Natural gas consumption up 1.5% on higher import prices
India’s natural gas consumption rose barely 1.5 per cent in 2018-19 as higher imported gas prices limited demand from the power sector and other industries, underlining the difficulty in making the cleaner fossil fuel popular in the country. Total gas available for sale in 2018-19 rose to 53.05 billion cubic metres (BCM) from 52.25 BCM a year earlier, according to the oil ministry data. In 2018-19, availability of domestic gas for sale rose 0.4 per cent while import of liquefied natural gas (LNG) went up 2.6 percent. The share of LNG in total gas consumption in the year was 51 percent. At this rate of demand growth, it would be hard for India to achieve its goal of raising the share of natural gas in its energy mix to 15 percent by 2030 from the current 6 percent. In a bid to penetrate much of the country with gas distribution infrastructure, the downstream regulator awarded city gas licenses for 136 geographical areas in a year, which should raise piped gas coverage to 70 percent of the country’s population from 20 per cent now. But some industry executives said policy push should be aimed at power sector which is a potentially heavy consumer. Natural gas consumption up 1.5% on higher import prices “The stagnancy in demand is mainly due to price sensitivity of customers,” said K Ravichandran, an analyst at rating agency ICRA. Power plants avoid using expensive LNG as electricity distributors prefer cheaper electricity produced from coal. This is why plant load factors at gas-based generators have been low, he added. Other gas-consuming industries switching to liquid fuel when LNG rates rose sharply last year also kept gas demand volatile and stagnant, Ravichandran said. Most factories have multi-fuel boilers and can easily switch to liquid fuel if that becomes economical. Unlike fuel oil, propane or coal that’s used as fuel by many industries, natural gas is not in the ambit of the goods and services tax. This means industries do not get input tax credit for gas consumed. Natural gas prices are mostly linked to crude oil rates and rose sharply following a spike in the oil rates last year. But spot rates of LNG have been down sharply since the beginning of this year with rates coming down to $6 per million metric British thermal unit (mmBtu). The fertilizer sector, another key consumer of gas, didn’t see operational capacity expansion last year. A new facility will start functioning this year and that will likely boost gas consumption.
Indian Oil plans to shut units at northeast refineries to upgrade fuel: Sources
Indian Oil Corp, the country’s top refiner, plans to shut units in phases at its northeast plants from August to produce cleaner fuels, two sources privy to the move said. Domestic refiners have lined up upgrade plans ahead of full-scale roll-out of Euro VI-compliant fuels in the country from April 2020. IOC’s refineries in the state of Assam are very old and small in size. These refineries get incentives from the government to protect their gross refining margins and cater to fuel demand in the land-locked region. IOC will shut a delayed coker, hydrotreater and gasoline units for about 15 days for catalyst replacement at its 13,000-barrels-per-day (bpd) Digboi refinery, the sources said. At the 48,000-bpd Bongaigaon refinery, it will shut one of the two crude units, a delayed coker, diesel hydrotreater and hydrogen generation unit for three months from September, they said. The second crude unit at the Bongaigaon refinery will be idle as most units at the plant will be shut. The refiner will also shut gasoline units at the plant for 20 days in September to install a new naphtha hydrotreater. It will fully shut its 20,000-bpd Guwahati refinery in the first quarter of 2020 to modify the plant for producing Euro VI-compliant fuels, they added. Apart from revamping the units, IOC aims to raise the capacity of Guwahati refinery to 24,000 bpd. IOC will source fuels from other refineries to meet demand in the northeast due to the shutdown of units, they added. IOC was not immediately available for comment.
