India in talks to export green hydrogen, official says
India is in initial talks with the governments of other countries to export green hydrogen made in the South Asian nation, an official of its foreign ministry said on Thursday, even as challenges remain in adapting the clean-burning fuel. Green hydrogen, derived from renewable energy sources such as wind and solar, has the best environmental credentials since there are few or no carbon dioxide emissions. It has been touted as key to decarbonising industries that rely on coal, gas and oil, but the costs of production have traditionally been much higher than other forms of hydrogen, while there are also uncertainties about the demand worldwide. “We are in a position to make green hydrogen as our main source of energy in the future,” Prabhat Kumar, an additional secretary of the external affairs ministry, said at an industry event in New Delhi. Kumar said India has plenty of sunshine which makes it viable for the country to produce green hydrogen, but did not specify a time frame for its export.
High LNG Prices Have Sparked Demand Destruction In India
India’s industrial gas customers have been buying less LNG from storage sites due to high spot prices, which has sent LNG storage levels at import terminals to near capacity, traders familiar with the situation told Bloomberg on Thursday. The very high spot gas prices have resulted in demand destruction for India’s industrial customers who have resorted to alternative fuels such as oil products and domestic supplies of gas, according to the traders. The lower demand for LNG has created a glut of the imported fuel with some storage tanks full and potentially delaying additional LNG imports into India, Bloomberg’s sources said. Lower demand from India could be a relief for global LNG prices just as the winter in Europe approaches. This year, Europe has been outbidding Asian customers as it has scrambled to secure gas supply with very low pipeline imports from Russia. High spot rates for LNG have discouraged many buyers and users of the super-chilled fuel in Asia, including in India. India could be forced to boost coal production in the face of high LNG import costs, officials told Hindustan Times earlier this week. India’s LNG import costs surged by 70% to reach $13.4 billion in 2021-22, compared to $7.9 billion in 2020-21, despite the fact that import volumes declined by around 7%. Between January and August this year, Indian LNG imports plunged by 18%, according to Wood Mackenzie. “India has reduced LNG usage by 30 to 40% year-on-year in refineries and petrochemical plants. Large-scale industries have replaced LNG with domestic gas, produced in India’s eastern offshore. And other small industries are switching to fuel oil and liquefied petroleum gas (LPG) for heating,” Lucy Cullen, Principal Analyst, APAC Gas & LNG Research at WoodMac, said in September. India and China saw the largest reductions in LNG consumption as consumers switch to coal and fuel oil in power and non-power sectors, Cullen noted.
Oil On Track For Another Weekly Loss Despite Price Spike
Oil prices were on track to record another week of losses despite occasional spikes due to supply concerns and hopes that China will soon begin relaxing its tough Covid policy stance. Indeed, China has signaled it will loosen some restrictions employed to deal with the flare-ups of infections that keep occurring despite the strict lockdowns and quarantines. Yet this only managed to push prices up temporarily, with fears that the pandemic will not disappear in China anytime soon acting as a strong headwind. Oil posted daily declines for most of the week on these fears, only settling with a gain on Thursday after the U.S. released consumer price index data that wasn’t as bad as expected. The U.S. Consumer Price Index for All Urban Consumers (CPI-U) rose by 0.4 percent in October from September, the CPI data showed. This compares with the expectation of a 0.6 percent increase in consumer prices month over month. Over the last 12 months, the CPI increased by 7.7 percent before seasonal adjustment, which again was lower than the 7.9 percent expected annual inflation for October. A day earlier, prices also ended trade with a drop, this time because of a build in U.S. crude oil inventories for the week to November 4, even though the EIA estimated declines in fuel inventories. However, these declines were lower than expected, which also helped pressure oil prices. At the time of writing, both Brent crude and West Texas Intermediate were up but unlikely to reverse three days of declines, especially with China again recording an increase in Covid cases. According to Reuters, the weekly loss for oil prices could reach 4 percent on higher U.S. crude inventories and fears that China will start locking down cities again despite the signs of restriction relaxation. “Since traders are hyper-sensitive to lockdowns in the world’s largest oil importer, this could temporarily hold the oil market’s top-side ambition in check,” Stephen Innes, managing partner at SPI Asset Management, told Reuters. “But unquestionably, we are in a much better place than yesterday.”
