NGS’ NG/LNG SNAPSHOT – Dec-16-31, 2023
National News Internatonal News
NATIONAL NEWS
City Gas Distribution & Auto LPG
GAIL Gas opens 22nd CNG outlet at Surathkal in Dakshina Kannada
GAIL Gas Limited (GGL) opened its another Compressed Natural Gas (CNG) station at HPCL Vijay Fuels, Surathkal on Tuesday. This is the 22nd CNG station of the company in Dakshina Kannada.
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The station can serve more than 1,000 small vehicles, LCVs and buses and trucks in a single day. As it is on the NH 66, it will encourage long distance journeys on CNG, a company release said.
It has plans to start CNG stations at Mangladevi, Kanyana, Kadanjebettu, Puttur, Nelyadi Ullal and Talapady in the district in the near future, it said.
R.K. Jain, Director (Finance), GAIL (India) Limited and Director, GAIL Gas Limited and Ajay Tripathi, Executive Director GAIL (India) Limited were present on the occasion.
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L-G launches PNG supply facility in Qutabgarh village, a first in Delhi
NEW DELHI: Delhi Lieutenant Governor (L-G) VK Saxena on Thursday launched a domestic piped natural gas (PNG) facility in Qutabgarh village, the first-ever such installation in rural Delhi, Raj Niwas officials said.
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The move would provide unprecedented impetus to the development of hitherto neglected villages in Delhi, they added. This also marks the first venture of the Indraprastha Gas Limited (IGL) in Delhi’s rural areas, which was until now confined to select urban residential colonies. This paves the way for extension of PNG pipelines and services to other urbanised villages in Delhi as well, the officials said.
Speaking on the occasion, Saxena announced that four more villages in the national capital — Jaunti, Nizampur, Rawta and Daurala –” will be provided with PNG connection within one month as a New Year’s gift. The LG added that all 29 villages will be fully equipped with PNG connections in the next three months.
The IGL has already completed the survey for laying PNG pipeline in 10 other villages, while preliminary works including requisite permission from civic agencies concerned in remaining 14 villages is also underway, a Raj Niwas official said.
Out of the around 1,000 households in northwest Delhi’s Qutabgarh village, nearly 350 have already got the PNG connection, while applications from the remaining families were received by the IGL through special camps organised in the village on Thursday, the official said.
The nearly 25-km pipeline from the nearest IGL depot to Qutabgarh was set up in a record time of less than six months, the official added. Saxena said the PNG connection in Qutabgarh is a small but valuable contribution to Prime Minister Narendra Modi’s vision of providing every household with clean and green energy for cooking.
He emphasised that this initiative would also prevent the villagers from the hassle of getting LPG cylinders refilled or replaced, therefore leading to huge savings in terms of money and energy.
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Over 1.19 Cr Nationwide PNG Connections, Including BPL Households: MoS
About 88 per cent of the total geographical area of the country spread over around 630 districts in 28 states/UTs for the development of CGD networks. As of 31 October 2023, the Centre had successfully installed over 1.19 crore Piped Natural Gas (PNG) connections nationwide, including for families living below the poverty line (BPL), stated the minister of state for petroleum and natural gas, Rameswar Teli to the Rajya Sabha.
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“Petroleum and Natural Gas Regulatory Board (PNGRB) has authorised 300 Geographical Areas (GAs) covering about 98 per cent of the population, including BPL families and 88 per cent of total geographical area of the country spread over around 630 districts in 28 states/UTs for the development of CGD networks, with the MWP target of establishing approx. 12.50 crore PNG connections across the country by 2032. As of October 31, 2023, 1.19 crore PNG connections (including those provided to the BPL families) have been provided by the authorised CGD entities across the country,” as per the statement by the minister of state in the ministry of petroleum and natural gas, Rameswar Teli, in a written reply in Rajya Sabha today.
The statement further added, “To ensure the affordability of PNG, the government has approved the revised domestic natural gas pricing guidelivia vide gazette notification dated April 7, 2023, for gas produced from nomination fields of ONGC/OIL, New Exploration Licencing Policy (NELP) blocks and pre-NELP blocks, where the Production Sharing Contract (PSC) provides for the government’s approval of prices. The price of such natural gas shall be 10 per cent of the monthly average of Indian crude basket and shall be notified on a monthly basis. For the gas produced by ONGC & OIL from their nomination blocks, the Administered Price Mechanism (APM) price shall be subject to a floor and a ceiling of USD 4.0/MMBTU & USD 6.5/MMBTU respectively.”
“The reforms have led to significant decrease in prices of Piped Natural Gas (PNG) for households and Compressed Natural Gas (CNG) for transport. Further, allocation of domestic gas to PNG (domestic) or CNG (transport) has been kept in the no-cut category. The government has increased the allocation for the CNG (T) and PNG (D) segments of the CGD sector from 8.32 MMSCMD in first half of 2013–14 to 21.143 MMSCMD for July-September 2023–24,” the minister noted.
Government steps include increasing domestic gas allocation to about 250 per cent of the allocation in 2013-14, diverting domestic gas from power and other non-priority sectors to meet the requirement for CNG (transport) and PNG (domestic) segments, declaring the CNG (T) and PNG (D) segments as the first priority for allocation of domestic natural gas, etc, the MoS stated.
The government has also stated that in any situation where proportionate distribution of the gas offered under the bidding process is required, the contractor must prioritise bidders from the CNG (T) or PNG (D) sectors.
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Natural Gas/ Pipelines/ Company News
73km-long PNG pipelines set to be changed in Vadodara after 50 years
Vadodara: For the first time after piped natural gas (PNG) project was launched in the city as well as the country in 1972, the gas lines of the area where the project kicked off will be changed finally. The pipelines in the walled city of Vadodara and surrounding areas had not been changed since they were laid when the project began.
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Vadodara had become the first city in the country where PNG was provided to households. The Vadodara Municipal Corporation (VMC) had established a gas project department and taken up the project. In 2013, the civic body entered into a joint venture with Gail Gas Ltd and floated Vadodara Gas Ltd (VGL) that has taken over PNG network and has also set up CNG stations for automobiles.
Despite the new corporate structure, the condition of the gas lines in the old city had not changed.
The old city areas of Vadodara have around 7,000 connections and a network of gas pipelines totaling to 73km.
The network was prone to leakages, and complaints of low pressure were frequent in the area. Sources said that the work of changing the pipelines had remained pending due to the congested area and difficulty in working there.
After a series of representations including that by Raopura MLA and Gujarat assembly chief whip Balkrishna Shukla, VGL has decided to change the pipelines. Work for replacing the pipelines and household connections began on Thursday.
Sources said that VGL will spend around Rs 5.5 crore on replacing the pipelines for domestic connections. Another Rs 4 crore will be spent on the gas pipelines that carry gas in the area.
The areas that will be covered include Mandvi, Wadi, Gajrawadi, Dandiabazaar, Kharivav Road, Panigate, Bavamanpura, Chhipwad, Bhutdi Jhampa and Karelibaug.
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Adani Total Gas signs MoU with Flipkart to decarbonise its supply chain
Adani Total Gas Limited on Wednesday (December 27) announced signing of a Memorandum of Understanding (MoU) with Flipkart to aid the e-commerce giant’s efforts to reduce carbon footprint across its supply chain.
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The Adani Group company will aid Flipkart’s decarbonisation journey of switching to cleaner fuel options like natural gas and electric vehicles, Adani Total Gas said in a regulatory filing.
“Under the MoU, AGTL will work with Flipkart to support its vision to reduce carbon footprint in the primary, secondary and tertiary movements of goods between sourcing locations, warehouses, and customers. ATGL will provide decarbonising solutions, aiding Flipkart’s journey to switch to cleaner fuel options, including natural gas, and the introduction of electric vehicles,” it said.
“We are fully committed to providing clean energy solutions to our customers and to help them achieve their decarbonization goals, thus actively contributing towards India’s climate action goals,” said Suresh P Manglani, Executive Director & CEO of Adani Total Gas.
The natural gas distribution company, which is co-promoted by Adani Group and France’s TotalEnergies, is committed to building India’s next generation energy infrastructure to provide cleaner energy solutions to residential, commercial, industrial, and transportation segments, as per the company statement.
“At Flipkart, we are committed to introducing solutions that help us move towards a sustainable future, such as integrating cleaner energy solutions and introduction of electric vehicles in our logistics. Through shared vision and collective action, we believe this collaboration with Adani Total Gas Limited will play an important role in supporting our efforts to achieve our net-zero goals and in catalysing the complete electrification of our fleet, which is a key part of Flipkart’s larger sustainability vision,” said Hemant Badri, Senior Vice President and Head of Supply Chain, Customer Experience & Re-Commerce, Flipkart Group.
Adani Total Gas shares are trading at a discount of 75% from its 52-week high of ₹4,000 which the stock hit on January 23, a day before the Hindenburg report hit the Adani stocks. Its 52-week low stands at ₹522.
At 12:12 pm, the scrip is trading 0.89% higher at ₹1,003.90 apiece on the NSE. Adani Total Gas shares have surged 56% in the last six months.
