India’s green hydrogen sector will need $4-12 billion support: A&M report
India’s green hydrogen sector will need substantial support, estimated at $4 to $12 billion, combined until 2030, to achieve scale, according to consulting firm Alvarez & Marsal. In a report released this week, the firm estimated green hydrogen’s trade opportunity for the world at $24–36 billion by 2030. The firm said the estimated support is driven by the need to level the playing field against global suppliers who enjoy government subsidies and to enable domestic end-use sectors to transition affordably. “By offering this bridge support, the end-use sectors that operate in competitive markets will be able to adopt sustainable alternatives sooner,” the report said. A&M listed India, along with the United Arab Emirates and Saudi Arabia, as one of the top three countries well placed in global green hydrogen competitiveness and therefore could partake in a significant share of global trade. The firm expects these three countries to produce green hydrogen at less than $2/kg by 2030. With an early-mover advantage, A&M said, India can stake a claim to a larger share of the global energy trade, substitute some of our imports, especially liquefied natural gas (LNG), and spur domestic gross domestic product (GDP) growth. “By 2030, this could lead to $3–5 billion of exports and $7–15 billion of import substitution, opening the doors to a much larger opportunity in the decades ahead,” the report noted. In addition to the generation of green hydrogen and its derivatives, A&M also expects India, along with Mainland China, to have manufacturing cost leadership for electrolyzers, a primary equipment to produce green hydrogen.
World’s Top Oil Trader Sees Oil Demand Peak After 2030
A slower pace of the energy transition will push peak oil demand beyond 2030, according to the world’s biggest independent oil trader, Vitol Group. “Oil demand has a good few number of years still to climb … before it plateaus,” Vitol’s chief executive Russell Hardy said at the International Energy Week in London, as carried by Reuters. Overall global demand for oil, natural gas, and coal is also set to peak later than expected as the energy transition is progressing slower than initially thought, according to the executive. Vitol’s view on peak oil demand is several years later than the International Energy Agency (IEA), which advocates for a faster energy transition and has insisted for half a year now that global oil demand will peak before 2030. According to the Paris-based agency, demand for all fossil fuels – oil, natural gas, and coal is set to peak before 2030, undermining the case for increasing investment in fossil fuels. Vitol, however, says that the energy markets have changed in recent months and peak oil wouldn’t occur this decade. “We agreed with that view 12-24 months ago, but we are of the view now that the pace of change is more challenging so it is likely to drift into the early 2030s,” Vitol’s Hardy said at this week’s conference, as carried by City A.M. The pace of change has been challenged by higher interest rates, supply-chain woes, and low returns for renewable project developers, and a public backlash against some governments imposing more expensive choices to consumers for their energy supply. The energy transition is happening, but it will not happen as fast as environmental zealots would have liked. Therefore, oil and gas consumption will continue to grow, even if the pace of growth may have peaked. Most analysts and banks expect peak oil demand in the early 2030s, as Vitol does now. The IEA’s “beginning of the end for fossil fuels” this decade is not shared by many. OPEC, which has a vested interest in continued oil demand growth for decades, sees robust demand even in the long term. The cartel last year raised significantly its long-term estimate in its latest annual World Oil Outlook, with global oil demand seen at around 116 million barrels per day (bpd) in 2045, up by 6 million bpd compared to the previous assessment from 2022. OPEC expects global oil demand to increase by more than 16 million bpd between 2022 and 2045, rising from 99.6 million bpd in 2022 to 116 million bpd in 2045. Even as China’s demand growth slows, India will emerge as the top driver of global oil consumption growth, according to OPEC and many other forecasters, analysts, and investment banks. India’s strong economic growth in the medium term would raise oil demand, as will continued urbanization and industrialization, analysts say. OPEC said in its latest annual outlook that India would be the driver of oil demand growth through 2045, expecting to add 6.6 million bpd to oil demand by then. With India driving oil demand growth and policymakers recalibrating their approach to energy transition pathways, peak oil demand is unlikely to happen this decade, OPEC Secretary General Haitham Al Ghais wrote in an article published on OPEC’s website last month. “Today, what is clear is that peak oil demand is not showing up in any reliable and robust short- and medium-term forecasts,” Al Ghais said. Peak oil demand will not happen by 2030, OPEC’s Al Ghais wrote, due to policymakers re-evaluating their approach to energy transition pathways and pushback from consumers. Faster industrialization in developing countries and the emergence of a larger middle class there, an expansion in transport services, and greater energy demand and access are also factors preventing peak oil demand this decade, according to OPEC’s secretary general. “After all, crude oil and its derivatives are a constant presence in our daily lives, bringing vital everyday products, and helping to deliver on energy security and energy access in a widely available and affordable way,” Al Ghais wrote. “Time and again, oil has defied expectations regarding peaks. Logic and history suggest that it will continue to do so.”
