Indian Energy Exchanges overall trade volume rises 14% to 9,044 million units in April
The Indian Energy Exchange (IEX) posted 14.1 per cent growth in its overall trade volume at 9,044 million units in April as compared to the year-ago period. The exchange achieved 7,928 MU overall trade volume in April 2023, including green market trade of 280 MU, 1,99,000 RECs (renewable energy certificates equivalent to 199 MU) and 1,23,000 ESCerts (energy savings certificates equivalent to 123 MU), as per IEX data. RECs at 618 MU increased 211 per cent YoY (year-on-year). At Rs 204 per certificate, the REC market recorded an all-time low price in the trading session held on April 24, 2024, a statement said. REC prices declined 80 per cent YoY. These prices provide an opportunity to obligated consumers to meet their Renewable Purchase Obligations, and voluntary customers to meet their sustainability aspirations. The Market Clearing Price in Day Ahead Market (DAM) during April 2024 at Rs 5.1/unit reduced approximately 6 per cent year-on-year. The sell bids on the exchange (Day Ahead Market plus Real Time Market) during the month increased 21 per cent YoY. The DAM prices were lower by almost 45 per cent as compared to prices discovered under bilateral contracts. Favourable policy and regulatory interventions by the government and regulators led to an improved sell scenario, leading to increased sell liquidity at IEX, despite an increase in the country’s energy demand, it stated.
Aramco Leads Oil Industry Investment in AI
Saudi Aramco is the biggest investor in artificial intelligence in the oil industry. The fact was recently revealed in a report by GlobalData, which also showed the Saudi state major was investing heavily in all sorts of cutting-edge technology. Because this is where competition will be in the future. Saudi Aramco spent $3.5 billion on research and development last year, GlobalData said in its report, noting the company was active in as many as 250 areas of innovation including, besides AI, drone technology, robotics, and electric vehicles. As for AI itself, the technology was deployed in areas such as oil exploration, fault monitoring, and cyber threat detection. On the one hand, this adds to evidence about the versatility of artificial intelligence that is driving its growing popularity in the information technology sector and elsewhere. On the other, the information suggests Aramco is actively working on attaining a new sort of competitive edge: a tech-driven one. The Saudi company is not alone in this, of course. Oil and gas, while traditionally slow to adopt emerging technology, has moved quite fast recently. Bloomberg reported earlier this year that U.S. shale drillers were deploying artificial intelligence to improve drilling efficiency and increase well recovery rates. The U.S. shale patch is a natural early adopter of such technology because production costs there tend to be generally higher than they are in conventional oil and gas drilling, motivating a higher appetite for new solutions. Now, thanks to tech, these costs are coming down as drilling times accelerate—and accuracy is improving too. Aramco, on the other hand, is as traditional as oil companies come, at least on the face of it. Below this face, the company appears to be—if not an early, then an eager—adopter of cutting-edge tech to improve its operations, even in lean years like 2023. It also seems Aramco is open to more adventures in tech. GlobalData reports that Aramco has set up a digital innovation ecosystem dubbed SAIL, or Saudi Accelerated Innovation Laboratory, to partner with other entities, including government agencies and startups, “to foster the development of digital innovation products,” per the report. “Aramco is also betting on futuristic technologies. The company is closely monitoring the startup ecosystem and has in the recent past invested in several companies such as Pragmatic, which develops flexible semiconductor chips, and Sunrate, a fintech company,” said Sourabh Nyalkalkar, practice head of innovation at GlobalData. It sounds like Aramco specifically and Saudi Arabia generally are trying to do what the UAE did with construction as a diversification strategy to reduce its almost exclusive income reliance on crude oil. That artificial intelligence, robots, and the rest of the new tech coming out of startups and Big Tech field, can be used to boost oil production as well must be a very welcome bonus. According to Evercore ISI, AI and other tech could bring costs in the shale patch down by double digits as soon as this year. “There’ll be significant cost savings, at a minimum double digits, but probably in the 25% to 50% of cost savings in certain scenarios,” Evercore analyst James West told Bloomberg in March. If it can bring costs down for shale drillers, AI could certainly bring them down for everyone else as well, even for the lowest-cost producers in the world – the Saudis. But cost reduction is only one of what seems like a lot of benefits that the oil industry stands to gain from using the technology such as more productive wells, more accurate exploration, and better threat detection, including not just cybersecurity but spills and leaks. Best of all, the industry has the commodities needed to power the use of electricity-thirsty AI.
