HPCL gets bids to lease part of Chhara LNG terminal
India’s Hindustan Petroleum Corp Ltd has received six or seven bids from industries to lease a part of its Chhara liquefied natural gas (LNG) import terminal on the west coast, the LNG unit’s chief executive said on Monday. HPCL aims to commission the terminal, with a planned capacity of 5 million metric tons per year (tpy) in the December quarter, K Sreenivasa Rao told reporters at an event. “We have received six or seven bids, and in the next three months, we should be able to decide on the award,” Rao said. HPCL was looking to lease capacity of 3 million tpy to other companies for a period of more than 10 years, he added. The terminal was completed in March, but its commissioning has been delayed as a 40-km (25-mile) pipeline link to an existing network meant for sales to consumers is not yet ready, Rao said. “We hope the 40-km pipeline should be ready very soon.” The terminal will run at about 30% of capacity in 2024 to reach full capacity in four or five years, he said, adding that HPCL has also made provision to double capacity to 10 million tpy in future. India is beefing up its gas infrastructure as Prime Minister Narendra Modi targets an increase in the share of natural gas in its energy mix to 15% by 2030 from about 6.5% now. India’s gas demand is picking up now, as prices have softened, Rao said, following a spike that had damped demand.
Oil & Gas exploration: Govt receives 13 bids for 10 blocks
The government received 13 bids, including three from the private sector, for 10 oil and gas blocks on offer in the latest exploration licensing round where companies had a year to submit their bids, according to a notification by the Directorate General of Hydrocarbons (DGH), which oversaw the process and extended bid submission deadline several times. State-run Oil and Natural Gas Corp (ONGC) placed bids for nine blocks while Oil India, Vedanta, Sun Petrochemicals, and the joint venture of Reliance Industries and BP placed bids for one block each. ONGC would win six blocks without a contest but compete with Vedanta, Sun Petrochemicals, and Oil India in one block each. Reliance-BP joint venture also faces no competition for the block it has bid for in the KG Basin.
Big Oil’s Radical Proposal: Curtail Consumption, Not Production
Last year, in the middle of an energy crunch, European governments called on their citizens to consume less energy. They also lashed out at Big Oil for making billions from the squeeze. Now, Big Oil is the one calling for a reduction in energy consumption. Essentially, supermajors have suggested that people should use less of their products. But they don’t want to slash production. The seemingly paradoxical message came out earlier this week from a conference in Vienna, where OPEC leaders met with their Big Oil counterparts from BP, Shell, and other oil companies to discuss the future of global energy. As might have been expected in this day and age, the message to come out of the gathering was that everyone is committed to a net-zero world in the future but that right now, everyone was committed to ensuring there is enough energy for those who need it, regardless of the source. What was, perhaps, less expected was the reported call from Big Oil for governments to focus on demand reduction rather than supply limitation as a means of enabling that net-zero world. OPEC officials, meanwhile, focused on the importance of energy security as they have done before. “We must do everything we can to reduce emissions, not to reduce energy,” OPEC secretary-general, Haitham al Ghais said, as quoted by Euronews. “There is a misconception going around about reducing production and reducing investment in oil and gas, we do not agree with that message.” One would assume the reason OPEC disagrees with this message is that it would lead to lower profits for its members. But according to Big Oil, the motive for switching from a focus on supply to one on demand will avoid even higher profits for oil producers. Not that the executives put it quite this way. The report on that call comes from Reuters, which was once again refused access to the conference but quoted sources present there. And that call follows statements made by Big Oil executives that they will slow down with their pivot away from their core business. From an activist perspective, Big Oil is trying to justify its renewed focus on oil and gas at a time when oil and gas are making record profits. From an energy security perspective, it is difficult to argue that reducing the supply of a commodity while leaving demand unchanged could only have one result: a sharp rise in the price of that commodity. Of course, there is a case to be made that right now, despite stable and growing demand for oil, prices are depressed—but this is because factors different from oil’s fundamentals are running the show, as it were. These factors