Hoegh LNG backs out of Chile LNG project but buoyant on market
Hoegh LNG said on Thursday it had let agreements lapse in Chile that tied one of its floating liquefied natural gas (LNG) import vessels to a project there because approvals for the initiative were likely to be delayed again. But the company, one of the few to specialise in floating storage and regasification units (FSRUs), said LNG prices and shipping rates will continue to be strong, raising the prospects of more dealmaking for global LNG import and export projects. The Norwegian company was due to provide a floating storage and regasification unit (FSRU) to GNL Penco under a 2015 deal, with an original start date of the second quarter of 2018, but regulatory permits were slow in coming. Hoegh said it had been “made aware that the planned approval process for the GNL Penco FSRU project is likely to be further delayed, and therefore the parties have agreed to let the contract expire”. Hoegh’s newbuild FSRU called Esperanza was intended for the Chile project, but with the delays in mind the company agreed a three-year charter deal with China National Offshore Oil Corporation (CNOOC) after taking delivery earlier this year. Hoegh, privately-owned Excelerate and U.S.-listed Golar LNG dominate the FSRU business, which has existed for barely a decade with the discovery of how to fit the complex and heavy infrastructure of an onshore terminal onto a vessel. There were 29 FSRUs operating around the world by the second quarter of 2018, compared to 25 a year before, Hoegh said. Of 12 vessels on order around the world, six were looking to be employed by projects, which Chief Executive Sveinung Stohle described as “very manageable”. Global LNG demand, particularly from China, has surprised on the upside in the past year, creating opportunities to strike financing and commercial deals for new or stalled projects after a protracted period of low LNG prices. LNG carrier rates soared through the year as high as $90,000 a day, Stohle said, compared to rates as low as $25,000 a day last year. Asian spot LNG prices have almost doubled to over $11 per million British thermal units (mmBtu). This may help Hoegh, irrespective of whether FSRU rates also rally, because it would keep LNG carrier companies focused on their core business rather than branching out into the FSRU segment, Stohle told investors. “The rates for the carrier market will stay and, even increase from where they are, certainly for the next two to three years,” he said. “Competition coming from that side will focus on the shipping, not the FSRU side.” “We are not many in this market; the question is how many will remain.” Hoegh has 10 FSRUs that are employed under long-term contracts or chartered, with two newbuilds due to be delivered. Stohle told investors a deal to provide an FSRU in Australia, announced on Monday, effectively leaves just one unemployed FSRU as of now. A newbuild due in November known as “FSRU 9” already has a 15-month charter while the vessel is marketed to long-term projects, and “FSRU 10” is due next May. Stohle indicated Hoegh was not considering taking FSRU Gallant out of Egypt early, despite questions raised about demand for LNG in the country with plans to boost gas output. Jayon Brown Authentic Jersey
No impact on output at BPCL Kochi refinery
BPCL’s Kochi refinery suffered as crude supply was delayed due to the floods in the state but it ensured output would not be disrupted going ahead as it had 8-10 days of crude oil inventory available, refinery’s executive director Prasad K Panicker told ET. After being flooded for almost a fortnight, Kerala is slowly crawling back to normal life as flood water has started to recede. Reports suggest that petrol pump stations have seen spurt in vehicles coming for refill. “Petroleum product supplies have not been impacted, other than in some parts of Kerala during peak flooding. Now things are getting back to normal,” Panicker said. Kochi Refinery, located at Ambalamugal near Kochi, has a crude oil refining capacity of 15.5 million tonnes per annum (MMTPA). The refinery had to stop unloading from a crude tanker as the sea swelled and other vessels could not be brought in either. An executive from the refinery said while the main unit did not get inundated, the water pumping plant was flooded and the substation went under water. The refinery sourced water from alternate sources using dieseldriven pumps then. “There was no flood at the refinery and we are running at 100% capacity. Our operations were not impacted. Supplies were initially disrupted because road and rail movement were disrupted but it is getting back to normalcy now,” Panicker said. Kawann Short Womens Jersey