Why Ujjwala scheme is losing battle against traditional fuels in rural India
On the face of it, Pradhan Mantri Ujjwala Yojana has accomplished a lot. More than 7 crore households have received subsidised cooking gas connections under the scheme. More than 82% of have bought refills in the last year. In Haryana, the best performing state, 97.5% of households have returned for a refill in a year. The government claims that, on average, the rate of refill is high — 6.5 cylinders a year against 8 by households with non-subsidised LPG connections. But a ground-level assessment of the scheme shows several teething problems, from delays in delivery of cylinders and subsidies to continued preference for food cooked on firewood or cow dung cake. The scheme was launched three years ago on May 1, 2016, in Uttar Pradesh’s Ballia district. Under Ujjwala, the government provides the gas cylinder, regulator, and the pipe for free. An executive at an LPG dealership in the district, who did not want to be named, said the beneficiaries of the scheme do not regularly refill their LPG cylinders because of the high price. “We have to force them to get a refill by warning them they will lose their connections if they don’t,” he said. A survey in February by Research Institute for Compassionate Economics, an Indian non-profit research, found that over 90% of Ujjwala beneficiaries still use old means of cooking. One reason for this is the stiff upfront payment for buying a refill. “Refilling a cylinder costs almost half the average monthly per capita expenditure in rural India, according to a National Sample Survey Office 2013 report, and if used exclusively, the average rural household would likely go through a cylinder each month. It’s possible that poor households do not refill their cylinders often because of the expense,” the report said. Also, solid fuels don’t cost much and are readily available. Households with cattle make dung cakes, while those that own land use agricultural waste or tree branches for firewood. Public land and forests are also a source of free wood. States with lowest rate of refills are generally those with easier access to forests. Guddi Devi of Ballia district, a beneficiary, said she uses the LPG cylinder sparingly. “For daily cooking, we use the chulha, but when guests are there, we use the LPG cylinder to make tea and snacks,” she said. Devi uses two or three cylinders a year. Official data shows that some parts of India are well below the national average of 82% refill rate. “LPG is considered unsuitable for making traditional items such as litti and rice or madua ki roti in Bihar or bajra or makke ki roti in the northern states. Chulhas are considered to add taste and flavour to such food,” an HPCL executive who served as a district nodal officer in a northern state said. LPG marketing companies have held more than one lakh ‘LPG Panchayats’ across the country to dispel these notions. “It’s difficult for these households to pay even the subsidised price, let alone buy cylinders at market price,” says Anil Srivastava, nodal officer in Ballia for state-owned gas majors IOC, HPC and BPC. LPG cylinders in Ballia cost Rs 782, and subsidized cylinders Rs 485. Households also complain of the time taken for the subsidy transfer. Many families, especially those below the poverty line, don’t have spare cash to wait for the subsidy to be transferred to their accounts beyond a few days. The subsidy amount, pegged at Rs 210.64 per cylinder with 14.2kg of LPG, is supposed to be transferred within five days after a refill is delivered. But in practice, it takes longer as rural dealers take time to send confirmations to the respective oil companies before starting the long payment process. An oil ministry official said the introduction of 5kg cylinders addresses the problem of affordability. Ujjwala households can now swap their normal cylinder for the smaller ones so the upfront payment becomes affordable. The 5kg cylinder costs Rs 184.34 after a subsidy of Rs 74.76. Ujjwala was launched with a target of giving free LPG connection to 5 crore BPL households by March 2019. The target was later raised to 8 crore by 2021 and now envisages giving all households a connection. The scheme has helped expand LPG coverage to 94% of households in the country in 2018 from 61% in 2016, and turned India into the world’s secondlargest domestic LPG consumer after China. The numbers are impressive but the next challenge is getting Ujjwala beneficiaries to make a complete shift from cooking on chulhas to LPG.
Bangladesh’s new LNG import terminal begins to feed gas to domestic grid
Bangladesh’s second liquefied natural gas (LNG) terminal has started to feed gas to the national grid after completing commissioning late on Monday, the terminal’s operator said. Summit LNG Terminal completed the commissioning of its floating storage and regasification unit (FSRU) known as ‘Summit LNG’ late on Monday, about one month ahead of schedule, Singapore-based Summit Power International said in a statement. The FSRU is 75 percent owned by Summit Corp, a unit of Summit Power International, and the remaining by Japan’s Mitsubishi Corp. About 503 million cubic feet per day (mmcfd) of gas is flowing from the FSRU – which is able to regasify 500 mmcfd of LNG – into the national grid, two sources familiar with the matter told Reuters. Summit Power International, which owns power generation assets in Bangladesh and is owned by Bangladeshi conglomerate Summit Group, has chartered the vessel from U.S. based Excelerate Energy for 15 years. “The process of feeding the gas from Summit FSRU to the national grid has started,” Nasrul Hamid, Bangladesh’s state minister for energy and power, told Reuters. “This is a huge achievement for our country’s energy security… We are taking more initiatives, including onshore and offshore gas exploration, to help feed the expanding economy.” About 3.75 million tonnes a year of LNG are expected to be imported through the facility, doubling the country’s LNG import capacity to 7.5 million tonnes per year once fully operational.