include GDP growth in big consumers, inflation, and central bank monetary policy. But there is also the perception that there is an abundant supply of oil that has contributed to the pressure on prices. So, what Big Oil executives are basically saying is that governments—and activists—have got the wrong end of the stick: they are trying to reduce the supply of oil and gas without addressing demand. And that is an approach that is doomed to failure, as we saw last year when the same governments that berated Big Oil for its profits subsidized the consumption of Big Oil’s products to avoid riots on their hands. Meanwhile, at another recent event, other Big Oil executives dared speak a truth that few leaders in the West would even acknowledge in private. That truth amounts to the fact that oil and gas are going nowhere in the next few decades, no matter what green transition plans governments are making. “We think the biggest realization that should come out of this conference … is oil and gas are needed for decades to come,” is how Hess Corp.’s John Hess put it. “Energy transition is going to take a lot longer, it’s going to cost a lot more money and need new technologies that don’t even exist today.” Naturally, this would be a welcome opportunity for a climate advocate to argue that Big Oil is trying to save its bacon when the world is turning vegan, but even that climate advocate would be hard-pressed to explain why, if the world’s moving away from hydrocarbons, China is building coal plants and India is building refineries. The truth is that the world is not moving away from hydrocarbons. Demand for oil has hit 102 million barrels daily. Demand for gas is soaring, too, notably from transition poster continent Europe. U.S. oil consumption is also growing after a drop in 2020—the lockdown year. There may be something, then, in a call for addressing demand for oil and gas instead of calling for less production. But addressing demand with a view to essentially discouraging it will be tricky—and also highly unpopular among voters. Germany is a good example worth studying by other transition-minded countries. It shows that forcing the transition down people’s throats does not usually yield the expected results.
India’s green hydrogen push and challenges
India wants to become a global hub for the production of green hydrogen, manufactured by splitting water molecules using renewable energy. It is an ambitious plan for a country whose hydrogen consumed currently is produced mostly with fossil fuels. Although first production is expected only in 2026, India has been negotiating bilateral agreements with the European Union, Japan and other countries to start exporting the fuel. Below are some details about India’s green hydrogen push and challenges. PRODUCTION TARGET India aims for annual production of 5 million metric tons of green hydrogen by 2030, which would cut about 50 million metric tons of carbon emissions and save more than $12 billion on fossil fuel imports. Indian companies including Reliance Industries, Indian Oil, NTPC, Adani Enterprises , JSW Energy, ReNew Power and Acme Solar have made announcements for setting up a cumulative annual green hydrogen manufacturing capacity of 3.5 million metric tons. As of now, most of the 5 million metric tons of hydrogen consumed in the country is produced with fossil fuels. GOVERNMENT SUPPORT In January, India approved an incentive plan of 174.9 billion rupees ($2.11 billion) to promote green hydrogen. This would be at least 10% of the cost to produce green hydrogen. New Delhi has also extended a waiver of transmission fees for renewable power to hydrogen manufacturing plants commissioned before January 2031.
GAIL to implement Pipeline project as an ambitious project envisioned by Modi
After the commissioning of the 282 km pipeline in Bihar, Natural Gas has now reached North Bengal encompassing the districts of Uttar Dinajpur, Darjeeling, and Jalpaiguri. GAIL (India) Limited is implementing the Barauni Guwahati Pipeline, which is an integral part of the Jagdishpur-Haldia and Bokaro-Dhamra Pipeline as part of the Pradhan Mantri Urja Ganga Project, an ambitious project envisioned by Hon’ble PM Shri Narendra Modi.
India’s gas regulator pitches for building natural gas storage
India should build storage for natural gas to boost the use of cleaner fuel in the country and hedge against global price volatility, A. K. Jain, chairman of the Petroleum and Natural Gas Regulatory Board, said on Monday. He said India should have natural gas storage that allows suppliers to build stocks when prices are low. That will also help in meeting higher demand from the industries, he added. “For market dynamics and supply assurance for the customers to shift to gas, (we) require gas storage,” Jain told reporters at an event. India has 5 million tonnes of strategic petroleum reserves but no storage facilities for natural gas yet.