Gas pipeline blast: 6 dead, several injured in explosion at SAIL’s Bhilai plant
Six people have been killed and many injured in a gas pipeline explosion at Steel Authority of India’s plant in Bhilai, ANI reported. The blast happened in a pipeline near coke oven section of the plant in Bhilai town, PTI quoted a local official as saying. The injured have been admitted to a local hospital and rescue teams rushed to the spot.
10% hike in natural gas price: Bad for CNG, PNG users; good for Reliance Inudstries, ONGC, Oil India
The Narendra Modi government has hiked the natural gas price by 10% in its six-monthly revision to $3.36 per million British thermal unit (mmBtu) from $3.06 from October 1, which will lead to higher CNG and PNG rates, while benefiting upstream oil and gas exploration companies like ONGC, Oil India and Reliance Industries, Care Ratings said in a report. The 10% hike, however, is less than 14%-15% anticipated earlier. The government revises natural gas price every six months based on the average rate in gas-surplus nations like Russia, the United States and Canada. The revised gas price of $3.36 per mmBtu will be applicable till March 31, 2019. “Upstream oil and gas exploration companies like ONGC, Oil India and Reliance Industries will benefit as higher gas prices will lead to higher earnings, due to improvement in per unit realisations in the natural gas segment, Care Ratings said in a report. It added that higher earnings will help in encouraging these companies to take up more exploration activities aiding in the country’s aim of reducing oil and gas imports by 10% by 2022. Meanwhile, the rise in natural gas price will lead to higher CNG and PNG prices, along with the modest impact on inflation. “A 9.8% increase in the prices of natural gas will increase the WPI directly by 0.05% which is not very significant,” the report added. Natural gas prices move in tandem with oil prices, which are on a rising streak. When the crude oil prices slumped below $60 a barrel between 2014-2017, the natural gas prices were cut too. From April 2015 to September 2017, the natural gas price was cut constantly before a steep hike of 16.5% in October 2017. The current revision is the third straight hike in nearly three-and-a-half years. The new gas pricing formula was approved by the Modi government in October 2014.
India targeting 40% of power generation from non-fossil fuel by 2030: PM
India is targeting 40 per cent of electricity generation from non-fossil fuel-based resources by 2030 as it looks to tap vast solar and wind potential to replace reliance on polluting coal to meet its energy needs, Prime Minister Narendra Modi said Tuesday. Modi said he saw the 121-country International Solar Alliance as the future OPEC for meeting energy needs of the world. Oil cartel OPEC led by Saudi Arabia currently meets close to half of the world’s oil needs. Speaking at the first Assembly of the ISA here, he said the solar power will play the same role that oil wells have played over the past few decades in meeting global energy needs. Humans have in the last 150-200 years relied on resources trapped below the earth’s surface for meeting energy needs. But for a secure future, resources available above the ground like solar and wind energy need to be harnessed, he said. Stating that the focus must be on renewable sources for meeting energy needs, he said India wants to bring all UN members on board of ISA. Modi said 50 GW of renewable energy will be soon added to existing capacity and non-hydro renewable will contribute 20 per cent of total energy. “This is the right time to invest in solar manufacturing,” he said adding he saw an investment potential of Rs 700 billion to Rs 800 billion in solar manufacturing. The prime minister said 310 million LED bulbs save 40,000 million units of electricity and Rs 160 billion in a year. He said 2.8 million solar pumps can save 10 GW of electricity every year.
