PNG connection reached 0.4 million households in Mumbai in last 4.5 years
Union Minister of Petroleum and Natural Gas Dharmendra Pradhan said that in last 19 years since 1995-2014, Piped Natural Gas (PNG) connection had reached to only 0.6 million households in Mumbai whereas, in last 4.5 years of the ruling government it has reached to over 0.4 million households. Speaking after the inauguration of PNG connection in Kurar village in Mumbai, he said, “PNG is cheap, efficient, reliable and environment friendly and in the next couple of years, more than 1 million households will benefit from PNG in the financial capital of India-Mumbai.” Pradhan further noted that Prime Minister Narendra Modi resolve to provide clean and affordable cooking fuel to the poorest of the poor has provided a huge impetus to transform India into a gas-based economy and has also witnessed rapid expansion of city gas distribution projects across India. “Prime Minister Narendra Modi firmly believes that no household in the country should be deprived of the benefits of clean cooking fuel and Pradhan Mantri Ujjwala Yojana (PMUY) has been a real game-changer in terms of bringing about an LPG revolution in the country,” he added. Asserting that the ruling dispensation has been working for the interests of poor and marginalised and for women empowerment since 2014, Pradhan said, “The unprecedented pace of implementation of public welfare schemes like PMUY, Ujala, PM AwasYojana are self-explanatory schemes.”
Opec rationing a cause of concern for India, says Dharmendra Pradhan
The move by the Organisation of Petroleum Exporting Countries (Opec) to cut crude oil production should not be one-sided and the interest of consumer nations should be taken into account for whom ‘rationing will be a cause of concern’, India’s petroleum minister Dharmendra Pradhan said on Tuesday. The oil cartel has decided to cut production by close to 1.2 million barrels per day (mbpd) following a drop in international crude oil prices in the last one month. “The cut in oil production should not be one-sided. The demand or the requirement of the consuming nations should be taken into account. Rationing of any type is a cause of concern for consumers like us,” Pradhan said on the sidelines of a KPMG summit in Delhi. The OPEC decision is likely to push Brent crude oil prices back to $70 a barrel mark according to industry experts. When asked about the Indian impact on the exit of Qatar from OPEC to focus more on production of natural gas, Pradhan said it would not be having any impact on India as it has diversified crude oil basket. Qatar’s exit was also triggered by the economic boycott of the country from June 2017 by other OPEC members like Saudi Arabia, accusing that the nation was in support terrorism. Pradhan added the ministry of petroleum was in the process of moving the Union Cabinet with a proposal to set up a gas hub that will bring in a new hub-based pricing for natural gas in the country. “The global investor industry is today keenly looking at Indian energy sector as an attractive investment destination,” he said. Brent crude was seen at $60.36 a barrel at one point on Tuesday. If prices go up, that is also likely to have an impact on the prices of petrol and diesel too in domestic market, in addition to the pressure on the government over the increase in crude oil import bill. The share of imported crude oil in India’s overall crude oil requirement has increased to 87.5 per cent during the first six months of the current financial year from 84.7 per cent during the financial year 2014-15. India’s crude oil import bill is expected to be $124.73 billion during 2018-19, as compared to $87 billion during the previous financial year. For every one dollar increase in crude oil prices, India’s import bill is expected to increase by Rs 61.58 billion, while a change of Rs 1 on exchange versus dollar will increase it by Rs 66.39 billion. Addressing the summit, Pradhan further said most transformative reform in the exploration and production sector is moving to a revenue-sharing model and opening the entire sedimentary basin to investors through open acreage licensing. “Various relaxations have been provided under the existing production sharing contracts to provided adequate flexibility to operators to enable early development of discoveries,” he added.
