Toshiba to pay $800 million to exit US LNG business
Japan’s Toshiba said on Thursday it is exiting its US liquefied natural gas (LNG) business and paying an overseas “buyer” it did not identify $800 million to assume its commitment to purchase 2.2 million tonnes per year of the fuel from Freeport LNG in Texas. The Nikkei business daily reported on Thursday, without citing a source for the information, that the buyer is a unit of Chinese gas company ENN Group. However, Toshiba said in its statement that it would only identify the buyer when the final sales contract is signed. An ENN Group spokesman said he was not aware of the deal when contacted by Reuters. The sale would remove a roughly $7 billion commitment to process US shale gas into LNG that the industrial conglomerate signed in 2013 as an incentive for sales of turbines for power plants, one of its major businesses. The company has spent years trying to either sell the gas to power customers or offload the business after signing the 20-year contract to buy LNG from Freeport.
Govt okays EIA of Motihari-Amlekhgunj pipeline
The construction of the Motihari-Amlekhgunj fuel project is expected to go on in full swing following the approval of the project’s Environmental Impact Assessment (EIA) by the government. The Ministry of Forests and Environment recently gave a nod to the EIA of the cross-border pipeline project allowing Nepal Oil Corporation (NOC) to cut down almost 6,000 trees of the conserved areas along the project’s route, informed Sushil Bhattarai, acting deputy managing director of NOC. “This will now ensure that the construction of the project will move ahead uninterruptedly,” said Bhattarai. The project has witnessed 50 per cent progress so far as the pipe laying process along a majority of the routes has been completed. However, the construction works along the project route that falls inside the Parsa Wildlife Reserve and a few community forests (approximately 10km) were delayed following the delay in approval of the EIA. Of the 37.35 km length of the oil project, pipe laying process has been completed across more than 20km of the route, as per NOC. Bhattarai informed that NOC will soon begin the process to mark trees to be cut in the wildlife reserve and community forests and seek approval from the Cabinet to start cutting them down. Once the pipe laying process is completed, works regarding development of fuel pumping stations and injecting fuel tanks, among others will be carried out as per NOC. The construction works of the project began in April. As provisioned in the agreement of the project that Nepal and India inked in 2015, NOC plans to complete the project within 30 months from April. The project involves laying pipeline of 10.75-inch diameter and will have the capacity to supply 200,000 litres of fuel per hour, with fuel pumping facilities in Motihari on Indian side. “Both NOC and Indian Oil Corporation are committed to completing project before the deadline with support from related Nepali government agencies and other related firms in the project,” said Bhattarai. The INR 2.75-billion petroleum pipeline project will be crucial to ensure smooth supply of petroleum products in Nepal and reduce fuel transportation costs. While the Indian government is injecting INR two billion for the project, Nepal will be contributing INR 750 million.
Australia’s APA slumps as govt opposes HK gas pipeline buyout
Shares in Australia’s biggest gas pipeline company APA Group fell 11 percent on Thursday after Australia’s treasurer said he intended to block a A$13 billion ($9.5 billion) buyout by Hong Kong’s CK Group. Treasurer Josh Frydenberg said after market hours on Wednesday that his preliminary view was that the takeover was against the national interest because it would create a concentration of foreign ownership in the sector. Frydenbeg said the move was not a reflection on CK Infrastructure Holdings Ltd, part of the empire founded by Hong Kong tycoon Li Ka-shing. Analysts said the move appeared to be partly aimed at preventing Chinese ownership of a strategic asset. “I don’t think its just the China element, but a combination of important assets, concentration of ownership and China,” said Morningstar analyst Adrian Atkins. “I think the Chinese element maybe had a bit more of an impact than the treasurer’s letting on … it’d probably be unpopular with the electorate to have a major asset go to a Chinese firm,” he said. The rebuff is likely to test an already strained relationship between Australia and its largest trading partner, just as Australia’s foreign minister makes a delayed visit to Beijing. Earlier this year, Australia banned China’s Huawei Technologies Co Ltd from supplying equipment for a 5G mobile network citing national security risks, while Canberra last year accused Beijing of meddling in domestic affairs. APA Group shares, which had never traded at the A$11 offer price, fell back to pre-bid levels at A$8.48, an almost five-month low, wiping A$1.2 billion off its market value. The broader market opened higher. APA said it noted the treasurer’s decision and would update shareholders in due course. CK Infrastructure said in a statement on Wednesday that it had noted the treasurer’s comments.
