Higher domestic gas production to keep LNG imports range-bound for two years
India’s liquefied natural gas (LNG) imports are expected to remain range-bound for the next two years, beginning FY25, on account of growing production of natural gas in the country, ratings agency CareEdge said. India is envisaged to have a robust demand for natural gas from all the major consumption segments such as fertilisers, city gas distribution (CGD), power, refineries and petrochemicals. With imported gas prices normalising around $10-$12 per million British thermal units (mBtu) by FY23-end and remaining range bound in FY24, gas consumption has again started its upward trajectory in 9M FY24 and CareEdge Ratings expects India to record its highest-ever gas consumption annually in FY24. On the back of limited domestic natural gas production, India historically had a high dependence on imported gas. However, during the last three years ending FY23, gas imports declined mainly due to improved domestic gas production and a rise in imported gas prices. “Going forward, gas imports are expected to increase at a moderate pace in spite of expected growth in domestic production because consumption of natural gas is expected to outpace domestic production. Still, imports as a percentage of total consumption are expected to remain largely range-bound during the next two years, up to FY26,” CareEdge said. After hitting a high of 92 million standard cubic meters per day (MSCMD) in FY20, LNG imports declined consistently hitting 73 MSCMD in FY24. CareEdge expects imports to hit 82 MSCMD each in FY24 and FY25. It also projects inbound shipments to reach 96 MSCMD in FY26. With the rise in domestic natural gas production, India’s dependency on imported LNG, which stood at 53 per cent of total consumption in FY21, has gradually declined over the last three years and is expected to remain around 45 per cent by FY26.
DMEA: Saudi Aramco to reduce supply of oil to China, India
Saudi Aramco is set to reduce its supply of crude oil to customers in China and India due to upcoming oilfield maintenance, according to comments made by five sources on March 11. The plans for reduction come following a decision by the Organisation of the Petroleum Exporting Countries and their allies (OPEC+) to extend voluntary oil output cuts of 2.2mn barrels per day (bpd) into Q2 in early March, due to benchmark prices remaining range-bound – mostly due to expectations of weak demand growth and extra supply from non-OPEC producers that are able to meet most upcoming demands in 2024.
Venture Global LNG to buy fleet of LNG vessels
Venture Global LNG said on Sunday it would acquire a fleet of nine liquefied natural gas(LNG) transport vessels, expanding its ability to sell and ship its own cargoes. Venture Global has exported hundreds of cargoes since it started liquefying gas for export in 2022 from the first of its three planned facilities in Louisiana. The vessels it used were owned by other companies and leased. The nine vessels in Venture Global’s future fleet will be built in South Korea with the first to be delivered later this year, the Arlington, Virginia-based company said. The company has shipped more than 250 cargoes under its own account from the first plant, called Calcasieu Pass, sparking complaints from big-name energy companies holding long-term contracts that the sales should have been made available to them.
Reliance on oil imports rises in April-February, likely to hit fresh full-year high in FY24
Growing demand for fuel and other petroleum productsamid stagnant domestic crude oil output resulted in India’s reliance on imported crude increasing to nearly 88 per cent in April-February, indicating that oil import dependency for the full financial year 2023-24 (FY24) could breach the all-time-high FY23 levels. As per latest data released by the oil ministry’s Petroleum Planning & Analysis Cell (PPAC), the country’s oil import dependency was 87.7 per cent in the 11 months to February, up from 87.2 per cent in the corresponding period FY23. For full FY23, reliance on imported oil was 87.4 per cent. According to industry insiders, like in the last financial year, import dependency in crude oil for the entire FY24 could be a tad higher than the April-February level. Given the energy demand, reliance on oil imports has been rising continuously over the past few years, except for FY21, when demand was suppressed due to the COVID-19 pandemic. Reliance on imported crude to meet domestic demand stood at 85.5 per cent in FY22, 84.4 per cent in FY21, 85 per cent in FY20, and 83.8 per cent in FY19. The government wants to reduce India’s extreme reliance on imported crude oil but sluggish domestic oil output in the face of incessantly growing demand for petroleum products has been the biggest roadblock. In 2015, the government had set a target to reduce reliance on oil imports to 67 per cent by 2022 from 77 per cent in FY14, but the dependency has only grown since. Heavy reliance on imported crude oil makes the Indian economy vulnerable to global oil price volatility, apart from having a bearing on the country’s foreign trade deficit, foreign exchange reserves, rupee’s exchange rate, and inflation.