Indian Oil becomes first oil PSU to cross 1,000-patent milestone
State-owned refiner Indian Oil Corporation (IOC) said its research and development (R&D) centre has crossed the 1,000-patent mark, becoming the first Indian oil public sector undertaking (PSU) to do so. The company’s Faridabad-based R&D Centre’s intellectual property portfolio comprises 794 active patents, of which 542 patents were granted abroad and 252 in India, IOC said in a statement. Sanjiv Singh, Chairman, IOC said that several quality upgradation projects implemented at IOC refineries for the production of BS-VI fuels were based on deep desulphurization, isomerization and dimerization technology patents developed in-house. IOC’s INDMAX technology patent, successfully commercialised at Paradip Refinery, has improved liquefied petroleum gas yields by 40 percent besides ensuring the highest propylene yields in its class, the company said. It further added that the Centre’s bio-methanation technology was best-in-class in methane yields and is being implemented at the Namakkal plant in Tamil Nadu for production of compressed biogas. “With 50 per cent of its active patents in the refining category, followed by 16 percent in biotechnology, the R&D team has made considerable progress even in the highly IP-crowded field of Ziegler-Natta catalysts, used in production of polymers (plastics),” said Dr S S V Ramakumar, director (R&D), IndianOil. The R&D Centre has expanded its research domain to cover petrochemicals, nano-technology, alternative fuels, energy storage solutions, and hydrogen-based fuel cell research, among others.
In Silicon Valley, the quest to make gasoline out of thin air
Rob McGinnis recently moved to Santa Cruz, Calif., and now drives around town in a VW Golf with a rack for a surfboard on top. Like many automobiles, the car is both a form of transportation and a way for its owner to communicate some vital part of his identity. “I used to drive a Tesla Roadster,” he said. “But now I’m making gasoline cool again.” Suffice to say that gasoline—a prominent contributor to climate change—is not considered very cool right now in places like Santa Cruz, a reliably liberal town which is in the process of being swallowed by the Pacific Ocean. McGinnis’s plan to resuscitate the fuel’s social standing hinges on a machine he’s building that creates usable gas from thin air—rather than the oil deposits deep underground. He’s one of a growing number of entrepreneurs pursuing direct carbon capture technology, which extracts carbon from the air and water and transforms it into usable substances like gasoline, construction materials and industrial chemicals. Like standard fossil fuels, McGinnis’s fuel would release carbon into the air when burned—but not any more than his machine removed to make it. In theory, it’s a circular process could keep his Golf powered up indefinitely, with no impact on greenhouse gas levels. Experts increasingly believe that any serious response to climate change must include proactively removing carbon from the atmosphere. Last fall, the United Nations’ Intergovernmental Panel on Climate Change for the first time described carbon removal as “essential.” And while there are a few carbon-removal strategies, direct air carbon capture is the process that has most captured the public imagination. The basic science of this approach have been understood for decades, but it’s an open question as to when—or if—it will be possible to capture airborne carbon at a scale that could make a difference. Almost immediately after the UN report, Y Combinator, a renowned early-stage investment firm, made a show of calling for new companies working on carbon removal. The firm, famous for its role in nurturing software companies like Airbnb Inc., Dropbox Inc., and Stripe Inc., said it was interested in projects that were “risky, unproven, even unlikely to work,” and suggested exotic ideas, such as building huge reservoirs in the desert stocked with genetically modified phytoplankton. “It’s time to take big swings at this,” YC wrote in its call to action. McGinnis’s company, which he named Prometheus, was offering exactly the kind of classic moonshot YC seemed to be seeking: a far-fetched idea that made sense on paper and could change everything on the off-chance it developed beyond that. When YC sorted through the dozens of pitches it received, his was one of just two in which it decided to invest. McGinnis brought his machinery – a six-foot tall box with several doors held closed by padlocks – to YC’s semiannual Demo Day in March. The event, a two-day marathon of startup pitches, is attended by some of the most high-profile investors in the world. McGinnis told the crowd he’d be making fuel that he could sell at a profit by as early as next year. (Hear more about McGinnis’s YC pitch and the carbon capture effort in this week’s episode of the Decrypted podcast.) This was exactly the sort of thing people wanted to hear, according to Gustaf Alströmer, a YC partner who’s working on its carbon project. “If you say, ‘I’m making gasoline,’ even if there’s a one in 500 or one in 1,000 chance it actually works, you will resonate very well with investors,” he said. Within weeks, McGinnis had raised enough money