Australia-listed Liquefied Natural Gas Ltd signs 20 year pact to supply US LNG to India
Australia-listd Liquefied Natural Gas Ltd (LNG Ltd) has signed a pact to potentially supply gas from its planned Magnolia LNG project in the US to India for 20 years. LNG Ltd signed a Heads of Agreement (HOA) with Vessel Gasification Solutions, Inc (VGS) for supply of 4 million tonnes a year of LNG from its Lake Charles, Louisiana, project for 20 years, the company said in a statement. “The non-binding HOA provides for a 20-year Free-on-Board (FOB) Sale and Purchase Agreement (SPA) of up to 4 million metric tonnes per annum” of liquefied natural gas, it said. VGS Group, an Indo-American company, is developing a floating LNG import and regasification terminal offshore Kakinada in Andhra Pradesh. The project has two stages, with phase one comprising building a Floating Storage Regasification Unit (FSRU) with a capacity of 4.47 million tonnes, which in the second phase would be scaled up to 8.94 million tonnes. The statement said VGS is targeting to be the first liquefied natural gas (LNG) import facility on the east coast but it did not give timeliness for either setting up the import terminal or supply of gas from US. “The obligations of the parties are conditional upon (its wholly-owned subsidiary) Magnolia LNG, LLC’s satisfaction with or waiver of conditions precedent including financial close of the Kakinada terminal and satisfaction by VGS of defined credit requirements underpinning their LNG purchases within agreed time frames,” the statement said. Magnolia LNG (MLNG) is an 8 million tonne per annum or more LNG export terminal development in Lake Charles, Louisiana, USA. LNG Limited’s Managing Director & CEO Greg Vesey said: “We look forward to supplying long-term volumes to the Indian market to meet their growing needs for clean energy. Overall, this agreement represents another important step forward for the MLNG Project.” “With the execution of this agreement, VGS is now in a prime position to execute on the first-mover advantage we have established on India’s East Coast,” said Gaurav Tiwari, President of VGS. “We are very excited to take this step forward in our relationship with Magnolia, and we look forward to working with the Magnolia team to bring a significant tranche of US-produced LNG to a key new market on the East Coast of India,” he added. Magnolia LNG proposes to construct and operate up to four liquefaction production trains, each with a capacity to turn 2 million tonnes per annum of natural gas into liquid fuel (LNG) for ease of transportation. The statement said Magnolia LNG is fully permitted and has requisite approvals to export gas to both FTA and non-FTA nations. “Final investment decision and initiation of construction are expected upon execution of sufficient offtake agreements to support financing,” it added. John Johnson Authentic Jersey
Budget 2017: HPCL expects custom duty exemption on greenfield expansion
Sharing his expectations from the upcoming Budget 2017, M K Surana, Chairman and Managing Director, HPCL said the company would like customs duty exemptions for greenfield and brownfield expansions. Such exemptions would aid funds infusion into infrastructure projects and also allow for potentially reasonable returns, he added. Surana said that he expects the government to continue with zero duty on crude imports. However, he does not expect the government to tinker with cess for upstream companies and expects lesser subsidy provision in the Budget because he expects the overall subsidy burden on the government to be less. Below is the verbatim transcript of MK Surana’s interview to Latha Venkatesh, Sonia Shenoy & Anuj Singhal. Anuj: What would be your key expectations heading into the Budget? The government policies have been in favour of companies like yours for last three years? A: In the way that the control of the prices of motor spirit (MS) and high speed diesel (HSD) has been good for the oil marketing companies as such and the government policies has been in the direction which keeps the oil sector in good humour to that extent. As far key things which we can hope from the Budget, I don’t know whether the government will be doing it, but we have got a lot of expansion plans coming in green field and brown field, new projects as well as expansion, so if the custom duty exemptions can be given for the green field expansion and the brown field expansion then that will be a definite help in infusing more infrastructure projects and ensure that the projects have reasonable returns on that. The second things is that there is Bharat Stage (BS) VI specifications to be implemented effective 2020, so a 100 percent depreciation on those projects. In the past government has considered that as a pollution control project. So that will be another thing which we can look for. The crude import duty is zero right now and we hope it will continue. So these are the two or three main key things which we hope in the Budget. Latha: What about cess. It went from specific duty of Rs 4,500 per tonne to an ad valorem. Will they tinker that and change the ad valorem in any way? A: It depends because as the crude prices goes up, the ad valorem thing will continue to be higher and higher which does have impact on the upstream companies. However, we need to see because the expectation is that crude