NGS’ NG/LNG SNAPSHOT – November 16-30, 2021
National News Internatonal News
City Gas Distribution & Auto LPG
Govt aims to set up 1,000 LNG stations in next three years
The ministry of petroleum and natural gas, along with Society of Indian Automobile Manufacturers Association (SIAM), has identified 1,000 locations across India to set up liquified natural gas (LNG) outlets over the next three years,
in a bid to replace diesel and petrol with cleaner fuel in long-haul vehicles and to achieve the target of a 15% share for natural gas in India’s total energy mix by 2030.
Automobile manufacturers have shown interest in manufacturing LNG-compliant vehicles to ride the benefits of efficiency and lower emissions, Tarun Kapoor, Union petroleum secretary, told FE. LNG trucks/ buses have a fuel carrying capacity that is 2.5 times of CNG trucks/ buses and can travel around 700 km in one refill, according to experts.
Shortage of CNG, PNG stops cab services, cooking stoves in homes in Lucknow
Commuters across the city and households in several areas continued to have a hard time for the third continuous day due to shortage of compressed natural gas (CNG) and piped natural gas (PNG).
According to estimates of Lucknow Cab Drivers’ Association and Autorickshaw Federation, more than 4,000 CNG cabs and 6,000 autorickshaw drivers have been affected due to the shortage. As many cabs and autorickshaws remained off roads, commuters had to face severe problems. Similarly, about 1,000 households in various parts of Indiranagar and Gomtinagar which are dependent on PNG had to manage with LPG cylinders or induction burners arranged through various sources.
Cooper Corporation supports the Swachh Bharat Abhiyan Initiative by providing a 150 HP CNG Auxiliary Gas Engine to Kam-Avida Enviro Engineers CNG Road Sweeper in Hyderabad
Cooper Corporation, one of India’s leading manufacturers of engines, auto components and gensets, has been expanding its efforts to support the Clean India Mission, on that note they have recently stepped up and contributed to the Swachh Bharat Abhiyan by supplying
Cooper 150 HP CNG Auxiliary Gas Engine to Kam-Avida Enviro Engineers CNG Road Sweeper. These engines are locally manufactured and are naturally aspirated and have turbo charged versions suitable for combined heat & power applications.
Cooper Corporation offers 24 variants of Cooper engines ranging from 8 hp to 1000 hp, backed by engineering excellence, relentless innovation, and a commitment to quality. Cooper Corporation has a technical collaboration with RICARDO, UK, for the design and manufacture of cutting-edge engines that meet current and future emission norms. These engines are equipped with fully electronic management systems and engine-mounted sensors. The vacuum assisted CNG drive road sweeper from Kam-Avida Enviro Engineers is designed to clean effectively. It includes all electric and electro-hydraulic functional switches, gauges, and controls that are ergonomically positioned inside the control panel. This high-performance Road Sweeper is easy to operate and maintain, with an extremely low dB level of operation. The equipment is used to clean City Roads, Large Parking Lots, Markets, Commercial Areas & Residential Areas.
‘96% of India’s population to be covered under CGD network after 11th rounds’
After the completion of 11th city gas distribution (CGD) round, 96% of India’s population and 86% of its geographic area would be covered under CGD network, said petroleum and natural gas minister Hardeep Singh Puri.
The latest bidding round will offer 65 geographical areas spread over 19 states and one Union territory, which would cover around 25% of India’s population.
With India pushing for a gas-based economy, 50 geographical areas (GAs) in 123 districts were offered in the 10th round. Gas accounts for around 6.2% of India’s primary energy mix as compared to a global average of 24%. The National Democratic Alliance (NDA) government plans to increase its share to 15% by 2030. India’s gas demand is expected to be driven by the fertilizer, power, city gas distribution and steel sectors. India is dependent on imports for as much as 85% of its oil needs and 55% of its natural gas demand. The country’s consumption has also been 15-16% higher than the pre-covid level.
CNG becomes costlier in Mumbai, 14 hikes in ten months: Details here
While the government is aiming at enhanced usage of greener fuel, one of the widely used greener and alternative fuels, CNG has become costlier in Mumbai. Compressed Natural Gas or CNG in the business capital of India now costs ₹61.5 per kg after being increased by ₹3.96 per kg.
This latest price hike comes as the third hike in two months. Also, this year, the price of CNG has been increased 14 times in the last ten months by Mahanagar Gas Limited or MGL.
CNG is considered as one of the greener fuels as compared to petrol and diesel. Not only that, CNG is much cheaper compared to other fossil fuels such as petrol and diesel. Considering the low cost of procurement, many autorickshaws, taxis, large commercial vehicles and passenger vehicles too shifted to CNG as prices of petrol and diesel had shot past ₹100 per litre mark in the city. Now the series of hikes in CNG prices are bound to affect these vehicle owners and will result in higher transportation costs.
Electric Mobility/ Hydrogen/ Bio- Methane
Green hydrogen makes a debut
Rapidly bringing down green hydrogen costs is clearly a laudable national goal and worthy of government support Till January, hydrogen featured as an afterthought in all energy-related discussions in India. It,
however, caught the attention of policymakers when the finance minister in her Budget speech in February set aside Rs 800 crore for a Hydrogen Mission. At the Reliance annual general meeting (AGM) in June, Mukesh Ambani said that as part of the group’s “new energy” vision, Reliance would bet big on hydrogen and set up fuel-cell and electrolyser factories to produce green hydrogen. Markets suddenly got excited about hydrogen. Electrolysis is an energy-intensive process. About 50 units of electricity is required to produce a kilogram of hydrogen, not counting the energy costs of the total plant system as well as for storage and transportation. So, if fossil fuels are used to generate the electricity to produce the hydrogen, then the question is: What is so “renewable” about it? But if the required electricity is produced from renewable sources, then the resultant hydrogen is termed green; and the by-product is water, making it a most environmentally friendly fuel.