to hire several people and begin planning to move beyond a single prototype machine. McGinnis took an unusual path to being an alternative fuel evangelist. He attended Yale as an undergraduate theater major, where he wrote plays he described as “techno-optimistic, strange, mini epics.” In his spare time, he built his own desalination machine. The side project eventually inspired him to leave the theater and get a PhD in chemistry. Eventually, his desalination hobby turned into a desalination company. He was successful enough that McGinnis bought that Tesla, along with a vanity license plate carrying the company name: Oasys. McGinnis then launched a second startup that made materials useful for separating chemicals into their chemical components. The membranes, known as carbon nanotubes, allowed him to conduct several steps of the separation process while the carbon was still in liquid form—making the process significantly cheaper. That idea gives Prometheus its competitive edge. McGinnis’s breakthrough struck Matt Eisaman, an assistant professor in the engineering department at Stony Brook University, whose research had been the basis of an effort by Google X to create fuel from seawater. The two-year-long project, which ended in 2016 and was dubbed Foghorn, was successful in making fuel. But Google nixed it anyway because it saw no clear path to make its product at competitive prices. Foghorn had been working with carbon and hydrogen at high temperatures in gaseous form, and Eisaman saw McGinnis’s work as a potential step forward. “I’ve seen a lot of attempts of, ‘How do you make a carbon-neutral fuel cost effective?’” he said. “I can get a good sense early on if there’s a chance.” Eisaman signed onto Prometheus as an advisor, but he remains cautious about its chances. When asked whether he thinks anyone can figure out a carbon-to-fuel process that will be economic at large scale, Eisaman pauses for a long time. “I don’t know,” he said finally. McGinnis, of course, is considerably more bullish. He predicts he’ll be selling a small amount of gasoline by next year in the $3 per gallon range. McGinnis acknowledges that reaching a scale vast enough to make a difference in the climate remains dauntingly expensive. He estimates that it would cost $800 billion to replace the U.S. gasoline market with carbon-neutral fuel. But there’s no need to wait. Prometheus can sell any gas it makes into markets that already exist, and it can be used to power
Gujarat Maritime Board’s Rs 500 crore push for LNG terminal at Mundra
The Gujarat Maritime Board (GMB), which regulates maritime activities in the state, has firmed up plans to invest Rs 500 crore in the proposed Rs 5,000 crore Mundra LNG terminal in Kutch. With this, the LNG terminal that was inaugurated by Prime Minister Narendra Modi in September last year is likely to be commissioned within the next two months. The project being implemented by GSPC LNG Ltd, a unit of Gujarat State Petroleum Corporation Ltd (GSPC). GMB’s move follows Indian Oil Corporation’s (IOC) decision to drop its plan to invest in the project with the proposed capacity to re-gasify 5 million tonnes per annum (mtpa). A senior official involved in the project said that decks have been cleared by the state government for GMB to invest in the terminal. The Gujarat government owns 50% share in GSPC LNG while 25% is owned by the billionaire Gautam Adani promoted Adani Group. “The authorized share capital for GSPC LNG is yet to be decided. GMB may pick up around 40% of the equity stake in the project for its Rs 500 crore investment,” said a state government official in the know of the development. The government has also held talks with the Adani Group to offer an additional stake to them, however, things have not materialized so far, the official said. When contacted, an Adani Group official refused to comment on the matter. The present promoters, especially GSPC, will have to dilute its stake to accommodate GMB as a third partner, the government official said. The government has been looking to induct a third partner in the project for many years now. The project commissioning has been facing delays as land lease and sub-concession agreements were not signed between the promoters and the Gujarat government. The terminal’s capacity can be expanded to 10 mtpa and is designed to have a berth for receiving LNG (liquified natural gas) tankers and storage tank facilities for re-gasification and gas evacuation. Indian Oil had earlier announced plans to pick up a 50% equity stake in the project for which it got in-principle approval from its board in August 2017. IOCL, which has carried out due diligence of the project, informed Gujarat government last year that it had dropped its investment plans. GSPC had a majority stake in the project, but the organization has been under financial stress. Subsequently, the state’s energy and petrochemicals department have funded a major part of the project. Gujarat State Petronet Ltd, a subsidiary of GSPC was also offered to pick equity stake in the LNG project. However, GSPL has already made a substantial investment of Rs 3,250 crore in Gujarat Gas Ltd last year and it is not looking at fresh investments presently, said a GSPC official.
