DGH launches single window clearance system
The Directorate General of Hydrocarbons (DGH) has launched a single window clearance system that connects upstream companies to different arms of the government, allows electronic filing of most applications, and sharply cuts time taken in obtaining numerous clearances. Oil and gas producers lose a significant amount of time and energy on obtaining countless permits from central and state governments for a range of things from mining lease to field development plan, budget, essentiality certificate, environment and vessel movements on sea. Slow grant of permits squeezes time available to companies for actual work on the ground, delaying the project on many occasions. The single window clearance system by DGH, the technical arm of the oil ministry, aims to attack these problems. “Under the new exploration licensing regime, a company gets 3-5 years for exploration as against 5-7 years earlier. So, if the government is reducing time given to companies for exploration, it would also need to help companies do more in less time,” said an official. The portal, just a few months old, is still adding new features every month by getting more and more stakeholders to connect to the system. At present, the DGH, Ministries of Defence and Home, and some state governments, which have oilfields, are already connected to the portal. The GST authority, another key stakeholder, has agreed to it in principle and got a software system ready that would link to DGH’s portal, but is yet to operationalise it.
To phase out diesel autos, Gurugram admin plans incentives for those making the green switch
The January 1 deadline to take diesel autos off city roads is less than a month away, but it appears unlikely that the target will be met. To give things a push, the district administration is planning to incentivise the switch from diesel to eco-friendly alternatives for auto drivers. At a closed-door meeting between chief minister Manohar Lal Khattar and officials of the Regional Transport Authority (RTA), the Gurugram Metropolitan Development Authority (GMDA) and other government departments, the CM said phasing out diesel autos needs to be prioritised to address pollution and traffic problems. While the chief minister did speak about the need to address pollution, he had a word of caution for all departments — don’t antagonise auto drivers. The instruction is in line with how things have panned out till now. In 2015, the EPCA had ordered a complete ban on diesel autos in NCR. In November this year, additional deputy commissioner and RTA secretary Imran Raza had announced an action plan to make sure the city’s 11,000 diesel autos go off the roads by January 1. Half-way through the period determined for the implementation, the target appears to be distant. RTA and GMDA officials, however, said they are following through on the plan. RTA and the district administration are considering e-rickshaws at subsidised rates for diesel auto drivers. The GMDA has proposed to link CNG auto services with city bus services to provide last-mile connectivity, with a trial run on one route on the basis of which it may be expanded. “The proposal is still at a nascent stage. We will deliberate on other modalities – like how much subsidy is needed, if and at what rate the government can buy these autos and if auto services can be streamlined. In the next few days, there will be more discussions and a concrete plan will be laid out,” said DCP (traffic) Himanshu Garg, who also holds additional charge as the CEO (mobility) of GMDA. But there are quite a few challenges ahead. “We need to have a broader perspective. We can’t just decide something today and make these autos illegal the next day. So many livelihoods are involved. So many people depend on these autos for their commutes. The idea should be to replace them with environmentally sustainable options,” Garg said, adding, “It will be an injustice to the auto drivers who have recently acquired a permit. Such transitions need more planning. The good thing is that everyone is on the same page.” Besides, these diesel autos ferry passengers on a sharing basis and are much cheaper than buses or CNG autos. RTA officials said that awareness drives are being conducted across the city to tell auto drivers why should switch to CNG autos. The switch would be in line with GMDA’s draft mobility plan, which has drawn attention to the need to have a better public transport network in the city.