India’s LNG imports jump in February
India’s liquefied natural gas (LNG) imports jumped in February compared to the same month in 2023, according to the preliminary data from the oil ministry’s Petroleum Planning and Analysis Cell. The country imported about 2.44 billion cubic meters, or about 1.8 million tonnes of LNG, in February via long-term contracts and spot purchases, a rise of 33.3 percent compared to the same month in 2023, PPAC said. During April 2023-February 2024, India took 27.93 bcm of LNG, or some 21 million tonnes, up by 17.6 percent, PPAC said. India paid $1.1 billion for February LNG imports, the same amount as in the year before, and $12 billion in April-February, down from $15.9 billion in the year before, it said. As per India’s natural gas production, it reached 2.47 bcm in February, up by 11.1 percent compared to the corresponding month of the previous year. During April-February, gas production rose by 5.7 percent to about 33.2 bcm, PPAC said. At the moment, India imports LNG via seven facilities with a combined capacity of about 47.7 million tonnes. 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. During April 2023-January 2024, the17.5 mtpa Dahej terminal operated at 95.3 percent capacity, while the 5.2 mtpa Hazira terminal operated at 32.6 percent capacity, PPAC said. The 5 mtpa Dhamra LNG terminal operated at 24.6 percent capacity, the 5 mtpa Dabhol LNG terminal operated at 39.4 percent capacity, and the 5 mtpa Kochi LNG terminal operated at 20.6 percent capacity, it said.
Saudi Arabia’s Non-Oil Revenue Hits 50% Of GDP
For decades, Saudi Arabia has been regarded as the de facto leader of OPEC and a swing-producer critical to curtailing large price overshoots in either direction. Over the past few years, the Arab nation has borne the lion’s share of OPEC+ production cuts after recently agreeing to cut 1 million barrels per day or nearly half of the group’s 2.2 mb/d in pledged cuts. Well, it appears that Saudi Vision 2030 is already bearing fruit, and Riyadh might not be feeling the pinch from those cuts as much as many feared. Saudi Arabia’s Ministry of Economy and Planning has revealed that non-oil revenues hit 50% of the Kingdom’s gross domestic product (GDP) in 2023, the highest level ever. The country’s non-oil economy was valued at 1.7 trillion Saudi Riyals (approximately 453 billion U.S. dollars) at constant prices, driven by steady growth in exports, investment and consumer spending. Last year, the Kingdom’s private-sector investments expanded by a brisk 57 percent, reaching a record high of 959 billion Saudi Riyals (254 billion dollars) while arts & entertainment and real service exports grew in triple-digits to the tune of 106 percent and 319 percent, respectively, reflecting the Kingdom’s transformation into a global destination for tourism and entertainment. Meanwhile, the food sector recorded 77 percent growth; transport and storage services grew 29 percent, health and education recorded growth of 10.8 percent, trade, restaurants and hotels at 7 percent while transport and communications increased 3.7 percent. GCC Diversification Paying Off Three years ago, Saudi Arabia’s Crown Prince Mohammed bin Salman unveiled Saudi Vision 2030, the Kingdom’s ambitious roadmap for economic diversification, global engagement, and enhanced quality of life. The main thrust of the vision is to diversify Saudi Arabia’s economy and create dynamic job opportunities for its citizens through privatization of state-owned assets, including partial IPO of Saudi Aramco; unlocking underdeveloped industries such as renewable energy, manufacturing and tourism and modernizing the curriculum and standards of Saudi educational institutions from childhood to higher learning. In the economic plan, Saudi Arabia has set a target to develop ~60 GW of renewable energy capacity by 2030, multiples higher than the country’s current installed capacity of only 2.8 GW and comparable to ~80 GW of power plants burning gas or oil. With its steady Red Sea breezes and sun-scorched expanses, Saudi Arabia really is prime real estate for renewable energy generation. Meanwhile, Saudi Aramco has announced plans to spend $110 billion over the next couple of years to develop the Jafurah gas field, estimated to hold 200 trillion cubic feet of gas. The gas will then be converted into a much cleaner fuel: Blue hydrogen. The Saudi government is also building