Equinor sets up office in New Delhi to support oil marketing, trading
Norway’s Equinor said on Friday it is setting up an office in India’s capital New Delhi partly to support its oil marketing and trading activities. The company expects to appoint a country manager for the office soon, Equinor’s spokesman said in an e-mail to Reuters. “It will not be a dedicated trading office as such but the office will also support our marketing and trading activities for crude, LPG (liquefied petroleum gas) and other products towards the Indian market,” he said. India is the world’s third largest crude oil importer and it overtook Japan as the world’s second largest LPG importer in 2017. Equinor’s Senior Vice President for trading and marketing, Tor Martin Anfinnsen, said in Singapore last year that the company was opening an office in Tokyo and its first office in India by early 2019 as it expands its presence in Asia. Besides marketing its equity oil from Europe, Africa and the Americas to Asian customers, Equinor also trades oil from Russia and the Middle East. In November, Equinor struck a deal to build and operate an LPG terminal at Port Klang, Malaysia. The terminal could start operating in mid-2021, enabling Equinor to sell LPG to south and southeast Asian countries.
Philippines’ Phoenix gets green light for $2 billion LNG terminal
Philippines firm Phoenix Petroleum said on Friday it has won government approval to build the nation’s first liquefied natural gas (LNG) import terminal for $2 billion, in partnership with China National Offshore Oil Corp (CNOOC). Phoenix, a fuel retailer, said it plans to break ground this year for the LNG regasification and receiving terminal south of the capital Manila, in a country that still relies heavily on coal as a fuel source. The company said its Tanglawan Philippine LNG Inc unit, which will undertake the project, is partnering with CNOOC Gas and Power Group Co Ltd, a unit of CNOOC and China’s largest LNG importer and terminal operator. The LNG facility is expected to have a capacity of 2.2 million tonnes per year, with commercial operations targeted to start by 2023, Phoenix said in a regulatory filing. The Philippines has been looking to start importing LNG to feed gas-fired power plants in Batangas, south of the capital, as domestic gas supplies from its Malampaya field are set to run out in 2024 at the earliest. Phoenix, owned by local businessman Dennis Uy who helped bankroll Philippine President Rodrigo Duterte’s 2016 election campaign, also plans to build a 2,000-megawatt gas-fired power plant as part of the integrated project in Batangas province. Raymond Zorilla, Phoenix vice-president for external affairs, said investments will reach $686 million for the regasification terminal and $1.3 billion for the power plant. Dozens of domestic and foreign companies had expressed interest in the LNG project, but only three groups, including the Phoenix-CNOOC group, were short-listed. The other two were state-owned Philippine National Oil Company and power producer First Gen Corp with Tokyo Gas. Whether the two other groups would be allowed to build their own facilities would depend on the viability of their project proposals, DOE Assistant Secretary Leonido Pulido told Reuters. First Gen operates four power plants in Batangas with a combined capacity of about 2,000 MW, all running on Malampaya natural gas. The Malampaya gas field, which lies near the disputed South China Sea waters and is operated by a unit of Royal Dutch Shell Plc, fuels plants that supply about 40 percent of the power for the main Luzon island.
How India Inc. plans to become LNG friendly nation driving overall demand?