India’s crude oil imports from Russia jump 18% in April amid decline in total imports
India’s crude oil imports fell around 8 percent in April from the previous month amid the country’s efforts to ramp up domestic production and reduce reliance on imports. According to energy tracker Vortexa, India’s total crude oil imports stood at 4.5 million barrels per day (bpd) in April, lower than 4.9 million bpd in March. Despite decline in total oil imports, Russia’s supply of crude oil to India increased by 18 percent in April from last month. Moscow supplied 1.7 million barrels of crude oil to India in April, as against 1.5 million bpd in March. Russian Urals—sour grade—was India’s major import from Moscow. The rise in oil supply from the Eurasian country comes despite reports of narrowing discounts on Russian oil and tighter US sanctions on the country. Meanwhile, India’s import of crude oil from other countries including Iraq, Saudi Arabia, UAE and the US fell in the month. Iraq supplied 776,000 bpd of crude oil to India in April, lower than 1.11 million in March while India purchased 681,000 bpd and 103,000 bpd of oil in the month from Saudi Arabia and the US, respectively. Imports from Venezuela also declined to 66,000 bpd in April compared to 161,000 bpd in the previous month. India started buying crude oil from Venezuela in late 2023 after a gap of three years. India last imported Venezuelan oil in 2020 after which the country came under sanctions from the US
Reliance Industries Ltd starts trading US oil setting Brent oil benchmark
Reliance Industries Ltd (RIL) has made its first foray into trading a type of U.S. crude oil that underpins the global Brent benchmark in a process run by oil-index publisher S&P Global Commodity Insights, the publisher said. RIL, operator of the world’s biggest refining complex, on Wednesday offered a cargo of WTI Midland in the Platts Market on Close process, known as the Platts window. It was Reliance’s first time offering WTI in the window, Platts spokesperson Kathleen Tanzy told Reuters. A Reliance spokesperson did not immediately respond to a Reuters request for comment. India, the world’s third-biggest oil importer and consumer, is looking to diversify its oil supplies as fresh U.S. sanctions on Moscow threaten to dent Russian oil sales to India, the biggest buyer of Russian seaborne crude. India was the top buyer of Russian oil last year after other groups retreated from purchases following Western sanctions on Moscow for its full-scale invasion of Ukraine in February 2022. RIL made its first oil purchase from Canada’s new Trans Mountain pipeline last month, trade sources said. More players have become involved in trading crude that can set the Brent price in the Platts window since Platts added WTI to the benchmark last year. Saudi Aramco, the world’s largest oil firm, made its first purchases of WTI in the window in February and has participated regularly since. U.S. WTI Midland is one of six crude oil grades assessed by Platts that can set the value of dated Brent, part of the wider Brent complex used to price more than three-quarters of the world’s traded oil. The price of dated Brent is set by the cheapest of the six crudes and Midland, by far the largest of the six crude streams, often plays a role in setting its value. The other five are North Sea crudes.
BP appoints Kartikeya Dube as India unit chief
BP has appointed Kartikeya Dube as its India unit chief, the energy major said in a statement on Tuesday Dube’s appointment will be effective from July 1. He will take over from Sashi Mukundan who will retire from BP after serving the company for over 42 years. Kartikeya has been with BP for more than 20 years, serving in finance, commercial and business transformation in India, Singapore, and the UK, according to the statement. Last year he assumed the position of vice president of group investor relations in the company’s London head office. Previously, Kartikeya was involved with setting up the BP joint ventures with Reliance in India. He was the chief financial officer for BP’s mobility joint venture with Reliance in India from 2020 until 2023.
