NTPC’s clean energy arm to build $21 billion green hydrogen hub
The clean energy unit of NTPC Ltd., India’s largest thermal power producer, is developing a green hydrogen hub at an estimated cost of Rs 1.8 trillion ($21 billion) as the country seeks to add more carbon-free fuel to meet its needs. NTPC Green Energy Ltd. is developing the project at Pudimadaka, near the city of Visakhapatnam, in the southern state of Andhra Pradesh. This is the first such project under India’s National Green Hydrogen Mission, a government statement said Monday. Prime Minister Narendra Modi will lay the foundation stone for the project on Jan. 8, the statement said. Green hydrogen is produced by using renewable energy to split hydrogen and oxygen atoms in water. India aims to lift green hydrogen production to 5 million tons a year by 2030 from almost zero currently under a strategy to decarbonize heavy industries — including refineries and steel mills — and to become a major supplier of the fuel to global markets. The goal is being championed by state energy giants, such as NTPC as well as billionaires Gautam Adani and Mukesh Ambani.
PNGRB proposes uniform insurance coverage for PNG and CNG consumers
The Petroleum and Natural Gas Regulatory Board (PNGRB) has proposed a uniform insurance policy for piped natural gas (PNG) and compressed natural gas (CNG) consumers, comparable to the insurance coverage provided to LPG users. This proposal was discussed during an open house meeting held on December 20, 2024, with participation from eight city gas distribution (CGD) entities and other stakeholders. e PNGRB emphasized the growing need for safety and risk coverage as PNG usage expands across India. With over 10 million PNG connections and more than 5,000 CNG stations as of November 2024, the sector is experiencing significant growth. “With the rapid shift of LPG consumers to PNG due to growing infrastructure, it is essential that PNG consumers receive similar insurance benefits,” said Lt Col Kumar Abhishek, Director (CP & CGD), PNGRB. Currently, insurance coverage in the CGD sector varies among entities. HPCL highlighted its existing public liability insurance for employees at CNG stations, supplemented by contractors’ policies. AG&P Pratham outlined a comprehensive general insurance framework covering risks such as gas leaks and equipment failures, while Indian Oil Adani Gas Pvt. Ltd. stated that it maintains an insurance cover of ₹200 milion under Public Liability (PL) and Commercial General Liability (CGL) policies. Adani Total Gas Ltd. reported a premium of ₹250 million for its PL and CGL policies, noting the need for a collaborative approach to reduce costs and extend coverage.
India’s Petroleum Demand To Grow 3-4% In FY25: Fitch
India’s petroleum products demand is expected to rise by three to four percent in the financial year ending March 2025, lower than five percent growth in FY24, according to a report by Fitch Ratings. The growth in the current fiscal is supported by rising consumer, industrial and infrastructure demand, the rating agency said in the report, projecting India’s GDP growth at 6.4 percent in FY25. The growth in petroleum product demand is likely to be broad-based, with diesel and petrol accounting for the majority, it added. For India’s oil marketing companies (OMCs), refinery margins are expected to fall below their mid-cycle levels in FY25 amid lower product cracks, regional oversupply, and lower benefits from price differences between crude varieties, it said. However, marketing margins would be healthy on lower Brent crude oil prices than FY24. “This will mitigate the pressures from lower refining margins for the OMCs, although pure refiners like HPCL-Mittal Energy Limited’s (HMEL, BB+/Stable) will face greater pressure on profitability. We expect refining margins to recover to their mid-cycle levels in FY26, as the regional oversupply eases and Brent crude oil prices fall in line with Fitch’s assumption, while we project marketing margins to remain supportive. HMEL’s low rating headroom in FY25 will improve in FY26 due to a gradual normalisation in refining margins,” the report said
India’s fuel consumption surges in 2024, driven by higher petrol demand
India’s fuel demand saw an uptick in 2024 as the country’s energy consumption continues to grow amid the aim of becoming a ‘Viksit Bharat’ by 2047. According to the oil ministry data, India’s petrol consumption rose by almost 8 percent in the year till November from the previous year, while diesel—the most consumed petroleum product in the country—witnessed a growth of 2.4 percent in the same period. The increased fuel consumption of the country could be attributed to the rise in industrial activity and economic growth. In 2024, India’s diesel consumption reached 83,087 tonnes by November, according to official data, while petrol consumption stood at 36,137 tonnes during the same period. Domestic demand of other petroleum products such as aviation turbine fuel (ATF) and liquefied petroleum gas (LPG) also saw significant growth in the year. The growth momentum in demand of diesel—mainly used by trucks, commercially run passenger vehicles and farm machinery—was relatively steady in the year majorly due to prolonged monsoons in the year and a change in consumption pattern. Amid expanding middle class and rising consumer spending, India’s petrol demand is picking up over diesel. Amid rising demand, India’s oil companies including Indian Oil Corporation Limited (IOCL), Bharat Petroleum Corporation Limited (BPCL) and Hindustan Petroleum Corporation Limited (HPCL) have plans to set up new refineries while increasing capacity of existing refineries.
