IGX sees 324% growth in gas trade volumes in February m-o-m
The Indian Gas Exchange (IGX) traded 6,136,850 MMBtu (~155 MMSCM) gas volume in February, with 324 percent month-on-month (m-o-m) increase and 17 percent year-on-year (y-o-y) increase. In February 2024, IGX traded record 4.74 Million MMBtu (120 MMSCM) of monthly R-LNG volumes, said IGX on Tuesday. A total of 101 trades were executed during the month. The maximum number of trades were executed in monthly contracts (62 trades), followed by weekly and fortnightly contracts of 20 and 10 trades, respectively. The most active delivery point for free market gas was Hazira. This was the first month when Hazira became the most active delivery point. Other trading delivery points were — Dabhol, Gadimoga, Dahej, Ankot, Suvali, Mhaskal & KG Basin. During the month, the Exchange traded gas deliveries were 11,06,000 MMBtu (~1 MMSCMD). GIXI at $10.7 per MMBtu in Feb: IGX GIXI (Gas Index of India) for February 2024 was Rs 888/$10.7 per MMBtu, lower by 11% last month. GIXI- South was Rs. 798/$9.6 per MMBtu and GIXI-West Rs 891/$10.7 per MMBtu. Different spot gas benchmark prices recorded were: HH at ~$2/MMBtu, TTF at ~$8.1 /MMBtu, whereas LNG benchmark indices were: WIM ~9.1 $/MMBtu. IGX currently offers delivery-based trade in six different contracts such as Day-Ahead, Daily, Weekday, Weekly, Fortnightly and Monthly, under which the trade can be executed for six consecutive months. The gas trade takes place at multiple delivery points, such as, Dahej, Hazira, Ankot, Mhaskal, Bhadhbhut, Dabhol, KG Basin, Gadimoga, Suvali. It covers six regional gas hubs, namely, Western Hub, Southern Hub, Eastern Hub, Central Hub, Northern Hub, and North Eastern Hub across India.
OPEC expects share of Indian oil imports to rise again
OPEC is set to win a bigger share of India’s oil imports in coming decades due to the proximity of its supplies, the producer group’s head told Reuters, after its dominance was recently eroded by competition from discounted Russian oil. The share of oil from the Organization of the Petroleum Exporting Countries (OPEC) imported by India declined from about 65% in 2022 to 50% last year, according to industry data, after New Delhi became the biggest buyer of seaborne Russian crude in the aftermath of Moscow’s invasion of Ukraine. OPEC members and other producers must adapt to changing market dynamics due to the “redirection” of trade flows since early 2022, with more Russian oil supply to India and elsewhere in Asia, Haitham Al Ghais, OPEC’s secretary general, said in an emailed response to Reuters questions. “OPEC Middle East producers remain ideal suppliers to the Indian market, given their close proximity. It is a perfect supplier-consumer fit, and cost efficient for all parties,” Al Ghais said, adding he sees a greater role for OPEC members in India’s development beyond oil. OPEC supplied 54% of India’s imported oil in January, according to industry sources. “We expect levels to rise further in the coming decades as India’s economic development continues,” Al Ghais said, adding that “many” national oil companies from OPEC members plan to invest in India’s refining sector. India plans to expand refining capacity to 9 million barrels per day (bpd) by 2030, from 5.02 million bpd currently. India, the world’s third-biggest oil importer and consumer, is forecast by the International Energy Agency to be the world’s biggest oil demand growth driver through 2030.
IOC to make fuel for Formula 1 – first by an Indian firm
Indian Oil Corporation Ltd (IOC) – the nation’s top oil firm – will in three months start manufacturing fuel used in adrenaline-pumping Formula One or F1, motor racing as it looks to expand its basket of niche fuels. IOC, which already has three branded fuels, including high-selling XtraGreen diesel, on Wednesday unveiled ‘Storm’ petrol that it will supply for the Asian region motorcycle road racing championship. “Today, we are partnering with FIM Asia Road Racing Championship for the supply of ‘Storm’. We are the first company in India to manufacture fuel of specifications used in road racing,” IOC Chairman Shrikant Madhav Vaidya said. IOC will supply fuel for all the motorcyclists from 15 countries that will participate in the FIM Asia Road Racing Championship. “Our R&D (research and development) in two months will be able to produce Category-1 fuel and in three months Formula 1 fuel,” he said. “Unless we go to F1, the journey is not complete.” ‘Storm – Ultimate Racing Fuel’ is different from regular commercial as well as premium gasoline or petrol (95-Octane XP95 and 100-Octane XP100) in fuel properties like density range, distillation range, vapour pressure (DVPE), and olefins. And Formula 1 fuels are ones that deliver highly optimised peak performance. Vaidya said current norms provide for 40 per cent of the F1 fuel coming from non-fossil sources, such as alcohol, algae or waste keeping in the sustainability angle. IOC would also start manufacturing similar grade fuel and thereafter pitch to automobile makers racing in F1. Unlike FIM Asia Road Racing Championship where there is one single fuel supplier for all the motorcycles racing, F1 allows teams to select their own fuel supplier. For instance, Shell is the fuel supplier to Ferrari. “This is just the beginning,” Vaidya said. ‘Storm – Ultimate Racing Fuel’ provides cleanliness of engine parts, fuel delivery system and corrosion protection to the metallic parts of vehicles. It provides faster acceleration, more power, smoother drivability, lower engine deposits and lower exhaust emissions. It is suitable for use in all racing championships (enduro, trial, circuit racing, motocross and supermoto, cross-country, e-bike, and track racing) in all classes of motorbikes requiring FIM Category 2 race fuels. F1 fuel will be a notch higher. It would fall under high octane premium road fuel with octane thresholds of 95 to 102.
