China’s Guangdong starts building $1 bln Huizhou gas terminal
China has begun building a $1 billion natural gas import and storage base in the southern coastal province of Guangdong, a project in which U.S. energy major ExxonMobil is advancing discussion with partners for a joint investment. ExxonMobil entered in September 2018 a preliminary deal with Guangdong province to invest billions of dollars worth of projects in the manufacturing hub, including a petrochemical complex and an LNG terminal in Huizhou. “ExxonMobil is progressing project discussions with potential partners,” a Beijing-based company representative said, without giving further details. Official Xinhua news agency had reported on Saturday Guangdong started constructing the terminal last Friday and aimed to start operating the import facility around the end of 2023. The new terminal, situated at Huidong county of Huizhou city, has a designed annual receiving capacity of 4 million tonnes under phase-one investment estimated to cost 6.636 billion yuan ($1.02 billion), Xinhua said. China’s state economic planner, the National Development and Reform Commission, gave the greenlight for the project in early-July, the report added. The Huizhou terminal includes a berth that can dock up to 266,000 cubic-meter tankers of liquefied natural gas and three storage tanks each sized 200,000 cubic meters. The report did not give any details on the investors of the project. Guangdong also envisages expanding the project under phase two by adding another three 260,000-cubic meters tanks to raise the facility’s handling capacity to 10 million tonnes a year, the report said.
Excise duty collections from petroleum products being used in infra development: Nitin Gadkari
Union Minister Nitin Gadkari on Thursday said excise duty collected from petroleum products are being used for infrastructure development and other development items. The road transport and highways minister said this in the Lok Sabha while replying to a question on the impact of rising fuel prices on the logistics cost of transportation in the country. “The excise duty rates on petroleum products have been calibrated to generate resources for infrastructure and other development items of expenditure, keeping in view the prevalent fiscal situation,” Gadkari said. According to the minister, the logistics cost of transportation through road depends on several factors such as capital cost of the vehicle, salaries, insurance, permit tax, maintenance, fuel, toll tax and other miscellaneous expenses. The excise collections on petrol and diesel jumped by 88 per cent to Rs 3.35 lakh crore in the last fiscal ended March 31, 2021, after excise duty was raised to a record high. The excise duty on petrol was hiked from Rs 19.98 per litre to Rs 32.9 last year to recoup gains arising from international oil prices plunging to a multi-year low as the pandemic gulped the demand. Citing a study conducted by the Ministry of Road Transport & Highways through a consultant, Gadkari said the impact of fuel is 34 per of the total transport freight cost by vehicle. “The transport companies may or may not pass the increased cost depending upon the market situation or capacity to absorb additional cost etc,” he said, quoting the study. The prices of petrol and diesel are market-determined with effect from June 26, 2010, and October 19, 2014, respectively. Since then, the public sector oil marketing companies (OMCs) have been taking the appropriate decision on the pricing of petrol and diesel based on international product prices and other market conditions. Replying to a separate question, Gadkari said the national and local level lockdowns and restrictions due to COVID-19 posed constraints to the movement and supply/availability of materials, machinery and labour, which affected the progress of works. “However, due to several initiatives taken by the government under Atmanirbhar Bharat to provide relief measures to contractors/ concessionaires/ consultants, the maintenance and development work on National Highways have overshot the targets,” he noted. The minister pointed out that NHAI awarded 31 projects of 890 km length at a cost of Rs 26,322 crore from April to August 2020. The length of projects awarded by NHAI in the April to June period of 2021-22 stood at 383 km.
Trump slams Biden for approach to energy, coronavirus, internal security
Former US President Donald Trump has criticized the administration of US President Joe Biden for its approach to dealing with COVID-19 and the current energy policy, as well as an array of other issues, including border security. Speaking at the Turning Point USA Student Action Summit in Phoenix, Arizona, on Saturday, Trump said the Biden administration has been “negotiating with OPEC and Russia.” “Now we’re not energy independent,” Trump said. Earlier this month, the OPEC+ countries decided to extend the agreement on oil production cuts until the end of 2022. The US does not participate in OPEC talks, but Washington has expressed support for the negotiations. Trump also criticized Biden for allowing the Nord Stream 2 gas pipeline project to go ahead, and laughed at claims of reported Russian involvement in the Hunter Biden laptop hack. “Russia did it again,” Trump told the Turning Point USA Student Action Summit in Phoenix, pointing out that “it’s always Russia” because “they are getting rich from China” but not from Russia. Trump also criticized the current administration in Washington for not doing enough to stop the spread of COVID-19 and once again blamed the pandemic on China, saying it should “pay us retribution.” The former president reiterated his claim that the presidential elections last year were rigged, saying that the Democrats cheated with “millions of votes” in 2020. Trump called the election a “disgrace” and told the Turning Point USA Student Action Summit that “our nation is being destroyed.” The former US president pointed to increasing violence and crime in the US, saying that defunding the police and weakening law enforcement is going to make the situation worse. “Hundreds of people are being shot every weekend” in Chicago, Trump said, stressing that the city is “worse than any war zone.” He also emphasized that crime rates are at unprecedented high in New York. “We’re becoming a communist country,” Trump emphasized, adding that the current leadership is allowing the US to get “pushed around” by other countries. He said that the current administration is responsible for the influx of immigrants who continue crossing the southern border. Trump also criticized the Green New Deal (GND) on climate change.