prices will continue to hover in the range of USD 55-65/bbl for some time. So right now the ad valorem rate is there but it is more or less not much of a difference to that extent. So I do not think there will be much change to that effect on that. Sonia: Are you expecting any kind of hike in the oil subsidies and can you tell us with every dollar increase in oil prices, what does that do to the total under recoveries? A: Right now there is no under recovery on MS and HSD. It is fully balanced. So overall subsidy burden on the government should be lesser than what it used to be. It will be only on liquefied petroleum gas (LPG) and public distribution system (PDS) kerosene. The consumption of PDS kerosene is also slowly coming down as more and more LPG being brought into the system. So overall the subsidy provision should be lesser than what has been in the past, in my opinion. Anuj: Kerosene price hike which has been the norm now. It resulted in a lot of consumption, moving away from this. Do you expect that to continue because that would again be positive from economic point of view? A: The reduction in the kerosene consumption is a result of two-three things. It is not purely because the price is being hiked, because the price is being made closer to the other kerosene, the kerosene which goes into adulteration etc gets reduced and therefore the consumption of kerosene reduces and so the subsidy burden also reduces – that’s one thing. Second, with the push on the Pradhan Mantri Ujjwala Yojana (PMUY) LPG for the below poverty line (BPL) category, so some part of kerosene is getting shifted to LPG and to that extent the ration quota will get reduced for the kerosene and to that extent some of the part of that kerosene which was not going actually for PDS and being used in some other means, will not be done. Latha: Are you privy to any targets on this BPL LPG front and therefore some estimate of how much kerosene consumption may fall – and that would be good for you profit and loss (P&L), wouldn’t it? A: Not for our P&L as such but good for the country as a whole. I do not think it will have much impact on oil companies because there is some subsidy part on that but overall from the country point, it definitely will impact. Latha: Any pressure from the government for higher dividend . It is widely believed that especially because you all have been the beneficiaries of the way the government has handled the subsidy issue. There will be more dividend request. Are you privy to anything? A: I think its better that I do not comment on this right now. Stephon Gilmore Jersey
British Gas to pay 9.5 million stg for customer billing failings-Ofgem
Centrica-owned British Gas has to pay 9.5 million pounds ($11.9 million) in compensation to customers who faced billing problems after the household energy supplier upgraded its system in 2014, UK energy market regulator Ofgem said on Tuesday. Ofgem said British Gas, Britain’s biggest energy supplier, had shown failings in its registrations, complaints handling and billing processes for business customers and over 6,000 new customers had experienced delays registering with the supplier. The 9.5 million pounds comprises payments to affected customers and payments to a charity to help energy customers in need, Ofgem added. British Gas said it voluntarily reported the issues to Ofgem after it introduced the new IT billing system. “We invested in a new billing system so we could improve the service we provide to our business customers,” British Gas said in a statement. “At the time, this was a major undertaking – merging nearly 100 different systems into one. It didn’t go as smoothly as we would have liked so we reported this to Ofgem as a priority,” it added. British Gas said the issues have now been resolved and it has restored a “very good quality of customer service”. ($1 = 0.8009 pounds) Vita Vea Jersey
State-owned gas utility GAIL planning to raise Rs 750 crore through bonds
State-run gas marketer GAIL (India) Ltd is planning to raise Rs 750 crore in bonds via private placement to finance its ongoing projects. The company has decided to issue non-convertible bonds of up to Rs 750 crore with an option to double the issue size via private placement in one or more tranches, GAIL said in a statement on Friday. “The issue of the rupee bonds would help in funding the growing capex requirements for the future growth of the Company,” Chairman B C Tripathi said. The board also recommended issuance of one bonus share for every three equity shares held by shareholders. Following the issue, the paid-up share capital of the company will expand from Rs. 1,268 crore to Rs. 1,691 crore. “The decision has been taken in order to enhance shareholders’ value and acknowledge their support to the company over the years,” Tripathi said. The last time GAIL had issued a bonus share was in October 2008. GAIL has also decided to pay an interim dividend of Rs 8.5/share, or 85% of the paid-up equity share capital, for 2016-17. The record date for this is February 3. All state enterprises, especially the profitable oil companies, are facing increased demand for big dividends from the government aiming to generate enough resources to expand public spending. Mason Cole Jersey
Russia’s Gazprom Calls For Urgent Gas Investment Decisions In Europe