France’s Total sees robust demand for LNG from Russia’s Yamal
French oil and gas group Total believes there is enough demand on the spot market for liquefied natural gas from its Yamal LNG plant in Russia, Total’s chief executive said on Tuesday, as the project has expanded ahead of schedule. On Tuesday, Russian Prime Minister Dmitry Medvedev attended a ceremony marking the launch of the third train, or stage, of Yamal LNG, which expanded its annual capacity to 16.5 million tonnes. The expansion had been initially expected at the end of 2019 and a quicker rise in output has raised questions about Yamal LNG’s ability to sell the additional volumes. It has pre-sold more than 96 percent of its LNG production under long-term contracts for the next 20 years. Russian gas producer Novatek controls Yamal LNG, which is co-invested by Total, China’s CNPC and the Silk Road Fund. It started operations in December 2017. Total’s Chief Executive Patrick Pouyanne said Yamal LNG would start sales under a long-term contract from the third stage of the Yamal LNG project as initially planned. “It is not difficult to sell on the spot market, the LNG market is growing by 10 pct per year or more, so clients are asking for more LNG, it’s not a real issue,” Pouyanne told reporters. “We export more LNG quicker, its good for the project. In fact, it is a surprise, but the (LNG) trains are ready in front of all the vessels,” he said. Last month, an LNG tanker transferred a cargo of Yamal LNG to another vessel off the tip of northern Norway, the first such operation that will help the facility raise production. This has irked the United States, who has said the operations undercut Europe’s energy diversification efforts. By transferring LNG to more conventional tankers in Norway, the Arctic vessels cut in half the distance they would cover to deliver gas to Europe, enabling more frequent shipments from the Novatek terminal and increasing Russia’s gas exports. Russia’s foreign ministry, in emailed comments to Reuters, said the operation’s aim is to reduce transportation costs, calling criticism from the United States “unfair” and “political pressure”.
Mexico cancels oil block auctions for private firms under new president
Mexico’s energy regulator said Tuesday it was canceling its remaining oil block auctions for private firms, the centerpiece of the country’s landmark energy reform, now under attack by new President Andres Manuel Lopez Obrador. The National Hydrocarbons Commission (CNH) said it was scrapping the two pending auctions because the energy ministry had asked it to withdraw the 46 blocks up for grabs so it could “review energy policy and evaluate the results and progress” made under the 2013 reform. “Since the totality of the areas under consideration in each auction have been excluded… we have approved the cancellation of the auctions in question,” it said in a statement. The CNH had already suspended the auctions after Lopez Obrador won a landslide election victory in July. Former president Enrique Pena Nieto launched the ambitious energy reform in a bid to breathe new life into Mexico’s oil sector, where production had plummeted under 76 years of monopoly by state firm Pemex. But Lopez Obrador, an anti-establishment leftist and energy nationalist, has criticized the opening of the sector to private and foreign companies as a corruption-riddled “farse.” The blocks up for auction in what would have been the 10th and 11th tenders of the third round of the process are located in the oil-rich far north and south of the Gulf of Mexico. Since the energy reforms were launched, Mexico has awarded more than 100 contracts to firms including Exxon-Mobil, Shell, Total and BP, for total potential investment that the previous government calculated at $150 billion. Lopez Obrador said earlier that companies should show they are following through on their promised investments within three years or have their oil blocks taken away. “As they say in sports, the ball’s in their court. If there’s investment and they produce, then go ahead. If they’re just sitting on the contracts to speculate, we can’t allow that,” he told a press conference. The CNH also announced a six-month postponement to a separate tender to seek partners for Pemex projects that had been scheduled for early next year. Lopez Obrador said Sunday he was increasing Pemex’s budget by $3.7 billion for 2019 in a bid to boost production.
France’s Total sees robust demand for LNG from Russia’s Yamal
French oil and gas group Total believes there is enough demand on the spot market for liquefied natural gas from its Yamal LNG plant in Russia, Total’s chief executive said on Tuesday, as the project has expanded ahead of schedule. On Tuesday, Russian Prime Minister Dmitry Medvedev attended a ceremony marking the launch of the third train, or stage, of Yamal LNG, which expanded its annual capacity to 16.5 million tonnes. The expansion had been initially expected at the end of 2019 and a quicker rise in output has raised questions about Yamal LNG’s ability to sell the additional volumes. It has pre-sold more than 96 percent of its LNG production under long-term contracts for the next 20 years. Russian gas producer Novatek controls Yamal LNG, which is co-invested by Total, China’s CNPC and the Silk Road Fund. It started operations in December 2017. Total’s Chief Executive Patrick Pouyanne said Yamal LNG would start sales under a long-term contract from the third stage of the Yamal LNG project as initially planned. “It is not difficult to sell on the spot market, the LNG market is growing by 10 pct per year or more, so clients are asking for more LNG, it’s not a real issue,” Pouyanne told reporters. “We export more LNG quicker, its good for the project. In fact, it is a surprise, but the (LNG) trains are ready in front of all the vessels,” he said. Last month, an LNG tanker transferred a cargo of Yamal LNG to another vessel off the tip of northern Norway, the first such operation that will help the facility raise production. This has irked the United States, who has said the operations undercut Europe’s energy diversification efforts. By transferring LNG to more conventional tankers in Norway, the Arctic vessels cut in half the distance they would cover to deliver gas to Europe, enabling more frequent shipments from the Novatek terminal and increasing Russia’s gas exports. Russia’s foreign ministry, in emailed comments to Reuters, said the operation’s aim is to reduce transportation costs, calling criticism from the United States “unfair” and “political pressure”.
