Delhi industries asked to switch over to PNG by January-end
All the industrial units spread across 50 areas in Delhi have been directed to switch over to Piped Natural Gas (PNG) by January 31 next year. This move is aimed at reducing the city’s air quality index which has been deteriorating regularly. Considering the fact that the industrial sector is one of the major contributors to air pollution in Delhi and the National Capital Region (NCR), the Commission for Air Quality management has issued notices to about 1,644 such industrial units which are running in different areas in Delhi. Though a sizeable number of industries are using PNG, the Commission stressed the need for all identified industries in Delhi to switch to PNG. Indraprastha Gas Limited (IGL) and Gas Authority of India Limited (GAIL) were impressed upon to complete the pipeline network, metering and associated infrastructure. “IGL, Delhi Pollution Control Committee (DPCC) and Delhi government were also asked to work in close coordination with the industrial units so as to target completion of infrastructure works and complete switch over to PNG, by all the identified industrial units in Delhi, by January 31, 2021,” said a statement from the Ministry of Environment, Forest and Climate Change. The DPCC was also directed to inspect and identify the industries using unapproved fuels and to take stringent penal action in case of non-compliance. The air quality of the national capital has been deteriorating continuously and remained in the ‘very poor’ category with overall AQI of 373 recorded on Tuesday by the System of Air Quality and Weather Forecasting and Research (SAFAR) under the Ministry of Earth Science. “The overall air quality has deteriorated to the higher end of the very poor category as forecast. Surface-level winds are low and westerly. Surface winds are likely to further slowdown and surface inversion is likely to form,” SAFAR said. “Under the calm wind-cold conditions, fog formation is likely in the region. This would be mainly radiative fog as a result of locally generated favourable weather conditions and may not persist longer. Slowing of dispersion owing to low ventilation is forecasted for the next two days.” Hence, SAFAR said, AQI is forecasted to further deteriorate to the higher end of the “very poor” category by December 23 and December 24. Quite a few regions may even experience severe AQI for a shorter time period, especially during early morning. “Secondary particulate formation mechanism (which rapidly multiplies particulate pollution) is forecasted not to be triggered at present.” According to SAFAR, the concentrations of the particulate matter (PM) with a diameter of 10 and 2.5 microns stood at 379 and 215 respectively.
Venezuela resumes direct oil shipments to China despite U.S. sanctions
Venezuela has resumed direct shipments of oil to China after U.S. sanctions sent the trade underground for more than a year, according to Refinitiv Eikon vessel-tracking data and internal documents from state company Petroleos de Venezuela (PDVSA). Chinese state companies China National Petroleum Corp (CNPC) and its listed subsidiary PetroChina – long among PDVSA’s top customers – stopped loading crude and fuel at Venezuelan ports in August 2019 after Washington extended its sanctions on PDVSA to include any companies trading with the Venezuelan state firm. https://reut.rs/36ZyATv The imposition of the sanctions was part of a push by the Trump administration to oust Venezuelan President Nicolas Maduro, but they failed to completely halt the South American nation’s oil exports or to loosen Maduro’s grip on power. PDVSA’s customers instead boosted shipments to Malaysia, where transfers of cargoes between vessels at sea have allowed most of Venezuela’s crude to continue flowing to China after changing hands and using trade intermediaries. PDVSA and Venezuela’s oil ministry did not reply to requests for comment. A U.S. Treasury Department spokesperson said on Nov. 25 that “those engaged in activity in the Venezuelan oil sector risk exposure to sanctions.” The first tanker to resume transport of Venezuelan crude directly to China was the Kyoto, identified by shipping monitoring service TankerTrackers.com while loading 1.8 million barrels of heavy crude at Venezuela’s Jose port in late August. At least one other tanker, the Warrior King, is discharging Venezuelan crude at China’s Bayuquan port, while two vessels listed in shipping database Equasis as being owned by CNPC units loaded oil in Venezuela in November, according to PDVSA’s loading schedules and shipping documents, and Refinitiv Eikon data. Singapore court documents seen by Reuters show shares in the companies that own the two vessels – the Xingye and the Thousand Sunny – were transferred to CNPC units earlier this year. Following publication of this story, a CNPC spokesman said the two tankers were no longer owned by CNPC at the time of the loading. He provided no further details of the sale of the tankers and Reuters was unable to confirm it independently. The CNPC spokesman said the company and its subsidiaries had suspended oil trading with Venezuela. The Kyoto, chartered by a company