Long-term gas demand in Europe means immediate investment decisions are needed to build new infrastructure, Alexander Medvedev, a deputy chief executive officer at Russian gas giant Gazprom, said on Tuesday. Last year, Russia supplied Europe and Turkey with a record 179.3 billion cubic metres (bcm) of gas as consumers capitalised on low gas prices, which follow the prices of oil with a lag of six to nine months. Its share of the EU gas market rose to an all-time high of 34 percent from 31 percent in 2015. Russia plans to boost supplies further and remain the dominant player on the European gas market. “In order to cater for the growth (in Europe’s gas demand) tomorrow, large-scale investment decisions are required already today. This is a stimulus for us to invest in new fields and gas pipelines,” Medvedev told a European Gas conference in Vienna. “According to a consensus forecast of the world’s leading energy agencies, thanks to new spheres of growth, Europe will need some additional 90 bcm of gas by 2025 from the current level of supply and more than 120 bcm by 2035,” he said. Nord Stream-2 Gazprom has been pushing for the Nord Stream-2 underwater gas pipeline project, which would double the existing annual capacity of the current two pipelines from 55 bcm. The project has faced resistance from some European countries, notably from Poland, which want to cut their reliance on energy supplies from Moscow amid political tensions. “Gazprom is ready to create a powerful infrastructure for gas supplies, which will cost European taxpayers not a single euro cent,” Medvedev said. He added Nord Stream-2 was on schedule as new pipelines were being commissioned in Russia to supply gas from Siberia. “The Nord Stream-2 project is being implemented in full compliance with the schedule. The Bovanenkovo-Ukhta-2 gas pipeline has been launched recently, this is a part of our Nord Stream-2 schedule,” Medvedev said about a pipeline in Siberia. Geoffroy Hureau, the general secretary of data provider CEDIGAZ, said Russia would be able to keep its market share in Europe thanks to lower production costs and have the upper hand in the battle with an expected influx of liquefied natural gas from the United States over the coming years. “They have a lot of gas they can put on the market at relatively low cost because they have developed some fields in view of a growing European market,” he said on the sidelines of the conference. Mitch Richmond Jersey
Petrochina Aims To Meet A Third Of China’s Shale Gas Target By 2020
China’s biggest energy giant PetroChina plans to step up shale gas development in Sichuan province this year, aiming to meet a third of a 2020 government target for the unconventional resource, according to state media and a government official. News agency Xinhua reported on Wednesday that PetroChina will step up drilling in southern parts of Sichuan province, China’s top gas-producing region and a key area for early shale gas development. PetroChina’s plan to build 10 billion cubic metres (bcm) of shale gas output capacity by 2020 in Sichuan province would represent a third of Beijing’s production target for the resource that year. Domestic rival Sinopec Corp, which has been leading the sector with China’s largest commercial shale gas discovery in nearby Chongqing municipality, aims for 10 bcm of output by the end of the decade as well. “PetroChina is playing catch-up with Sinopec, as its understanding of the geology deepens and its technology improves,” said a government official who oversees shale gas development. “Longer-term PetroChina has greater potential in tapping shale resources as it operates on a much larger acreage,” said the official, who declined to be named as he is not authorized to speak to press. China, which claims to have the world’s largest technically recoverable shale gas resources, has a much higher development cost compared with North America, however, due to more complicated geology and scarce water resources. Despite Beijing’s push to boost gas use at the expense of coal, natural gas demand has since late 2014 grown much slower compared with the previous decade, mainly because of easing economic growth and competition from cheaper global supplies. PetroChina last year produced 2.3 bcm of shale gas in Sichuan province, mostly from 120 production wells in the Changning-Weiyuan pilot zone, Xinhua said. It also laid 220 kilometres of pipelines. For 2017, the state oil and gas company plans 19 new rigs to drill 110 wells in the area, part of a total 600 wells planned over the coming four years, Xinhua said. Mike Daniels Womens Jersey
Petronas boosts capacity at Malyasian LNG complex
State-run Petronas subsidiary Petronas LNG 9 Sdn. Bhd. (PL9SB) has started commercial operations of the ninth LNG liquefaction train at the Petronas LNG Complex (PLC) in in Bintulu, Sarawak, Malaysia (OGJ Online, Feb. 24, 2012). Equipped with a nameplate capacity of 3.6 million tonnes/year, the new production train entered commercial operation on Jan. 1, said JX Nippon Oil & Energy Corp. (JX NOE), Tokyo, which owns a 10% interest in PL9SB. Startup of PL9SB’s liquefaction plant raises total production capacity at PLC to about 30 million tpy from its previous capacity of 25.7 million tpy. Announcement of PL9SB’s official launch of commercial operations follows initial startup, commissioning, and production activities at the train in September 2016, Petronas said in its latest quarterly earnings presentation to investors. JX NOE, which purchased equity interest in PL9SB in June 2016, also holds 10% interest in Petronas subsidiary Malaysia LNG Tiga Sdn. Bhd.’s operations at PLC, according to separate June 3, 2016, releases from JX NOE and Petronas. In 2012, Petronas said Train 9, once completed, will receive its required feed gas of up to 850 MMcfd from various fields off Sarawak and, alongside all associated utilities, include units for the following: • Gas receiving. • Acid gas removal. • Dehydration and mercury removal. • Fractionation and liquefaction. • LNG rundown Marcus Cooper Womens Jersey
