ONGC fails again to attract bids for stake in Deen Dayal gas field
State-owned Oil and Natural Gas Corporation’s (ONGC) third attempt to get a partner to rescue the Deen Dayal gas field in the KG basin in Bay of Bengal has met with the same fate as previous efforts as it got no bids, sources said. The tender offering stake to technical and financial partners in the Deen Dayal field, which ONGC had acquired from a Gujarat government firm for USD 1.2 billion, received no bids, two sources aware of the matter said ONGC on June 12 sought expression of interest from “global oil and gas companies with requisite technical expertise and financial strength to join as partner (with participative interest) for firming up a viable strategy” for the field, according to the tender document. Bids closed on September 12.
VTTI looks to buy into LNG terminals in Asia
Energy storage company VTTI BV, backed by Abu Dhabi’s main oil company and Vitol Group, is looking to invest in LNG import terminals in Asia as demand for the fuel increases in the region, according to Bloomberg. “There is a lot of potential in India, Bangladesh, Pakistan and the Philippines,” Chief Executive Officer Guy Moeyens said in an interview on Tuesday in Fujairah in the United Arab Emirates. “There will be a disproportionate need for regasification facilities in that region. More than, I would say, in Europe or the Americas.” The Rotterdam-headquartered company acquired a 50% stake in Dragon LNG, one of the UK’s three LNG import terminals, in August and agreed to buy a majority stake in Italy’s Adriatic LNG earlier this year. It also has an agreement with Hoegh LNG to jointly develop an energy terminal in the Dutch province of Zeeland. It’s now keen to expand in similar facilities in Asia by investing alongside a partner, Moeyens said. LNG is taking on an increasingly important role in the world’s energy supply as countries look to use more of the cleaner-burning fuel amid concerns over climate change, while they also build more renewable energy projects. The US and countries in the Middle East are among regions expanding their LNG export capacities in order to meet the rising demand. VTTI counts Abu Dhabi National Oil Co. and Vitol as shareholders. Adnoc this year approved the construction of a new LNG export terminal, and bought stakes in projects in the US and Africa.
India’s natural gas production dips 1.6% in September; LNG imports surge by 13.5%
India’s natural gas production for September 2024 recorded a gross output of 2,977 MMSCM, showing a decline of 1.6% compared to the same month last year, according to the Petroleum Planning & Analysis Cell (PPAC). Despite this drop, LNG imports surged by 13.5%, reaching 2,932 MMSCM, highlighting the country’s increasing reliance on imports to meet its energy demand. The total availability of natural gas for sale was 5,411 MMSCM, marking a 5.8% increase year-on-year, demonstrating that higher imports are compensating for the reduced domestic output. Natural gas consumption for September 2024 stood at 5,752 MMSCM, with the fertilizer sector accounting for the largest share at 29%, followed by city gas distribution (CGD) at 20%, and the power sector at 12%. The CGD sector saw a significant growth of 16% compared to the previous year, reflecting the sector’s expansion and the rising adoption of gas for urban utilities. In contrast, power sector consumption declined by 13%, with its share dropping, possibly due to shifts in energy preferences and the integration of renewables.
India eyes higher ethanol blend post-2025 mandate
The Indian government has begun discussions to develop a post-2025 roadmap to further raise the ethanol blend in gasoline from 20%, said Hardeep Singh Puri, Minister of Petroleum and Natural Gas in an industry event on Oct. 14. Talk of raising the blend target has come about as the 2025 target of 20% appears likely to be met, the oil minister said at the 12th CII Bioenergy Summit in New Delhi. “I am not in a position to make announcement but I can tell you there are lot of people in Government of India including me, who are already working about preparing a roadmap for the post 20 per cent blending after 2025,” he said. India may be able to produce enough ethanol to support a higher blending percentage with its existing ethanol production infrastructure, according to market sources. This increased ethanol production could also boost the domestic sugar industry, which is a key source of feedstock for ethanol thereby boosting the agricultural sector. The minister shared notable results from the ethanol program, revealing that from 2014 to August 2024, it has led to foreign exchange savings of 1,060 billion rupees with a reduction of CO2 emissions by 54.4 million mt, and a crude oil substitution of 18.1 million mt. During the event, Minister Puri predicted that India’s robust economic growth will account for 25% of global energy demand over the next two decades. He stressed that bioenergy will play a vital role in meeting this demand while also supporting climate goals and rural development. Emphasizing India’s agricultural strength and vast biomass potential as key to the transition to clean energy, Puri stated that India is recognized as an agricultural powerhouse, being a leading producer of rice, wheat, cotton, sugar, and various horticultural and dairy products. He mentioned that the country has over 750 million mt of available biomass, with about two-thirds used for domestic purposes like cattle feed and compost The oil ministry also noted that India’s status as a major biofuel producer and consumer has been bolstered by coordinated policies, political support, and abundant feedstocks. He cited the International Energy Agency forecast predicting a growth potential of 3.5-5 times for biofuels by 2050 due to net-zero targets, representing a substantial opportunity for India. Indian government’s ambitious SAF targets, aiming for 1% blending by 2027 and 2% by 2028 were also highlighted at that event. Platts, part of S&P Global Commodity Insights, assessed SAF production costs in Southeast Asia at $1,725.41/t on Oct. 14, rising $1.67/t from the previous day.