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Adani Green finalises joint venture with TotalEnergies, raises $300 million
New Delhi: Adani Green Energy Limited (AGEL) announced on Wednesday that it had finalised its 1,050-megawatt joint venture (JV) with TotalEnergies. TotalEnergies has invested about $300 million in the AGEL subsidiary, acquiring a 50% stake in the JV’s projects. In a regulatory filing, Adani Green wrote: “Further to the execution of the joint venture agreement, the company and TotalEnergies owns a 50:50 stake in ARE9L. ARE9L in-turn houses a 1,050 MW project portfolio. TotalEnergies has acquired a 50% stake in ARE9L for an amount of $300 million.”
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The binding agreement for the JV was announced in September. ARE9L, the joint venture, houses a 1,050 MW portfolio comprising a mix of an already operational capacity of 300 MW, under-construction capacity of 500 MW, and under-development assets of 250 MW including both solar and wind projects in India. AGEL said the JV would help it achieve its target of 45 GW of renewable-energy capacity by 2030.
TotalEnergies is a French multi-energy company that produces and markets energy commodities including oil and biofuels, natural gas and green gases, renewables and electricity. It operates in 130 countries.
On Tuesday AGEL announced it had raised ₹9,350 crore by issuing preferential warrants to its promoters. Earlier this month the company had announced a $1.36-billion facility with funding from eight international banks for the construction of 2,167 MW of solar-power projects in Khavda, Gujarat.
In the September quarter, the company reported a 149% year-on-year jump in consolidated net profit to ₹372 crore. As of 30 September, its net debt stood at ₹38,190 crore, compared to ₹40,455 crore on 30 March 2023, according to an investor presentation released on 30 October.
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Tariff For GAIL’s KG Pipeline Fixed At Rs 8.4 Per MmBtu
The Petroleum & Natural Gas Regulatory Board has finalised a tariff of Rs 8.4 per metric million British thermal unit for GAIL (India) Ltd.’s newly integrated Krishna Godavari basin pipeline off the east coast.The tariff implies the maximum price GAIL can charge for the natural gas transported through the KG pipeline.
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It is 77% lower than the tariff of Rs 37.01 per mmBtu that was proposed by the gas distribution company earlier this year, according to a PNGRB’s order dated Dec. 27.The Rs 8.4/mmBtu tariff translates to a substantially lower gas price for consumers across various sectors like power generation, fertilisers, city gas distribution and even households using piped natural gas. The price set by the regulatory board makes gas cheaper for certain industries, especially those heavily reliant on gas for energy or feedstock.
f used in power generation, the cheaper gas can also bring down electricity tariffs for consumers. Depending on how gas distributors pass on the cost savings, city gas and piped natural gas could become more affordable for households as well.
What It Means For GAIL?
Although customers will enjoy reduced prices, GAIL’s revenue per unit of gas transported via the KG pipeline is expected to decline substantially.
This can be counterbalanced by the elevated gas volume. The reduced tariff may encourage producers to increase the gas flow through the pipeline, potentially resulting in higher overall revenue for GAIL despite the reduced per-unit price.
GAIL might also outpace competitors by providing more economical transportation, possibly attracting a larger clientele and strengthening its standing in the gas transportation sector.
Motilal Oswal On GAIL
Motilal Oswal Financial Services Ltd. maintains a ‘buy’ rating on GAIL at a target price of Rs 195, implying a potential upside of 24%.Motilal forecasts the company’s volume to have a compound annual growth rate of 9% over 2023–26. The volume growth would be fuelled by an increase in domestic gas output from Reliance Industries Ltd., Oil & Natural Gas Corpo. and Oil India.
The brokerage expects gas consumption in India to be aided by a notable rise in LNG regasification capacity over the next few years as five new LNG terminals ramp up operations.”We expect a sizable new liquefaction capacity coming online during CY24–26, especially in the U.S. and Qatar, which should keep spot LNG prices in check,” it said.
Motilal expects the transmission Ebitda to account for 46% of total Ebitda in financial year 2026 from 40% in the last fiscal, saying that it should improve the earnings stability.Shares of GAIL were trading 3.37% higher at Rs 162.40 apiece on the NSE compared to 0.18% decline in the benchmark Nifty 50 as of 10.05 a.m.
https://www.ndtvprofit.com/business/tariff-for-gails-kg-pipeline-fixed-at-rs-84-per-mmbtu
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Policy Matters/ Gas Pricing/ Others
CNG price hiked by Rs 1 per kg in Delhi-NCR: Check new rates
The price of compressed natural gas (CNG) in Delhi-NCR has been increased by Rs 1 per kg from December 14, and will now cost Rs 76.59 per kg. The Indraprastha Gas Limited (IGL) said that the rate of CNG has been hiked in Delhi, Noida, Greater Noida, and Ghaziabad. The new rates of CNG have come into effect from 6 am on December 14. This year, the CNG prices have been increased four times.
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The new price of CNG in Noida is now at Rs 82.20 per kg, and Rs 81.20 per kg in Greater Noida. The new rate of CNG in Ghaziabad is at Rs 81.20 per kg, and in Gurugram, the rate of CNG now stands at Rs 83.62 per kg.
Earlier, the prices of CNG increased in November and August but were reduced in July.
Last month, the IGL hiked the prices of CNG in Delhi, Noida, Greater Noida, and Ghaziabad by 1 per kg. In Delhi, the price of CNG was revised from Rs 74.59 per kg to Rs 75.59 per kg. In Noida, the revised rate was Rs 81.20 per kg, and in Greater Noida, it was 80.20 per kg. In Ghaziabad and Hapur, the revised CNG rate was Rs 80.20 per kg. In Rewari, the rate of CNG was Rs 81.20 per kg.
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PNGRB accelerates CGD Network Development with Inaugural Road Show for 12th CGD Bidding Round
NewDelhi, Dec 17: In a significant stride towards achieving 100% coverage of country’s area for the development of City Gas Distribution (CGD) network, the Petroleum and Natural Gas Regulatory Board (PNGRB) hosted its first Road Show for the 12th CGD Bidding Round. The event took place on November 30, 2023, at the Taj Mahal Hotel in New Delhi.
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The event was inaugurated by Pankaj Jain, Secretary MoPNG, and Dr. Anil Kumar Jain, Chairperson PNGRB, accompanied by Board members and Secretary, in the presence of representatives from key stakeholders from the oil and gas sector.
The 12th CGD Bidding Round aims to achieve 100% coverage of the country by expanding the reach of natural gas by offering 8 Geographical Areas covering six North East states and UTs of Jammu & Kashmir and Ladakh.
Upon completion of the 12th CGD bidding round, almost the entire country (except Islands), will be covered under the City Gas Distribution network. This landmark achievement by PNGRB will provide access to cleaner cooking fuel for households, support industrial and commercial facilities, and fuel transportation, marking a giant leap towards achieving a gas-based economy.
Pankaj Jain appreciated the impressive strides made by PNGRB, through the CGD initiatives undertaken in the last 11 rounds. He also highlighted the potential of PNG in these states. Moreover, Pankaj Jain emphasized the utilization of emerging technologies to introduce gases in these areas, recognizing the tremendous potential for innovation and progress in enhancing gas infrastructure and accessibility.
Addressing the gathering, Dr. Anil Kumar Jain, the Chairperson, articulated PNGRB’s current focus on creation of a vibrant and sustainable gas infrastructure across the entire country. The initiation of this bidding round specifically tailored for these States/UT reflects a strategic move to provide cleaner fuel within the delicate ecosystems of these regions. Additionally, he highlighted the potential of northeastern India, portraying it as a crucial link between mainland India and Southeast Asia. Dr. Jain further mentioned that CNG has a lot of potential in these states.
Distinguished speakers at the event included Aneesh Dey (Partner and Global Head), KPMG, Sukhmal Jain, Director (Marketing), BPCL, and Jinal Mehta, Director, Torrent Gas. Smt. Vandana Sharma, Secretary, PNGRB, delivered a detailed presentation on the present status and opportunities in the CGD sector, showcasing the success story of 9th to 11th CGD bidding rounds and outlining important timelines for the 12th CGD Bidding Round.
Electronic bids have been invited from October 13, 2023 with the last date for submission of bids set for January 11, 2024, for 7 GAs under 12th CGD Bidding Round and February 23, 2024 for Mizoram GA. PNGRB aims to finalize the award by February/March 2024.
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PNGRB invites bids for 875 Km natural gas pipeline connecting Ennore to Barshi
The Petroleum and Natural Gas Regulatory Board (PNGRB) has invited bids for laying an 875 km-long natural gas pipeline between Ennore in Tamil Nadu and Barshi in Maharashtra. The proposed pipeline will have a minimum capacity of 8 mmscmd, including common carrier space, and serve industrial, commercial and other customers falling along the route in Andhra Pradesh, Telangana, Karnataka and Maharashtra, according to the PNGRB bid document. Indian Oil has an LNG import terminal at Ennore, which is barely utilized today due to a lack of connectivity with demand centers.
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The bids must be submitted by April 16. Interested parties will have to offer a natural gas pipeline tariff bid for each year of the economic life of the project. The successful bidder will need to lay, build, and operate the natural gas pipeline.
