NGS’ NG/LNG SNAPSHOT – August 16–31, 2022

National News Internatonal News


City Gas Distribution & Auto LPG

HPCL launches cowdung-to-compressed biogas project in Rajasthan

As part of its move towards increasing the green energy mix, state-run Hindustan Petroleum has announced a cow dung-to-compressed biogas project at Sanchore in Rajasthan.

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This is the oil major’s first project under the waste-to-energy portfolio and the plant is proposed to utilize 100 tonnes per day of cowdung to produce biogas, which can be used as automotive fuel.

The project is expected to be commissioned in a year, HPCL said in a statement on Tuesday, August 23.

The project is coming at Pathmeda in the Jalore district of Rajasthan, the company stated without disclosing the financial details of the project.

The project is being developed under the Gobar-Dhan scheme launched by government in April 2018, which is part of the biodegradable waste management programme, and seeks to positively impact cleanliness and generate wealth and energy from cattle and organic waste.


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North East Gas Grid achieves a 50% target

Guwahati: The NEGG (North East Gas Grid) Project has achieved a 50.17% physical target incurring an expenditure of Rs 2236.97 crore, including Rs 1,030-crore VGF (Viability Gas Funding). The scheduled completion target of the project is March 2024.

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As many as 411 km of mainline welding and 324 km of pipeline lowering out of the total length of 1656 km of the NEGG project is over by July end. A report from the Ministry of Petroleum and Natural Gas has revealed this.

The Petroleum and Natural Gas Regulatory Board (PNGRB) has authorized the work of the 1,656-km-long North East Natural Gas Pipeline Grid to Indradhanush Gas Grid Limited. The Ministry took up the NEGG project connecting all the northeastern states to the National Gas Grid through the Barauni-Guwahati natural gas pipeline as a part of the “Pradhan Mantri Urja Ganga” Scheme. The NEGG Project runs through 12 districts of Assam, one district of Arunachal Pradesh, two districts of Manipur, four districts of Meghalaya, two districts of Mizoram, two districts of Nagaland, two districts of Sikkim, seven districts of Tripura and two districts of West Bengal. The total capital expenditure of the project is Rs 9265 crore, including the VGF of Rs 5,559 crore.

In addition, the PNGRB has authorized seven geographical areas for the city gas distribution (CGD) network in Assam. Till May 2022, the authorized CGD entities have laid a 7,721-inch km steel pipeline and 11,757-inch km of medium density polyethylene pipe (MDPE) pipeline in their geographical areas for PNG connections and establishing CNG stations.

Indradhanush Gas Grid Ltd (IGGL) is a joint venture company of IOCL, ONGC, GAIL, OIL and NRL. The government incorporated IGGL on August 10, 2018, towards implementing the Hydrocarbon Vision 2030 for Northeast India, released by the Ministry of Petroleum and Natural Gas in 2016. Hydrocarbon Vision 2030 envisages Northeast economic development by leveraging its hydrocarbon potential, enhancing access to clean fuel and accelerating growth.

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Natural Gas/ Pipelines/ Company News


Oil & Natural Gas Corp.  inks HoA with ExxonMobil

Oil & Natural Gas Corp. has signed a Heads of Agreement (HoA) with global petroleum giant ExxonMobil for Deepwater exploration in East and West coasts of India.

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The collaboration areas focus on the Krishna Godavari and Cauvery Basins in the eastern offshore and the Kutch-Mumbai region in the western offshore. There has been a scientific exchange of exploration data in the last few years, which has led to this partnership.

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GAIL and Indus Gas agree new price terms

India’s GAIL has agreed to pay at least $4.50/mmBtu, in gross calorific value (GCV) terms, for gas purchased from Indian concession RJ-ON/6 Block, operated by London-listed Indus Gas.

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Indus Gas said the price revision moves the pricing floor for GAIL’s purchases up to the existing realised price – the actual price paid under the previous framework of around $5/mmBtu in net calorific value terms.

The revision means GAIL will pay $6.10/mnBtu in GCV terms for the April 1 – September 30 period, equating to a real terms price increase of around 35%.

RJ-ON/6 is situated in the Indus Basin in the north Indian state of Rajasthan, adjacent to several earlier discoveries in Pakistan’s share of the basin, including Eni-operated Kadanwari, OGDC’s Qadirpur and Pakistan Petroleum’s Kandhkot.

The initial discovery well flowed near-pure methane during testing, at a 24-hour rate of 15mn ft3/day. GAIL’s gas sale purchase agreement dates to mid-2009, when it agreed to offtake roughly 33.5mn ft3/day of gas from RJ-ON/6 under “take or pay” terms.

Indus announced the price adjustment on August 18. It said the new arrangement reflected national guidelines on wholesale domestic gas prices, issued by New Delhi’s division for petroleum planning and analysis.

Indus owns a 90% participating equity stake in RJ-ON/6, which is currently operated by India-based independent Focus Energy. Estimates prepared in 2012 by UK technical consultant Senergy pegged the licence’s proved plus probable gas reserves at 573bn ft3.

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Sh. Ayush Gupta takes charge as Director (Human Resources), GAIL

Sh. Ayush Gupta on Monday, August 22, took over as Director (Human Resources) of GAIL (India) Limited, the nation’s largest gas utility. Prior to this, he was chief general manager (human resource development) in the organisation.

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An Electrical Engineer from IIT Roorkee and MBA in Operations Management, Gupta has over 30 years of experience in the fields of training and human resource development, talent acquisition, leadership development, performance management, HRD initiatives, project management and operations and maintenance.He is also on the Board of Directors of GAIL Gas Limited, a wholly-owned subsidiary of GAIL.

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Sh. Sukhmal Jain joins BPCL as director marketing

State-owned Bharat Petroleum Corporation Ltd (BPCL) on Monday, August 22, announced the appointment of Sukhmal Jain as its director for marketing.