Rapidly bringing down green hydrogen costs is clearly a laudable national goal and worthy of government support. The Union government plans to implement the Green Hydrogen Consumption Obligation in production of fertiliser, metals, and petroleum refining, similar to what was done with renewable purchase obligations (RPOs). This is expected to start at 10 per cent, and increased in later years to 20-25 per cent. Viability gap funding for green hydrogen in heavy mobility is also being considered along with possibly production-linked incentive scheme for manufacturing electrolysers to produce green hydrogen. The draft Electricity Rules-2021 have allowed green hydrogen purchase to meet RPOs. It is reliably understood that the Union government is expected to initiate a serious play in this area by calling bids for 4GW electrolyser capacity to be ramped up to 20GW in the medium term.
India’s cleanest city Indore turns waste into bio-CNG, money in Maharashtra
The IMC earns Rs 8 crore annually from the plants which convert waste into useful products such as bio-CNG. The efforts taken by the Indore Municipal Corporation (IMC) to keep the city clean not only earn it bragging rights as India’s cleanest city year after year,
but also some hard cash. Indore was adjudged the cleanest city for the fifth year in a row in the Union government’s annual survey .The IMC earns Rs 8 crore annually from the plants which convert waste into useful products such as bio-CNG, an official said. The corporation employs about 8,500 sanitary workers in three shifts from 6 am to 4 am — 22 hours a day — to keep the city clean.
At present, the private companies which make bio-CNG, compost and other products by processing wet and dry waste pay about Rs 8 crore to the IMC every year, he told PTI. “The city generates 300 million litres per day (MLD) of sewage water. Of this, 110 MLD water is reused to water public gardens, farms and also for construction activities,” Warsi said. The cleanliness model of the city is based on 3 ‘R’s — Reduce, Reuse and Recycle. For the past six year, there are no big garbage containers in the city. About 700 vehicles with compartments to segregate six types of waste including bio-waste such as diapers and sanitary napkins collect garbage from almost every doorstep, officials said. The IMC disposes of 600 tons each of wet and dry waste every day.
Greaves Electric Mobility launches its largest EV plant in Tamil Nadu
The Chief Minister along with his cabinet colleague Industries Minister Thangam Thennarasu through virtual platform inaugurated the facility located in Ranipet Greaves Electric Mobility, the e-mobility division of Greaves Cotton Ltd said the company’s
largest electric vehicle production facility in Tamil Nadu was formally inaugurated by Chief Minister M K Stalin. The Chief Minister along with his cabinet colleague Industries Minister Thangam Thennarasu through virtual platform inaugurated the facility located in Ranipet, which is part of the Rs 700 crore investment roadmap laid by Greaves Electric Mobility.
The 35-acre plant would serve as an electric mobility hub for both domestic and overseas markets, a company statement said. The manufacturing unit was part of the Rs 700 crore investment road map announced by the company to expand its market share in the electric vehicle market. The production facility was also in accordance with the Centre’s ‘Atmanirbhar Bharat’ campaign, it said.The facility would have a capacity to produce 1.20 lakh units by end of this financial year and the company has planned to gradually enhance the production to one million units in future.
EVs, Ethanol and CNG to cut India’s petrol, diesel demand growth to half
Growth in demand for petrol and diesel combined will likely decline to 1.5 per cent per annum this decade, compared with 4.9 per cent in the last, because of increasing blending of ethanol with petrol, and rising usage of vehicles powered by compressed natural gas (CNG) and electricity (EVs),
according to rating agency CRISIL. It added the trend will also be persuaded by policy interventions as India targets net zero emissions by 2070 and taking cue, oil refiners would be altering their production mix in favour of alternatives such as petrochemicals, which should also support their profitability.
However, refiners are expected to add around 37 million metric tonne per annum of capacity — 15 per cent over the existing base — by 2024- 25, investing over Rs 1.5 lakh crore and almost all these facilities would be capable of producing both, transportation fuel and petrochemicals. Consumption of petrochemicals is expected to grow at a healthy 8-10 per cent in India. Per-capita consumption of polymers is expected to double to 18-20 kg by fiscal 2030. That, and slowing demand for transportation fuel would result in the share of petrochemicals in petroleum products rising to 17 per cent by fiscal 2030 from 7% in fiscal 2020. According to CRISIL, this healthy demand growth for petrochemicals will partly offset the decline in India’s crude oil demand growth to 3.5 per cent this decade from 4.5 per cent in the last.
Natural Gas/ Pipelines/ Company News
Domestic gas production expected to get a boost
India’s domestic gas production is expected to get a boost from KG Basin, from Motilal Oswal Financial Services (MOFSL). Besides, the MOFSL cited that after remaining stagnant at 70mmscmd for the past five years, domestic gas available for commercial consumption has risen. It rose to 80mmscmd in the past few months.
Furthermore, the report said that key trunk pipelines like Jagdishpur-Haldia, Kochi-Bangalore, Mehsana-Bhatinda, and North East grid would facilitate better gas penetration. Additionally, it said that favourable gas prices would benefit domestic consumption and would benefit the overall gas sector in the country.
India’s gas consumption to jump more than 3 times by 2030: GAIL
Demand from city gas is likely to rise to 140 mmscmd in 8 years from 35 mmscmd now while gas use in refineries is expected at 58 mmscmd from about 14 mmscmd now. India’s natural gas consumption is projected to rise to as much as 550 million
standard cubic meters per day by the end of the decade from about 174 mmscmd now as the user base expands with the inclusion of newer industries such as steel, GAIL (India) marketing director E S Ranganathan said.
While the government is targeting to increase the share of natural gas in the primary energy basket to 15 per cent by 2030 from the current 6.2 per cent, the share of the environment-friendly fuel in the total energy demand is only 2 per cent. Gas consumption presently is around 174 mmscmd, largely by fertilizer plants, city gas networks and power units. Of this, 49 per cent is met by domestic production and the rest through imports in form of liquefied natural gas (LNG).
Gas demand will be “380 mmscmd on the conservative side and 550 mmscmd on the optimistic side by the end of this decade,” he said. “We also estimate the growth of renewable will be an opportunity for gas to grow. Gas being the lowest carbon-emitting alternative to that, so wherever renewable is not there, gas can pitch in so we can have a low carbon-emitting mechanism in place.” India needs Rs 1.6 lakh crore in investments over the next 5-8 years to expand the use of natural gas, including building terminals and laying of pipelines, he said adding major gas demand is expected to come from industries using blast furnaces such as steel, oil refineries, long-haul transport, and heating and cooling requirement.
