Away from OBOR, India pushing for ‘energy diplomacy’ in neighborhood
Away from the arc lights that accompany China’s OBOR project, India has been quietly working on creating connectivity grids in its neighborhood and moving beyond physical connectivity to energy as a tool of connectivity. From Indonesia to Mauritius, India is working on a web of energy relationships that seeks to leverage India’s position as a big source of petroleum products, sharing of technology and building inter-dependencies. “We are trying to use energy as a means of diplomacy in a very different way, not only to find overseas sources of hydrocarbons,” Dharmendra Pradhan, energy minister said to TOI. Mauritius, one of India’s closest partners in the Indian Ocean region could become a hub for petroleum storage and bunkering for which India has started building infrastructure. India already supplies petroleum products to Mauritius from Mangalore refineries as well as being a retail player in that country. As a petroleum hub, Mauritius’ can secure its own energy supplies, while India can use it to market in other parts of Africa. On the other side of the Indian Ocean, India and Indonesia are beginning an energy relationship — Indonesia is one of the world’s bigger sources of hydrocarbons and has been in and out of OPEC. But after power minister Piyush Goyal restarted an energy dialogue with Indonesia in April, India is working on a new project — to build floating storage and regasification units (FSRU) for Indonesia to help it supply energy to the thousands of islands in the country. In return, India is asking Indonesia to supply LNG kits for Indian transport vehicles. After his visit, Goyal was quoted as saying, “(we) have agreed to explore cooperation in number of areas such as upgrading of refineries in Indonesia, relocation of gas-based plants from India to Indonesia, sharing of experience in use of LEDs and renewable energy in India, sharing the expertise of Indonesia in gasification of fuel oil, exploration of oil, gas and coal fields,” Goyal said. Indonesia has asked India to bid for refineries in that country, which is the next stage. Myanmar may have its own energy sources, but China takes almost 80 per cent of its gas through a pipeline deal struck years ago. As Myanmar develops, India has taken up the job of supplying diesel to this eastern neighbor from the Numaligarh refinery in Assam. India, however, is seriously considering building an LNG terminal in Sittwe — that would be used to provide energy products to Myanmar, and, once the Kaladan multi-modal transport project is complete, can also be used to supply LNG to Aizawl in Mizoram. India is also trying to get into LPG storage and distribution in Myanmar, although the Aung San Suu Kyi government canceled a tender won by India but had been given by the former military government. The idea here, as in other neighborhood countries, said official sources, is that India wants to develop inter-dependencies, rather than make these relationships either extractive in nature or a one-way street. That way, both sides can take home wins which also makes these deals more acceptable all around. For India to use energy as a diplomatic tool, there has to be huge development on its eastern seaboard. Almost all of India’s new energy relationships are part of its Act East policy and with eastern neighbors, since the west is largely blocked off due to India’s problems with Pakistan. To address this, India is working on building LNG terminals in Ennore, Vizag/Kakinada and Dhamra all on the east coast. In recent weeks, India has cemented big energy relationships with Sri Lanka and Bangladesh. In Sri Lanka, India has fully utilized the Trincomalee lower tank farms, of which 10 are exclusively for the use of the Sri Lankan government. Consulting company, Pricewaterhouse Coopers (PwC) has been tasked with working out a business development model for the upper tank farms for which the lease has just been extended to 99 years. Bangladesh is emerging as the poster child for neighborhood ties. From syncing gas grids to supplying diesel (to Parbatipur) to building pipelines and gas-based power plants India plans to help Bangladesh power up. In the process, Bangladesh is allowing India to use transit facilities and even the Bangladesh grid to supply to India’s northeast. A recent unusual quid pro quo was electricity supply from India in return for Bangladesh giving internet bandwidth to India’s northeast. India is working on building a 7.5 mmt LNG terminal in Qutubdi island off Bangladesh’s coast, while Bangladesh is already lighting up with over 1000 MW power from India. Nepal did not have power cuts last winter, thanks to power supplies from India, Nepal’s ambassador Deep Upadhyay said. The new effort is to build an oil pipeline from Raxaul to Amlekhganj and onward to Chitwan — this would not only be cheaper, but Nepal is insured from phases of poor relations with India which could disrupt energy supplies. As part of BBIN, an electricity sharing MOU between India, Bangladesh Bhutan and Nepal is also in progress, which could allow Bangladesh to source power from Bhutan, or Nepal once the Himalayan country can get its act together to build more hydropower projects. The difficulties come in the form of quick delivery of projects, which is a place China scores over India. Patrick Chung Jersey
Assam got Rs 70 billion as oil royalty, Rs 63 billion investment in 11 months: Sarbananda Sonowal