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Prior to his elevation to the board, he was the executive director incharge (marketing corporate) in the Corporate Office and before that the head of Gas Business Unit, the firm said in a statement.

A Mechanical Engineering graduate from the Delhi College of Engineering and MBA from SP Jain Institute of Management and Research, Jain has held several leadership positions in retail, LPG and gas verticals in his 35 years with the company.

He is also the chairman of Goa Natural Gas Pvt Ltd (GNGPL). Earlier, he was the chairman of Central UP Gas Ltd (CUGL) and director on the board of Bharat Gas Resources Limited (BGRL), a wholly-owned subsidiary of BPCL which has recently merged with the parent firm.

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GAIL set a target to become net-zero carbon emitter by 2040 – Sh. Manoj Jain, CMD

GAIL has embarked upon alternate energies like green hydrogen, renewables and bio-fuels projects, said Sh. Manoj Jain, CMD. GAIL has set a target to become net zero with respect to greenhouse gas (GHG) emissions by 2040, its Chairman and Managing Director Manoj Jain said on Friday, August 26.

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Sh. Jain pointed out that global events that unfolded during the previous year have the potential to alter the structural landscape of the energy sector.

Emphasising on the transition towards clean energy, Jain said with an existing LNG portfolio of more than 14 million tonnes per annum (mtpa), diversity in supply sources and price indices, GAIL is well poised to cater to the needs of its customers. To that effect, the company is setting up a green hydrogen production unit with a capacity of 4.3 tonnes per day at Vijaipur (MP), which will produce green hydrogen using polymer electrolyte membrane (PEM) technology, based on water electrolysis.

Sh. Jain informed the shareholders that the Maharatna company has also taken few initiatives on compressed bio-gas (CBG). In line with the National Hydrogen Mission, GAIL has commenced India’s first-of-its-kind project of mixing hydrogen with natural gas at Indore. The hydrogen blended natural gas is being supplied to Aavantika Gas, a JV of GAIL and HPCL, operating in Indore.

Sh. Jain informed shareholders that GAIL has been working tirelessly to strengthen its core business and today, it owns and operates about 14,500 km of trunk natural gas pipeline representing nearly two-third of the country’s existing network.

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Policy Matters/ Gas Pricing/ Others

CNG & PNG prices slashed by MNGL in Pune

Pune-based City Gas Distribution (CGD) Company, Maharashtra Natural Gas Limited (MNGL), have slashed the retail selling price of Compressed Natural Gas (CNG) for vehicular segment by ₹4 per kg and alsp reduced the selling price of domestic

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Piped Natural Gas (PNG) by ₹2 per standard cubic meter (SCM) in city as well as Pimpri-Chinchwad, Chakan, Talegaon and Hinjewadi with effect from midnight of Wednesday, August 17 & Thursday, August 18 respectively.

Accordingly, MNGL has reduced retail selling price of CNG to ₹87 per kg from an earlier price of ₹91 per Kg. MNGL has affected this CNG price reduction on account of downward revision in purchase cost of domestic natural gas. MNGL has decided to pass on the benefit of reduced gas costs to the customers.

Accordingly, MNGL has reduced retail price of PNG to ₹49.50 per standard cubic meter (SCM) from an earlier price of ₹ 51.50/- per SCM.

After this price reduction, MNGL’s PNG will be cheaper by around 16%, as compared to LPG cylinders at current price levels in Pune city, Pimpri -Chinchwad, Hinjewadi, Talegaon and Chakan areas.

MNGL has effected this Piped Natural Gas (PNG) price reduction on account of a downward revision in purchase cost of domestic natural gas. MNGL has decided to pass on the benefit of reduced gas costs to the customers.

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Centre looks to tweak natural gas pricing policy

The government is planning to overhaul the natural gas pricing policy with an aim to cushion consumers from global shocks and ensure fair rates for both buyers and producers. The oil ministry may soon set up a committee under economist

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Sh. Kirit Parikh to recommend ways to keep domestic natural gas prices stable and affordable for consumers while offering decent returns toproducers.

The ministry has also asked producers and consumers such as fertiliser, power and city gas companies to nominate representatives to the committee, the people cited earlier said. The committee’s recommendations will help frame a new policy to replace the gas guidelines of 2014, under which volume-weighted average prices of gas in the US, Canada, Europe and Russia are used to determine domestic prices every six months, they said.

Spiralling prices have shaken local gas consumers and spurred the government to relook at the pricing policy, people cited earlier said. A sharp economic recovery from the Covidled slump and the Russian supply curbs following the invasion of Ukraine have driven up gas prices to record-high levels. The effects of international price movements are reflected in domestic rates with a lag, as the current formula uses international price data for the trailing four quarters with a one-quarter lag.

Producers have often complained about it. The effect of delayed transmission is that India is yet to feel the full impact of the global gas storm and would continue to feel the price heat months after the global turmoil has faded. It will be a challenge for the committee to balance the interests of both producers andconsumers.

Before the recent surge, domestic formula prices have mostly remained benign, in line with global rates, which were affected by the liquefied natural gas (LNG) glut or Covid in the last few years.

This has prompted local producers to sell at rates below their cost for at least two years. Producers have often urged the government to lift all price restrictions. Consumers have often sought affordable rates, while city gas companies–a key consumer segment–have recently demanded a ceiling on domestic prices to keep compressed natural gas (CNG) fuel attractive with respect to petrol.

For years, city gas companies have made big profits by obtaining traditionally cheaper domestic gas and selling CNG to drivers at market rates.

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Mahanagar Gas cuts PNG and CNG prices on higher supply from govt

Mahanagar Gas on Tuesday cut the prices of kitchen fuel Piped Natural Gas (PNG) and automobile fuel Compressed Natural Gas (CNG), following an increase in allocation of domestically produced natural gas from the government.