a $5 billion green hydrogen plant that will power the planned megacity of Neom. Dubbed Helios Green Fuels, the hydrogen plant will use solar and wind energy to generate 4GW of clean energy that will be used to generate green hydrogen. Last year, Aramco made the world’s first blue ammonia shipment–from Saudi Arabia to Japan. Japan is looking for dependable suppliers of hydrogen fuel with Saudi Arabia and Australia on its shortlist. But it’s not just Saudi Arabia that’s succeeding with its economic diversification. Last year, the World Bank published the World Bank Gulf Economic Update (GEU) that states that diversification efforts in the Gulf Cooperation Council (GCC) region are paying off. “The region has shown notable improvements in the performance of the non-oil sectors despite the downturn in oil production during most of 2023. Diversification and the development of non-oil sectors has a positive impact on the creation of employment opportunities across sectors and geographic regions within the GCC,” said Khaled Alhmoud, Senior Economist at the World Bank. The World Bank estimates that GCC saw its GDP grow by 1% in 2023 with the weaker performance driven primarily by lower oil sector activities–which contracted by 3.9%–to reflect OPEC+ successive production cuts and the global economic slowdown. Thankfully, the region will see economic activity picking up again to grow at 3.6 and 3.7 percent in 2024 and 2025, respectively. According to the World Bank, the reduction in GCC’s oil sector activities will be compensated for by non-oil sectors, which are expected to grow by 3.9 % in 2023 and 3.4 % in the medium term driven by accommodative fiscal policy, strategic fixed investments and sustained private consumption.
Saudi Arabia’s Non-Oil Revenue Hits 50% Of GDP
For decades, Saudi Arabia has been regarded as the de facto leader of OPEC and a swing-producer critical to curtailing large price overshoots in either direction. Over the past few years, the Arab nation has borne the lion’s share of OPEC+ production cuts after recently agreeing to cut 1 million barrels per day or nearly half of the group’s 2.2 mb/d in pledged cuts. Well, it appears that Saudi Vision 2030 is already bearing fruit, and Riyadh might not be feeling the pinch from those cuts as much as many feared. Saudi Arabia’s Ministry of Economy and Planning has revealed that non-oil revenues hit 50% of the Kingdom’s gross domestic product (GDP) in 2023, the highest level ever. The country’s non-oil economy was valued at 1.7 trillion Saudi Riyals (approximately 453 billion U.S. dollars) at constant prices, driven by steady growth in exports, investment and consumer spending. Last year, the Kingdom’s private-sector investments expanded by a brisk 57 percent, reaching a record high of 959 billion Saudi Riyals (254 billion dollars) while arts & entertainment and real service exports grew in triple-digits to the tune of 106 percent and 319 percent, respectively, reflecting the Kingdom’s transformation into a global destination for tourism and entertainment. Meanwhile, the food sector recorded 77 percent growth; transport and storage services grew 29 percent, health and education recorded growth of 10.8 percent, trade, restaurants and hotels at 7 percent while transport and communications increased 3.7 percent. GCC Diversification Paying Off Three years ago, Saudi Arabia’s Crown Prince Mohammed bin Salman unveiled Saudi Vision 2030, the Kingdom’s ambitious roadmap for economic diversification, global engagement, and enhanced quality of life. The main thrust of the vision is to diversify Saudi Arabia’s economy and create dynamic job opportunities for its citizens through privatization of state-owned assets, including partial IPO of Saudi Aramco; unlocking underdeveloped industries such as renewable energy, manufacturing and tourism and modernizing the curriculum and standards of Saudi educational institutions from childhood to higher learning. In the economic plan, Saudi Arabia has set a target to develop ~60 GW of renewable energy capacity by 2030, multiples higher than the country’s current installed capacity of only 2.8 GW and comparable to ~80 GW of power plants burning gas or oil. With its steady Red Sea breezes and sun-scorched expanses, Saudi Arabia really is prime real estate for renewable energy generation. Meanwhile, Saudi Aramco has announced plans to spend $110 billion over