Assam has received Rs 70 billion as royalty for crude oil and investments worth Rs 63 billion in the first 11 months of the BJP-led government coming to power in the state, Chief Minister Sarbananda Sonowal said on Saturday. Speaking at a function in Dibrugarh, his home district, Sonowal described this as a big achievement for his government, and said this had become possible because of the unconditional support of Prime Minister Narendra Modi to unleash an era of development in the state. “I must put on record Prime Minister Narendra Modi for his vision as also for the union government’s unconditional support to unleash an era of development in Assam and the Northeast. While Assam has received Rs 63 billion as crude oil royalty including arrears during the last 11 months, the state has also received over Rs 63 billion worth investment in various industries during the same period,” Sonowal said. The chief minister said Assam had not seen such release of crude oil royalty and flow of funds for investments ever before. “Thanks to the prime minister’s vision for Sabka Saath Sabka Vikas, Assam is marching rapidly on the path of development. While projects for electrification of the railway line and doubling of railway track have taken off, a record number of projects for improvement of surface commencement have been also initiated in the past 11 months,” he said. The investments would generate direct and indirect employment for around 80,000 persons, he added. Super-speciality hospital Sonowal, along with Dharmendra Pradhan, Union minister of State for Petroleum and Natural gas, on Saturday also laid the foundation stone for setting up a multi-speciality hospital at Rajabari in Sivasagar district fully funded by ONGCL. The multi-speciality hospital is being built at a sprawling area of 50 acre at a cost of Rs 3.12 billion under ONGCL’s CSR programme and would have 362 beds. To be named after Sukaphaa, founder of the Ahom kingdom in 1228, the hospital would be run by the Babasaheb Ambedkar Vaidyakiya Prathisthan in partnership with the ONGC. Greg Monroe Authentic Jersey
India’s oil boom stalls
India’s gasoline consumption has flattened out in recent months after tremendous growth between 2014 and 2016. India’s motorists consumed 581,000 barrels of gasoline per day between February and April, according to the Petroleum Planning and Analysis Cell at the Ministry of Petroleum and Natural Gas. Gasoline consumption rose by 4 percent compared with the same period a year earlier, a sharp slowdown from the 14 percent increase between 2015 and 2016.. Gasoline consumption growth has been slowing since the middle of 2016 after surging for the previous two years. Consumption growth for most other fuels used for cooking and transportation has also been slowing for the last nine months. Demand for liquefied petroleum gas and kerosene used for cooking, heating and lighting as well as diesel used for transport all show signs of levelling off or actually falling in the first four months of 2017. The slowdown may have been compounded by the demonetisation of large-denomination bank notes announced at the start of November as part of the government’s anti-corruption campaign. Demonetisation resulted in a sharp slowdown in sales of the cheaper motorcycles favoured by first-time buyers in rural areas. Rapid expansion in motorcycle ownership has been one of the major factors driving increases in gasoline demand (“India’s new motorcycle owners drive gasoline boom”, Reuters, September 2016). Rising crude oil and refined fuel prices over the last year are also likely to have constrained the growth in consumption and other fuels. Demand for liquefied petroleum gas and kerosene used for cooking, heating and lighting as well as diesel used for transport all show signs of leveling off or actually falling in the first four months of 2017. Retail gasoline prices rose by around 10 percent between January 2016 and January 2017 while diesel prices climbed by almost 8 per cent, according to data from the Ministry of Petroleum and Natural Gas. India’s emerging urban and rural middle class is relatively sensitive to increases in the cost of fuel so rising prices have curbed demand growth. Despite the recent slowdown in consumption growth for gasoline and other fuels it is too early to determine whether the deceleration is temporary linked to demonetisation and price rises or something more lasting. But India has been one of the most important sources of oil demand growth during the slump so any prolonged slowdown in consumption growth would make the task of global market rebalancing harder. Jordan Eberle Womens Jersey
Continuing Gas Price Cuts To Deter Fresh Exploration Capex, India Ratings Says
The ongoing rupee surge coupled with continuing price reductions of gas will push fuel cost down by around 5 percent, which in turn will lower the gross margins of upstream oil and gas players and deter fresh investment into the sector, says a report. For the fifth consecutive time since implementation of the domestic gas pricing formula in November 2014, the government in March lowered domestic gas prices by 0.8 percent to $2.48 per million British thermal units (mmbtu). The price will be in force from April 1 to September 30, 2017. This came even as the average Henry Hub gas prices rose 12 percent y-o-y to $2.52/mmbtu during the same period. “The latest lowering of domestic gas prices, coupled with the 4 percent rise of the rupee against the greenback in the second half of FY17, will lower the gross margins for upstream players, especially for ONGC and Oil India which contribute around 80 per cent of the domestic production, while their operating cost is around $2.5/mmbtu,” India Ratings said