Russia’s Gazprom to increase natural gas deliveries to Austria
Russian energy producer Gazprom will deliver more gas to its Austrian partner OMV , the two companies said on Monday. Deliveries to Austria will be increased by 1 billion cubic metres per year, they added. “The signing of a document on additional exports beyond the contractual amounts serves as yet another proof of the high demand for Russian gas on the part of our European consumers,” Gazprom CEO Alexei Miller was quoted as saying in the statement.
GAIL Q2 profit jumps 50% YoY to Rs 1,963 crore, beats analysts’ estimates
State-run GAIL on Monday reported a 49.89 per cent year-on-year rise in profit at Rs 1,962.96 crore for the September quarter. Analysts in an ET NOW poll had estimated the profit figure at Rs 1,473 crore. The company had posted a net profit of Rs 1,309.63 crore in the corresponding quarter last year. Total income of the company increased 54.86 per cent to Rs 19,640.96 crore in Q2FY19 over Rs 12,682.88 crore in Q2FY18.
Qatar reshuffles Cabinet, board of Qatar Petroleum
Qatar named the head of its largest bank as the new trade minister and restructured the boards of its state-run energy firm and sovereign wealth fund amongst other changes in a top-level shake-up on Sunday. It was the first government reshuffle in Qatar, the world’s top liquefied natural gas producer, since early 2016, but diplomats and analysts said the changes did not represent a significant shift in power in the world’s largest liquefied natural gas exporter. The tiny but wealthy country has been subject to a diplomatic and economic boycott by Saudi Arabia, the United Arab Emirates, Bahrain and Egypt since June 2017. They accuse Qatar of backing terrorism and cosying up to Iran. Doha denies the charges and says the boycott aims to impinge on its sovereignty. Qatar’s ruler issued decrees outlining changes to the boards of Qatar Petroleum (QP) and Qatar Investment Authority (QIA), the world’s ninth largest sovereign wealth fund with about $300 billion in assets. A Cabinet reshuffle saw Qatar National Bank (QNB) CEO Ali Ahmed al-Kuwari appointed to a new portfolio which combined commerce and industry under one ministry. Saad al-Kaabi, the chief executive of QP, was named Minister of State for Energy Affairs and there were also changes to the justice, labour and social affairs, and municipality and environment ministries. Western diplomats and analysts did not see the shake-up as indicative of a shift in policy nearly 18 months since the start of the regional rift, which Qatar has weathered with new trade routes and amid higher oil prices that have helped it swing to a budgetary surplus this year. “The Cabinet shuffle was expected to come earlier, but was apparently on hold as the country dealt with the blockade and now as the ramifications have been successfully dealt with it was time,” said Majed al-Ansari, an analyst and professor of political sociology at Qatar University. “It does not signal a change in policy or power shift in the government,” he said. It was not clear whether Kuwari would retain his post at QNB, the Middle East’s largest lender by assets. The bank, which is 50 percent owned by the country’s sovereign wealth fund, did not immediately respond to Reuters’ request for comment. QP’s Al-Kaabi, a US-educated engineer, rose through the ranks to become chief executive in 2014 and also sits on the board of the Qatar Investment Authority. He has gained a reputation among executives of the world’s energy majors, such as Exxon, Shell and Total , as a reliable counterpart for energy projects that have made the tiny nation of 2.6 million people the biggest exporter of liquefied natural gas (LNG) on the planet. Abdulla Abdulaziz Al Subaie was appointed minister of municipality and environment, a post seen as key to preparations for the country’s 2022 World Cup. Subaie has served as managing director and CEO of Qatar Rail, which expects to launch Doha’s first metro line this year. A separate decree on Sunday appointed Mohammed Bin Hamad Al-Thani chairman of the Qatar Financial Markets Authority as part of a shuffle to its board of directors.