called Wanneng Munay according to an internal PDVSA document, discharged at China’s Dalian oil terminal in early November after covering a large portion of its route to Asia in a so-called “dark voyage,” with its location transponder offline, Refinitiv Eikon data showed. Wanneng Munay is among a group of more than a dozen Russian-registered companies with no known prior oil trading experience that have emerged as PDVSA customers in recent months. The emergence of these firms has allowed PDVSA to continue shipping oil to Asian destinations in recent months despite withdrawals by established customers like India’s Reliance Industries and Thailand’s Tipco after the U.S. Treasury ended their exemptions to sanctions. Wanneng Munay could not be reached for comment. The company that registered its webpage, Moscow-based OGX Trading, told Reuters in October the firm had not been able to start trade activities as planned due to the coronavirus. Monte Nero Management SA, operator of the Kyoto, did not immediately respond to a request for comment. BIDEN GOVERNMENT The direct shipments come ahead of January’s transition of power in the United States from Republican President Donald Trump to Democratic President-elect Joe Biden, whose advisers have said he would retain sanctions but shift the focus of U.S. strategy. The resumption of direct imports by China comes after Washington earlier this year took action against units of Russia’s Rosneft and later went after shipping firms that continued to do business with PDVSA following trade sanctions first imposed in early 2019. Since its units were hit by sanctions, Rosneft has halted business with PDVSA, the company has said, but the sanctions on its subsidiaries have not been lifted. The U.S. State Department had no comment about the resumption of direct oil trade between Venezuela and China. On Nov. 26, the Togo-flagged tanker Warrior King, which was owned by Venezuela until September, was docked at China’s Bayuquan oil terminal after transporting some 600,000 barrels of Merey 16 heavy crude loaded in September, according to one of the PDVSA documents and Refinitiv Eikon data. PDVSA did not list a customer for the cargo and Panama-based Umbridges Trade SA, owner of the tanker, could not be reached for comment. PDVSA documents and vessel tracking data also confirmed that two China-flagged very large crude carriers (VLCC) with the capacity to transport some 2 million barrels of crude each loaded Venezuelan heavy crude at the Jose terminal in recent days. One of the vessels, the Xingye, departed from Venezuela on Nov. 26 signaling Singapore as its destination, Eikon data showed. The other, the Thousand Sunny, had yet to set sail. Both tankers were owned by a PDVSA-PetroChina joint venture until earlier this year when PetroChina assumed full ownership, After publication of this story, the CNPC spokesman said the company had not owned the vessels “since a long time ago.” He did not provide details of any sale. The buyer behind the two cargoes is a firm called Cirrostrati Technology Co LTD, according to the PDVSA documents. Reuters could not reach the company for comment or determine where it was based. China has joined Venezuela’s other close allies – Russia and Cuba – in publicly criticizing sanctions on OPEC-member Venezuela. Maduro’s Socialist government held a meeting with a delegation of Chinese officials and businessmen in November to tout a new law to promote investment despite what Caracas has called a “blockade” by Washington. The law allows the government to sign new oil deals confidentially. Maduro said during the meeting he would send a letter to China’s President Xi Jinping encouraging more robust commercial relations between the two countries. “We have to move forward with investments, with wealth creation, with new partnerships. The anti-blockade law allows all that. Let’s do it in this new phase,” Maduro said.
Russia looking to bolster oil supplies to India for decades ahead
Russia retains a solid place in the Indian energy market, and wants to expand its oil exports to the South Asian country, says Russian Ambassador to India Nikolai Kudashev. “This means more oil supplies there on a long-term basis, as well reaching contractual terms for the supply of Russia’s black gold to India for 20-25 years ahead,” he told reporters on Monday, adding that negotiations on the issue are currently underway. “We supply crude oil and liquefied natural gas there. The point is now to raise this cooperation to a new long-term level, and therefore to give a new quality to our interaction in terms of energy supplies and security.” The ambassador also talked about attracting Indian investment “more widely” in the development of the Vostok Oil project in the Russian Arctic. The project’s annual crude production could be up to 100 million tons, according to preliminary estimates. Kudashev said that India has shown “great interest in the project.” Crude reserves in Russia’s Arctic have been attracting Indian companies willing to invest into the massive Vostok oil project which is “very interesting” for the country, Indian Minister for Petroleum and Natural Gas Dharmendra Pradhan said earlier.
