British Gas owner Centrica expects tough H1 trading conditions
Britain’s largest energy supplier Centrica faces a challenging trading environment in the first half of the year due to a national cap on energy prices, warmer-than-normal weather and weak UK natural gas prices, it said on Monday. The company, whose British Gas unit is Britain’s largest energy supplier, said these factors would impact financial performance in the first half of 2019, but maintained its full-year outlook for operating cash flow and net debt. The company said it expects to achieve 2019 adjusted operating cash flow in the 1.8-2 billion pound range but said the tough trading conditions would put pressure on the outlook for the year. British energy regulator Ofgem was told by parliament last year to cap energy prices after lawmakers said customers were being overcharged for electricity and gas. Prime Minister Theresa May had called the tariffs a “rip-off”. Centrica said earlier this year the cap on standard energy prices would lead to a 300 million pound ($390 million) hit to profits in 2019, including a one-off impact of about 70 million in the first quarter of 2019. The company on Monday said its performance could be impacted by low output from Britain’s eight nuclear plants, in which it owns a 20% stake. France’s EDF owns the remaining 80% in the plants. The Hunterston plant has been offline since last year after cracks were found in the cores of its two reactors, while the two reactors at the Dungeness site are also currently offline and not expected to return to service until later in the year. Centrica hopes to sell its stake in the nuclear fleet by the end of 2020 and said it would likely provide an update at its interim results. “We intend to provide a strategic update regarding our portfolio and prospects at the time of our interim results in July,” Chief Executive Iain Conn said in a statement. Shares in the company rose around 3% on Monday morning as analysts described the trading update as mildly positive. “Despite a number of negative external factors (warm weather, outages at EDF-operated nuclear plants, falling gas prices), Centrica has confirmed all 2019 targets,” analysts at Jefferies said in a research note.
British Gas owner Centrica expects tough H1 trading conditions
Britain’s largest energy supplier Centrica faces a challenging trading environment in the first half of the year due to a national cap on energy prices, warmer-than-normal weather and weak UK natural gas prices, it said on Monday. The company, whose British Gas unit is Britain’s largest energy supplier, said these factors would impact financial performance in the first half of 2019, but maintained its full-year outlook for operating cash flow and net debt. The company said it expects to achieve 2019 adjusted operating cash flow in the 1.8-2 billion pound range but said the tough trading conditions would put pressure on the outlook for the year. British energy regulator Ofgem was told by parliament last year to cap energy prices after lawmakers said customers were being overcharged for electricity and gas. Prime Minister Theresa May had called the tariffs a “rip-off”. Centrica said earlier this year the cap on standard energy prices would lead to a 300 million pound ($390 million) hit to profits in 2019, including a one-off impact of about 70 million in the first quarter of 2019. The company on Monday said its performance could be impacted by low output from Britain’s eight nuclear plants, in which it owns a 20% stake. France’s EDF owns the remaining 80% in the plants. The Hunterston plant has been offline since last year after cracks were found in the cores of its two reactors, while the two reactors at the Dungeness site are also currently offline and not expected to return to service until later in the year. Centrica hopes to sell its stake in the nuclear fleet by the end of 2020 and said it would likely provide an update at its interim results. “We intend to provide a strategic update regarding our portfolio and prospects at the time of our interim results in July,” Chief Executive Iain Conn said in a statement. Shares in the company rose around 3% on Monday morning as analysts described the trading update as mildly positive. “Despite a number of negative external factors (warm weather, outages at EDF-operated nuclear plants, falling gas prices), Centrica has confirmed all 2019 targets,” analysts at Jefferies said in a research note.