the next couple of years to develop the Jafurah gas field, estimated to hold 200 trillion cubic feet of gas. The gas will then be converted into a much cleaner fuel: Blue hydrogen. The Saudi government is also building a $5 billion green hydrogen plant that will power the planned megacity of Neom. Dubbed Helios Green Fuels, the hydrogen plant will use solar and wind energy to generate 4GW of clean energy that will be used to generate green hydrogen. Last year, Aramco made the world’s first blue ammonia shipment–from Saudi Arabia to Japan. Japan is looking for dependable suppliers of hydrogen fuel with Saudi Arabia and Australia on its shortlist. But it’s not just Saudi Arabia that’s succeeding with its economic diversification. Last year, the World Bank published the World Bank Gulf Economic Update (GEU) that states that diversification efforts in the Gulf Cooperation Council (GCC) region are paying off. “The region has shown notable improvements in the performance of the non-oil sectors despite the downturn in oil production during most of 2023. Diversification and the development of non-oil sectors has a positive impact on the creation of employment opportunities across sectors and geographic regions within the GCC,” said Khaled Alhmoud, Senior Economist at the World Bank. The World Bank estimates that GCC saw its GDP grow by 1% in 2023 with the weaker performance driven primarily by lower oil sector activities–which contracted by 3.9%–to reflect OPEC+ successive production cuts and the global economic slowdown. Thankfully, the region will see economic activity picking up again to grow at 3.6 and 3.7 percent in 2024 and 2025, respectively. According to the World Bank, the reduction in GCC’s oil sector activities will be compensated for by non-oil sectors, which are expected to grow by 3.9 % in 2023 and 3.4 % in the medium term driven by accommodative fiscal policy, strategic fixed investments and sustained private consumption.
No delay over IOC-Mercator petroleum deal: DIPAM
The Department of Investment and Public Asset Management (DIPAM) has clarified that its approval was not sought for Indian Oil Corp’s acquisition of Mercator Petroleum Ltd through the insolvency process and that there was no delay on its part that affected closing of the transaction Responding to a March 13 ET report that said IOC’s Mercator buyout was held up due to a delay in getting DIPAM’s approval, the department said Mercator informed it about the deal on February 6. Following this, the department explained its position to Mercator and the Ministry of Petroleum and Natural Gas (MoPNG) on February 7, it said. “Thereafter, the proposal was received from MoPNG only for information to DIPAM and as such no nod of DIPAM was sought in the process, which was noted,” the department said. IOC, the country’s biggest fuel retailer, has yet to complete the acquisition of oil and gas company Mercator, more than four months after the National Company Law Tribunal allowed the sale of the distressed asset.
Union Minister Launches Indian Oil’s ETHANOL 100 Automotive Fuel”
Hardeep Singh Puri, Union Minister for Petroleum & Natural Gas and Housing and Urban Affairs, launched ‘ETHANOL 100, a revolutionary automotive fuel at Indian Oil Retail Outlet M/s. Irwin Road Service Station, New Delhi today. Customers can avail ETHANOL 100 at select 183 retail outlets of Indian Oil across five states – Maharashtra, Karnataka, Uttar Pradesh, New Delhi, and Tamil Nadu. Pankaj Jain, Secretary, Ministry of Petroleum & Natural Gas; Shrikant Madhav Vaidya, Chairman, senior officials from MoP&NG, functional Directors of Indian Oil also participated in the launch ceremony. Speaking on the occasion, Puri said that the launch of ETHANOL 100 was inspired by the vision of the Prime Minister of India to transform Annadatas to Urjadatas. “It reflects the government’s commitment to reducing import dependency, conserving foreign exchange, and boosting the agriculture sector.
India’s oil imports to be disrupted as US-Venezuela tensions escalate
Indian imports of cheap Venezuelan oil, the country’s fifth-biggest crude supplier in 2019, may face disruptions from April as the US and the South American country are embroiled in a dispute over renewing a six-month permission for crude exports. Uncertainty over Venezuelan supplies for Indian refiners comes amid reduced discounted Russian flows also targeted by the US