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The price of PNG has been reduced by Rs 4 per standard cubic metre to Rs 48.50 per SCM, while that of CNG by Rs 6 a kilogram to Rs 80 per kg, as per an official statement.

After the rate revision, CNG usage will help a vehicle owner save 48 percent on fuel costs in the financial capital, Mahanagar Gas Ltd (MGL) said.

In the case of PNG users, the savings will be 18 percent when compared with the most used alternative Liquified Petroleum Gas (LPG), it said.

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India aims to have 15% gas in energy mix by 2030

GMTS started defaulting on supply to GAIL since late May and so far in the current calendar year, it has not supplied eight cargoes. For the full year, GMTS is supposed to supply 36 cargoes or 2.5 million tonnes to GAIL.

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India’s target to raise the share of gas in its energy mix to 15% by 2030 from around 6.4% now seems improbable, as demand will continue to outstrip domestic supply while inadequate evacuation infrastructure could prevent large-scale imports that would be required to realise the lofty goal.

Far from going up, India’s net production of natural gas fell in the last decade to 33,131 million standard cubic metre (mmscm) in FY22, compared with 39,753 mmscm in FY13. Net production denotes gas available for consumption. The gross domestic production of natural gas in FY22 was 34,024 mmscm, up from 28,672 mmscm in FY21. ONGC is the leading producer of gas in the country contributing around 61% of the country’s production in FY22.

India’s consumption of natural gas, on the other hand, hit 63,907 in FY22, compared with 57,367 mmscm in FY13 on growing demand from the fertiliser, city gas distribution (CGD) and other sectors. Of the total gas consumption in India in FY22, 30% was consumed by the fertiliser sector followed by the CGD sector (20%) and power sector (15% ), among others.

As domestic production fell and demand continued to grow, India’s reliance on imports went up to 48.2% of consumption in FY22, compared with 30.7% in FY13. Coupled with rising prices, total cost of natural gas imports increased from $9.5 billion in 2019-20 to $7.9 billion in FY21 and $13.4 billion in FY22.

To reduce the risks, India needs to rapidly change its current, fossil-gas-based trajectory and transform its economy to rely more on renewable energy sources. This will not only ensure energy security and independence, but will also save India crucial foreign exchange as it reduces expenditures from natural gas imports, along with reduced risk of gas infrastructure to remain stranded, Climate Action Tracker suggested.

Sourcing gas is also a problem now. Country’s biggest gas importer GAIL is facing uncertainty over supply of one-fifth of its contracted natural gas from Gazporm Marketing and Trading Singapore (GMTS).

GAIL had in 2012 signed a 20-year contract with Russia’s Gazprom to buy 2.5 million tonnes of LNG. Supply from GMTS started since 2018. GMTS, which had signed the contract on behalf of Gazprom, was moved to Gazprom Germania. In April, Gazprom gave up its ownership in Gazprom Germania.

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Torrent gas cuts PNG and CNG prices by ₹5

Torrent Gas today announced that it has reduced the price of CNG and domestic PNG by ₹ 5 per kg and ₹5 per SCM respectively with effect from the 17th of August 2022 across all geographical areas where it is present.

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Reduction in prices has been made possible due to increased allocation of domestic natural gas by the Ministry of Petroleum and Natural Gas. Under the revised guidelines of Ministry of Petroleum and Natural Gas for allocation of gas to domestic PNG and CNG segments of CGD sector, the share of domestic gas in the CGD sector requirement has been increased to 94% of the average consumption of April to June 22 quarter instead of the earlier allocation of 85% of the average consumption of Jan to March 22 quarter.

The reduction in prices, will bring significant relief to customers and will give further impetus to the adoption of Domestic PNG by households and CNG by vehicle owners. With this decrease, the revised price of Domestic PNG in Pune will be ₹46 per SCM ; (inclusive of taxes) representing a 26% discount to LPG and the revised price of CNG will be ₹87 per Kg; (inclusive of taxes) representing a 45% discount to petrol.

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Govt allocation helps Adani Gas cut prices of PNG and CNG

Adani Total Gas has cut the prices for domestic PNG or piped natural gas by up to ₹3.20 per standard cubic metre, while CNG or compressed natural gas price has been brought down by ₹4.7 per kg. The reduction in gas prices has been effected from August 17, 2022, a LiveMint report said.

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The Union ministry of petroleum and natural gas recently increased the allocation of domestic gas and the downward revision of the Unified Base Price (UBP) helped the City Gas Distribution (CGD) industry in moderating the prices of CNG and home PNG to end customers.

Earlier this month, the oil ministry amended an earlier order to increase the allocation of domestically produced gas to city gas operators.

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CNG, PNG prices reduced by Adani Total Gas across 19 geographical areas

Adani Total Gas Ltd (AGTL) has announced a reduction in the prices of Compressed Natural Gas (CNG) and Piped Natural Gas (PNG) across 19 geographical areas that it caters to. In a statement on August 18, the price reduction comes after the government increased the allocation of domestic gas and slashed

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the unified base price. Earlier this month, the Oil Ministry amended an earlier order to raise the allocation of domestically produced gas to city gas operators.

Adani Total Gas Ltd has reversed the earlier increases in the prices and cut the price for domestic PNG by up to Rs 3.20 per SCM and that of CNG by up to Rs 4.7 per kg. The reduction in gas prices has been effected from August 17, 2022, across 19 geographical areas covered by ATGL, which will result in considerable savings for the lakhs of consumers we serve.

City gas distribution company Adani Total Gas and its likes had approached the Ministry of Petroleum and Natural Gas (MoPNG) seeking help as they faced supply constraints even as they were expanding their network. Subsequently, the government revised the guidelines for the allocation of domestic gas.

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LNG Use / LNG Development and Shipping

State-owned GAIL India in gas import talks with Russia’s Gazprom

State-owned GAIL India and Russia’s Gazprom are negotiating over the import of gas to India as the evolving payment mechanism between the two countries facilitate easier trade, said people familiar with the matter.