Mahanagar Gas acquires 30.97% share in three-wheeler EV company 3ev Industries
Mahanagar Gas said on Tuesday that it has entered into a shareholders’ agreement with 3EV Industries Private Limited to acquire 30.97 percent shareholding in the company that manufactures and operates three-wheeler electric vehicles (EVs). “… we wish to inform that subsequent to execution of Share Subscription Agreement (“SSA”), Mahanagar Gas Limited (“Company”) has entered into Shareholders’ Agreement (“SHA”) with 3EV Industries Private Limited (“3ev”), Founders, Promoters and other Shareholders of 3ev, to acquire 30.97% shareholding in 3ev,” Mahanagar Gas told the stock exchanges in a regulatory filing “The Agreement has been entered for acquiring 30.97 percent shareholding and voting rights in 3ev through equity instruments, subject to the fulfilment of terms and conditions under the definitive agreements entered/ to be entered into by the Company in connection with the above-mentioned transaction,” said Mahanagar Gas. The shareholding will give MGL the right to appoint one Director on the board of 3ev and one board observer. MGL will have the right to subscribe 30.97 percent of share capital of 3ev and will subscribe shares on pro-rata basis for every further issue of shares.
India Could Become a Key Player in the $500-Billion Green Hydrogen Market
India could become a key market player in the global green hydrogen industry, which is set to create $500 billion in economic opportunities, consulting firm Alvarez & Marsal said in a new report this week. India could be at the forefront of green hydrogen development, thanks to its competitiveness in producing clean energy — abundant renewable energy resources, manufacturing competitiveness, and low cost of capital, according to the consultancy. Countries rich in renewable energy resources like solar and wind are well-placed to take advantage of the green hydrogen opportunity, says Alvarez & Marsal. These countries include India, Egypt, Chile, Argentina, Saudi Arabia, the United Arab Emirates (UAE), the Chinese mainland, Australia, and the United States. “The UAE, India, and Saudi Arabia seem well placed in global green hydrogen competitiveness and therefore could partake a significant share of global trade,” Alvarez & Marsal analysts wrote in the report. On the other hand, the EU, Japan, and South Korea could be the early adopters of hydrogen on the demand side with imports around 2030, according to the consultancy. While heavy industry and governments pin their hopes on hydrogen for faster decarbonization, and power-generating companies and oil and gas majors look to diversify into low-carbon hydrogen production, costs are still high for green hydrogen production and hold back massive deployment of projects, analysts say. Forecasters, including the International Energy Agency (IEA)—a staunch supporter of all things green – acknowledge that costs need to be slashed significantly if clean hydrogen is to play a major role in the energy transition. Green hydrogen—currently costing 3 euros to 8 euros per kg in some regions—is more expensive than ‘grey’ hydrogen, produced from natural gas, PwC said in an analysis last year. “Low-emission hydrogen production can grow massively by 2030 but cost challenges are hampering deployment,” the IEA said in its Global Hydrogen Review 2023 report in September 2023.
