Slew of products, starting with CNG and LNG planned; Ashok Leyland
Hinduja Group flagship Ashok Leyland has put in place a team to focus on alternate fuel technology that uses low carbon like CNG and LNG as part of its move towards building a green mobility future, the company said on Wednesday. The city-headquartered commercial vehicle maker also dedicated its existing testing facility in Hosur to exclusively focus on alternate fuels. Ashok Leyland today announced several initiatives to build a green mobility future. To enhance its presence in the alternate fuel space, the company has planned a slew of products, starting with CNG and LNG, the company said in a statement here. Powertrains are predominantly driven by IC engines — gasoline and diesel. Over the next decade, alternative powertrains comprising of battery electric, fuel cell electric would emerge and Ashok Leyland has dedicated teams focusing on the development of these future power trains, it said. “As we march towards our vision of being among the Top 10 Global CV Makers, it is equally important that we do this sustainably. Our mission is to positively impact humanity and conserve the environment through sustainable energy and mobility solutions”, Ashok Leyland Managing Director and CEO, Vipin Sondhi said. Future mobility is moving towards alternate fuel technology, and the Hosur Testing facility dedicated today, managed by a talented and capable team will help drive Ashok Leyland’s green mobility future”, he said. The CTO N Saravanan said the company was already seeing a push for CNG and LNG and expects other fuels like methanol and hydrogen to start replacing fossil fuels. “At Ashok Leyland, we are working on the development of all the above alternate fuel technologies, while we continue to make our IC engines more efficient. We are committed to this path of sustainable mobility”, he added.
Long delays at Indian LPG terminals tie up VLGCs, freight hits 10-month high
India’s large imports of LPG to meet festive-season demand in November have sparked heavy congestion at its ports, forcing some vessels to wait more than two weeks to discharge cargoes, VLGC fixtures from ship brokers showed, pushing freight to the highest in 10 months Nov. 23. “There are delays and congestion at the ports. We have been seeing huge imports in the Indian market. The ports are getting busy on the discharge due to the volume of imports amid a rise in domestic consumption,” an Indian shipping source said. “Domestic consumption in India is on the rise even while prices of LPG are going up and this is the major reason Indian importers are taking more LPG cargo imports in recent weeks and also to avoid inventory losses,” the source said. “(It is) not unusual waiting time in India these days — three to five days in Haldia. But yes, some places we do have some delays… which of course helps on the shipping market,” another ship broker said, referring to the rise in VLGC rates from the delays caused by a combination of large imports and less than adequate port infrastructure. “It is not easy to fix out your ship coming ex-India,” he added. India’s LPG consumption has been rising and hit nine-month highs at 2.49 million mt in October, as the country prepared for Diwali in November. Though imports in September fell 7.7% on the month to 1.57 million mt, these were from a record high of 1.71 million mt in August, according to data from the Petroleum Planning and Analysis Cell dating back to 1998. In the first 10 months this year, India’s LPG consumption totaled 23.076 million mt, up 2.52% on the year, PPAC data showed. Freight rebounds Up to the third week of November, around 624,100 mt of mixed propane-butane LPG cargoes aboard 13 VLGCs were waiting at Indian terminals, including Mumbai, Haldia, Pirpau, Visakhapatnam, Kandla and Mangalore, fixtures showed. The waiting times ranged between one day and two weeks, according to the fixtures. The 58,123 Dwt BW Birch, fully laden with a Middle Eastern propane-butane cargo, has been waiting off Haldia for more than two weeks, according to the fixtures and Platts cFlow trade-flow analytics software. The number of vessels peaked at 30 in the second week of November, waiting to discharge about 1.52 million mt of mixed cargoes off ports including Mumbai, Visakhapatnam, Pipavav, Kandla, Haldia, Pirpau, Mangalore, Dahej, Tuticorin, Porbandar and Ennore, the fixtures showed. In the first week of November, about 1.08 million mt of LPG in 27 ships were waiting off India’s east and west coast ports, the fixtures showed. Congestion at Indian and Chinese ports, along with delays vessels face in transiting the Panama Canal, had limited the number of available VLGCs to move cargoes during a high-demand season in Asia, sending rates on the major Persian Gulf- Japan route to almost six-month highs at $63.5/mt Nov. 16. Though freight briefly eased to around $61/mt, as more trader relets emerged, levels rebounded to $66/mt Nov. 23, the highest since $69/mt on Jan. 25, as concerns over delays persisted amid healthy flows of US cargoes to Asia in December. “(It is due to) long waiting times, and just generally bullish sentiment. We see this pattern all the time,” a third ship broker said. “While the Persian Gulf-Chiba route might be losing steam, I think Houston-Chiba will keep going,” he said, pointing to the busy schedules of US-to-North Asia shipments. He said waiting times to transit the Panama Canal is currently about nine days for north-bound vessels and 15 days for those south bound, compared with the typical five to six days. Up to the Nov. 5 week, waiting times were around 18 days north bound and about 10 days south bound. “Discharge port delays in India and the Far East are tying up potential ships and affecting itineraries as with the preference to place ships on a long-haul voyage where rates are typically at a seasonal high, leaving behind relatively fewer ships,” the third ship broker added.
