Japanese company may bring to India bio-diesel run mining machines
Japanese mining and construction equipment maker, Komatsu is considering introduction of bio-diesel run machines in India. Komatsu operates here through its arm Komatsu India Private Limited with L&T as the dealer for its products. On Wednesday, an oil checking lab was inaugurated at the company’s facility in the city. Located over 20km from the city off Nagpur-Amravati Road, the lab would test the oil used in the equipment as an indicator of its condition. Arvind Garg, executive vice-president of L&T’s construction and mining machinery division, said that they may try marketing Komatsu’s small and mid-sized machines running on bio-diesel in the Indian market too. Garg further said that Komatsu is already running bio-diesel machinery in Indonesia. “A blend of as much as 20% of bio-diesel is already running successfully in Indonesia, and there have been favourable results on trying 30% blending also. The model may be adopted in India too depending on the availability of the fuel stations for bio-diesel in the country,” said Garg. The company is keen on bringing machinery that work on alternate fuel. Recently, a meeting was held with Union transport minister Nitin Gadkari who stressed the use of alternate fuels like ethanol, LNG and CNG. “Ethanol blends well with petrol, however, for diesel run vehicles, bio-diesel has to be used. CNG can be tried for construction and mining sector vehicles. The company has already supplied electric-run mining vehicles to the South Eastern Coalfields Limited (SECL). This was in the large machinery segment. The presence of electric-run vehicles can increase depending on the coming up of charging stations throughout the country,” said Garg. Yasunori Fuji, managing director of Komatsu India Private Limited, said that the demand had taken a major hit after the second wave of Covid. However, it is hoped that the demand would grow in the coming financial year. The company also sees a major demand due to the ongoing road construction work taken up by the ministry of transport. “Apart from the PSU mining companies which include the subsidiaries of Coal India Limited, opening up of commercial mining through coal blocks auction is also expected to spur the demand for equipment like earthmover and dumpers,” said Garg.
BHP, Woodside investors jittery over $29 billion petroleum merger
Shares in BHP Group and Woodside Petroleum fell on Wednesday as investors on both sides raised questions about the value of the Perth-based oil and gas group’s proposed $29 billion merger with BHP’s petroleum arm. While a 6per cent fall in BHP’s share price was linked to a decision to end its UK dual listing, where its shares have traditionally traded at a large discount, a fall of up to 4per cent in Woodside reflected concerns about the expansion, they said. “Woodside is one of the worst-performing companies within the energy sector globally post-COVID; the company doesn’t yet have a strong mandate to enter a deal of such questionable value and this could further drag on Woodside’s shares,” said Jamie Hannah, deputy head of investments at Van Eck Australia, a shareholder in both companies. BHP agreed to hive off its petroleum business to Woodside in a nil-premium merger, in return for new Woodside shares which will go to BHP shareholders, who will own 48per cent of the enlarged group. The deal will make Woodside a top 10 global independent oil and gas producer, giving it oil assets in the Gulf of Mexico, gas in Trinidad and Tobago and ageing assets in Australia’s Bass Strait, while doubling its stake in North West Shelf LNG. However, it raised concerns about the strategic sense of expanding in oil and taking on ageing gas assets with big decommissioning costs. Investors said the fall in Woodside shares was also partly due to worries about an overhang of stock as BHP investors who want to get out of fossil fuels would look to dump the shares. The stock was down 1.2per cent in afternoon trade, underperforming a 1per cent rise in local rivals Santos and Oil Search . Woodside’s new chief executive, Meg O’Neill, said while investors were very familiar with BHP’s Australian oil and gas assets, they did not appreciate the value of its Gulf of Mexico oil stakes – Mad Dog, Atlantis and Shenzi. “Those are just first-class top-tier assets that will be very cash accretive to the merged company,” O’Neill told Reuters.
