Cedigaz: global LNG imports increased 1.7 percent in January-May
Global LNG imports rose by 1.7 percent to 169.3 million tonnes in January-May 2024, up from 168 million tonnes during the same period in 2023, according to preliminary data released by Cedigaz. Confirming the trend seen this year, the growth was driven by Asian gas demand, with LNG imports increasing by 10.37 million tonnes year-on year, up 15.3 percent, to 115.31 million tonnes, the France-based association said in a report. Meanwhile, European LNG importsfell by 11.4 million tonnes, down 20 percent year-on-year, to 45.37 million tonnes in the first five months of 2024, it said. Asia was followed by Central and South America (+1.25 million tonnes, or up around 30 percent to 5.34 million tonnes) and the Middle East (+0.82 million tonnes, or up 45 percent to 2.62 million tonnes), Cedigaz said. In Europe, reduced gas demand and high inventories were primarily behind the drop in LNG imports, it said. Cedigaz said the sharpest drop in terms of volume was recorded by the UK, where imports fell by 6.21 million tonnes, down around 59 percent, to 4.21 million tonnes, amid low gas-to-power and residential demand in the UK and increased LNG import capacity in Europe. China’s LNG imports jump In Asia, China led the pack with a total of 31.97 million tonnes, representing around 28 percent of imports in Asia, imported in January-May 2024, up from 27.10 million tonnes during the equivalent period in 2023, Cedigaz said. This was also the highest level reached since the same period in 2021, when China LNG imports hit 32.96 million tonnes, the association noted. For the whole of 2024, China is projected to hit a new record in LNG imports of around 78-80 million tonnes, with demand driven by the industrial and commercial sectors, according to reports citing a PetroChina official in May, Cedigaz said. China imported a total of 70.4 million tonnes in 2023, according to Cedigaz database, though the highest annual level was reached in 2021 with 78.79 million tonnes. China was followed by Japan, which imported 27.81 million tonnes in January-May 2024, and South Korea with 20.41 million tonnes, it said. India boosts LNG imports India’s LNG imports posted the second biggest year-on-year increase in terms of absolute changes (+2.52 million tonnes, up almost 30 percent year-on-year) to 10.99 million tonnes, Cedigaz said. This marked an increase from 8.47 milion tonnes during the same period last year, making India the fourth-largest importer so far this year after overtaking the UK, which slipped to the 12th position, it said. India boosted its LNG imports this year and past winter as softer prices fueled buying interest to meet soaring demand – the country remains a price-sensitive market. India’s LNG imports were already expected to increase this year due to demand fundamentals, Cedigaz said. With the country currently going through an unusually severe heatwave, this trend is only expected to strengthen, Cedigaz added.
These Are the World’s Biggest Oil Reserves
Russia has reportedly discovered colossal oil reserves in the British territory of Antarctica. According to documents presented to the UK House of Commons Environmental Audit Committee in early May, the discovery was made by Russian research vessels in the Weddell Sea, part of the Antarctic territory claimed by the UK. The reserves discovered are estimated to contain some 511 billion barrels of oil, around 10 times the production of the North Sea over the last 50 years. However, as Statista’s Anna Fleck reports, the exploitation of hydrocarbons in Antarctica is strictly prohibited. Since the signing of the Antarctic Treaty in 1959 (which came into force in 1961), the continent has been reserved for peaceful activities only, and may become “neither the scene nor the object of international disputes”. Antarctica is therefore mainly used for scientific purposes, in particular for research into climate change. The Russian discovery has raised concerns in the scientific community. Klaus Dodds, an Antarctic expert and professor at London’s Royal Holloway College, reportedly told British MPs that Russian research could be “a conscious decision to weaken the standards of seismic research in Antarctica, and ultimately a first step towards future exploitation operations”. As this infographic, based on the most recent annual report of the Organization of Petroleum Exporting Countries (OPEC), shows, the size of the oil reserves discovered in Antarctica is significant. Estimated at 511 billion barrels, the area would rank as the second largest crude oil reserve by region in the world, behind only that of the Middle East, whose proven reserves stood at over 871 billion barrels in 2022. This also represents almost double the known reserves of Saudi Arabia, the country with the second-largest proven oil reserves in the world (behind Venezuela, whose reserves are dense and more difficult to process, and therefore less profitable).