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While talks are in the early stages, the cost of these imports could be lower than international prices since Russia has surpluses as its exports to Europe have dwindled.

Saint Petersburg-based Gazprom, the state-owned multinational energy company, has likely proposed to the Indian public sector company that it purchase the fuel from Gazprom Singapore and settle payments in euros in future trades. The Singapore unit is a subsidiary of Gazprom Germania, where the Russian company still has a ‘quota’ despite abandoning ownership in April, sources said.

It is said to have agreed to pay demurrage charges after failing to deliver shipments to India as part of a long-term gas supply deal. Demurrage refers to the charge that the merchant pays for the use of containers in a terminal beyond the free time period. Traditional Russian banks that engage in oil and gas business globally are now under economic sanctions and barred from using SWIFT, interrupting payment settlements.

Both countries are aiming to reach an annual trade volume of $30 billion by 2025 from $13.12 billion in FY22. Lenders from both sides are going to play a crucial role in bilateral trades. Currently, Russia and India are implementing joint projects in various sectors including energy, oil, defence, pharmaceuticals, food, chemicals, interbank and insurance.

More than 15 Russian banks are in advanced talks with Indian lenders to facilitate bilateral business in their respective local currencies, ET reported on August 22. The Reserve Bank of India (RBI) had on July 11 allowed invoicing and payments for international trade in rupees, potentially facilitating greater bilateral business with Russia.

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Electric Mobility/ Hydrogen/ Bio- Methane

India banks on Green Hydrogen for economic development

Green Hydrogen has become an integral part of Indias economic development and net-zero plans. Hydrogen will act as a critical enabler to achieving the global targets to limit the increase in temperature to 1.5 degree Celsius, adapt to adverse impacts of climate change and foster low greenhouse gas emissions development.

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A NITI Aayog report suggests, it can help abate 3.6 gigatons of cumulative CO2 emissions by 2050, which may prove to be a boon for the country if it succeeds in its endeavours.European countries are seeking to collaborate with India for Green Hydrogen projects.

The global pandemic has taught nations to diversify their energy demand as well as their geographical availability. The fluctuations in the oil & gas market have disrupted supply-demand chain and cause variations in fuel costs.

Developing countries like India needs to find out an alternative to strengthen its national energy security.India is the third largest global CO2 emitter (7% of global CO2 emission) well below China and the US. It has also committed to reducing its emissions intensity by 33-35 per cent under the Paris Agreement.

India is the world’s third largest crude oil importer with import dependency of more than 80%. It also imports 54% of natural gas and 24% of coal requirements, which largely affects India’s financial account balance. India’s oil import bill in FY20 and FY19 was around $101.4 billion and $111.9 billion, respectively.

A number of sectors like iron ore and steel, fertilizers, refinery, methanol, heavy duty trucking, aviation and maritime shipping emit large amounts of carbon dioxide. According to the NITI Aayog report, if these sectors are helped with carbon free hydrogen or green hydrogen, the country will be able to deep decarbonise itself, which may help the country transition to clean energy and meet the net-zero targets by 2070. The report suggests, India has its distinct advantage in low cost renewable energy generation, which makes green hydrogen the most competitive form of hydrogen in the long run and cost parity with natural gas-based hydrogen or grey hydrogen could also be achieved by 2030.

NITI Aayog says with emerging global momentum on hydrogen, India can situate this decarbonisation opportunity not just within the context of a low-carbon economy, but also as an enabler of energy security and economic development for the nation. Green hydrogen can potentially provide a replacement of fossil fuels in industrial processes and the next steps at the policy level could involve arriving at the correct mix between mandates/regulations and price instruments.

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Natural Gas / Transnational Pipelines/ Others

Savannah signs another gas supply deal in Nigeria

UK-based independent energy company Savannah Energy’s indirectly owned subsidiary, Accugas, has entered into a new gas sales agreement in Nigeria with Notore Chemical Industries.

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Accugas will supply Notore with up to 10mn ft3/day of gas to augment its current supplies. The contracted supply is for an initial term of one year, with the option to extend for a mutually agreed period. Notore’s fertiliser production plant is connected to the Accugas network via the Nigerian Gas Company pipeline from Ikot Abasi and no further tie-in or capital expenditure is required by Accugas.

Notore Chemical Industries, formerly Notore Chemical Industries, is a Nigeria-based integrated agro-allied, chemicals and infrastructure company located in the Onne Oil and Gas Free Zone area of Rivers state in southern Nigeria.

Savannah has in recent months penned gas supply agreements with companies like TransAfram Power and Egypt’s Mulak Energy .

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Phillips 66 offers to buy pipeline operator DCP Midstream
U.S. refiner Phillips 66 (PSX.N) offered to acquire the public units of DCP Midstream (DCP.N) in a deal that would value the pipeline operator at $7.2 billion deal and bulk up Phillip’s natural gas liquids business.

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A deal would mark the first major move by Mark Lashier, who took over as the chief executive officer of Phillips 66 last month. Earlier this year, the company acquired the public units in transportation and storage business Phillips 66 Partners.

Canadian pipeline operator Enbridge (ENB.TO), which owned 50% of DCP’s general partner, said it would reduce its stake in the company to 13.2% from 28.3%. It received a $400 million cash payment from Phillips 66 as part of the deal.

Enbridge will, in turn, take over as operator and more than double its stake in Grey Oak pipeline, previously operated by Phillips 66. The Grey Oak pipeline transport crude oil from West Texas to the Gulf Coast. Phillips 66’s (PSX.N) economic interest in the Gray Oak pipeline will fall to 6.50% from 42.25%.