Infrastructure for Siliguri-Charali petroleum pipeline soon
The construction of infrastructures for Siliguri-Charaali petroleum pipeline will begin soon. The construction is underway for the infrastructures to store 40,000 kilolitres of petrol in Charali of Jhapa in eastern Nepal. According to local depot chief Manish Neupane, Nepal Oil Corporation in had purchased the land for the purpose four years ago and infrastructure construction was underway now. The depot will have the capacity of storing 12,050 kiloliters of petrol, 28,050 kiloliters of diesel, 450 kiloliters of kerosene, and 250 kiloliters of aviation fuel. The budget for the three-year project is Rs 10 billion. This is the second inter-country pipeline project in the country. The respective country will bear the construction cost of the project in their territories. The pipeline project will begin from Siliguri, India and will enter Nepal via Indo-Nepal border at Mechi Bridge. Of the total 50 km of pipeline, 35 km will be on the Indian side while 15 km in Nepal.
India notifies transparent gas market price discovery template
The Union government has laid down the template for the transparent gas market price discovery and has empanelled SBI Capital Markets Ltd, MSTC Ltd, Crisil Risk and Infrastructure Solution Ltd, RITES Ltd and mjunction services Ltd to carry out discovery auctions through an electronic platform. A petroleum and natural gas ministry notification dated 3 December has laid down the process to be followed for discovering market price for domestically produced natural gas. According to the notification, a contractor shall engage on independent agency from the above-mentioned firms, who have been initially empanelled for three years. “The Contractor shall design the tender/ bid offer, including eligibility criteria, bid parameters, evaluation criteria, tender fee, salient terms and condition of Gas Sales Agreement and any other relevant information, etc., with a view to encourage wider participation from prospective buyers, promote competition and maximize the value of natural gas offered,” the notification stated. This standardized e-bidding mechanism has been formulated by the directorate general of hydrocarbons (DGH) after the Cabinet Committee on Economic Affairs (CCEA) in October had approved the formulation of a standard procedure for market price discovery of gas across various contractual regimes. “On completion of the bidding, the Contractor shall submit a bid closure report to DGH with details such as list of participants, list of qualified bidders, selected bidders with their price and quantity allocated etc. Further, a copy of all the Gas Sales Agreements (GSAs) executed between Contractor and buyers shall be submitted to DGH,” the notification said. The move is expected to attract investors and help India’s push for a gas-based economy, with the government’s plan to increase domestic gas production by an additional 40 million standard cubic meters a day (mmscmd), from the current 80 mmscmd. “The entire proceeding will he conducted by the Contractor/producer without any need for approval of the government. The government however will have the right to ask for information and intervene if there are reasons to believe that there is foul play,” the notification said. The government has already provided for pricing and marketing freedom of gas from blocks awarded under the Discovered Small Field Policy (DSF), Hydrocarbon Exploration and Licensing Policy (HELP) and Coal Bed Methane (CBM) contracts, and discoveries from difficult fields such as deep water, ultra-deep water and high pressure-high temperature areas. This brings all of it under a standard procedure for market price discovery of gas. “National Oil Companies viz., ONGC and OIL shall also follow the above guidelines for discovery of market price of natural gas produced from their Nomination fields wherever pricing and marketing freedom has been granted,” the notification added. Gas comprises about 6.2% of India’s primary energy mix, far behind the global average of 24%. The government plans to increase this share to 15% by 2030. India’s gas demand is expected to be driven by fertilizer, power, city gas distribution, and steel sectors. “The objective of the policy is to prescribe standard procedure to discover market price of gas to be sold in the market by gas producers, through a transparent and competitive process, permit Affiliates to participate in bidding process for sale of gas and allow marketing freedom to certain Field Development Plans (FDPs) where Production Sharing Contracts already provide pricing freedom,” the government had said in a statement in October. However, this mechanism will not be applicable for production from blocks awarded on a nomination basis, governed by a formula announced in October 2014 by the National Democratic Alliance government. The formula uses the weighted averages of prices in the three major international gas trading hubs of US Henry Hub, the UK National Balancing Point and Japan’s custom-cleared rate. As per the gas price formula for nominated fields, India has reduced the domestic natural gas price to $1.79 per million British thermal units (mmBtu)—the lowest under the new domestic gas price regime, which was introduced in 2014. The new price will be applicable from 1 October till 31 March. “The existing gas sales agreements, made in connection with contract provisions, would continue till duration of the agreements/contracts and thereafter subsequent sale of gas shall be subject to these guidelines,” the notification said.
