Uzbekistan seeks $300 mln loan from Russia’s Gazprombank for gas complex
Uzbekistan is seeking a $300 million loan from Russia’s Gazprombank as it wants to increase output at its state-run Shurtan gas and chemical complex, the president’s office said on Thursday. The complex, which produces polyethylene, is operated by Uzbekistan’s state oil and gas company Uzbekneftegaz, a strategic partner of Russian state gas company Gazprom which is a major shareholder in Gazprombank. Uzbekistan’s President Shavkat Mirziyoyev sent a request to officials at the energy and finance ministries to seek a $300 million loan from the Russian bank, according to a statement on Mirziyoyev’s website. Gazprom has been operating energy projects in Uzbekistan since 2002. Gazprombank, Russia’s third biggest lender by assets, said in a statement that it aimed for further development of mutually beneficial relations with Uzbekistan in various areas including energy and was considering the $300 million loan as part of cooperation with Uzbekneftegaz.
Hydrocarbon project: Movement to hold rally in Thanjavur
Movement Against Destruction will be staging a massive rally against all the ongoing and proposed projects, which pose a threat to environment and humanity. The protest is scheduled to be held on March 2, in Thanjavur, founder and president of the movement KK R Lenin said. Speaking to reporters here on Thursday, he said that they vehemently oppose hydrocarbon extraction project, thermal power project, Kudankulam nuclear power plant, and the proposed Sagarmala project and Neutrino project. All these projects are purposely implemented in Tamil Nadu with an ulterior motive of the destruction of Tamilians. It is total genocide of Tamils, he alleged. “The entire area starting from Karaikal to Nagapattinam should be announced as a protected agriculture zone, instead of the present status of a protected petrochemical zone. Once thermal power plants would come, all the trees will be chopped, which will lead to an acute shortage of rain,” he said. Once the Neutrino project would be implemented, the area would be utilized to stock nuclear waste, he alleged. During the process of oil and gas extraction, the rocks are being pierced or broken using a hydraulic and fracturing method. The process involves drilling of exploratory wells in the chosen places to release natural gas and oil from deep beneath the surface of the Earth. To extract gases they inject high-pressure fracturing fluid into the sedimentary rocks which crack the rocks. The high-pressure fluid is ultimately water, sand and a massive amount of chemicals, Lenin said. “The water pumped inside could be recycled using waste water treatment. However, more than 90% of water never returns to the surface. The water is just removed from the natural cycle and this will automatically lead to drought. The main risk associated with this extraction process is the potential contamination of drinking water with chemicals used in the process and when the Earth develops huge holes, it would lead to an artificial quake,” he added. So, all the destructive projects should be revoked. Moreover, the proposed projects which are ruining nature should be stopped, he added.
Senior level exits in Gujarat Gas as pvt players stoke competition
Public sector Gujarat Gas Limited (GGL), India’s largest gas distribution player, is facing a clear challenge from rising competition in city gas distribution (CGD). In the last twelve weeks, the CGD arm of the State-run Gujarat State Petroleum Corporation (GSPC) has witnessed at least a dozen top-level exits in favour of new CGD players. With a number of such ‘start-ups’ getting active in the space, the demand for skilled manpower has shot up sending shock-waves through the HR in established players such as GGL. Some of the exits at the levels of vice presidents, assistant VPs and heads of some key functions has forced GGL to rethink its HR policy and put in place measures to contain attrition. The destinations included players like Adani, Torrent, Think Gas, AG&P, Maharashtra Natural Gas, Green Gas among others. Head hunt Sources revealed that the newly-set up CGD entities have been on an aggressive head-hunt to run the highly-specialised business of gas. “In this fight for experienced talent, private companies are offering up to 50 per cent higher salaries and designations many levels up from the current role.” said a source from the sector, requesting anonymity. Admitting the concerns, GSPC Managing Director, T Natarajan told BusinessLine, “This had to happen following a sudden rise in CGDs. Now that this is a reality as demand for trained manpower has shot up, certain people are interested in moving out. But this is completely based on new opportunities and growth prospects.We are working on and taking up other HR initiatives to retain talent.” Following the Centre’s push for gas-based economy and focus on penetration of piped gas for households and commercial establishments, a spurt was seen in the number of CGD players. It is evident from the CGD bidding rounds by the sector regulator, Petroleum and Natural Gas Regulatory Board (PNGRB) gained momentum post 2015.The tenth round is underway at present. GGL, which was taken over by the GSPC Group in 2013 from British Gas Group (BG), is seen as a repository of rich talent – in technical and managerial areas. One of the oldest gas players, GGL has over 22,000 km of gas pipeline network covering over 1.3 million households. A former employee of the company said, “The fabric of the Gujarat Gas culture has never been like a PSU. Even after the GSPC takeover, the company managed to keep its independent fabric intact. However, because of bureaucratic intervention, it could have fuelled the attrition of top executives.” Natrajan clarified that the exits will not affect GGL’s operations, “As a GSPC Group, we are able to take care of immediate problems. We have manpower at other group companies and have kept some cushion also.