BP Energy Outlook: An energy transition is underway
?BP EnergyOutlook 2017 Global energy demand to increase by around 30% to 2035, driven by increasing prosperity in developing countries, partially offset by rapid gains in energy efficiency Technological improvements and environmental concerns are changing the mix of primary energy demand but oil and gas, together with coal, remain the main source of energy to 2035 Gas grows faster than either oil or coal; the rapid expansion of LNG is likely to lead to a globally integrated gas market, anchored by US gas prices Oil demand grows but at a slowing pace; and non-combusted uses replace transport as the main source of demand growth by 2030s Global coal consumption peaks, while renewables remain by far the fastest-growing energy source, quadrupling over the next 20 years The power sector accounts for nearly two-thirds of the increase in primary energy Carbon emissions grow at less than a third of the rate of the past 20 years, reflecting both gains in energy efficiency and the changing fuel mix, but in the base case are still projected to increase, highlighting the need for further action ?The 2017 edition of the BP Energy Outlook, published today,?said that ?global demand for energy is expected to increase by around 30% between 2015 and 2035, an average growth of 1.3% per year. However, this growth in energy demand is significantly lower than the 3.4% per year rise expected in global GDP, reflecting improved energy efficiency driven by technology improvements and environmental concerns. ?“The global energy landscape is changing. Traditional centers of demand are being overtaken by fast-growing emerging markets. The energy mix is shifting, driven by technological improvements and environmental concerns. More than ever, our industry needs to adapt to meet those changing energy needs,” said Bob Dudley, BP group chief executive. The Outlook looks at long-term energy trends and develops projections for world energy markets over the next two decades. The 2017 edition was launched today in London by Spencer Dale, BP’s group chief economist, and Bob Dudley, group chief executive. Main energy sources While non-fossil fuels are expected to account for half of the growth in energy supplies over the next 20 years, the Outlook projects that oil and gas, together with coal, will remain the main source of energy powering the world economy, accounting for more than 75% of total energy supply in 2035, compared with 86% in 2015. Oil demand grows at an average rate of 0.7% a year, although this is expected to slow gradually over the period. The transport sector continues to consume most of the world’s oil with its share of global demand remaining close to 60% in 2035. However, non-combusted use of oil, particularly in petrochemicals, takes over as the main source of growth for oil demand by the early 2030s. “The possibility that the most important source of growth in oil demand in the 2030s won’t be to power cars or trucks or planes, but rather used as an input into other products, such as plastics and fabrics, is quite a change from the past,” said Spencer Dale. Gas grows more quickly than either oil or coal over the Outlook, with demand growing an average 1.6% a year. Its share of primary energy overtakes coal to be the second-largest fuel source by 2035. Shale gas production accounts for two-thirds of the increase in gas supplies, led by growth in the US. LNG growth, driven by increasing supplies in Australia and the US, is expected to lead to a globally integrated gas market anchored by US gas prices. Coal consumption is projected to peak in the mid-2020s, largely driven by China’s move towards cleaner, lower-carbon fuels. India is the largest growth market for coal, with its share of world coal demand doubling from around 10% in 2015 to 20%in 2035. Renewables are projected to be the fastest growing fuel source, growing at an average rate of 7.6% per year, quadrupling over the Outlook, driven by increasing competitiveness of both solar and wind. China is the largest source of growth for renewables over the next 20 years, adding more renewable power than the EU and US combined. Emerging themes The Outlook highlights a number of questions and uncertainties raised by the energy transition that is underway. Oil: changing dynamics of demand and supply All of the demand growth for oil in the period to 2035 comes from emerging markets, with China accounting for half. The transport sector accounts for around two-thirds of the growth in oil demand. Within that, oil demand for cars increases by around 4 million barrels per day underpinned by a doubling in the global car fleet. The number of electric cars is assumed to increase from 1.2 