Russia To Pursue Gas Deals With Turkey At G20
Russia is set to announce its plans for gas deals with Turkey at the G20 meeting in Indonesia next week, Russia’s foreign ministry said on Thursday. The ministry referenced “specific initiatives” that were planned, including “increasing gas cooperation with Turkey” in the form of a gas hub in Turkey, as well as organizing large grain and fertilizer shipments. The gas would then be sold in the European market. In October, Russian President Vladimir Putin—who will not be in attendance at the G20 meeting—suggested that Russia could redirect natural gas supplies that were originally destined to be transferred through the Nord Stream pipelines to the Black Sea, as well as creating a gas hub in Turkey. “We could move the lost volumes from the Nord Streams along the bottom of the Baltic Sea to the Black Sea region and thus make the main routes for the supply of our fuel, our natural gas to Europe through Turkey, creating the largest gas hub for Europe in Turkey. That is, of course, if our partners are interested in this. And economic feasibility, of course,” President Putin said last month. At that time, Turkish Energy Minister Fatih Donmez said that it was too early to make an assessment over the initial proposal. “These kinds of international projects need feasibility assessments… commercial aspects need to be discussed. These are things that need to be discussed,” Donmez said. Europe has struggled to come up with a concrete plan for weaning itself off Russian gas supplies and restricting Russia’s revenues from its energy products, although it has managed to mostly fill its storage ahead of winter. Without Russian gas, however, next year, filling Europe’s gas storage won’t come as easily.
Oil & gas emissions 3 times higher than figures being reported, shows data released at COP27
Emissions from oil and gas production worldwide are significantly underreported and are estimated to be three times higher, according to new data released at the UN climate summit (COP27) on Wednesday. Climate Trace — a non-profit coalition of organizations which monitors greenhouse gas emissions and publishes emissions inventories using satellite data, artificial intelligence and machine learning — said half of the 50 largest sources of emissions across the world are oil and gas production fields and their associated facilities. “Globally, emissions from oil and gas production are significantly underreported, with the data showing that of the countries required to report regularly to the UNFCCC, emissions are as much as three times higher,” Climate TRACE said.
On a high. Led by oil, Russia becomes 5th largest exporter to India
Crude and petroleum products dominated India’s import basket from Russia in the first half of 2022-23, with Moscow becoming the fifth largest source for many items for the country. The Ukraine conflict and the consequent economic sanctions on Russia by the West have improved trade prospects between India and Russia. Imports of coal and coke, and fertilisers also increased. However, while India’s imports from Russia in April-September period surged 410 per cent to $21.34 billion, its exports declined 18.8 per cent to $1.3 billion, leaving a trade gap of $20 billion, per government figures. “Attempts are on to increase exports to Russia as the success of the rupee trade mechanism, which is being implemented by the two countries to bypass Western sanctions, hinges on a better-balanced bilateral trade. With such a large trade deficit, Russia may be left with a huge rupee surplus that it receives for its exports,” said a source tracking the matter. With Russia identifying items such as food, pharmaceuticals and engineering goods that it can source from India and also suggesting the names of interested companies, work is apace on this front. Discounts on oil Following the economic sanctions imposed on it, Russian discounts on oil during April-June went up to $35 per barrel, with India getting oil at about $75/barrel. Consequently, in the first six months of 2022-23, India sourced crude worth $14 billion from Russia accounting for 15.62 per cent of its total oil imports up from less than 2 per cent last fiscal. “This scenario will play out again. With crude projected at $98-103 a barrel in H1 (calendar 2023), India might be able to secure supplies for $68-75, depending on how the Russian situation pans out,” said sources. Russia jumped to the position of No 3 crude supplier to India (after Iraq and Saudi Arabia) in April-September, per Commerce Ministry data. While data from energy intelligence firm Vortexa marks Russia as India’s top oil supplier in October, it is yet to be corroborated by Delhi. “It is not always that India, as a top oil consumer, gets preference from suppliers. Our first responsibility is energy security for the 1.35 billion Indians. As Russians are willing to give discounts, Saudi Arabia has also cut prices, and Iraq, too, has offered some discounts on Basrah (crude oil). The tilt right now is with Russia as it seems more accommodative to our requirements,” said an official. “Foreign Minister S Jaishankar said in Moscow that India will continue to source oil from Russia which indicates that Moscow’s share in India’s import basket may grow,” said an official.