CNG Pumps In India Get A Boost; Expect More CNG Pumps Near You
CNG pumps or stations in India will soon grow in number by a good margin. In other words, expect more CNG pumps near you or your resident location. At present, vehicles running on CNG (Compressed Natural Gas) occupy a small portion of India’s entire automotive sector. However, we can expect a shift in things in the not-too-distant future. Autocar India shares that a new business model was proposed at Petrotech 2019 — the 13th edition of the International Oil & Natural Gas Conference and Exhibition — that was held at the India Expo Mart at Noida, last week. At the event, Dharmendra Pradhan, Minister of Petroleum and Natural Gas, launched the Dealer Owned Dealer Operated (DODO) model for installing more CNG pumps in India. The general guidelines of the scheme state that the designated dealer land will be developed exclusively to set up CNG pumps and related commercial activities. This will be done at the CGD (City Gas Distribution) authorities’ discretion. 87 locations, serviced by 23 authorised bodies, will be covered under the new CNG scheme. In total, at least 4,600 CNG pumps are expected to open within the next eight years. Furthermore, a goal of covering 50 key areas (124 districts across 14 Indian states) that account for 24 per cent of the country’s geography and 18 per cent of its population is being considered. If this is proved a success, 53 per cent of India and 70 per cent of the Indian population will have better access to CNG stations. Put in simple words, within a decade, enough CNG fuel pumps will come near you. “India is moving towards a natural-gas-dependent economy,” shared the Minister. Compared to conventional petrol products such as petrol or diesel, CNG is cheaper and less polluting. The Petroleum and Natural Gas Regulatory Board (PNGRB) has shown an interest in the proposed CGD network as well. In addition to this, Maruti Suzuki recently shared their plans to discontinue diesel model and make more CNG cars.
Bangladesh PM’s office revives Swiss trader AOT’s LNG supply deal
Bangladesh’s prime minister has given the nod to a multi-billion dollar LNG supply deal with Swiss trader AOT Energy but the energy ministry will make a final decision on whether it goes ahead, an official at the premier’s office said on Wednesday. The deal with AOT to supply 1.25 million tonnes of liquefied natural gas (LNG) for 15 years has long been in the works, with terms agreed last February. Last month, the gas company that oversees Bangladesh’s LNG supplies, Rupantarita Prakritik Gas Co, said the deal would not go ahead. However, a document issued by the office of Prime Minister Sheikh Hasina on Jan. 28, and seen by Reuters on Wednesday, showed the government has not scrapped the plan. “In reference to the letter of (the) global head of AOT Energy, the Energy Ministry has been asked to take necessary action for finalising a long-term deal for LNG with AOT Energy,” the document said, referring to communication the prime minister’s office had received from AOT about finalising a deal. Tarikul Islam, director of the prime minister’s office, confirmed the letter. However, he said this did not seal the deal. “Based on a letter from AOT Energy, we have sent a letter to the energy ministry to take necessary action. But this is the ministry’s call whether they want to go ahead with them or not,” Islam said. The energy ministry did not respond to requests for comment. AOT declined to comment. The terms of the deal are secret but broadly speaking, using current LNG prices, the deal would be worth $6.3 billion. This would be AOT’s first long-term LNG contract although it trades LNG on the spot market and has short-term contracts. Its pipeline gas and LNG volumes amounted to 6.5 billion cubic metres last year, roughly 4.7 million tonnes’ worth of LNG. Bangladesh is new to LNG and only began importing it last year. Industry players say it is still on a learning curve and that its strategy has been haphazard at times. One government official conceded the nation had taken on too many projects without proper planning. The country received its first cargo of LNG last April. Qatar supplies one terminal under a 2.5 million tonnes a year (mtpa) deal. A 1 mtpa deal with Oman will kick in once a second terminal starts operations in March. Bangladesh has imported around 1 million tonnes since September when regular supplies began, according to Refinitiv Eikon data. With indigenous gas production dwindling, the nation of 160 million people is set to be a significant player in the global LNG market, alongside Pakistan and India. However, it has tempered its initial enthusiasm. Officials at one point were considering a dozen import projects but have since pared the list down and shifted focus to building onshore rather than floating facilities.
India will lay 2,000 Km LPG pipeline costing Rs 90 billion – Pradhan
India To Lay 2,000 KM – LPG Pipeline Costing 90 Billion Rupees From West To East India. Emphasis Is On Raising Hydrocarbon Production. New Exploration Licensing Rules Are Not Focussed On Profit And Revenue. Explorers Are Given Marketing, Pricing Freedom For Sale Of Hydrocarbons. New Exploration Rules Will Be Largely Applicable To 19 Basins. India To Lay 2,000 Km – LPG Pipeline Costing 90 Billion Rupees From West To East India. ONGC, Oil India Allowed To Induct Private Cos To Boost Output From Nomination Fields. New Exploration Rules Will Be Introduced In Future Licensing Rounds.