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Haryana government set to introduce city gas distribution policy
Chandigarh: Haryana Chief Secretary, Sanjeev Kaushal said that the state government is on the verge of introducing a comprehensive City Gas Distribution Policy.
This strategic move aims to expedite the approval process for the installation of Gas (CNG/PNG) Pipelines within a specified timeframe. The policy is a proactive step towards streamlining procedures, ensuring efficient and timely permissions for advancing the development of gas infrastructure in the state.
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While presiding over a meeting on this issue here today, the Chief Secretary said that all the stakeholder departments should deliberate and finalise the procedure for the City Gas Distribution Policy at the earliest.
Kaushal said that the City Gas Distribution (CGD) network is being developed to expand gas demand and utilisation across domestic households, commercial establishments, industrial facilities, and the transport sector. The state government has been strategically planning for extensive CGD infrastructure implementation, which will aid Haryana’s transition to a gas-based economy and reduce its dependence on crude oil imports.
This policy specifically focuses on granting necessary approvals for laying Gas (CNG/PNG) pipelines. For the installation of CNG stations, storage facilities, pumping stations, etc., the licensee will need to independently obtain NOCs or permissions from the appropriate authority after following due procedures.
The proposed policy will primarily concentrate on granting authorization for pipeline installations. The authorised entity will bear the responsibility for public safety at every stage, encompassing the establishment, maintenance, and any associated activities related to the City Gas Distribution (CGD) network.
The authorised entity must implement comprehensive safety measures throughout the entire process. Additionally, they are obligated to indemnify the local authority against any potential accidents or damage to life and/or property, whether occurring during the execution or in the post-execution phase. It will also cover permission of the right of way for laying the CGD network. It shall not be applied to other facilities of the project, such as the CNG station, storage facilities, pumping station, etc.
The provisions of the concerned Master Plan should be adhered to while granting sanction for the installation of CNG stations, Gas Storage facilities, Gas Pumping stations, etc. A streamlined 45-day timeline will be established for granting permissions.
It was apprised in the meeting that in Haryana, the development of CNG and PNG infrastructure is being driven by eight distinguished companies. The districts and their respective City Gas Distribution (CGD) Network Companies include: Nuh with AdTotal Gas Limited; Mahendergarh with Adani Total Gas Limited; Panchkula with India Adani Gas Pvt. Ltd., Panipat with IndianOil Adani Gas Pvt. Ltd., Palwal with Adani Total Gas Limited; Rewari with INDRAPRASTHA GAS LIMITED; Rohtak with BPCL; Sirsa with Gujarat Gas Limited; Sonipat with HPCL GAIL Gas Ltd.; and Yamunanagar with BPCL. Additionally, Ambala is associated with HPOIL Gas Private Limited, Bhiwani with Adani Total Gas Limited, Charkhi Dadri with Adani Total Gas Limited, Faridabad with Adani Total Gas Limited, Fatehabad with Gujarat Gas Limited, a part of Gurugram with Indraprastha Gas Limited, Hisar with HCG (KCE) Pvt. Ltd, Jind with HPCL, Jhajjar with Haryana City Gas (KCE) Private Limited, Kaithal with IGL, Kurukshetra with HPOIL Gas Private Limited, and Karnal with IGL.
Among those present in the meeting included the Additional Chief Secretary (ACS), Finance, Anurag Rastogi, ACS, Industries and Commerce, Anand Mohan Sharan, Additional Chief Secretary, Mines and Geology Department, Arun Kumar Gupta, Chief Administrator, Haryana Shehri Vikas Pradhikaran, T.L. Satyaprakash and other senior officers.
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LNG Use / LNG Development and Shipping
MOL names second LNG carrier for charter with GAIL
TOKYO : Japanese shipping company Mitsui O.S.K. Lines (MOL) has revealed that a naming ceremony was held for the second liquified natural gas (LNG) carrier to serve GAIL (India), the largest natural gas supplier under India’s Ministry of Petroleum and Natural Gas.
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As informed, the naming ceremony for the vessel Gail Urja, which was built by South Korean shipbuilding major Hanwha Ocean, was held at Okpo Shipyard on December 19. The vessel has a length of 294.9 meters, and a beam of 46.3. meters.
The capacity of the LNG carrier is 174,000 cbm. After delivery, Gail Urja is heading towards the US for its first loading. The ship will be engaged mainly in LNG transport from North America to India under a time charter contract with GAIL. Back in 2022, GAIL and MOL signed a charter agreement for the LNG carrier. It is expected that demand for gas will be increasing continuously in India, registering significant economic growth. MOL has been participating in the Indian market since the beginning of LNG import into the country. The first LNG carrier newbuild, Gail Bhuwan, was named at a ceremony held in February 2021.
https://indiashippingnews.com/mol-names-second-lng-carrier-for-charter-with-gail/
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India ranks second in LNG regasification capacity additions in Asia through 2027
India is set to register the second highest LNG regasification capacity additions in Asia between 2023 and 2027, accounting for about 22% of the region’s total capacity additions by 2027, forecasts GlobalData.
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GlobalData’s report ‘LNG Industry Outlook by Capacity and Capital Expenditure (CAPEX) Including Details of All Operating and Planned Terminals to 2027’, reveals that India is likely to witness LNG regasification capacity additions of 4870 billion ft3 by 2027. Out of this, 3239 billion ft3 of capacity is likely to come from the new build terminals, while the remaining will be from the expansion of the existing regasification terminals.
Himani Pant Pandey, Oil & Gas Analyst at GlobalData, said: “India is adding significant regasification capacity as part of government plans to increase natural gas share in the country’s energy mix from 6.3% to 15% by 2030. The move helps to meet the ever-growing demand for natural gas from both the industrial and domestic sectors.”
Jafrabad Floating is the largest upcoming regasification project in India by 2027. To be operated by Swan LNG Pvt Ltd, it is expected to start operations in 2024 with a capacity of 244 billion ft3, which is likely to reach 487 billion ft3 by 2027.
The second largest contributor among the upcoming projects in the country is the Jaigarh Port terminal, which is likely to add a capacity of 390 billion ft3 by 2025. H-Energy Pvt Ltd is the operator of this regasification terminal while Hiranandani Group owns 100% stake in the project.
Pandey concludes: “With a capacity of 292 billion ft3, Jaigarh Port Floating is the third largest upcoming regasification project in India by 2027. H-Energy will operate this terminal as well, with Hiranandani Group holding 100% equity in the project.”
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APAC LNG demand set to boost credit profiles of producers, despite market challenges: Fitch Ratings
New Delhi [India], December 19 (ANI): Fitch Ratings projects a steady increase in liquefied natural gas (LNG) demand across the Asia-Pacific (APAC) region, driven by the ongoing economic recovery and the commissioning of new re-gasification facilities.
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According to Fitch Ratings, this upward trajectory in demand is expected to persist in the medium term, with additional support from the markets in South and Southeast Asia, where domestic production struggles to keep pace with rising demand.
Fitch anticipates that this demand rebound will positively influence the credit profiles of Australian LNG producers, even amid their substantial investment plans.
The economic recovery across the APAC region is identified as a key driver for the gradual rise in LNG demand.
The establishment of new re-gasification facilities further contributes to this growth. The markets in South and Southeast Asia are expected to play a crucial role in sustaining medium-term demand, with an evident gap between domestic production capabilities and the burgeoning demand for LNG.The United States, a prominent contributor to the surge in LNG supply observed in 2023, is poised to solidify its market position in the coming years.
The addition of approximately 25 million tonnes per annum of new LNG capacities is anticipated to bolster the country’s supply capabilities.
Additionally, both Canada and Mexico are witnessing the operationalization of new liquefaction capacities, augmenting the availability of LNG in the APAC region.
Despite the positive outlook for increased supply, Fitch Ratings cautions that the market balance is likely to remain weak.
This could contribute to the sustained volatility of spot prices in the LNG market.
The delicate equilibrium between supply and demand, compounded by the introduction of new capacities, may create challenges for maintaining a stable market balance.
Australian LNG producers, despite facing substantial investment plans, are expected to benefit from the recovering demand scenario.
The anticipated growth in LNG consumption in the APAC region is likely to create a favourable environment for these producers, contributing positively to their credit profiles.
As the global LNG landscape evolves, with the APAC region at the forefront of demand resurgence, producers and stakeholders will navigate the complexities of market dynamics, balancing investments and production capabilities to meet the growing energy needs in the region. (ANI)
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Indian Gas Exchange plans to soon launch small-scale LNG trading, awaits PNGRB nod
This will be the first instance of exchange trading of natural gas in its liquefied or super-cooled form. The Indian Gas Exchange (IGX) plans to soon launch small-scale liquefied natural gas (LNG) contracts on its trading platform and has sought the approval of sector regulator Petroleum and Natural Gas Regulatory Board (PNGRB) for the same, the exchange’s chief executive officer Rajesh Mediratta said. This will be the first instance of exchange trading of natural gas in its liquefied or super-cooled form. Currently, the three-year-old IGX offers trading only in natural gas–domestic as well as regasified LNG.
