India’s petroleum products demand to increase mid-single-digit percentage in 2023-24: Fitch
India’s demand for petroleum products is likely to increase by a mid-single-digit percentage in the financial year ending March 2024, following a 10 per cent post-pandemic recovery in 2022-23, according to Fitch Ratings. Both petrol and diesel sales recorded robust 4-6 per cent increases in the first nine months of 2023-24, fuelled by heightened economic activities in the agriculture and power sectors, coupled with a surge in holiday travel and auto sales. Fitch said it expects Indian refiners’ gross refining margins (GRM) to moderate during 2024-25 from the strong levels expected in 2023-24, but remain above mid-cycle levels. By 2025-26, it foresees a shift closer to mid-cycle levels, but remaining resilient, bolstered by the escalating demand for end-products. “The gradual normalisation of the crude supply mix away from Russian imports is likely to narrow GRMs, although we expect margins to stay strong, supported by the rising demand for end-products,” the rating agency said. In the upstream segment, domestic oil and gas production has modestly increased, driven by a 5 per cent rise in gas production in the first nine months of 2023-24. “We expect production to continue to rise moderately as technological investments in enhanced oil recovery techniques will offset natural declines,” the rating agency said. Fitch forecasts the oil and gas sector’s high capex intensity to continue in the medium term, particularly with upstream companies investing in production enhancement. In the downstream segment, Hindustan Petroleum Corporation Limited should maintain higher capex due to planned investments by its subsidiary, HPCL Rajasthan Refinery Limited. The capex of other oil marketing companies, including HPCL-Mittal Energy Limited, should be minimal as they have completed their expansion projects, it said. India, the world’s third-biggest oil importer and consumer, is dependent on crude oil from various sources in the global market to meet its domestic demand.
India Calls For $1 Trillion Annual Climate Funding from Developed Economies
Developed economies need to provide at least $1 trillion per year to climate finance for developing countries to meet the national and global climate targets, one of the biggest developing economies and a major carbon polluter, India, said in a proposal to the United Nations. Developed countries have pledged to support developing economies with funding to address climate change and reduce emissions. Developing countries have been arguing for years that they cannot meet climate goals without substantial international mobilization of finance. In addition, the worst effects of climate change are being felt in many developing and very poor countries that don’t have the financial means to recover and build resilience amid extreme weather events and natural disasters. In the submission of the so-called New Collective Quantified Goal (NCQG) to the United Nations Framework Convention on Climate Change (UNFCCC), India wrote this week that “In line with the needs of developing countries, developed countries need to provide at least USD 1 trillion per year, composed primarily of grants and concessional finance.” These goals are expected to be discussed at the next climate summit, COP29, in Azerbaijan in November. At the end of last year, Climate Policy Initiative, an analysis and advisory organization, said in a report that annual climate finance flows exceeded $1 trillion for the first time in 2021, six years after the Paris Agreement was adopted in 2015. However, flows must increase by at least five-fold annually by 2030 to avoid the worst impacts of climate change, according to the organization. Future growth will need to come largely from private sources, while 51% of climate finance still comes from public sources, the report found. Moreover, the geographic distribution of climate finance is also uneven, as the ten countries most affected by climate change between 2000 and 2019 received less than 2% of total climate finance. “While crossing the 1 trillion dollar threshold is undeniably good news, it is important to emphasize that this represents just 1% of global GDP,” said Dr. Barbara Buchner, Global Managing Director at Climate Policy Initiative.
ATGL and INOX Partner for LNG in India
Indian city gas distribution company Adani Total Gas Ltd (ATGL) and INOX India Ltd have signed a mutual support agreement for a liquefied natural gas (LNG) partnership. Under the agreement, the two companies have designated each other “preferred partner” status for the delivery of LNG and liquefied compressed natural gas (LCNG) equipment and services. ATGL and INOX will also explore collaboration opportunities for “strengthening the LNG ecosystem in the country”, they said in a joint news release. ATGL will have certain inherent project level benefits, which include preferential treatment and access to advanced scheduling, and consideration for collaborative opportunities for establishing LNG/LCNG stations, LNG satellite stations, transitioning to LNG as a transport fuel, LNG logistics, as well as developing small-scale liquid hydrogen solutions for the industry, according to the release. The agreement covers the role and obligations of both parties to leverage expertise in developing LNG infrastructure, including small-scale LNG plants, LNG stations, bringing economy of scale for conversion of heavy vehicles to LNG, developing best practices towards HSE, fuel efficiency, high quality conversion, and services. “As our economy prepares to go [into] an overdrive, it is imperative that we also maintain a focus on ensuring that the transition happens in a sustainable manner”, Siddharth Jain, non-executive director for INOX, said. “We are, therefore, excited about our cooperation with ATGL, which would look to strengthen the LNG ecosystem and building and promoting LNG as a transport fuel. Our combined synergies, backed by expertise and scale of both the Parties will truly benefit the stakeholders in the economy in reducing emissions, and make significant contributions towards the green transition”.
India’s Natural Gas Consumption Set To Triple by 2050
India’s industry expansion and rising oil refining to meet higher fuel demand are set to drive a tripling of the country’s natural gas consumption by 2050, the U.S. Energy Information Administration (EIA) said on Wednesday. In 2022, India’s natural gas consumption amounted to 7.0 billion cubic feet per day (Bcf/d), with over 70% of the demand coming from the industrial sector. By 2050, India’s natural gas consumption is set to more than triple to 23.2 Bcf/d, according to EIA’s estimates. Among India’s five consuming sectors, the industrial sector’s share of gas consumption will grow the most, rising to 80% of total consumption, followed by the transportation sector rising to 10%. India’s gas consumption in oil refining is expected to grow significantly to keep up with India’s domestic demand for oil products, the EIA notes. By 2050, gas consumption will surge by more than 250% for the production of basic chemicals and by more than 400% for refining, with the two industries together accounting for about 79% of India’s industrial natural gas demand in 2050. India is boosting its refining capacity. The country should add 1.12 million bpd to its current total each year until 2028, a junior oil minister told India’s parliament at the end of 2023. Total Indian refining capacity is expected to increase by 22% in five years from the current 254 million metric tons per year, which are equal to around 5.8 million bpd, Rameswar Teli said. Per the EIA forecasts, India’s gas demand – buoyed by oil refining and other industrial production – is expected to grow at an annual rate of 4.4% by 2050, more than twice the 2.0% annual growth rate of gas consumption in China, the next-fastest-growing country. India’s economy is growing faster than all other major economies, and so is its demand for energy. All forecasters expect India to replace China as the biggest driver of global oil demand growth in the long term, which should happen before 2030.
Shell Lowers LNG Growth View as Demand Set to Peak in 2040s
Shell Plc said that demand for liquefied natural gas by 2040 will be slightly lower than previously forecast as the world is preparing for life beyond fossil fuels. The LNG market “will continue growing into the 2040s, mostly driven by China’s industrial decarbonisation and strengthening demand in other Asian countries,” Shell’s report said. Shell holds the largest gas liquefaction and marketing portfolio among global energy majors, servicing almost 20% of worldwide demand, according to Bloomberg Intelligence.