Afghanistan’s Taliban Reports $80 Million In Crude Oil Sales In 10 Days
Afghanistan has sold 150,000 tons (1.1 million barrels) of crude oil from the Amu Darya basin for more than $80 million over the past 10 days, with Beijing’s investment in the country beginning to bear fruit. On Sunday, Humayun Afghan, the spokesperson for the Taliban’s Ministry of Mines and Petroleum, revealed that the group had sold 130,000 tons of crude oil for $71.6 million before it successfully put up another 20,000 tons (146,000 barrels) of crude worth $10.5 million for bidding on the same day. This marks a reversal of fortunes for one of the Middle East’s most volatile regions with the country previously importing the 50,000 barrels of oil it consumes daily from neighboring countries such as Iran and Uzbekistan. It all began a year ago when China’s Xinjiang Central Asia Petroleum and Gas Co, or CAPEIC, signed a 25-year contract with Taliban authorities in Afghanistan. That contract requires CAPEIC to invest $150 million by the first year and a total of $540 million by 2026. So far, CAPEIC’s investment of $49 million in Afghanistan has helped boost the country’s daily crude oil output to more than 1,100 metric tons (8,000 barrels per day), a volume that could increase significantly if the company is to fulfill its contract. According to a top Taliban official, CAPEIC fell short of its investment target due to inaccurate estimates of material and labor costs coupled with a three-month delay in the approval of its financial plan by Afghan authorities. “The investments will add up as the contract stipulates,” the Taliban official told VOA on condition of anonymity, adding that the Taliban’s treasury earned about $26 million from the project last year. Spanning Afghanistan and Tajikistan, the Amu Darya basin is estimated to contain 962 million barrels of crude oil and 52,025 billion cubic feet of natural gas, according to a 2011 assessment by the U.S. Geological Survey. To tap into this potential, CAPEIC plans to dig 22 additional wells in 2024, aiming to increase daily production to more than 2,000 tons, or~15,000 barrels. Beijing has been cozying up to Kabul ever since the United States withdrew from Afghanistan in 2021 after a 20-year presence. Chinese diplomats have been meeting their Afghan counterparts almost weekly since the establishment of a Taliban government in Kabul, with western analysts alluding to some sort of emerging “cooperation.” Back in January, Chinese President Xi Jinping received the diplomatic credentials of the Taliban’s ambassador to Beijing. The move confounded foe and friend alike because no country has formally declared its recognition of the Taliban government. However, it’s not clear if Beijing’s action constitutes diplomatic recognition. “Although the attraction of [Afghanistan’s] mining and energy resources is strong, there is considerable Chinese wariness about the internal security situation, the reliability of Taliban assurances regarding foreign investments, and Afghanistan’s poor infrastructure,” Andrew Scobell, distinguished fellow for China at the United States Institute of Peace, told VOA. Meanwhile, other geopolitical analysts have hypothesized that Beijing’s main motivation in its dealings with Afghanistan is risk mitigation amid a potential security vacuum, a viable reason considering that the two countries share a 92 kilometer-long border. Last year, Beijing and Islamabad agreed to include Afghanistan in the China-Pakistan Economic Corridor. CPEC provides a blueprint for civil-military cooperation aiming to enhance the participants’ connectivity. There’s little doubt that China wants to project power over Central Asia for several reasons. First, the region is a core component of the Belt and Road Initiative, a global infrastructure development strategy adopted by the Chinese government in 2013 to invest in more than 150 countries and international organizations. Second, on a regional level, Beijing would want Kabul to consider it a top ally over competing powers such as Russia and India, both of which have some influence over Afghanistan. On its part, the U.S. government and other lawmakers are more concerned about the possibility of China taking over the Bagram airfield in the north of Kabul that its military used as its main base throughout the Afghan war. “We don’t see Afghanistan as a place where we need to compete with the Chinese and the Russians,” Thomas West, the U.S. special representative for Afghanistan, has declared. The United States and China have adopted very different diplomatic approaches toward Afghanistan. Whereas Beijing has chosen the investment/security cooperation route, the U.S. remains the leading humanitarian donor to Afghanistan, providing more than $2 billion in humanitarian assistance since the Taliban takeover.