Refiners weigh options to deal with oil price rally, upcoming sanctions on Iran
India’s oil refiners — both state-owned and private — are coming together to look at “common goals” as the galloping crude prices and the fresh bout of sanctions by the US on Iran from November throws up challenges for Asia’s third biggest economy and the world’s third biggest oil consumer. At a meeting on September 15, refiners looked at the possibilities of protecting India against the surge in global crude prices and alternative ways to reduce the overall consumption of crude, including tapping into bio-fuels in a much bigger way, improve overall efficiencies and alternative sources of fuel so that the country’s dependence on OPEC-related crude is reduced, at least two officials who attended the meeting said. “We met for the first time to see how all of us together can impact pricing and consumption of crude. Together, we have almost the second highest growth in consumption of oil after China, ahead of Europe and maybe marginally ahead of the US. So, we were discussing why is it that OPEC countries should not be looking at us seriously and why the Asian premium exists for India and China,” one of the officials, an executive with a state-owned oil marketing company, said. Special price needed The refiners felt that “OPEC should seriously consider a special price for India”. India should be looked at from the overall geopolitical economics of crude pricing. Our consumption is so much that producers should take notice. They should seriously consider a special price for India, the official said. “If you look at the prices charged by OPEC for Eastern Asia and Europe and US, they are different. The difference ranges from $2 to as much as $5 per barrel. So, we are saying why are you asking us to sponsor price for western Europe or US,” he said. OPEC is the Organisation of Petroleum Exporting Countries. On Monday, the benchmark Brent crude surged above $83 per barrel. India imported 220 million tonnes (mt) of crude in the year to March 2018, 3 per cent more than the previous year. India’s oil import bill, though, rose 25 per cent in FY18 to $88 billion from $70 billion in FY17 due to higher crude prices. Every dollar increase in oil prices will push up India’s import bill by around Rs. 107 billion on an annual basis. Inventory reduction Inventory reduction was one of the things that was discussed at the meeting, a second official who participated, said. “If we are together able to bring an inventory reduction that much quantity will be reduced from our foreign exchange dependence and also to that extent it impacts oil demand. Because, at some point of time, OPEC will also need to be worried that if the prices just go up in countries like India and China and if the demand goes down, they may have the oil, but nobody will buy it,” he said. “Fundamentally, we all felt that a lot of these things are driven not really by production and demand. World oil prices are moving more on pronouncements and statements by the US and Iran than by what exactly is dictated by demand. We were having a meeting to see what is it that we can do together as a refining industry to look at common goals,” he said, adding that the government must continue engaging with the US to get Iranian crude into India. “Iranian oil is good for India. It comes on short haul, they give some rate concessions and all of us have significant value for that. While all these engagements happen, the Indian refiners are not worried because they will find a way to get alternative sources of crude,” the second official said.
India, Nepal Mull Cross Border LPG, LNG Pipeline
Following the successful collaboration on the 69-km-long Motihari (India) — Amlekhgunj (Nepal) oil pipeline, India and Nepal have agreed to explore the possibility of laying pipelines for LPG and LNG to fuel fertilizer plants and industries in Nepal. The Indian Oil Corporation and Nepal Oil Corporation will work together on these projects, India’s Petroleum Minister Dharmendra Pradhan told the media after visiting Kathmandu, Nepal’s capital. China Opens Seven Ports for Nepal to Bypass India in International Trade Meanwhile, the Motihari-Amlekhgunj oil pipeline project is expected to become operational in 2019. “India and Nepal are now working together to build the 69-km oil pipeline from Motihari in India to Amlekhgunj in Nepal. We believe that the construction of the pipeline will be finished within one year,” Dharmendra Pradhan added. ‘Piecemeal Strategy is No Future of India-Nepal Relations’ – Professor So far, a 17 kilometer stretch of the 69-km Motihari-Amlekhgunj oil pipeline has been completed according to an agreement that was signed by the two countries in 2015. It has the capacity to supply two million tons of petroleum products annually. Nepal is seeking an extension of the pipeline up to Chitwan in the southwestern part of the country. During his meeting with Nepal’s Minister for Industry, Commerce and Supply, Matrika Prasad Yadav in Kathmandu, the Indian petroleum minister reviewed the bilateral energy cooperation. Pradhan and his Nepalese counterpart also inaugurated the construction of a terminal to receive products through the pipeline from India.
Europe may need 100 bcm of gas a year by 2030: Gazprom deputy CEO
Europe may need 100 billion cubic metres of new gas supply each year by 2030 due to falling production, Alexander Medvedev, deputy chief executive of Russian gas exporter Gazprom, said on Wednesday. Russian gas supplies to Europe may hit a record high this year, Energy Minister Alexander Novak said on Wednesday . They were both speaking at the Russian Energy Week forum in Moscow.