Dehradun among 10 state districts set to receive piped natural gas lines next year
In an effort to reduce dependency on regular gas cylinders, Dehradun and nine other districts of Uttarakhand are set to receive PNG (piped natural gas) pipeline connections for households by March 2022.
To this end, the Petroleum and Natural Gas regulatory board, along with the Gas Authority of India Limited (Gail), is working towards laying down the pipeline in Dehradun, Pauri Garhwal, Uttarkashi, Rudraprayag, Tehri Garhwal, Pithoragarh, Champawat, Almora, Chamoli, Bageshwar. The network of gas pipelines, according to officials, is likely to benefit nearly 39 lakh people across the state. The Dehradun district alone is expected to have an estimated 3 lakh connections over the next eight years.
India urges global firms to join its energy transition journey
Union Minister of Petroleum and Natural Gas Hardeep Singh Puri said that the demand for natural gas within India has seen an upward tick from the past India has invited global companies to invest in its energy transition and
work with it to achieve its vision to expand the green footprint by more than doubling the share of natural gas in the country’s energy basket. Addressing investors virtually during a roadshow ahead of the 11th round of bidding for city gas distribution (CGD), Union Minister of Petroleum and Natural Gas Hardeep Singh Puri said that the demand for natural gas within India has seen an upward tick from the past.
Talking about the upstream industry, he said, “India has not yet fully explored its oil and gas reserves, and as we move along and we start exploring more and more area, we will certainly have more discoveries.” The latest bidding round will offer 65 geographical areas spread over 19 states and one Union Territory, which would cover around 25% of India’s population. India is currently the third-largest primary energy consumer after China, and the U.S., and it is one of the fastest-growing energy consumers across the world. The country aims to enhance the share of natural gas in its energy basket from 7.6% to 15% by 2030.
Policy Matters/ Gas Pricing/ Others
Natural Gas Prices Continue to Increase
India Ratings and Research (Ind-Ra) has published the September 2021 edition of its credit news digest on India’s oil and gas sector. The report highlights the trends in the sector, with a focus on domestic production, import, consumption, refining and gross under-recovery,
regulatory changes and recent rating actions. Ind-Ra believes that natural gas (NG) prices globally have been on an increasing trend since the start of FY22, led by an elongated winter season till March 2021, creating an imbalance in the supply and demand of NG, and resulting in lower levels of storage for summers.
High competition for LNG cargoes, low storage availability, and continued supply-side constraints are few more key reasons for the same. Additionally, demand from China, which has outpaced Japan as the highest gas importing nation, and Europe has surpassed the supply, leading to stocks dwindling to low levels. The increase in gas prices globally was reflected in a 62% yoy rise in the domestic natural gas price to USD2.9 per million British thermal units (mmBtu) during 2HFY22 under the domestic gas price regime. Ind-Ra believes due to the ongoing high prices, domestic gas prices for the next control period could increase further. The gas price increase has already been reflected in the hike in both CNG and PNG rates across entities and an increase in the industrial CNG rates. The high prices will also impact the profitability of the gas-based power plants, whose viability remains highly contingent upon gas prices.
MRPL pact with Adani Gas for CNG stations
Mangalore Refinery and Petrochemicals Ltd (MRPL) has signed a memorandum of understanding (MoU) with Indian Oil Adani Gas Pvt Ltd (IOAGPL) for setting up of CNG stations in northern Kerala and Karnataka.
A statement by MRPL said this agreement is made for establishing CNG stations at MRPL’s retail outlets in northern Kerala and Hubballi-Dharwad regions of Karnataka where IOAGPL has licences from Petroleum and Natural Gas Regulatory Board to establish CNG stations.
LNG Development and Shipping
LNG trade: IGX volume on the rise, with prices up to 30% below spot rates
The prices on IGX dropped to a low of $6.1/mmBtu in April 2021 when spot LNG was at $10/mmBtu. IGX contract prices have since consistently increased in tandem with the rise in crude oil price and LNG in international markets but have remained lower
than the spot LNG prices in the range of $5 to $20/mmBtu. As global LNG prices are ruling high, industrial fuel consumers in India are mitigating the adverse impact on them to some extent by increasing the volume of purchases on the platform of IGX, the country’s fledgling natural gas exchange. In October when spot LNG prices touched a high of $35/mmBtu in line with the increase in Brent crude price, IGX prices remained considerably lower at $18.7/mmBtu. In November the spot LNG prices have dropped to $31/mmBtu and the IGX prices were at $27.4 per mmBtu.
According to the ministry of petroleum and natural gas (MoPNG), India has an LNG regasification capacity of 42.5 million metric tonnes per annum (mmtpa) out of which 24.3 mmtpa is utilised and about 50-60% capacity is booked on a long term basis, which leaves close to 40% of capacity for spot RLNG. In comparison countries such as Japan and South Korea have 80% of LNG contracted in long term. Mediratta believes government notification in August allowing domestic producers of gas to sell 10% of annual production on exchanges will increase the volumes from Q4FY22. This will help companies to bring more acreage under production as they will get market price for their gas compared to the administered price of $2.9/mmBtu.
Ashok Leyland announces slew of products, starting with CNG and LNG
Ashok Leyland announced several initiatives to build a green mobility future. To enhance its presence in the alternate fuel space, the company has planned a slew of products, starting with CNG and LNG, the company said in a statement here.
Hinduja Group flagship Ashok Leyland has put in place a team to focus on alternate fuel technology that uses low carbon like CNG and LNG as part of its move towards building a green mobility future, the company said. The city-headquartered commercial vehicle maker also dedicated its existing testing facility in Hosur to exclusively focus on alternate fuels. Powertrains are predominantly driven by IC engines — gasoline and diesel. Over the next decade, alternative powertrains comprising of battery electric, fuel cell electric would emerge and Ashok Leyland has dedicated teams focusing on the development of these future power trains.
Natural Gas / Transnational Pipelines/ Others
Peru: HAM develops new CNG service station for Limagas in Cuzco
HAM Perú, a subsidiary of HAM Group, has been the company in charge of the technical design, construction and commissioning of the new CNG refueling facility of Limagas, located at the Super Servicentro of Primax service station,
on Avenida de la Cultura 1506, the longest avenue in Cuzco, with an extension of almost 13 kilometers and significant vehicle traffic. This new filling station offers all its clients a 40m3 tank, with a CNG pump and two double dispensers. It should be noted that the tank is buried, eliminating any impact on the circulation flows and reducing the aesthetic impact. HAM Group has been a pioneer in Europe in its commitment to CNG-LNG stations with a totally buried tanks, through the Yellow Project.