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California took responsiblity of natural gas pipeline safety

The Public Utilities Commission (PUC) is responsible for regulating, enforcing intrastate gas pipeline transportation and pipeline facilities. California has numerous formal acts in statute. Public Utilities Code Division 1, Part 1, Chapter 4.5, Article 2 provides

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the Natural Gas Pipeline Safety Act of 2011, which is contained in Section 955 to 972. Section 955 names the act.

In addition, the PUC is the state authority responsible for regulating and enforcing intrastate gas pipeline transportation and pipeline facilities, including the development, submission, and administration of a state pipeline safety program certification for natural gas pipelines.

The commission must establish the standards to ensure that intrastate transmission and distribution lines have emergency response plans that adequately prepare them for a natural disaster or malfunction that could cause injury to human life or property, with the purpose of minimizing the occurrence of both.

The comprehensive pressure testing implementation plan must provide for testing or replacing all intrastate transmission lines as soon as practicable. The comprehensive pressure testing implementation plan must set forth criteria on which pipeline segments were identified for replacement instead of pressure testing. The plan must also include specified information. And, at the completion of the implementation period, all California natural gas intrastate transmission line segments must meet specified criteria.

The plan must be consistent with best practices in the gas industry and with federal pipeline safety statutes, how the gas corporation will implement the policy established, provide opportunities for meaningful, substantial, and ongoing participation by the gas corporation workforce in the development and implementation of the plan, with the objective of developing an industrywide culture of safety that will minimize accidents, explosions, fires, and dangerous conditions for the protection of the public and the gas corporation workforce.

Finally, the commission must mandate each gas corporation to provide bundled basic gas service to all core customers in its service territory unless the customer chooses or contracts to have natural gas purchased and supplied by another entity.

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African countries seek to revive Trans-Saharan Gas Pipeline dream

The Trans-Saharan Gas Pipeline (TSGP), as the trilateral project with a decades-long history is officially called, recently saw a fresh attempt at a revival when representatives from Algeria, Niger and Nigeria met in Niamey, Niger, in June. In July,

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the energy ministers of the three countries signed a memorandum of understanding (MoU) and agreed to set up a task force for the project with the aim of updating an existing feasibility study. The idea to pipe gas across the Sahara to Europe was first mooted more than 40 years ago. In 2009, an agreement was signed by the three gas-rich countries, but progress has stalled since then.

TSGP, also known as the NIGAL pipeline, may now move closer to becoming reality as Europe attempts to cut its strong dependency on Russian gas in the wake of economic sanctions against Moscow over the Ukraine war.

Once the $13 billion (€12.8 billion) pipeline is complete, it could transport up to 30 billion cubic meters (1 trillion cubic feet) of gas annually from Nigeria, in West Africa, north through Niger and on to Algeria. From there, TSGP gas is planned to be pumped through the undersea Trans-Mediterranean Pipeline to Europe or loaded onto liquefied natural gas (LNG) tankers for export.

Energy experts, however, doubt that African gas will flow into Europe any time soon, with some saying the pipeline won’t be built in the next 10 years. Isaac Botti, a Nigerian public finance specialist from Abuja, believes a lack of political will could be the project’s biggest challenge.

Despite Nigeria’s huge wealth in resources, its population suffers from poverty and political instability. In the Muslim-dominated north of the country, Islamic fundamentalists from the Boko Haram terrorist group are waging a civil war against central government authorities. Experts already say the worsening Nigerian security situation could ensure the pipeline remains a pipe dream.

Another uncertainty that could thwart international funding for the project is climate change and plans in wealthy Western economies to cut their consumption of fossil fuels. The EU, for example, is planning to reduce its carbon footprint by at least 55% by 2030, beginning with phasing out coal and oil, but also cutting natural-gas use. Fossil fuel is to be replaced with green hydrogen generated from renewable forms of energy.

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Croatian govt approves 180 mn euro investments in gas pipeline

ZAGREB (Croatia)- The Croatian government said it has approved a total investment of 180 million euro ($186 million) to expand the country’s gas pipeline network and more than double the capacity of its existing LNG terminal to secure the country’s natural gas supply and become a regional energy hub.

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An investment valued at 25 million euro, the annual regasification capacity of the LNG terminal on Krk will reach 6.1 billion cubic metres from the current 2.9 billion cubic metres.

A further 155 million euro will be invested in the construction of the 58-kilometre Zlobin – Bosiljevo gas pipeline to create preconditions for further development of the country’s gas pipeline system and to increase the transportation of gas to Hungary and Slovenia.

European Union funds will be used as much as possible to finance these projects, as well as funding from the state budget.

The LNG terminal on the island of Krk started operating in January 2021. It delivers gas to the Croatian national transmission network, which is connected to fellow EU member states Slovenia, Italy and Hungary, as well as to non-EU members Serbia and Montenegro.

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Natural Gas / LNG Utilization

UK to receive the shipment of Australian gas
The UK is expected to take delivery of a shipment of gas all the way from Australia next week, as the pressure on European energy supplies grows. The liquid natural gas (LNG) is due to arrive on 22 August, according to commodities analysts Kpler.

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Australia doesn’t usually sell gas this far afield, but European countries have been seeking alternatives to Russian gas following the invasion of Ukraine. The UK stopped importing gas from Russia in April.

While the UK bought only a tiny fraction of its gas from Russia before the conflict began, the country is connected to the European gas network. Continental Europe is much more reliant on Russian gas, and deliveries via the Nordstream pipeline have already been curtailed.

Moscow has been accused of using gas as a political weapon and there are fears it could cut supplies to European countries altogether, if there is no resolution to the crisis. This is the first time Australia has shipped a liquefied natural gas (LNG) cargo to Europe in at least six years, according to Bloomberg, which first reported the news.

Australia’s decision to sell to Europe could also be partly due to reduced demand from China, where Mr. Cox said repeated Covid lockdowns had reduced the need for energy.