in a note. The price ceiling for gas produced from discoveries in deep-water, ultra-deep water and high pressure-high temperature areas for the period April-September 2017 is $5.56/mmbtu on gross calorific value basis, while the domestic prices has been lowered to $2.48/mmbtu on gross calorific value basis for this period. The report further cautioned that “any reduction in the realization from this level will adversely impact their gross margins and will act as a deterrent for fresh investments towards gas exploration and related capex”. However, it will marginally benefit the midstream entities like Gail (India) Ltd., which will see its trading revenue fall by Rs 2.50 billion from domestic sales during the first half of FY18. But since Gail. sells its domestic gases on a cost-plus basis, its gross margins will be protected. The report also warned that petroleum crack spreads and GRMs will drop in FY18 in the absence of inventory gains, while crack spreads will have a downward bias. The products crack spread, which is the difference between wholesale petroleum product prices and crude prices, is estimated to remain under pressure in FY18, on the back of the fragile global demand growth amid net capacity additions as Chinese and the US export volumes are likely to remain high helping maintain utilisation levels. The agency expects the rally in crude prices to fade and price to remain in a narrow range in FY18. C.J. Miles Jersey
India’s eighth sedimentary basin to go live in 2 years
The state-owned Oil and Natural Gas Corporation (ONGC) will open up India’s eighth sedimentary basin — the first in over three decades — for oil and gas production in two years, Chairman Dinesh K Sarraf said today. ONGC, which laid open for commercial production six out of India’s seven producing basins, has made a significant natural gas discovery in the Gulf of Kutch off India’s west coast, which it plans to bring to production in two years. “This will be the eighth-producing basin in India,” he told reporters on the margins of an industry event here. India has 26 sedimentary basins, of which only seven have commercial production of oil and gas. Except for the Assam shelf, ONGC opened up for commercial production all the other six basins, including Cambay, Mumbai Offshore, Rajasthan, Krishna Godavari, Cauvery and Assam-Arakan Fold Belt. Declining to give details, he said the discovery made in the Gulf of Kutch is in shallow waters, but cannot be tied to either the production facilities in Mumbai High fields or Hazira and may require a new landfall point. The company, the chairman, said had had a record number of oil and gas discoveries in the fiscal year to March 31. “In all, we had 23 discoveries,” he said. ONGC has continued to spend on exploration and development of discovered reserves despite the worldwide trend of putting on hold future investment in view of low oil prices. The International Energy Agency (IEA) yesterday stated that global oil discoveries fell to a record low in 2016 as companies continued to cut spending and conventional oil projects sanctioned were at the lowest level in more than 70 years. “We made 35 per cent more discoveries in 2016-17 as compared to 17 we made in 2015-16,” he pointed out. Of the 23 new discoveries, 12 are new prospects — a potential trap which may contain hydrocarbons while 11 are new pools — a geological term for subsurface hydrocarbon accumulation. As many as 13 new discoveries were made in onland and 10 in offshore wells. “A total of 100 exploratory wells were drilled as compared to 92 wells drilled in the previous year 2015-16. Of these, 37 wells proved hydrocarbon bearing registering success ratio of 37 per cent,” he said. He added that the accretion of in-place hydrocarbons was 203.24 million tonnes of oil and oil equivalent gas and the ultimate reserve accretion was 64.32 mt. The reserve replacement ratio (RRR) for the year has been 1.49. J.R. Sweezy Authentic Jersey
SWISS to abolish two-persons-in-the-cockpit rule framed after suicidal crash
Is it safe to have just one crew member in the cockpit? It was not thought so after a suicidal Germanwings pilot locked the captain out and deliberately crashed the plane into a mountain, killing all 150 people on board in 2015. As a precautionary measure after the crash, two-persons-in-the-cockpit rule was recommended by the European Aviation Safety Agency (EASA) and adopted by several airlines. The rule requires two crew members to be present in the cockpit all the time. When one goes out, he has to be replaced by a third member. Two years later, Swiss International Air Lines (SWISS) has decided to abolish this rule, with effect from May 1. A press release by the airline says that the the action follows an extensive safety and security review which has concluded that the rule does not enhance flight safety. The action is being taken following a structured safety, security and risk analysis that has been conducted by the carrier and coordinated with similar risk assessments by its fellow Lufthansa Group airlines, the release says. These analyses have concluded that the requirement of having two crew members in the cockpit at all times during a flight does not enhance safety, and actually introduces additional risks to daily operations in flight safety terms (such as the fact that the rule results in more and longer openings of the cockpit door). The European Aviation Safety Agency had revised its recommendation in 2016, offering airlines the option of abolishing the two-persons-in-the-cockpit rule provided they met the relevant further criteria.
