India cuts windfall tax on petroleum crude
India has cut its windfall tax on petroleum crude to 8,400 Indian rupees ($100.66) a metric ton from 9,600 rupees with effect from May 1, the government said on Tuesday. The tax, which is revised every fortnight, was left unchanged at zero for diesel and aviation turbine fuel. The government had on April 16 raised the windfall tax on petroleum crude to 9,600 rupees a metric ton from 6,800 rupees
Commissioning of India’s Chhara LNG terminal delayed
India’s Hindustan Petroleum, a unit of state-owned ONGC, has reportedly delayed the commissioning of its Chhara LNG import terminal in Gujarat. LNG Prime reported on April 15, citing shipping data, that the 2015-built 159,800-cbm, Maran Gas Mystras, has arrived at the 5 mtpa LNG terminal in the Chhara port on April 11. Prior to that, Maran Gas Mystras picked up a cargo of LNG at Marathon Oil’s Punta Europa LNG terminal in Equatorial Guinea. However, the LNG carrier did not unload this shipment at the facility. Instead, the vessel delivered the shipment to Petronet LNG’s Dahej terminal, according to its AIS data provided by VesselsValue. LNG Prime invited HPCL to comment on the terminal’s commissioning, but we did not receive a reply by the time this article was published. Kpler said in a report that the commissioning of HPCL’s Chhara LNG terminal “is likely to be delayed due to infrastructure issues, with operations expected to extend beyond the monsoon season.” Other reports said that the issues were related to the terminal’s jetty. Also, HPCL has reportedly not yet completed the breakwater for the LNG facility to protect it during the monsoon season which typically lasts from June to September. India’s eighth LNG import facility HPCL LNG (HPLNG), a unit of HPCL, built the 5 mtpa LNG terminal with all associated facilities for receipt, unloading, storage, regasification of LNG, and gas supply to the grid. The firm, formerly known as HPCL Shapoorji Energy Private Limited (HSEPL), was incorporated as a 50:50 joint venture between HPCL and SP Ports Private Limited (SPPPL) on October 15, 2013. However, HPCL purchased the 50 percent stake from SPPPL in March 2021, becoming the sole owner of the LNG import facility. The LNG terminal features a 1.2 km long jetty capable of receiving carriers with a capacity of 80,000 cbm to 266,000 ccbm, two LNG storage tanks each with a capacity of 200,000 cbm, while GSCP built the connecting pipeline, according to HPLNG. This is India’s eighth LNG import facility. At the moment, India imports LNG via seven facilities with a combined capacity of about 47.7 million tonnes per year. These include Petronet LNG’s Dahej and Kochi terminals, Shell’s Hazira terminal, and the Dabhol LNG, Ennore LNG, Mundra LNG, and Dhamra LNG terminal.
QatarEnergy doles out $6 billion for 18 huge LNG vessels on historic fleet expansion mission
Qatar’s state-owned energy giant QatarEnergy is bolstering its giant liquefied natural gas (LNG) fleet expansion with a $6 billion deal for 18 ultra-modern QC-Max size LNG vessels, which are said to be the largest LNG ships ever built. The Qatari heavyweight’s agreement with China State Shipbuilding Corporation (CSSC)will enable the construction of 18 QC-Max size LNG vessels, with a capacity of 271,000 cubic meters each, which will be built at China’s Hudong-Zhonghua Shipyard, a CSSC wholly-owned subsidiary. With a total length of 344 meters, a beam of 53.6 meters, a depth of 27.2 meters, and a designed draft of 12 meters, these vessels will adopt a dual-fuel low-speed engine propulsion system and the NO96 Super+ containment system. While elaborating that the carrying capacity of the ship’s cabin is 57% higher and the energy consumption per ton-mile cargo transportation is 9.9% lower than that of a conventional 174,000-cubic-meter large LNG carrier, CSSC underscores that the vessel’s carbon intensity index (CII) is 23% lower with diversified and optimized draft and loading design enabling the ship to cover major mainstream routes with excellent ship-shore compatibility. The multibillion-dollar deal for these ships was signed in Beijing by Saad Sherida Al-Kaabi, Qatar’s Minister of State for Energy Affairs, President and CEO of QatarEnergy; Chen Jianliang, Chairman of Hudong‐Zhonghua Shipbuilding; and Li Hongtao, Chairman of China Shipbuilding Trading, during a ceremony attended by senior executives from QatarEnergy, QatarEnergy LNG, and China State Shipbuilding Corporation.
GAIL to Expand LNG Trading Globally
GAIL’s plans for global expansion underscore its strategic vision to diversify its business portfolio and tap into new growth avenues. By venturing into international LNG trading, the company aims to leverage its expertise and experience in the energy sector to capture a larger share of the global LNG market The expansion of GAIL’s LNG trading business aligns with India’s broader energy security objectives and the government’s push to enhance the country’s energy infrastructure and supply diversification. It also reflects the company’s commitment to playing a significant role in meeting the growing demand for clean energy GAIL’s entry into global LNG trading is expected to bolster India’s position as a key player in the global energy market and contribute to the country’s efforts to strengthen its energy security and promote sustainable development. By expanding its footprint in international markets, GAIL aims to create value for its stakeholders.
