LPG demand to decline 7% by 2030 on growing piped natural gas adoption
India’s liquefied petroleum gas (LPG) demand will decline by 7% by 2030 after having risen 82% in a decade as a planned massive adoption of piped natural gas will eat into its growth, according to a joint study by the Petroleum and Natural Gas Regulatory Board (PNGRB) and Deloitte. Household consumption makes up about 90% of the total LPG consumption in the country. About 99% of households have access to clean fuel—domestic LPG connections have doubled in a decade to 320 million — but many poor families consume an abysmally low amount of fuel. Their consumption is expected to expand in the future and can fuel demand for LPG. However, this growth will likely be more than offset by a rapid expansion of piped natural gas (PNG). “As city gas distribution sector grows, it will be the key factor that will erode LPG demand,” the study said. “Demand erosion will be prominent in the domestic segment as PNG—domestic and commercial—is cheaper than LPG.”
India’s import of Russian oil drops in Nov to lowest level since June 2022
India’s import of Russian crude oil dropped in November to its lowest level since June 2022 but the Kremlin continues to be the biggest source of oil for India, according to a monthly tracker report of a European think tank. India became the second biggest buyer of Russian crude oil since Moscow invaded Ukraine in February 2022, with purchases rising from less than one per cent of the total oil imported to almost 40 per cent of the country’s total oil purchases. The rise was primarily because the Russian crude oil was available at a discount to other internationally traded oil due to the price cap and the European nations shunning purchases from Moscow. “India’s imports of Russian crude oil dropped by a massive 55 per cent in November – the lowest figure since June 2022,” the Centre for Research on Energy and Clean Air (CREA) said its latest report. Russia remained India’s top oil supplier, followed by Iraq and Saudi Arabia. “China has bought 47 per cent of Russia’s crude exports, followed by India (37 per cent), the EU (6 per cent), and Turkey (6 per cent),” CREA said without giving absolute numbers. In November, there was a 17 per cent month-on-month increase in the discount on Russia’s Urals grade crude oil to an average of $6.01 per barrel compared to Brent crude oil. The discount on the ESPO grade narrowed by a massive 15 per cent and was traded at an average discount of $3.88 per barrel while that on the Sokol blend narrowed by 2 per cent to $6.65 per barrel, it said.
Putin Halts Arctic Gas Production as Sanctions Take Effect
Russia has been compelled to halt operations at a section of the world’s largest liquefied natural gas (LNG) facility near the Arctic city of Murmansk due to diminished demand caused by Western sanctions. The Belokamenka yard, which was completed last year and was planned to employ 15,000 workers, is now abandoned, as most contractors have vacated the site. This shutdown represents a significant setback for Russian President Vladimir Putin. Last year, Putin visited the facility alongside Leonid Mikhelson, the CEO of Novatek—the second-largest gas company in Russia responsible for constructing the plant. In the previous year, Novatek produced 79 billion cubic meters of gas, approximately matching the United Kingdom’s entire annual consumption. During their visit, both Putin and Mikhelson touted Belokamenka as a leading global industrial site. However, just a few months later, the US Treasury imposed sanctions on the Arctic LNG 2 project, with the European Union following suit with similar measures. The imposition of sanctions has led to a shortage of available ships. Novatek required a fleet of ice-breaking LNG carriers for their project to proceed, but only a few shipyards were willing to risk violating sanctions. In September, construction firm Vellestroy reportedly pulled out of Belokamenka, and contractors Renkons Arktik have now also departed. Currently, approximately 500 individuals remain on the site, primarily security personnel. A significant setback to Putin’s ambitions in the Arctic occurred in September when India declared it would no longer purchase LNG from Arctic LNG 2.