MGL signed an MOU with BMC for setting up a Compressed Biogas plant in Mumbai
Mahanagar Gas Limited signed an MOU with Brihanmumbai Municipal Corporation (BMC) for setting up a Compressed Biogas (CBG) plant in Mumbai. The CBG plant will have the capacity to process up to 1000 TPD of source segregated food and vegetable waste and will be set up on a parcel of land to be provided by BMC, shared Sanjay Shende, Deputy Managing Director, Mahanagar Gas Limited in an interview with Energetica India. Que: How has Mahanagar Gas Limited (MGL) strategically positioned itself to mitigate the impact of gas price volatility, considering the current market dynamics? Ans: The implementation of a new domestic gas pricing policy has brought much-needed relief to the CGD sector. Post submission of Kirit Parikh Committee Report, the Government of India issued revised domestic gas pricing guidelines in April 2023. Under the approved guidelines, the APM gas price will be determined at 10 percent of the monthly average of the Indian crude basket and will be notified on a monthly basis. The guidelines also have a ceiling of USD 6.5 per MMBtu and a floor of USD 4 per MMBtu for the next two years. After that, the floor and ceiling prices will increase by 25 cents every year. These guidelines played a crucial role in stabilizing prices, mitigating the risk of sudden price hikes, and thereby alleviating inflationary pressures to ensure a more stable price. The revised guidelines are now linked to crude oil prices, a practice that is currently followed in most industry contracts and more relevant to the country’s consumption basket and has deeper liquidity in global trading markets on a real-time basis. Moreover, there has been a notable decrease in LNG price compared to last year, especially in August-September, where it fluctuated between USD 35 to USD 40 per MMBtu. Presently, prices are at approximately USD 15 to USD 16 per MMBtu. MGL has implemented proactive measures to mitigate the impact of such volatility, maintaining a diversified portfolio of gas sourcing. The company has entered into term contracts with Reliance Industries Ltd and BP Exploration (Alpha) Ltd. for Gas from High Pressure High Temperature (HPHT) fields, and has also entered into contracts with GAIL for Henry Hub indexed pricing. Consequently, MGL has adopted a strategy to diversify the duration and indices of gas prices. Que: Could you provide insights into MGL’s term contracts with Reliance Gas for High Pressure High Temperature (HPHT) gas and agreements with GAIL for Henry Hub? Ans: In order to ensure supply security and to mitigate the price volatility risk, MGL signed term gas contracts with Reliance Industries Ltd and BP Exploration (Alpha) Ltd. for 0.6 MMSCMD under HPHT and with GAIL for Henry Hub RLNG 0.78 MMSCMD (Henry Hub) to cater to the demand over and above APM allocation as well as meet its industrial and commercial supplies. Que: With 90 percent of PNG and CNG being sourced domestically, how is MGL planning to align with national production trends? ¬ Ans: Around 80 percent of the priority segment requirement is met through APM gas and for the balance, as outlined above, we have in place a term contract with RIL as well as with GAIL to meet the requirement of priority segment as well as industrial and commercial segment. Que: How does MGL view the government’s recent policy prioritizing City Gas Distribution (CGD), and what impact does it foresee on meeting the company’s needs? Ans: A major portion of the demand for D-PNG and CNG segment is catered through government-allocated APM gas. Also, the Government’s notification regarding High Pressure High Temperature (HPHT) Gas allocation priority to CGD is another positive step for D-PNG and CNG segment. These guidelines were effective in maintaining price stability and reducing inflationary pressures. Que: MGL has set a goal of establishing around 50 CNG stations annually. Can you share more details about this expansion plan and its geographical focus? Ans: MGL has planned to set up 50 CNG stations annually primarily in Mumbai, Thane and Raigad District of which 25 CNG outlets are expected in Mumbai and Thane District and the balance 25 CNG outlets in Raigad district. MGL has issued letters of intent to private plot owners and procured sites from private plot owners and government agencies. MGL has recently executed an agreement with Reliance BP Mobility Limited which will additionally help MGL expand CNG Outlets in Thane and Raigad Districts. Que: MGL emphasizes the growth of the CGD sector contributing to India’s energy security. How does MGL see its role in achieving the government’s goal of increasing gas’s contribution from 6 percent to 15 percent? Ans: MGL believes it can play