Germany’s Oil and Gas Production Continues to Drop
German oil and gas production fell again in 2023 compared to 2022, industry association BVEG said on Tuesday, calling for increased domestic production to reduce dependence on more emissions-generating LNG imports. Last year, Germany’s oil production dropped by 5.9% year-over-year, while natural gas output slumped by 10.4%. The share of domestic gas supply of total German supply was 5.7%, while domestic oil production met about 2.2% of Germany’s oil consumption in 2023, figures by BVEG showed. Germany’s oil and gas production peaked in the 1960s and 1990s, respectively. Output has been falling in recent decades, increasing the share of imports to meet demand. Germany should maximize domestic oil and gas production, which would be extracted with 30% lower emissions compared to LNG imports, Ludwig Möhring, Managing Director at the BVEG association, said at a press conference. Higher domestic output would also boost the security of supplies and reduce dependence on imports, Möhring added. The BVEG association groups the companies operating in Germany, including the local affiliates and joint ventures of ExxonMobil, Shell, Neptune Energy, and Wintershall Dea, among others. Politicians must commit to decarbonization and at the same time to continuous domestic production, Möhring said. Germany has faced two difficult years scrambling to secure gas supply with energy prices spiking after the Russian invasion of Ukraine and the halt of Russian pipeline gas exports to Germany. Last year, Germany imported the equivalent of 968 terawatt hours (TWh) of natural gas in 2023, down by 32.6% from the 1.437 TWh imports in 2022, as consumption also dropped, according to the country’s energy regulator Bundesnetzagentur. Norway was Germany’s top natural gas supplier last year, delivering as much as 43% of the imported gas, followed by the Netherlands with 26% and Belgium with 22%. Germany’s industry is unlikely to fully recover from the energy price shock and return to the competitiveness from before the Russian invasion of Ukraine, the chief executive of Germany’s top utility, RWE, told the Financial Times last week.
India’s Chhara LNG terminal gets first cargo
India’s Hindustan Petroleum, a unit of state-owned ONGC, has received the first cargo of liquefied natural gas at its Chhara LNG import terminal in Gujarat, according to shipping data. The 2015-built 159,800-cbm, Maran Gas Mystras, arrived at the LNG terminal in the Chhara port on April 11, according to its AIS data provided by VesselsValue. Maran Gas Mystras previously picked up a cargo of LNG at Marathon Oil’s Punta Europa LNG terminal in Equatorial Guinea, the data shows. Local media reports suggest that Gujarat State Petroleum Corporation (GSPC) purchased this commissioning LNG cargo for the delayed facility from trader Vitol. LNG Prime could not verify this by the time this article was published. The reports also claim that Hindustan Petroleum (HPCL) has not yet completed the breakwater for the LNG facility to protect it during the monsoon season, but it should be completed next year. India’s eighth LNG import facility HPCL LNG (HPLNG), a unit of HPCL, built the 5 mtpa LNG terminal with all associated facilities for receipt, unloading, storage, regasification of LNG, and gas supply to the grid. The firm, formerly known as HPCL Shapoorji Energy Private Limited (HSEPL), was incorporated as a 50:50 joint venture between HPCL and SP Ports Private Limited (SPPPL) on October 15, 2013. However, HPCL purchased the 50 percent stake from SPPPL in March 2021, becoming the sole owner of the LNG import facility. The LNG terminal features a 1.2 km long jetty capable of receiving carriers with a capacity of 80,000 cbm to 266,000 ccbm, two LNG storage tanks each with a capacity of 200,000 cbm, while GSCP built the connecting pipeline, according to HPLNG. This is India’s eighth LNG import facility. At the moment, India imports LNGvia seven facilities with a combined capacity of about 47.7 million tonnes per year. These include Petronet LNG’s Dahej and Kochi terminals, Shell’s Hazira terminal, and the Dabhol LNG, Ennore LNG, Mundra LNG, and Dhamra LNG terminal.