India looks elsewhere for oil as US sanctions crimp Russia trade
Tightening enforcement of US sanctions is denting India’s oil trade with Russia, forcing processors to consider other supplies, according to refinery executives familiar with the matter. Russia is still the dominant supplier to India, but there are signs refiners are buying more from elsewhere. Overall imports from Saudi Arabia are 22% higher this month than January, with the biggest private refiner — Reliance Industries Ltd. — taking its highest volume since May 2020, according to Kpler. India’s refiners are keen to take more Russian oil, but there would need to be US approval for buying to ramp up again, the executives said, asking not to be identified because the information is private. Russian oil is now only $2-$4 a barrel cheaper than other supplies and double-digit discounts are unlikely to return due to competition for barrels from China, the executives said. The discount blew out to more than $30 after the war. India’s imports of Russian oil surged after the war as refiners took advantage of cheaper barrels that other buyers shunned. At its peak last year, crude from the OPEC+ producer accounted for almost half of the nation’s purchases, but fresh US sanctions has recently stranded some cargoes. Moscow is also seeking payment in yuan due to increased scrutiny by some banks over using dirhams to settle the trade in the past few months, said a refinery executive and a government official.
Displace Indian coal power with Canadian natural gas: report
Canada is a founding member of the Powering Past Coal Alliance – a consortium of national and subnational governments committed to addressing climate change by phasing out coal power. Conspicuously absent from the alliance is India, which has signaled plans to double coal production to 1.5 billion tonnes tonnes by 2030 in order to add 88 gigawatts (GW) of new thermal power from coal by 2032, according to the National Bank of Canada. The amount of greenhouse gases that would produce would wipe out any emissions reductions Canada is able to achieve through its climate change policies many times over, National Bank of Canada says in a new report, which urges investors and policymakers to promote the use of Canadian natural gas, through LNG exports, to replace coal in thermal power generation in places like India. According to the Intergovernmental Panel on Climate Change (IPCC), GHG emissions can be reduced by 50 per cent when combined cycle natural gas power plants replace thermal power from coal. So while increased production of natural gas and LNG in Canada would contribute to an increase in Canada’s own GHGs, it could dramatically decrease GHGs outside of Canada, if it displaces coal power. “Emissions are global, they are not bound by geographical boundaries, as such, we propose to reorient the conversation with a global tilt,” the report says. “Continued efforts in constraining certain sectors of the economy could be futile in ‘deleveraging’ the global environmental balance sheet as a direct result of other countries increasing their absolute share by orders of magnitude more. “ The report is aimed at investors and policymakers, said report author Baltej Sidhu, ESG research analyst for National Bank of Canada.
Qatar to Build New LNG Project as US Stalls on Export Push
Qatar plans to expand exports of liquefied natural gas amid rising demand and a pause on growth projects in the US, a key rival supplier. The nation, which vies with the US and Australia as the biggest shipper of the fuel, will develop a new 16 million tons a year project before the end of this decade, lifting annual production capacity to 142 million tons by 2030, the country’s Energy Minister Saad Al-Kaabi said Sunday.
Tankers: The Next Growth Cycle Can Be Fueled By India
The tanker market could be headed for a significant leg of growth in the coming years, as a result of India’s gradual emergence, as a major player in the global economy, which in turn is fueling its oil and refining needs. In its latest weekly report, shipbroker Gibson said that “whilst there is significant debate as to the strength of long-term oil demand growth, there is little debate as to where much of that growth will come from; India. The world’s most populous country sits far behind China in terms of its oil demand per capita, underscoring how much potential remains. Indeed, the country is set to be the largest single source of demand growth between now and 2030. Prime Minister Narendra Modi recently announced a plan to raise domestic refining capacity to 9mbd by 2030; however, for this goal to be achieved, significant new investment will be required”. According to Gibson, “currently, the country is home to 5.8mbd of refining capacity and is planning to add another 1.1mbd by 2028. No new refineries have come online since Indian Oil Corp’s (IOC) 300kbd Paradip refinery in 2016. The greenfield Hindustan Petroleum Corporation’s (HPCL) 180kbd Rajasthan refinery is due to start operations in January 2025, whilst Chennai Petroleum Corp (CPCL) is also building a 180kbd refinery at Nagapattinam in the South East of the country, with completion expected sometime around 2028. The remainder of the 1.1mbd expected to come online by 2028 will be delivered through debottlenecking and expansions at existing facilities”.