CNG Pumps In India Get A Boost; Expect More CNG Pumps Near You
CNG pumps or stations in India will soon grow in number by a good margin. In other words, expect more CNG pumps near you or your resident location. At present, vehicles running on CNG (Compressed Natural Gas) occupy a small portion of India’s entire automotive sector. However, we can expect a shift in things in the not-too-distant future. Autocar India shares that a new business model was proposed at Petrotech 2019 — the 13th edition of the International Oil & Natural Gas Conference and Exhibition — that was held at the India Expo Mart at Noida, last week. At the event, Dharmendra Pradhan, Minister of Petroleum and Natural Gas, launched the Dealer Owned Dealer Operated (DODO) model for installing more CNG pumps in India. The general guidelines of the scheme state that the designated dealer land will be developed exclusively to set up CNG pumps and related commercial activities. This will be done at the CGD (City Gas Distribution) authorities’ discretion. 87 locations, serviced by 23 authorised bodies, will be covered under the new CNG scheme. In total, at least 4,600 CNG pumps are expected to open within the next eight years. Furthermore, a goal of covering 50 key areas (124 districts across 14 Indian states) that account for 24 per cent of the country’s geography and 18 per cent of its population is being considered. If this is proved a success, 53 per cent of India and 70 per cent of the Indian population will have better access to CNG stations. Put in simple words, within a decade, enough CNG fuel pumps will come near you. “India is moving towards a natural-gas-dependent economy,” shared the Minister. Compared to conventional petrol products such as petrol or diesel, CNG is cheaper and less polluting. The Petroleum and Natural Gas Regulatory Board (PNGRB) has shown an interest in the proposed CGD network as well. In addition to this, Maruti Suzuki recently shared their plans to discontinue diesel model and make more CNG cars.