Govt ‘sensitive’ towards prices of petroleum products, says Puri
The government is “sensitive” towards the prices of petroleum products and is taking all possible steps to address the issue, Union Petroleum and Natural Gas Minister Hardeep Singh Puri said on Wednesday and blamed the Congress for the trend of hike in petrol and diesel prices. If state governments want they can lower the prices of petrol and diesel, as a state did so recently, he said in a press conference at the Delhi BJP office. “We are sensitive towards it and are taking possible steps like doing blending of 10 per cent which we are going to raise to 20 per cent. So, we are taking many steps,” Puri said when asked about the rising prices of petroleum products including cooking gas. The Congress government in 2010 deregulated prices of petrol and diesel, meaning there would be a local impact of international rates, he said. “The Centre imposes excise tax on petrol and diesel, while states impose VAT on it. We use this excise money to fund schemes like PM Garib Kalyan Yojna under which 80 crore people received free foodgrains, PM Awas Yojna, Ujjwala scheme,” he said. Puri said that the Congress government, before 2014, issued oil bonds of INR 1.34 lakh crore to control prices of petrol and “passed on their problem to us. They emptied the chest. We have to pay INR 20,000 crore this year for the oil bonds that have a maturity period of 15 years.” The minister also hit at the Congress saying the figures on oil bonds presented by it were “flawed” and challenged the party to ask states ruled by it to reduce VAT on petrol and diesel.
Oil extends losses on pandemic fears and rise in U.S. gasoline stockpiles
Crude prices extended their losses into a sixth day on Thursday, hovering near 3-month lows, hurt by growing fears over slower fuel demand amid a spike in COVID-19 cases worldwide while an unexpected rise in U.S. gasoline inventories added to pressure. Brent crude was down 85 cents or 1.3% at $67.38 a barrel by 0019 GMT, having fallen 1.2% on Wednesday. U.S. West Intermediate crude (WTI) lost 93 cents or 1.4% to $64.53 a barrel after tumbling 1.7% in the previous session. Both benchmarks have lost more than 5% over the past six sessions, trading near their lowest level since May 24 in the previous session. The slide continued as investors remained worried over the increase in infections caused by the Delta variant of the coronavirus worldwide. “Crude prices continue to look vulnerable around those mid to late summer support levels – $65 in WTI and $67 in Brent,” Craig Erlam, senior market analyst at OANDA Europe, said in a note. Slower growth in China as it imposes further restrictions in response to rising COVID-19 cases and some weakness in a few U.S. data points this past week has driven the softness in oil prices, he cited. “A move below $65 in WTI, for example, could see prices drop back into Q2 trading ranges between $57 and $65. This would be quite a drop from the levels we’ve seen the last couple of months and surely reflect growing concerns about the spread of delta and the implications for fourth quarter growth,” he added. The surprise build in U.S. gasoline inventories also fuelled concerns over slowing demand. U.S. crude inventories fell 3.2 million barrels last week to 435.5 million barrels, their lowest since January 2020, the Energy Information Administration said on Wednesday. But gasoline stocks rose by 696,000 barrels to 228.2 million barrels, against analysts’ expectations for a 1.7 million-barrel drop.
Australia faces “precarious” gas supply in 2022, watchdog warns
Australia’s southern states could face a gas shortfall in 2022 unless liquefied natural gas (LNG) exporters offer more gas into the domestic market, the Australian Competition and Consumer Commission (ACCC) said on Tuesday. The report paints a more dire picture than the Australian Energy Market Operator (AEMO) gave in March, when it said plans by billionaire Andrew Forrest to have an LNG import terminal ready by 2022 would stave off any gas shortfall until 2026. The ACCC said on Tuesday proposed LNG import terminals would not be ready until 2023 at the earliest.