Opposition parties slam Centre for fresh nod for hydrocarbon projects in Tamil Nadu
Opposition parties DMK, AMMK and PMK on Sunday slammed the Centre for granting environmental nod to Vedanta, ONGC and others to carry out preliminary work for exploring hydrocarbons in Villupuram district in Tamil Nadu as well as in neighbouring Puducherry region. In a related development, several farmers’ associations and Tamil outfits have announced plans to stage massive protests against the Centre’s nod to ONGC and others to conduct environmental impact studies to establish 40 hydrocarbon wells in the delta districts. Saying they opposed all hydrocarbon and neutrino projects from being implemented in the state, Tamil Nadu Vivasayigal Sangam will hold a demonstration at headquarters of five delta districts on June 1 demanding that state government and the Centre shelve the projects. In a statement, DMK president M K Stalin recalled the opposition to hydrocarbon exploration projects in the delta districts and several protests that were held against such projects in districts like Nagapattinam, Villupuram, Cuddalore and Tiruvarur. “While both the BJP government at the Centre and the AIADMK government in the state ignored these protests, it is highly condemnable that fresh environmental nod has been given to new projects in Villupuram and Puducherry regions and that too when the Model Code of Conduct is in place,” Stalin said. He urged the state government to take up the issue with the Centre and stop any further progress on these new projects. AMMK general secretary T T V Dhinakaran said the Centre, which was keeping quiet for elections to get over, has once again unleashed new hydrocarbon exploration projects in Villupuram and Puducherry regions. “AMMK will continue to oppose any project that will affect the environment and covert the fertile Cauvery delta region into a desert. The AIADMK government, which has bequeathed all rights of Tamil Nadu with the Centre, should immediately oppose the fresh attempt to initiate hydrocarbon exploration in the delta region and prevail upon the Centre against implementing such projects henceforth in the state,” Dhinakaran said in a statement, while coming down heavily on Vedanta, accusing it of spoiling the environment in Tuticorin through its Sterlite Copper smelter. PMK founder S Ramadoss said the fresh nod given to hydrocarbon exploration projects in Tamil Nadu went against the assurances given to the state by the Centre. “Both the state and the Centre should ensure that hydrocarbon explorations will not be taken up in any part of the state and steps should be taken to notify Cauvery delta districts as protected agricultural zone,” Ramadoss said.
Future of fuel may lie in methane-consuming bacteria
Researchers have finally unveiled the mechanism behind the conversion of methane into readily usable methanol in methanotrophic bacteria. The research could contribute to the future of fuel. The study published in the journal Science has found that the enzyme, present in the methanotrophic bacteria, responsible for the conversion of methane into methanol catalyses the reaction at a site that contains only one copper ion. The finding could lead to newly designed, human-made catalysts that can convert methane — a highly potent greenhouse gas — to readily usable methanol with the same effortless mechanism. “The identity and structure of the metal ions responsible for catalysis have remained elusive for decades. Our study provides a major leap forward in understanding how bacteria methane-to-methanol conversion takes place,” said Northwestern’s Amy C. Rosenzweig, co-senior author of the study. “By identifying the type of copper centre involved, we have laid the foundation for determining how nature carries out one of its most challenging reactions,” said Brian M. Hoffman, co-senior author. By oxidizing methane and converting it to methanol, methanotrophic bacteria (or ‘methanotrophs’) can pack a punch or two. Not only are they removing harmful greenhouse gas from the environment, but they are also generating a readily usable, sustainable fuel for automobiles, electricity and more. Current industrial processes to catalyze a methane-to-methanol reaction require tremendous pressure and extreme temperatures, reaching higher than 1,300 degrees Celsius. Methanotrophs, however, perform the reaction at room temperature and ‘for free’. “While copper sites are known to catalyze methane-to-methanol conversion in human-made materials, methane-to-methanol catalysis at a monocopper site under ambient conditions is unprecedented,” said Matthew O. Ross, the paper’s first author. “If we can develop a complete understanding of how they perform this conversion at such mild conditions, we can optimize our own catalysts,” said Ross.
Will not allow hydrocarbon project in Puducherry: CM V Narayanasamy
The Puducherry government will not permit excavation of oil and gas in the Union territory of Puducherry, said chief minister V Narayanasamy. Talking to reporters on Saturday, he said he learned through unofficial sources that the Union government proposed to launch projects to explore oil and gas from the Union territory of Puducherry and Tamil Nadu’s adjoining district of Villupuram. He pointed out that the Puducherry government had vehemently opposed similar projects in Karaikal, the territory’s enclave 140km south of its headquarters, two years ago. He said he wrote to the Union government then opposing the project. “We have made it clear on the floor of legislative assembly of the Union territory that the Puducherry government will not accord permission for projects exploring oil and natural gas earlier. We heard now that the Centre has now proposed similar projects in Villupuram in Tamil Nadu and Puducherry Union territory. We have not received any communication from the Centre so far. We will register our protest against the project as and when the Centre approaches us in this regard,” said Narayanasamy. A private firm has sought the approval of the Union environment, forest and climate change ministry seeking approval for environment impact studies for the proposed offshore and onshore oil and gas exploration projects in Bay of Bengal, Puducherry and Villupuram regions. The firm said that it has proposed to carry out oil and gas exploration in the block and urged the ministry to exempt public hearing to elicit the views of the people for conducting the environmental impact studies. Several farmers forums and political parties including the CPM have registered their strong protest against the hydrocarbon project arguing that the project will spell doom for agricultural activities and will render several lakhs of farmers jobless.