million in 2015 to around 100 million in 2035 (around 5% of the global car fleet). The Energy Outlook constructs two illustrative scenarios to consider the impact of the broader mobility revolution affecting the car market, including autonomous cars, car sharing and ride-pooling. “The impact of electric cars, together with other aspects of the mobility revolution, such as self-driving cars, car sharing and ride pooling, is one of the key uncertainties surrounding the long-term outlook for oil” said Spencer Dale. The slowing rate of oil demand growth is contrasted by the abundance of global oil resources. The Energy Outlook speculates that the abundance of oil may cause low-cost producers, such as Middle East OPEC, Russia and the US, to use their competitive advantage to increase their market share at the expense of higher-cost producers. Gas: the emergence of a global market Gas continues to gain share from coal, helped by energy policies that encourage the shift in both industry and power generation. The main growth comes from China, Middle East and the US. In China, growth in gas consumption outstrips domestic production, so that by 2035 imported gas comprises nearly 40% of total consumption, up from 30% in 2015. In Europe, the share of imports rises from around 50% in 2015 to over 80% by 2035. The Outlook expects
India to become the fastest oil consumer by 2035
Having pipped Japan to become world’s third largest oil consumer, India’s oil consumption growth will be the fastest among all major economies by 2035, BP Statistical Review of World Energy said. India, Asia’s second-biggest energy consumer since 2008, had in 2015 overtaken Japan as the world’s third-largest oil consuming country behind US and China. “We project that India’s energy consumption grows the fastest among all major economies by 2035. As a result, the country remains import dependent despite increases in production,” it said. While energy consumption will grow by 4.2 per cent per annum — faster than all major economies in the world — India’s consumption growth of fossil fuels would be the largest in the world. India, it said, will overtake China as the largest growth market for energy in volume terms by 2030. Oil consumption will rise from 4.1 million barrels per day in 2015 to 9.2 million bpd in 2035. Natural gas consumption would jump from 4.9 billion cubic feet per day to 12.8 bcfd while coal consumption is project to more than double to 833 million tons. India’s energy demand growth at “129 per cent is more than double the non-OECD average of 52 per cent and also outpaces each of the BRIC countries as China (47 per cent), Brazil (41 per cent), and Russia (2 per cent), all expand slower,” BP said. Its share of global energy demand increases to 9 per cent by 2035, accounting for the second largest share among the BRIC countries with China at 26 per cent, Russia at 4 per cent and Brazil at 2 per cent. BP said India’s demand for gas expands by 162 per cent, followed by oil (120 per cent) and coal (105 per cent). Renewables rise by 699 per cent, nuclear by 317 per cent and hydro by 97 per cent by 2035. “The fuel mix evolves very slowly over the Outlook (period) with fossil fuels accounting for 86 per cent of demand in 2035, compared to 92 per cent today. “The share of coal in the fuel mix falls from 58 per cent today to 52 per cent by 2035, while the share of renewables rises from 2 per cent to 8 per cent,” it said. Energy production as a share of consumption declines marginally from 58 per cent today to 56 per cent by 2035 as imports rise by 138 per cent. “Declining oil production (-26 per cent) is outweighed by increases in gas (+154 per cent) and coal (+104 per cent), and non-fossil fuels (+312 per cent),” BP said. Coal remains the dominant fuel produced in India with a 65 per cent share of total production in 2035. Renewables overtakes oil as the second largest, increasing from 4 per cent to 14 per cent in 2035 as oil drops from 10 per cent today to 3 per cent by 2035. “Oil imports rise by 165 per cent and account for 56 per cent of the increase in imports, followed by increasing imports of gas (173 per cent) and coal (105 per cent),” it said. Taylor Chorney Authentic Jersey
India’s energy consumption to grow faster than major economies
India’s energy consumption is set to grow 4.2% a year by 2035, faster than that of all major economies in the world, according to BP Energy Outlook. India, Asia’s second biggest energy consumer since 2008, had in 2015 overtaken Japan as the world’s third largest oil consuming country behind the US and China. “We project that India’s energy consumption grows the fastest among all major economies by 2035. As a result, the country remains import dependent despite increases in production,” the publication said. India’s consumption growth of fossil fuels will be the highest by 2035 and it will overtake China as the largest growth market for energy in volume terms by 2030. Globally, energy demand will increase by about 30% by 2035. Natural gas consumption will grow faster than either oil or coal, expanding at 1.6% a year. Coal demand will peak in the mid-2020s, as China moves toward cleaner, lowercarbon fuels, the report said. India’s gas demand to expand 162%, followed by that of oil (121%) and coal (105%). Renewables rise by 712%, nuclear by 317%, and hydro by 97%. Kayvon Webster Authentic Jersey