India’s natural gas consumption to surpass 64 BCM in 2024
Natural gas consumption in India is expected to grow by 7 per cent y-o-y to 64.35 billion cubic meters (BCM) in the current calendar year aided by lower prices and rising demand from power and industrial sectors. According to the International Energy Agency (IEA), India is expected to see an increase in LNG imports due to the decline in spot LNG prices in 2024. However, this growth could be tempered by the increase in domestic gas production from ONGC’s Krishna-Godavari field. “Following an announcement by Prime Minister Narendra Modi in January, 2024, the $67 billion investment plan for developing India’s natural gas supply chain is set to maintain its momentum over the coming years. India’s natural gas consumption in 2024 is projected to increase by over 7 per cent,” the IEA said in its latest gas market report. During October 2023-February 2024, India’s cumulative natural gas consumption rose by 17 per cent y-o-y to 28.12 BCM. In the 2023 calendar year, the consumption stood at 60.12 BCM. The world’s fourth largest importer of liquefied natural gas (LNG) consumed 66.63 BCM natural gas in FY24, compared to 59.97 BCM and 64.16 BCM in FY23 and FY22, respectively. Fertilisers followed by the Power sector, city gas distribution (CGD) and refineries are top natural gas consumers in the country. Growing consumption Lower natural gas prices continued to stimulate gas demand in India, with gas use in industry rising by an impressive 15 per cent y-o-y during the October 2023-February 2024 period, the IEA said. According to the Petroleum Planning & Analysis Cell (PPAC), India’s primary natural gas supply (including net domestic production and LNG imports) increased by 16 per cent y-o-y between October, 2023 and February, 2024. This strong growth in supply reflects growing demand for natural gas across all sectors, it added. The increase in consumption was mainly driven by the oil refining sector (up by more than 70 per cent y-o-y) and industry (up by over 15 per cent y-o-y), the agency noted. The lower spot price environment led to a notable increase in overall spot tenders for the purchase of LNG cargoes, with three to four times more tenders in winter 2023/24 than in the previous winter. These tenders also had a higher success rate, particularly since October, 2023. With lower prices, the improved competitiveness of gas in certain industries has driven a greater appetite for LNG imports. India imported 30.92 BCM of LNG in FY24, compared to 26.30 BCM and 31.03 BCM in FY23 and FY22, respectively. Production in the last financial year stood at 35.72 BCM as against 33.66 BCM and 33.13 BCM in FY23 and FY22, respectively. As of March, 2024, India’s total domestic piped natural gas (PNG) connections were 12.6 million, while industrial and commercial consumers stood at 18,500 and 40,940, respectively. The total number of compressed natural gas stations stood at 6,456.
Earnings for Big Oil backpedal as natural gas prices tumble
U.S. and European oil companies reported weaker first quarter results on Friday due to a sharp drop in natural gas prices compared with a year ago. Results at oil and gas firms are still retreating from record levels in 2022 that were boosted by a surge in demand after the COVID-19 pandemic and then when prices spiked after Russia invaded Ukraine. In the U.S., Exxon Mobil missed Wall Street earnings targets on fuel derivatives and Chevronbeat tempered expectations with better-than-expected U.S. oil production. French oil major TotalEnergies also slightly beat analysts forecasts as good refining margins partially offset a steep drop in profits from natural gas. “European gas prices declined by 35%, reflecting a mild winter and high storage levels,” said TotalEnergies Chief Financial Officer Jean-Pierre Sbraire. Exxon’s profit fell 28%, Chevron decreased 16% and TotalEnergies was down 22% year-on-year, with the two U.S. oil majors also taking a toll from weaker profits from gasoline and fuels. Henry Hub futures, the benchmark for U.S. gas, has been trading below USD1.70 per million British thermal unit (mmBtu), and earlier this year dropped to a 3-1/2-year low on warm weather and oversupply
Norway’s Oil Demand Hasn’t Crashed Despite Record EV Market Share
The fact that a record 90% share of all new car sales in Norway are electric has failed to make any impact on the country’s oil demand, indicating that hopes of rising EV uptake making an immediate dent in global oil demand are unrealistic. Last year, 82.4% of all new passenger cars sold in Norway were fully electric, up from 79.3% in 2022, according to the Norwegian Public Roads Administration and the Norwegian Road Federation (OFV). This share has jumped to over 90% this year, but the impact on Norway’s oil demand “has been negligible,” bank UBS said in a note this week carried by Investing.com. Norway has risen to become an EV powerhouse, also thanks to “generous financial incentives,” which have been partly funded by the Government Pension Fund Global, the world’s largest sovereign wealth fund that has amassed its wealth from sales of oil and gas, UBS noted. Norwegians, like other consumers, are concerned about vehicle range, and many opt for hybrids or gasoline-fueled vehicles to travel longer distances, according to the bank. “Another possibility is that electric vehicles are used for short distances, but Norwegians still rely on fossil fuels to cover longer distances,” UBS said in the note. Moreover, even if road transportation fuel demand has declined, demand for LPG and ethane, used for heating and cooking and in petrochemicals, has been very strong, the bank added. Road fuel demand in Norway has remained relatively stable even with soaring EV adoption, raising questions about whether EVs really have a material impact on diesel and gasoline sales, Rystad Energy said last year. The lack of a noticeable dent in oil demand in a country where EVs are 90% of all new car sales is a cautionary tale for those predicting an immediate drop in oil demand due to rising EV sales, according to UBS. The bank still sees years of rising global oil demand. “We continue to believe it will increase over the coming years, then plateau and begin a gradual decline at some stage during the next decade.”