India cuts windfall tax on petroleum crude
India has cut its windfall tax on petroleum crude to 8,400 Indian rupees ($100.66) a metric ton from 9,600 rupees with effect from May 1, the government said on Tuesday. The tax, which is revised every fortnight, was left unchanged at zero for diesel and aviation turbine fuel. The government had on April 16 raised the windfall tax on petroleum crude to 9,600 rupees a metric ton from 6,800 rupees
Commissioning of India’s Chhara LNG terminal delayed
India’s Hindustan Petroleum, a unit of state-owned ONGC, has reportedly delayed the commissioning of its Chhara LNG import terminal in Gujarat. LNG Prime reported on April 15, citing shipping data, that the 2015-built 159,800-cbm, Maran Gas Mystras, has arrived at the 5 mtpa LNG terminal in the Chhara port on April 11. Prior to that, Maran Gas Mystras picked up a cargo of LNG at Marathon Oil’s Punta Europa LNG terminal in Equatorial Guinea. However, the LNG carrier did not unload this shipment at the facility. Instead, the vessel delivered the shipment to Petronet LNG’s Dahej terminal, according to its AIS data provided by VesselsValue. LNG Prime invited HPCL to comment on the terminal’s commissioning, but we did not receive a reply by the time this article was published. Kpler said in a report that the commissioning of HPCL’s Chhara LNG terminal “is likely to be delayed due to infrastructure issues, with operations expected to extend beyond the monsoon season.” Other reports said that the issues were related to the terminal’s jetty. Also, HPCL has reportedly not yet completed the breakwater for the LNG facility to protect it during the monsoon season which typically lasts from June to September. India’s eighth LNG import facility HPCL LNG (HPLNG), a unit of HPCL, built the 5 mtpa LNG terminal with all associated facilities for receipt, unloading, storage, regasification of LNG, and gas supply to the grid. The firm, formerly known as HPCL Shapoorji Energy Private Limited (HSEPL), was incorporated as a 50:50 joint venture between HPCL and SP Ports Private Limited (SPPPL) on October 15, 2013. However, HPCL purchased the 50 percent stake from SPPPL in March 2021, becoming the sole owner of the LNG import facility. The LNG terminal features a 1.2 km long jetty capable of receiving carriers with a capacity of 80,000 cbm to 266,000 ccbm, two LNG storage tanks each with a capacity of 200,000 cbm, while GSCP built the connecting pipeline, according to HPLNG. This is India’s eighth LNG import facility. At the moment, India imports LNG via seven facilities with a combined capacity of about 47.7 million tonnes per year. These include Petronet LNG’s Dahej and Kochi terminals, Shell’s Hazira terminal, and the Dabhol LNG, Ennore LNG, Mundra LNG, and Dhamra LNG terminal.
QatarEnergy doles out $6 billion for 18 huge LNG vessels on historic fleet expansion mission
Qatar’s state-owned energy giant QatarEnergy is bolstering its giant liquefied natural gas (LNG) fleet expansion with a $6 billion deal for 18 ultra-modern QC-Max size LNG vessels, which are said to be the largest LNG ships ever built. The Qatari heavyweight’s agreement with China State Shipbuilding Corporation (CSSC)will enable the construction of 18 QC-Max size LNG vessels, with a capacity of 271,000 cubic meters each, which will be built at China’s Hudong-Zhonghua Shipyard, a CSSC wholly-owned subsidiary. With a total length of 344 meters, a beam of 53.6 meters, a depth of 27.2 meters, and a designed draft of 12 meters, these vessels will adopt a dual-fuel low-speed engine propulsion system and the NO96 Super+ containment system. While elaborating that the carrying capacity of the ship’s cabin is 57% higher and the energy consumption per ton-mile cargo transportation is 9.9% lower than that of a conventional 174,000-cubic-meter large LNG carrier, CSSC underscores that the vessel’s carbon intensity index (CII) is 23% lower with diversified and optimized draft and loading design enabling the ship to cover major mainstream routes with excellent ship-shore compatibility. The multibillion-dollar deal for these ships was signed in Beijing by Saad Sherida Al-Kaabi, Qatar’s Minister of State for Energy Affairs, President and CEO of QatarEnergy; Chen Jianliang, Chairman of Hudong‐Zhonghua Shipbuilding; and Li Hongtao, Chairman of China Shipbuilding Trading, during a ceremony attended by senior executives from QatarEnergy, QatarEnergy LNG, and China State Shipbuilding Corporation.
