India LNG demand to dip on phase out of subsidy for power sector
India’s liquefied natural gas (LNG) demand could ease as the government has scrapped subsidies on gas sales to power companies, the chief executive of the country’s biggest gas importer said on Wednesday at a gas conference in Japan. Natural gas accounts for about 6.5 percent of India’s overall energy needs, far lower than the global average. India plans to raise the share of gas in its energy mix to 15 percent over the next three years, but a major challenge to that goal is the price sensitivity of Indian consumers. India has for the last two fiscal years been giving discounts on the sale of imported LNG to revive more than 14 gigawatts of stranded power generation capacity that had been hit by domestic gas shortages. But a power ministry official confirmed that the LNG subsidy has not been extended beyond March 31, and Prabhat Singh, chief executive of Petronet LNG, said these gas-based projects cannot compete with plants using cheaper coal. “If (the power subsidies in India) don’t happen, then definitely around a million to 2 million tonnes of LNG which was going there will be lost,” Singh told reporters at Gastech in Japan. After the subsidies were first put in place, India’s annual LNG imports surged 15 percent to 16.08 million tonnes in 2015/16. Then for the first 11 months of the 2016/2017 fiscal year – the April-February period – India imported 17 million tonnes. Data for March is not yet available. Andrus Peat Jersey
Nine companies prequalify for oil and gas exploration in Lebanon
The deadline for the second prequalification round for oil and gas exploration has expired. Nine new companies have now applied to partake in the first licensing round, according to the Ministry of Energy and Water (MoEW). The companies are ONGC Videsh Limited (India), PJSC Lukoil (Russia), Sapurakencana Energy SDN BHD (Malaysia), Sonatrach International Petroleum Exploration and Production Corporation (Algeria), Qatar Petroleum International Limited, Advanced Energy Systems (ADES) SAE (Egypt), Petropars Ltd (Iran)., JSC Novatek (Russia), and Vega Petroleum Limited (Egypt) jointly with both Edgo Energy Limited (Jordan) and Petroleb (Lebanon). The ministry said that the 14 companies that in 2013 had previously applied for the first prequalification round have now updated their files, providing the needed information regarding any changes which could impact their prequalification. This includes audited financial statements for the years 2014 and 2015, and unaudited statements for 2016. The Lebanese Petroleum Administration (LPA) is now in the process of contacting the rest of the companies that participated in the first prequalification round for their files to be updated. A total of 46 companies were accepted in the first prequalification round. But the process was halted after the government failed to ratify two decrees pertaining to the delineation of maritime blocks and contracts pertaining to exploration and production. Blocks one, four, eight, nine and ten are up for bidding in the first licensing round. According to the ministry, the criteria adopted for qualifying companies remain unchanged. The companies are divided into four main areas: Legal, technical, financial and environmental. Participating companies should be joint stock companies, and should have expertise relating to oil and gas exploration in water depths of more than 500 meters, as well as having previously produced petroleum. They must also have a minimum capital of $10 billion. The results of the second prequalification round will be announced on April 13 this year. Tim Schaller Jersey
OVL to invest over $3b in Iran gas block; submits revised plan
National oil & gas explorer ONGC is planning to invest over $3 billion in the Farzad-B natural gas block in Iran, a top company official said today. The proposed investment will be driven through a consortium of state-run oil companies led by its overseas arm ONGC Videsh (OVL). The statement comes amidst media reports that government is threatening to massively reduce crude intake from Iran as Tehran delays clearing the investment plan in the block. An OVL-led consortium had already submitted a $3 billion development plan to Iran to develop an offshore field in Farzad B, which is said to hold 12.5 trillion cubic feet in reserves, which may last for 30 years. Iran has been delaying New Delhi’s proposal after the US-led western nations lifted the economic embargo on Tehran last year opening its doors to more competitive options, which Tehran wants to explore now. “Last month, we submitted a revised plan to Tehran for the block. We will be able to develop the block within five years if we are given the go-ahead,” OVL managing director NK Verma told reporters