Bangladesh PM’s office revives Swiss trader AOT’s LNG supply deal
Bangladesh’s prime minister has given the nod to a multi-billion dollar LNG supply deal with Swiss trader AOT Energy but the energy ministry will make a final decision on whether it goes ahead, an official at the premier’s office said on Wednesday. The deal with AOT to supply 1.25 million tonnes of liquefied natural gas (LNG) for 15 years has long been in the works, with terms agreed last February. Last month, the gas company that oversees Bangladesh’s LNG supplies, Rupantarita Prakritik Gas Co, said the deal would not go ahead. However, a document issued by the office of Prime Minister Sheikh Hasina on Jan. 28, and seen by Reuters on Wednesday, showed the government has not scrapped the plan. “In reference to the letter of (the) global head of AOT Energy, the Energy Ministry has been asked to take necessary action for finalising a long-term deal for LNG with AOT Energy,” the document said, referring to communication the prime minister’s office had received from AOT about finalising a deal. Tarikul Islam, director of the prime minister’s office, confirmed the letter. However, he said this did not seal the deal. “Based on a letter from AOT Energy, we have sent a letter to the energy ministry to take necessary action. But this is the ministry’s call whether they want to go ahead with them or not,” Islam said. The energy ministry did not respond to requests for comment. AOT declined to comment. The terms of the deal are secret but broadly speaking, using current LNG prices, the deal would be worth $6.3 billion. This would be AOT’s first long-term LNG contract although it trades LNG on the spot market and has short-term contracts. Its pipeline gas and LNG volumes amounted to 6.5 billion cubic metres last year, roughly 4.7 million tonnes’ worth of LNG. Bangladesh is new to LNG and only began importing it last year. Industry players say it is still on a learning curve and that its strategy has been haphazard at times. One government official conceded the nation had taken on too many projects without proper planning. The country received its first cargo of LNG last April. Qatar supplies one terminal under a 2.5 million tonnes a year (mtpa) deal. A 1 mtpa deal with Oman will kick in once a second terminal starts operations in March. Bangladesh has imported around 1 million tonnes since September when regular supplies began, according to Refinitiv Eikon data. With indigenous gas production dwindling, the nation of 160 million people is set to be a significant player in the global LNG market, alongside Pakistan and India. However, it has tempered its initial enthusiasm. Officials at one point were considering a dozen import projects but have since pared the list down and shifted focus to building onshore rather than floating facilities.
India will lay 2,000 Km LPG pipeline costing Rs 90 billion – Pradhan
India To Lay 2,000 KM – LPG Pipeline Costing 90 Billion Rupees From West To East India. Emphasis Is On Raising Hydrocarbon Production. New Exploration Licensing Rules Are Not Focussed On Profit And Revenue. Explorers Are Given Marketing, Pricing Freedom For Sale Of Hydrocarbons. New Exploration Rules Will Be Largely Applicable To 19 Basins. India To Lay 2,000 Km – LPG Pipeline Costing 90 Billion Rupees From West To East India. ONGC, Oil India Allowed To Induct Private Cos To Boost Output From Nomination Fields. New Exploration Rules Will Be Introduced In Future Licensing Rounds.
Russia’s Novatek 2018 income up to $2.5 bln after Yamal LNG launch
Russian gas producer Novatek said on Wednesday its 2018 net profit rose 4.7 percent to 163.7 billion roubles ($2.5 billion) thanks to the start of liquefied natural gas (LNG) production. Novatek, controlled by CEO Leonid Mikhelson and businessman Gennady Timchenko, a friend of Russian President Vladimir Putin, launched Yamal LNG in the Arctic in December 2017 as part of Russia’s plan to raise its share on global energy markets. Moscow-traded shares in Novatek, Russia’s biggest gas producer which is not owned by the state, rose 1.3 percent. Other stakeholders in the project with annual capacity of 16.5 million tonnes per year are Novatek’s shareholder and French energy major Total, as well as China’s CNPC and the Silk Road Fund. Excluding the effect of foreign exchange differences, as well as the one-time effect from the disposal of interests in joint ventures, profit jumped 49 percent to 232.9 billion roubles. Higher oil and gas prices helped lift earnings, the company said. Last-year revenues rose by 42.6 percent to 831.8 billion roubles, while natural gas production increased 8.5 percent to 68.8 billion cubic metres, oil and gas condensate output edged up by 0.3 percent to 11.8 million tonnes.
Gas pricing, marketing freedom to help companies draw investments
The government’s decision to free up gas pricing and incentivise incremental output is likely to fire up investments in gas fields and raise production, said company executives and analysts. The Cabinet on Tuesday granted marketing and pricing freedom to all new gas discoveries whose field development plan (FDP) had yet to be approved. It also introduced fiscal incentive to operational fields for producing more than the current level. “This is positive for us as we will be able to fast-track at least three projects that were ready to develop but commercially not viable,” said ONGC chairman Shashi Shanker. These three discoveries have a producible reserve of 30 billion cubic metres and are expected to have a combined peak production of 10 million metric standard cubic metres a day, he said. For ONGC, the benefit will not be limited to just three discoveries. “We welcome the reform momentum and are looking forward to details of the policy to assess the impact on our production, including in current sites,” said a spokesperson for Vedanta. “This is a positive step in terms of encouraging additional activities in the E&P sector and should help accelerate development of discovered resources. We have yet to review the notification, but at this point of time none of BP’s existing developments will be affected by this announcement,” said a spokesperson for BP. BP is a partner of Reliance Industries in several upstream projects in India. “Pricing freedom would incentivise production. Producers can easily expect a price that is double that of domestic formula prices,” said K Ravichandran, analyst at credit rating agency ICRA. At present, the domestic formula price for gas is $3.36 per unit. Just about 25 of the total 115 gas discoveries made in blocks auctioned previously are under production as per the official data, and so 90 discoveries can potentially benefit from pricing freedom, Ravichandran said.