Government imposes restrictions on import of bio-fuels
The government has imposed restriction on import of bio-fuels including ethyl alcohol and other denatured spirits, bio-diesel, petroleum oils and oils obtained from bituminous minerals other than crude, through an amendment in import policy. The import of these items, which was free earlier, will now only be allowed for non-fuel purpose on actual user basis. “Import policy of bio-fuels revised from ‘free’ to ‘restricted’ and allowed for non-fuel purpose on actual user basis as per the National Bio-Fuel Policy,” the Directorate General of Foreign Trade (DGFT) said in a notification. In another notification, the government said export of beach sand minerals has been brought under state trading enterprise and shall be canalised through Indian Rare Earths Limited. Export of rare earth compounds classified as beach sand minerals, permitted anywhere in the export policy, will now be regulated. Joel Heath Jersey
In poll-bound Chhattisgarh, women stick to chulhas despite LPG scheme
Vimla Nishad bends on her small chulha and tries to light a fire. Her two-room house fills up with smoke and her two-year-old son starts coughing. The firewood is damp as it has been raining the whole day so it is taking longer to light up. She looks around nervously as it is 8 pm and she has to get the dinner going. Sitting in one corner of her bare kitchen is her LPG cylinder – empty. Vimla, a resident of Lahanga village in Durg district, is a beneficiary of Pradhan Mantri Ujjwala Yojana, a flagship programme of Modi government which provides clean cooking fuel to below poverty line (BPL) urban and rural households. The scheme was rolled out on May 1, 2016 in Balia in Uttar Pradesh with an aim to replace unclean cooking fuels with LPG. On the ground, it is a different story. ET travelled through election-bound Chhattisgarh to find women have still not given up traditional fuels like firewood and dung cakes and still cook on their earthen chulhas. With meagre incomes villagers find refills expensive and claim they are often short-changed by LPG dealers. A NEW WAY OF LIFE For new users in villages, LPG cylinders have not become a way of life. Vimla’s mother-in-law Uttara lives close to her home. “I got the cylinder in a camp in May,” says Uttara showing her gas stove. She, however, does not know how to use it. “I still use my chulha. My daughter uses it.” Her daughter Sulochana is the only earning member of the family. She works as a casual labourer in a farm. “My mother has never seen the cylinder and she is so old it is difficult to ask her to switch now,” says Sulochana. While she is away at work, Uttara cooks on the chulha. The evening meal is cooked on the gas stove by Sulochana. For several other women, switching completely over to LPG cylinder is not even an option. Kaushalya Narang of Bhatgaon village in Raipur district has 11 children. “It is a struggle to cook just on the gas. I have a large family so I cook on the gas and my chulha,” she says showing her chulha, which has blackened an entire wall of her kitchen. When you point that it is not safe to have a chulha near the gas stove, she shrugs it off and says, “Try cooking for 11 children and a husband in the morning. This is not even a thought.” She puts her rice on the chulha and dal and sabzi on the gas stove. ECONOMICS OF UJJWALA More than the habit, it is the economics that deters women from switching over to LPG. Vimla’s LPG cylinder ran out two months back. “My husband is a casual labourer. A refill is too expensive at Rs 800-900. It is cheaper for me to go for firewood nearby and light a fire,” she says. Har Bai Patle of Kewtara village in Bilaspur district explains the economics. “The first cylinder is for free. It lasts upto 2 months and then we have to go for refill, which is Rs 850-900 now. We are agricultural labourers. So at one time we do not have this kind of money to spare. Even then, it is more expensive than the uplas (cow dung cakes). We can make these at home or even buy for Rs 600 a supply for 3-3.5 months. How is it even comparable?” asks Patle. It is this logic which is behind gas cylinders and stoves lying unused in corners of rural households in the state. Villagers also complain of being short-changed by the new initiative. Manisha, another resident of Kewtara village, says even refills are not done completely. “When we go, they charge us the full amount but don’t fill the cylinder completely. We realise it now since the first cylinder lasted us 2 months but the refill finished in just a month,” she said. When contacted, a spokesperson of ministry of petroleum and natural gas said, “Shift to LPG as the