Punjab, Haryana to face shortfall of cheapest BBMB power in summers
With the cheapest power from Bhakra Nangal and Beas projects all set to fall in the first quarter due to depleted level of water at reservoirs, the power utilities in Punjab and Haryana will have to spend extra buck to maintain adequate supply. Due to less rains in the catchment area, the prevailing water level at Bhakra reservoir (1200MW) and Pong (360MW) is 35 per cent and 41 per cent respectively below normal (average of last 10 years) levels. The BBMB is primarily an irrigation project and power is a by-product allocated supplied at around paise 33 per unit to beneficiary states. Punjab gets lion’s share of 51.8 per cent (1161 MW) of the total installed capacity whereas Haryana gets 37 per cent share. The projects had generated 11819 million units in 2016-17 almost 10.5 per cent lower than the previous year due to less rainfall in the catchment area. The BBMB projects have an installed capacity of 2866 MW. “Power from other sources will be arranged to cover up the shortfall and it will definitely cost more than the supply from BBMB,” a senior official of Haryana Power Generation Corporation Limited said. The dip in hydro power generation is likely to affect Punjab State Power Corporation Limited more as it also gets 1041 MW of hydro power from its share and PPAs in other projects in the North. Out of 91 main water reservoirs in the country 37 reservoirs have hydropower benefit with installed capacity of more than 60 MW. This year the water levels at such reservoirs is better than the last year and last 10 years in states of Gujarat, Odissa, Uttar Pradesh, Madhya Pradesh and Chattisgarh. In states of Maharashtra, Uttrakhand, Kerela and Tamil Nadu the water level in the reservoirs having hydro generation capacity is less than normal (average of last 10 years) but better than the last year. Robert Newhouse Authentic Jersey
Wind power capacity addition outpaced predictions last year: ICRA
Capacity addition in the wind energy sector was much better than predicted by ICRA last year. This was largely attributable to a bunching up of commissioning in March 2017. This in turn was the result of removal of generation based incentive (GBI) benefit and reduction in accelerated depreciation (AD) benefit with effect from April 1, 2017. These apart, independent power producers were trying to utilise the current feed in tariff regimes in states where it existed – the apprehension being that in future, tariff based bidding, as exemplified by the award of projects by Solar Energy Corporation Ltd in February 2017, could largely replace feed-in tariff regime. ICRA has gathered from industry sources that distribution utilities in states like Andhra Pradesh, Rajasthan, Karnataka and Gujarat are evaluating competitive bidding mechanism for awarding wind power projects. The wind power capacity addition during FY2017 stood at 5.4 GW, increasing by 58% over the capacity addition of 3.4 GW achieved in FY2016. The solar power capacity addition stood at 5.5 GW in FY2017, reporting a significant jump of 83% as against the capacity addition of 3.0 GW in FY2016. Despite the record capacity addition in the wind segment, the annual capacity addition in the solar power segment exceeded the wind power segment for the first time, supported by the strong policy support and also the improved cost competitiveness of solar power against conventional as well as other renewable sources, including wind. Nevertheless, the renewable energy sector reported a record capacity addition of over 11 GW in FY2017, an increase of around 60% over 7.1 GW reported in FY2016. Large capacity additions in FY2017 in the wind power segment was mainly seen in the states of Andhra Pradesh (2190 MW), Gujarat (1275 MW) and Karnataka (882 MW), while large capacity addition in FY2017 in the solar power segment was mainly seen in the states of Andhra Pradesh (1294 MW), Karnataka (882 MW) and Telangana (759 MW). Marcus Cannon Authentic Jersey
Solar installation to touch 10 Gigawatt as module prices fall further: Mercom