Australia’s east coast LNG plants unlikely to ever hit full capacity -study
Australia’s three east coast liquefied natural gas (LNG) plants are unlikely to ever run at their combined full capacity of 25.3 million tonnes a year as there is not enough gas to feed them and meet local demand, a study released on Thursday said. The three plants – Queensland Curtis LNG, Australia Pacific LNG and Gladstone LNG – were the world’s first LNG exporters to use coal seam gas rather than gas from conventional fields. But the wells they source their gas from in Australia’s Surat and Bowen basins in Queensland state have turned out to be less productive than expected. As a result, the three plants – each with two processing units – have been running below capacity, operating at average 82 percent in 2018. “Unfortunately, there are serious headwinds coming and the outlook is less rosy as the industry over-reached by building three projects of six trains,” EnergyQuest CEO Graeme Bethune said in a statement. QCLNG, run by Royal Dutch Shell averaged 87 percent capacity, and GLNG, run by Santos, only 65 percent, EnergyQuest, an industry consultancy, said. In a detailed study of government and company drilling and production data and reserves booked at coal seam gas (CSG) prospects and licenses, it found that only 56 percent of booked proven and probable reserves had shown any commercial productivity. “The emerging and critical shortages are resulting from the fact the CSG LNG projects were sanctioned on ambitious estimates of proved and probable (2P) reserves, not proven reserves (1P) that underpin conventional LNG projects,” Bethune said. He predicted that by 2025 at least two trains would have to be shut to keep four trains running at full capacity, which would reduce medium-term exports to around 17 million tonnes a year, down from about 21 million tonnes in 2018. About 70 percent of exports go to China, 16 percent to South Korea and 9 percent to Japan. Exacerbating the problem, the producers have come under pressure to step up gas sales into the domestic market, with supply in Australia’s southeast falling as ageing offshore fields dry up and as states restrict drilling onshore. The three projects supplied about 25 percent of Australia’s eastern demand in 2018. “With dwindling production from southern gas fields, the political pressure on the LNG producers to divert gas to the domestic market is likely to intensify,” Bethune said.
Shell, PetroChina spat holds up Australia’s biggest coal seam gas project
Royal Dutch Shell and PetroChina are at loggerheads over gas sales pricing at their Arrow Energy joint venture, holding up development of Australia’s biggest coal seam gas resource, three industry sources said. Shell and PetroChina acquired the Surat gas resource in a A$3.5 billion ($2.5 billion) takeover of Arrow in 2010, and had expected to reach a final investment decision in 2018, with first production around 2020. That was after the Arrow Energy venture signed a 27-year deal in December 2017 to supply natural gas from Surat to the Queensland Curtis LNG plant (QCLNG), which is operated by Shell. PetroChina, though, is unhappy with the price in the sales agreement with QCLNG and the technical plan for developing the gas, issues that are now holding up final approvals, according to three industry sources familiar with the talks, who declined to be named due to the sensitivity of the matter. “PetroChina, as a 50-percent stakeholder in Arrow, expects to maximise interests from the JV versus QCLNG. But for Shell, it may be thinking of using its operator role at QCLNG to protect its interests,” a Chinese oil industry executive said. “We are working hard to manage approvals with joint venture partners,” a Shell spokeswoman said. PetroChina did not respond to a request for comment.