on the sidelines of an industry meeting here. “We are keen to invest north of $3 billion to develop this field,” he said adding they are awaiting feedback from Tehran now. It can be noted that New Delhi was one of the few large oil consumers to have continued buying Iranian crude during the global economic sanctions over Tehran’s nuclear programme. But since the lifting of the sanctions last year, Iran has sought other investors and there is some uncertainty whether new Delhi would get the Farzad block contract. Output from Farzad-B could range from 1 billion to 1.6 billion cubic feet of natural gas per day, Verma said. On its production target, Verma said the company expects to raise production in fiscal 2018 to 14 million tonne oil equivalent, up from 12 million tonne in fiscal 2017. He also said the company is planning to invest $45 million to produce from gas wells owned by Imperial Energy, which was acquired by OVL in 2008. As part of its plans to secure energy resources, government has chalked out an investment plan worth $20 billion in Iran, which will include developing oil and gas fields apart from setting up petrochemical plants, gas-processing facilities and developing the strategic Chabahar port in Southern Iran. Earlier this week, media reports said the government would massively reduce its Iranian oil purchases by a fifth over the delay in clearing the investment in the gas field. For Iran, India is the biggest oil buyer after China. Unhappy with Tehran’s delays, the oil ministry has reportedly asked state refiners to cut imports from Iran. The state-run refiners reportedly told National Iranian Oil Co about their plans to reduce oil imports by a fifth to 1,90,000 bpd from 2,40,000 bpd. Between April 2016 and February 2017, the domestic oil companies more than doubled their intake from Iran at 5,42,400 bpd, compared to 2,25,522 bpd a year earlier. John Timu Jersey
RIL gets green nod for Rs 13,250 crore Dahej unit expansion project
Reliance Industries Ltd (RIL) has received environment clearance for expansion and debottlenecking of its Dahej petrochemical facility in Gujarat at a cost of Rs 13,250 crore. The Mukesh Ambani-led firm wants to expand its Dahej facility located in Bharuch district in view of erratic supply of feed stock, change in the government’s policy to prioritise domestic supply over industrial sector, adequate supply of Shale gas ethane from the US, besides meeting demand-supply gap of petrochemicals in India. “Based on the recommendations of the Expert Appraisal Committee (Industry), the Environment Ministry has given the environmental clearance for RIL’s expansion project yesterday,” a senior government official said. The green nod to the proposed project, which will be carried out within the existing plant area of 700 hectare, is subject to some conditions, the official said. The estimated cost of the project is Rs 13,250 crore. A budget of Rs 400 crore will be kept aside for environment protection and conservation. The fuel used for the proposed project would largely be ethane, lean gas and off gas. The power required for the project will be met from the existing captive power plant. As per the proposal, RIL Dahej facility presently utilises a mixture of ethane and propane to produce downstream products and by-products. Dahej facility proposes to modify its feedstock ratio of ethane and propane in the gas cracker plant owing to the availability of shale gas ethane imported from the US. This change in feedstock mixture will result in higher production of ethylene. The RIL’s proposal also include setting up of new plants including Chlorinated Poly Vinyl Chloride (CPVC), Vinyl Chloride Monomer (VCM), Poly Vinyl Chloride (PVC) and a dedicated Ethane storage tank. Brett Hundley Authentic Jersey
Shell to fuel world’s first LNG-powered Aframax oil tankers
A unit of Royal Dutch Shell will fuel the world’s first LNG-powered Aframax crude oil tankers under a deal signed with Russian shipping company SCF Group (Sovcomflot). Shippers are looking to liquefied natural gas (LNG) to help them meet stricter emissions regulations in 2020. Oil tankers are “another marine segment embracing the benefits of LNG fuel”, Maarten Wetselaar, Shell’s integrated gas and new energies director, said in an announcement released on Monday. Shell subsidiary Shell Western LNG will supply four Aframax tankers operating in the Baltic Sea and northern Europe from a bunkering vessel that will load at the Gate terminal in Rotterdam and a second supply point in the Baltics. The dual-fuelled tankers are scheduled to begin operations at the start of the third quarter of 2018. Ship owners and operators face tougher regulations on marine fuel, also known as bunker fuel, in 2020. Under International Maritime Organization (IMO) requirements set in October, the cap on sulphur emissions from vessels will fall to 0.5 percent by 2020 from the current 3.5 percent. In order to comply, shippers can burn lower-sulphur, but more expensive, middle distillates, install “scrubbers” that enable them to burn dirtier fuel, or invest in ships powered by LNG. LNG has virtually no sulphur content, while producing low nitrogen oxides compared to industry standard fuel oil and marine gasoil. Jimmie Ward Authentic Jersey