Solar installations in India is expected to reach approximately 10 GW as it becomes one of the most important solar markets in the world, after China and the United States, Mercom India has forecast. Fuelled by slowdown in China’s demand the industry is expecting module prices to decline slightly in the second quarter and a more pronounced fall in the second half of the year. Nevertheless, current installed capacity of domestic cells and modules is estimated at 3 GW and 8.4 GW respectively while operational capacity of solar cells and modules is 1.5 GW and 6.6 GW respectively. The Indian solar sector is seeing strong activity with cumulative installations reaching approximately 12.8 GW at the end of Q1 2017. In fact, utility-scale projects account for about 12 GW and rooftop installations account for almost 850 MW of the installed capacity. Pipeline for utility-scale projects that are under development is currently at about 12.6 GW and there are approximately 6.1 GW of tenders pending auction. In fact, large-scale projects under the National Solar Policy (NSM or JNNSM) lead in installations followed by states like Tamil Nadu, Gujarat, Telangana and Karnataka. In terms of pipeline, most of the under development and tendered projects are coming up under the NSM program in various phases and batches, followed by projects under state policies led by Telangana, Karnataka, and Madhya Pradesh. On the policy front, so far, 2.6 GW of solar projects have been commissioned under various phases. These projects are spread across states including Andhra Pradesh, Karnataka, Rajasthan, Telangana and Uttar Pradesh. SECI targets 1,000 mw grid connected projects under JNNSM – Phase II Batch 5 for public sector undertakings and government organizations’ self-use or third-party sale or merchant sale. Meanwhile, Chinese module prices in India have continued to slide with average selling prices coming to Rs 20.68 per watt in the first quarter of 2017, a drop of an 11 per cent from Rs 23.27 per watt in Q4 2016. Chinese module prices have now fallen by about 33 percent in the last 12 months, enabling the recent low bids of Rs 3.30 per unit and Rs 3.15 per unit in Kadapa. Matt Dumba Authentic Jersey
Ageing oilfields drag down India’s crude output for fifth straight year
India’s crude oil production fell for the fifth straight year in 2016-17 as output continued to slide at ageing oilfields. Output fell 2.5% from the previous fiscal to 36 million metric tonnes as production at the Oil and Natural Gas Corporation’s Mumbai High field and Cairn India’s fields in Rajasthan slipped, according to Petroleum Planning and Analysis Cell (PPAC), an arm of the oil ministry. “The delay in deployment of Sagar Samrat rig to mobile offshore production unit as well as development of western periphery of Mumbai High (MH) South field has also affected the crude production for ONGC,” PPAC said in its monthly note. “The major decline was observed in Rajasthan’s fields due to closure of a few high water cut wells in Mangala field and poor reservoir performance of Bhagyam wells.” Meanwhile, a rapidly expanding economy pushed up country’s oil demand 5% in 2016-17. Though lower than 11% demand growth witnessed in 2015-16, increased consumption, along with falling output, prompted a 5.2% jump in the import of crude to 213 million metric tonnes worth $70 billion during the fiscal. This increased India’s import dependence to 82% of its requirement in 2016-17 from 81% in the previous year. The government is aiming to bring down import dependence to 67% by 2022 by raising local output and increasing use of biofuel in transportation, a bid to reduce dependence on overseas energy sources and save on valuable foreign exchange. Domestic natural gas production fell 1% to 30.8 billion cubic meters in 2016-17 while consumption went up 6%. Import of liquefied natural gas (LNG), accounting for 45% of total domestic consumption, rose 15% during the year. Indian state firms’ production from overseas fields, however, rose sharply to 15.9 million tonnes of oil equivalent (mtoe) in 2016-17 from 9.7 mtoe in the previous year, driven mainly by stake purchases in Russia’s Vankor field. ONGC Videsh’s production jumped 40% to 12.5 mtoe. It is expected to go up another 15% in the current fiscal. India imported 22% more petroleum products in 2016-17, mainly due to increase in petcoke import by the private sector. The country exported 7% more petroleum products, with private sector accounting for 80% of total export. Pierre Desir Authentic Jersey