ONGC looks at mini-LNG plants to evacuate natural gas from isolated fields
State-owned Oil and Natural Gas Corporation (ONGC) is looking to set up mini-LNG plants to evacuate natural gas from wells located in areas that are not connected with pipelines. The firm has identified five sites in Andhra Pradesh, Jharkhand and Gujarat for setting up mini plants at wellhead that will convert the gas pumped out from under the ground into liquefied natural gas (LNG) by super cooling it to minus 160 degrees Celsius. This LNG will be loaded on cryogenic trucks and transported to the nearest pipeline where it will be reconverted into its gaseous state and pumped into the network for supply to users like power plants, fertilizer units or city gas retailers. ONGC has floated a tender seeking manufacturers/service providers to tap stranded natural gas, according to the tender. The locations identified for setting up mini-LNG plants in the tender are two sites at Rajahmundry in Andhra Pradesh and one each at Ankleshwar in Gujarat, Bokaro in Jharkhand and Cambay in Gujarat. ONGC in the tender document said while the country has an extensive network of pipelines that connect supply and demand centres, there remains a substantial volume of stranded gas (non-connected) that is required to be tapped for enhancing domestic supplies and meeting the needs of nearby demand centres.
Gujarat Leads India’s Green Transition
Gujarat has taken center stage in India’s renewable energy revolution, notably under the leadership of Prime Minister Narendra Modi. The state, historically under Modi’s transformative governance, has demonstrated significant progress over the last 23 years. With a total power generation capacity of 52,424 MW, Gujarat stands as a beacon for renewable energy, attributing 50 percent of this to renewable sources. The state’s commitment to clean energy saw a remarkable leap from 45,912 MW to 52,424 MW in just a year, showcasing impressive advancements and a determination to lead India’s sustainability mission. Strategic investments in solar, wind, and hybrid projects, bolstered by a conducive policy environment, have been pivotal. The recent Renewable Energy Summit 2024 further highlighted Gujarat’s role as a leader, involving global stakeholders to discuss the future of clean energy. Having invested substantially in plants producing renewable energy, surpassing its conventional power investments, Gujarat’s advancements are not confined to infrastructure alone. Its policies, such as extending the Gujarat Renewable Energy Policy to 2028, underline the state’s emphasis on a sustainable agenda, empowering solar and wind energy solutions. Landmark projects like Modhera Solar Village and Charanka Solar Park exemplify Gujarat’s successes in renewable energy. These initiatives have yielded not only environmental benefits but have also been drivers for economic growth and social inclusion, as seen with the energy self-sufficiency at Modhera, which reduced resident electricity costs significantly.
Oil Prices Start the Week in Decline on Bearish Economic Data From China
Crude oil prices were falling at the start of the week following the latest economic news from China which was interpreted as bearish for oil demand. That latest news was inflation data for September, which showed consumer prices had only gone up modestly, by 0.4%, falling short of economist expectations of 0.6% as shared with Reuters. The September consumer price figure was also the slowest price rise in three months, Reuters noted in its report. Lower consumer prices are normally bullish for oil prices because the lower the prices, the stronger the consumption but in this case the dominant interpretation appears to be focusing on weaker prices as reflection of weaker demand that will only weaken further as inflation slows. “China faces persistent deflationary pressure due to weak domestic demand. The change of fiscal policy stance as indicated by the press conference yesterday (Saturday) would help to deal with such problems,” the chief economist of Hong Kong-based Pinpoint Asset Management told Reuters. On Saturday, the Chinese government announced it would be injecting further stimulus into the economy, which should have been positive for oil prices. However, Beijing did not elaborate on the size of the stimulus package, which would be in the form of “significantly increased” debt buying from local governments and subsidies to low-income households. Apparently, the only thing traders wanted to hear from that update was exactly how much the Chinese government would spend on these additional stimulus measures. As a result, oil traders forgot about the Middle East temporarily and focused on the world’s largest oil importer yet again, betting that whatever stimulus it offers, it would not be enough to prop up global stock and commodity markets. That’s despite reports from Friday that the U.S. will expand its sanctions against Iran, targeting its so-called ghost fleet of oil tankers. “These measures will help further deny Iran financial resources used to support its missile programs and provide support for terrorist groups that threaten the United States, its allies, and partners,” National Security Adviser Jake Sullivan said, as quoted by Reuters.