Globally LNG market dynamics are changing fast as the industry is still at the evolution stage and right mature sustainable business models are yet to be realised among the players. Commoditization or consolidation in the trade activities is still under contemplation within the industry. 2018 was yet another year showing a consistent increase in global LNG demand reaching to abt 310 MMTPA. Most of the growth as compared to 2017 came from China, Japan, South Korea, and India, with China contributing almost half of the growth. On the supply side, US is on the full throttle with the advent of shale gas, to lead the world as a major exporting hub with capacity ramping up fast. New FIDs are going to take shape in coming years and competitive pricing offered for US gas will play the major pivotal role in LNG supply chain transformation resulting in several SPAs across the globe. India is currently ranked 4th globally for driving LNG demand behind established gas driven economies China, Japan, and South Korea. Top demand drivers from Asia (China, Japan, South Korea, and India) are all in their own time zones of following their own gas driven economic strategies. Japan will restart its nuclear plant in 2020 and China will start getting its gas supplies through Russian pipelines by 2020-21. These two major developments will put the pressure on the demand side of the global LNG supply chain resulting in dampening of growth rate in China & Japan. Meanwhile, India is sitting on a plethora of opportunities to become a gas driven economy and change the face of the game. Here’s how India has prepared itself for bigger LNG game : 1) India’s position as a founder in global LNG trade: India’s LNG growth can be compared to any typical startup with a huge TAM(Total Addressable Market) and high growth business potential on its plate. Such a business model comes with its own risks such as industry technicalities, financial, geopolitical and many others which cannot be easily controlled. In such cases, it is advisable to take baby steps first in the best possible beachhead market and make all efforts to make the model successful in that market. Once the feasibility is tested from all angles in this market, it is now possible to apply the repeatability model to replicate success in other markets with easy and fast execution. To Start this journey, India Inc. selected this beachhead market as the State of Gujarat. 2) Gujarat State as Beachhead : Gujarat is the most vibrant maritime state on the west coast of India and is the leader in gas-fuelled energy diversification. Gujarat’s gas story began in 1972 and today natural gas comprises 25% of the energy mix in the state which is higher than the world’s average of 24%. Several gas companies are operating and cover approximately 85% of the state through 469 CNG stations, catering to 1 Million NGVs daily. India’s average energy mix is 6.2% with a national total of 1491 CNG stations and 3.2 million NGVs. Gujrat alone operates more than 30% of these CNG stations and NGVs in the country. To tap International gas, India inc. set up India’s first RLNG terminal at Dahej in 2004 and Immediately just in 2005, second LNG terminal was commissioned in Hazira. With this security in gas supplies, Govt of Gujarat (GoG) revised the legislation to make CNG as compulsory fuel for vehicles and became the first in India to do so. The year 2018 was remarkable again adding the 3rd RLNG terminal in Gujarat state at Mundra port. Hence, Gujarat has been prepared as a model state prototype by India Inc. to lead in NGV, Gas and RLNG distribution in India. 3)Petronet LNG as a Chief LNG architect for the country: Petronet LNG Ltd (PLL) backed by GAIL, ONGC, BPCL, IOC , was the pioneer of LNG import in India from Gujarat state and leads the country in fulfilling LNG requirements of the country with current capacity of 20 MMTPA and 7.5 MMTPA as further proposed expansion making total of 27.5 MMTPA. This will enable PLL to fulfill country’s gas hunger from all directions West (Dahej), South (Kochi) and East(Gangavaram). 4) Role of other players as key market enablers: India inc. backed by key oil and gas players such as GAIL, ONGC, BPCL, and IOC have been committed to making India clean energy and pollution free country. In the past decade, private players have increasingly come forward to contribute and capitalize on country’s plan towards gas driven strategy. Shell(Hazira), HEnergy (Jaigarh /Kolkata), Adani (Mundra/Dhamra), Swan(Jafrabad), Shapoorji Pallonji (Charra), KRPEL/LNG Bharat(Krishnapatnam), are the few players who are already active in the market. These companies are not only applying new innovative ideas & business models to reduce the LNG cost for the end consumers but also contributing to establishing distribution network across the country along with Govt agencies to develop India as a gas friendly nation by taking gas access to every corner of the country. With a strong team in action at all levels in the country, Here’s how India will play the key pivotal role in driving LNG demand in the years to come: (1) LNG for power generation & combating pollution: Long time usage of dirty fuels like coal and fuel oil have resulted in severe pollution and depleted the air quality to dangerous levels in various cities across India. The same situation was faced by China sometime back forcing them to switch to LNG as cleaner fuel option to combat pollution, giving rise to LNG import in the country in the past few years. Air quality index is at dangerous levels for most of the major cities in India and strict measures to fight air pollution is the number one agenda for Indian Govt. The only solution India has is to follow China’s path and reduce the dependency on coal & oil and increase the usage of LNG as a fuel for power generation. The Indian government is keen
Iraq to proceed with oil exploration with Iran
Iraq’s oil minister says Iraq and Iran are jointly exploring two oil fields shared by the two countries, despite US efforts to isolate Iran from global oil markets. Thamer Ghadhban says Iraq is honoring an existing exploration agreement with neighboring Iran. He received Iranian Oil Minister Bijan Zanganeh in Baghdad on Thursday. The US has been pressuring Iraq to break its energy dependence in Iran since it reinstated sanctions against the Islamic Republic last year. Iraq imports gas and electricity from Iran to meet its energy needs. The US granted Iraq a sanctions waiver until March to continue buying gas from Iran, after which Iraq could face punitive measures. Zanganeh said Iran was ready to increase gas sales to its neighbor.