The new facilities designed and built by HAM Perú are monitored remotely, guaranteeing their perfect operation. The project has been possible thanks to Limagas commitment to natural gas for vehicles, with the aim of contributing to sustainable development through the design of efficient energy solutions that help its customers in the challenge of reducing their environmental impact. With this new project in Cuzco, HAM continues to bet on the promotion of CNG and LNG in South America, allowing customers to access energy that is friendly to the environment, reducing emissions of CO2, NOx and particles fine, in addition to allowing significant savings compared to other more expensive and polluting fuels.
Amazon buys more than 1,000 IVECO CNG trucks for European operations
IVECO announced an important development in its commercial relation with Amazon. The multinational technology company has already taken delivery of the first batch of 216 units IVECO S-WAY CNG to be operated by its partners in Europe and another 848
vehicles have been ordered with deliveries to be started in the middle of 2022 (for a total order of 1,064 trucks).
These 1,064 vehicles are powered by the state-of-the-art FPT Industrial Cursor 13 natural gas engines and equipped with 1052-liter CNG tanks, the largest available, with the expectation that they will yield an impressive range of 620 km (approx. 385 miles) between refueling. The 848 units on order for delivery in 2022 will also feature IVECO Driver Pal, the Brand’s trailblazing on-board vocal driver companion with Amazon Alexa features.
Colombia: new logistics brand unveils fleet of 50 Scania CNG trucks
The Daabon Group, a Colombian company specialized in agricultural, agro-industrial and port transportation, has launched Elogia Soluciones Logísticas, a sustainable transportation brand with a fleet of 50 Scania G410 A 6×4 Euro 6 tractors powered by natural gas.
Initially, the 50 trucks will circulate in the cities of Santa Marta, Barranquilla, Bogotá and Medellín, while next year they expect to complete 100 vehicles, which will be the largest order of this type in Colombia, reported the newspaper La República.
Likewise, the company seeks to encourage a new business culture around sustainability and environmental commitment with multimodality and competitiveness, giving adequate use of natural resources. Within its logistics chain, Elogia will cover the Terlica liquids terminal, the Free Zones of Las Américas and Tayrona, the Port of Santa Marta, Trans Bio and Superlogistics, achieving comprehensive coverage that will promote agility in movements in a sustainable way with the highest quality standards.
Pakistan: Govt introducing virtual gas pipeline system of LNG: Hammad Azhar
Minister for Energy Hammad Azhar said the government was going to introduce virtual gas pipeline system of Liquefied Natural Gas to overcome energy shortage in the country. Hammad Azhar said the government would receive two extra LNG cargoes in December to fulfill the requirement of the gas in the country.
The minister said the consumption of gas increased three per cent in every winter season and the government was making all-out efforts to meet the domestic demand of gas.
On November 19, Advisor to Chief Minister Sindh on Law and Karachi Administrator, Murtaza Wahab had said that on November 12 Federal Minister for Energy, Hammad Azhar had misstated about production of gas in Sindh.
Egypt, Israel sign MOU to increase gas supplies
Egypt and Israel signed a Memorandum of Understanding (MoU) to increase natural gas supplies from Israel to Egypt for re-export, Egypt’s Ministry of Petroleum announced in a statement.
The agreement comes within the framework of efforts to expand the use of natural gas to reduce greenhouse gas emissions in the region, the statement added.
The MoU was signed between Egypt’s Petroleum Minister Tarek El-Molla and Israel’s Energy Minister Karine Elharrar on the sidelines of the Sixth Ministerial Meeting of the East Mediterranean Gas Forum held in Cairo. Elharrar said Egypt is an important partner in achieving energy security in the region and also to combat the climate crisis. In early 2020, Israel began exporting natural gas to Egypt from their Leviathan and Tamar offshore fields under a 15-year deal signed with a private firm in Egypt, Dolphinus Holdings, according to Reuters. Egypt, which achieved self-sufficiency in natural gas by the end of September 2018, has since then been seeking to become a regional energy hub. The booming of the North African country’s gas production was supported by huge gas discoveries and production, which reached over seven billion cubic feet per day. The giant Zohr field, discovered by Italian energy company Eni in 2018, was one of the most important finds. It is currently producing about 3 billion cubic feet of natural gas per day from 13 wells.
Global LNG Development
US: El Salvador receives first shipment to supply new LNG plant
An initial shipment from a storage and regasification vessel arrived in El Salvador to supply a new liquefied natural gas (LNG) plant that will provide 30% of the Central American country’s energy, President Nayib Bukele said.
Speaking in the coastal town of Acajutla, Bukele said the plant would diversify El Salvador’s energy mix, cut greenhouse gas emissions below 600,000 tons of carbon dioxide per year and allow the country to begin using natural gas to generate power. The $1 billion project overseen by El Salvador’s Energia del Pacifico, whose main partner is U.S. firm Invenergy, includes a large plant that will generate 378 megawatts of power.
Australia: Woodside Moves Closer to Scarborough Field FID. Strikes Deal to Sell 49% in Pluto LNG Plant
Australia’s Woodside Petroleum took a big step toward funding its biggest growth project, announcing the sale of a 49% stake in the planned expansion of its Pluto liquefied natural gas (LNG) plant in Western Australia.
In a statement, Australia’s biggest independent oil and gas firm said it had agreed to sell a 49% stake in a planned second processing unit, or ‘train’, at the Pluto LNG plant to private equity firm Global Infrastructure Partners (GIP). Woodside has been looking for nearly two years to lock in the sale of the stake ahead of making a final investment decision by Dec. 15 on the $12 billion combined Scarborough gas project and Pluto LNG expansion, which will super-chill gas from the Scarborough field for export.
Under the agreement, GIP will pay its 49% share of the $5.6 billion construction cost of Pluto Train 2, plus a further $835 million. The $835 million could be reduced if costs on the project blow out or if the project is delayed, while if costs come in under budget, then GIP will reward Woodside.