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According to Mediratta, small-scale LNG contracts will benefit buyers located in areas that are not connected by natural gas pipelines. He added that the PNGRB’s nod to the proposal is expected soon. Although there is no prohibition on LNG trading in India, IGX is required to seek the regulator’s approval before launching any new contract.
Small-scale LNG refers to direct use of LNG in the liquid form, instead of the conventional route of regasifying it and then using it as natural gas. Regasified LNG, which is essentially natural gas, needs pipelines to be transported to consumers. In areas that are not covered by a natural gas pipeline network, small-scale LNG, which is supplied using cryogenic road tankers, is seen as an alternative route for increasing natural gas consumption.
LNG can be directly used as fuel for heavy commercial vehicles, and is viewed as an alternative for diesel in that segment. A few Indian oil and gas companies have plans to push the use of LNG directly as a vehicular fuel and small-scale LNG fits well into those plans. According to Mediratta, currently around 0.7 million standard cubic metres a day (mscmd) of LNG is transported by road in India, but the quantum is expected to jump to 5 mscmd over the next five years.
IGX, which is India’s only physical delivery-based gas exchange, plans to launch small-scale LNG contracts for delivery from five LNG terminals—Dahaj, Dabhol, Hazira, Kochi, and Ennore, and plans to add more terminals later.
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Electric Mobility/ Hydrogen/Bio-Methane
What NTPC, GAIL and other govt entities doing under Green Hydrogen Mission
New Delhi: Various government-owned entities including NTPC and GAIL are taking a number of steps to aid the ambitious National Green Hydrogen Mission by setting up projects, Parliament was informed on Thursday. In January, the Centre approved the mission with an outlay of Rs 19,744 crore. The Ministry of New and Renewable Energy is implementing the mission which aims to make India the global hub for production, usage and export of green hydrogen and its derivatives, Union Minister R K Singh told the Lok Sabha in response to a question.
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On the present status of adoption of green hydrogen in the country, the minister for new and renewable energy said, GAIL Ltd has started India’s maiden project of blending hydrogen in city gas distribution grid.
He said two per cent by volume of hydrogen is being blended in CNG network and 5 per cent volume of hydrogen is being blended into PNG network at city gas station of Avantika Gas Limited (AGL) at Indore in Madhya Pradesh.
Oil India Limited has developed a 60-kW capacity hydrogen fuel cell bus.
NTPC Limited has initiated blending of green hydrogen up to 8 per cent (vol/vol) in PNG Network at NTPC Kawas Township, Surat, Gujarat from January 2023.
In addition, several entities have announced plans to set up production facilities for green hydrogen/green ammonia in India.
Since green hydrogen adoption in the country is at an initial stage, through demonstration projects, its impact on job creation, reduction in dependence on oil and exports has been limited so far.
However, the mission aims to reach 5 million metric tonne per annum ((MMTPA) of green hydrogen capacity, contributing to reduction in dependence on import of fossil fuels.
Achievement of mission targets is expected to reduce a cumulative Rs 1 lakh crore worth of fossil fuel imports by 2030. This is likely to leverage over Rs 8 lakh crore in total investments and create over 6 lakh jobs.
Under the Strategic Interventions for Green Hydrogen Transition (SIGHT) scheme (Mode – I, tranche – I) of the National Green Hydrogen Mission, Singh said, requests for proposals have been invited for selection of green hydrogen producers to set up production facilities of 4,50,000 tonnes of green hydrogen in the country.
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‘2024 will lay the roadmap for hydrogen-powered vehicles’
Bengaluru: If 2023 has been the year of electric mobility gathering momentum, 2024, say industry observers, will essentially be about laying the groundwork for broad-basing India%E2%80%99s engagement with alternative fuel – particularly hydrogen. Some enabling action by both the government and the automotive industry was already seen in this calendar, which is expected to evolve into developing the base infrastructure and policy support in the coming year.
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Many participants in the sustainability journey are not so impressed by electric mobility. “Electric vehicles are no longer considered the silver bullet solving the twin problem of emissions and our large import bill. We are effectively just moving the emissions from one place to the other in the chain. Hydrogen is expected to emerge as a viable commercial option for both passenger and commercial vehicles and play a significant role in resolving both problems. It is critical that the industry, government and consumer groups are in step to ensure that the regulatory environment facilitates faster adoption,” said Kabir Bogra, Partner at Khaitan & Co.
Kickstarting
On the ground, in January, one saw the Union Government launch the National Green Hydrogen Mission with the aspiration to develop a production capacity of at least 5 MMT per annum bringing in investments of about Rs 8 trillion. The same month one also saw Tata Motors and Ashok Leyland showcase heavy-duty trucks with hydrogen internal combustion engine (H2ICE) technology at the Auto Expo.Omega Seiki Mobility is set to launch a hydrogen-fuel cell-powered three-wheeler by mid-2024. More recently, India’s first green hydrogen fuel cell electric bus – a product of collaboration between Tata Motors and Indian Oil Corporation – was unveiled in Delhi, in September. Then came the global debut of an H2ICE vehicle by JCB at Bengaluru last week.
The future
These are just the first stirrings. According to Mumbai-based BlueWeave Consulting, between 2023 and 2029, the size of India’s hydrogen fuel cell vehicle market is projected to grow at a compound annual growth rate of 27.66% reaching a value of $347.85 million by 2029 from about $80.36 million in 2022.According to Subhabrata Sengupta, partner at Avalon Consulting, India may see 10,000-12,000 hydrogen-powered vehicles, mainly medium and heavy commercial vehicles by 2030. While estimates on the share of hydrogen vehicles are “still speculative”, as the technology is in nascent stages, projections for India’s electrification of its vehicles peg it at just 10-12% by 2030, well below China’s 48% and USA’s 27%, pointed out Rajeev Singh, partner and consumer industry leader for Deloitte – Asia Pacific. EVs will remain a better proposition for urban intra-city mobility, while hybrids will take on intercity (long-haul) transportation. While efforts are on with flex engines using ethanol blending and biofuels, lighter fuels such as hydrogen make a lot more sense where payload is a detrimental factor, explained Mustafa Wajid, Chair – IET Future of Mobility and Transport Panel. “Green hydrogen-powered heavy vehicles could be seen on roads in the next 12 months,” he added.“We are very well placed, thanks to our experience with gasoline, diesel and CNG, to take on H2ICE. All we need is a little tweaking on the CNG engines for example in terms of quantum of pressure adjustments,” suggested Anuraag Bharadwaj, Vice President and Industry Platform Leader for Automotive – India, Capgemini.
The challenges
Fuel cell technology, while safe, is also extremely expensive and is less efficient (as low as 30%) as compared to EVs, even though it addressed range anxiety, a major issue, industry leaders agreed. “India is still importing electrolytes (used in fuel cell production),” said Himanshu Singh, research analyst with Prabhudas Lilladher Pvt Ltd. Efforts are also underway to produce synthetic hydrogen, the carbon capture way. Singh pointed out that for scalability, pricing has to reach a sustainable level. Today EVs cost about 3-4 times as compared to internal combustion engine vehicles and so far estimates are unavailable on the price range of hydrogen-powered ones.“The challenges and economic viability of production, transport and storage are big roadblocks for hydrogen-led mobility today,” Shreyas Shibulal, founder and director of Micelio Mobility added.
Action required
Ravi Chawla, managing director and chief executive of Gulf Oil sees early efforts to set up the supply chain among the oil and gas players and technical interventions addressing the cost problem in the long-term. “We are all set when it comes to lubricants required with more efforts needed to set up the supply chain,” he said. Singh underlined that government incentives like PLI will boost domestic production of electrolytes and bring down costs helping the segment to take off.
Veer Singh, chief executive of Lord’s Automative Pvt Ltd underscored a twofold approach under which governments can strengthen existing regulations to accommodate the unique characteristics and requirements of alternative fuel vehicles, especially in areas of storage, distribution and safety, along with drafting new regulations tailored particularly for emerging technologies. “The government could drive faster adoption either through reduction in tax rates and monetary incentives to producers or the users, or through mandatory adoption/restriction,” Ashish Bagadia, Partner, Corporate Finance & Investment Banking, BDO India added.“We expect the FAME 3 to feature alternate fuel types,” Shibulal suggested, adding that the country could see startups emerging to create solutions to position hydrogen as a commercially viable alternative fuel for vehicles.
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INTERNATIONAL NEWS
Natural Gas / Transnational Pipelines/ Others
Czech Republic: Czech Power Firm Acquires Gas Transportation Infrastructure
State-owned Czech Transmission System Operator (ČEPS) has completed the acquisition of NET4GAS Holdings, s.r.o, which holds the exclusive license for natural gas transportation in the Czech Republic, granted by the government’s Energy Regulatory Office.
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NET4GAS, s.r.o., a subsidiary of NET4GAS Holdings, operates around 2,485.5 miles (4,000 kilometers) of gas pipelines, three border transfer stations, five compression stations, and a hundred transfer stations at the interface with national gas distribution. Another subsidiary, BRAWA, a.s., owns the Gazela gas pipeline, which connects Germany and runs through Czech territory from the North Bohemian crossing of Brandov to Bavaria.