Opec-allies’ output cut may not amount to big shift in oil prices
The good news for a major importing country like India is that oil prices are unlikely to touch October highs of around $85 a barrel anytime soon. Global oil markets can have a small celebration. The Organization of the Petroleum Exporting Countries (Opec) has agreed to cut oil output by 800,000 barrels per day (bpd) starting January. Simultaneously, non-Opec friends will cut production by 400,000 bpd. Together, the output cut amounts to 1.2 million bpd and is broadly on expected lines. On Friday, Brent crude prices increased by 2.7% to $61.67 a barrel. According to an analyst who did not want to be named, the current deal would support Brent crude prices in the range of $60-65 a barrel from a near-term perspective. “It is possible Brent may inch towards $70 a barrel provided demand is consistent and these countries are compliant with the cuts,” he added. However, the good news for a major importing country like India is that oil prices are unlikely to touch October highs of around $85 a barrel anytime soon. That’s because oil markets are well supplied at the moment. The US turned into a net oil exporter last week, breaking 75 years of continued dependence on foreign oil, said a Bloomberg report last week. This was helped by record production in the country. Watered-down American sanctions on Iran, as waivers were granted to eight countries for a few months, meant more-than-initially-anticipated Iranian oil supply in the market. Additionally, Opec and non-Opec friends were producing more in recent months in anticipation of lower Iranian oil exports post- US sanctions. Another reason which will limit a meaningful spike in oil prices is that there are concerns on the demand front. There are slowdown concerns in the US and China, two large oil consumers, and that can weigh on prices. In its oil market report in October, the International Energy Agency had reduced its demand growth forecast for this year and the next. Further, an escalation in the US-China trade war post the 90-day truce is something investors will have to watch for. Meanwhile, Opec and non-Opec members will meet in April to review market conditions. Until then, news flow on global macroeconomic growth and US production could offer meaningful clues on oil prices.
Firms set up LNG trading desks in Singapore to capture Asian growth
Several energy firms are setting up dedicated gas trading desks in Singapore as they try to capture the fast growing liquefied natural gas market (LNG) in Asia. As of September, Singapore has over 45 companies with an LNG trading or business development presence here, Enterprise Singapore told Reuters on Monday. This is up from the nearly 40 companies set up in the city-state in May this year, according to local media. “We are looking to develop Singapore’s LNG industry further, as LNG becomes a more important component of Asia’s energy mix,” Enterprise Singapore told Reuters in an emailed statement on Monday. Singapore has been expanding its LNG infrastructure by increasing storage capacity and also adding capabilities to bulk-break cargoes, an Enterprise Singapore spokeswoman said. “As such, increasing numbers of energy traders in Singapore have begun expanding into LNG,” she added. Asia’s appetite for the super-chilled fuel, led by China, is expected to grow rapidly over the next few years, attracting investment and triggering new LNG trading desks opening globally. A recent push for more transparency in the sector has boosted spot trades of Asian LNG. Singapore, which is the Asian oil trading hub, is seen as a natural hub for LNG especially for companies that already have a presence in the city-state and are looking to expand into LNG. The gas and power division of China National Offshore Oil Co (CNOOC) has set up an office in Singapore, which it will officially open on Monday, several sources familiar with the matter told Reuters. It will have about five staff including two people handling commercial matters, one of the sources said. Singapore business registry records show Shen Yiming and An Zichun as directors of the company, which was registered in the city-state in September with a paid up capital of $10 million. A CNOOC spokesman did not immediately reply to a Reuters query on the matter but the sources said the Singapore office will handle spot LNG trading for one of China’s biggest importers of the fuel. China’s Beijing Gas, whose Singapore office was incorporated in early 2017, beefed up its headcount this year to a total of five people, a source familiar with the matter said. The company recently received approval from the central Chinese government to build a LNG terminal which is expected to be ready by 2022. It is aiming to secure import cargoes for when the terminal is ready, the source added. Aramco Trading Company and Japan’s JERA are also some of the companies adding headcount to their Singapore offices.