Asian LNG prices drop for second straight week on mild winter
Asian spot prices for liquefied natural gas (LNG) dropped for a second consecutive week as supply flooded the market, overshadowing demand subdued by a winter that has been milder than average. The average LNG price for January delivery into northeast Asia is estimated to be about $5.50 per million British thermal units (mmBtu), down 10 cents from the previous week, several industry sources said. “It’s still looking pretty bearish for January,” a Singapore-based LNG trader said. “There are some pockets of demand, but way too much supply.” Russia’s Sakhalin 2 plant probably sold a cargo for loading on Jan. 22 at $5.70 to $5.90 per mmBtu, an industry source said, although this could not immediately be confirmed. Angola LNG offered a cargo for delivery over late January to mid-February in a tender that closes next week. GAIL (India) has also offered up to 10 cargoes on a free-on-board (FOB) basis from the Sabine Pass and Cove Point LNG plants in the U.S. for loading from early next year to early 2021, industry sources said. In the United States, Cheniere Energy asked U.S. energy and safety regulators to approve a process to return to service a storage tank that leaked at its Sabine Pass LNG export plant. The lower spot prices appeared to stoke some demand from China, Japan and India. China’s Guangzhou Gas and Japan’s Tohoku Electric Power each sought a cargo for delivery in late January, industry sources said. In India, Gujarat State Petroleum Corp (GSPC) is seeking a cargo for delivery in January while Reliance Industries sought a cargo for delivery over the second-half of January, industry sources said. Pakistan LNG is seeking a cargo for delivery over Feb. 16 to 17 in a tender that closes on Dec. 17, a tender document showed. Still, temperatures in Tokyo, Beijing and Seoul are expected to be mostly warmer than average over the next two weeks, according to weather data by Refinitiv Eikon. South Korea’s LNG demand is also set to slow over the next two years, despite a number of coal plant closures, the boss of power company SK E&S said this week. Chief Executive Jeong Joon Yu expects at least 10 coal plants to be shut down by spring, but the drop in coal power production will be offset by weaker electricity demand and new nuclear output, he said.
Petronas’ India growth roadmap looks beyond oil, toward renewables, LNG
India’s growing urgency to embrace cleaner fuels has prompted Petronas to chalk out a growth strategy that leans towards environment-friendly energy such as LNG and renewables, as New Delhi aims to encourage companies that can help speed up the country’s energy transition plans. While the Malaysian oil and gas firm is actively looking at partnership opportunities in the gas value chain, it has made its maiden foray into the renewables space with the acquisition of Amplus Energy Solutions, which will provide end-to-end solutions for rooftop and ground-mounted solar power projects, and serves the Indian market. Analysts said these initiatives will help Petronas build on its capabilities in India, where the company traditionally has a wide portfolio across the energy value chain, covering crude oil trading, LPG, petrochemicals and lubricants, in addition to LNG, and more recently, renewables. “Cleaner fuels such as LNG and renewable energy have a huge potential in India as the country continues to grow and combat worsening air pollution. Petronas’ efforts to expand business in these areas are likely to pay off in the long run,” said Kang Wu, head of Asia Analytics at S&P Global Platts. As India’s energy needs continue to grow because of rapid urbanization and a rising middle class population, Petronas is eying a bigger share of the energy market, the company said in a statement recently, and added that by 2030, India would be home to seven megacities, boosting demand for energy, power and consumer goods. “Petronas is on track to build an effective business ecosystem in India to better serve our customers and stakeholders in this important market,” Rizan Ismail, chairman of Petronas Energy (India) Private Ltd., said recently during a visit to India. Petronas in April acquired Amplus, which has a cumulative capacity of 600 MW in operation and under development. Amplus recently launched a new 75 MW open access solar plant in Mirzapur in Uttar Pradesh state. India is also aggressively pushing for renewable energy, but the South Asian giant’s energy structure is unlikely to see a major shift soon. The Indian government has set a target of installing 175 GW of renewable energy capacity by 2022. Some analysts note that the growth in renewable energy use would be faster than that for gas in the coming years in India. In addition to renewables, the company’s lubricant business in India is also witnessing progress with the commencement of commercial operations at its lubricant blending plant in Patalganga in the western state of Maharashtra. With a production capacity of 97,000 mt/year, it would enable Petronas to expand its distribution network to 35,000 outlets, from the current 12,000 outlets, across the country by 2021, the company said. THE LNG PUSH Petronas said its LNG business in India will expand further as it explores potential opportunities in the gas value chain. “This reflects Petronas’ commitment to support the government of India’s aspiration of having natural gas achieve 15% of the country’s total energy mix by 2030, by co-creating the gas market,” it said. Many other global companies are also in the race to grab a share of the Indian gas market. Total announced in October it would acquire a 37.4% stake in Adani Gas, highlighting its gas ambitions at a time when companies like Shell and BP are stepping up efforts to play a bigger role in India, where the share of gas in the energy mix is as low as 6% compared with a global average of 24%. By increasingly investing in downstream demand, Petronas appears to be taking a route similar to the one taken by many large national and international oil and gas companies, Jeff Moore, manager for Asian LNG Analytics at S&P Global Platts, said. “Not only does India provide a strong growth market from an energy perspective, it also provides a potential outlet for Petronas’ future LNG ambitions, as it can look to ensure a market for future volumes by helping to invest in downstream infrastructure,” Moore added. Platts Analytics expects Malaysia’s LNG exports to remain relatively steady over the next ten years, at an average of around 31 Bcm/year. “As contracted capacity continues to expire, the company would be looking for new customers for their volumes, and India represents a strong growth market,” Moore said. Petronas LNG is looking at regions like India and Southeast Asia, which are running large energy deficits and have significant latent gas demand waiting to be tapped, Ezhar Yazid Jaafar, CEO of Petronas LNG, a subsidiary of Petronas, said recently. “India is one of our target markets. It is a market where we see a lot of potential,” he said. Petronas LNG has a team in India looking to develop small-scale LNG solutions as a means to supply its LNG, and to capture market opportunities like LNG trucking, a transportation option widely used in China but not popular in other countries, he added.
