with new rules by the International Maritime Organization that will go into effect in 2020. The new regulations slash the amount of sulphur allowed in the fuel that ships burn.
Patna to get 30 CNG buses by March next year
The Bihar State Road Transport Corporation (BSRTC) has decided to introduce 30 new compressed natural gas (CNG) buses in the city from March 2020 and convert the 100 existing diesel-driven buses into CNG by the end of next year. The BSRTC has initiated the bidding process for procuring 200 new AC and non-AC buses, including 30 CNG buses. “The initiative has been taken to curb pollution in the city. The state government has decided to ban all diesel-based autorickshaws after March 31, 2021,” said transport secretary Sanjay Kumar Agarwal, adding that CNG is not only an eco-friendly fuel, but cheap as well. While diesel and petrol are sold at Rs 71.45 and Rs 79.64 per litre respectively, the cost of one kilogram of CNG is just Rs 63.47 in Patna. “Maintenance cost of CNG vehicles running is also less when compared to diesel and petrol vehicles. The system in which CNG fuel is sealed doesn’t usually leak. Hence, it is safer too,” a transport department official said. There are, however, only three CNG fuelling stations in the city. The transport department official said the number of CNG stations in the city would be increases to 10 by March next year. “Talks in this regard are on with Gas Authority of India Limited (GAIL),” he added. GAIL deputy general manager Rajnish Kumar said the city will get two new CNG stations soon. “The city already has CNG stations at three places – Rukanpura, Zero Mile and Patna-Bakhtiyarpur NH-30 toll plaza. Another CNG station will come up at Saguna Mor by the end of this month. Work on developing a CNG station at Naubatpur will commence in the first week of January,” he added.
India plans bio-gas plants to tackle toxic pollution, but experts sceptical
India is planning to set up more than 100 bio-gas plants and provide thousands of farmers with machines to dispose of crop stubble in a bid to halt the choking crop-burning pollution that blights the country every winter. A major source of the smog that engulfs vast swathes of northern India, including the capital New Delhi, is the burning the straw and stubble of the previous rice crop to prepare for new planting in October and November. New Delhi is regularly judged to be one of the world’s most polluted major cities. Government-backed Indian Oil Corp Ltd will invite private companies to apply to set up 140 bio-gas plants that will use rice stubble as feed stock, two government officials, who didn’t wish to be identified in line with official policy, said. The plants would cost 35 billion rupees ($487.67 million) and each would require two tonnes of crop residue every hour for at least 300 days to produce “an optimum amount” of compressed natural gas (CNG), one of the sources said. The government would earmark funds for the project that would make it attractive for farmers to sell their waste rather than burn it, they said. The stubble pollution has become more acute in recent years because mechanised harvesters leave more residue than crops plucked by hand. Other than helping farmers sell their residue to the new bio gas plants, the government would provide 100,000 new machines every year to farmers to dispose of the farm waste in their fields, the sources said. “We’ll give farmers the choice to either get rid of crop residue or sell it to the bio CNG plants,” one of the sources said. Environmental experts were sceptical. “Given the amount of resources that the government has, what will decide the efficacy of this plan is consistent engagement with farmers,” said Nandikesh Sivalingam, a programme manager for Greenpeace. “But if you expect results next winter, it can’t happen.”
Shell, RIL to hand over PMT fields back to ONGC tomorrow
Reliance Industries (RIL) and Royal Dutch Shell’s Indian subsidiary in a joint statement on Friday announced that they are handing over the Panna-Mukta and Tapti (PMT) oil and gas fields located at Mumbai offshore back to government of India’s nominee Oil and Natural Gas Corporation (ONGC) on 21 December after the 25 year production sharing contract (PSC) ends. The PSC for the Panna-Mukta and Tapti fields, were executed by the PMT joint venture (JV) partners with the government of India in 1994. The PMT JV constituents of ONGC, RIL, and BG Exploration and Production India (BGEPIL), with each holding 40 per cent, 30 per cent and 30 per cent participating interest, respectively. B Ganguly, president of exploration and production at RIL in a statement said, “At their peak, Panna-Mukta have contributed to nearly 6 per cent of India’s oil production and almost 7 per cent of India’s gas production in 2007-08.” According to the release, the PMT fields were the first fields in India to be operated under a joint operatorship model. The fields have produced 211 million barrels of oil and 1.25 trillion cubic feet of natural gas since December 1994. In 2019, the average monthly production from the fields was 10,000 barrels per day of crude oil and 140 million standard cubic feet per day of natural gas. “The Tapti fields had ceased production earlier in 2016 and its process platform facilities were handed over to ONGC in 2016. Decommissioning and site restoration of residual Tapti facilities, including five unmanned platforms and in-field pipelines, are currently being carried out by the PMT JV under India’s first offshore decommissioning and site restoration project,” the release said. According to Press Trust of India report, the fields were awarded to a consortium of US energy giant Enron and Reliance in 1994 and ONGC — which had originally discovered the fields — was given 40 per cent back-in right as a government nominee. Trivikram Arun, managing director at BGEPIL said, “The PMT JV is a great example of a successful partnership between India’s largest national oil company (ONGC), India’s largest private company (Reliance) and an international oil company (Shell).” Enron during its bankruptcy was taken over by BG Group of UK in 2003, while BG Group’s interest was subsequently taken over by Shell in 2016.