PNGRB proposes Jammu-Srinagar natural gas pipeline
The Petroleum and Natural Gas Regulatory Board (PNGRB) has proposed building a natural gas pipeline between Jammu and Srinagar to help meet the energy needs in the union territory of Jammu & Kashmir. The downstream regulator has begun a public consultation for the proposed pipeline and sought comments from all stakeholders within a month on the route as well as carrying capacity. The proposed pipeline will connect with Gurdaspur-Jammu natural gas pipeline and also receive gas through that.
India in talks to supply 10 million tonnes of green hydrogen to EU: Report
India has hosted talks on a possible deal to supply 10 million metric tonnes of green hydrogen to the European Union (EU), which in turn would invest in one such clean energy project in India, sources told news agency Reuters. According to an earlier report, India will consider bilateral agreements with countries to allow them to use carbon credits linked to the production green hydrogen, or hydrogen made using renewable energy, in India in exchange for investment and purchase deals. Under the plan, EU businesses could invest in the projects in India and claim carbon credits, according to one of the officials, who attended a meeting that took place on Wednesday in New Delhi. The meeting was attended by officials from EU governments and Indian renewable companies, including Avaada Group, Renew Power and ACME Group.
IGX traded gas volumes at over 1.62 mmBtu in June
Indian Gas Exchange (IGX) on Wednesday said its platform traded 16,22,100 million British thermal unit (mBtu), or around 41 million metric standard cubic meters (mmscm), of gas volumes in June. Volumes were up 91% sequentially due to increase in spot buying interest from buyers amid correction in global gas prices. At 6,66,500 mmBtu, IGX traded a record single-day domestic ceiling price gas at $10.6/mmBtu during the month, it added. According to the company, a total of 47 trades were executed during the month. The maximum number of trades executed in Monthly contracts was 15, followed by Daily & weekly contracts of 12 and 11 trades respectively. The most active delivery point for free market gas was Dahej and domestic ceiling price gas was traded at Gadimoga. Other trading delivery points were- Mhaskal, Hazira, Suvali, and Ankot. “GIXI (Gas Index of India) for June 2023 was ₹879 /$10.6 per MMBtu, lower by 7% last month. Different spot gas benchmark prices recorded were: HH at $2.4/MMBtu, TTF at $10 /MMBtu, whereas LNG benchmark indices were: WIM 11.5 $/MMBtu,“ reads a statement. “IGX traded a total of 666,500 MMBtu domestic ceiling price gas at below ceiling price at Rs. 860 (volume weighted average price) during the month, complying with MoPNG notification dated 13.01.2023. Priority sector allocation in Ceiling Price gas were, CGD (CNG + PNG) – 6% and others (CGD (I&C), Marketers) – 94%,“ it added.
The World’s Green Energy Transition Depends On Asia
The rapid green transition of the Asian region may be key to the rest of the world meeting its climate pledges, according to several experts. The speed at which some of Asia’s largest countries and biggest polluters, such as China and India, achieve net zero could determine the success of other regions around the globe in accomplishing a green transition. And while China is progressing with the acceleration of its shift to green, several other Asian countries may need greater support to achieve this goal. According to Petronas CEO Tengku Muhammad Taufik, Asia must hit its net-zero targets for the rest of the world to do so. Taufik explained, “The bulk of the emissions [that] are expected to emit will be produced in Asia going forward.” He added, “The world cannot achieve net zero without Asia achieving net zero.” As Asia will contribute around half of the world’s GDP by 2040 and 40 percent of global consumption, its transition to green will be key to the world meeting its climate targets. Taufik also highlighted the importance of world leaders working together to achieve their climate goals, as no one power can meet the goals outlined in the Paris Agreement by working in isolation. This includes the aim of limiting global warming to well below 2°C and pursuing efforts to limit it to 1.5°C. At present, emissions from Asia’s developing economies and emerging markets are increasing at a faster rate than other regions, rising by 4.2 percent in 2022. This is largely due to the rapid rate of industrialisation across the region, as well as the growing energy demand of several huge populations. Many Asian countries, including China, India and Indonesia, continue to rely heavily on coal to meet their energy demand, which is much more polluting than green alternatives or even other forms of fossil fuel. While Asia is not likely to move away from fossil fuels any time soon, as it depends on coal, oil, and gas for both its industry and consumer energy needs, a lot can be done to develop its renewable energy capacity at a more rapid rate. Greater investment in green energy and related technologies across the region will support efforts to decarbonise, as well as support an eventual shift away from fossil fuels to renewable alternatives. Unlike many European countries, Asia is not yet in a position to drop fossil fuels, but this could allow it to do so within the coming decades. Taufik emphasised the idea that “We’ve always positioned natural gas as a transition fuel,” and this will be key to energy security in Asia for the mid to long term.
