Prices At The Pump Continue To Plunge, But Stronger Demand Could Halt The Trend
The national average for a gallon of gas at the pump in the United States fell to $4.139 on Thursday, the 51st consecutive day the country has seen a price drop for gasoline, according to AAA. The month-ago average for American drivers was $4.807, representing a 16% reduction at the pump over the past 30 days and a sustained break in the upward trend that saw prices peak at $5.02 on June 14th. Whether the downward price trend will continue will depend on the demand situation, says AAA, noting that the steady drop in gasoline prices could reverse with a “slight uptick” in demand. “We know that most American drivers have made significant changes in their driving habits to cope with high gas prices,” AAA spokesperson Andrew Gross said. “But with gas below $4 a gallon at nearly half of the gas stations around the country, it’s possible that gas demand could rise.” On Wednesday, the Energy Information Administration (EIA) recorded a slight increase in gasoline inventories of 200,000 barrels in the week ending July 29th, with production averaging 9.3 million barrels daily. That increase compares to a 3.3-milllion-barrel draw the previous week. Earlier this week, the EIA noted that gasoline demand had risen from 8.52 million barrels per day to 9.25 million barrels per day the previous week, but still 80,000 bpd lower than for the same period last year. However, the AAA notes that if that demand rise continues, we could see a slowing of price reductions at the pump. The EIA’s Wednesday inventory report is more conducive to continued price decreases for American drivers. While the previous week’s report showed a large decrease in stockpiles, this week’s report shows a slight increase, indicating more available supply.
AG&P to launch Philippines LNG terminal this year, eyes Asia expansion
AG&P aims to commission the Philippines’ first liquefied natural gas (LNG) import terminal this December as part of the company’s strategy to operate five LNG regasification facilities across Asia by 2025. The import facility being developed in the Philippines was scheduled to start operating in September, but commissioning has been delayed to December 2022, Karthik Sathyamoorthy, president, AG&P LNG Terminals & Logistics, told Energy Voice. “Like other mega projects, we had supply chain issues from China, due to the lockdowns. However, we are still very much on track for this year’s start,” he said. AG&P, whose LNG business is headquartered in Singapore, is backed by several major shareholders, the largest being a Kuwaiti fund called Asiya, followed by Japan’s Osaka gas and Japan Bank for International Cooperation (JBIC). However, from an operational perspective, AG&P has over 8,000 employees in the Philippines and Manilla remains its largest operational location. It is currently building a 3 million tonnes per year (t/y) capacity LNG import terminal in the Philippines that will eventually be expanded to handle 5 million t/y. “The onshore site for the terminal is pretty much done and offshore jetty works are in the final stages. We should be finished by October. Then we can start testing and commissioning with actual commissioning in December,” said Sathyamoorthy. “The capacity will be up to 5 million t/y. We have started construction for two onshore tanks that will be integrated as part of the main terminal in 2024. Until then the floating storage unit (FSU) acts as the only storage, during that period it will be a 3 million t/y terminal,” he added. The Philippines, which is facing a looming gas supply crunch, as domestic production from Malampaya – the country’s sole field – is forecast to decline rapidly in the coming years, desperately needs LNG import capacity to improve its energy security. The AG&P-led terminal is a tolling facility and the initial capacity will supply its anchor customer San Miguel Corporation that operates the 1200MW Ilijan power plant. San Miguel is also adding another 1200MW generation capacity. The combined 2400MW at peak would use almost all the 3 million t/y LNG terminal capacity, said Sathyamoorthy. According to Sathyamoorthy, San Miguel has secured a short-term LNG supply contract and a medium-term contract from a portfolio player starting 2023. To make LNG more affordable for the Philippines, the import prices of LNG will be blended with the price of domestic gas. The extra 2 million t/y terminal capacity will be used by AG&P to aggregate downstream demand from industrial, residential, transport and city-gas customers. The terminal can be expanded further as the market evolves, both by adding additional storage and regasification capacity.