Petrol sales up 7%, diesel declines 9.5% in April
India’s petrol consumption soared 7 per cent in the first half of April but diesel sales were down 9.5 per cent ahead of the onset of a harsh summer season that is set to crank up fuel demand, preliminary data of state-owned firms showed on Tuesday. Petrol sales of three state-owned firms, which control 90 per cent of the fuel market, rose to 1.22 million tonnes during April 1 to 15 when compared to 1.14 million tonnes of consumption in the same period last year. Diesel demand dropped 9.5 per cent to 3.14 million tonnes. While petrol sales were up mostly due to an increase in use of personal vehicles on the back of a price cut, crop harvesting season as well as the onset of summer which will increase the demand for air conditioning in cars is likely to reverse the trend in diesel demand. Petrol and diesel prices were last month reduced by Rs 2 per litre, ending a nearly two-year-long hiatus in rate revision. Month-on-month petrol sales dropped 3.6 per cent when compared to 1.27 million tonnes of consumption in March 1-15. Diesel demand too was down 2.7 per cent month-on-month when compared to 3.22 million tonnes in the first half of March. Diesel is India’s most consumed fuel, accounting for almost 40 per cent of all petroleum product consumption. Transport sector accounts for 70 per cent of all diesel sales in the country. It is also the predominant fuel used in agriculture sectors, including in harvesters and tractors. Petrol consumption has consistently shown a year-on-year rise, diesel consumption has been on a see-saw – rising in one month and falling in another. Consumption of petrol during the first half of April was 9.2 per cent more than in the COVID-marred April 1-15, 2022, and 56.5 per cent more than in the first half of April 2020. Diesel demand was up 4.7 per cent over April 1-15, 2022, and 27.9 per cent compared to the first half of April 2020. Jet fuel (ATF) sales rose 10.4 per cent year-on-year to 3,35,700 tonnes during April 1-15, 2024. But this was 1.2 per cent lower month-on-month. Like petrol and diesel, ATF demand too is now firmly above pre-Covid levels. ATF consumption was 34.3 per cent more than in April 1-15, 2022, and 18.4 per cent more than in the first half of April 2020. Cooking gas LPG sales were up 8.8 per cent year-on-year at 1.2 million tonnes in April 1-15, 2024. LPG consumption was 15.3 per cent higher than in April 1-15, 2022, and 28.3 per cent more than in the first half of April 2020. Month-on-month, LPG demand fell 11.6 per cent against 1.36 million tonnes of LPG consumption during March 1-15, the data showed.
What Could Rising Tensions in Middle East Mean for India & World Economy? Impact on Oil and Rupee Explained
As if the Hamas war was not enough that the escalation of tensions between Iran and Israel has added fuel to the fire in Middle East. The so-called retaliatory drone attack on Israel by Iran on Sunday is making the world anxious about this will pan out for the economies and geopolitics. Global leaders, including UN chief Antonio Guterres, have called for restraint to avoid any further escalation, as the “Middle East is on the brink”, and the world could not afford more wars. US President has already warned Israel that it would not take part in a counteroffensive against Iran after the weekend attack that involved 300 missiles and drones While Israel and allies including the US, UK and France managed to mostly foil the unprecedented attack by Iran, stock markets in Israel, Saudi Arabia and some other countries in the Middle East fell on Sunday, but only slightly. Will Oil Take a Hit? Bloomberg reported that oil prices rose in the wake of the Syria strike, with Brent climbing above $90 a barrel and analysts saying it could reach $100 on a direct conflict between Iran and Israel. The Israeli shekel weakened and neared its weakest level this year. India is also keeping a close eye on the tensions in Middle East, considering 80% of its crude oil requirements are imported, a surge in prices would impact the country’s growth, inflation, rupee and balance of trade. India has called for immediate de-escalation of hostilities between the two sides that threaten regional peace and security, and return to the path of diplomacy. Though the pressure on petrol and diesel prices is unlikely until mid-June due to the Lok Sabha Election, but oil retailers will feel the burden on profits, and could increase the subsidy bill for the government. Oil production in the Middle East amounted to roughly 30.7 million barrels per day in 2022, accounting for 31.3% of the global total, according to data from intelligence platform statista.com. Moreover, higher oil prices also mean higher food prices — not just in the Middle East but across the world. That would intensify food insecurity, already high in many developing countries.