Iran inaugurates major oil pipeline to bypass Hormuz Strait
Outgoing Iranian President Hassan Rouhani has inaugurated a major onshore pipeline that allows the country to bypass the Hormuz Strait for crude oil exports. The pipeline, with some 1,000 km in length, will transfer the pumped oil from facilities in Goureh to the Omani sea port of Jask, reports Xinhua news agency. The inauguration of the Goureh-Jask pipeline “gives a strong and firm response to all plotters particularly to the US,” Rouhani said during the virtual opening ceremony on Thursday, alluding to the American sanctions, which are aimed at hindering Tehran’s oil exports. “The US government waged war on us in two areas, one on oil exports, and the other on the supply of goods.” “They aimed to stop Iran’s oil exports and reduce crude exports to zero,” he said, hinting at the failure of the US anti-Iran maximum pressure policy. The $2- billion project, the construction of which started two years ago, detours the strategic Hormuz Strait which has long been used as a vital passageway for oil exports of the region. “As time goes by, the importance of this project will become more evident for the Iranians,” said Rouhani. The oil pipeline is able to initially export 300,000 barrels per day (bpd) of crude and will reach the capacity of one million bpd once fully ready in October, according to authorities.
LNG imports dip 17 per cent in June as prices soar, local output rises
Import of liquefied natural gas (LNG) dropped 17% in June over the last year as prices soared and local gas production expanded. LNG prices in the spot market have risen as high as $14 per metric million British thermal units (mmBtu), curbing demand and prompting many consumers to switch back to cheaper fuel oil. The spot prices had dropped to a record low of $2 per mmBtu last year but have been above $10 for the past few months. “Barely any spot cargoes have been imported in the past 2-3 months,” said an executive at GAIL, the country’s largest gas marketer. Spot and short-term cargoes comprise about half of India’s total LNG demand. Currently, prices under long-term contracts are a few dollars lower than the spot market and are being preferred by consumers, industry executives said. However, long-term LNG, too, has become expensive in the past few months as it’s mostly linked to crude oil prices that have climbed above $70 a barrel with a return in global demand amid an artificial supply curb by key producers. Some of the local demand for LNG is also being met by new production from the KG Basin gas fields operated by Reliance and BP. Production from fields operated by private players jumped three-fold to 862 million standard cubic meters (mscm) while the country’s overall output rose by a fifth to 2,777 mscm. The overall gas demand in the country, however, was lower at 5 billion cubic meters (bcm) in June, compared to 5.1 bcm a year earlier and 5.4 bcm of June 2019. “Any quantum jump in the domestic gas demand would come only after some of the under-construction fertiliser plants come onstream,” said the GAIL executive cited earlier.
India’s gas production jumps 19.5% in June on back of KG-D6
India’s natural gas production jumped 19.5 per cent in June, as Reliance Industries Ltd and its partner BP Plc ramped up output from their eastern offshore KG-D6 block, government data released on Friday showed. India produced 2.77 billion cubic meters of natural gas in June, up from 2.32 bcm in the same month last year, as per the data released by the Ministry of Petroleum and Natural Gas. This is the fifth straight month of output rising on a year-on-year basis. “Increase in gas production is through contributions from D-34 field of KG-DWN-98/3, which commenced from December 18, 2020 (and) wells from satellite cluster (commenced with effect from April 25, 2021),” it said. Reliance is the operator of block KG-DWN-98/3 or KG-D6 in the Krishna Godavari basin, off the east coast. The firm started producing from the second wave of discoveries in the block in December. D-34 or R-Series was the first field to start, followed by Satellite Cluster. Peak production from R-Cluster will be 12.9 million standard cubic meters per day, according to the operators. Satellite fields would produce a maximum of 7 mmscmd. MJ field in the same block will start production in the third quarter of 2022 and will have a peak output of 12 mmscmd. The production from KG-D6 more than made up for a fall in the output from fields operated by Oil and Natural Gas Corporation’s (ONGC). ONGC produced 5.6 per cent less gas at 1.68 bcm. Production from fields operated by the private sector in the eastern offshore was 545.53 million cubic meters in June as compared to 45.62 mmcm a year back, the data showed. It did not give a field-wise breakup. India’s crude oil production in June slipped 1.8 per cent to 2.48 million tonnes as state-owned ONGC and Oil India Ltd (OIL) produced less. Oil refineries processed 5 per cent more crude at 18.4 million tonnes in June when compared to the year-ago period, when economic activity had almost come to a halt because of a stringent nationwide lockdown. Private sector refiners produced 13.6 per cent more crude at 6.9 million tonnes, while public sector refiners processed 2.7 per cent less crude at 10.04 million tonnes. This is because public sector refineries operated at 85.71 per cent of their capacity, while private ones operated at 94.76 per cent. The refineries produced 4 per cent more fuel at 19.17 million tonnes in June.
RIL likely to produce natural gas from MJ field starting Q3FY23
Reliance Industries Ltd (RIL) is likely to produce natural gas from the MJ field of the KG D6 block by the third quarter (October-December) of next fiscal. The company, in an investor presentation, said that the first offshore installation campaign has been completed and the second offshore installation campaign will commence in November 2021. Noting that drilling and completion of wells are underway and FPSO and Subsea Production System on track, the presentation said: “First gas expected by 3Q FY23.” Regarding the performance of the oil and gas of the company, the presentation said that significant turnaround in oil & gas business was witnessed with start-up of new production system in KG D6. The Q1FY22 domestic production (RIL share) stood at at 35.83 BCFE, almost at par with FY20 levels and the revenue was at 10-quarter high. It added that three rounds of bidding have been completed for KG D6 gas and 18 MMSCMD of gas have been successfully contracted in domestic market.