Have to repay oil bonds, can’t cut excise duty on fuel: FM
Finance minister Nirmala Sitharaman on Monday ruled out a cut in excise duty on petrol and diesel to ease prices, which have touched an all-time high, saying payments in lieu of past subsidised fuel pose limitations. Petrol and diesel as well as cooking gas and kerosene were sold at subsidised rates during the previous Congress-led UPA government. Instead of paying for the subsidy to bring parity between the artificially suppressed retail selling price and the cost that had soared because of international rates crossing $100 per barrel, the then government issued oil bonds totalling Rs 1.34 lakh crore to the state-fuel retailers. “If I did not have the burden to service the oil bonds, I would have been in a position to reduce excise duty on fuel,” she told reporters Sitharaman, who had raised excise duty on petrol and diesel to record high to shore up revenue collections last year, said the interest on oil bonds paid in the last seven years totalled Rs 70,195.72 crore. Of the Rs 1.34 lakh crore of oil bonds, only Rs 3,500 crore of principal has been paid and the remaining Rs 1.3 lakh crore is due for repayment between this fiscal and 2025-26, she said.
No proposal to cut petrol prices in state: Karnataka CM
Karnataka Chief Minister Basavaraj Bommai on Tuesday said there was no proposal before the government to cut petrol prices in the state on the lines of neighboring Tamil Nadu. “There is no such proposal,” Bommai said in response to a question by reporters, about any proposal to cut petrol prices like in Tamil Nadu. Tamil Nadu Finance Minister Palanivel Thiaga Rajan, presenting his maiden budget to the Assembly on Friday had said that the government has decided to cut tax on petrol by Rs three per litre. Following this Congress leader and Leader of Opposition in Karnataka assembly Siddaramaiah had urged Chief Minister Bommai to cut the price of both petrol and diesel in the state. Responding to a question on reports that COVID negative certificates are being issued in exchange for money at testing camps, the CM said, “It has come to my notice, I will give directions to officials whether it is in railway stations or bus stands who ever is doing it- to take action against them and stop such things.” He said, those who have been given such negative certificates, will be made to undergo tests once again. Noting that he is reviewing the work of Higher Education, PWD and Housing departments today, Bommai said accelerating the development of the state is his main objective. “Infrastructure development will give a push to economic activities, also social and economic life of poor has to get improved, keeping this in mind I have begun my work,” he said pointing out at various programmes announced by him on the Independence Day. The Chief Secretary has been given directions to ensure speedy implementation of programmes, he said, adding that officials have been asked to function in a way that government’s initiatives reach the people in a shortest time.
India’s Petronet aims to extend long-term LNG buy deal with Qatar
India’s top gas importer Petronet LNG hopes to extend its long-term deal to purchase liquefied natural gas (LNG) from Qatar to beyond 2028, the company’s head of finance V.K. Mishra said on Monday. Petronet has a deal to buy 7.5 million tonnes per year (mtpa) of LNG from Qatar under a long-term deal expiring in 2028. “It is a good contract and perhaps we will be able to negotiate with them,” Mishra told an analyst conference after the June quarter earnings of the company. He said negotiations for the extension of the contract under new terms and conditions will begin in 2023. India’s gas demand is set to rise as Prime Minister Narendra Modi targets raising the share of the cleaner fuel in the country’s energy mix to 15% by 2030 from the current 6.2%. Indian companies are investing billions of dollars to build infrastructure including pipelines and gas import terminals. Petronet, which operates two LNG import terminals in the country, plans to build a third such facility on the east coast. Mishra said his firm is conducting gas demand assessment ahead of placing construction orders for the project next year.