GAIL to Expand LNG Trading Globally
GAIL’s plans for global expansion underscore its strategic vision to diversify its business portfolio and tap into new growth avenues. By venturing into international LNG trading, the company aims to leverage its expertise and experience in the energy sector to capture a larger share of the global LNG market The expansion of GAIL’s LNG trading business aligns with India’s broader energy security objectives and the government’s push to enhance the country’s energy infrastructure and supply diversification. It also reflects the company’s commitment to playing a significant role in meeting the growing demand for clean energy GAIL’s entry into global LNG trading is expected to bolster India’s position as a key player in the global energy market and contribute to the country’s efforts to strengthen its energy security and promote sustainable development. By expanding its footprint in international markets, GAIL aims to create value for its stakeholders.
India’s natural gas consumption to surpass 64 BCM in 2024
Natural gas consumption in India is expected to grow by 7 per cent y-o-y to 64.35 billion cubic meters (BCM) in the current calendar year aided by lower prices and rising demand from power and industrial sectors. According to the International Energy Agency (IEA), India is expected to see an increase in LNG imports due to the decline in spot LNG prices in 2024. However, this growth could be tempered by the increase in domestic gas production from ONGC’s Krishna-Godavari field. “Following an announcement by Prime Minister Narendra Modi in January, 2024, the $67 billion investment plan for developing India’s natural gas supply chain is set to maintain its momentum over the coming years. India’s natural gas consumption in 2024 is projected to increase by over 7 per cent,” the IEA said in its latest gas market report. During October 2023-February 2024, India’s cumulative natural gas consumption rose by 17 per cent y-o-y to 28.12 BCM. In the 2023 calendar year, the consumption stood at 60.12 BCM. The world’s fourth largest importer of liquefied natural gas (LNG) consumed 66.63 BCM natural gas in FY24, compared to 59.97 BCM and 64.16 BCM in FY23 and FY22, respectively. Fertilisers followed by the Power sector, city gas distribution (CGD) and refineries are top natural gas consumers in the country. Growing consumption Lower natural gas prices continued to stimulate gas demand in India, with gas use in industry rising by an impressive 15 per cent y-o-y during the October 2023-February 2024 period, the IEA said. According to the Petroleum Planning & Analysis Cell (PPAC), India’s primary natural gas supply (including net domestic production and LNG imports) increased by 16 per cent y-o-y between October, 2023 and February, 2024. This strong growth in supply reflects growing demand for natural gas across all sectors, it added. The increase in consumption was mainly driven by the oil refining sector (up by more than 70 per cent y-o-y) and industry (up by over 15 per cent y-o-y), the agency noted. The lower spot price environment led to a notable increase in overall spot tenders for the purchase of LNG cargoes, with three to four times more tenders in winter 2023/24 than in the previous winter. These tenders also had a higher success rate, particularly since October, 2023. With lower prices, the improved competitiveness of gas in certain industries has driven a greater appetite for LNG imports. India imported 30.92 BCM of LNG in FY24, compared to 26.30 BCM and 31.03 BCM in FY23 and FY22, respectively. Production in the last financial year stood at 35.72 BCM as against 33.66 BCM and 33.13 BCM in FY23 and FY22, respectively. As of March, 2024, India’s total domestic piped natural gas (PNG) connections were 12.6 million, while industrial and commercial consumers stood at 18,500 and 40,940, respectively. The total number of compressed natural gas stations stood at 6,456.