India Will Show World A New Path On Biofuels Through The Global Biofuels Alliance (GBA): Petroleum And Natural Gas Minister Hardeep Singh Puri
Petroleum and Natural Gas Minister Hardeep Singh Puri has said that India will show the world a new path on biofuels through the Global Biofuels Alliance (GBA). The alliance was launched by Prime Minister Narendra Modi on the sidelines of the G20 Summit. GBA is an India-led initiative to develop an alliance of governments, international organizations and industry to facilitate adoption of biofuels. Mr Puri said, 19 countries and 12 international organisations have already agreed to join the alliance. The Minister observed that Global Biofuels Alliance has given a historic momentum for world’s quest for cleaner and greener energy. It will transform country’s farmers from ‘Annadatas to Urjadatas’ as an additional source of income. Mr Puri added that India will save about 450 billion rupees in oil imports and 63 Metric Tonnes of oil annually.
Oil Prices Are Set for a Weekly Gain as Yellen Sees Inflation Falling
Crude oil prices may end this week in the green as the U.S. Treasury suggested the weak first-quarter GDP data may be revisable and as supply concerns persisted. If the benchmarks do indeed end the week with gains, it would be the first positive week in three. “The U.S. economy continues to perform very, very well,” Janet Yellen told Reuters yesterday commenting on the latest economic reports out. Those showed a GDP growth rate of just 1.6% for the first quarter and an accelerated inflation rate of 3.7% in personal consumption expenditures. Expectations had been rather different, with GDP seen at 2.4% by analysts polled by Reuters. The quarterly change in the rate of personal consumption expenditures inflation was also surprising. “The fundamentals here are in line with inflation continuing back down to normal levels,” the Treasury Secretary said, which served to quickly quench any concern oil traders may have had about the state of the economy of the world’s biggest oil consumer. Meanwhile, Israel said it was going to bomb Rafah again, which seems to have reignited concern about the security of oil supply in the Middle East as Tel Aviv’s Western allies urged the country not to step up the attacks for fear of escalation with Iran. A third factor that has helped oil prices this week was the state of U.S. inventories, which booked a decline for last week. The Energy Information Administration said on Wednesday that crude oil inventories had shed as much as 6.4 million barrels in the week to April 19—an amount apparently seen as sizeable enough to motivate a more bullish sentiment on the oil market. As a result of all this, Brent crude is back above $89 climbing towards $90 per barrel and West Texas Intermediate is closing in on $84 per barrel again.
GAIL plans to expand LNG trading business to global markets
India’s top gas marketer GAIL aims to become a global liquefied natural gas (LNG) trader as the expanding market fuels new business opportunities. “We plan to ramp up our LNG trading business. We began with sourcing LNG cargoes for ourselves and have expanded to sourcing cargoes for some other Indian companies. Now we plan to serve non-Indian customers as well, with an aim to become a global LNG trader,” GAIL chairman and managing director Sandeep Kumar Gupta told ET. “The global trade can significantly boost our topline and provide visibility to our Singapore subsidiary,” said Gupta who has set the ambition to turn GAIL into a “company of global standing”. The Singapore subsidiary is engaged in sourcing spot LNG. GAIL plans to double its LNG trading volume by 2030, Gupta said, without specifying the current size of its business. “We have expertise in gas. We have been procuring from so many geographies. We have sold several US cargoes to multiple customers,” said Gupta. GAIL has a long-term contract to purchase LNG from the US and sells part of those supplies to international customers, instead of bringing it to India based on arbitrage opportunities. But with a focus on trading now, GAIL would actively seek out buyers and sellers of spot LNG in the global marketplace. GAIL has long-term contracts for the annual purchase of 14 million tonnes of LNG from various suppliers across the globe, about three-fourths of India’s total long-term buys of about 19 million tonnes. The country’s LNG import from the spot market is small-just about 10%-but growing. GAIL plans to confine itself to the spot market for its global LNG trade for now, Gupta said. Many established global traders also offer long- and medium-term contracts to buyers and suppliers. The spot market for LNG has hugely expanded over the last decade with booming supplies, especially from the US and Australia, and diverse customers, mainly from emerging markets. The creation of trading infrastructure has also aided the growth of the spot market, which offers flexibility to buyers and suppliers.