Will Afghanistan situation have bearing on global oil prices?
Will the political turmoil in strategically-located Afghanistan impact global crude oil prices? No one has the answer yet. For the uninitiated, it may seem far-fetched that the political brawl in Afghanistan, which neither features as a prominent oil producing country nor a major consumer country, would have a bearing on global crude prices. But the impact of such utter confusion and uncertainty could easily spill over in the region including Iran and other countries such as the Saudi Arabia and UAE which are major oil producers in the world. Saudi Arabia is the second largest oil producer in the world, exporting about 59 per cent of its crude. “What happens in Afghanistan in near future will impact oil prices, especially if the Talibans go back to their old ways and allow sanctuaries to Islamic fundamentalists from hydrocarbon-rich Middle East, North Africa and Central Asia,” energy expert Narendra Taneja in a tweet said. “If they changed, they will not be Talibans,” he added. Taneja told India Narrative that if the turmoil is restricted within Afghan boundaries, the impact would be limited. But if Afghanistan continues to be on boil, and boil violently, the oil producing regions of Middle East and Central Asia could get affected and, consequently, oil prices,” he said. Barrons, a Dow Jones & Company publication, said that tensions in the “Middle East have the potential to lift prices.” It noted that earlier JP Morgan had predicted that oil prices could touch $80 a barrel with rising demand and constraint supply. Matt Gertken, head of geopolitical strategy, BCA Research, a provider of global investment strategy, in an interview with Barrons, however said that the OPEC (Organization of the Petroleum Exporting Countries) 2.0 “has regained discipline after last year’s market-share wars.” “The group won’t want prices to rise too high, which would accelerate global green efforts. The most likely outcome is increased volatility in oil prices,” Barrons quoted him as saying. Brent crude price on Tuesday touched $66.74 a barrel. Global oil prices have been rising throughout 2021 driven by hopes of economic recovery. The major oil producing countries had also cut supplies. Increase in global crude prices has a direct bearing on India’s economy. This could be even harsher at this point, especially as the country, which imports over 80 per cent of its total crude requirements, is still grappling with the after-effects of the Covid 19 pandemic. Domestic prices of petrol and diesel are already at an all time high. Meanwhile, India has already started to diversify its oil importing markets to reduce dependence on particular exporting countries. Countries like the US, Nigeria have come up as important suppliers of crude for India.
GAIL to foray into hydrogen generation, scale up its renewable portfolio
Gail will foray into hydrogen generation and take the acquisition route to scale up its renewable energy portfolio as it pivots business beyond natural gas to align with energy transition being witnessed across the globe. As part of a push to embrace cleaner forms of energy, GAIL will be laying pipeline infrastructure to connect consumption centres to gas sources while also augmenting its renewable energy portfolio, GAIL Chairman and Managing Director Manoj Jain said. “The global energy sector is witnessing a paradigm shift in recent years as the world is transitioning to a sustainable energy future,” he said in the company’s latest annual report. To accomplish a cleaner primary energy mix for India, the government is emphasizing the expansion of the natural gas sector so as to achieve a gas-based economy along with growth in renewables. GAIL as a leading integrated energy major has aligned with this vision, he said. The firm is laying around 6,000-kilometres of pipeline, including a west coast to east coast pipeline from Mumbai to Jharsuduga in Odisha via Nagpur, he said. It currently has around 13,700-km of natural gas pipeline network. GAIL “will be selectively investing in the renewable energy domain given the future growth potential,” he said. The company “has been scouting for opportunities to scale up the RE portfolio from the current 130 MW through bidding and other inorganic routes such as mergers and acquisitions.” “In addition, the company is also foraying into ethanol and hydrogen generation,” he said without giving details. Hydrogen is a clean fuel