GAIL awards contracts worth Rs 10,500 crore for key pipeline projects
State-owned gas utility GAIL (India) today announced awarding of major contracts worth Rs 10,500 crore for the ongoing Jagdishpur-Haldia and Bokaro-Dharma natural gas pipeline projects (JHBDPL) and Barauni–Guwahati pipeline project (BGPL). The pipelines are part of the Pradhan Mantri Urja Ganga (PMUG) project. GAIL Chairman B C Tripathi said the company has exceeded its capex target of Rs 6,400 crore for financial year 2018-19. “Major contracts for integrated JHBDPL including BGPL have been awarded which will contribute to the economic development of the country and provide employment opportunities in the pipeline project and City Gas Distribution networks in the country,” he said. GAIL has already placed an order worth Rs 475 crore for steel pipes of around 280 Kilo meter to provide pipeline connectivity from Durgapur to Haldia including spur line to Kolkata in West Bengal. So far, the company has committed over Rs 12,500 crore for the project. According to the utility, the pipeline has already reached Barauni and GAIL is ready for supplying gas to refinery and upcoming fertilizer plants in the region. The work for balance portion is scheduled to be completed by December 2021 in a phased manner. The company said it is currently executing around 5,500 km of pipeline related projects for Rs 25,000 crore to provide gas supply largely to Eastern and Southern parts of the country. Another 1,400 km pipeline involving capital expenditure of Rs 7,000 crore is under evaluation which is targeted to be completed by 2023. These pipeline projects by GAIL will be part of the National Gas Grid, connecting the mainland with the eastern part of the country.
Oil gains despite mounting US-China trade tensions
il prices rose on Friday despite the start of U.S. President Donald Trump’s tariff hike on $200 billion of Chinese goods, stoking the trade dispute between the world’s two biggest economies. China on Friday said it “deeply regrets” the U.S. move, adding that it would take necessary countermeasures, without elaborating. Prices were supported by tighter supply amid ongoing production cuts by the Organization of the Petroleum Exporting Countries (OPEC) and U.S. sanctions on Iran and Venezuela. The Brent crude oil benchmark was at $70.73 a barrel at 0643 GMT, up 34 cents, or 0.5%, from its last close, after rising as far as $71.23 a barrel. U.S. West Texas Intermediate (WTI) crude futures were up 39 cents at $62.09 per barrel, having earlier hit $62.49 a barrel. Brent is down slightly on the week, on course for its second weekly loss, while U.S. crude is set for a weekly gain of 0.2% in what would be its first gain in three weeks. Growing trade between the world’s two largest oil consumers could impact oil demand. The two countries combined to make up 34% of global oil consumption in the first quarter of 2019, according to data from the International Energy Agency. “(Still) crude prices are likely to be supported on geopolitical risks,” said Edward Moya, senior market analyst at futures brokerage OANDA. “We could see the Iran situation be the biggest bullish catalyst for oil prices,” he said. “With the ending of the U.S. sanction waivers becoming effective this month, Iranian shipments are falling sharply.” The United States reimposed sanctions on Iran in November after pulling out of a 2015 nuclear accord between Tehran and six world powers last year, although it allowed Tehran’s biggest buyers to continue buying some crude oil via waivers for another six months. But those exemptions ended at the beginning of May, as Washington aims to cut Iran’s oil exports to zero. Meanwhile, efforts by OPEC to crimp supply to reduce global inventories have also supported prices. Markets have been buoyed further by expectations oil demand will rise in 2019. The U.S. Energy Information Administration expects global appetite for oil to rise by 1.4 million barrels per day this year.