UK: LNG industry launches ‘carbon neutral’ framework
An international liquefied natural gas (LNG) body launched a framework to establish rules to declare cargoes carbon neutral as it seeks to make the practice of offsetting emissions a last resort.
Environmental groups are skeptical about the use of carbon offsets and say the ability to pay for emission reductions elsewhere could prolong the use of fossil fuels. Around 30 cargoes, or less than 1% of global LNG trades have been declared carbon neutral to date, but the number is expected to grow as companies seek to differentiate themselves through their environmental credentials.
Not all of the 30 shipments that have claimed to be carbon neutral to date include scope 3 emissions and therefore would not have been able to make that claim under the GIIGNL framework, Demoury said. The framework did not specify which type of offset, which can cost as little as 50 cents, should be used, but said they should meet criteria, such as being independently verified and retired from circulation once they have been used.
US: JERA to Invest in Freeport LNG Development
JERA Co. Inc. has decided to invest, through its subsidiary JERA Americas Inc., in Freeport LNG Development L.P. (FLNG), which operates the Freeport LNG project in the US, and has concluded a securities purchase agreement
with infrastructure fund Global Infrastructure Partners to acquire the approximately 25.7% interest in FLNG held by its subsidiaries.
The approximately US$2.5 billion acquisition is expected to be completed after the necessary approval and authorisation procedures. For this transaction, JERA Americas Inc. appointed Goldman Sachs & Co. LLC as its exclusive financial advisor and Sidley Austin as its legal advisor. In a statement, JERA said that FLNG’s new LNG projects have extremely low development risk due to the use of the existing Freeport LNG project, which enables the company to flexibly expand production capacity in response to increased global LNG demand. In addition, since there are no resale or destination restrictions on LNG exported from the project, JERA believes it will be possible to supply LNG to Japan when supply is tight and to otherwise respond flexibly to the LNG supply and demand situation in the Asian region. By leveraging the knowledge and expertise it has accumulated through its global LNG value chain business and power plant operations, JERA will work together with FLNG on its various businesses — such as operation of the existing Freeport LNG project, development of new LNG projects, and flexible LNG transactions — as it strives to improve the competitiveness of the Freeport LNG project.
Southeast Asia: Southeast Asia steps up LNG storage and Reload
LNG storage and reload activity is picking up in Southeast Asia, with at least two terminal operators offering third-party access to existing and proposed facilities. LNG storage and reload activity is picking up in Southeast Asia,
with at least two terminal operators offering third-party access to existing and proposed facilities. Petronas wants to add a new tank solely for storage and reload purposes at its Pengerang regasification terminal in Johor, Malaysia, and is seeking market interest in a long-term lease. Pertamina, meanwhile, is offering a five-year lease for storage and reload capacity at its Arun terminal in Sumatra, Indonesia from 4Q 2023.
Third-party storage and reload access remain limited across Asia compared to Europe. Thailand, Malaysia and China have established third-party access frameworks for LNG and gas infrastructure as part of their market liberalization efforts, but leases have been rare amid regulatory uncertainty and commercial hurdles. Many terminal operators also want to keep these facilities for their own use, especially in current markets. The Petronas and Pertamina third-party access offers come amid growing commercial interest in Asian storage and reload services, as LNG commoditizes, and markets get more volatile. Firm and indicative demand in non-segregated storage and reload capacity at the Singapore LNG (SLNG) terminal, for instance, is increasing as winter approaches. Taking this capacity at Singapore or other Asian terminals is currently in the money after accounting for lease and operational costs, amid sky-high spot prices in Northeast Asia, market sources say.
Africa: DNG gets its first LNG consignment
DNG Energy, a black-owned firm, said this week it had received its first consignment of liquefied natural gas (LNG) from Rotterdam, Netherlands, an important milestone. The company, which is driving a multibillion-dollar investment into creating a pan-African
LNG supply network, said the development was a precursor to the commissioning of DNG’s first floating storage unit delivery in the first quarter of next year, setting the stage for a new era of growth, competition and sustainability in the energy market.
DNG Energy Group chief executive Aldworth Mbalati said the arrival of the LNG consignment was an inflection point for South Africa’s energy market, marking a key moment in the shift from coal-fired and oil-fired power-generation to cleaner alternatives. This affordable alternative energy was said to be the culmination of a $5 billion (R76bn), seven-year investment in infrastructure. The development would catalyse the growth of a new gas economy in South Africa, in turn, supporting the shift to more sustainable energy sources, facilitating industrialisation, creating new jobs, and offering commercial customers more choice. In addition to being an abundant energy resource for generating electricity and providing fuel for industrial processes and heating, LNG can be used as a raw material to produce chemicals, fertiliser and hydrogen. It can also be used in several residential, commercial and transport applications.As a first step in contributing to sustainable development, DNG Energy said it was championing the use of LNG for road and maritime transport, specifically for trucks, buses and ships.
Russia: Gazprom expanding production and use of liquefied natural gas
The Gazprom Board of Directors expressed its approval of the Company’s ongoing projects for the production and supply of liquefied natural gas (LNG). It was noted that the Company’s work in this promising direction will make
it possible to strengthen the position of Gazprom in foreign markets and address in a more flexible manner the tasks related to providing reliable gas supplies to domestic consumers.
Near the settlement of Ust-Luga in the northwestern part of Russia, Gazprom and RusGazDobycha are building the Complex for processing ethane-containing gas. The Complex will include a large-scale liquefied natural gas production plant which, with its capacity of 13 million tons of LNG per year, is designed to become the biggest such plant in northwestern Europe. The project for the construction of the LNG production, storage and shipment complex near the Portovaya CS in the Leningrad Region is in its final stage. The complex will produce 1.5 million tons of LNG per year. The possibility of building another mid-scale LNG plant near Vladivostok is being considered.
Gazprom pays special attention to the development of small-scale LNG complexes, for instance, those designed to bring gas to localities that are situated far away from gas trunklines. The first of these projects was implemented in the Perm Territory: a small-scale LNG plant and three natural gas receiving, storage and regasification stations have been in operation here since 2014. Access to gas has been provided to over 2,200 households and 10 boiler houses in the Ilyinsky, Karagaisky, and Sivinsky Districts. Gazprom is now working to implement similar projects in the Tomsk and Sakhalin Regions.