The UK gets about half of its gas directly from the North Sea. A further third comes via pipelines from Norway and it also buys LNG from Qatar, the US and a handful of other countries.

Commodities intelligence firm Kpler confirmed to the BBC that the LNG vessel Attalos is headed to the UK’s Isle of Grain terminal near London, bringing with it a cargo from the North West Shelf liquefaction plant in Australia.

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Japan’s LNG imports down 0.4% in July

Japanese LNG imports in July were 6.16mn metric tons, down 0.4% year/year, according to the provisional data published by the country’s finance ministry on August 17. The imports were up 6.2% month/month, however.

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Japan’s shipments last month cost 773bn yen ($5.72bn), up 124% yr/yr.

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China’s LNG imports drop 15% in July

Chinese LNG imports in July dropped 15.4% year/year to 4.74mn metric tons, customs department data published on August 18.

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The cumulative LNG imports in the first seven months of the year were 35.93mn mt, down 20.3% yr/yr. The pipeline gas imports last month were 3.96mn mt, up 8% yr/yr. China’s cumulative pipeline gas imports during the January-July period were 26.28mn mt, up 10.8% yr/yr.

China last year imported a record 78.93mn metric tons of LNG, up 18.3% year/year.

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Global LNG Development

US pledges significantly more liquefied natural gas to EU

US President Joe Biden has promised the European Union that the US will send at least 15 billion cubic meters of liquefied natural gas to Europe this year, more than previously planned. In a joint statement with European Commission

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President Mrs. Ursula von der Leyen stated We certainly do not want to support Putin’s aggressive attack on Ukraine by buying his power.” Exports of 15 billion cubic meters of liquefied natural gas this year could ensure a “secure, transparent energy supply for the future”. America wanted to help Europe gain independence from Russian gas.

In the long term, as emphasized by Biden and van der Leyen, the volume of LNG is to be increased to 50 billion cubic meters per year. According to the commission, this would replace a third of current gas imports from Russia.

According to the EU Commission, the new deal will cover one-tenth of Russian gas supplies to the EU this year. Accordingly, the EU imports 155 billion cubic meters of gas from Russia per year 40% of the gas consumed in the EU.

Von der Leyen had already announced that the EU and the US would “present a new chapter in our energy partnership”. LNG is to be transported to Europe by tanker ships. Deliveries are initially scheduled to fill European gas storage facilities before the coming winter. Mrs. Von der Leyen said it was about securing energy supplies in the long term. The president of the European Commission stressed that the agreement between the EU and the US also shows the strength of Western democracies.

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Saudi Arabia: Saudi Aramco confirms phased development plan for vast $100 billion gas project

The first development phase for the Jafurah gas plant is likely to come on stream by 2025. Saudi Aramco has confirmed a phased development approach for its $100 billion-plus Jafurah unconventional onshore gas project, which is expected to produce up to 2 billion cubic feet per day of gas by 2030.

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Aramco said it is progressing with the phased development of a project that will reach a raw gas processing capacity of 3.1 Bcf. The full field development of Jafurah is expected to reach a production capacity of 2 Bcfd by 2030, lifting the company’s overall gas production capacity by 50% in the same time frame.

The unconventional gas project is part of the country’s long-term strategy, which aims to boost gas production to free up almost 1 million barrels per day of oil from domestic use, boosting export capacity. Saudi Arabia’s dry natural gas production exceeded 4 trillion cubic feet for the first time in 2020.

Aramco commissioned the Fadhili natural gas processing plant in 2019 and thus began processing natural gas from non-associated fields in the eastern region, scaling up gas-based infrastructure in the country.

Most of the incremental gas production in the country is likely to come from the Jafurah development, which is also the largest non-associated gas field in Saudi Arabia, with over 200 Tcf reserves.

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Sweden: Avenir pens MoU for Swedish LNG terminal

Small-scale LNG developer Avenir LNG has agreed preliminary terms on building an LNG terminal in the Swedish port of Oxelosund. The MoU was signed with the port’s operator Oxelosunds Hamn.

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Under the agreement, Avenir will buy the terminal’s operating company OXGAS AB, which is currently wholly owned by Oxelosunds Hamn. OXGAS would import LNG and bio-LNG using Avenir’s existing carrier fleet, dispatching regasified fuel into a local Swedish distribution grid. Some LNG quantities could also be re-exported via two truck loading bays at the port for redistribution to other port facilities.

Oxgas installed a temporary LNG regasification terminal in Oxelosund in April 2020, comprising a 500-m3 container. The company has previously said that the permanent terminal would have a capacity of 32,900 m3.

Oxgas hopes to leverage the strengths of its existing infrastructure at the port, and will also push the new facility’s biogas compatibility with green methane sources, furthering Sweden’s energy transition objectives. In addition, the facility will offer bunkering to LNG-fuelled ships in the area.

Avenir LNG has a pedigree in small-scale European LNG terminal construction. It already operates a two-loading bay LNG import and regasification facility on the Italian island of Sardinia, described as the Mediterranean’s “first dedicated small scale” LNG depot.

Under agreement’s terms, Avenir will oversee the full LNG and bio-LNG supply chain for the terminal. The company also expects the deal to “consolidate” LNG supply routes to its existing bunkering fuel customers around Sweden, freeing up vessel capacity elsewhere.

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Brazil’s Vibra Energia eyeing LNG projects

Brazil’s Vibra Energia is looking at liquefied natural gas (LNG) projects with a focus on consumers not served by gas pipelines, the company’s CEO, Wilson Ferreira Júnior.

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On another business front, Vibra is moving forward with its project to enter the production and commercialization of biogas and biomethane through the acquisition of 50% of Zeg Biogás. With this, it will have access to the production of more than 2Mm³/day (million cubic meters per day) of biomethane in up to five years.