GAIL faces profit hit over gas supply cut – finance chief
Profit at GAIL (India) Ltd GAIL.NS will be hit as it rations gas sales after supplies are cut under its long-term deal with a former unit of Russian energy giant Gazprom amid high spot prices, its head of finance Rakesh Kumar Jain said on Thursday. GAIL, India’s largest gas distributor and operator of pipelines, imports 14 million tonnes per annum (mtpa) of liquefied natural gas (LNG) under various long term deals. Of this about 2.5 mtpa, or up to 39 LNG cargoes, were to be supplied this year by Gazprom Marketing and Trading Singapore (GMTS), now a unit of Gazprom Germania. Since the end of May, GMTS has missed delivery of 8 LNG cargoes to GAIL and is not certain about future supplies as it is securing the fuel for Europe, Jain said in an analyst call. He said GMTS has not declared force majeure, but “they are not scheduling (LNG cargoes supplies) at the moment. “Profitability certainly will be hit if the situation remains as it is today…There is a challenge in this quarter,” he said, adding GAIL’s gas marketing and transmission business will be hit due to lower supplies. GAIL has cut supplies to fertiliser and industrial clients besides reducing operations at its petrochemical plant at Pata, northern India, by over 50% to avoid purchase of costly spot LNG, Jain said, confirming a Reuters report. The state-run firm is also advancing delivery of some of its overseas LNG cargoes through time swaps and has chartered ships to bring in some of its U.S. LNG that it was planning to trade. GAIL has deals to import 5.8mtpa LNG from the US. Jain said GAIL is also scouting for long term LNG deals to secure supplies, although its previous tender for a 10-year 0.75mtpa deal failed. The company agreed a 20-year deal with Russia’s Gazprom in 2012 for annual purchases of an average 2.5 million tonnes of LNG. Supplies under the contract began in 2018. GMTS had signed the deal on behalf of Gazprom. At the time, Gazprom Germania was a unit of the Russian state firm. However, following Western sanctions against Russia over its invasion of Ukraine, Gazprom gave up ownership of Gazprom Germania in early April without explanation and placed parts of it under Russian sanctions. (Source: Reuters) GAIL Q1 net profit rises 51% to Rs 21.57 bilion on marketing margin boost August 5, 2022: GAIL (India) Ltd, the nation’s largest gas utility, on Thursday reported a 51 per cent jump in its June quarter net profit on the back of bumper margins from gas marketing. GAIL posted a consolidated net profit of Rs 3,250.95 crore, or Rs 7.34 per share, in April-June compared to Rs 21.5715 billion, or Rs 4.81 a share, net profit in the same period a year back, the company said in a regulatory filing. Sequentially, the profit was lower than Rs 34.7377 billion net earnings in the January-March quarter. The rise in year-on-year profit for the nation’s largest gas transporter and seller was on the back of bumper earnings from natural gas marketing. The firm reported a pre-tax profit of Rs 23.1791 billion from natural gas marketing in the first quarter of the current fiscal, as compared to Rs 4.4984 billion pre-tax profit a year back and Rs 19.7623 billion in the preceding quarter. The margin on gas marketing made up for a 12.5 per cent decline in earnings from the gas transportation business and a 74 per cent drop in petrochemicals earnings. Turnover more than doubled to Rs 380.3330 billion in the April-June quarter, from Rs 177.02.43 billion a year back, the filing showed. GAIL said the earnings per share have been adjusted on account of a buyback of 1.28 per cent shares by the company. Last month, the board of directors of the company had recommended the issue of one bonus share for two existing equity shares. Later in a press statement, GAIL said standalone net profit rose 91 per cent to Rs 29.15 billion in Q1 FY23 (April 2022 to March 2023 fiscal) as against Rs 15.30 billion in the corresponding quarter of last fiscal. “The positive results were mainly on account of increased gas marketing and transmission volumes, better marketing spread and higher product prices,” it said. Manoj Jain, Chairman & Managing Director, GAIL, said the company has successfully registered a healthy growth in the overall performance despite turbulent times in the gas business. GAIL has incurred a capital expenditure of about Rs 19.75 billion during the quarter mainly on pipelines, petrochemicals and equity contribution to joint ventures, he said. GAIL has commissioned the 533-kilometre Bokaro (in Jharkhand) to Angul (in Odisha) pipeline section of the Jagdishpur-Haldia & Bokaro-Dhamra natural gas pipeline (JHBDPL) during the quarter. With this, 1,642 kilometres of JHBDPL, popularly known as Pradhan Mantri Urja Ganga, has been commissioned while the remaining sections are expected to be completed by June 2023, Jain said. The pipeline travels from Uttar Pradesh to West Bengal with spur lines to Jharkhand and Odisha. He further added that to provide a thrust to the government’s focused initiatives to increase the share of natural gas in the primary energy basket, the company has approved the setting up of a Small Scale LNG (SSLNG) plant on a pilot basis and orders for two small-scale liquefaction skids has been placed. This will help in providing natural gas to areas not connected to the main pipeline, facilitate LNG as transport fuel and help monetize stranded/isolated upstream gas assets, the statement added.