The acquisition received regulatory approval from the Office for the Protection of Economic Competition and the Directorate General for Economic Competition (DG COMP) of the European Commission, ČEPS said in a recent news release.
The purchase price consists of two parts, with the first amount of $140 million (CZK 3 billion) paid after the signing of the transfer contract.
“ČEPS will pay the second part in two installments, up to a maximum of CZK 2 billion [$90 million], if the economic performance parameters of NET4GAS are met”, ČEPS Chairman Martin Durčák said. “The transaction will be paid for mainly from ČEPS, a.s.’s own resources, in combination with external resources, depending on the current state of the company’s operational cash flow”.
“NET4GAS is essential for the transport of gas through our territory and the further development of the gas system”, Czech Minister of Industry and Trade Jozef Sikela said. “Considering that natural gas will play an important role in the energy decarbonization process in the coming years, it is necessary to ensure the company’s stable future development”.
Síkela added that the investment follows the purchase of gas storage tanks that provide up to 45 percent of the country’s winter consumption of gas or for the acquisition of shares in liquefied natural gas (LNG) terminals in the Netherlands and Germany.
“As part of the shift away from coal and the development of renewable energy sources, gas will play an important role as a stable and reliable source for the production of electricity and heat. In the coming years, we expect an increase in its consumption by 25 to 50 percent, which is why the state’s investment in NET4GAS is a very important step towards strengthening energy security”, Sikela explained.
According to the release, the NET4GAS system before 2022 transported around 1.59 trillion cubic feet (45 billion cubic meters) of natural gas per year, of which approximately 282.5 billion cubic feet (8 billion cubic meters) was for domestic consumption. In 2022, due to the Russia-Ukraine conflict, the volume of transported gas fell to around 1.09 trillion cubic feet (31 billion cubic meters), and in 2023, the average monthly volume of transportation fell by another approximately 70 percent.
“We see great potential for another future increase in the volume of gas transported through Czech territory”, Sikela said. “Russia still supplies the states to the east of us with large volumes of gas supplies via Ukraine; however, the contract for transporting this gas through the territory of Ukraine will expire next year and its renewal is not at all certain. The Czech Republic would then again play a big role in the transport of gas to the countries of Eastern Europe”.
Síkela noted that another reason for a possible increase in gas transport via the Czech Republic could be future deliveries of hydrogen from Ukraine to the Czech Republic or Germany.
“NET4GAS gas pipelines could become part of the so-called Central European Hydrogen Corridor, which could be used to transport up to circa 15 billion cubic meters of hydrogen per year in the future”, Síkela added.
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Russia: Russia to ship more than 22 bcm of gas to China this year
Russia will export more than 22 billion cubic metres of natural gas to China this year via the Power of Siberia 1 pipeline, Russian Deputy Prime Minister Alexander Novak said on Wednesday.
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Novak also said agreements were being finalised on the Power of Siberia 2 pipeline project which would increase the capacity for such supplies.
https://www.hellenicshippingnews.com/russia-to-ship-more-than-22-bcm-of-gas-to-china-this-year/
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US: WILLIAMS TO BUY NATURAL GAS STORAGE ASSETS FOR $1.95 BLN
Dec 27 (Reuters) – Pipeline operator Williams said on Wednesday it would buy a portfolio of natural gas storage assets from an affiliate of Hartree Partners LP for $1.95 billion, to cater to rising demand from liquefied natural gas projects.
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The deal, expected to close in January 2024, includes six underground natural gas storage facilities with total capacity of 115 billion cubic feet in the U.S. states of Louisiana and Mississippi
Williams would also get 230 miles of gas transmission pipeline and 30 pipeline interconnects to markets including liquefied natural gas, as well as connections to Williams’ Transco pipeline.
“These assets better position Williams’ natural gas storage operations to serve Gulf Coast LNG demand and growing electrification loads from data centers along the Transco corridor,” said Williams CEO Alan Armstrong.
Williams had hired two veteran executives to set up an LNG marketing operation last year.
The United States was the top exporter of LNG in the first half of this year, according to the Energy Information Agency (EIA), ahead of Qatar and Australia. New export plants expected to begin production next year would cement its status as top exporter, analysts have said.
Consolidation in the oil and gas pipeline business has accelerated this year as problems with getting permits for new pipelines has made existing operators more valuable and U.S. production grows.
(Reporting by Sourasis Bose in Bengaluru; Editing by Krishna Chandra Eluri)
https://www.naturalgasworld.com/williams-to-buy-natural-gas-storage-assets-for-1.95-bln-108951
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Russia: Gazprom Approves Plan for Gas Flow Measurement Projects
Russian energy giant Gazprom PJSC has approved a plan to enhance infrastructure facilities that ensure the accuracy of the measurements of volumes of natural gas being transmitted. The 2024–2028 Comprehensive Target Program for the Provision of Metrological Support for the Operations and Technological Processes of Gazprom, has now received the approval of the Gazprom Management Committee.
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Gazprom said in a media release that the program envisages, inter alia, the further adoption of high-tech single-line gas metering stations (GMSs) equipped with ultrasonic gas flow transducers.
The research work for the development of these GMSs won the top Science and Technology Prize of Gazprom in 2022. In 2023, five GMSs of the new type were built on the trunklines operated by Gazprom Transgaz Kazan and Gazprom Transgaz Tchaikovsky, the company said.
Gazprom also said it continues to create the infrastructure for the Special National Primary Standard for high-pressure natural gas flow. The main process unit is now being tested at the manufacturing plant. After that, it will be transported to and installed at the Ural Regional Metrology Center of Gazprom. The process unit will transfer the standard value of a unit of gas flow rate to flow meters at a high pressure.
Meanwhile, the project for the expansion of the Ural Regional Metrology Center of Gazprom envisages the creation of Russia’s first-ever site for the testing, verification and calibration of instruments that measure gas volumetric flow rate (flow meters) during its transmission by trunklines under a pressure of 0.1 to 10 MPa. It will be available for all interested companies of the fuel and energy complex wishing to check and adjust the functioning of their instruments, Gazprom said.
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Natural Gas / LNG Utilization
US weekly LNG exports reach 28 cargoes
US liquefaction plants shipped 28 liquefied natural gas (LNG) cargoes in the week ending December 13, while natural gas deliveries to these terminals increased by 3.9 percent compared to the week before. The US EIA said in its weekly report, citing shipping data provided by Bloomberg Finance, that the total capacity of these 28 vessels is 105 Bcf. During the week from November 30 to December 6, 29 vessels with a capacity of 105 Bcf departed the US plants.
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Natural gas deliveries to US terminals
Average natural gas deliveries to US LNG export terminals during December 7-13 rose by 0.5 Bcf/d week over week, averaging 14.6 Bcf/d, according to data from S&P Global Commodity Insights.
Natural gas deliveries to terminals in South Louisiana increased by 7.5 percent (0.6 Bcf/d) to 9.2 Bcf/d, while natural gas deliveries to terminals in South Texas decreased by 2.4 percent (0.1 Bcf/d) to 4.2 Bcf/d.
The agency said that natural gas deliveries to terminals outside the Gulf Coast were essentially unchanged at 1.2 Bcf/d.
Cheniere’s Sabine Pass plant shipped nine cargoes and the company’s Corpus Christi facility sent four shipments during the period under review.
The Freeport LNG terminal, Sempra Infrastructure’s Cameron LNG terminal, and Venture Global’s Calcasieu Pass each shipped four cargoes during the week under review.
Also, the Cove Point LNG terminal shipped two cargoes and the Elba Island LNG facility sent one cargo.
Henry Hub drops to $2.33/MMBtu
This report week, the Henry Hub spot price decreased 40 cents from $2.73 per million British thermal units (MMBtu) last Wednesday to $2.33/MMBtu this Wednesday, the agency said.
Moreover, the price of the January 2024 NYMEX contract decreased 23.4 cents, from $2.569/MMBtu last Wednesday to $2.335/MMBtu this Wednesday.
According to the agency, the price of the 12-month strip averaging January 2024 through December 2024 futures contracts declined 18.3 cents to $2.563/MMBtu.
TTF down
The agency said that international natural gas futures decreased this report week.
Bloomberg Finance reported that weekly average front-month futures prices for LNG cargoes in East Asia decreased 33 cents to a weekly average of $15.77/MMBtu.
Natural gas futures for delivery at the Dutch TTF decreased $1.18 to a weekly average of $11.73/MMBtu.
In the same week last year (week ending December 14, 2022), the prices were $33.46/MMBtu in East Asia and $42.46/MMBtu at TTF, the EIA said.
https://lngprime.com/lng-terminals/us-weekly-lng-exports-reach-28-cargoes/100135/
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Spain: Baleària’s 2nd LNG-powered fast ferry hits the water
Spanish ferry operator Baleària has launched its second LNG dual-fuel fast ferry Margarita Salas at the Armon Shipyard in Gijón, where it is currently under construction. Worth a total investment of €126 million, Baleària’s Margarita Salas is set to commence operations next summer.