Spread of COVID-19 Delta variant knocks oil demand outlook – IEA
Rising demand for oil abruptly reversed course in July and is set to proceed more slowly for the rest of the year due to the spread of the COVID-19 Delta variant, the International Energy Agency said on Thursday. “Growth for the second half of 2021 has been downgraded more sharply, as new COVID-19 restrictions imposed in several major oil consuming countries, particularly in Asia, look set to reduce mobility and oil use,” the Paris-based IEA said. “We now estimate that demand fell in July as the rapid spread of the COVID-19 Delta variant undermined deliveries in China, Indonesia and other parts of Asia,” it said in its monthly oil report. The IEA put the demand slump last month at 120,000 barrels per day (bpd) and predicted growth would be half a million bpd lower in the second half of the year compared to its estimate last month, noting some changes were due to revisions in data. An output deal reached by the OPEC+ alliance – consisting of the Organization of the Petroleum Exporting Countries and others such as Russia – last month would restore market balance in the near term, the IEA added. “But the scale could tilt back to surplus in 2022 if OPEC+ continues to undo its cuts and producers not taking part in the deal ramp up in response to higher prices,” it said. OPEC+, which had introduced output curbs to support prices and ease oversupply, agreed in July to boost output by 400,000 bpd a month starting in August until the rest of a 5.8 million bpd cut is phased out. The United States on Wednesday called on OPEC+ to boost oil output to tackle rising gasoline prices and aid the global economic recovery. OPEC+ is scheduled to hold a meeting on Sept. 1 to review the situation. Citing a United Nations report this week saying climate change was spiralling out of control, the IEA said the world needed to urgently move to a carbon neutral world. “The world oil industry is struggling to find new business models to navigate the energy transition … while still meeting sustained oil demand.”
Exxon, Chevron look to make renewable fuels without costly refinery upgrades: Sources
U.S. oil major Exxon Mobil Corp, along with Chevron Corp, is seeking to bulk up in the burgeoning renewable fuels space by finding ways to make such products at existing facilities, sources familiar with the efforts said. The two largest U.S. oil companies want to produce sustainable fuels without ponying up billions of dollars that some refineries are spending to reconfigure operations to make such products. Renewable fuels account for 5% of U.S. fuel consumption, but are poised to grow as various sectors adapt to cut overall carbon emissions to combat global climate change. Both Chevron and Exxon have massive refining divisions that contribute heavily to their overall carbon emissions. The companies have been criticized for a less urgent approach to renewable investments than European rivals Royal Dutch Shell Plc and TotalEnergies, and have generally spent a lower percentage of their capital than those companies on “green” technologies. The companies are looking into how to process bio-based feedstocks like vegetable oils and partially-processed biofuels with petroleum distillates to make renewable diesel, sustainable aviation fuel (SAF) and renewable gasoline, without meaningfully increasing capital spending. Commercial production of renewable fuels is costlier than making conventional motor gasoline unless coupled with tax credits. A task force was created at Exxon’s request within international standards and testing organization ASTM International to determine the capability of refiners to co-process up to 50% of certain types of bio-feedstocks to produce SAF, according to the sources. Exxon did not respond to a request for comment. Chevron is looking into how to run those feedstocks through their fluid catalytic crackers (FCC), gasoline-producing units that are generally the largest component of refining facilities. “Our goal is to co-process biofeedstocks in the FCC by the end of 2021,” a Chevron spokesperson told Reuters, to supply renewable products to consumers in Southern California. The company is partnering with the U.S. Environmental Protection Agency (EPA) and California Air Resources Board (CARB) to develop a path to produce fuel that would qualify for emissions credits. A source familiar with the matter said if approved by the EPA and CARB, Chevron would be able to produce and generate credits for renewable gasoline. That product is not yet commercially available, but can reduce carbon dioxide emissions by 61% to 83%, depending which feedstock is used, according to the California Energy Commission. Chevron said on its earnings call earlier this month that in the second phase of its process, it would be the first U.S. refiner to use the cat cracker to produce renewable fuels. “We did it this way, in part, because it’s very capital-efficient … It’s literally just a tank and some pipes,” Chevron Chief Finance Officer Pierre Breber said on the call. Congress is considering legislation for tax credits that would further spur refiners to process sustainable aviation fuel commercially. Some refiners, like San Antonio-based Valero Energy Corp and Finland-based Neste, have ramped up production of renewable fuels from waste oils and vegetable oils to cash in on lucrative federal and state financial incentives. Several U.S. refiners are in the midst of partially or totally converting plants to produce certain renewable fuels, particularly diesel. If approved, new methods of producing renewable fuels at refineries could allow refiners to avoid lengthy environmental permitting processes. Many of these processes are still undergoing further testing to see which can make renewable fuels commercially, but without damaging refining units.