main and only fuel for a rural household is a process which may happen only gradually and not overnight. It involves transformation of mindset and social behavioural changes which will take some time. The ministry has taken up an initiative, LPG PANCHAYAT, to proactively connect with the LPG consumers (rural women, in particular) and motivate them about benefits of shifting to LPG as a clean cooking fuel.” The financial constraints have been acknowledged by the ministry and now it is trying to popularise 5-kg cylinder refill. The spokesperson said, “In terms of constraints for accessing refills, the affordability issue is sought to be addressed through 5 kg refills and accessibility issue through expanding distribution network. We are targeting 5000 new distributorships by March 2019, out of which 1100 have already come up. All these would come up in rural areas only.” Charles Harris Jersey
Indian Oil Corporation to invest over Rs 370 billion in Tamil Nadu
Energy major Indian Oil Corporation (IOC) will be investing about Rs 71.12 billion in infrastructure facilities in Tamil Nadu over the next three years, said a senior official. At the IOC group level — IOC and group company Chennai Petroleum Corporation Ltd — will be investing about Rs 371.12 billion in Tamil Nadu. “The investments will be in pipeline expansion, construction of captive jetty, additional facilities for petrol and diesel handling, POL (petroleum, oils and lubricants) terminals at an outlay of Rs,71.12 billion in the next three years,” R. Sitharthan, Executive Director – Tamil Nadu and Puducherry, told IANS. He said, group company Chennai Petroleum will be expanding its refinery capacity at Narimanam to nine million ton per annum at an outlay of about Rs 300 billion. These apart, the company will be investing in the city gas distribution network in Coimbatore and Salem where it has won the distribution bids recently, Sitharthan said. Sitharthan said pipelines are being laid down at various places to carry the gas from the Ennore LNG terminal to industries and also to carry carry other petroleum products. On the other hand, IOC’s joint venture for the five million ton per annum (tpa) liquified natural gas (LNG) terminal at Ennore has an investment of Rs 51.51 billion and is expected to be ready by December this year. Johnny Bower Jersey
India seeks re-negotiation in gas price from TAPI pipeline
India had previously used its position as world’s fastest-growing energy consumer to renegotiate gas import deals with Australia, Russia and Qatar. India has sought re-negotiation of the natural gas price it is to source through a proposed USD 10 billion Turkmenistan-Afghanistan-Pakistan-India (TAPI) pipeline in view of the slump in global energy markets, a top source said. The four nations to the pipeline projects had in 2013 signed a gas sale purchase agreement (GSPA) that benchmarked the price of natural gas that Turkmenistan is to export at 55 per cent of the prevailing crude oil price. This translates into a price of about USD 7.5 per million British thermal unit (mmBtu) at current oil prices at the Turkmen border. Added to this would be transit fee and transportation charges which would jack up the rates to over USD 10.5 per mmBtu at the Indian border, the source said. For a consumer, the price would be around USD 13 per mmBtu after adding local taxes and transportation charges. “This rate in the present global energy scenario is unacceptable. And so taking into cognizance of the current gas market, India has proposed for re-negotiation of GSPA,” the source said. The price of Turkmen gas is more than double of the USD 3.6 per mmBtu rate paid for post natural gas producers in India. Leaders of the four countries performed the ground-breaking of the project in December 2015 but the project hasn’t moved significantly since then. The source said the project has not moved forward because of unresolved issues like the economic viability of the project, security of supply and tie-up of debt and equity. The four nations have incorporated TAPI Pipeline Company Limited (TPCL) in Isle of Man to build, own, and operate the TAPI Pipeline. Turkmenistan’s Turkmengas has been appointed as the consortium leader. State gas utility GAIL India Ltd represents India on the consortium. TAPI pipeline is nearly 1,680-kilometers long, with 735-km in Afghanistan and nearly 800-km in Pakistan. The 56-inch diameter pipeline will run from Turkmenistan’s Yoloten-Osman gas field to Herat and Kandahar province of Afghanistan, before entering Pakistan. In Pakistan, it will reach Multan via Quetta before ending at Fazilka (Punjab) in India. Turkmenistan would export 90 million standard cubic meters per