Wood Mac Shaves 1 Million BPD off Global Oil Demand Forecast
Wood Mackenzie has revised its global oil demand forecast downward by 1 million barrels per day to 1.9 million bpd for 2024, with the biggest increases in demand coming from China and India. Citing a Wood Mac briefing during an Energy Institute conference in London, Reuters reported on Thursday that Wood Mac’s VP of oils research, Alan Gelder, was largely in line with OPEC own estimates for this year. In January, Wood Mac said it expected global oil demand growth to continue to set records this year, up nearly 2 million bpd compared to 2023, with China expected to account for 25% of that growth. At that time, Wood Mac said it expected total global oil demand to average 103.5 million bpd for 2024, with much of that growth coming in the second half of the year. OPEC is expecting demand growth of 2.25 million bpd. The International Energy Agency (IEA) is expected growth of only 1.22 million bpd, with a peak by 2030. On Wednesday, Vitol Group, the largest independent trader in the world, told the same London energy conference that oil demand “had a good few number of years still to climb … before it plateaus” because the energy transition is proceeding at a slower pace than initially anticipated. Oil prices were holding steady on Thursday, with supply trumping geopolitical risk in the Middle East as January inflation data for the United States suggested that there was still room for an interest rate cut by the Federal Reserve in June. The U.S. Personal Consumption Expenditures (excluding energy and food) price index rose 0.3% in January, while the core inflation (including energy and food) rose 0.4%. The numbers potentially signal an end to cooling prices, which in turn could prompt the Fed to cut interest rates quicker. On Thursday at 11:48 a.m. ET, Brent crude was inching up a slight 0.06%, trading at $83.73, while West Texas Intermediate (WTI) was up 0.47%, trading at $78.91.
IndianOil cancels tenders for 10 KTA green hydrogen unit
The Indian Oil Corporation (IOCL) has cancelled its tender to set up the first green hydrogen plant in the company’s Panipat Refinery and Petrochemical Complex in Haryana, amid a lacklustre response and allegations that the tender norms favoured a joint venture that included the state-run oil marketing company. The Independent Green Hydrogen Producers Association, which represents private sector players from the industry, moved court against the tender. Following this, last week, IOC issued a corrigendum stating that the tender for the green hydrogen project of capacity 10-kilo tonne per annum stands cancelled. In December, IOCL received only one bid for the tender from GH4India Pvt Ltd, which is a joint venture the company has formed with infrastructure and engineering major Larsen & Toubro (L&T) and renewable energy company ReNew.
Govt hikes windfall tax on petroleum crude
The government hiked its windfall tax on petroleum crude to Rs 4,600 a metric ton from Rs 3,300 with effect from March 1, according to a government order released on Thursday. India also cut the windfall tax on diesel to zero from Rs 1.50 per litre effective March 1, the order showed. The tax on petrol and aviation turbine fuel will continue to be nil. On February 16, the government raised the windfall tax on petroleum crude to Rs 3,300 a metric ton from Rs 3,200 and hiked the tax on diesel to Rs 1.5 rupees a litre from zero. India imposed a windfall tax on crude oil producers from July 2022 and extended the levy on exports of gasoline, diesel and aviation fuel, as private refiners wanted to sell fuel overseas to gain from robust refining margins instead of selling locally. The government revises the tax fortnightly.
Cochin Shipyard Ltd launches India’s 1st hydrogen cell ferry
Leading central public sector undertakings (PSUs) are betting big on hydrogen fuel, realising the clear shift that is likely to happen in the sustainable energy sector in the country in the coming years. The latest to join the bandwagon is Cochin Shipyard Ltd (CSL) after it launched the country’s first hydrogen fuel cell ferry on Wednesday. CSL’s move follows Fertilisers and Chemicals Travancore Ltd’s (FACT) plans to set up a small green hydrogen plant on its premises in Kochi, in collaboration with Oil India Ltd, and Cochin International Airport Ltd (CIAL) signing an agreement with Bharat Petroleum Corporation Ltd (BPCL) earlier this month to explore opportunities in the domain of green hydrogen, including green ammonia/green methanol and other derivatives. Launching CSL’s hydrogen fuel cell ferry virtually from Thoothukudi, Prime Minister Narendra Modi said India’s commitment to a sustainable future aims for achieving net-zero by 2070. This timeline seems to be the factor that’s driving companies to be bullish on hydrogen, said officials. They said major players like IOC, BPCL, HPCL, NDPC, and Reliance are heavily investing in hydrogen fuel technology. “These firms are on a mission to shift from oil to energy companies in the next five to ten years,” Madhu S Nair, chairman and managing director of CSL. A CIAL official said the airport company’s collaborative effort, combining technological prowess and infrastructure, will result in the world’s first green hydrogen plant and fuelling station located within an airport setting. Green hydrogen, produced from water using renewable energy sources, is recognised as a future fuel and aligns with zero-carbon energy strategies.
Centre Hikes Natural Gas Prices to $8.17 Per MmBtu
The price of domestic natural gas has been increased to $8.17 per million metric British thermal units (mmBtu) for March from $7.85 in the previous month, the Ministry of Petroleum and Natural Gas reported. The domestic natural gas price, however, will continue to remain at $6.5 for the month, as per the formula used for the calculation of prices. According to the new gas pricing mechanism, domestic gas prices are now subject to a floor and ceiling of $4 per mmBtu and $6.5 per mmBtu, respectively. The price stood at $6.5 per mmBtu in January and February as well. The domestic gas price notified by the government applies to the natural gas produced from the legacy and oil fields of Oil and Natural Gas Corporation Ltd (ONGC) and Oil India Limited (OIL). Under the new pricing regime, domestic gas pricing is linked with imported crude pricing and would be at 10 percent of the Indian crude basket. The prices are revised every month.
India’s green hydrogen sector will need $4-12 billion support: A&M report
India’s green hydrogen sector will need substantial support, estimated at $4 to $12 billion, combined until 2030, to achieve scale, according to consulting firm Alvarez & Marsal. In a report released this week, the firm estimated green hydrogen’s trade opportunity for the world at $24–36 billion by 2030. The firm said the estimated support is driven by the need to level the playing field against global suppliers who enjoy government subsidies and to enable domestic end-use sectors to transition affordably. “By offering this bridge support, the end-use sectors that operate in competitive markets will be able to adopt sustainable alternatives sooner,” the report said. A&M listed India, along with the United Arab Emirates and Saudi Arabia, as one of the top three countries well placed in global green hydrogen competitiveness and therefore could partake in a significant share of global trade. The firm expects these three countries to produce green hydrogen at less than $2/kg by 2030. With an early-mover advantage, A&M said, India can stake a claim to a larger share of the global energy trade, substitute some of our imports, especially liquefied natural gas (LNG), and spur domestic gross domestic product (GDP) growth. “By 2030, this could lead to $3–5 billion of exports and $7–15 billion of import substitution, opening the doors to a much larger opportunity in the decades ahead,” the report noted. In addition to the generation of green hydrogen and its derivatives, A&M also expects India, along with Mainland China, to have manufacturing cost leadership for electrolyzers, a primary equipment to produce green hydrogen.