Oil and gas industry set for long-term benefits with digitalisation: Report
Certain technologies, such as artificial intelligence (AI), blockchain, cloud computing, the Internet of Things (IoT), robotics, and virtual and augmented reality (VR and AR), are now part of the oil and gas industry The GlobalData’s report, titled ‘Digitalisation in Oil and Gas,’ highlights the role of major oil and gas companies, such as ADNOC, BP, Chevron, ExxonMobil, Shell, and TotalEnergies, in the development and adoption of digital tools to solve business problems. “Field personnel are extensively using handheld devices to gather data, make notes, and communicate with their team. These changes are aimed at cutting down inefficiencies in workflows for improved productivity and lower costs,” said Ravindra Puranik, oil and gas analyst at GlobalData. Operational risks are also reduced due to a lesser need for human intervention in hazardous environments, which is a very important benefit of digitalisation. The adoption of digital technologies is also expected to deliver intangible value in the form of emission reductions. A recent poll from GlobalData indicated that companies were deploying digitalization to lower their operational emissions. With worries over climate change increasing every year, managing emissions has become critical for the industry.
Oil Demand Stays Strong Despite EV Surge
In the new hit TV show “Landman”, the lead character, Tommy Norris, delivers a five-minute speech that summarizes just how critical for modern civilization crude oil is. Everything, up to and including wind turbines, depends on oil. This year, with record EV sales in China and the continued build out of wind and solar in Europe, has proven just how pertinent that speech is to the current state of the energy transition-or the absence of it. About a month ago, the World Bank predicted in a blog post that crude oil demand would hit 103 million barrels daily in 2024. What the World Bank noted was that this number represented slowing demand. What the World Bank did not mention was that the number also represented another all-time high for oil demand. In its latest monthly oil market report, the International Energy Agency, another doomsayer for oil demand, said demand was about to actually pick up in 2025, rising from this year’s estimated 840,000 barrels daily to 1.1 million barrels daily. The IEA attributed the pick-up to the increase in demand for petrochemical products that would offset lost demand from the transport sector. Yet even demand from the transport sector is not shrinking anywhere near the rate that was predicted. China has cemented its place as the world’s number-one market for electric vehicles. These constitute increasingly large portions of total car sales. July 2024 was the first month ever in which so-called new energy vehicle sales exceeded ICE car sales. Since July, China has consistently marked months of EV sales, holding more than 50% of new car sales
India’s oil import bill drops despite rising import volumes
India’s oil import bill has seen a reduction year-on-year for the months of September, October, and November, despite an increase in import volumes, according to data from the petroleum Ministry. This marks a shift from earlier in the fiscal year when the value of oil imports had been higher compared to the same period in the previous year. During the September-November period, India’s oil imports decreased by 9 percent in value terms, totaling USD31.2 billion. However, import volumes increased by 4.4 percent to 57.2 million tonnes, as reported by the Petroleum Planning & Analysis Cell. The value decline was most significant in November, where it fell by 13 percent, followed by a 10.9 percent drop in October and a 2.8 percent decrease in September, when compared to the same months of the previous fiscal year. Despite the fall in import costs, volumes continued to rise, with November seeing a 2.7 percent increase, October a 4.3 percent increase, and September a 6.3 percent rise. This trend reflects India’s growing demand for oil, driven by softer global crude prices.
Qatar agrees to supply LNG to Gail India in five-year deal
Qatar will supply liquefied natural gas to Gail India Ltd. from next year under a new five-year pact, according to people with knowledge of the matter. India’s state-owned company will receive one LNG shipment a month from April 2025 until March 2030, said the people, who asked not to be identified because the information is not public. The deal was concluded as part of a tender that closed earlier this month. Qatar is already India’s largest LNG exporter, providing roughly half of the South Asian nation’s total purchases last year. Gail India and QatarEnergy didn’t immediately respond to a request for comment.
Natural gas consumption rises 12%, LNG imports jump 18% in H1 FY25
India’s domestic natural gas production recorded a modest growth of 1.6% during April-September 2024, increasing to 18,160 MMSCM from 17,879 MMSCM in the corresponding period of 2023, according to a report by the Petroleum Planning & Analysis Cell (PPAC). The marginal rise was attributed to an 8.6% production increase in PSC/JV fields and a 3.9% boost in Oil India Limited’s (OIL) nomination fields. However, production from ONGC nomination fields witnessed a decline of 3.5%. LNG imports see double-digit growth Liquefied Natural Gas (LNG) imports surged by 18.03% to 18,915 MMSCM during April-September 2024 from 15,416 MMSCM in the same period last year. In value terms, the imports rose by 17.37%, amounting to $7,613 million compared to $6,486 million in the previous year. LNG terminal utilization varied widely, with Dahej terminal operating at 103.9% capacity, while Kochi terminal utilization was at 21.8%. The city gas distribution (CGD) sector also expanded its footprint, reporting 7,259 CNG stations and over 13.7 million PNG connections across 297 geographical areas (GAs) as of October 1, 2024. CGD sector sales increased by 8% to 41.63 MMSCMD during April-September 2024, driven by a 9% rise in CNG sales and an 8% increase in industrial sector sales. However, domestic and commercial sales dipped by 2%.