that, when consumed in a fuel cell, produces only water. Many countries are venturing into hydrogen production from a variety of domestic resources, such as natural gas, nuclear power, biomass, and renewable power like solar and wind. In India, companies ranging from Reliance Industries to Indian Oil Corporation and NTPC have announced ambitious plans for generating hydrogen. GAIL too joins that list now. GAIL, Jain said, has the largest and most diverse LNG portfolio in India that can offer both stable prices and reliable supply to consumers. The company “shall be pushing for higher gas usage in the industrial segment, transport segment using CNG and LNG, Trigeneration, cold storage, etc,” he said, adding the firm was looking for avenues to supply gas in the new segments like LNG trucking (LNG for long-haul transportation). He said GAIL is also looking to expand its presence in petrochemicals and also diversifying into high-margin downstream businesses. “The focus is on having polypropylene (PP) production capacity through setting up two polypropylene units (Propane Dehydrogenation Polypropylene Plant – PDHPP in Usar, Maharashtra and PP plant at Pata, Uttar Pradesh) and assessing opportunities in certain speciality chemicals in India,” he said. GAIL presently has a 1.6 million tonnes per annum polyethylene and PP production capacity. It is also setting up at least two compressed biogas plants and an ethanol factory. India, which imports 85 per cent of its crude oil needs, is stepping up efforts to explore new forms of energy to clean up the skies and reduce dependence on imported fuels. “We have 120 MW of renewable energy capacity which we want to scale up to 1GW in next 3-4 years,” Jain had told PTI last month. GAIL will bid for a 400 MW solar power capacity being auctioned by SECI (formerly Solar Energy Corporation of India) in Rewa, Madhya Pradesh. The company had in 2019 won a bid for 874 MW operational wind power projects of IL&FS for Rs 48 billion. But IL&FS’ other partners used the first right of refusal to block GAIL’s bid, he had said. GAIL has signed up with state-run power gear maker BHEL for its renewable energy foray. The tie-up looks to leverage the competitive strengths of both companies. GAIL will be the project developer and BHEL will be a project manager and EPC (engineering, procurement and construction) contractor. The move by GAIL, which commands a 75 per cent market share in gas transmission and more than 50 per cent share in gas trading in India, is seen as part of the government’s vision to prepare for the energy transition process, under which the share of gas in the energy mix is sought to be raised to 15 per cent by 2030, from the current 6.2 per cent.
Papua New Guinea resumes talks with Exxon on gas field agreement
The Papua New Guinea government and U.S. oil major Exxon Mobil Corp plan to resume talks on the P’nyang natural gas project, nearly two years after their negotiations halted, Oil Search Ltd, a partner in the project, said on Monday. In November 2019 https://www.reuters.com/article/us-papua-exxon-mobil-lng-idUSKBN1XW0AS, talks tied to a $13 billion expansion of the country’s liquefied natural gas (LNG) exports fell apart with the government saying Exxon was unwilling to negotiate on the country’s terms. The government has been pressing for better returns for the impoverished country than it obtained in the original PNG LNG agreement in 2008.
Adani Total Gas acquires gas meter manufacturing co
Adani Total Gas Ltd – the city gas joint venture of Adani Group and TotalEnergies of France – has acquired 50 per cent stake in a company that manufactures gas meters to aid its gas retailing business. The firm bought 50 per cent in Smartmeters Technologies Pvt Ltd(SMTPL) for INR 1 crore, according to a company’s filing to stock exchanges. Smartmeters, which had a turnover of INR 4.83 crore in the year up to March 31, 2021, manufactures gas meters which are used to measure consumption of gas piped into household kitchens. The objective of the acquisition is “to manufacture gas meters with a focus on prepaid smart meters,” Adani Total Gas said. The acquisition, it said, is expected to be completed by September. Adani Total Gas retails CNG to automobiles and piped natural gas to household kitchens and industries. “The cost to acquire 50 per cent stake in SMTPL will be INR 1.00 crore i.e. ten lakhs equity shares of INR 10 each by way of further issuance of equity shares by SMTPL,” it added.