Hughes India bags Rs 200 crore order from oil marketing firms
Satellite-based broadband services firm Hughes India has bagged an order to the tune of Rs 200 crore for a five-year period from oil marketing firms Indian Oil (IOCL), Bharat Petroleum (BPCL) and Hindustan Petroleum (HPCL) to upgrade connectivity across their 19,000 retail points, a senior official of the company said. “We have been working with OMCs, and this is the first time we have awarded order to upgrade their retail outlets. Total order size is in the range of around Rs 200 crore for a period of 5 years,” said Shivaji Chatterjee, senior vice-president and head, Hughes Communications India. Under separate contracts, IOCL, BPCL and HPCL will each use the JUPITER system to upgrade network connectivity across 19,000 locations collectively to increase speed of transactions, eliminate manual interference, and deliver accurate, real-time data across the retail operations. “The contract includes around 4,120 outlets of HPCL, 10,015 of IOCL and 5,000 retail outlets of BPCL,” Chatterjee said.
OMCs to help customers in gas booking, re-filling via CSCs
In an effort to make it easier for new gas connection, re-filling and delivery of household cylinders, the Government has appointed common service centres to provide such facilities through Digital Seva Portal. Public sector oil marketing companies (OMCs) and common service centres on Saturday signed a memorandum of understanding (MoU) to facilitate these services through 0.3 million CSCs across the country. Retail marketing of petroleum products is done by OMCs which include Indian Oil Corporation (IOCL), Hindustan Petroleum Corporation (HPCL) and Bharat Petroleum Corporation (BPCL). They have agreed to provide the benefits of Ujjawla connection, re-filling of new connection and other services through CSCs – a last mile access at consumers’ doorstep. CSCs will help the beneficiary to scan/upload his/her KYC document for verification of his/her identity for new booking connection. Beneficiaries can also collect the gas cylinder from their nearby CSC. The service centres will also provide requisite information about the scheme and promote it among citizens so that maximum number of beneficiaries can avail the benefit. The Ministry of Petroleum & Natural Gas is appointing one Ujjawala Didi for every five villages whose prime responsibility is to support and give service to Ujjawala beneficiaries. “The MoU with CSC will help us in promoting a transparent and convenient option. To fulfil the last mile gap, role of CSCs can be very significant. CSC is the greatest model of the bottom of pyramid,” the Minister of Petroleum & Natural Gas and Skill Development & Entrepreneurship, Dharmendra Pradhan ,said. He said in the last four years, the government had provided 1 million additional LPG connections. “Our aim is to provide 1.3 million LPG connections in five years of our government. And today’s initiative will add the new chapter in the New India’s concept,” he said. Speaking on the occasion, the Minister of Electronics & IT, Ravi Shankar Prasad, said, “CSCs have played a significant role in promoting rural enterprise as well as digital inclusion, mainly for rural citizens. CSCs today deliver large number of services and through PMGDISHA have trained more than 10 million citizens in digital literacy.”