Big is back: Canada’s mega LNG project gets green light on Asia demand
The approval on Tuesday of a massive liquefied natural gas export (LNG) terminal in Canada is being touted as the return of the mega-project, ending a lean period where low energy prices and oversupply concerns kept investors from taking big risks. The C$40 billion ($31 billion) LNG Canada project led by Royal Dutch Shell was given the go-ahead by the Anglo-Dutch giant and its partners, making it the fuel’s first major new project to win approval in recent years. Construction will start immediately, with first shipments of the super-chilled fuel expected before 2025, aiming to feed surging demand from Asian buyers, primarily China. “It seems that mega-projects are back,” said Dulles Wang, director, North America gas at Wood Mackenzie, in an email note, adding that LNG Canada is the biggest greenfield project to be approved globally since Russia’s Yamal LNG in 2013. LNG from the project will reach Asia in about half the time it takes from the U.S. Gulf Coast, LNG Canada said. Global LNG demand is expected to double by 2035, with much of that growth coming from Asia where gas is displacing coal, it said. At the same time, output from older projects is set to decline in coming years, just as soaring demand from China, India and Southeast Asia is devouring a supply glut previously expected to last for years, fanning fears that an LNG shortage may be looming. “LNG Canada’s FID would signal the appetite to invest in LNG is back,” said Saul Kavonic, director for Asia Pacific markets and head of energy research at Credit Suisse in Australia. LNG Canada, to be built in the northern community of Kitimat, British Columbia, also marks the largest private-sector investment project in Canadian history, Prime Minister Justin Trudeau said at a Vancouver news conference. The announcement provides a much-needed boost for Trudeau’s ruling Liberals, who have struggled with an exodus of global energy firms from Alberta’s oil sands as well as setbacks in building a crude pipeline expansion to Canada’s Pacific Coast. “We can’t build energy projects like we did in the old days where the environment and the economy were seen as opposing forces,” Trudeau said. “They must go together.” The project was approved by all its stakeholders – Shell, Malaysia’s Petroliam Nasional Bhd (Petronas), PetroChina Co Ltd , Korea Gas Corp (KOGAS) and Japan’s Mitsubishi Corp . “Getting an LNG project to a final investment decision is like a moon landing,” Maarten Wetselaar, Shell’s integrated gas and new energies director, said in Vancouver. “It is very, very difficult to do, and requires teamwork.” MEGA-PRICE The project’s C$40 billion price tag includes the export terminal, the associated pipeline, pre-construction and site work, contingency and upstream carrying costs. Within that broader number, the cost of building the terminal has been pegged at $14 billion, with the Coastal GasLink pipeline running C$6.2 billion. Pipeline operator TransCanada Corp said it expects to start construction on the pipeline in early 2019, which will carry natural gas from the Montney gas-producing region of British Columbia and Alberta to the LNG Canada facility. The project owners will provide their own natural gas supply and will individually market their share of LNG. LNG Canada’s initial output will be 14 million tonnes per annum (Mtpa) from two trains, or processing units, with the option to add two more trains to expand to 28 Mtpa. Canada has committed C$275 million to infrastructure and environmental performance measures related to LNG Canada, which will have the lowest carbon intensity of any large LNG facility in the world, Trudeau said. The project will boost Canada’s oilpatch, which has struggled to attract investment amid pipeline constraints and investor malaise over a recent court decision overturning the approval of the Trans Mountain pipeline expansion. Natural gas producers such as Encana Corp and Tourmaline Oil Corp stand to gain as Canada’s depressed gas prices rise, Raymond James analysts said. Smaller pipeline companies including Pembina Pipeline Corp will also benefit, said RBC analyst Robert Kwan. RISING APPETITE The construction decision comes amid a U.S.-China trade dispute that has led to tariffs being imposed by China on LNG shipments from the United States, threatening U.S. President Donald Trump’s energy dominance plan. China is the fastest-growing major buyer of LNG and in 2017 overtook South Korea to become the world’s No. 2 importer, behind Japan. Energy consultancy Wood MacKenzie said it appeared project partners had pushed hard to reach an investment decision, with rival projects progressing in Qatar, Russia, Mozambique and the United States. “I don’t see it as a case of replacing U.S. cargoes, more about meeting projected demand growth,” said Wood Mackenzie analyst Nicholas Browne.
Petrol pumps are about to face their biggest test, and no, it’s not angry customers
Rising motor oil prices have thrown up a unique problem not foreseen by those who designed the dispensing units (DUs) for petrol pumps. If motor oil prices cross the Rs 100 mark, DUs at petrol pumps will run out of digits. The fuel dispensing units at petrol bunks have been calibrated for digital display of prices in two digits with two decimal figures and can display a maximum price of Rs 99.99. With this, if the price of the fuel touches Rs 100.00, the DUs will display Rs 0.00 and the vendor will have to collect the additional Rs 100 from consumer manually. With motor oil price crossing the Rs 90 mark (petrol is selling in Mumbai at Rs 92 a litre), the Rs 100 mark is well within sight as no respite is seen in the rising global prices of crude oil. “When the DUs were digitized they didn’t foresee the day the price per liter petrol would touch Rs 100 and they have woken up to the reality at the last minute. The dealers and consumers will suffer because it takes time to upgrade the system and the retail industry may even come to a standstill,” M Prabhakar Reddy, chairman of All-India Petroleum Dealers Association told TOI. The oil companies are preparing for the tricky scenario reminiscent of the way software companies readied to face the threat of Y2K bug at the beginning of this century. Oil companies are upgrading their fuel dispensers to ensure they display correct prices when rates reach Rs 100 per litre. According to a recent ET report, most pumps do not need upgradation but some have old dispensers that can only display prices in two digits before the decimal point, which would make them obsolete if petrol price hits Rs 100. Citing executives at state-run and private fuel retailing companies, the report said while most dispensers are equipped to display three-digit prices for a litre of petrol or diesel, a small segment of older pumps in rural areas or smaller towns would need to be upgraded. Less than a fifth of dispensers used by the Indian Oil Corporation, the country’s largest fuel retailer, would need re-calibration to show prices in three digits, the report said citing the executives. The company’s dispensers are set to be upgraded over the next month or so, which would address the issue of price display as well, an IOC executive told ET. The upgrade, he said, was part of the regular operational exercise and not being done in anticipation of higher prices.