CNG and LPG vehicles can be at the forefront of transforming mobility in India, says Nomura
The report finds that the existing volume of oil import is posing a monetary as well as a strategic burden on the Indian economy leading to an imminent need to reduce import dependence. It says that while EV adoption can be a potential solution to this issue, the pace of adoption and financial viability still raises many questions. “NGV’s (Natural Gas Vehicles) can play a big role in transforming mobility in India, as an automobile fuel, natural gas is a proven technology in terms of providing better air quality, sustainability and eco-friendliness. A favourable policy is required for promotion of natural gas vehicles (NGVs) through development of CNG infrastructure to increase customer acceptance and provide cost competitiveness,” said Ashim Sharma – Partner and Group Head, NRI Consulting & Solutions India. It says that the primary energy consumption in India is largely dependent on coal and imported crude oil, the report further highlights the transport sector as one of the major contributors to the crude oil burden as it makes up for around 53 percent of demand of petroleum products. On the other hand, globally the natural gas resources is available in abundance (796 TCM) and is geographically dispersed, where India holds around 4 TCM of gas reserves. While, global production of NG (natural gas) has risen steadily over the years, in India the production has declined since 2011 due to reduced production from KG basin. It says although around 50 percent of natural gas is imported, the per unit energy import cost is 44 percent cheaper than crude oil and is expected to remain the same. CNG and LPG as an alternative fuel The CNG vehicle in the country has risen over the years. The CNG infrastructure acts as the main driver for CNG vehicle demand, which has led to OEMs increasingly offering CNG variants in passenger, commercial and goods vehicle segments. In addition, CNG retro fitment technology can be leveraged to convert existing vehicles running on conventional fuels. This will help as many as 7 states benefited after the 10th round of CGD (City Gas Distribution) making up for 55 percent of the total vehicle sales in the country as of FY2018. After the 9th and 10th round, CGD infrastructure will cover 52 percent area and 72 percent population and will make natural gas accessible across the country. Nomura’s finding predicts that the cost competitiveness, infrastructure development and domestic manufacturing will make LNG a promising alternative for long-haul trucks and intercity buses. Due to the higher energy density of LNG, these vehicles will have a longer driving range than that of CNG and will require cryogenic tanks to store the fuel at -162 degree C. The mono-fuel LNG trucks from leading OEMs are available in the European and US markets and OEMs are also developing dual fuel LNG trucks. The increase in the use of LNG worldwide as an economically viable and environmentally friendly fuel for trucks is encouraging LNG vehicle development in India too. The report says that different configurations of the LNG stations are available which can be deployed according to requirements. Nomura says that the upcoming LNG terminals will bring natural gas supply to underserved states, while LNG infra on the major highways is needed for LNG adoption. The increase in LNG production and export capacity, along with flexible contracts will lead to increased competition among LNG suppliers, which will make natural gas prices attractive for the end-consumers in the short term. The report by NRI Consulting concludes with an outlook that CNG infrastructure development is expected to complete in a timely manner thereby giving a boost to CNG vehicle sales and a similar boost to LNG infra will lead to added benefits. The demand push resulting from countrywide infrastructure will incentivize OEMs to launch dedicated NGV platforms leading to better economies of scale and efficient products. The localisation of NGV components such as LNG cryogenic cylinders and certain CNG power train components will reduce the acquisition cost for the customer boosting their TCO savings. Also, implementation of BS-VI emission norms will increase price differential between CNG and diesel vehicles, making CNG vehicles more attractive.-+
Rajesh Kumar Srivastava appointed ONGC Director (Exploration)
Rajesh Kumar Srivastava, presently the Group General Manager, Chief E and Directorate, Oil and Natural Gas Corporation (ONGC), has been appointed as the Director (Exploration), ONGC by Public Enterprise Selection Board (PSEB). Srivastava had joined ONGC in 1984 as Geologist at KG-PG Basin, Rajahmundry. Owing to an experience of more than 34 years in upstream hydrocarbon explorations from on-land and offshore sites to developing geology and seismic data interpretation, monitoring and planning of explorations, and development activities in several basins including deep water exploration on east coast of India. Owing to his specialisation in reservoir characterisation and geo-statistical modelling, he has made important contributions in field development by promoting geological models for number of oils and gas fields of India especially the fields located in Assam Arakan Bassin, Neelam, Mumbai High North, El-Nar Field of Sudan. He is the recipient of several awards including Geologist of the year award from the Chairman of ONGC in the year 2002.
Exxon, Qatar to start construction on Texas Golden Pass LNG export plant
Exxon Mobil and Qatar Petroleum told the U.S. Federal Energy Regulatory Commission (FERC) on Thursday they would start construction of the $10 billion-plus Golden Pass liquefied natural gas (LNG) export terminal in Texas on May 13: * Exxon and Qatar Petroleum made a final investment decision to build the project in February and expect the project to enter service in 2024. * Golden Pass is designed to produce around 16 million tonnes per annum (MTPA) of LNG, equivalent to about 2.1 billion cubic feet per day (bcfd) of natural gas. * One billion cubic feet is enough gas for about 5 million U.S. homes for a day. * Qatar Petroleum owns 70 percent of the project, while Exxon owns 30 percent. * Enable Midstream Partners LP has said it expects to complete the Gulf Run pipeline to transport gas to Golden Pass in late 2022. * Golden Pass selected McDermott International Inc, Chiyoda Corp and Zachry Group to build the project. * After exporting no LNG at the start of 2016, the United States is expected to become the third biggest LNG exporter in the world in 2019 behind Australia and Qatar. * The U.S. Energy Information Administration (EIA) projected U.S. LNG exports will rise to an average of 5.3 bcfd in 2019 and 7.4 bcfd in 2020 from 3.0 bcfd in 2018. LNG exports in 2018 were worth about $3.5 billion. * Looking at just the terminals under construction, total U.S. LNG export capacity is expected to increase to 7.4 bcfd by the end of 2019 and 10 bcfd by the end of 2020, up from 5.2 bcfd now.