ADNOC announces discovery of new oil, gas resources in UAE
UAE oil company ADNOC has announced the discovery of new oil and gas resources, with an eye on full self-sufficiency as US sanctions on Iran go into effect. State-run ADNOC, based in the oil-rich capital Abu Dhabi, said on Sunday it had discovered new gas fields, totalling 15 trillion standard cubic feet, and another billion barrels of oil. The company also announced plans to boost output to four million barrels per day by 2020 and five million bpd by 2030 — a plan UAE officials said was aimed at making the country entirely self-sufficient. Abu Dhabi Crown Prince Mohammed bin Zayed also announced the Supreme Petroleum Council, the city’s main decision-making council, approved a budget of 486 billion dirhams ($132 billion) to support a five-year growth plan. This included ADNOC’s “gas strategy to become self-sufficient and a net gas exporter,” he said on Twitter. The United Arab Emirates, OPEC’s fourth largest producer, currently produces up to 3.5 million bpd. Sunday’s announcement came as the United States imposed strict sanctions against Iran. The move targets buyers of Iranian oil with the aim of throttling Tehran’s main source of income. The UAE and its main ally, Saudi Arabia, support the new sanctions. The two countries have also severed ties with Qatar — the world’s largest exporter of liquified natural gas — in a spat over Doha’s policies, primarily on Iran and radical Islamist groups. But the UAE still relies on Qatar for gas imports via the Dolphin pipeline, which Qatari officials say is still functional. Saudi Arabia is the only producer with significant spare capacity of around two million bpd that can be tapped into to compensate for the loss of Iranian supplies. But analysts doubt Riyadh can sustain high production for a prolonged period.
Oil price rise: Making India’s voice count
The steep rise in international oil prices over the last few months is pinching the government and the people alike. This has not only affected the finances of people and the government, it has also affected the exchange rate of the rupee against international currencies. The current geopolitical landscape continues to pose a challenge in keeping prices within an affordable range. We have come across statements of global leaders appealing to oil-producing countries to reduce oil prices for long-term benefits that will accrue to the global economy. That hasn’t helped. While OPEC countries remain the main balancer of prices, there are several other factors that affect global crude rates. We have been raising the issue of the Asian premium, loud and clear, at every relevant international forum. At the ministerial meeting of the International Energy Forum on April 11, PM Narendra Modi had said, “We need to move to responsible pricing, which balances the interests of both the producer and consumer.” In a recent meeting with global oil experts and CEOs, which was also attended by the oil ministers of Saudi Arabia and the UAE, Modi noted that the oil market was producer-driven and oil-producing countries determined both the quantity and prices. Over the last many years, OPEC has played a key role in India’s quest for secure sources of supplies as the overall trade with OPEC nations is more than 80% in crude and 75% in gas of total import. Our companies pay huge sums on this account each year. To diversify our crude sourcing and get a better price for crude oil, we started importing from the US since last year. Now, it has become a regular feature for our PSUs to import from the US. In view of India’s high import dependence for oil and gas, in the first phase of the Strategic Petroleum Reserve (SPR) programme, the government has built SPR facilities with a capacity of 5.3 million metric tonnes. The total reserve of SPR has an estimated capacity of 9.5 days of India’s crude oil requirement. Under the second phase, we will build two more facilities. A refiners’ forum of private and public sector refineries in India has been formed to negotiate and strengthen as a block for better bargaining with producer countries. Recently, the International Energy Agency acknowledged that India will be the fastest growing energy consumer – and market – till 2040. The forecast also holds a promise for renewable energy, as fast-declining costs turn solar and wind energy into the main drivers of growth in the power sector. Reducing dependence on fossil fuel is one of the prime focus of our government’s policies and initiatives. Another interesting aspect in pricing of petrol and diesel in India that is less known is that international prices of petrol and diesel (not the price of crude oil) determine the price of petrol and diesel for Indian consumers. Many times, we have come across situations when the price of crude oil remains at a modest range while the cost of petrol or diesel is at a higher range pushing up the retail price in India. India remains the loudest and most reasonable voice representing the consuming nations. We have championed the cause of reasonable price of crude oil as something, which is in the long-term interest of the oil-producing countries. The PM has led this debate in his dialogue with the global community. There has been consensus that rise in oil prices was not a byproduct of shortages in supply of oil or demand supply imbalance. Rather, a more plausible argument is that it is a balanced market but the sentiments are imbalanced. In simple terms, geopolitical uncertainties and speculation about the macro-economic situation in large economies are having a crucial influence on prices rather than the actual production of crude oil. Our views arguing for long-term stability of oil industry by keeping oil prices at reasonable level has gained acceptance by major players in the international oil circuit. We are optimistic their future decisions will factor in concerns of consuming countries as championed by us.