India’s robust LNG imports are Asia’s standout, but higher prices may weigh: Russell
Asia’s imports of liquefied natural gas(LNG) are displaying contrasting dynamics in May, with strength in usually price-sensitive buyers like India, but a softer trend in the developed economies such as Japan and South Korea. The top-importing continent is on track to receive about 23.61 million metric tons of the super-chilled fuel this month, according to data compiled by commodity analysts Kpler. This is up slightly from April’s 23.23 million tons, although on a daily basis May’s arrivals are a touch weaker, while they are stronger than the 20.75 million from May 2023. But while the overall LNG import figures are relatively stable for Asia this month, the breakdown is somewhat at odds with recent movements in the spot price. India’s May imports are estimated at 2.46 million tons, up from 2.03 million in April and the strongest month since October 2020. The surge in arrivals comes even as the spot price for delivery to North Asia has been rallying, rising from a near three-year low of $8.30 per million British thermal units (mmBtu) in the week to Feb. 23 to a five-month high of $12.30 last week. What is worth noting is that the cargoes arriving in India in May would have been secured in a window from later February to early April, a time when spot prices were rising but were still below the $10 per mmBtu level. Now that the spot price has risen decisively above that level, it raises the possibility that Indian utilities will scale back purchases as LNG will no longer be competitive in the domestic market.
Petroleum Secy Inaugurates GAIL’s 10 MW Green Hydrogen Plant
n May 25th, Mr. Pankaj Jain (1987-batch IAS officer), the incumbent Petroleum Secretary of India, inaugurated the state-of-the-art Green hydrogen plant at GAIL Vijaipur in Madhya Pradesh, as a testament to the union’s National Green Hydrogen Mission (NHM). Present at the event were GAIL Chairman and Managing Director (CMD), Mr. Sandeep Gupta, Director (Projects), Mr. Deepak Gupta, Director (Human Resources), and Mr. Ayush Gupta, among other senior officials. The Maharatna PSU GAIL’s Green Hydrogen Plant has a capacity of producing 4.3 TPD of Hydrogen, through 10MW PEM (Proton Exchange Membrane) Electrolyzer units, by electrolysis of water using renewable power. The purity of hydrogen from this plant shall be 99.999% (by volume.) and will be produced at a pressure of 30 Kg/cm2. The hydrogen thus produced from this unit shall be used as a fuel along with natural Gas for captive purposes in the various processes and equipment running in the existing plant at Vijaipur, after which it shall be dispensed to retail customers in the nearby geographies, transported through high-pressure cascades.
India, Egypt top destinations for Russian seaborne fuel oil, VGO exports in April, LSEG data shows
India and Egypt were the top destinations for Russian seaborne fuel oil and vacuum gasoil exports in April, traders said and LSEG data showed. In total, Russian fuel oil and VGO seaborne exports fell in April by 10% month-on-month to about 3.32 million tons, as refining capacity idled due to maintenance, technical outages and drone attacks, increased last month by 13.6% from March, Reuters calculations showed. The European Union’s full embargo on Russian oil products went into effect in February 2023 and the bulk of Russia’s fuel oil and VGO was redirected to other regions, mostly Asia. In April 2024, direct fuel oil and VGO shipments from Russian ports to India increased to 0.6 million metric tons from 0.4 million tons the previous month. Russian fuel oil loadings to China decreased last month to about 450,000 tons from 660,000 tons in March, according to LSEG data and Reuters’ calculations. China and India import straight-run fuel oil and VGO for refining, partially replacing more expensive Urals barrels, traders said. Fuel oil supplies to Egypt increased in April to almost 0.5 million tons from 0.1 million tons in the previous month. All the cargoes were discharged at Ain Sukhna Terminal, shipping data showed. Traders use Ain Sukhna Terminal as storage and blending facilities, buying fuel oil for power generation ahead of the summer season, market sources said. At least 200,000 tons of fuel oil had been loaded in Russian ports so far in May to supply the Ain Sukhna Terminal, according to LSEG data. Russian VGO and fuel oil loadings to Fujairah increased in April to about 260,000 tons from 60,000 tons in March.