Peru discusses importing natural gas through pipeline from Bolivia
Energy ministers from Peru and Bolivia agreed on Thursday to discuss building a pipeline that would transport natural gas and liquefied natural gas (LNG) from Bolivia to its neighbor. The pipeline would provide crucial access to the Pacific Ocean for land-locked Bolivia, running to Peru’s southern port of Ilo. Bolivia had wanted to build a pipeline through Chile to reach the ocean and expand its gas exports, but the International Court of Justice ruled against Bolivia’s demand that Chile negotiate granting it sovereign access to the sea in October. Bolivia is South America’s top natural gas exporter, but it is a net importer of oil, as is neighboring Peru. Bolivia told Peru it would also like to build an oil pipeline to Peru and import gasoline, diesel and crude through Ilo. Peru did not mention that an oil pipeline was under consideration. “We’re interested in investing in Peru’s Ilo port. We’re working to build a large storage plant for imports of gasoline, diesel and crude,” Bolivian Energy and Mines Minister Luis Alberto Sanchez said in a statement following his meeting with counterpart Francisco Ismodes. Talks between Peru and Bolivia also include the creation of a joint venture between Bolivian state energy company YPFB and its Peruvian counterpart, Petroperu, to commercialize LNG in border regions, Bolivia said. Neither country gave a timeframe for implementing the projects discussed or the cost, but they said they would meet again in February.
Iraq to proceed with oil exploration with Iran
Iraq’s oil minister says Iraq and Iran are jointly exploring two oil fields shared by the two countries, despite US efforts to isolate Iran from global oil markets. Thamer Ghadhban says Iraq is honoring an existing exploration agreement with neighboring Iran. He received Iranian Oil Minister Bijan Zanganeh in Baghdad on Thursday. The US has been pressuring Iraq to break its energy dependence in Iran since it reinstated sanctions against the Islamic Republic last year. Iraq imports gas and electricity from Iran to meet its energy needs. The US granted Iraq a sanctions waiver until March to continue buying gas from Iran, after which Iraq could face punitive measures. Zanganeh said Iran was ready to increase gas sales to its neighbor.
CPC pipeline exports 61.1 mt of oil in 2018, sees 11 per cent rise in 2019
Crude oil exports via the Caspian Pipeline Consortium (CPC) pipeline reached 61.1 million tonnes in 2018, up 5.98 million tonnes on a year earlier, the consortium said on Thursday. Oil from Kazakhstan accounted for 54.3 million tonnes, with the rest coming from Russia, CPC data showed. The Kazakh oil included 28.7 million tonnes from Tengiz, 10.3 million tonnes from Karachaganak and 13.2 million tonnes from Kashagan, the data showed. CPC expects to export 67.7 million tonnes of CPC Blend oil in 2019 based on producers’ requests for this year, CPC Chief Executive Nikolai Gorban said. That is a rise of 11 percent. He said oil from Tengiz would account for a little more than 30.3 million tonnes, with 11.3 million tonnes coming from Karachaganak and 14.6 million tonnes coming from Kashagan. Market participants said CPC’s plans to hike oil exports in 2019 looked ambitious given Kazakhstan has said it would decrease production this year. Kazakh output is expected to be 89.5 million tonnes in 2019 compared to 90.3 million tonnes in 2018, Energy Minister Kanat Bozumbayev told reporters at the end of 2018, as Kazakhstan complies with output limits agreed with OPEC and others. Bozumbayev said planned maintenance at Kashagan, Tengiz and Karachaganak oilfields would help Kazakhstan meet those limits. Exports from those fields are exported via the CPC pipeline, which is run by a consortium including Russian state-owned Transneft, the government of Kazakhstan, U.S. energy firm Chevron and Russia’s Lukoil.