The company also has expansion plans in the solar power segment. In the first half, it invested 904mn reais (US$176mn) and raised another 2.2bn reais for centralized and distributed generation projects under construction and scheduled to start operations in 2023.

Meanwhile, in partnership with Ezvolt Clean Energy, Vibra is creating the largest corridor of ultra-fast electric chargers in Brazil, covering 9,000km.

Vibra Energia is Brazil’s largest fuel distributor, with a 24% market share in the second quarter of the year, an increase of 0.2 percentage points from the previous quarter and also year-on-year. In the three-month period, the company sold 5.6Mm3, up 3.8% from the previous quarter and 4.5% year-on-year.

The reasons for the growth included the reduction of the participation of other fuel importers, given the detachment of domestic fuel prices from international ones, as Petrobras took long intervals to adjust its prices due to political pressure.

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Germany signs MoU with utilities to ensure LNG supply for two FSRUs

Germany’s economy minister Mr. Robert Habeck signed August 16 a memorandum of understanding (MoU) with utilities Uniper, RWE, and EnBW/VNG designed to ensure the supply of LNG to the country’s first two LNG import terminals at Wilhelmshaven and Brunsbuttel.

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Under the new agreement, the declared goal is to fully utilize the two FSRUs immediately from the date of their commissioning, with the utilities guaranteeing the necessary delivery volumes.

Germany’s efforts to guarantee LNG volumes for its new import terminals come as European gas prices continue to surge on winter supply concerns. The Dutch TTF month-ahead price reached a new all-time high of Eur221.48/MWh on August 15.

Germany has no LNG import terminals at present, but Berlin is moving to fast-track the development of LNG import infrastructure, including the deployment of four state-backed FSRUs. It is hoped the first two FSRUs at Wilhelmshaven and Brunsbuttel will be ready to begin operations at the turn of the year. The two terminals will be operated by Uniper and RWE on a transitional basis until a special purpose vehicle takes over the operation, the ministry said.

In addition to Uniper and RWE, EnBW and its subsidiary VNG will be tasked with ensuring the supply of LNG to the FSRUs. Corresponding legally binding contracts are now being drawn up, the ministry said.

The two terminals combined will have a regasification capacity of up to 12.5 Bcm/year, and will enable Germany to access the global LNG market directly for the first time. Two more state-backed FSRUS at Lubmin and Stade are expected to be ready for operation from the end of 2023, while a fifth privately-backed FSRU is expected to be deployed at Lubmin by year-end.

Germany is currently at the second of three alert levels in its emergency gas plan and has said it needs to cut gas use by 20% to make it through the coming winter.

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TotalEnergies lets FEED contract for Papua LNG plant
TotalEnergies SE has let a front-end engineering design (FEED) contract to Technip Energies for the 5.6-million tonne/year Papua LNG plant in Papua New Guinea.

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TotalEnergies SE has let a front-end engineering design (FEED) contract to Technip Energies for the operator’s Papua LNG project upstream production infrastructure in Papua New Guinea.

The operator in 2021 remobilized project teams for work on the project after a pause due to the COVID-19 pandemic. The project is targeting a final investment decision (FID) around the end of 2023, and a start-up at the end of 2027.

The 5.6-million tonne/year (tpy) Papua LNG plant will liquefy gas from the onshore Elk and Antelope fields in Block PRL-15. Gas produced by the fields is expected to be transported by a 320 km onshore/offshore pipeline to the Caution Bay site north of Port Moresby to be liquefied in two trains, which will be integrated into ExxonMobil’s existing 7.9 million tpy infrastructure in Caution Bay.

The project also incorporates a carbon capture and sequestration (CCS) scheme to remove field CO2 and reinject it into the reservoirs.

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Gazprom says Russian gas storage is 91.4% full
Kremlin-controlled energy giant Gazprom on Friday said that Russian gas storage was 91.4% full as of August 24.

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The level of Russian gas storage before the winter heating season has been watched closely since Moscow said the need to fill domestic storage is to be prioritised over gas exports.

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LNG as a Marine Fuel/Shipping

Mozambique to export first LNG as global natural-gas prices soar

Mozambique is poised to ship its first cargo of liquefied natural gas overseas, joining the ranks of the world’s exporters as a global energy crunch pushes prices of the fuel to record highs.

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Mozambique is poised to ship its first cargo of liquefied natural gas overseas, joining the ranks of the world’s exporters as a global energy crunch pushes prices of the fuel to record highs.

The LNG tanker British Mentor, operated by BP Plc, is set to arrive August 24 at a new floating terminal that Eni SpA is completing off Mozambique’s northern coastline, ship-tracking data compiled by Bloomberg show. Eni didn’t immediately respond to a request for comment. The Italian company has said it’s already planning a second floating export platform in the southern African country that could be brought on in less than four years.

Mozambique is firing up its first export terminal as tight gas supplies after Russia’s invasion of Ukraine send prices soaring in Europe, where countries including the UK and Germany have warned that the fuel squeeze could prompt rationing and trigger a recession. Seeking to end their dependence on Russian gas, European buyers are paying a hefty premium as they compete with Asia to secure LNG cargoes ahead of the winter.

Eni’s $7-billion Coral-Sul project had been targeting first exports by October and has moved forward despite the pandemic and an Islamic State-linked insurgency in Mozambique that derailed a $20 billion TotalEnergies SE export facility. BP in 2016 signed a deal to buy all of the output for 20 years from Coral-Sul, which is designed to produce 3.4 million metric tons of LNG.

Mozambique, the world’s third-poorest country according to data from the World Bank, has in recent years had its economy battered by a sovereign debt scandal and the jihadist insurgency. A series of severe tropical cyclones have also wreaked havoc along its coastline.

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USA: Port of long beach welcomed MV George III, the first container ship powered by LNG

The Port of Long Beach on welcomed Pasha Hawaii’s MV George III, the first container ship powered by liquefied natural gas to refuel on the West Coast. The ship’s LNG-powered engines are dramatically cleaner than those of a traditional cargo ship.