What oil at $100 a barrel would mean for the world economy
Surging crude prices are posing another headwind for the world economy after President Donald Trump’s “zero” pledge on Iran oil sales. Brent crude has risen about 33 percent this year and is close to the highest in six months. While higher prices due to strong demand typically reflects a robust world economy, a shock from constrained supply is a negative. Much will depend on how sustained the spike proves to be. Exporting nations will enjoy a boost to corporate and government revenues, while consuming nations will bear the cost at the pump, potentially fanning inflation and hurting demand. Ultimately, there comes a point where higher prices may be damaging to everyone. 1. What does it mean for global growth? The impact will vary. Rising oil prices will hurt household income and spending and it could accelerate inflation. As the world’s biggest importer of oil, China is vulnerable, and many countries in Europe also rely on imported energy. Seasonal effects will also impact. With the Northern Hemisphere summer approaching, consumers can switch energy sources and scale back usage. A slowing world economy will also hurt demand and by extension keep a lid on prices. 2. How can the world economy absorb oil at $100? For a sustained hit to growth, economists say oil would need to hold above $100. It also depends on dollar strength or weakness, given crude is priced in greenbacks. Analysis by Oxford Economics found that Brent at $100 per barrel by the end of 2019 means the level of global gross domestic product would be 0.6 percent lower than currently projected by end-2020, with inflation on average 0.7 percentage points higher. “We see increased risks of significantly higher oil prices,” Oxford economists John Payne and Gabriel Sterne wrote in a note. “In the short-run, it is likely the supply impact will be offset by higher production elsewhere, but the market is tightening and all it would take is one more shock to supply and oil could reach $100.” 3. How will Iran and Trump impact the market? An upending of global oil trade around the Iran-Trump spat could continue to have a sizable impact on financial markets, as the affected supply is as much as 800,000 barrels a day. Uncertainties around availability have already whipsawed oil markets. And the political sensitivities of these developments have other markets bracing for volatility. Trump has pledged to help, alongside Saudi Arabia and the U.A.E., those needing to shift orders from Iran to another supplier. But U.S. claims that its domestic supply can help offset the loss are a high bar to meet, given that the daily American output for similar crude is about a quarter of Iran’s. 4. Who wins from higher oil prices? Emerging economies dominate the list of oil-producing nations which is why they’re affected more than developed ones. The increase in revenues will help to repair budgets and current account deficits, allowing governments to increase spending that will spur investment. Winners include Saudi Arabia, Russia, Norway, Nigeria and Ecuador according to analysis by Nomura. 5. Who loses? Those emerging economies nursing current account and fiscal deficits run the risk of large capital outflows and weaker currencies, which in turn would spark inflation. That, in turn, will force governments and central banks to weigh up their options: hike interest rates even as growth slows or ride it out and risk capital flight. Nomura’s losers list includes Turkey, Ukraine, and India. 6. What does it mean for the world’s biggest economy? While U.S. oil producers try to take advantage of any sales boost from customers moving away from Iran, the broader U.S. economy won’t necessarily see benefits with oil price tags as high as $100 a barrel. It would be a squeeze on American consumers that are the backbone of still-steady economic growth. Prices at the gas pump already have risen more than 7 percent this month to $2.89 a gallon, which could weigh on retail sales that jumped in March by the most since 2017. And if things go awry in global oil markets, there’s a risk that political blame shifts back to the U.S. for the sanctions, which could mean backlash via investment or other channels that threaten economic stability. 7. Will it lead to higher inflation around the world? Because energy features prominently in consumer price gauges, policymakers look to core indexes that remove volatile components. If the run-up in prices proves to be substantial and sustained, those costs will filter through to transportation and utilities. 8. What does it mean for central banks? Led by the Federal Reserve, central banks around the world have taken a dovish tilt as the absence of inflation allows policymakers to shift their focus to slowing growth. That’s unlikely to quickly change. The International Monetary Fund this month lowered its global growth forecast and said the world is in a “delicate moment.”