Let us see who buys BPCL, that will give a clue where the scandal lies: P Chidambaram
Former Finance Minister P Chidambaram on Thursday trained his guns at Prime Minister Narendra Modi over his silence on economic slowdown and termed the government an “incompetent manager of the economy”. He also described the disinvestment of Bharat Petroleum Corporation Ltd (BPCL) as a “scandal”. Chidambaram also said that the Congress will oppose the Citizenship Amendment Bill and that he supports the protests of the students of the Jawaharlal Nehru University, the IIMC and other institutions over the proposed fee hike. Addressing a press conference at the party headquarters, a day after his release from Tihar Jail on bail, he, however, refused to comment on his case, only saying that the order would clear the “many layers of dust” that have settled on the understanding of criminal law and the manner in which it had been administered by the courts. Targetting the government over the slowdown, he said: “The government is an incompetent manager of the economy.” Hitting out at Modi over his silence on the economic slowdown, the senior Congress leader said: “The Prime Minister has been unusually silent on the economy. He has left it to his ministers to indulge in bluff and bluster.” He also charged the government with making mistakes, saying it believed that the problems faced by the economy were “cyclical” even after seven months into the current financial year. “It is wrong. Let me repeat, the government is wrong and they are wrong because they are clueless,” he said, adding that the government was unable to look for the obvious clues because it is “stubborn and mulish” in “defending its catastrophic mistakes like demonetisation, a flawed GST, tax terrorism, regulatory overkill, protectionism, and centralised control of decision-making in the Prime Minister’s Office”. According to the Congress leader, the previous UPA dispensation had lifted 14 crore people out of poverty between 2004-2014, while the NDA had pushed millions of people below the poverty line since 2016. Stressing that every number pointed in the direction of a floundering economy, he said that the economy can be brought out of the slowdown but this government was incapable of doing it. “We will be lucky to end the year if growth touches 5 per cent. Please remember (former Chief Economic Adviser) Arvind Subramanian’s caution that 5 per cent under this government, because of suspect methodology, is not really 5 per cent but less by about 1.5 per cent,” Chidambaram said. To a question over the government’s plans to disinvest many Public Sector Units (PSUs) like BPCL, he said: “BPCL is a scandal. My colleague Jairam Ramesh pointed it out some months ago. By asking one PSU to buy another PSU is accounting manoeuvring. Government coffers are full and it doesn’t make any difference to me, the organisation or the company or the economy. Let us see who buys BPCL, that will give a clue where the scandal lies.” Attacking Finance Minister Nirmala Sitharaman over her remarks on onions, he said: “This shows the mindset of the government.” He was referring to Sitharaman’s remarks in Parliament on Wednesday where she said that she does not eat onions and garlic. Questioning the delay in procuring onions, he said: “They should have planned in advance. What’s the point of importing now?” The former Finance Minister also said that he supports students of JNU and IIMC in “their protest against the steep hike in their hostel and educational fees”. To a question over the government ending Special Protection Group (SPG) protection to the Gandhi family, Chidambaram said: “That is a cost the government has to bear. The Gandhis were extremely graceful over the decision and said ‘It’s fine, its your decision’.” To a question on industrialist Rahul Bajaj, who had told Union Home Minister Amit Shah if people were scared to criticise the government, he said: “There is fear everywhere. Media also gripped with fear.” On the situation in Jammu and Kashmir, Chidambaram said: “My first thoughts upon my release were with the Kashmiri people who have been denied their basic freedoms since August 4, 2019 – the day before the Constitution’s Article 370 conferring the region special status was removed. “I intend to visit Jammu and Kashmir, if the government allows me to do so,” he said. Chidambaram was released on Wednesday evening after spending 106 days in connection with INX Media case. He was arrested on August 21 by the CBI from his residence after a 24-hour-long drama. He was also arrested by the ED in connection with the money laundering probe.