India’s use of crude tankers to export diesel slows in May
Indian refiners’ use of crude oil vessels to ship refined fuels such as diesel to key European markets has diminished in May after volumes neared two-year high levels last month, trade sources and analysts said. That is because rising inventories in the Antwerp-Rotterdam-Amsterdam region and shaky east-west diesel price spreads undermine the case for sellers to ship large volumes of the industrial fuel West. While more April shipments from India to Europe provided a floor for Asian margins, fewer such voyages in May will likely compel Indian refiners to shift diesel sales back to Asia, exacerbating a supply glut in the region, analysts and traders said. Diesel exports using Suezmax and Aframax vessels Mesta, Pertamina Halmahera and Marlin Santorini – mostly from Reliance Industries’ Jamnagar refinery – reached a near two-year high of around 380,000 metric tons (2.831 million barrels) in April, Kpler, Vortexa and LSEG shiptracking data showed. Reliance did not respond to a Reuters email for comment. Shiptracker Kpler in February estimated a switch by 35 Aframax crude tankers to carry refined products instead of crude. Traders switched to using Suezmax and Aframax tankers – that typically load so-called “dirty” crude oil and residue fuel – for carrying “clean” refined products after freight rates for long-range (LR) tankers spiked following Houthi attacks on ships in the Red Sea that forced longer voyages and tightened vessel availability. “At the time it was a reflection of how tight the LR1 and LR2 clean product tanker market was given the additional tonne miles vessels were having to do to avoid the Red Sea, and the lack of available prompt tonnage to book because ships were massively displaced given the additional sail times,” said Wood Mackenzie’s research analyst Emma Howsham. The crude oil market was also weaker, as refinery maintenance in the United States and Middle East dented demand for dirty vessels, making it attractive to ship diesel using them, she added. Even after the cost for scrubbing and cleaning a vessel to load ultra-low sulphur diesel, that was still nearly twice the cost for shipping up to 130,000 tons of fuel on a Suezmax vessel on a similar route, traders said. Traders have been among the biggest shippers of Indian-origin diesel, and they have the option for several discharge destinations and thus have room to ship using bigger vessels, one Europe-based trade source said. The trend has abated for May with no dirty tankers carrying diesel on the India-northwest Europe route, shiptracking data showed, as analysts expect Europe’s supply to be long. The economics for Indian refiners to supply to Europe via the Cape of Good Hope looks challenging as “European supply looks ample in the coming months”, said Woodmac’s Howsham.
GAIL To Set Up 26 Bio CNG Plants In JV Partnership
State-owned GAIL (India) Ltd. plans to set up around 26 Bio CNG plants over the next two to three years, both as producers as well as joint venture partners with raw material suppliers or biogas producers. The company has issued an Expression of Interest across India, for companies qualifying with certain parameters to form joint ventures for raw materials such as paddy straw, municipal solid waste and sugarcane press muds. The company alongwith joint venture partners is likely to invest up to Rs 13 billion, including equity contributions of 30%. Earlier, in February, Gail announced plans to import ethane from ethane-surplus countries to be transported through its pipeline systems to demand centres.
India’s use of crude tankers to export diesel slows in May
Indian refiners’ use of crude oil vessels to ship refined fuels such as diesel to key European markets has diminished in May after volumes neared two-year high levels last month, trade sources and analysts said. That is because rising inventories in the Antwerp-Rotterdam-Amsterdam region and shaky east-west diesel price spreads undermine the case for sellers to ship large volumes of the industrial fuel West. While more April shipments from India to Europe provided a floor for Asian margins, fewer such voyages in May will likely compel Indian refiners to shift diesel sales back to Asia, exacerbating a supply glut in the region, analysts and traders said. Diesel exports using Suezmax and Aframax vessels Mesta, Pertamina Halmahera and Marlin Santorini – mostly from Reliance Industries’ Jamnagar refinery – reached a near two-year high of around 380,000 metric tons (2.831 million barrels) in April, Kpler, Vortexa and LSEG shiptracking data showed. Reliance did not respond to a Reuters email for comment. Shiptracker Kpler in February estimated a switch by 35 Aframax crude tankers to carry refined products instead of crude. Traders switched to using Suezmax and Aframax tankers – that typically