day of gas through TAPI, with Afghanistan getting 14 mmscmd and India and Pakistan 38 mmscmd each. The gas will be sourced from the Yoloten Usman field, which ranks amongst the five biggest fields in the world. The field is being developed by Turkmenistan national oil firm TurkmenGas. India had previously used its position as world’s fastest-growing energy consumer to renegotiate gas import deals with Australia, Russia and Qatar. Renegotiating terms of the 20-year deal to import 2.5 million tons a year of liquefied natural gas (LNG) from Gazprom saved the country between Rs 85 billion and Rs 95 billion over the contract period ending 2040. Last year, India got US energy major Exxon Mobil Corp to lower the price of 1.5 million tons a year of LNG from Gorgon project in Australia, saving Rs 40 billion in import bill. In 2015, it renegotiated a long-term deal for the supply of 7.5 million tons of LNG with Qatar, saving around Rs 80 billion. Morgan Burnett Authentic Jersey
GE to supply gas turbines for HPCL Vizag refinery expansion
GE Power today said it has got a Rs 220-crore order to supply gas turbine and generator for a captive power unit planned at Hindustan Petroleum Corp Ltd’s (HPCL) refinery at Visakhapatnam. The order for the supply of a 6F.03 gas turbine and a generator was placed on it by state-owned Bharat Heavy Electricals Ltd (BHEL) – the principal contractor for the project. “The order, worth Rs 220 crores, is part of the capacity expansion plan of HPCL refinery from the current 8.33 million tonnes per annum to 15 million tonnes. The gas turbine will generate close to 60 MW of power to run the plant operations, while the exhaust steam energy generated will be used for process applications,” GE Power said in a statement here. The HPCL Vizag order also marks the foray of GE’s F-class technology into India’s refinery segment, which offers a significant opportunity for technology upgrades in future, it said. Delivering the heat rate improvement of more than 25 per cent over the traditional Frame 5 machines, the 6F.03 gas turbine will bring significant cost benefit to HPCL in terms of fuel savings during the power plant operations, it said. “Globally, GE’s 6F-class gas turbines (6F.01/6F.03) are offering superior performance… These machines are also a perfect replacement to the frame 5 and 6B gas turbines that are powering the refineries in India for more than a decade,” said Deepesh Nanda, CEO, Gas Power Systems, GE South Asia. GE’s gas turbine fleet in the O&G sector in India comprises of an installed base of approximately 2.5 GW. Damian Lillard Authentic Jersey
‘About 200 new oil and gas projects to be sanctioned in 2018’
In 2018, about 200 new oil and gas projects, with a collective amount of US$127bn, might get approval by year-end, according to Rystad Energy rystad 16Subsea tie backs have been favoured the most by operators in 2018. (Image source: Alan Jamieson/Flickr) The 45 offshore projects that have been approved year-to-date are already more than the amount approved in 2016. In addition to beating 2016’s activity, this year’s offshore project sanctioning is on track to surpass 2017’s sanctioning levels by 50 per cent. About US$34bn of onshore projects are expected to be approved in 2018. Despite a steady stream of onshore projects being sanctioned during 2018, the size of these projects varies significantly. “This has caused a mere US$3bn increase in onshore commitments from May through September. In addition, the fourth quarter will see US$15.1bn of onshore projects approved,” said Rystad Energy. Subsea tie backs have been favoured the most by operators in 2018. Collectively, about US$26bn in subsea tie-back projects have been approved, with an additional US$7bn forecasted by year-end. This will give subsea contractors a potential US$7.4bn in greenfield contract opportunities over the next few years. ExxonMobil’s Neptun Deep project is poised to approve a subsea tie back to the Domino field in Romania in late-2018. The development will give US$1.5bn in new contract opportunities to service companies, including more than US$420mn in EPCI contracts. The project aims to start-up in early-2022. The rest of the year will see more fixed facilities and floater projects approved than subsea tie backs. The Marjan Expansion project in Saudi Arabia is set to be the largest fixed facility project up for sanctioning. Once approved, it will look to award contracts in excess of US$4.6bn over the next several years, allowing Saudi Aramco to construct and install more than 20,000 tonnes of topsides for their steel platform. Recent cost reduction efforts have moved a few significant projects in South America below the US$60 per barrel breakeven threshold. However, there are still US$14bn to-be-sanctioned offshore and onshore projects globally for 2018 require breakeven prices above US$60 per barrel. Total’s Lake Albert project in Uganda will look to develop their Jobi-Rii asset for more than US$2.4bn. However, the project will require a breakeven oil price above US$60 per barrel. If approved, this onshore development would target a 2022 start-up. Luke Stocker Jersey