IGL hikes CNG, PNG prices; rise in subsidised LPG price too
State-run Indraprastha Gas Ltd (IGL) has raised the price of compressed natural gas (CNG) by Rs 1.70 per kg and of domestic piped gas by Rs 1.30 per standard cubic metres (scm) in Delhi, effective Monday, following a change in the rate of domestic natural gas prices payable to producers. As part of the six-monthly official revision of rates, the domestic natural gas price will go up from October 1 to $3.36 per million British thermal unit (mbtu), from the current $3.06. IGL has also raised the price of CNG by Rs 1.95 per kg in Noida, Greater Noida and Ghaziabad. “The new consumer price of Rs 44.30 per kg in Delhi and Rs 51.25 per kg in Noida, Greater Noida and Ghaziabad would be effective from midnight of September 30 and October 1,” an IGL release said. “The price of CNG being supplied in Rewari is being increased by Rs 1.80 per kg from Rs 52.25 per kg to Rs 54.05 per kg. The price of piped natural gas (PNG) to households in Noida, Greater Noida and Ghaziabad have also been raised by Rs 1.50 per scm. “The revision in retail prices of CNG and domestic PNG has been effected after taking into account the overall impact on the cost, as a result of the increase in prices of domestically produced natural gas notified by the government and appreciation of the dollar as compared to rupee since the last price revision,” it added. State-run oil marketer, Indian Oil Corporation (IOC), on Sunday also announced a marginal increase of Rs 2.89 per cylinder in the price of subsidised LPG cylinder for domestic customers in Delhi for October. “While the price of non-subsidised LPG at Delhi will increase by Rs 59.00 per cylinder in October 2018 mainly due to change in international price and foreign exchange fluctuations, the actual impact on subsidised domestic LPG customers is only Rs 2.89 per cylinder, which is mainly due to GST,” IOC said.
Exxon-led Russian consortium to pay Rosneft $230m to settle production dispute
Russia’s Sakhalin-1 consortium, led by ExxonMobil, has agreed to pay Russian energy giant Rosneft $230 million in an out-of-court settlement of an oil production dispute, an executive of an Indian consortium partner said on Friday. Rosneft had filed a $1.4 billion lawsuit in the Sakhalin district arbitration court in Russia’s far east, accusing the consortium of unjust enrichment, an allegation the consortium denied. The dispute centred around how oil should be shared between the Sakhalin-1 concession and an adjacent Rosneft field. “Rosneft was demanding that it should be paid $1.4 billion … We have agreed for an out-of-court settlement and will be paying $230 million as Rosneft entered the other area in 2011,” N.K. Verma, managing director of India’s ONGC Videsh, a partner in the Sakhalin-1 consortium, told Reuters. Rosneft, which also has a stake in the Sakhalin-1 consortium, declined to comment. ExxonMobil in Moscow declined immediate comment. “We don’t have anything we can share,” said Suann Guthrie, an ExxonMobil spokeswoman in the United States. P.K. Rao, director for operations at ONGC Videsh, said the out-of-court settlement was reached about 10 days ago. The row was over oil “cross-flows” from Northern Chayvo oilfield, controlled by Rosneft. Sakhalin-1, off Russia’s Pacific Ocean coast, is operated by Exxon Neftegaz Ltd, through which ExxonMobil owns 30 percent in the project. Rosneft and ONGC control 20 percent each. Japanese consortium Sodeco owns 30 percent. ONGC’s Verma said production at Sakhalin-1 reached 250,000 barrels per day (bpd), up from some 200,000 bpd, as Russia had lifted output restrictions as part of a global deal with OPEC. Russia’s total oil production hit a post-Soviet high of 11.347 million barrels per day this month. The dispute between Rosneft and the Sakhalin-1 consortium unfolded against the background of a wider rift between Russia and the United States over what Washington called Moscow’s meddling in a 2016 presidential election. Exxon had to quit some joint projects with Rosneft, including developing Arctic oil and gas, over sanctions imposed on Russia by the United States. Participation in Sakhalin-1 is not punishable by sanctions.