Maruti drives past 0.5 million cumulative sales mark for CNG models
Auto major Maruti Suzuki India (MSI) on Monday said it has crossed cumulative sales milestone of 0.5 million CNG vehicles in the country. The company currently offers compressed natural gas (CNG) option in seven of its models, including Alto 800, Alto K10, WagonR and Celerio. Currently, WagonR is the highest selling CNG model in the Maruti Suzuki CNG portfolio. MSI introduced its first fleet of factory-fitted CNG vehicles in 2010. “The benefit of low-cost of ownership comes along with environment friendly fuel option of CNG. The government’s resolve to rapidly expand countrywide CNG will enable many more customers to own an environment-friendly transport,” MSI MD and CEO Kenichi Ayukawa said in a statement. MSI’s range of factory-fitted CNG vehicles are popular in Delhi NCR and across select cities in states of Gujarat, Maharashtra, Andhra Pradesh, Telangana, Odisha, UP and Punjab. In 2018-19, the company expanded its CNG vehicle availability to 26 new cities to reach over 150 cities across the country.
India’s energy sector to attract $300 bn investment in coming decade: Pradhan
Oil Minister Dharmendra Pradhan today said that the global investor industry has its eyes on India’s growing energy sector and investments in the tune of $300 billion is expected in the sector in the coming decade. “The global investor industry is today keenly looking at Indian energy sector as an attractive investment destination. About 300 billion dollars would be invested in coming decade,” Pradhan said, speaking at KPMG’s annual energy conclave – ENRich 2018. He added that Asia’s biggest greenfield oil refinery-cum-petrochemical complex is being set up collectively by Oil Marketing Companies (OMCs) along with Saudi Aramco and ADNOC in the state of Maharashtra at a cost of about $40 billion. Speaking on city gas distribution network, Pradhan said that work on 174 districts has begun which will further expand to cover over 400 districts in next 2-3 years covering 70 per cent of the population and 52 per cent of India’s geography. Talking about boosting India’s natural gas infrastructure and connecting the north-east part of the country with natural gas Pradhan said, “work is underway on 2600 km long Jagdishpur-Haldia and Bokaro-Dhamra pipeline project also known as Pradhan Mantri Urja Ganga project. This project is being further extended from Barauni to Guwahati for connecting the other areas of the Northeast with the gas grid. Approximately Rs.13,000 crores will be spent on these projects.” He added that in order to connect north eastern states with gas grid, Indradhanush Gas Grid Ltd has been formed to lay 1500 km pipeline with an investment of Rs 6000 cr. Pradhan said that the government will soon be setting up a gas trading hub that will allow easy and ready access to gas suppliers and buyers to freely trade natural gas and in turn help India to develop its own hub based pricing. He added that the proposal to set-up the hub will be sent to the cabinet soon. Petroleum and Natural Gas Regulatory Board (PNGRB), India’s downstream oil and gas regulator, has appointed ratings agency CRISIL as consultant to prepare regulations for the planned Natural Gas Trading Exchange. PNGRB will be working with Oil Industry Development Board (OIDB) to work out the complete regulation, operations and location of the upcoming gas exchange platform.
India’s falling oil and gas production is a concern: Minister Pradhan
India’s falling oil and gas production is a matter of concern, Oil Minister Dharmendra Pradhan said, adding the government will soon set up a gas trading hub. India’s crude oil production in October dropped 5 percent from a year earlier to about 2.89 million tonnes, while natural gas output was down 0.4 percent at 2.80 billion cubic metres, provisional data issued by the government showed last month. The government also plans to invest $300 billion in the oil and gas sector in the coming decade, Pradhan added.