Russia’s Novatek 2018 income up to $2.5 bln after Yamal LNG launch
Russian gas producer Novatek said on Wednesday its 2018 net profit rose 4.7 percent to 163.7 billion roubles ($2.5 billion) thanks to the start of liquefied natural gas (LNG) production. Novatek, controlled by CEO Leonid Mikhelson and businessman Gennady Timchenko, a friend of Russian President Vladimir Putin, launched Yamal LNG in the Arctic in December 2017 as part of Russia’s plan to raise its share on global energy markets. Moscow-traded shares in Novatek, Russia’s biggest gas producer which is not owned by the state, rose 1.3 percent. Other stakeholders in the project with annual capacity of 16.5 million tonnes per year are Novatek’s shareholder and French energy major Total, as well as China’s CNPC and the Silk Road Fund. Excluding the effect of foreign exchange differences, as well as the one-time effect from the disposal of interests in joint ventures, profit jumped 49 percent to 232.9 billion roubles. Higher oil and gas prices helped lift earnings, the company said. Last-year revenues rose by 42.6 percent to 831.8 billion roubles, while natural gas production increased 8.5 percent to 68.8 billion cubic metres, oil and gas condensate output edged up by 0.3 percent to 11.8 million tonnes.
Gas pricing, marketing freedom to help companies draw investments
The government’s decision to free up gas pricing and incentivise incremental output is likely to fire up investments in gas fields and raise production, said company executives and analysts. The Cabinet on Tuesday granted marketing and pricing freedom to all new gas discoveries whose field development plan (FDP) had yet to be approved. It also introduced fiscal incentive to operational fields for producing more than the current level. “This is positive for us as we will be able to fast-track at least three projects that were ready to develop but commercially not viable,” said ONGC chairman Shashi Shanker. These three discoveries have a producible reserve of 30 billion cubic metres and are expected to have a combined peak production of 10 million metric standard cubic metres a day, he said. For ONGC, the benefit will not be limited to just three discoveries. “We welcome the reform momentum and are looking forward to details of the policy to assess the impact on our production, including in current sites,” said a spokesperson for Vedanta. “This is a positive step in terms of encouraging additional activities in the E&P sector and should help accelerate development of discovered resources. We have yet to review the notification, but at this point of time none of BP’s existing developments will be affected by this announcement,” said a spokesperson for BP. BP is a partner of Reliance Industries in several upstream projects in India. “Pricing freedom would incentivise production. Producers can easily expect a price that is double that of domestic formula prices,” said K Ravichandran, analyst at credit rating agency ICRA. At present, the domestic formula price for gas is $3.36 per unit. Just about 25 of the total 115 gas discoveries made in blocks auctioned previously are under production as per the official data, and so 90 discoveries can potentially benefit from pricing freedom, Ravichandran said.
Australia’s east coast LNG plants unlikely to ever hit full capacity -study
Australia’s three east coast liquefied natural gas (LNG) plants are unlikely to ever run at their combined full capacity of 25.3 million tonnes a year as there is not enough gas to feed them and meet local demand, a study released on Thursday said. The three plants – Queensland Curtis LNG, Australia Pacific LNG and Gladstone LNG – were the world’s first LNG exporters to use coal seam gas rather than gas from conventional fields. But the wells they source their gas from in Australia’s Surat and Bowen basins in Queensland state have turned out to be less productive than expected. As a result, the three plants – each with two processing units – have been running below capacity, operating at average 82 percent in 2018. “Unfortunately, there are serious headwinds coming and the outlook is less rosy as the industry over-reached by building three projects of six trains,” EnergyQuest CEO Graeme Bethune said in a statement. QCLNG, run by Royal Dutch Shell averaged 87 percent capacity, and GLNG, run by Santos, only 65 percent, EnergyQuest, an industry consultancy, said. In a detailed study of government and company drilling and production data and reserves booked at coal seam gas (CSG) prospects and licenses, it found that only 56 percent of booked proven and probable reserves had shown any commercial productivity. “The emerging and critical shortages are resulting from the fact the CSG LNG projects were sanctioned on ambitious estimates of proved and probable (2P) reserves, not proven reserves (1P) that underpin conventional LNG projects,” Bethune said. He predicted that by 2025 at least two trains would have to be shut to keep four trains running at full capacity, which would reduce medium-term exports to around 17 million tonnes a year, down from about 21 million tonnes in 2018. About 70 percent of exports go to China, 16 percent to South Korea and 9 percent to Japan. Exacerbating the problem, the producers have come under pressure to step up gas sales into the domestic market, with supply in Australia’s southeast falling as ageing offshore fields dry up and as states restrict drilling onshore. The three projects supplied about 25 percent of Australia’s eastern demand in 2018. “With dwindling production from southern gas fields, the political pressure on the LNG producers to divert gas to the domestic market is likely to intensify,” Bethune said.