Gail India offers up to 10 LNG cargoes for loading from US: Sources
Gail (India) has offered up to 10 liquefied natural gas (LNG) cargoes for loading in the United States over early 2020 to early 2021, two industry sources said on Thursday. The cargoes are being offered on a free-on-board basis from the Sabine Pass and Cove Point LNG plants, one of the sources said.
H-Energy now expects Jaigarh LNG import terminal in India to launch in first quarter 2020
Indian natural gas company H-Energy Pvt Ltd expects its liquefied natural gas (LNG) import terminal at Jaigarh to start operations in the first quarter of 2020, Rahul Tiwari, H-Energy’s senior LNG trader,told a conference on Thursday. The terminal, which is a floating storage and regasification unit (FSRU), and will be India’s first, has been delayed on several occasions, with the previous deadline the fourth quarter this year. Tiwari told Reuters on the sidelines of the CWC LNG conference in Rome that the launch is now expected in the middle of next quarter. He added that the terminal is expected to be predominantly used for term supply, with occasional spot cargoes, adding that the launch of the terminal will not create additional spot demand in India immediately. The global LNG market has been oversupplied in the past year, with current spot prices at record lows for winter, but the low price has pushed some Indian buyers on the market to procure cheap LNG. Tiwari said that stable purchases from Indian buyers will continue on subdued prices, but additional demand is unlikely as Indian regasification terminals are already running at full capacity. H-Energy’s trading office in Dubai signed a sale and purchase agreement with Malaysia’s Petronas in 2018 for the delivery of LNG to the Jaigarh terminal. The terminal is planned to be capable of handing 4 million tonnes per year. “We are planning to start easy,” Tiwari said about the amount of LNG supplies to the terminal.
Oil minister sees jet fuel, gas under GST soon to improve business climate
Oil minister Dharmendra Pradhan on Thursday hoped that finance minister Nirmala Sitharaman will in her Budget set the tone for bringng jet fuel and natural gas under the GST regime to reduce multiplicity of taxes and improve the business climate. “Our expectation is that in the coming Budget, ATF and natural gas is included in GST,” Pradhan said at a conference on natural gas organsied by industry chamber Ficci here. On a day Delhi’s air quality pust focus back on pollution in cities, Pradhan said bringing clean-burning natural gas under GST will be one of the biggest drivers of not just consumption but will also incentivize producers to spend more on finding and producing more gas as well as incentivise importers to bring in more LNG. In the same vein, Pradhan at another function later in the day rode in a hydrogen fuel-driven car developed by Toyota-Kirloskar. Here too he asked industry to focus on finding alternative fuels and mobility solutions. Pradhan said the government is working to raise the share of gas in the country’s energy basket to 15% by 2030 from 6% at present with a view to reducing dependence on coal and liquid fuels. Pradhan’s words on GST will be music for the aviation and gas industries. Jet fuel makes up nearly half the cost of airline operation. Lower and uniform tax rate across the country will thus reduce the operating cost for airlines. Gas companies will benefit as they will be able to claim GST paid on inputs for gas production or distribution etc. Pradhan has been making a case for the GST Council – the highest decision-making body of the indirect tax regime – to take a decision in favour of these two fuels at the earliest. The Council is headed by Union Finance Minister and comprises representatives of all states and union territories. Under the existing structure, both natural gas and ATF attract the Centre’s excise duty and a state’s value-added tax (VAT). Both these and all other levies will get subsumed under GST if they are brought under its ambit. The decision on their inclusion depends on the financial position of states as revenues from these five petroleum products constitute a substantial chunk of state government finances. Barring a few, most of the states are incurring revenue shortfall as GST subsumed a dozen of their taxes, introducing the single levy, in a bid to simplify taxation system and remove the cascading effect of ‘tax on tax’ in the country. According to the industry, keeping ATF and natural gas out of the GST net was increasing the cost of these products as a tax on inputs is not being credited against the sale of these products, which ultimately, adds to the cost of production. The aviation ministry has time and again sought inclusion of ATF under GST as any surge in international oil rates gets reflected in domestic jet fuel prices, leading to costlier air tickets. Natural gas is widely used as industrial input by a variety of industries – from power to steel – and it coming under GST would help eliminate the cascading impact of taxes, bringing down prices of CNG and piped natural gas.