Do you have a better deal?: India’s Jaishankar responds on getting ‘cheap oil’ from Russia
Indian Foreign Minister S Jaishankar gave a stern reply on Saturday (Dec. 9) to the criticism of New Delhi buying oil from Russia amid the country’s ongoing war with Ukraine. Foreign Minister Jaishankar was taking part in the 22nd edition of the Doha Forum panel on “Conflict Resolution in a New Era” in Doha. “Pleased to participate @DohaForumpanel today on the topic “Conflict Resolution in a New Era” in Doha today along with PM & FM@MBA_Al Thani_of Qatar and FM @EspenBarthEide of Norway. As the conflicts around us increase, the need of the hour is more diplomacy, not less,” Jaishankar said in a post on X. ‘Do you have a better deal?’ On being asked about India getting “cheap oil” from Russia, Jaishankar said, “I get oil, yes. It is not necessarily cheap. Do you have a better deal?” Last month, Indian Petroleum and Natural Gas Minister Hardeep Singh Puri said that Russia had become the largest supplier of crude oil to India, accounting for over 35 per cent of the country’s imports. In September, Puri said that New Delhi was prepared to keep buying oil from Russian companies that were allowed to make such sales since prices were cheap. Western sanctions on Russia over its war with Ukraine have capped the price Russia can charge for its crude oil, and India is prepared to buy oil and gas at the lowest possible prices from anyone, Puri told the news agency Reuters. Jaishankar on Russia-Ukraine war Meanwhile, at the Doha Forum panel, Foreign Minister Jaishankar reiterated India’s stance that the Russia-Ukraine war could only be resolved through dialogue and diplomacy and not on the battlefield. “We’ve always held to the view that this war is not going to be solved on the battlefield. At the end of the day, people are going to return to some kind of negotiating table, the sooner the better. Our effort has been to facilitate that to the extent possible. That has not been the most popular thing, at least in some parts of the world,” Jaishankar said
Surprise Crude Oil Build Pressures Prices
Crude oil inventories in the United rose by 499,000 barrels for the week ending November 29, according to The American Petroleum Institute (API). Analysts had expected a draw of 1.30 million barrels. For the week prior, the API reported a 1.232-million barrel build in crude inventories. So far this year, crude oil inventories have fallen by roughly 3.4 million barrels since the beginning of the year, according to API data. On Tuesday, the Department of Energy (DoE) reported that crude oil inventories in the Strategic Petroleum Reserve (SPR) rose by 0.7 million barrels as of December 6. SPR inventories are now at 392.5 million barrels, a figure that is about 46 million above its multi-decade low last summer, yet still 242 million down from when President Biden took office. At 3:11 pm ET, Brent crude was trading down $0.08 (-0.11%) on the day at $72.06—down roughly $1.60 per barrel compared to last Tuesday. The U.S. benchmark WTI was trading up on the day by $0.08 (+0.12%) at $68.45—up about $1.50 per barrel from last Tuesday. Gasoline inventories rose this week by 2.852 million barrels on top of last week’s 4.623-million-barrel increase. As of last week, gasoline inventories are 4% below the five-year average for this time of year, according to the latest EIA data. Distillate inventories rose by 2.452 million barrels, after last week’s 1.014-million-barrel increase. Distillate inventories were about 5% below the five-year average as of the week ending November 29, the latest EIA data shows. Cushing inventories—the benchmark crude stored and traded at the key delivery point for U.S. futures contracts in Cushing, Oklahoma—fell by 1.517 million barrels, according to API data, after rising by 112,000 barrels in the previous week.