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“We already had an excellent ship in terms of navigability, comfort, and passenger satisfaction, and we are proud to have taken another step forward with the Margarita Salas, which is sure to deliver even better results,” Adolfo Utor, President of Baleària, said emphasizing the technological and comfort improvements of the Margarita Salas over Eleanor Roosevelt.
Baleària’s pioneering LNG-powered fast ferry Eleanor Roosevelt has been operating since 1 May 2021.
The new catamaran is the eleventh in the company’s fleet equipped with dual gas engines. Eleanor Roosevelt has already reduced over 11,000 tons of CO2 emissions this year by using natural gas as fuel, the company said.
The ship’ was constructed using aluminum, a material known for reducing weight, fuel consumption, and carbon footprint while being highly recyclable.
The Margarita Salas shares the dimensions of its predecessor, namely 123 meters length and 28 meters beam. The ferry boasts a 10% power increase with four dual natural gas engines of 9,600 kW each.
The ferry features advanced technology for maneuverability, stability, and noise reduction, as well as an onshore power supply system for electrical connection during port stays. It also includes monitoring equipment for real-time fuel consumption and engine efficiency.
The vessel maintains the passenger and vehicle capacity of its predecessor, 1,200 and 400, respectively.
https://www.offshore-energy.biz/balearias-2nd-lng-powered-fast-ferry-hits-the-water/
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Japan: NYK leads consortium for high-efficiency LNG engine conversion
NYK Line, Namura Shipbuilding and Sasebo Heavy Industries are collaborating to replace the main propulsion of Moss LNG carriers powered by steam turbines.
Last October, NYK received an approval in principle (AiP) from the Class NK partnership to convert a LNG carrier’s steam turbine to a dual-fuel diesel engine. This is the first AiP granted by Class NK for main engine conversion on LNG carriers.
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The three companies will proceed with a detailed steam turbine conversion design, aiming to improve environmental performance, make efficient use of existing vessels and contribute to the stable transport of LNG.
LNG holds promise as an essential transitional energy for achieving a decarbonised society, and demand for LNG transport is expected to grow steadily.
The shortage of LNG carriers is a concern due to the limited number of new LNG carriers that can be ordered and the retirement of steam turbine-powered LNG carriers due to their inferior fuel economy compared to diesel-powered LNG carriers.
The three companies, to solve the problem, will replace the main propulsion of steam turbine-driven LNG carriers with low-speed, dual-fuel diesel engines called X-DF engines. Moss-type LNG tanks installed on steam turbine-powered LNG carriers are durable and can withstand long-term use. In addition to improving fuel economy, the engine replacement contributes to an efficient use of the ship’s resources.
The three companies will support the stable transport of LNG by converting the main engines and contribute to the efficient use of ship resources with the technical capabilities of Japan’s maritime group.
https://www.seatrade-maritime.com/tankers/nyk-leads-consortium-high-efficiency-lng-engine-conversion
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Canada: LNG Canada celebrates year-end successes
LNG Canada is celebrating significant strides in 2023 as it moves toward opening its natural gas liquefaction facility in Kitimat, now over 85 per cent complete. In a recent year-end update, LNG Canada CEO Jason Klein indicated the start of the new year will mark a pivotal step for the project.
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“We reached our peak construction cycle this past fall, with more than 8,000 Canadians employed at our gas liquefaction and export facility,” Klein said. “We’ve installed all 215 of the large modules required for our gas liquefaction process and completed other critical work scopes, safely.”
LNG Canada is now gearing up for safe start-up activities. This phase involves extensive testing and fine-tuning of equipment, marking the start of LNG production. Three months of flaring is expected to start in the second quarter of 2024.
The overall startup will take more than a year to complete, the progress of which Klein said the company will continue to keep local communities and First Nations informed.
Meanwhile, HaiSea Marine, the Haisla-led joint venture that will operate and maintain low and zero-emissions tugboats guiding tankers in and out of Kitimat has already taken possession of several of its new vessels.
Meanwhile, TC Energy recently announced that the Coastal GasLink project, the pipeline that will deliver natural gas to the facility, is mechanically complete, ahead of schedule.
Klein also highlighted LNG Canada’s spending of more than $11 million on community-based programs, services, and infrastructure.
Additionally, LNG Canada says it has awarded more than $4.2 billion in contracts to B.C. businesses, with more than $3.3 billion going to First Nations-owned and local area businesses.
“Across our organization, we continue to look for ways to participate in reconciliation. That includes economic reconciliation,” Klein said.
Klein also mentioned the company’s ongoing recruitment and expansion plans, including the proposed Phase 2 project, but without offering any details or timelines.
https://www.thenorthernview.com/local-business/lng-canada-celebrates-year-end-successes-7286391
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Global LNG Development
Lativa: Latvenergo signs LNG purchase deal with Equinor
European energy company Equinor has signed a deal to supply electric utility company Latvenergo AS with approximately six liquefied natural gas (LNG) cargoes, or six terawatt hours (TWh) of natural gas. Under terms of the deal, two LNG cargoes will be supplied each year between 2024 and 2026. The natural gas will be delivered via the Klaipėda LNG terminal.
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The purchase of natural gas in the medium term guarantees the security of supply to Latvenergo’s combined heat and power plant for power and thermal energy generation, as well as the sale of natural gas to customers in the Baltics.
Dmitrijs Juskovecs, Chief Commercial Officer of Latvenergo AS, said, “We have secured a very attractive agreement with clear supply conditions with a reliable supplier that has supplied LNG into the Baltics since imports started in 2014, and with the pricing reflecting European market prices through the period.” Following the Russian aggression in Ukraine, Latvenergo stopped purchasing natural gas from Russia in February 2022 and quickly closed deals with companies from the US, Norway, Switzerland, and the UK.
https://www.gasworld.com/story/latvenergo-signs-lng-purchase-deal-with-equinor/2131602.article/
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Global LNG: Asia prices slip on weak demand, high stocks despite China’s cold snap
SINGAPORE: Asian spot liquefied natural gas (LNG) prices fell to a four-month low this week on the back of high inventories and weak demand in both Asia and Europe, despite a cold snap causing below-freezing temperatures across most of China. The average LNG price for January delivery into Northeast Asia fell 18% to $12.70 per million British thermal units (mmBtu) from $15.50 last week, industry sources estimated.
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The average LNG price for February delivery was estimated at $11.90/mmBtu.
“Weak fundamentals in Europe continue to impact JKM prices in my view,” said Siamak Adibi, principal consultant at consultancy FGE, referring to the LNG benchmark price assessment for spot physical cargoes in Asia.
“Barring any unplanned outages for LNG or pipelines, the combination of high storage levels and increased wind power generation in Europe will exert downward pressure on (Dutch gas hub) TTF prices, Northwest Europe LNG, and consequently JKM.”
Asia-Europe LNG spread at widest level in almost a year
However, with cold weather and low temperatures appearing in North Asia, pockets of demand are creeping in for February cargoes, said Toby Copson, head of energy APAC at commodities broker Marex.
A cold snap that began at the start of this week extended its grip over China on Friday, with temperatures plummeting to below freezing across most of the country, causing authorities to limit traffic flows on highways in several provinces after vehicles collided on icy patches.
While milder weather across Europe has consistently kept prices on a negative trajectory, added Copson, “we’re seeing more on-water volumes, indicating a potential contango market (in) the first half of 2024”.
A contango market structure means that front-month prices are below that of later-delivery contracts, which gives traders an incentive to buy and store fuel to sell at higher prices when supplies shrink.
In Europe, S&P Global Commodity Insights assessed its daily northwest Europe LNG Marker (NWM) price benchmark for cargoes delivered in January on an ex-ship (DES) basis at $10.367/mmBtu on Dec. 14, a $0.875/mmBtu discount to the January gas price at the Dutch TTF hub.
Commodity pricing agency Argus assessed its daily northwest Europe LNG price for cargoes delivered in January on an ex-ship (DES) basis at $10.575/mmBtu on Dec. 14, a $0.67/mmBtu discount to the January gas price at the TTF hub.
Dutch and British wholesale gas prices fell on Friday morning as forecasts for above-normal temperatures and strong renewable power output curbed demand.
“Europe’s underground gas storage is still nearly 90% full, an unusual situation for this time of the year,” said FGE’s Adibi, adding that pipeline supplies, especially from Norway, remain robust and are operating near capacity.
“Norway has still a potential to send an additional 400-500 million standard cubic feet per day of gas supply to the market when needed. North African supply from Algeria is also steady.”
Additionally, ten LNG cargoes were rerouted from ports in the United Kingdom to Turkey, the United Arab Emirates and Egypt last week due to weaker National Balancing Point gas prices, according to a Tellurian commentary.
On LNG freight, both Atlantic and Pacific spot rates fell again this week, said Spark Commodities analyst Qasim Afghan. Atlantic rates declined 6% week-on-week to $133,750 a day on Friday, while Pacific rates fell 12% to $103,500 a day.
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Australia: Australian crewing of Woodside LNG vessel
Woodside Energy has reached an agreement with three Australian maritime unions on the Australian crewing of an LNG vessel, building on a co-operative relationship that dates back to the commencement of LNG exports from the North West Shelf Project in the 1980s.