Korea: Samsung Delivers $2.5B FLNG Plant for Mozambique’s Coral South Field
Mozambique is hoping to inject new life into its beleaguered liquefied natural gas (LNG) sector after Samsung Heavy Industries (SHI) completed the construction of a floating LNG facility (FLNG) for the offshore Coral South project.
With onshore LNG projects in limbo due to insurgency, the country is banking on an offshore project implemented by Italian company ENI and Korea Gas Corp (KOGAS) to develop its vast LNG resources.
The $2.5 billion Coral-Sul FLNG is a floating liquefaction plant with a capacity of 3.4 million tonnes per annum. It will develop the resources of the Coral gas field in Mozambique’s Rovuma Basin, which is estimated to hold approximately 16 trillion cubic feet of gas. KOGAS controls a 10 percent stake in the Coral gas field and has invested $513 million in the floating LNG facility. It is also guaranteeing up to $640 million of the project’s debt financing.
Korea: Korea Gas and KT announce data center at LNG terminal
New facility will benefits from waste cooling at Incheon gas plant KT (Korea Telecom) and Korea Gas (Kogas) have announced a plan to build a data center cooled by a liquid natural gas (LNG) plant.
The two companies have signed an agreement to develop a data center that would use the cold energy from regasification at the LNG import plant at Incheon near Seoul, Korea. The combination would save energy at the data center and use waste cold energy, the companies said at a ceremony in Seoul for the signing of the memorandum of understanding (MoU). LNG gasification plans have been proposed several times as a good location for data centers. All natural gas is imported in liquid form, and when it is turned back into a gas, it absorbs a vast amount of heat, a process that could provide cooling for other industries. Data centers could be a natural fit, as up to thirty percent of a data center’s energy is used in cooling the servers. However, there are many obstacles to overcome and, if KT and Kogas succeed, this would be the first data center actually built at an LNG plant. Among the most obvious drawbacks to the idea, LNG plants are unlikely to have good fiber links, as the plants are sited remotely to reduce danger to the public. The Kogas Incheon plant, for instance, is on an artificial island, 8km offshore. The risk of explosion at LNG plants is itself another factor that might put data center customers off.
Kogas and KT will cooperate in fields including a feasibility review, safety verification, and domestic and foreign business development. The use of LNG cold energy could save around 12MW of power at a data center such as the one KT runs in Yongsan, Seoul, the companies claim.
Natural Gas / LNG Utilization
Spain: Port of Barcelona, Naturgy, HAM switch diesel straddle carrier to LNG
The Port of Barcelona, APM Terminals Barcelona, Applus IDIADA, HAM and Naturgy recently completed the pilot project to test the viability of natural gas as a fuel in port machinery. The initiative, consisting of transforming
APM Terminals Barcelona’s straddle carrier (machine for the transport of containers) to LNG, concluded with good results in terms of greenhouse gas (GHG) emissions, specifically CO and CO2, certifying an important reduction in comparison with the machines that work with diesel. On the test bench, the reduction in fuel consumption was 11%, which can be an economic stimulus for the transformation or purchase of new machines that run on natural gas. Total hydrocarbon emissions are also reduced with the use of natural gas, according to the tests. In order to also achieve a reduction in NOx, the tests conclude that the installation of catalysts in the machine would be necessary.
The Port of Barcelona coordinated the project, both technically and economically, and developed the safety studies. The reduction of polluting emissions and GHG is one of the port’s priorities, in line with the objectives of the European Union and the International Maritime Organization. The project to transform the straddle carrier to LNG, which began in January 2016 and had a budget of 1.22 million euros, is included in the CORE LNGas hive project, coordinated by Enagás.
Europe: European Natural Gas Prices Surge on Nord Stream 2 Delay — LNG Recap
European natural gas prices surged after German regulators delayed certifying the Nord Stream 2 (NS2) pipeline, exacerbating fears that the continent won’t have enough of the fuel this winter.
Prices started the week higher after Gazprom PJSC elected not to book additional capacity into Western Europe for next month. That “elevated” supply uncertainty “into the end of the year,” said analysts at Goldman Sachs Commodities Research.
The German regulator that oversees natural gas suspended the NS2 certification process after Gazprom affiliate Nord Stream 2 AG said it would establish a subsidiary to operate the German stretch of the system, which is designed to move 5.3 Bcf/d from Russia to Europe. Regulators said they would restart the certification process once assets have been transferred to the new subsidiary.
European Union rules require ownership of transmission and natural gas to be separate, which could complicate the certification process, given Gazprom’s integrated structure. The certification delay raises the specter that Europe may wait longer for much needed supplies from NS2, “increasing risks of a catastrophe this winter if weather is sufficiently cold,” said EBW Analytics Group. Natural gas in European storage is at about 74% of capacity compared to the five-year average of 91%.
US: US Congress passes clean transport bill with aids for NGV infrastructure
NGVAmerica applauds U.S. House of Representatives passage of the Senate-approved Bipartisan Infrastructure Framework, or BIF, a major national investment in infrastructure and clean transportation. “
This legislation is a key tool for fighting climate change and decarbonizing our heavy-duty transportation sector through investments in alternative and renewable fuel technologies including natural gas,” said NGVAmerica President Dan Gage.
The bill now heads to President Biden’s desk for a signature. This represents one of the most substantial infrastructure and climate change investments in U.S. history while also setting the stage for consideration of clean energy tax provisions as part of the budget reconciliation process.
US: LNG tanker rates surge to record as Asia buys more U.S. gas
Spot freight rates for liquefied natural gas tankers in the Asia-Pacific have surged to record highs as a steady flow of U.S. cargoes to the region boosts demand for ships. The cost of chartering a vessel to carry a shipment of the super-chilled fuel from Australia to Japan spiked to $316,750 per day, f
ive times higher than two months ago, according to data from Spark Commodities. That beats the previous high in January during a cold snap in Northeast Asia. The jump comes in the run-up to the peak winter consumption season and is spurring concern among Asian buyers that colder-than-normal temperatures could be exacerbated by the shortage of ships, pushing costs of the electricity feedstock even higher. Asian benchmark LNG prices are currently about $39 per million British thermal units. That’s down from a peak above $56 in early October, but above the high last winter.