Government tells ONGC to list overseas unit
The Indian government has asked its biggest state-owned firm, Oil and Natural Gas (ONGC) , to list its overseas unit ONGC Videsh, according to a letter seen by Reuters. The move to float the unit – which has investments in 11 producing assets in countries including Russia, Brazil and Iran – is part of a government push to sell state-assets to raise funds. A listing would also help unlock value in the unit by improving its corporate governance and efficiency, the letter from the Department of Investment and Public Asset Management to ONGC said. The letter, sent last week, did not state how much of ONGC should be offered to outside investors.
GAIL seeks foray into solar power plants, battery charging stations
State-owned GAIL India has sought shareholder nod to amend the charter of the company to invest in start-ups, build solar power plants and set up battery charging stations for electric vehicles as it looks to diversify its portfolio beyond gas and petrochemicals. The nation’s biggest natural gas transporting and marketing company wants to insert six new sections in the main objects clause of the memorandum of association of the company, according to shareholder notice. It wants to invest in “start-ups in core business areas (of natural gas, petrochemicals, and energy) and non-core areas (like health, social and environment, safety, and security) either directly or indirectly.” “The investment can be made through special purpose vehicle (SPV), alternative investment fund (AIF), fund of funds (FoF) and trust,” it said. GAIL said that there is a necessity to adopt new and different pathways to provide clean, cost-effective and efficient mobility services that are safe, reduce dependence on oil imports and achieve more efficient land-use in cities with the least environmental footprints and impacts on human health. With the objective in mind, the firm wants to set up “battery charging stations and providing charging services” to electric vehicles. With the government planning to make a major shift to electric vehicles by 2030, GAIL felt that charging infrastructure for electric vehicles in India has not been fully developed yet. GAIL with its “pan-India presence through the natural gas network is deep-pocketed and has the capability of setting up charging infrastructure at a faster pace,” the notice said. The 34th annual general meeting of the company is scheduled for September 11. The company also wants to “explore the business opportunity in waste-water treatment plants, water distribution, large water pipeline laying as an early mover.” With groundwater depleting and monsoons becoming less predictable and unreliable, availability and utilisation of water are becoming key issues in modern India. Many cities are sourcing the fresh water through long-distance transport ranging from 50-200 km. Stating that with growing population and industrialisation the effluent water discharged has increased significantly, GAIL said the treatment of the effluent water and maintaining of the freshwater table is a big challenge and a business opportunity. It is also looking to “harness solar power potential available at its various sites and installations which can be connected to grid for sale or for own use at other installations through wheeling of power.” In line with its strategy to promote the use of green fuel, it is contemplating to promote gas appliances in households to increase gas usage and minimise electric usage in housing equipment and appliances such as gas boiler, gas-based air conditioner and bathroom heater. Operating nearly 14,000-km of natural gas and LPG pipeline and executing more than 4,500 km of new lines, GAIL feels it can provide services such as engineering, procurement and construction (EPC), engineering, procurement, construction management (EPCM) and project management consultancy (PMC) in the field of hydrocarbon pipelines. “GAIL also has adequate experienced manpower and infrastructure for providing these services,” the notice said. It also wants to “carry on the business of manufacture, import, distribution, and marketing of appliances relating to gas marketing and distribution, such as gas meter and CNG kits.” Andy Dalton Womens Jersey