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The agreement with the Construction, Forestry and Maritime Employees Union – Maritime Union of Australia Division; the Australian Institute of Marine and Power Engineers; and the Australian Maritime Officers Union preserves a role for Australian-resident seafarers in the maritime industry delivering LNG to customers across Asia.
The continued investment in the development of strategic maritime skills covers the period from April 2024 to the end of March 2029 and sets a path for a more enduring relationship, subject to Woodside’s aspirations to grow its LNG operations in Australia being realised.
Woodside CEO, Meg O’Neill, said the agreement would support the security of supply that underpins Woodside’s reputation globally as a reliable supplier of LNG, while also providing employment opportunities for Australian-based seafarers.
“This agreement reflects our shared interest with unions in ensuring continued opportunities for employment across all aspects of the LNG industry, including shipping, and recognises the Australian Government’s interest in strengthening maritime supply chains,” she said.
The National Secretary of the Maritime Union of Australia, Paddy Crumlin, added: “LNG shipping has provided many Australian seafarers with rewarding and fulfilling employment, working in the national economic and strategic interest of all Australians, for many decades. The skills and employment base that the LNG trade provides our industry cannot be understated, and we look forward to building on this and offering more Australian workers the chance to pursue a life at sea.”
The Australian Institute of Marine and Power Engineers Federal President, Martin Byrne, welcomed the agreement and said the parties have also agreed to hold further discussions in good faith with an intent to explore expanding the agreement across future marine operations.
The Australian Maritime Officers Union Executive Officer, Mark Davis, concluded: “The continuity of employment for highly skilled and experienced LNG ships’ officers will benefit all parties to the new arrangement and the opportunity for new trainees to gain international gas ship experience will be invaluable.”
The agreement will support employment of around 70 Australian-resident seafarers on an LNG carrier within Woodside’s chartered fleet. The crew will be employed by the vessel’s contracted Crew Manager, ASP Ship Management Pty Ltd, based in Melbourne.
Under the agreement, the maritime unions will cooperate fully with Woodside and its contractors in maintaining maritime operations at Woodside’s operated North West Shelf Project and Pluto LNG Project.
https://www.lngindustry.com/lng-shipping/15122023/australian-crewing-of-woodside-lng-vessel/
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Spain: Scale Gas signs for LNG bunker newbuild at CIMC SOE
Spanish owner Scale Gas has contracted China’s Nantong CIMC Sinopacific Offshore & Engineering (CIMC SOE) for a newbuild LNG bunkering vessel. No price has been placed behind the 12,500 cu m vessel Enagas unit is paying to see it delivered in 2026. The unit is set to have an electric propulsion.
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Founded in 2017, Scale Gas is an independent owner and operator of small-scale LNG, bio-LNG and renewable energy gas infrastructure in Spain and the Western Mediterranean region. The company currently owns and operates 2 LNG bunker ships, with another 12,500 cu m expected to deliver from Hyundai Mipo in South Korea in 2024.
https://splash247.com/scale-gas-signs-for-lng-bunker-newbuild-at-cimc-soe/
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Germany: Norwegian Energy Giant Signs 50 Billion Euro Natural Gas Deal With Germany
Norwegian energy giant Equinor (former Statoil) has signed a 10-year supply agreement with German state-owned energy company SEFE (Securing Energy for Europe). The deal entails the delivery of 111 TWhours (10 billion cubic meters – bcm) of natural gas per year from 1 January 2024 until 2034, including the option of extension of another 5 years, at terms reflecting market prices. As stated by Equinor, the deal is around 33% of total German industrial demand at present. The Norwegians also reported that the additional 5-year period is for a total of 319 TWh (around 29 bcm) over the period. Analysts already have put the total value of the deal at around 50 billion euros ($55 billion).
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At the same time, Equinor reiterated that it has signed a non-binding letter of intent (LoI) with the intention that SEFE will become a long-term off-taker of giga-scale, low-carbon hydrogen supplies from Equinor starting in 2029 and continuing towards 2060. According to Anders Opedal, Equinor’s CEO, the deal is “a response to Europe’s need for long-term, reliable supply of energy and a viable route to decarbonization at scale”. Germany has been since the start of Norway’s gas exports in 1977 a major market. Opedal stated also that the LOI is meant “to explore opportunities to supply SEFE with low-carbon hydrogen at industrial scale for decades to come, enabling European industries and flexible gas power plants to accelerate decarbonization”. Egbert Laege, SEFE’s CEO, stated that “the procurement of natural gas from the Norwegian continental shelf ensures the sustainable and future-proof supply for European and, in particular, German customers in the household and industrial sectors”.
As is known, Germany’s current energy supply situation is rather dire, due to the loss of Russian natural gas supplies and higher energy prices overall. Reports are showing that Germany’s industrial and manufacturing base, the main cornerstone of the country’s economy, is confronted by severe threats. Some reports already have indicated that Europe’s main economic power could be facing a deindustrialization situation in the coming years, as lots of industrial giants and producers are even looking to leave Germany to set up shop elsewhere. In the statement made by Equinor and SEFE, Laege also indicated that both companies share the ambition to accelerate the hydrogen economy. He indicated that SEFE Group’s storage company Astora could be a key building block in this.
How far all of this is going to materialize even in the coming decades is still unclear, especially when looking at the lack of demand for green hydrogen or ammonia, while at the same time, the new commodities do not even have a price-point set. Customers or clients are interested, but without a real price indicator, no real volumes will be traded for sure. It is also very interesting to see what the role of this deal will be in light of ongoing discussions or potential hydrogen deals between the Norwegians and other main players, such as Dutch Gasunie. The German pull could be constraining others, leading to potentially major supply problems or cancellation/delays of investments.
SEFE is expected to become a long-term off-taker of low-carbon hydrogen from Equinor in the future. Equinor targets to supply low-carbon hydrogen to SEFE at industrial scale, 5TWh per year by 2029, ramping it up to 50TWh per year by 2050. SEFE was set up by the German government in 2022 after Berlin nationalized Gazprom Germania GmbH.
The Equinor-SEFE deal comes at the right time, looking at the increased volatility in European gas markets due to the Ukraine war and the current Red Sea Houthi maritime crisis. Increased fear in the market about possible supply constraints, as major shipping lines have stopped their Red Sea passage after attacks by Yemen Houthis on perceived Israeli vessels, has already pushed up European front-month deliveries up by more than 11%. The market reaction is clearly linked to statements by British oil and gas major BP and others that oil deliveries through the Red Sea have been suspended. Looking at the Red Sea’s role in European LNG deliveries, the impact should not be extremely harsh, as only 5% of European LNG imports at present are from Qatar. European gas storages are also still very well stocked, with most analysts expecting that the current winter draws will not even hit 50% of total storage.
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LNG as a Marine Fuel/Shipping
Germany: Uniper: Germany’s first LNG terminal received 42 cargoes this year
Germany’s first FSRU-based import facility in Wilhelmshaven has received 42 liquefied natural gas (LNG) cargoes since its commissioning in December 2022, according to state-owned energy firm Uniper. The 170,000-cbm FSRU Hoegh Esperanza, owned by Norway’s Hoegh LNG and chartered by the German government, received its first LNG cargo in Wilhelmshaven from the US in early January.
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Prior to that, the chartered FSRU arrived in Wilhelmshaven on December 15 with a cargo from Spain’s Sagunto terminal, while Uniper and its partners launched the facility two days later. The vessel started supplying this gas to the German grid on December 21.
Germany’s first LNG terminal at the Hooksiel outer harbor near Wilhelmshaven celebrated its first anniversary on December 17, 2023.
The contract awarded to Uniper by the German government in March 2022, enabling the import of LNG via the terminal in Wilhelmshaven, was completed in record time with a construction period of nine months, Uniper said in a statement.
“Since commissioning on December 21, 2022, the terminal has been running almost without interruption. 42 LNG carriers have so far delivered around 7 million cubic meters of LNG via the FSRU Hoegh Esperanza,” the company said.
This LNG has been converted into around four billion cubic meters of natural gas and fed into the German gas grid.
Six percent of German gas consumption in 2023
According to Uniper, around six percent of German gas consumption in 2023 could thus be covered by the liquefied natural gas imported at this location.
“It is already certain that the capacities of the FSRU will also be fully utilized for 2024,” the firm said.
Uniper’s unit LNG Terminal Wilhelmshaven (LTeW) is responsible for the operational and technical management of the terminal and acts on behalf of the state-owned Deutsche Energy Terminal (DET), which is responsible for the operation and marketing of all LNG terminals built on the German North Sea coast on behalf of the federal government.
In October, DET allocated 60 regasification slots at the Brunsbüttel and Wilhelmshaven 1 sites and is now working to launch the second Wilhelmshaven FSRU and the Stade FSRU.
The Wilhelmshaven 1 terminal has a capacity of 6 bcm per year and the Brunsbüttel terminal has a capacity of 3,5-5 bcm per year.