AG&P Announces Integrated Plug-and-Play Solutions for LNG Supply Network in Asia
AG&P (Atlantic, Gulf and Pacific Company), the global leader of infrastructure solutions, today announced two standardized modular products for the LNG supply network that will drive down costs, accelerate schedule and enable last-mile delivery to LNG demand centers scattered across Southeast Asia, South Asia and the Caribbean. Speaking at Gastech 2017, the company presented designs incorporating standardized equipment to deliver a scalable LNG delivery platform and a fit-for-purpose, onshore modular regasification unit. These ‘plug and play’ packages, based on standard solutions, are built in AG&P’s dedicated, state-of-the-art, 150-hectare modularization facilities which helps speed delivery times and significantly reduces the cost of customized engineering and project man-hours while increasing productivity and quality. Cost-effective and built for transportation across the world, AG&P believes these off-the-shelf products have the potential to bolster the small and mid-scale LNG market. Key benefits include: Scalable LNG delivery platform Onshore modular, standardized regasification unit AG&P has focused on optimizing the storage and marine design to drive cost efficiencies and adoption Selection of shallow draft barge design and conventional vessel hull design allow for fixed cost hull construction over a scalable range, typically: Platform 1: 4,000 to 8,000m³ capacity for shallow water delivery Platform 2: 6,000 to 16,500m³ for open water delivery Utilizes identical hull design and equipment from 6,000, 7,500,10,000 up to 16,500m³ Products utilize existing GTT hull designs specifically configured to optimize membrane tank configuration Geometrical membrane tanks are standardized which reduces re-engineering costs Detailed designs are completed by AGP/GET, integrating standardized equipment/technologies and prefabricated in our manufacturing facilities in Manila, Philippines, All kits, including accommodation fitments and bridge equipment are standardized packages Modularized and pre-commissioned in our state-of-the-art facilities in the Philippines Each unit consists of: TEMA NJN plate and tube exchanger utilizing indirect glycol/water heat transfer Uses configuration of 125mmscfd process train, typically, in 250mmscfd modularized package Each individual 250mmscfd module consists of: High-pressure pump Tube and shell exchanger Boil-off gas (BOG) recondenser HIPPS ESDV/F&G/CAMS Central control room (E-house) Off module equipment or shared utilities consisting of: Glycol water plate exchanger circuit BOG compressor LP booster pumps All equipment is purchased utilizing an in-house approved vendor list Allows competitive pricing based on standard product requiring no re-engineering Enables shorter procurement times based on standard product Typical schedule -12 months ex-works “While there is increasing preference for small-scale and mid-scale LNG solutions in emerging economies like Indonesia and India, uptake remains slow with few projects underway. Standardization and modular solutions will be the circuit-breaker that will bring projects online, enabling the switch to LNG as a clean and affordable energy source,, said Mr. Albert Altura, President AG&P. “AG&P is combining its modularization capabilities and unique alliances with engineering and technology partners to provide the complete spectrum of infrastructure assets that enable LNG distribution and last-mile delivery. Serving as a single point of contact for customers across the LNG value chain, we deliver a whole terminal and sell tolled gas to power plants, mines, bunker fuel operations, transportation fleets, cold storage and other industrial applications,, added Mr. Albert Altura. AG&P has a long and successful track record of delivering pragmatic solutions for the oil and gas industry with expertise in LNG. It is only one of three companies worldwide to have a global technical and licensing agreement for membrane tank design from the French giant, GTT. In addition, AG&P owns a major stake in GAS Entec, the leading Korea-based engineering firm and has entered a joint venture with Risco Energy Group of Indonesia. Gerry Cheevers Jersey
India’s ONGC submits revised plan for Farzad B gas field in Iran