a pivotal role in GOI’s endeavour to increase the share of natural gas in India’s energy basket from 6 percent to 15 percent. Aligned with the government’s ambitious goal of elevating gas contribution from 6 percent to 15 percent, MGL is dedicated to augmenting its core CNG and PNG infrastructure. This involves expanding the network of CNG stations and increasing the customer base in residential, commercial, and industrial establishments. In a strategic move towards sustainability, MGL is diversifying into alternative green fuels, specifically Compressed Biogas (CBG) and Liquified Natural Gas (LNG). To realize this vision, MGL is setting up one of the largest MSW to CBG plants in Asia in Mumbai. MGL is also rolling out LNG stations to develop the LNG ecosystem enabling the switch from diesel to LNG for long haul transportation. Currently, MGL operates one LNG station at Savroli, Khalapur and has plans to add 6 nos. of stations in Maharashtra through its JV Mahanagar LNG Pvt. Ltd. The primary objective includes enhancing access to clean and affordable natural gas, promoting its utilization across various sectors, and collaborating with stakeholders to facilitate policy initiatives that support this growth. Through these multifaceted endeavours, MGL aspires to make a substantial contribution towards attaining the national target of increasing the share of natural gas in India’s energy mix.
India asks state refiners to partly pay in rupees for oil supplies from Gulf
The Reserve Bank of India has asked the country’s major state-owned refiners to press Gulf suppliers to accept at least 10 percent of oil payments in rupees in the next financial year, three executives at the processors said. The move is aimed at promoting the Indian currency in international trade and cutting dependence on dollars, said the executives, who asked not to be named due to the sensitivity of the matter. The government is worried that India’s booming demand for energy will put downward pressure on the rupee, and also wants to leverage the growth in consumption to its own advantage, they said. The three refiners — Indian Oil Corp., Bharat Petroleum Corp., and Hindustan Petroleum Corp. — have already approached oil exporters on the matter, but the suppliers are pushing back due to currency risk and conversion charges, the executives said. The central bank has asked the Indian refiners to bear part of the currency transaction charges, but they are also resisting the idea on the grounds it will erode margins, they said. An RBI spokesperson wasn’t immediately available for comment, while communications staff at the three refiners didn’t reply to emails seeking comment. India is the world’s third-largest crude importer and is forecast to be the leading driver of global consumption growth this decade. The vast majority of global oil transactions are in dollars, although China has had some success in using the yuan more to pay for imports. Indian Oil partly paid Abu Dhabi National Oil Co for a shipment of 1 million barrels of crude in rupees last August. However, there haven’t been any transactions in the currency since then. The country’s refiners have also used other currencies — include UAE dirhams — to pay for Russian crude.
Possibility of setting up LNG plant being explored in Rajasthan
Rajasthan State Gas Limited (RSGL) has started exploring the possibilities of setting up a LNG plant in the state, Mines Secretary Anandhi said during a meeting of the board of directors of RSGL held at the Secretariat here on Monday. With the setting up of the liquified natural gas (LNG) plant, the future fuel demand of LNG vehicles in the state can be met there itself. The fuel requirement of long distance goods vehicles and mining sector vehicles can also be met with this LNG fuel, Anandhi added. The secretary said that Rajasthan Gas will have to chalk out an action plan to diversify its operations. Along with compressed natural gas (CNG) and Domestic Piped Natural Gas (DPNG) distribution networks, we will have to enter new areas like production and distribution of biogas and LNG. Praising the work of RSGL, she said that a campaign should be launched to connect new families with the gas distribution system through a domestic pipeline in Kota. New units in the industrial and commercial sector should be encouraged to make new connections by giving them information about the benefits and low cost of CNG-PNG, she added. Managing Director of RSGL, Ranveer Singh said that there is a plan to set up two new CNG stations in the state. Till February, RSGL has provided an average of 47390 standard cubic meters of gas per day in the state, which is a new record. On an average, 45440 SCMD gas was provided daily by RSGL in the last financial year.