Inpex Corp., Kyushu Electric Power Co. and PTT International Trading signed a memorandum last month to collaborate on LNG trading and hiring gas tankers to optimize their operations amid the dearth of ships. Asian buyers will be hoping there are no unplanned LNG supply outages in the U.S. over winter as that would force them to seek cargoes from Australia, Southeast Asia or Qatar, putting even more pressure on the tanker market. They’re also seeking to avoid a repeat of last winter’s congestion in the Panama Canal, and are deploying vessels to travel around the Cape of Good Hope from the U.S. to Asia, stretching shipping capacity even further, traders said. A round-trip voyage could tie up tankers for two to three months.
Argentina: Argentina regulates authorization of locally-built natural gas heavy vehicles
The National Gas Regulatory Entity (ENARGAS) reported that through Resolution No. 432/2021 it approved NAG-452 for the authorization of heavy duty vehicles, produced in Argentine territory, powered by natural gas.
The objective of this new norm is to establish the procedure to enable the use and supply of natural gas as fuel in vehicles destined to the transport of passengers or cargo, from the moment of its production in the country until the subsequent controls, even after its commercialization. For this reason, NAG-452 is aimed at regulating a new pole of demand for natural gas, which will entail the development of technologies with high added value and the generation of new sources of jobs with the use of qualified labor.
The new standard was carried out with the purpose of promoting and facilitating policies aimed at improving the quality and efficiency of the road transport service for passengers or cargo, in terms of healthier mobility due to the reduction of gaseous and noise polluting emissions, particularly valuable in areas of high urban concentration and due to the decrease in logistics costs, with the use of a fuel with a lower price. In addition, it intends to promote a safe and rational use of energy, taking into account the use of certified technologies through national regulations, international and regional standards and countries with recognized experience in the matter.
Egypt: Egypt exports 1m tons of LNG in third quarter of 2021
Egypt’s surpassed its Arab neighbors in natural gas exports during the third quarter of 2021, the country’s minister of petroleum and mineral resources said. The country exported 1 million tons of liquefied natural gas, Tarek Al-Mulla said.
He said the oil and gas sector contributed 24 percent to the country’s gross domestic product in 2019-2020 despite the pandemic. Before the pandemic, the sector’s contribution to the GDP was recorded at around 27 percent in 2018-2019. A surplus, equivalent to about EGP9.5 billion ($604 million), in the petroleum balance of payments was reached during 2020-2021, compared to a surplus of EGP9.9 billion in 2018-2019, Al-Mulla said.
China: Sinopec pumps more natural gas to cope with new cold front
Chinese oil major Sinopec is pumping more clean energy sources to North China as large parts of the country brace for a new cold front that will send temperatures plunging. The daily supply of natural gas has been boosted by an additional 10 million cubic meters to
North China while nationwide supply has also risen to 180 million cubic meters, the company said in a statement sent to the Global Times, adding that residential and industrial demand has been met effectively.
The company resolved to tap its resources from multiple fronts, and its daily natural gas output nationwide has been ratcheted up to 99.79 million cubic meters, a record set. The company also ensured its natural gas storage facilities around the country contained a ready level of gas, at 1.79 billion cubic meters (bcm). Now these facilities can perform peak/valley allocation and distribution of natural gas at any time. Sinopec said it had booked 27.2 bcm of natural gas for the winter/spring season from domestic and global sources and its liquefied natural gas (LNG) terminals are working at full throttle. A further LNG terminal will be put into operation by end-November in North China’s Tianjin Municipality and the doubled LNG receiving capacity will ensure a warm winter for residents in northern parts of the country.
Europe: Europe’s LNG Imports on Rise, Flows To Asia Unaffected
Although gas prices in Europe were rising almost continuously between April and early October, this year has most clearly demonstrated what particular region sets the tone for the global LNG market. After a long break,
European terminals started to receive large quantities of vessels only in recent months, which among other things eased the supply/demand situation. But Asia’s imports slowed down just for a while, and with colder weather approaching, the region’s players should hunt for cargoes with renewed vigour.
In October, aggregated LNG imports to Europe amounted to more than 7 million tonnes, increasing by 60pc from this year’s lowest monthly level in July. Deliveries to NWE and Mediterranean are expected to grow further in November, according to Kpler data. Europe’s energy crisis reached its acute stage in late Q3 and early Q4, resulting in unprecedentedly high gas prices, which in turn helped to significantly improve the economics of delivering LNG to the region as compared to the previous months in summer. For instance, a trader buying a cargo on an FOB basis in the US Gulf in late September for delivery to the Dutch TTF could make five times as much as in early July. It is not surprising, then, that the European regas facilities imported over 2 million tonnes from the US in October, for the first time in five months.
LNG as a Marine Fuel/Shipping
China: China Prepares for Delivery of World’s Largest LNG Tank Carrier
China, which is a major energy importer, is preparing to take an important step forward launching a unique approach to the importation of LNG. Yangzijiang Shipbuilding Group recently completed the float out of the second of two vessels,
which it is calling the world’s largest LNG tank container transport dual-fuel cargo ships. The shipbuilder expects to deliver the first vessel in the next few weeks and both will be used to launch an LNG import business.
The 250,000 dwt Tiger Maanshan was moved from the construction dry dock on November 5 to prepare for its sea trials. The Tiger Longkou had previously been floated and completed testing in October. Based on the success of the efforts, the shipyard now reports that it has advanced the delivery date for the Tiger Longkou with the vessel scheduled to be handed over in December 2021, four months ahead of schedule. The two ships, along with two others and options for up to four more are being built for Tiger Gas, headed up by Gerry Wang, the former CEO of Seaspan. Each of the four vessels will be used to transport LNG, but instead of opting for the traditional LNG carrier, Tiger Gas developed vessels that will transport LNG gas tanks in a fashion similar to containers. Each ship has the capacity to load up to approximately 700 45-foot tanks. They will have a total capacity to transport about 15,000 tons of liquified natural gas.