PetroChina Q1 profit flat as weak fuel business offsets exploration gains
PetroChina said on Monday its first-quarter net profit edged up 1 percent from a year earlier as a weaker refined fuel business offset strong growth at its exploration and production segment. The state-controlled giant, Asia’s largest oil and gas producer, said net profit in the January-March period was 10.255 billion yuan ($1.52 billion), versus 10.15 billion a year ago. Total revenue grew 8.9 percent during the period to 591 billion yuan, the firm said in a filing to the Hong Kong Stock Exchange. It is still the lowest quarterly revenue since the second-quarter of 2018. PetroChina’s crude oil production rose 4.6 percent during the period to 223.4 million barrels, and output of natural gas expanded 8.9 percent to 999.9 billion cubic feet. Its dominant exploration and production business reaped in operating profit of 14.33 billion yuan in the first three months of the year, up 47 percent over a year earlier. The group’s crude oil throughput rose 3.3 percent to 291.6 million barrels, or 3.24 million barrels per day. First-quarter operating profit from the refining and chemical segment, however, shrank by 64 percent to 2.999 billon yuan, because of inventory loss in refined fuel products and also weakening margins in petrochemicals production. The natural gas import business – including piped gas and liquefied natural gas – suffered a net loss of about 3.3 billion yuan, narrowing from the 5.82 billion loss a year earlier, thanks to higher sales, the firm said. The state firm has for years suffered heavy losses in the gas import business because the cost of gas imports often exceeds the government-capped domestic prices. PetroChina’s Hong Kong share prices are up 3.7 percent so far in 2019, underperforming the 21 percent rise of its domestic peer CNOOC Ltd and the 23 percent jump of the Shanghai Composite index over the same period.
Qatar expected to add 30 MTPA to global LNG production in 2025-26
The year 2018 witnessed an important change of direction in the commissioning of new LNG projects. Stronger global market conditions led to new LNG projects getting approval in the past year. A larger volume of new proposed production received FID (final investment decisions) in 2018 than in the prior 3 years combined, MENA Advisors noted in its latest report. According to the report, Qatar is expected to add 30 MTPA (million tonnes per annum) to the global LNG production in 2025-26, taking the global production to over 500 MTPA, up by over 60 percent from 2008. A total of 21.5 MTPA (6 percent of existing capacity) received FID in 2018 and a further 15.6 MTPA reached FID in February 2019 with a number of other large US projects expected to reach FID this year. According to MENA Advisor, the global LNG market had a good year in 2018. LNG trade grew 10 percent, following on from strong growth of 12 percent in 2017. In particular, demand from Asia, mainly China and South Korea, grew strongly as the region looks to natural gas to reduce the negative impact on air quality of other energy sources, mainly coal. Additionally, most LNG prices globally followed an upward trend in 2018, thanks to strong demand growth and also as a result of higher oil prices, which has a knock-on impact on the LNG market. The new commissions come in addition to 101 MTPA of production capacity that is already under construction, equivalent to 26 percent of 2018 production capacity, having been commissioned before the sharp drop in oil prices in 2014. Additionally, LNG spot prices have softened during 2019 due to a slowdown in demand from Asia. However, analysts at the MENA Advisors argue that the global LNG market will not be oversupplied, at least in the next seven years. “Facilities already under construction mean that there should be a fairly sharp increase in production capacity in 2019 and 2020, before plateauing in 2021-24. Most of these new additions will come from the US and Australia. We expect Qatar to add 30 MTPA in 2025-26, taking global production to over 500 MTPA, up by over 60% from 2018,” they said. For this additional capacity to be fully utilised, demand would need to grow at just over 6 percent. This is not out of line with historical demand growth, which has averaged 6.4 percent since 2000, nor with recent demand growth, which has risen to an average of 11 percent over the last two years as Asian countries have voraciously switched to gas as a cheap and clean source of energy. Additionally, many countries, mainly China and India, continue to build out regasification facilities, which are needed to receive LNG, in a positive indication for future demand growth. Despite these strong drivers, slower growth in the global economy, especially China, could lead to slower growth in demand for LNG. However, even if demand growth fell short and grew at 3 percent per year on average out to 2026, this would be sufficient to maintain the utilisation of production capacity in 2018, which was 80 percent.