Massive LNG Expansion Expected Worldwide Despite Green Transition
Since 2022, several countries worldwide have announced plans to expand their natural gas production capacity over the next decade, with multiple new large-scale projects coming online over the last three years. This was largely driven by the 2022 Russian invasion of Ukraine and subsequent sanctions on Russian energy, which led to a global shortage of natural gas. As countries across Europe and North America hurriedly sought out alternative supplies of the fuel, several governments decided to back new gas expansion plans to ensure the future of their energy security, with many viewing natural gas as a necessary mid-term transition fuel. A recent report by the climate group Reclaim Finance states that $200 billion in funding has been earmarked by large banks for new gas terminals, in addition to $252 billion from around 400 other investors. While most major banks have committed to a shift toward “net-zero” banking, many continue to define natural gas as a transition fuel, allowing for funding exceptions. The wave of new gas projects comes in the wake of the Russian invasion of Ukraine and the widespread energy shortages that followed. Many countries have shifted their reliance on Russia for gas supplies to alternative producers, such as Norway and the U.S., over the last almost three years. “Oil and gas companies are betting their future on LNG projects, but every single one of their planned projects puts the future of the Paris Agreement in danger,” Reclaim Finance campaigner Justine Duclos-Gonda said in a statement this month. “Banks and investors claim to be supporting oil and gas companies in the transition, but instead they are investing billions of dollars in future climate bombs.” The report found that eight liquefied natural gas (LNG) export terminal projects and 99 import terminal projects were completed between 2022 and 2024, increasing the global export capacity by 7 percent and the import capacity by 19 percent. In addition, LNG developers have a project pipeline of 156 new LNG terminals worldwide to be completed by the end of the decade, consisting of 63 export terminals and 93 import terminals. This has raised concerns among climate experts over the potential emissions increase in relation to new gas projects. The report stated that methane leaks from these terminals could produce as much as 10 gigatonnes of greenhouse gas emissions by 2030, which is nearly equivalent to the annual emissions of all operational coal plants globally. In October, the International Energy Agency’s (IEA) World Energy Outlook 2024 warned that there could be a severe oversupply of gas by the end of the decade if all planned projects go ahead. This will likely lead to a sharp drop in gas prices. The IEA predicts that the price of gas imported into the EU could fall from a record average high of over $70 per million British thermal units (MBtu) in 2022 to just $6.50 by 2030. The U.S. has taken the lead in LNG production, overtaking Qatar and Australia to become the world’s largest LNG exporter in 2023, according to the U.S. Energy and Information Administration (EIA). U.S. LNG exports averaged 11.9 billion cubic feet per day (Bcf/d), a 12 percent increase on 2022 levels. Australia and Qatar each exported between 10.1 Bcf/d and 10.5 Bcf/d annually between 2020 and 2023. Russia and Malaysia were the fourth- and fifth-highest LNG exporters globally over the last five years. There are no signs of slowing for the U.S., which has an extremely large LNG project pipeline for the next decade. Three new LNG export projects, currently under construction, are expected to come online by the end of 2025. Earlier this year, the EIA forecast that U.S. natural gas exports would grow by 6 percent in 2024 compared to 2023, to 13.6 billion Bcf/d. Net exports are set to increase even further in 2025, by an additional 20 percent, to 16.4 Bcf/d. This is not just a U.S. phenomenon, with North American LNG exports on track to more than double by 2028, as the U.S., Canada, and Mexico all expand their export capacities. By July, 42 LNG projects across Europe were planned to start in 2025. The current European project pipeline is expected to increase the continent’s LNG capacity by 121 million metric tonnes a year by 2030. However, a decrease in European demand means that utilization rates at many operating terminals have fallen below 50 percent. Energy experts are growing increasingly concerned over the potential overinvestment and underutilization of the market. The race to develop new LNG terminals in the wake of the Russian invasion of Ukraine and subsequent global gas shortages may be short-sighted, if demand predictions from the IEA are to be believed. The rapid expansion of the global LNG market could lead to a huge oversupply, thereby driving down gas prices dramatically over the next decade. However, this does not appear to be deterring many of the developers building these new projects, who expect demand to remain high as gas is used globally as a ‘transition fuel’.