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Following George III’s inaugural visit to Long Beach, the newly built 774-foot-long ship will begin its maiden voyage to its home port in Honolulu. And there’s another LNG Pasha ship on the way the Janet Marie will be the second of two “Ohana Class” container ships to join Pasha Hawaii’s fleet, in the fourth quarter of 2022, in service between Hawaii and the U.S. mainland.

The vessel was named after George Pasha IV’s late father, George Pasha III. Operating fully on natural gas, the new vessel surpasses the International Maritime Organization’s 2030 emission standards for ocean vessels, representing the most technologically advanced and environmentally friendly class of vessel to serve Hawaii and one of several that serve Long Beach. Energy efficiencies are also achieved with a state-of-the-art engine, an optimized hull form, and an underwater propulsion system with a high-efficiency rudder and propeller.

LNG-powered ships achieve a 99.9% reduction in diesel particulate matter and sulfur oxide emissions, 90% less nitrogen oxides and a 25% reduction in carbon dioxide compared to ships running on traditional fuels.

Accommodating Pasha Hawaii’s new LNG-fueled ship aligns with the Port of Long Beach’s dedication to environmental sustainability and strengthens its commitment to the Green Port Policy and San Pedro Bay Ports Clean Air Action Plan enacted more than 15 years ago. Those historic actions have led to unprecedented reductions in emissions connected to goods movement as the Port continues to work toward meeting a goal of deploying all zero-emissions cargo-handling equipment by 2030 and zero-emissions drayage trucks by 2035.

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South Korea: DSME orders marine compressors for four LNG carriers

Daewoo Shipbuilding & Marine Engineering (DSME) has chosen TMC Compressors (TMC) to deliver a complete marine compressed air system to four LNG carriers the Korean shipbuilder is constructing for Greek shipowner GasLog.

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TMC will supply three control and service air compressors to each of the four LNG carriers. In addition, TMC will provide feed air compressors to the vessels’ N2 (nitrogen) system.

Norway-headquartered TMC will manufacture the equipment in the Nordic region and ship it to DSME in Korea. TMC will supply its energy efficient single stage, oil-lubricated marine screw compressor to the four LNG carriers. These are designed and manufactured for continuous operation in high ambient temperatures.

The new liquified natural gas carriers will have a capacity of 174,000 cubic metres. DMSE will deliver the four vessels during 2024 and 2025.

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MOL secures deals for six new LNG-fuelled ships

MITSUI O.S.K. Lines has announced plans to build six new ships that will use liquefied natural gas as their main fuel. MOL has signed a construction deal for four new capesize bulkers with Chinese shipbuilder Qingdao Beihai Shipbuilding.

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The company also secured a construction contract for two very large crude carrier tankers with Kawasaki Heavy Industries. The new capesize bulkers and VLCC tankers are scheduled for delivery from 2025 through 2026.

The MOL Group said it is moving forward with decarbonisation and low-carbonisation with the aim of reaching net zero GHG emissions by 2050. It plans to expand its fleet of LNG-fuelled vessels to around 90 by 2030.

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Technological Development for Cleaner and Greener Environment Hydrogen & Bio-Methane

UK: Winlaton first to integrate hydrogen into public natural gas network

Winlaton, a village near Gateshead, has become the first community in the UK to receive hydrogen blended with natural gas via the public natural gas network.

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The HyDeploy project saw up to 20% hydrogen blended with natural gas on a public gas network in Winlaton, operated by Northern Gas Networks. 668 houses, a church and a school received the blend for 11 months and residents were able to use their gas supply as unusual with no changes to appliances. This is because current gas appliances are designed to operate with a blend of up to 23% hydrogen. Unlike natural gas, hydrogen does not produce carbon monoxide when burned, cutting carbon emissions and helping tackle climate change.

However, large-scale hydrogen production will also have to be decarbonised to make the switch worthwhile – whether that’s using renewable electricity or gas production linked with carbon capture and storage (CCS). Heating in the UK is currently responsible for around a quarter of carbon emissions, hydrogen is a viable solution to cut emissions and help reach the government’s 2030 net zero targets.

The report of findings from the Winlaton project will be submitted to the government later this year, ahead of a decision around the wider blending of hydrogen in the UK gas network, which is due to be taken in 2023. Earlier this year Ofgem shortlisted two UK locations for a Hydrogen Village demonstration, which will see natural gas swapped to hydrogen in around 2,000 properties.

The Hydrogen Village programme will start in 2025 and is expected to last around two years.

Hydrogen programme manager at Northern Gas Networks Fergal O’Donovan said: “We’re delighted to have successfully completed blending hydrogen into the gas supply at Winlaton.

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Germany’s Scholz to sign hydrogen deal on Canada trip

Germany’s Chancellor Mr. Olaf Scholz will sign a deal to establish hydrogen supply chains with Canada during his two-day visit to the country next week as Berlin accelerates its green transition to reduce dependence on Russian gas supplies.

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With fears that Russia could completely shut down already heavily reduced gas flows in retaliation for Western sanctions following its invasion of Ukraine.

However, they cautioned this would not offer a solution for this winter when Germany is facing a possible gas shortage, nor next, as the infrastructure is not yet in place. Along with Economy Minister Mr. Robert Habeck and with a large business delegation in tow, Scholz heads to Canada on Sunday evening on his first official trip to the country, with a packed itinerary taking him to Montreal, Toronto and the small, remote windswept town of Stephenville in the eastern island of Newfoundland.

While Scholz hopes to deepen economic cooperation with Canada, the war in Ukraine will be among other topics under discussion. Top of the agenda is an agreement on hydrogen the chancellor will sign with Canadian Prime Minister Justin Trudeau in Stephenville, where there are plans to build a plant that will use wind energy to produce the fuel for export.

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