Gas crisis in Pakistan to worsen in January 2021
The gas crisis in Pakistan is set to worsen in January 2021, as Sui Northern Gas Pipelines Limited (SNGPL) will face a shortage of 500 mmcfd and will be left with no option but to close down Regasified Liquefied Natural Gas (RLNG) supply to the power sector. According to The News International, in wake of delay in receiving the LNG cargo from Nigeria, the gas crisis has aggravated in Balochistan and Sindh as Sui Southern Gas Company (SSGC) is not able to retain the RLNG of 200 mmcfd, instead, the intake of RLNG to SSGC has reduced, which has further worsened the gas crisis in Karachi and Quetta. SNGPL has already closed down RLNG supply to captive power plants meant for non-zero rated industry, and the supply of RLNG to CNG and fertiliser sectors have also been stopped. After placing a cut of RLNG to the power sector, the authorities will be able to divert 250 mmcfd to the domestic sector, but it will continue to face a gas deficit of 250 mmcfd. In Pakistan, people are forced to purchase LPG to cater to their food needs, and the gas crisis has reached an extent that, except in posh areas, people have started facing gas with low pressure and in some areas, they are using wood as fuel. The Pakistan government may also go for RLNG supply cuts to the export industry once a week from January 2021. From January 4 to 20, the gas crisis will heighten to a large extent because of failure in getting hold of three cargoes of LNG as the bids were received in fixed price in dollar terms at USD 12.95 to USD 15.95 per mmbtu, and the government decided not to procure the pricey LNG, The News International reported. Pakistan LNG Limited (PLL) wanted to have six spot cargoes for January, but when the bids were opened on December 10, 2020, international LNG suppliers for the first time did not turn with bids for the LNG vessels required for the time slot of January 8 to 11, 2021, January 12 to 14 and January 14 to 15. Furthermore, no response from LNG suppliers for the said time slots had put the authorities in a state of shock. The News International reported that the Pakistan government authorities are trying to shift some LNG cargoes, which are due in the last week of December, to the month of January to reduce the intensity of the gas crisis. The government is also reported to be desperately trying to garner the support of Qatar authorities to bail Pakistan out of the impending gas shortage.
India’s natural gas consumption rises 2% in November from a year earlier
Natural gas consumption in the country has risen 2% in November from a year earlier, signalling a rebound in the industrial activity. The consumption rose to 5.2 billion cubic meters (BCM) from 5.1 BCM last November, as per the official data. The demand for the April-November period is down nearly 5% from last year. “There has been a growth in consumption as the economic activities regain slow and steady growth,” the oil ministry’s Petroleum Planning & Analysis Cell said in its monthly report. The initial demand recovery was led by the fertilizer and power plants and refineries. “City gas demand that had sharply dropped due to the lockdown is also returning with new city gas licensees setting up CNG fuelling stations,” said E S Ranganathan, director (marketing) at GAIL, the nation’s largest gas marketer. Lockdown had curbed public transport, a key consumer of compressed natural gas in big cities like Delhi and Mumbai. With schools still shut, a big segment of CNG buses are still not on the roads. But the deficit is being met by new CNG pumps being set up in new city gas license areas. Increased activity in smaller factories, which get supply from city gas distributors, has also helped. Fertilizer is the biggest consumer with about 30% of all gas consumed while power takes about 20%. City gas distributors have recovered to 18% while refinery and petrochemicals take about 14% and 6% respectively. The demand for natural gas for cooking at home has remained steady although it has fallen sharply for restaurants this year due to fewer people eating out. India imports a little more than half of its natural gas requirement and lower international prices for many months also helped boost domestic demand. Rates of natural gas have risen in the international market now, which can have adverse effect on consumption.