Japanese Investors Partner With I Squared Capital on US$370 Million Strategic Investment in Natural Gas Infrastructure to Accelerate the Energy Transition in India
Squared Capital, a leading independent global infrastructure investor, today announced that a consortium of Japanese investors will become strategic minority shareholders in the Natural Gas Transition Platform (the Platform), a Singapore-based holding company with investments in Indian city gas distribution networks that develop and operate Compressed Natural Gas (CNG) stations for vehicles, pipe natural gas to homes, and distribute Piped Natural Gas (PNG) as well as Liquefied Natural Gas (LNG) to industrial and commercial customers. The Japanese investor consortium is made up of Osaka Gas, the second-largest city gas distributor in Japan, Sumitomo Corporation, one of Japan’s largest trading houses, and the Japan Overseas Infrastructure Investment Corporation (JOIN), a government-sponsored entity that promotes Japanese investment abroad. The transaction will diversify the Platform’s shareholder base and bring in additional long-term capital from the consortium members. Commenting on the transaction, Harsh Agrawal, Senior Partner, APAC, I Squared, said: “India aims to boost the share of natural gas from nearly 7% currently to 15% of the primary energy mix by 2030. I Squared Capital, through the Natural Gas Transition Platform, is committed to supporting a just and equitable transition of the country’s energy sector. Our new partners, Osaka Gas, Sumitomo Corporation and JOIN share this ambition and together we will be working to facilitate the shift from more carbon-intensive fossil fuels to natural gas in India.” He continued: “We are very pleased to attract these long-term and experienced partners to our growing energy Platform. The additional capital provided will be used to support the energy transition in India through the expansion of last-mile city gas distribution infrastructure. We regard natural gas as a transitional energy source that will play an important role in global decarbonization, substituting for more polluting fuels such as diesel and coal, while at the same time supporting India’s urbanization and industrialization with stable and affordable energy.”
Fear of High Gasoline Prices May Deter Biden From Toughening Sanctions on Iran
The Biden Administration is unlikely to attempt to dramatically curtail Iranian oil exports after Iran’s attack on Israel, due to concerns about higher oil and gasoline prices in an election year and an unwillingness to further harm U.S.-China relations as Beijing is Iran’s key remaining oil customer, analysts have told Reuters. The U.S. toughening the sanctions enforcement against Iranian oil exports was expected by analysts after Iran launched drones on Israel this weekend. Most investment banks and analysts do not see a major escalation in the Middle East that would directly hamper oil production and exports. But some expect tougher U.S. sanction enforcement against Iran’s oil exports. On Monday, the U.S. House of Representatives passed the Iran-China Energy Sanctions Act by a vote of 383-11. The bill expands sanctions to cover Chinese financial institutions that buy petroleum products from Iran. The bill proposes to “impose restrictions on correspondent and payable-through accounts in the United States with respect to Chinese financial institutions that conduct transactions involving the purchase of petroleum or petroleum products from Iran.” However, considering that most of Iran’s oil goes to China and that removing further barrels from the market would lead to higher oil prices, the Biden Administration could opt not to ramp up enforcement of the sanctions, analysts say. “I would not expect the administration to tighten enforcement in response to Iran’s missile and drone attacks against Israel over the weekend, mainly for concerns (that) could lead to increases in oil prices,” Kimberly Donovan, a sanctions and anti-money laundering expert at the Atlantic Council, told Reuters. Another anxiety about a clampdown on Iranian oil sales could be concerns about encroaching on China’s oil imports. China has been a major buyer of Iranian crude as it has brushed off all Western sanctions on Iranian, Russian, or Venezuelan oil exports so far. The Chinese teapots, the independent refiners, are estimated to be buying 80% of all Iranian crude oil exports. “I’d expect to see a gesture in the direction of (imposing) economic consequences on Iran, but I don’t expect the White House — or any future White House — to be able to completely turn off the spigot of Iranian oil,” Jon Alterman, a Middle East analyst at the Center for Strategic and International Studies, told Reuters.