The overseas arm of India’s Oil and Natural Gas Corp has submitted a revised plan to develop the giant Farzad B gas block in Iran, including a commitment to spend more than $3 billion, a senior executive said on Tuesday. ONGC Videsh expects to produce between 1 billion and 1.6 billion cubic feet per day of gas in five years from the start of development of the block, N. K. Verma, the company’s managing director told Reuters in Mumbai on Tuesday. India is the second-largest buyer of Iranian crude, and was among the few countries to continue trade with Iran while the country faced Western sanctions over its nuclear programme. But since the lifting of some of the sanctions last year, Iran has sought other investors and there is some uncertainty whether the Farzad block contract will be awarded to an Indian company. The impasse has led Indian refiners to plan on cutting imports from Iran by a fifth in 2017-18. Verma also commented that ONGC Videsh expects to raise production during the fiscal year ending in March 2018 to 14 million tonnes oil equivalent, up from 12 million tonnes in the fiscal year of 2017. The company also plans to invest $45 million to produce from gas wells owned by Imperial Energy, which ONGC Videsh acquired in 2008. “We are setting up gas processing facilities… we have dug four pilot wells and have got encouraging response,” Verma said. Ryan Schraeder Authentic Jersey
Government Releases a record 3.25 Cr LPG connections in FY 2016-17
Thanks to the government’s flagship programme Pradhan Mantri Ujjwala Yojana (PMUY), where the government wants to make Indian rural kitchens smoke free by providing access to clean cooking fuel, the state-owned Oil Marketing Companies (OMCs) have successfully released 3.25 crore new LPG connections during FY 2016-17, the highest ever number of LPG connections released in a financial year so far in the LPG history of the country. The connections released includes 2 crore connections released under PMUY, which was launched on 1st May 2016 by Prime Minister and 1.25 crore connections to new consumers other than PMUY beneficiaries. Under PMUY, women of BPL families especially residing in rural areas have been given LPG connections. This increase in connections has resulted in a jump in the LPG coverage and as on 01.04.2017, the national LPG coverage is estimated to be 72.8% with 19.88 crore active consumers. The government has mandated oil companies to add 10 crore new cooking gas customers between April 2016 and March 2019. Half of the new connections have to go to poor households under the government’s Ujjwala Yojana. “When Modi ji took over as prime minister, the country had 14 crore active LPG consumers, which has today expanded to 19.80 crore. So, we have achieved 5.8 crore in less than three years,” oil minister Dharmendra Pradhan recently said. “When we formed government, it used to be less than 1 crore new connections a year,” he said, adding that 3.16 crore connections had been given by March 24. This exceeds the 2016-17 target of 3 crore connections and is way ahead of 1.77 crore new customers added in 2015-16,” he added. Craig Robertson Womens Jersey
Qatar restarts development of world’s biggest gas field
Qatar has lifted a self-imposed moratorium on development of the world’s biggest natural gas field, the chief executive of Qatar Petroleum said on Monday, as the world’s top LNG exporter looks to see off an expected rise in competition. Qatar declared a moratorium in 2005 on the development of the North Field, which it shares with Iran, to give Doha time to study the impact on the reservoir from a rapid rise in output. The vast offshore gas field, which Doha calls the North Field and Iran calls South Pars, accounts for nearly all of Qatar’s gas production and around 60 percent of its export revenue. “We have completed most of our projects and now is a good time to lift the moratorium,” QP Chief Executive Saad al-Kaabi told reporters in Doha. The new development will increase production of the North Field by about 10 percent, adding about 400,000 barrels per day of oil equivalent to Qatar’s output, he said. LNG GLUT Qatar is expected to lose its top exporter position this year to Australia, where new production is due to come on line. The LNG market is undergoing huge changes as the biggest ever flood of new supply is hitting the market, with volumes coming mainly from the United States and Australia. President Vladimir Putin said on Thursday Russia aimed to become the world’s largest LNG producer. The flurry of LNG production has resulted in global installed LNG capacity of over 300 million tonnes a year, while only around 268 million tonnes of LNG were traded in 2016, Thomson Reuters data shows. That has helped pull down Asian spot LNG prices by more than 70 percent