LNG trade: IGX volume on the rise, with prices up to 30% below spot rates
As global LNG prices are ruling high, industrial fuel consumers in India are mitigating the adverse impact on them to some extent by increasing the volume of purchases on the platform of IGX, the country’s fledgling natural gas exchange. “In a year since trading started on IGX the gas prices discovered have been on average 10-30% lower compared with global spot LNG prices,” Rajesh Kumar Mediratta, CEO & MD of IGX told FE. IGX offers contracts in day-ahead, daily, weekdays, weekly, fortnightly and monthly modes. The prices on IGX dropped to a low of $6.1/mmBtu in April 2021 when spot LNG was at $10/mmBtu. IGX contract prices have since consistently increased in tandem with the rise in crude oil price and LNG in international markets but have remained lower than the spot LNG prices in the range of $5 to $20/mmBtu. In October when spot LNG prices touched a high of $35/mmBtu in line with the increase in Brent crude price, IGX prices remained considerably lower at $18.7/mmBtu. In November the spot LNG prices have dropped to $31/mmBtu and the IGX prices were at $27.4 per mmBtu. “The lower price discovery has increased liquidity on the exchange,” said Mediratta. The trading volumes have risen from 2500 mmBtu in January to 10,00,000 mmBtu in October 2021. “The volumes were positively impacted by the introduction of the open auction that allowed bidders to watch the price quoted by other participants and accordingly revise their bids. It also helped in market price discovery gas at IGX,” Mediratta said. However, the rising international gas prices have impacted spot LNG prices forcing some customers to shift to long term contracts of over six months and one year. “Some customers have moved to contracts for six months and some to alternate fuels with the increase in spot LNG prices. Spot prices have moved from $5 per mmBtu in February to $35 now. But we believe the prices will again drop after February when winter will end in Europe, America and Northern parts of Asia. IGX prices are beneficial in the long term,” Mediratta said. According to the ministry of petroleum and natural gas (MoPNG), India has an LNG regasification capacity of 42.5 million metric tonnes per annum (mmtpa) out of which 24.3 mmtpa is utilised and about 50-60% capacity is booked on a long term basis, which leaves close to 40% of capacity for spot RLNG. In comparison countries such as Japan and South Korea have 80% of LNG contracted in long term. Mediratta believes government notification in August allowing domestic producers of gas to sell 10% of annual production on exchanges will increase the volumes from Q4FY22. This will help companies to bring more acreage under production as they will get market price for their gas compared to the administered price of $2.9/mmBtu. IGX has also sought permission from the Petroleum and Natural Gas Board of India (PNGRB) to increase the number of gas hubs to facilitate buying, which will help reduce the cost for buyers as different zones have additional rates based on distance from supply zones. “We are adding four hubs, two each in Uttarakhand and Haryana, two in Gujarat and one in Maharashtra,” said Mediratta.