Dharmendra Pradhan asks oil ministry, PSUs to explore hydrogen fuel feasibility
Oil minister Dharmendra Pradhan on Thursday instructed the ministry officials and heads of the three oil and gas public sector undertakings (PSUs) to explore the feasibility of using hydrogen as a fuel in the Indian ecosystem by collaborating with experts and holding workshops as a starting point. The minister was inspecting an electric vehicle (EV) powered by hydrogen-fuel cell technology at an event organised by Toyota India in New Delhi. “India’s massive biomass potential, expanding natural gas coverage, and push for electricity generation from renewables offers a good opportunity to explore hydrogen as well as other green and sustainable sources of energy for a more decarbonised future,” Pradhan said in a social media post. In a bid to decrease India’s increasing dependence on imported crude oil, the oil ministry has been trying to push for higher adoption of natural gas and alternative fuels to revive its economy. India’s oil import dependence reached a record-high of 84.5 per cent in the April-October period of financial year 2019-20 (FY20). Prime Minister Narendra Modi has set a target of reducing crude oil import dependence by 10 per cent by 2022. The oil ministry through a slew of policy initiatives has tried to push new business models around generation of natural gas and alternative fuels, at a time when increasing the country’s domestic crude oil production from current levels seems like a distant possibility. Pradhan at an industry event on Thursday added that while domestic natural gas production is expected to significantly increase from current levels, domestic crude oil production will plateau. The ministry has, in the past four years, come out with a number of policies including blending of ethanol in petrol by promoting second generation and first generation ethanol industry — National Policy on Biofuels; conversion of used cooking oil to biodiesel for blending — Repurpose Used Cooking Oil; and agriculture waste to compressed biogas used as CNG in automobiles — Sustainable Alternative Towards Affordable Transportation scheme. The minister on Thursday, after test driving the hydrogen-fuelled EV, instructed officials at the oil ministry and oil and gas PSUs to take a stock of research being done around the country on hydrogen-fuel cell technology and economical production of hydrogen. Indian Oil Corporation (IOC), the country’s largest fuel retailer, through its research and development (R&D) centre has been researching on hydrogen-fuel cell technology and on bringing down the cost of producing hydrogen. S S V Ramakumar, director – R&D, IOC, had earlier told ET EnergyWorld that the company had a testing facility for hydrogen fuel stacks and has been running trials on a retrofitted bus running on hydrogen-fuel cell technology. The company also has a first-of-its-kind hydrogen dispensing station at its Faridabad R&D facility.
India to get $60 bn funding for gas infra; demand to triple for achieving 15% share in energy pie: Pradhan
Oil Minister Dharmendra Pradhan today said that India’s natural gas sector will witness $60-billion investment in the coming days and added that the country will require 600 million standard cubic meter per day (mmscmd) of gas in order to push its share to 15 per cent in the energy basket. “If in the coming years we have to achieve a target of 15 per cent gas share in the energy basket then we will require 600 mmscmd of gas. We are currently producing around 80-90 mmscmd of gas, a similar quantity is imported by us. So, from 180-190 mmscmd currently we need to push it to 600 mmscmd,” Pradhan said in an event organised by FICCI. The minister said that the government will come out with a commercial model for converting domestic coal, high ash content coal and petcoke to syngas which would lead to industry players receiving syngas at the burner tip for around $6-$7, adding, that the first plant will be commissioned in Odisha soon. Pradhan highlighted that with India now moving towards achieving 450 GW of renewable energy capacity there is no doubt among industry players and government that natural gas will be the right fit to balance the power grid. The ministry expects compressed biogas plants being set up under the Sustainable Alternative Towards Affordable Transportation scheme to produce around 10-15 Million Tonne of oil equivalent gas in the coming years and added that the government has issued 500 Letter of Intent to set-up such plants across the country. Pradhan said that India’s gas market is moving towards market-based pricing and India Energy Exchange plans to start a natural gas trading hub soon, with Petroleum Natural Gas and Regulatory Board assisting the exchange with a regulatory framework. Pradhan said that the ministry expects natural gas and aviation turbine fuel to be included in the goods and services tax soon and added that while domestic natural gas production is projected to increase in the coming years, crude oil production will be flat.