The vessels measure 630 feet in length with a beam of 121 feet are registered in Hong Kong. They are outfitted with dual-fuel engines and will operate on LNG. The ships will operate at a speed of 16 knots and while powered by LNG will have a range of up to 5,000 nautical miles. Tiger says that their design will greatly improve the transportation efficiency for LNG, providing a new model which can be expanded to other regions of the world. By loading, individual LNG tanks and providing the vessels with the capabilities to dock at smaller terminals, Tiger plans to provide a door-to-door service delivering LNG directly to end-users. The ships will be able to sail on inland waterways, such as China’s Yangtze River, to reach the customers making it possible for a broader range of businesses to convert to LNG.
Trio act on LNG cargoes’ greenhouse gas emissions
QatarEnergy and Chevron have teamed up with Singapore’s Pavilion Energy to jointly publish a quantification and reporting methodology to produce a statement of greenhouse gas emissions for delivered LNG cargoes.
Intended for wide adoption, the so-called the SGE Methodology, provides a calculation and reporting framework for greenhouse gas emissions from wellhead to discharge terminal, based on industry standards.
This is the first such published methodology that will be applied to liquefied natural gas sales and purchase agreements, specifically the executed SPAs by Pavilion with QatarEnergy and Chevron. The SGE Methodology was developed by a team of technical specialists representing the three companies and supported by global sustainability consultancy Environmental Resources Management. It aims to create a common standard for the measurement, reporting and verification of GHG emissions associated with producing and delivering an LNG cargo to drive greater transparency and enable stronger action on GHG reduction measures.
Hyundai Samho Heavy Industries selects GTT technology for LNG-fuelled container newbuilds
The two vessels, each with a capacity of 15,600 containers, will be equipped with LNG tanks, each holding up to 12,800 m3 of LNG used as fuel. The tanks will be fitted with the Mark III Flex membrane containment technology, developed by GTT.
In addition to the engineering services and on-site technical assistance, GTT will assist the operator through every step of the first LNG-fueled project: commissioning of the LNG tank, first LNG bunkering operations, as well as further specific LNG operations and maintenance of the vessels. Moreover, GTT will provide training for the crews, supported by its proprietary G-Sim training simulator, which replicates the future LNG operations of the vessels. GTT will also offer its HEARS emergency response service with 24/7 technical assistance. In addition, GTT will fit the vessels with its GTT Digital platform, a smart shipping solution to monitor and optimise the operational performance of the vessels and further reduce their energy consumption and environmental footprint. Vessel deliveries are scheduled to occur between the Q4 of 2023 and the Q2 of 2024.
Germany: Man to equip 10 containership with LNG engines
Germany’s MAN Energy Solutions said on November 23 it had secured a contract from Chinese shipbuilder Yangzijiang Shipbuilding to supply 10 ME-GI LNG engines for 7,000-teu containerships.
The ships were ordered by Seaspan Corp and have already been chartered under long-term contracts. MAN will deliver the engines between October 2023 and 2024.
Technological Development for Cleaner and Greener Environment Hydrogen & Bio-Methane
UK: New plants develop waste-based biomethane & biohydrogen for fleets
Advanced Biofuel Solutions Ltd (ABSL), a developer and producer of advanced biofuels, and Greenergy, a manufacturer and supplier of waste-based biofuels, signed of a Joint Development Agreement to develop,
construct and operate up to five municipal waste-based biofuel plants in the UK. Design work for the first plant to be situated at Ellesmere Port near Liverpool is underway and commercial production is due to commence in 2025.
Using ABSL’s proven and patented RadGas technology, the first plant will convert annually 133,000 tons of municipal waste into biomethane for natural gas vehicles or biohydrogen for hydrogen vehicles. Together, the five plants would replace millions of liters of fossil petrol and diesel used in transport fuels, saving 800,000 tons of CO2 per year, with the output of the plants equivalent to powering 5,000 HGVs.
Hopes for hydrogen as China to tackle carbon
Hydrogen fuel cell vehicles are expected to experience a rapid expansion thanks to new global environmental goals, according to insiders and experts, who also acknowledge difficulties on the road to commercialization. In terms of developing new energy vehicles,
electric and hydrogen fuel cells are regarded as the two major technologies. However, the development of hydrogen vehicles is lagging compared with the global market containing millions of EVs.
Statistics show that by the end of 2020, there were only 32,535 hydrogen fuel cell vehicles worldwide. The situation is not optimistic in China, which has the largest number of NEVs. According to the China Association of Automobile Manufacturers, in 2020, the production and sales of hydrogen fuel cell vehicles in China were 1,204 and 1,182 respectively-and all of them were commercial vehicles.
Hydrogen and fuel cells can help with decarbonizing and reducing emissions. This is a main route for the transformation of China’s energy and transportation and the realization of the dual carbon goals, said Chen Xuesong. He is president of FTXT, a hydrogen fuel cell product manufacturer of Great Wall Motors, China’s largest sport utility vehicle producer.
Australia: Australian startups join forces to develop 1.3 GW hydrogen export facility in Malaysia
Two Australian companies, hydrogen fuel cell startup H2X and emerging renewables developer Thales New Energy, have signed an agreement with a Malaysian state-owned corporation to develop a 1.3 GW hydrogen export facility powered by
hydroelectricity in the Malaysian state of Sarawak. Australian companies H2X and Thales New Energy have signed a memorandum of understanding (MoU) with Malaysia’s state-owned Sarawak Economic Development Corporation (SEDC) through its wholly owned subsidiary SEDC Energy. The agreement with see the trio form an incorporated joint venture to develop Samalaju Hydrogen Production Plant, which is proposed to be a massive 1.3 GW, capable of producing as much as 170,000 tonnes per year of liquid hydrogen or 970,000 tonnes per year of ammonia for export.
The plant is proposed for the newly built Samalaju Industrial Park and Port and will produce its green hydrogen via electrolysis powered by hydroelectricity. Sarawak, the state where the facility is to be housed, is home to the majority of Malaysia’s hydro assets, which are currently the country’s main renewable energy source while it seeks to expand its solar assets through its large-scale government-run tender programme. The state of Sarawak sits on Borneo island, stretching along its northwest coast. The Malaysia region is reportedly gearing up to become a hub for the emerging ASEAN (Association of Southeast Asian Nations) hydrogen energy market, planning a range of hydrogen infrastructure projects. The state’s high penetration of hydro assets, as well as its strategic coastal location in the centre of south east Asia clearly adding to its attractiveness for such propositions.