Qatar’s Gas Boost Will Bring Energy Dominance — and Lots of Cash
With a two-phase mega-expansion already underway and an enormous new buildout now on the horizon, the small Gulf nation of Qatar is setting itself up to control about a quarter of all liquefied natural gas by the end of the decade — and with it, a growing share of the world’s influence and wealth. Qatar’s energy minister Saad Al-Kaabi unveiled last Sunday plans to boost capacity another 13% on top of its previously announced projects, together lifting the nation’s output of LNG from 77 million metric tons per year today to 142 million tons by 2030. That puts the peninsula with fewer residents than the state of Mississippi on track to produce the equivalent of about 7.25 million barrels of oil per day. Most of that will be exported, essentially matching the oil shipments from the region’s reigning energy giant, Saudi Arabia.
Sri Lanka awards energy deal to India after rejecting China
Sri Lanka on Friday awarded the construction of three solar and wind hybrid power generation facilities to an Indian company after scrapping a tender won by a Chinese firm. New Delhi has long been concerned about growing Chinese influence in the island nation, which sits near key global shipping lanes and which India considers to be within its sphere of influence. The project, initially financed by an Asian Development Bank (ADB) loan, was temporarily shelved two years ago after India raised concerns over China’s involvement. Sri Lanka’s energy ministry said Friday that the project had been revived and was now fully funded by an $11 million Indian government grant. It added that renewables firm U-Solar from India’s tech hub of Bengaluru had been awarded the building contract. India’s assistance “underscored the significance New Delhi attached to bilateral energy partnership”, the Indian embassy said in a statement. The three facilities will have a combined 2,230 kilowatts of renewable energy capacity and be located on islets near the northern city of Jaffna, not far from India’s southern coast. China and India have been competing for major infrastructure projects in Sri Lanka, which is currently emerging from its worst economic crisis since independence from Britain in 1948. Beijing is also Sri Lanka’s single largest bilateral creditor, accounting for around 10 percent of the island nation’s $46 billion foreign debt at the time of a government default at the peak of the crisis in 2022.
PM unveils oil and gas projects worth Rs 1.62 lakh cr across India
Prime Minister Narendra Modi on Saturday unveiled a series of oil and gas sector projects worth about Rs 1.62 lakh crore across the country from Bihar’s Begusarai district. The projects are spread across various states like Bihar, Haryana, Andhra Pradesh, Maharashtra, Punjab and Karnataka. The PM also flagged off four trains, including the Danapur-Jogbani Express (via Darbhanga-Sakri). Trains from Jogbani to Saharsa and Siliguri and Sonpur-Vaishali Express were also flagged off. Bihar Governor Rajendra Vishwanath Arlekar, Chief Minister Nitish Kumar and Deputy CMs Samrat Chaudhary and Vijay Kumar Sinha were present on the occasion. The PM dedicated to the nation the ‘First Oil’ from KG Basin and flagged off the first crude oil tanker from the ONGC Krishna Godavari deepwater project.
ONGC Board Approves JV with EverEnviro to Set up CBG Plants
State-run Oil and Natural Gas Corporation (ONGC) will form a joint venture with EverEnviro Resource Management Pvt. Ltd., India’s leading compressed biogas / RNG developer to set up compressed biogas plants (CBG) across the country. The board of ONGC at its meeting held recently considered and accorded in principle, an approval for formation of joint venture companies with EverEnviro and another entity to set up 15 CBG plants. The board also accorded, in principle, approval for formation of 50:50 Joint Ventures separately with both the entities either by ONGC or through its subsidiary (ies) associates. EverEnviro’s aims to establish over 100 CBG plants across India based on diverse feedstock, including municipal solid waste (MSW), agro waste, and agro-industrial waste. The organisation is already executing 20+ CBG projects across Madhya Pradesh, Uttar Pradesh, Delhi, and Punjab with a significant capital investment of nearly Rs 20 billion which will result into a robust output of 320 metric tons per day of CBG. Mr. Deepak Agarwal, Executive Director, EverEnviro Resource Management Pvt. Ltd. said, “We are honoured to partner with ONGC, one of the Navratnas of Government of India for bolstering domestic renewable energy production. Our vision is to attain a daily CBG output of 1000 metric tons on a pan India scale within the next five years. This partnership reflects our joint commitment towards achieving India’s energy transition goals by 2023 and promote our country’s environmental stewardship with reduced carbon emissions.”
OPEC+ Agrees to Extend Output Cuts Until Mid-Year
Anonymous sources within OPEC revealed on Sunday that certain OPEC members and allies, spearheaded by Russia, have reached an agreement to prolong voluntary oil output reductions from the first quarter into the second quarter of 2024. These cuts, initially totaling approximately 2.2 million barrels per day (bpd), were endorsed by OPEC+ in November, with Saudi Arabia leading by example by extending its own voluntary reduction. OPEC+ has been implementing successive output reductions since late 2022 to stabilize the market amidst heightened production from non-member producers like the United States, coupled with concerns regarding demand due to elevated interest rates in major economies. Oil analysts, for the most part, had expected the extension. While some pundits argued that some OPEC+ members would seek to increase supply with Brent prices above $80, it appears that OPEC+ remains cautious about bringing back additional supply amid ongoing uncertainty surrounding demand in China. Looking ahead, the next OPEC meeting in June will provide insight into how OPEC perceives demand growth in Asia developing in late 2024 and 2025. Thus far, the group of producers has managed to align its interests, but maintaining this unity may become more challenging if the anticipated surge in demand materializes later this year.