load so-called “dirty” crude oil and residue fuel – for carrying “clean” refined products after freight rates for long-range (LR) tankers spiked following Houthi attacks on ships in the Red Sea that forced longer voyages and tightened vessel availability. “At the time it was a reflection of how tight the LR1 and LR2 clean product tanker market was given the additional tonne miles vessels were having to do to avoid the Red Sea, and the lack of available prompt tonnage to book because ships were massively displaced given the additional sail times,” said Wood Mackenzie’s research analyst Emma Howsham. The crude oil market was also weaker, as refinery maintenance in the United States and Middle East dented demand for dirty vessels, making it attractive to ship diesel using them, she added. COST FACTOR The cost for shipping 65,000 tons of fuel on a LR1 tanker averaged $75 per ton in March and April from India to northwest Europe, compared to $60 a ton in February, pricing data from SSY Tanker showed. Even after the cost for scrubbing and cleaning a vessel to load ultra-low sulphur diesel, that was still nearly twice the cost for shipping up to 130,000 tons of fuel on a Suezmax vessel on a similar route, traders said. Traders have been among the biggest shippers of Indian-origin diesel, and they have the option for several discharge destinations and thus have room to ship using bigger vessels, one Europe-based trade source said. The trend has abated for May with no dirty tankers carrying diesel on the India-northwest Europe route, shiptracking data showed, as analysts expect Europe’s supply to be long. The economics for Indian refiners to supply to Europe via the Cape of Good Hope looks challenging as “European supply looks ample in the coming months”, said Woodmac’s Howsham.
Auditors flag unpaid ‘use or pay’ charges of Rs 18.32 billion at Petronet LNG
Auditors have flagged the unpaid ‘use or pay’ charges of Rs 18.32 billion at Petronet LNG, the country’s largest operator of natural gasimport terminals Customers must pay for the regasification capacity they book at Petronet’s import terminals even if they don’t use it. Some customers, however, have not done so in the last three financial years, resulting in unpaid dues climbing to Rs 18.32 billion, which includes Rs 6.10 billion for the year 2023-24, Rs 8.45 billion for 2022-23, and Rs 3.79 billion for 2021-22. The company has made a provision of Rs 3.58 billion towards this. Petronet reported a 20% year-on-year rise in the fourth quarter profit to Rs 7.38 billion on higher utilization of its import terminals. Revenues for the Jan-March quarter marginally fell to Rs 137.93 billion from Rs 138.74 billion in the year-ago period.
Adani Total Gas Launches CBG Production
Adani Total Gas has commenced production at its inaugural compressed bio-gas (CBG) plant, the Barsana Biogas Project, in Uttar Pradesh. This marks a significant milestone in the company’s renewable energy initiatives. Mathura district, the plant is designed to process up to 600 tonnes of agricultural waste per day across its three phases, producing over 42 tonnes per day of CBG and 217 tonnes of organic fertiliser The plant employs advanced anaerobic digestion technology to convert organic materials into renewable biogas, significantly reducing greenhouse gas emissions and reliance on fossil fuels. This sustainable approach supports India’s goals for fuel security and emission reduction.
Kochi Port Welcomes LNG Carrier
Kochi Port marked a significant milestone in its green initiatives with the docking of the LNG-powered container carrier, MSC ROSE. This 365-meter-long vessel, capable of carrying 15,500 TEUs, is the first LNG-powered ship to berth at the Vallarpadom Container Terminal. LNG, or Liquefied Natural Gas, offers a more environmentally friendly alternative to traditional diesel fuel, reducing greenhouse gas emissions and improving air quality.
Gail may line up Rs 500 billion capex in big petrochemical bet
Gail (India) plans to invest up to ₹500 billion to build a 1.5 million tonnes per annum ethane cracking unit at Sehore, Madhya Pradesh, three officials aware of the development told ET. This is among the biggest proposed capital expenditures by the state-run gas utility. The new facility is expected to help Gail meet the robust domestic petrochemicals demand, which is expected to nearly triple to $1trillion by 2040. Ethane is a component of natural gas. An ethane cracker breaks down ethane into ethylene, which is the key chemical input for making plastics, adhesives, synthetic rubber, and other petrochemicals. “Gail is very bullish on the petrochemicals segment. This new facility is still in the planning stage and will almost double Gail’s existing 810 KTA (thousand tonnes per annum)petrochemicals facility in Pata near Kanpur, UP,” said an official aware of the development.