Europe And China Face Off Over U.S. LNG Supply Deals
Concerned about energy security, Europe and China are in an intensifying competition to sign long-term supply deals with U.S. LNG developers and exporters. The race for LNG supply indexed to Henry Hub prices and with flexibility clauses to resell the cargoes if not needed gives buyers certainty about long-term supply and the possibility to send cargoes elsewhere if the market is not as tight as expected. For sellers, the U.S. LNG developers and exporters, more long-term purchase deals with Europe and Asia mean more chances for projects to contract future volumes from planned export facilities and underpin financing and final investment decisions for a greater number of U.S. LNG export terminals. “More volumes are good for the market, and with the new deals we will see more LNG export projects being developed,” Sindre Knutsson, partner of gas and LNG research at Rystad Energy, told the Financial Times. Despite concerns about cost inflation, developers of LNG projects in the United States are set to approve a record-high volume of export capacity this year, driven by rising global LNG demand and increased long-term contracting from customers willing to boost energy security. Venture Global LNG has already approved one project this year—it announced in March the FID and successful closing of the $7.8 billion project financing for the second phase of the Plaquemines LNG facility. This, along with Sempra’s Port Arthur LNG Phase 1 project in Jefferson County, Texas, were the two projects approved so far in 2023. The third one, NextDecade’s Rio Grande LNG project, targets FID in early July, after signing framework agreements with Global Infrastructure Partners (GIP) and TotalEnergies, and selling 16.2 million tons per annum (MTPA) of LNG from Phase 1, or 92% of nameplate capacity, under long-term agreements, sufficient to support the binding debt commitments from these leading lenders and the near-term FID of the 17.61 MTPA Phase 1. Supermajor TotalEnergies will hold a 16.7% interest in the first phase of the project, and has agreed to purchase 5.4 million MTPA of LNG from Phase 1 for 20 years and has options to purchase LNG from Train 4 and Train 5. In another major long-term offtake agreement between an energy major and a U.S. LNG exporter, Equinor signed last month a 15-year purchase agreement of around 1.75 million tons of LNG per year from Cheniere, which will double the volumes of LNG that Equinor will export out of Cheniere’s LNG terminals on the U.S. Gulf Coast. Another deal saw Germany’s state-controlled firm Securing Energy for Europe (Sefe) sign last month a 20-year agreement with Venture Global LNG to import 2.25 million tons of LNG per year from Venture Global’s third project, CP2 LNG, as Europe’s biggest economy is looking to secure gas supply after Russia stopped deliveries. Long-term LNG contracting has seen a flurry of deals in recent months, including from buyers in Europe, where energy security has taken center stage at the expense of concerns about emissions from natural gas imports. China is also looking at the U.S., apart from Qatar, to secure long-term LNG supply after last year’s energy crisis put an additional emphasis on Chinese energy security. Just last week, Cheniere Energy signed a long-term deal with China’s ENN to deliver LNG to the Chinese buyer for more than 20 years—the second deal between Cheniere and ENN. U.S. LNG exporters are signing deals with other Asian buyers such as Japan, securing further offtake commitments and making the U.S. export projects easier to push through the FID milestone. Developers of U.S. LNG export facilities could launch $100 billion worth of new plants over the next five years as high prices and the need for energy security create strong momentum for long-term LNG demand and contracts, energy consultancy Wood Mackenzie said in a report earlier this year.
Morgan Stanley cuts oil price forecasts, sees surplus in H1 2024
Morgan Stanley on Wednesday lowered its oil price forecasts, predicting a market surplus in the first half of 2024 with non-OPEC supply growing faster than demand next year The Wall Street bank cut its Brentprice outlook for the third quarter this year to $75 from $77.50 per barrel and lowered its fourth quarter forecast to $70 from $75. It also cut its forecasts for 2024 by $5, and now sees prices at $70 in the first quarter, at $72.50 in the second, and at $75 and $80 for the final two quarters, respectively
Discounted Russian crude imports saved Indian refiners $7 billion
Indian refiners saved at least $7.17 billion in foreign exchange in the 14 months that ended May 2023 by ramping up purchases of discounted Russian crude oil following the outbreak of the war in Ukraine, an analysis of India’s trade data for the period shows. India, the world’s third-largest consumer of crude oil, depends on imports to meet over 85 per cent of its oil needs. With Western buyers cutting oil imports from Russia in the wake of its February 2022 invasion of Ukraine, Moscow has been offering discounts on its crude. Indian refiners have been lapping up these discounted barrels, so much so that Russia, which used to be a marginal player in India’s oil trade, is now New Delhi’s biggest oil supplier The total value of India’s oil imports for the 14-month period from April 2022 to May 2023 was $186.45 billion