Shell, PetroChina spat holds up Australia’s biggest coal seam gas project
Royal Dutch Shell and PetroChina are at loggerheads over gas sales pricing at their Arrow Energy joint venture, holding up development of Australia’s biggest coal seam gas resource, three industry sources said. Shell and PetroChina acquired the Surat gas resource in a A$3.5 billion ($2.5 billion) takeover of Arrow in 2010, and had expected to reach a final investment decision in 2018, with first production around 2020. That was after the Arrow Energy venture signed a 27-year deal in December 2017 to supply natural gas from Surat to the Queensland Curtis LNG plant (QCLNG), which is operated by Shell. PetroChina, though, is unhappy with the price in the sales agreement with QCLNG and the technical plan for developing the gas, issues that are now holding up final approvals, according to three industry sources familiar with the talks, who declined to be named due to the sensitivity of the matter. “PetroChina, as a 50-percent stakeholder in Arrow, expects to maximise interests from the JV versus QCLNG. But for Shell, it may be thinking of using its operator role at QCLNG to protect its interests,” a Chinese oil industry executive said. “We are working hard to manage approvals with joint venture partners,” a Shell spokeswoman said. PetroChina did not respond to a request for comment.
Saudi Aramco discussing investments in Reliance Industries – CEO
Saudi Aramco’s Chief Executive Officer Amin Nasser said on Wednesday that the company is in talks with India’s Reliance Industries Ltd for possible investments and is seeking other opportunities in the country. Saudi Aramco signed an agreement in April with a consortium of state-owned Indian refiners to participate in a $44 billion refinery project on the country’s west coast. “We are looking at additional investment in India so we are in discussions with other companies as well, including Reliance and others,” Nasser said in a panel discussion in New Delhi. “We are looking at it. We are not limited to that investment which is the mega refinery,” Nasser said, referring to the west coast project, which would process 1.2 million bpd of crude and produce 18 million tonnes per year of petrochemicals. Nasser is part of the entourage travelling with Saudi Arabia’s Crown Prince Mohammed bin Salman, who is in India for a one-day visit. Reliance Industries, controlled by Asia’s richest man Mukesh Ambani, is India’s biggest refining and petrochemicals company and runs a 1.4 million barrels per day (bpd) refinery in western India. It plans to expand the capacity to 2 million bpd by 2030, according to plans shared with the Indian government. Saudi Arabia, the world’s biggest crude oil exporter, is keen to expand further into oil refining and petrochemicals. India would provide a fast growing market for oil and fuels and is already a steady buyer of Saudi oil. “India is an investment priority for Saudi Aramco. India takes from us almost 800,000 barrels a day and by 2040 India’s total consumption will be around 8.2 million barrels per day,” Nasser said. India is currently world’s third-biggest crude oil consumer with demand of 4.7 million bpd, according to government figures. However, Aramco is already facing delays for the refinery project, planned for the western state of Maharashtra, as thousands of farmers have refused to surrender land for it. Reuters reported on Tuesday the Maharashtra government is looking to move the refinery location. Yousef al-Benyan, the chief executive officer for SABIC, the Saudi Arabia-based petrochemical company that is the fourth largest in the world, was also on the panel. He said SABIC wants to expand its business and presence in India.
India’s fuel demand rose 6.4% year-on-year in January
India’s fuel demand rose 6.4 percent in January compared with the same month last year. Consumption of fuel, a proxy for oil demand, totalled 18.34 million tonnes, data from the Petroleum Planning and Analysis Cell (PPAC) of the oil ministry showed. Sales of gasoline, or petrol, were 13.2 percent higher from a year earlier at 2.37 million tonnes. Cooking gas or liquefied petroleum gas (LPG) sales increased 11.0 percent to 2.31 million tonnes, while naphtha sales fell 1.2 percent to 1.26 million tonnes. Sales of bitumen, used for making roads, were 15.1 percent up, while fuel oil use edged unchanged in January.
Anadarko signs another supply deal for Mozambique LNG project, FID imminent
Anadarko Petroleum has signed a deal with Indonesia’s Pertamina to sell 1 million mt/year of LNG from its planned Mozambique LNG project for a period of 20 years, bringing the project one step closer to a final investment decision, the US-based company said Tuesday. The deal is the fifth sales agreement signed for the 12.88 million mt/year Mozambique LNG project this month alone, and brings the total SPAs signed to seven, for more than 9.5 million mt/year. “The Anadarko-led Mozambique LNG project is well positioned to make a sanctioning decision in the first half of this year, as we remain on track to complete the project financing process, secure the necessary approvals, and have executed a sufficient volume of long-term SPAs, which now total more than 9.5 million mt/year,” Anadarko vice president Mitch Ingram said in a statement. Already this month, Anadarko has agreed deals with India’s BPCL, China’s CNOOC and Anglo-Dutch giant Shell, as well as a joint deal with the UK’s Centrica and Japanese utility Tokyo Gas. A non-binding heads of agreement was also signed in 2017 with Thailand’s PTT to sell 2.6 million mt/year. Anadarko is developing Mozambique’s first onshore LNG facility, which will have two LNG trains with a total nameplate capacity of 12.88 million mt/year, to support the development of the Golfinho/Atum field in Offshore Area 1. Partners in Offshore Area 1 include Anadarko (26.5%), Mitsui (20%), Mozambique’s state-owned Empresa Nacional de Hidrocarbonetos (15%), India’s ONGC Videsh (10%), Beas Rovuma Energy Mozambique Limited (10%), India’s BPCL (10%) and Thailand’s PTT Exploration & Production (8.5%).