Indian company among dozen sanctioned by US for illicitly carrying Iranian oil
An Indian shipping firm is among the dozen-odd companies sanctioned by the US for allegedly carrying Iranian oil for sale to buyers in Asia days after slapping restrictions targetting Iran’s energy trade for its October 1 attack on Israel. Gabbaro Ship Services, the India-based company, was involved in the transport of Iranian petroleum as the technical manager of crude oil tanker Hornet and knowingly engaged in a significant transaction for the transport of petroleum from Iran as part of a ‘Ghost Fleet’, the State Department alleged. The latest American sanctions against several companies across the world comes in response to Iran’s October 1 ballistic missile attack against Israel. “This attack targeted Israel’s most populated city, Tel Aviv, and could have killed hundreds if not thousands of innocent people,” US National Security Advisor Jake Sullivan said. Following that attack, the US had made it clear that Iran would face severe consequences, he said, and added, the Departments of the Treasury and State on Friday announced the “new and significant measures to more effectively target Iran’s energy trade.” “The new designations today also include measures against the ‘Ghost Fleet’ that carries Iran’s illicit oil to buyers around the world. These measures will help further deny Iran financial resources used to support its missile programmes and provide support for terrorist groups that threaten the United States, its allies, and partners,” Sullivan said. The Treasury claimed Iran’s oil exports are enabled by a network of illicit shipping facilitators in multiple jurisdictions which, “through obfuscation and deception,” load and transport Iranian oil for sale to buyers in Asia. Prominent among them include United Arab Emirates-based Max Maritime Solutions FZE (Max Maritime), which used vessels under its management to conduct multiple ship-to-ship transfers of Iranian oil with vessels affiliated with the US-designated National Iranian Tanker Company (NITC), it alleged. The NITC moves Iranian oil for National Iranian Oil Company (NIOC) to transport it to refineries in the China. Among the companies sanctions by the State Department are Suriname-based Strong Roots Provider NV, Glazing Future Management NV, Engen Management NV; India-based Gabbaro Ship Services Pvt Ltd; Malaysia-based Alya Marine Sendirian Berhad, and Hong Kong-based Celia Armas Ltd. Secretary of the Treasury Janet L Yellen said, “Today’s sanctions target Iranian efforts to channel revenues from its energy industry to finance deadly and disruptive activity with dangerous consequences for the region and the world. Yellen described deadly and disruptive activity as those including development of Iran’s nuclear programme, the proliferation of ballistic missiles and unmanned aerial vehicles, and support to regional terrorist proxies. “We will not hesitate to take further action to hold Iran accountable,” she said.
Surprise Crude Inventory Spike Slams Oil Prices
Crude oil inventories in the United States rose by a shocking 10.9 million barrels for the week ending October 4, according to The American Petroleum Institute (API). Analysts had expected a build of 1.95 million barrels. For the week prior, the API reported a 1.5-million-barrel decrease in crude inventories. So far this year, crude oil inventories have slumped by just 5 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 0.3 million barrels as of October 4. SPR inventories are now at 382.9 million barrels, a figure that reflects an increase of more than 35 million from its multi-decade low last summer, yet 252 million from when President Biden took office. At the current rate of replenishment, it will take more than five years to return to January 2020 levels. Oil prices shrugged off what is now becoming rather for the markets—threats of a possible supply shock in the wake of continued conflict in the Middle East. WTI and Brent fell sharply ahead of the API data release as traders took handsome profits from the recent oil rally and their kept their eyes on soft demand from China. At 3:39 pm ET, Brent crude was trading down $3.46 (-4.28%) on the day at $77.47—a nearly $4 per barrel gain from this time last week. The U.S. benchmark WTI was also trading sharply down on the day by $3.29 (-4.26%) at $73.85—a $3.70 per barrel gain from this time last Tuesday. Gasoline inventories fell this week by 557,000 barrels, compared to last week’s 900,000-barrel increase. As of last week, gasoline inventories are 1% below the five-year average for this time of year, according to the latest EIA data. Distillate inventories fell by 2.59 million barrels, on top of last week’s 2.7-million-barrel decrease. Distillates were already about 8% below the five-year average as of the week ending September 27, 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, rose by 1.359 million barrels, according to API data, on top of the 700,000-barrel build of the previous week. Inventories at Cushing are now under 24 million barrels.
India clears 1 million sq km for oil exploration in ‘no-go’area: Hardeep Singh Puri
India has cleared 1 million square kilometers of its 3.5 million square kilometers of sedimentary basin for oil and gas exploration, a significant portion that was previously classified as a “no-go” area, said Petroleum Minister Hardeep Singh Puri announced at the FT Live Energy Transition Summit. Of the bids received in the Open Acreage Licensing Policy(OALP) Round 9, 38% are in this newly cleared “no-go” zone. The 10th bidding round is also in the pipeline. Puri stressed India’s efforts to attract global investors, saying, “We are making it easier. You don’t even need to invest initially. If you come to assist in seismic surveys, we’ll compensate you.” This marks a significant shift toward a more flexible, investor-friendly approach. Addressing oil prices, Puri reaffirmed India’s call for stability amidst global tensions. “We have enough oil in the world, but global disruptions raise freight and insurance costs,” he said, expressing optimism that both state and non-state actors would act responsibly to avoid escalations. On 8th October, Brent crude futures dropped by $1.31, or 1.6%, settling at $79.62 per barrel after hitting a monthly high amid fears of increased Middle East tensions. India’s energy demand continues to soar, with Puri noting that India’s consumption is three times the global average and that it is projected to account for 25% of the increase in global energy demand over the next two decades. India is set to consume over 6 million barrels of crude oil daily in the foreseeable future, highlighting its critical role in the global energy landscape.