GAIL to set up India’s largest, 1,500-KTA Ethane Cracker project in MP
GAIL (India) Limited has plans to set up India’s largest, 1,500-KTA Ethane Cracker Project at Ashta in Sehore district of Madhya Pradesh (MP), the company said on Monday. The product will entail an investment of around Rs 600 billion and will have a product slate of various ethylene derivatives. The public sector undertaking (PSU) will seek investment approval for the project from its Board of Directors. GAIL said in a regulatory filing to the stock exchanges that it has submitted its request to the Madhya Pradesh state government for providing suitable enablers for the project. “Around 800 hectares of land shall be provided by the MP Industrial Development Corporation Limited, for which the state government has already initiated the process,” said GAIL.
Gujarat Gas, GAIL, Petronet LNG shares: 3 cos to benefit if natural gas is included in GST
Jefferies in its latest note said that the Modi government reviving talks to include natural gas under GST should aid companies such as Gujarat Gas Ltd, GAIL (India) Ltd and Petronet LNG Ltd, adding that three out of four key states that could hold sway are under the ruling NDA. Such an inclusion could lower natural gas cost by $0.8-0.9 per mmBtu and aid faster adoption, helping GAIL’s transmission and trading volumes in the medium term, the foreign brokerage said. GAIL’s consolidated Ebitda could rise 2 per cent assuming it retains the benefit in the LPG segment, it added. In the case of Gujarat Gas Ltd, it’s competitiveness to propane is seen improving 6 per cent, aiding volumes or margin. Gujarat Gas would benefit in Morbi, Jefferies said noting that the 6 per cent VAT on natural gas sold in Morbi, if subsumed under GST, would improve Gujarat Gas’ competitiveness to propane by Rs 2.5 per kg at current prices. If passed on, this would improve volumes; if retained, it would improve margins. Petronet LNG could also benefit as improved competitiveness of natural gas if GAIL passes on the $0.8-0.9 MMBtu benefit should drive volume growth, aiding PLNG’s LNG volumes. It said such benefits would accrue gradually over the medium term. “VAT on CNG in Delhi/Mumbai/Gujarat is 0 per cent/3 per cent/5 per cent. We expect CGD players to pass on the benefit to consumers if CNG is subsumed under GST. This should increase the discount to petrol/diesel and marginally aid volume growth,” Jefferies said.
Energy ministries: Delicate balance between energy security, rising demand
In the last two terms of the Narendra Modi-led National Democratic Alliance (NDA) government, clean energy and energy transition became a crucial part of economic growth. With India now positioning itself as the voice of the Global South, the push towards green growth is expected to continue. However, rising energy demand could tilt India’s energy basket towards fossil fuels from coal to oil and natural gas. Return of coal and natural gas The country’s electricity demand has not been as coal-dependent as in the past couple of years. With electricity demand touching a new record every year, it is coal that is running the show. The Union power ministry has pulled all strings to ensure surplus supply, including directives on importing coal and running gas-based units. Officials say this has helped the country wade through extreme heat days with no major hiccups. This has had a domino effect on supply of domestic coal, imported coal, and also natural gas. Coal India Ltd (CIL) is looking to have the highest ever supply of coal this year. The Union Ministry of Coal has ensured coal availability of more than 15 days this summer (it usually would go below 10 days). The new coal minister has to maintain this streak with the much-needed support from the Railways, states, the power ministry, and generating stations. Maintaining enough fuel supply while facing global pressure to dial down on coal mining and usage will remain a challenge for these two ministries. But, for the power ministry, the challenge of energy security is multifold. It would need to balance green energy, which has grown multiple times in the last decade but is not available round the clock. All the power ministers in the Modi government have also donned the hat of the minister of new and renewable energy. With India committing 500 Gw of green energy by the end of this decade, both the power and new and renewable energy ministries would need to put feet on the pedal while developing allied infrastructure from transmission to energy storage. The new power minister will also have to walk the tightrope on the new power distribution reforms scheme, which requires cooperation from all states to fix the beleaguered power supply ecosystem. In tandem with the larger push towards cleaner fuels, the petroleum and natural gas ministry aims to expand the Sustainable Alternative Towards Affordable Transport (SATAT) scheme, under which it aims to set up 5,000 compressed biogas plants by FY25, officials say.