Besides these four FSRUs, the German government sub-chartered the FSRU Transgas Power to private firm Deutsche Regas to serve the planned LNG import terminal in the port of Mukran.
https://lngprime.com/europe/uniper-germanys-first-lng-terminal-received-42-cargoes-this-year/100247/
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South Korea: Hutchison Ports welcomes LNG-powered 23K TEU colossus CMA CGM Palais Royal
On December 19, Hutchison Ports BEST terminal received 23,000 TEU containership CMA CGM Palais Royal, one of the world’s largest liquefied natural gas (LNG)-powered vessels. The containership, built in 2020, is 400 meters long and 61 meters wide, built. The arrival of this vessel is not only historic for its size and capacity but also for its contribution to the transition towards cleaner and more efficient maritime logistics, according to the port authority.
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In the logistics sector, sustainability is essential to mitigate environmental impact and improve the efficiency of the entire supply chain. Container terminals play a critical role in this process, as they are hubs where multiple logistics activities converge.
Furthermore, from energy management and the implementation of cleaner technologies, container terminals can significantly influence the environmental footprint of the entire logistics chain. Adopting strategies to reduce energy consumption, minimize waste and improve transport management within these terminals is expected to contribute directly to the overall sustainability of the logistics sector.
Hutchison Ports BEST’s sustainability strategy is based on promoting sustainable supply chains, prioritizing three key pillars: caring for the planet, caring for people and promoting ethical and sustainable business practices.
This strategy focuses on the decarbonization of port activity and indirect emissions, which generates direct benefits for shipping companies by reducing Greenhouse Gas (GHG) emissions during their stay in port.
From January 2024, this commitment is expected to translate into tangible fuel savings and GHG emission reductions, reflected in lower carbon emission allowances.
Shipping companies have a focus on decarbonization, adopting various strategies to reduce their environmental footprint.
In this context, the commitment of terminals such as BEST to innovative projects such as onshore power (OPS) is highlighted. The alignment of terminals with these eco-friendly solutions demonstrates a firm step towards a more sustainable future for the maritime industry, the port highlighted.
To remind, in October this year, the port six new hybrid cranes as part of its decarbonization agenda. With the arrival of this new equipment, CO2 emissions could be reduced by up to 40% thanks to the use of a regenerative energy system, contributing to a substantial improvement in the terminal’s energy efficiency, BEST terminal officials noted.
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Australia: Shell’s QCLNG plant ships 1000th cargo
The Shell-operated Queensland Curtis LNG export plant in Australia has shipped its 1000th cargo since it started operations in May 2015, according to shareholder CNOOC. CNOOC’s gas and power unit said in a statement that the two-train 8.5 mtpa liquefaction plant on Curtis Island in Queensland has exported the milestone cargo on December 18 onboard the 174,000-cbm LNG carrier, Kool Firn.
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This 2020-built vessel, owned by CoolCo and chartered by a unit of LNG giant Shell, took about 70,000 tons of LNG.
The project has produced a total of 66.21 million tons of LNG since May 2015, according to CNOOC Gas & Power.
Shell’s QGC business also confirmed the departure of the milestone cargo from the QCLNG plant saying that the company was the first to deliver natural gas from wells drilled into coal seams from the Surat Basin to Curtis Island, and it also the first of the Queensland projects to reach 1,000 cargoes.
Other two LNG plants on Curtis Island include the Santos-operated GLNG plant and the ConocoPhillips-led APLNG terminal.
Besides Shell, CNOOC owns 50 percent equity in QLNG’s train 1 and Japan’s Tokyo Gas has 2.5 percent equity in train 2.
Back in 2021, Shell also sold a stake in QCLNG to a unit of Global Infrastructure Partners for about $2.5 billion.
Shell, via its unit QGC, owns 80 percent of the QCLNG common facilities that include storage tanks, jetties and operations infrastructure that service the plant’s two trains.
https://lngprime.com/australia-and-oceania/shells-qclng-plant-ships-1000th-cargo/100824/
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Technological Development for Cleaner and Greener Environment Hydrogen & Bio-Methane
Singapore Calls for Proposals for Methanol Bunker Network by 2025
The Maritime and Port Authority of Singapore (MPA) is taking steps to further build out the infrastructure required to support the widespread adoption of methanol as a marine fuel. Today they released a call for proposals for the implementation of end-to-end methanol bunkering solutions following the launch of the port’s first dedicated methanol bunker vessel and efforts to develop the protocols for the new fuel.
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In launching the effort to obtain proposals for the bunkering operations, the MPA cites the expected delivery of newly-built methanol-capable vessels in the coming years. The container segment has been moving forward aggressively with orders for dual-fuel methanol-capable vessels. While LNG remains the most favored option, experts have predicted that methanol will overtake other options due to its increasing availability and the planned production of green methanol, as well as the relative ease in handling the fuel versus LNG or ammonia.
The MPA highlights that its call for proposals comes after the recent completion of the world’s first ship-to-containership methanol bunkering operation on July 27, 2023, in Singapore for the Laura Maersk. While Singapore has long been a hub for Asia and the largest bunkering port, Maersk however has selected a route for its first new methanol dual-fuel containership that does not include Singapore. X-Press Feeders also announced plans for its first feeder network with its currently under-construction methanol-capable vessels focusing on Scandinavia and the Baltic.
To ensure a resilient supply of methanol to meet the international bunkering needs in the Port of Singapore, the MPA is inviting interested parties to submit proposals for the supply of methanol as a marine bunker fuel.
The effort focuses on the methanol supply sources, the model for a methanol bunkering operation at a commercial scale in Singapore, and the alternatives for the physical transfer of methanol. Proposals are due by the end of February 2024, and the MPA reports it will assess the viability of various solutions received, which will also inform and shape the development of MPA’s methanol bunkering licensing framework.
The is also working with industry partners to study methanol supplies, infrastructure requirements such as terminal facilities and methanol-carrying bunker tankers, seafarers training, and bunkering standards, as part of the broader effort to operationalize methanol bunkering and supply methanol at scale in the Port of Singapore.
The goal is to have a commercial-scale methanol bunkering infrastructure in place by 2025 to support the emerging fleet of vessels and to maintain Singapore’s role as a leader in bunkering.
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Rolande opens its eighth Bio-LNG station in Germany
The facility is located on the A9 interstate highway running from Munich to Berlin and represents a major step in advancing carbon neutrality in north-south freight transport. Rolande has opened a new Bio-liquefied natural gas (Bio-LNG) station in Himmelkron, located near the town of Bayreuth in Bavaria.
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Trucks can now refuel Bio-LNG at one of the station’s two pumps, thus reducing their carbon emissions. The site is conveniently located on a key north-south route running from Scandinavia to the Mediterranean Sea. The location between Munich and Berlin represents the most significant addition to Rolande’s public network of Bio-LNG filling stations in Germany.
The recently opened filling station is Rolande’s eighth Bio-LNG station in Germany. As with previous locations, the company leased the site from IDS (International Diesel Service), a European provider of fuel and fuel cards.
“Using local waste streams promotes a circular economy, the range of Bio-LNG-fueled vehicles is comparable with traditional fuels, and fast refueling times enable efficiency in day-to-day transport operations,” said Jolon van der Schuit, CEO of Rolande.
The public, self-service filling station in Himmelkron, Bavaria, is accessible around the clock, underscoring the potential of Bio-LNG as an environmentally friendly fuel alternative.
Rolande’s stations are helping expand Germany’s network of Bio-LNG stations, which currently comprises 157 public filling stations according to the German Energy Agency (DENA).
https://www.petrolplaza.com/news/34442
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Korean Register okays HMM’s methanol dual-fuel retrofit boxship design
Classification society Korean Register (KR) has awarded approval in principle (AiP) for the methanol dual-fuel retrofit design of HMM’s 16,000 TEU containership.As informed, the ceremony for the AiP was held on December 22. The retrofit design of the 16,000 TEU containership which will be powered by methanol was developed in collaboration with HD Hyundai Marine Solution and HD Hyundai E&T.
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Furthermore, South Korean shipbuilding heavyweight HD Korea Shipbuilding & Offshore Engineering Co. (HD KSOE) also worked on the design with the partners.
“KR is committed to the goals of digitalization and decarbonization, and we will continue collaborating closely with our partners to achieve world-class competitiveness,” the classification society commented in a social media post.
Currently, the global maritime industry is grappling with the development of various countermeasures to meet strengthening greenhouse gas regulations, and market interest in eco-friendly fueled ships has increased.
In September this year, Korean Register awarded AiP for an LNG dual-fuel very large gas carrier (VLGC) jointly developed by KR and HD Hyundai Heavy Industries (HD HHI), a subsidiary of HD Korea Shipbuilding & Offshore Engineering.
HD HHI executed the ship’s basic design, established the layout of fuel supply pipes and the gas detection system, and designed the LNG fuel tank using their technical expertise.
Meanwhile, KR verified the safety, suitability and regulatory compliance of the design by reviewing national and international regulations, leading to the issuance of the AiP for the LNG dual-fuel VLGC.
Meanwhile, as part of its decarbonization efforts, South Korean shipping company HMM recently nked a landmark contract with China State Shipbuilding Corporation (CSSC) for the construction of up to ten 10,800 CEU LNG dual fuel car carriers.
HMM has a substantial fleet, comprising 66 owned ships, including container ships, VLCCs, and bulkers, with an additional 35 newbuildings on order.
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