Oil regulator for opening ATF pipelines at airports
Oil regulator PNGRB has proposed supplying jet fuel or ATF in all existing and future airports through pipelines that can be accessed by any supplier to bring in competition and cut fuel costs. Currently, ATF is transported by road and rail network and only a limited number of airports are linked with pipelines. Even where pipelines are there, they are not on an open access basis which means only the company that has laid it can supply jet fuel to airlines. The Petroleum and Natural Gas Regulatory Board (PNGRB) has invited comments from the public and various stakeholders including oil marketing companies (OMCs), airport operators, and airline operators for the development of aviation turbine fuel (ATF) pipelines connecting various greenfield and brownfield existing and upcoming airports in India. “Pipelines are the cheapest mode of transport of liquid fuels with road transport being quite costly. And looking at the high share of ATF price in airline costs, provision of the pipeline could bring down the cost of air travel,” the regulator said in a notice inviting comments. While the fuel market is open in the airport premises, in the absence of a common carrier pipeline the objective of this open market cannot be achieved. “There are a few other ATF pipelines which are being operated by the OMCs, which also need to be declared as common/contract carriers,” the regulator said. “This move will enable other OMCs to utilize these pipelines for transporting their products, fostering competitiveness within the industry”. Further, to ensure security of supply there may be desirability of more than one pipeline supply to major airports. Additionally, existing pipelines need to be declared as common carriers especially due to the historical domination of government-owned ATF marketing companies so as to allow private marketers get access, it said. This will cater to the rising fuel demand of the aviation sector. Domestic air passenger traffic rose by compounded annual growth rate of 8.9 per cent between 2012-13 and 2022-23. International passenger traffic grew by a slower 3.1 per cent over the same period. During fiscal year 2022-23 (April 2022 to March 2023), India saw a 47.1 per cent surge in ATF consumption, correlating with heightened air traffic. The previous year was marred by the pandemic that shut businesses. Transporting ATF by any other means than pipeline, results in logistical inefficiencies, increased expenses, and disruptions in the supply chain, PNGRB said. “The absence of an ATF pipeline exacerbates these issues, hindering the sector’s competitiveness and sustainability,” PNGRB said it is seeking comments from stakeholders to gather insights for the effective development of ATF pipelines across the aviation infrastructure in the country. It asked stakeholders to identify key airports requiring ATF pipeline connectivity, assess potential demand over the next 30 years, identify ATF supply sources, evaluate potential routes for pipeline construction and assess the need for single or multiple common/contract carrier ATF pipelines to ensure redundancy and operational reliability. “The views and suggestions received will help PNGRB in initiating suo moto bidding processes or assisting entities in identifying potential projects,” the notice said.
Woodside Energy Expects a 50% Increase in LNG Demand by 2034
Woodside Energy expects demand for liquefied natural gas to increase by 50% over the next ten years driven by Asia, Bloomberg has reported, citing chief executive Meg O’Neill. “We’re seeing signs of that demand growth in emerging Asia,” O’Neill told the publication. “There’ll be points in time where we’ll see a fair amount of new supply arriving, but the demand growth is really likely to absorb that over the course of the coming years,” she added. In her comments, O’Neill echoes the forecast of fellow LNG major Shell, which earlier this month said it expected demand for the superchilled fuel to gain 50% by 2040, again citing strong demand from the emerging nations of Asia. Despite the fact that demand for natural gas has peaked in some regions, Shell expects global demand to peak after 2040. This view on demand peak is more than 10 years further out in time compared to the most recent estimates by the International Energy Agency. The IEA sees demand for all hydrocarbons peaking before 2040. Woodside, like Shell, is quite upbeat in its gas demand projections, saying gas will be needed to back up intermittent wind and solar over the long term. Germany recently provided proof for that: the Scholz government is building four new gas-powered plants for that reason, with the total price tag at $17 billion. The plants will be hydrogen-ready in case hydrogen becomes a viable alternative for gas in power generation. With a view to this strong demand, Woodside continues to expand its gas operations and recently made an attempt to add an acquisition to its growth efforts. The company was in talks with local heavyweight Santos but the two failed to reach a deal that would be satisfactory to both. Had they ended successfully, the deal would have created an LNG giant in the Asia Pacific.