LNG Developers Caught in a Regulatory Waiting Game
If you think LNG is America’s energy darling, think again. Two major Gulf Coast projects—Venture Global’s CP2 and Commonwealth LNG—are stuck in limbo as the U.S. Department of Energy (DOE) says its hands are tied until the Federal Energy Regulatory Commission (FERC) finishes environmental reviews. This isn’t just bureaucratic red tape; it’s a tug-of-war between energy expansion and environmental scrutiny. FERC recently yanked Venture Global’s construction go-ahead for CP2, demanding another environmental review. Commonwealth LNG is in a similar boat, waiting for FERC’s nod. With no clear timeline, developers are frustrated, environmentalists are elated, and the industry is left holding its breath. The stakes couldn’t be higher. The U.S. is the world’s top LNG exporter, thanks to soaring demand in Europe post-Russian pipeline woes. The US exported nearly 12 billion cubic feet per day last year, outpacing rivals like Qatar and Australia. But delays like this threaten that momentum, and let’s not forget that under Biden, approval times for new LNG projects have stretched from weeks to nearly a year. Adding fuel to the fire, natural gas prices are wobbling. While crude oil prices are holding steady—WTI at $69.01 and Brent at $72.68—natural gas is sliding, down 1.73% to $3.127. That’s not great news for an industry facing rising costs and political hurdles. Venture Global isn’t mincing words, calling the additional FERC review unnecessary. But this is more than a one-off slowdown; it’s emblematic of a broader clash. Coastal communities in Louisiana and Texas are speaking out against pollution, and climate activists are leveraging these grievances to push for fewer hydrocarbon projects altogether. What will likely follow is uncertainty, delays, and more court battles. The Biden administration’s focus on stricter environmental reviews has drawn praise from activists but sparked ire among energy execs. As the industry tries to balance expansion with regulation, LNG’s future is anything but smooth sailing.
National Gasoline Prices Fall Below $3 Per Gallon
The U.S. national average price of gasoline has fallen below $3 per gallon for the first time in more than three and a half years. According to GasBuddy data compiled from more than 12 million individual price reports covering over 150,000 gas stations across the country, the average national gasoline price was $2.97 per gallon on Monday, a level they last touched in 2021. De Haan has noted that some 35 U.S. states now enjoy average gas prices below $3 per gallon, an increase of seven states from a month ago. “The national average has finally fallen below $3 per gallon, and it couldn’t come at a better time for motorists with the holidays upon us. One would need to count over 1,300 days since we’ve seen the national average this low, with the affordability of gasoline at its lowest non-COVID level since 2015,” said Patrick De Haan, head of petroleum analysis at GasBuddy. Oil is the primary factor that determines gasoline prices in the United States, and commodity experts at Standard Chartered have predicted that U.S. oil production will not surge under Trump. According to the experts, U.S. crude production has increased by 4.7 mb/d since the pandemic-era low of May 2020; however, it’s just 0.4 mb/d higher than the pre-pandemic high of November 2019, working out to an annual production growth rate of just 80 thousand barrels per day (kb/d) over this timeframe. Further, the growth clip is forecast to continue to slow down in the current year and in 2025. U.S. liquids supply increased by 1.605 mb/d in 2023, but StanChart has forecast growth of just 630 kb/d in 2024, slowing further to 300 kb/d in 2025. With more than a month since U.S. President-elect Donald Trump won a second term in the Oval Office, oil markets have been struggling to find direction despite event risk remaining high, particularly in the Middle East. According to StanChart, the market’s apparent hesitation to trade a view with any conviction has intensified the notion that oil markets seem content to wait for Trump to take office.