Italy to block oil and gas exploration permits
The Italian government is planning to block the issuing of about 36 permits to look for oil and gas as part of plans to cut the country’s carbon footprint, the industry ministry said on Wednesday. In a statement the ministry said upstream oil and gas activity in Italy was not of strategic importance for the country. Some industry experts say Italy is sitting on some of the biggest reserves in Europe, but red tape has scuppered exploration for years. Italy’s domestic gas production accounts for only 7.5 percent of its needs while its oil production is around 7.3 percent of demand. The ruling coalition of populist 5-Star Movement and right-wing League want to boost the role of renewable energy in Italy’s energy mix rather than explore for oil and gas. It plans to phase out coal power production by 2025 and has set a target of having 30 percent of domestic energy consumption generated from green sources by 2030. Long-term, it is looking to phase out fossil fuels by 2050. “The issuance of about 36 permits currently pending, including 3 permits already issued in the Ionian Sea, will be halted,” the ministry’s energy undersecretary Davide Crippa said in a statement. The measures will be included in an amendment to legislation that will be discussed in parliament in coming days, the ministry said.
Farzad-B Gas Field – India Can Still Acquire the Gas Field in Iran
The Farzad-B Gas Field was one thorn between blooming India-Iran Relations. After the recent visit of Iranian Foreign Minister Mohammad JavadZarif to India, it appears that the thorn of Farzad-B Gas Field can be removed. India may still get access to Iran’s Farzad-B gas block as discussions are ongoing, a senior Iranian minister has said. “Indians have had the opportunity of getting into Farzad-B (gas field) earlier, and they still have it,” Gholam Reza Ansari, deputy minister for Economic Affairs at Iran’s Foreign Affairs Ministry, said on Tuesday, hinting that Iran was willing to provide easier terms for India once negotiations progress. The total reserves of the Farzad B gas field are around 21.7 trillion cubic feet of which around 60% is recoverable and production is slated to be around 1.1 billion cubic feet/day. Ansari’s comments come after senior officials from Oil and Natural Gas Corporation Videsh Limited (OVL) — the overseas investment arm of ONGC — said it may lessen its investment outlay, and agreed to Iran taking delivery of all gas already produced in the field. India had been looking to secure a contract for developing the gas field since 2009 but consecutive sanctions against Tehran played the spoiler besides the differences over pricing. Earlier as EurAsian Times reported, India with few other nations managed to squeeze out a six-month waiver from the US with regards to sanctions. As a result, New Delhi was permitted to import only nine million barrels of Iranian crude. “As far as I understand, Indians are trying to extend these waivers and I think, due to the traditional relation between our countries, they will be successful in securing those waivers as well,” Ansari said. As a result, the US has made the issue a part of its present trade negotiations with New Delhi. “Senior US officials visiting India have recommended that they may be willing to give India a waiver on US’ tariff hikes on aluminium and steel imports, provided India pledges to significantly change its sourcing pattern with regards to petroleum,” a senior trade department official said. India is yet to respond to this, he added. The Indian government had also been able to bypass international sanctions led by the US after deciding to use the euro for paying Iranian producers. But India will not have access to the European currency this time around as leading European Union nations have also supported Trump’s call for sanctions.
Shell completes acquisition of 26% equity in Hazira LNG and Ports
Shell Gas B.V., a subsidiary of global energy giant Royal Dutch Shell plc, on Wednesday announced that it has completed acquisition of 26 per cent equity interest in the Hazira LNG and Port venture from French energy player Total GazElectricite Holdings. The development brings Shell’s equity interest in the LNG (Liquefied Natural Gas) terminal and port on the coast of Gujarat state to 100 per cent now. “The move allows Shell to build an integrated gas value chain, supply from its global LNG portfolio, regasification at the Hazira facility, and downstream customer sales,” Shell said in a statement. In August last year, the gas major had announced to acquire 26 per cent stake from Total. The financials of the deal were not revealed. Strategically, the 100 per cent ownership of the LNG and port venture will enable Shell to contribute towards India’s long-term need for more and cleaner energy solutions. “Fifteen years ago, Shell invested in the Hazira project – the single largest foreign direct investment for India in the energy sector at the time. I am very proud that as a 100% shareholder, we will now be able to utilize this great infrastructure asset to its full potential and help provide much needed gas to serve the growing energy needs of India,” said Ajay Shah, Vice President, Shell Energy Asia. Shell Energy India was established in 2017, to aggregate demand from downstream customers and secure competitive international supply to meet such demand. “Having commercial and operational flexibility over Hazira will further enable Shell to offer better customer value propositions and build a pan-India gas business,” the statement said.