BPCL, HPCL, Oil India bag license for building gas infra in J&K, Northeast
State-run oil Oil India Ltd (OIL), Bharat Petroleum Corporation Limited (BPCL), and Hindustan Petroleum Corporation Limited (HPCL), among others bagged the licenses for building gas infrastructure in the Northeastern states and Jammu and Kashmir under the 12th city gas distribution (CGD) bidding round. The 12th CGD bidding round constituted 8 Geographical Areas (GAs) across 6 Northeast states – Arunachal Pradesh, Meghalaya, Manipur, Nagaland, Sikkim and Mizoram – and two Union Territories of Jammu & Kashmir and Ladakh. This round in totality covered 103 districts. The winners for the GAs were as follows: 1. Arunachal Pradesh – BPCL and OIL consortium 2. Meghalaya – Haryana City Gas 3. Manipur – Tripura Natural Gas Company Ltd 4. Mizoram – Tripura Natural Gas Company Ltd 5. Sikkim- HPCL 6. Nagaland – HPCL and Oil India 7. Jammu and Kashmir – BPCL 8. Ladakh – BPCL
India to pump Rs 410 billion into natural gas network for Kashmir, Northeast
According to Oil Minister Hardeep Singh Puri, India will invest a sizable amount—Rs 410 billion —into the expansion of its natural gas network in the Kashmir and northeastern regions. This significant investment will fuel the rollout of city gas networks, providing retail CNG to automobiles and piped cooking gas to households over the coming years. The 12th city gas distribution (CGD) bidding round, encompassing eight geographical areas (GAs), witnessed participation from esteemed entities such as Oil India Ltd (OIL), Bharat Petroleum Corporation Ltd. (BPCL), and Hindustan Petroleum Corporation Ltd (HPCL). Minister Puri emphasised the government’s dedication to promoting natural gas as a fuel for transportation, domestic use, and industrial purposes, aligning with the vision to transform India into a gas-based economy. Developing a robust gas infrastructure ecosystem has paved the way for significant investments, fostering cleaner and more sustainable energy solutions. Moreover, reforms in gas pricing and regulatory measures by the Petroleum and Natural Gas Regulatory Board (PNGRB) aim to ensure equitable access to natural gas across the nation. The 12th CGD bidding round, spanning six northeastern states and two Union Territories, marks a significant step towards expanding India’s natural gas footprint and achieving greater energy security and sustainability.
India turns cautious on contracted Russian oil as US sanctions bite
India’s state-run oil refiners are shying away from contracted Russian crude supply as the once-booming trade becomes much harder under tighter enforcement of US sanctions. The biggest state-owned refiner Indian Oil Corp. will likely reduce the amount of crude received under so-called term supply, while Bharat Petroleum Corp. and Hindustan Petroleum Corp. have decided against making firm commitments to take contracted oil next financial year, six people familiar with the matter said, asking not to identified because the information is private. The three refiners had been in talks with Russia’s Rosneft PJSC to secure about 500,000 barrels a day — equivalent to a third of India’s daily imports — to try and reduce reliance on one-off purchases that can often be more expensive. The lukewarm response to a suggested contract clause that would address supply disruptions added to the caution from Indian refiners, the people said. Indian Oil has an existing long-term deal with Rosneft, but contracted supply would have been a first for HPCL and BPCL. Russia is still the biggest supplier to India, but there are signs refiners are buying more from other producers, including Saudi Arabia. The state-owned companies are also seeking contracted crude from the Middle East and West Africa, but the deals are likely to be more expensive than Russian oil, the people said. State refiners are expected to meet 40% of their crude needs in the financial year starting April 1 through one-off purchases, or spot deals, meaning big volumes of oil from Russia could still flow to India, four of the people said. Last year, Indian Oil entered into a series of deals with Rosneft, Sakhalin-1 LLC and Gazprom Neft PJSC to take 24.5 million tons, or 492,000 barrels a day, for the year ending March 31, two of the people said. That compares with a pre-war contract with Rosneft in 2021 to take 2 million tons over a year.
Mahanagar Gas reduces price of CNG in Mumbai
Mumbai-based Mahanagar Gas Ltd (MGL) has reduced the price of compressed natural gas (CNG) to Rs 73.50/Kg effective from midnight of 5th March 2024/ morning of 6th March 2024, the company said on Tuesday. “Due to reduction in gas input cost MGL is pleased to announce reduction in CNG price by Rs 2.5/Kg in and around Mumbai,” the company said, adding that MGL’s CNG price now offers attractive savings of 53% compared to petrol and 22% compared to diesel at current price levels in Mumbai. This reduction in CNG price would help to increase the consumption of natural gas in transportation segment, which is a step towards making India cleaner and greener, the company added.