India Will Dominate Oil, Gas Transmission Pipeline Length Additions in Asia
In a release sent to Rigzone recently by the GlobalData team, the company said India will dominate oil and gas transmission pipeline length additions in Asia by 2028. “India is expected to be at the forefront in terms of the trunk/transmission oil and gas pipeline network additions in Asia, accounting for more than 40 percent of the region’s total pipeline length additions by 2028,” the global data and analytics company stated in the release. GlobalData’s release highlighted that an outlook report by the company on oil and gas pipelines revealed that India “is likely to witness the start of operation of more than 50 planned and announced pipelines by 2028, adding a total transmission pipeline length of over 26,000km”. Of this figure, around 24,000km would be from planned pipelines that have received necessary approvals for development, GlobalData pointed out in the release. Bhargavi Gandham, an oil and gas analyst at GlobalData, noted in the release that “natural gas and product pipelines account for more than 80 percent of the upcoming transmission pipeline length additions in India by 2028”. Gandham added that the upcoming Kandla–Gorakhpur product pipeline is likely to be the longest among all the upcoming pipelines with a length of 2,809km. “The other significant addition to the country’s pipeline network is the planned Mehsana–Bhatinda natural gas pipeline,” Gandham said, noting that the pipeline will run a length of 1,834km. “With a length of 1,755km, Mumbai–Nagpur–Jharsuguda, a natural gas pipeline, is the next significant contributor to pipeline additions,” Gandham went on to state. In a separate release sent to Rigzone by GlobalData in May, the company said India is poised to take the lead in the number of liquid storage projects in Asia that are expected to start operations during 2024-2028, “contributing about 42 percent of the region’s total project count by 2028”.
PNGRB pushes for natural gas as a cleaner, greener energy solution for India
As the world’s fastest-growing emerging economy aims to transform into a manufacturing behemoth while adopting clean energy sources, natural gas plays a critical role as the best transition fuel, asserts the Petroleum and Natural Gas Regulatory Board (PNGRB). “India’s approach is aligned with global efforts to combat climate change through cleaner energy transitions. Various studies worldwide underscore the benefits of natural gas in reducing carbon and particulate matter emissions,” emphasises A Ramana Kumar, Member, PNGRB. The shift to piped natural gas (PNG), compressed natural gas (CNG) and liquefied natural gas (LNG) has been successful in several countries, leading to improved urban air quality. India’s initiatives serve as a model for similar economies looking to balance energy needs with environmental protection, he told businessline. PNGRB’s work on infrastructure creation and regulatory measures accelerates the shift towards natural gas. It also facilitates India’s goal of achieving a 15 per cent share of natural gas in its energy mix by 2030. Developing and expanding city gas distribution (CGD) networks is a critical intervention by the downstream regulator to curb air pollution, particularly in densely populated urban clusters. The supply chain transporting LPG cylinders to households adds to vehicular pollution and traffic congestion, which is negligible for PNG. Around 5,42,960 Inch-km of pipelines have been laid to enhance natural gas delivery to homes, transport, commercial and industrial sectors. PNGRB’s efforts to expand CGD networks and promote PNG are showing results. India now has around 13.6 million domestic PNG connections, which is expected to increase to 126.3 million by 2032. Promoting CNG in cities has helped reduce air pollution by encouraging the transport sector to switch to cleaner fuels. As of September 2024, around 7,000 CNG stations had been established nationwide, and the number is expected to reach 25,000 by 2032. The National Clean Air Programme (NCAP) of the Ministry of Environment, Forest and Climate Change has identified 131 cities as Non-attainment cities (NAC). NCAP aims to reduce PM10 concentrations by 20-30 per cent in these cities by FY25, with an extended target of up to 40 per cent by FY26, underscoring the need for cleaner fuels. Here, PNGRB is working in close coordination with the Environment Ministry to share available and upcoming Natural Gas infrastructure in these cities and devise various incentives for industries to convert to natural gas from polluting fuels.
Saudi Arabia Cuts Oil Prices
Saudi Arabia is cutting oil prices for buyers in Asia by more than expected after OPEC+ further delayed an output revival, underscoring how the outlook for the market remains weak. State oil producer Saudi Aramco will sell its main Arab Light crude grade at a premium of 90 cents a barrel to the regional benchmark in Jan, according to a price list seen by Bloomberg. That compares with $1.7 for this month. Earlier, OPEC+ – led by Saudi Arabia and Russia – agreed to push back production increases planned for the start of January by another three months, following two previous delays. The prospect of an impending oversupply leaves the group with the uncomfortable dilemma of whether to prolong production curbs well into 2025 or risk a price slump.