Wood Mac Shaves 1 Million BPD off Global Oil Demand Forecast
Wood Mackenzie has revised its global oil demand forecast downward by 1 million barrels per day to 1.9 million bpd for 2024, with the biggest increases in demand coming from China and India. Citing a Wood Mac briefing during an Energy Institute conference in London, Reuters reported on Thursday that Wood Mac’s VP of oils research, Alan Gelder, was largely in line with OPEC own estimates for this year. In January, Wood Mac said it expected global oil demand growth to continue to set records this year, up nearly 2 million bpd compared to 2023, with China expected to account for 25% of that growth. At that time, Wood Mac said it expected total global oil demand to average 103.5 million bpd for 2024, with much of that growth coming in the second half of the year. OPEC is expecting demand growth of 2.25 million bpd. The International Energy Agency (IEA) is expected growth of only 1.22 million bpd, with a peak by 2030. On Wednesday, Vitol Group, the largest independent trader in the world, told the same London energy conference that oil demand “had a good few number of years still to climb … before it plateaus” because the energy transition is proceeding at a slower pace than initially anticipated. Oil prices were holding steady on Thursday, with supply trumping geopolitical risk in the Middle East as January inflation data for the United States suggested that there was still room for an interest rate cut by the Federal Reserve in June. The U.S. Personal Consumption Expenditures (excluding energy and food) price index rose 0.3% in January, while the core inflation (including energy and food) rose 0.4%. The numbers potentially signal an end to cooling prices, which in turn could prompt the Fed to cut interest rates quicker. On Thursday at 11:48 a.m. ET, Brent crude was inching up a slight 0.06%, trading at $83.73, while West Texas Intermediate (WTI) was up 0.47%, trading at $78.91.
IndianOil cancels tenders for 10 KTA green hydrogen unit
The Indian Oil Corporation (IOCL) has cancelled its tender to set up the first green hydrogen plant in the company’s Panipat Refinery and Petrochemical Complex in Haryana, amid a lacklustre response and allegations that the tender norms favoured a joint venture that included the state-run oil marketing company. The Independent Green Hydrogen Producers Association, which represents private sector players from the industry, moved court against the tender. Following this, last week, IOC issued a corrigendum stating that the tender for the green hydrogen project of capacity 10-kilo tonne per annum stands cancelled. In December, IOCL received only one bid for the tender from GH4India Pvt Ltd, which is a joint venture the company has formed with infrastructure and engineering major Larsen & Toubro (L&T) and renewable energy company ReNew.
Govt hikes windfall tax on petroleum crude
The government hiked its windfall tax on petroleum crude to Rs 4,600 a metric ton from Rs 3,300 with effect from March 1, according to a government order released on Thursday. India also cut the windfall tax on diesel to zero from Rs 1.50 per litre effective March 1, the order showed. The tax on petrol and aviation turbine fuel will continue to be nil. On February 16, the government raised the windfall tax on petroleum crude to Rs 3,300 a metric ton from Rs 3,200 and hiked the tax on diesel to Rs 1.5 rupees a litre from zero. India imposed a windfall tax on crude oil producers from July 2022 and extended the levy on exports of gasoline, diesel and aviation fuel, as private refiners wanted to sell fuel overseas to gain from robust refining margins instead of selling locally. The government revises the tax fortnightly.
Cochin Shipyard Ltd launches India’s 1st hydrogen cell ferry
Leading central public sector undertakings (PSUs) are betting big on hydrogen fuel, realising the clear shift that is likely to happen in the sustainable energy sector in the country in the coming years. The latest to join the bandwagon is Cochin Shipyard Ltd (CSL) after it launched the country’s first hydrogen fuel cell ferry on Wednesday. CSL’s move follows Fertilisers and Chemicals Travancore Ltd’s (FACT) plans to set up a small green hydrogen plant on its premises in Kochi, in collaboration with Oil India Ltd, and Cochin International Airport Ltd (CIAL) signing an agreement with Bharat Petroleum Corporation Ltd (BPCL) earlier this month to explore opportunities in the domain of green hydrogen, including green ammonia/green methanol and other derivatives. Launching CSL’s hydrogen fuel cell ferry virtually from Thoothukudi, Prime Minister Narendra Modi said India’s commitment to a sustainable future aims for achieving net-zero by 2070. This timeline seems to be the factor that’s driving companies to be bullish on hydrogen, said officials. They said major players like IOC, BPCL, HPCL, NDPC, and Reliance are heavily investing in hydrogen fuel technology. “These firms are on a mission to shift from oil to energy companies in the next five to ten years,” Madhu S Nair, chairman and managing director of CSL. A CIAL official said the airport company’s collaborative effort, combining technological prowess and infrastructure, will result in the world’s first green hydrogen plant and fuelling station located within an airport setting. Green hydrogen, produced from water using renewable energy sources, is recognised as a future fuel and aligns with zero-carbon energy strategies.
Centre Hikes Natural Gas Prices to $8.17 Per MmBtu
The price of domestic natural gas has been increased to $8.17 per million metric British thermal units (mmBtu) for March from $7.85 in the previous month, the Ministry of Petroleum and Natural Gas reported. The domestic natural gas price, however, will continue to remain at $6.5 for the month, as per the formula used for the calculation of prices. According to the new gas pricing mechanism, domestic gas prices are now subject to a floor and ceiling of $4 per mmBtu and $6.5 per mmBtu, respectively. The price stood at $6.5 per mmBtu in January and February as well. The domestic gas price notified by the government applies to the natural gas produced from the legacy and oil fields of Oil and Natural Gas Corporation Ltd (ONGC) and Oil India Limited (OIL). Under the new pricing regime, domestic gas pricing is linked with imported crude pricing and would be at 10 percent of the Indian crude basket. The prices are revised every month.