from their 2014 peaks to $5.65 per million British thermal units (mmBtu). Qatar’s decision to lift the moratorium on new gas development now could help the Gulf monarchy maintain a competitive edge after 2020, when the global LNG market is expected to tighten. “With global activity levels and costs low, now is a good time to add new capacity, even if the LNG market does presently look over supplied,” said Giles Farrer, research director of Global LNG at Wood Mackenzie. “It’s a signal that Qatar intends to increase its market share, which has been falling as other regions have built new capacity.” An energy advisor to the Qatar government said he saw it as a preemptive step to warn competitors who are considering LNG investments that Qatar would remain an aggressive seller. “It will certainly give rivals something to chew on. It’s like when Saudi develops future oil capacity even when there is a glut – it shows you mean business,” he said, declining to be named as he was not authorised to speak publicly. The announcement coincides with the start of a major LNG industry conference this week in Japan, attended by many of its competitors and potential new customers. Kaabi said low prices would not pressure Qatar. “By the time this project comes online in five years or so it should be a good market for gas,” he said. “We don’t see that the pricing pressure has affected us as much as some.” IRAN NO ENEMY Iran, which suffers severe domestic gas shortages, has made a rapid increase in production from South Pars a top priority and signed a preliminary deal with France’s Total in November to develop its South Pars II project. Total was the first Western energy company to sign a major deal with Tehran since the lifting of international sanctions. Kaabi said the decision to lift the moratorium was not prompted by Iran’s plan to develop its part of the shared field. “What we are doing today is something completely new and we will in future of course … share all this with them (Iran).” The economy of Qatar, a future World Cup host with a population of 2.6 million, has been pressured by the global oil slump and in 2015 QP dismissed thousands of workers and has earmarked a number of assets for divestment. QP is merging two LNG divisions, Qatargas and RasGas, to save hundreds of millions of dollars. In February, Kaabi said Qatar would focus on seeking international opportunities by exploring for oil and gas in Cyprus and Morocco. But the current low LNG price environment may deter investment in new supply projects, bringing tighter supplies and price spikes in the future. New production from Qatar’s North field is seen starting within 5-7 years, targeting gas exports of 2 billion standard cubic feet per day, Kaabi said. Adrian Peterson Jersey
Petronas plans to invest $150 million in India’s lubricant market
Malaysian oil major Petronas plans to invest $150 million, or aboutRs.975 crore, to expand its presence in the country’s lubricant market. Petronas Lubricants International (PLI), manufacturing and marketing arm of the Malaysian national oil corporation, will spend the money to set up a plant with 110 million litres capacity in Patalganga, on the outskirts of Mumbai, and a technology centre for motorcycle engine oil, and invest in branding activity in the country, company officials said. Currently, the 10th largest lubricant brand in the world, India can be a key engine for growth in future for Petronas, said Giuseppe D’Arrigo, group CEO at Petronas Lubricant International. “India can be the engine of global lubricant market growth in future,” he told ET in an interview. Petronas is open to inorganic opportunities arising in the future, as it aims to become a top five player in the world in five years. “We have been amongst the fastest growing brand globally. Even in India we hope to do better than competition,” said D’Arrigo. He said immediate focus is on operationalising the new factory, which is expected to go on stream in the first quarter of 2018, and getting the brand’s ‘route to market’ right. The company may adopt an FMCG-style marketing strategy as it did in China. D’Arrigo said the new plant in India should attain full capacity in three to four years. He said the company would focus on value selling. “India is market for price, but more and more sophistication is taking place, people will look for value in the future and that is where Petronas will play. Better products and better value to customers,” he said. Petronas Lubricant currently sell about 30 million litres a year in the country, accounting for just 3% of its global volumes of about 1 billion litres. D’Arrigo said the firm is eyeing volumes of 1.5-1.7 billion litres globally by 2020-2021 and that by then share from India would cross 5%. Bud Norris Womens Jersey