NGS’ NG/LNG SNAPSHOT – Jan 1-15, 2023
City Gas Distribution & Auto LPG
Assam CM flags off 100 CNG buses, inaugurates 1st green fuel station
Assam Chief Minister Sh. Himanta Biswa Sarma on Sunday flagged off 100 new CNG-run buses, as part of the Smart City Mission.
He also inaugurated the city’s first CNG fuel station.The CM said the launch of the CNG-run buses and the inauguration of the fuel station were decisive steps for “ gradual but firm mitigation” of the impacts of climate change and global warming. The CNG buses were gifted by Guwahati Smart City Ltd to Assam State Transport Corporation.
The passenger vehicles are equipped with air-conditioning, fire-detection, global positioning systems and several other features, and will be operated by ASTC.
Noting that excessive use of fossil fuel, such as petrol and diesel, is the prime reason for global warming, the CM said the carbon emission from the use of such energy is creating climatic imbalances in many parts of the globe, including Assam.
It is important that “all must unite to mitigate the impacts of climate change and work out a long-term and permanent solution”, he said, adding that green energy, such as compressed natural gas, is the answer to the problem.
The gradual transition towards clean and green fuel in the public transport system of Guwahati would ensure that the state contributes towards the nation’s commitments on capping carbon emissions, Sh. Sarma said.
Gradually, other public transport vehicles, such as auto-rickshaws, and vans, would also be brought under the ambit of CNG, while the possibility of allowing CNG-run private vehicles would also be explored, he said.
The CM hailed Prime Minister Sh. Narendra Modi for implementing the gas-grid project, without which the launch of CNG station in Assam wouldn’t have been possible.
Andhra Pradesh gets its first Liquified Compressed Natural Gas station in Kadapa
Andhra Pradesh’s first Liquified Compressed Natural Gas (LCNG) station was launched by AG&P Pratham, one of the leading players in the Indian City Gas Distribution (CGD) industry, at APIIC Industrial Park in Kadapa of YSR district. The LCNG station was inaugurated by the Deputy Chief Minister of Andhra Pradesh, Sh. Amzath Basha Shaik Bepari.
Launching the LCNG station the Deputy CM said, ”The use of CNG has several merits over traditional fuels like diesel and petrol and we want to promote its use and help create an environmental-friendly ecosystem in Andhra Pradesh. Natural gas helps reduce air pollution caused by vehicles and industries and helps the country move towards responsible growth and energy sufficiency.”
He further said the government of Andhra Pradesh encourages companies like AG&P Pratham to continue their work in the state to ensure the faster roll-out of natural gas for CNG, industrial, commercial and domestic segments.With the launch of this new station, the residents of Kadapa and nearby areas have a source of this green fuel. Through this LCNG station, people in the areas of APHB Colony, Prakash Nagar, Sankara Puram, Pakkirapalli, Arvind Nagar, Reddy Colony, Bhagyanagar Colony, NGO Colony, Yeramukapalli, Maruti Nagar. Sainik Nagar, Ramanjeya Puram, Tilak Nagar, YSR Colony, Telecom Nagar, Vidhyut Nagar, RK Nagar, and RTC Colony will have access to natural gas.
Sh. Abhilesh Gupta, the MD and CEO of AG&P Pratham, said the launch of the first LCNG station is a commitment to make Andhra Pradesh adopt natural gas as an alternate fuel in households, industries, commercial and transport segments. ”AG&P Pratham aims to develop 300+ CNG stations, serve 26+ lakhs houses, 10000+ commercial establishments and 150+ industries generating 7000+ employment in the next eight years across Andhra Pradesh,” he said.
With a capacity to handle 100 tons of natural gas a day, the Kadapa LCNG station will cater to the requirements of YSR and Annamayya districts. The company will develop a 150-km pipeline network in Kadapa town of YSR district by the end of FY23. The new station will benefit 4,000 households, three industrial and 10 commercial establishments across Kadapa by March 2023. AG&P Pratham plans to launch two more LCNG stations in Andhra Pradesh in Ojili, Tirupati district and in Rapthadu village, Anantapur district in the near future.
AG&P Pratham is developing CGD networks in seven districts of Andhra Pradesh, including Sri Balaji, Chittoor, SPSR Nellore, YSR, Annamayya, Sri Sathya Sai and Anantapur. To date, AG&P Pratham has launched 21 CNG stations in Anantapur, YSR, Annamayya, and Sri Sathya Sai districts, 15 in SPSR Nellore and Sri Balaji Districts, and nine in Chittoor district. The company plans to launch seven more CNG stations in the state by March 2023.
Policy Matters/ Gas Pricing/ Others
Adani firm hikes CNG price by Re 1 in Gujarat
Private player Adani Total Gas Limited hiked the price of compressed natural gas (CNG) in Gujarat by Re 1 per kilogram effective from Jan 10, 2023. .
This has taken the price from Rs 79.34 to Rs 80.34 per kilogram, said Arvind Thakkar, president of Federation of Gujarat Petroleum Dealers Association.
The hike by Adani Total Gas Limited comes days after state-run Gujarat Gas raised the price of CNG by nearly Rs 3.5 per kg, Sh. Thakkar added.
Crude check. Short build-up on MCX-Crude oil
Crude oil prices slumped last week and have begun the year on a weak note. The Brent futures on the Intercontinental Exchange (ICE) declined 8.6 per cent to end the week at $78.5 per barrel. Likewise, the continuous contract of crude oil on the Multi Commodity Exchange (MCX) tumbled 6.2 percent to close the week at ₹6,149 a barrel.
Inventory build-up in the US weighed on the prices last week. According to the Energy Information Administration (EIA), the crude oil stocks in the US shot up by 1.7 million barrels for the week ended December 30, which was higher compared with an increase of 0.7 million barrels in the preceding week. Moreover, the latest data showed that the Manufacturing and Services PMI in the US were in the contraction zone, raising the demand concerns.
On the charts too, the bearish bias is very evident as both Brent and MCX futures have formed a lower low after falling off a resistance level. The possibility is high to see more fall from here.
Brent futures ($78.5)
The Brent futures declined after facing a roadblock at $87. Also, $85 is a resistance level. Now it has fallen back below $80-mark and the nearest support from the current level is seen at $76. Given that the overall trend is weak, the contract might drop below $76 and head south towards $65. On the upside, a rally beyond $85 is difficult.
MCX-Crude oil (₹6,149)
The January futures of crude oil plummeted on the back of the resistance at ₹6,750. In addition to this, the presence of the 50-day moving average at around ₹6,700 helped the bears’ cause.
Notably, the contract has closed below the ₹6,200 support, opening the door for further depreciation. There is significant short build-up as the cumulative Open Interest (OI) of crude oil futures increased to 11,610 contracts from 6,138 contracts over the past week. This strengthens the bearish case and increase the probability of more downside.
The contract is likely to slip below the support at ₹5,900 and decline to ₹5,600 in the near term. A breach of this level can result in a fall to ₹5,400.
On the upside, the contract has a resistance at ₹6,400 and another strong one at ₹6,750. For the bulls to stand a chance against the bears, the prices should rise decisively above ₹6,750. Until then, bears are expected to dominate.
Trading strategy: One can consider initiating fresh short positions at the current level of ₹6,149. Add more shorts if the price moves up to ₹6,400. Place stop-loss at ₹6,750 at first. Revise it down to ₹6,050 when price falls below ₹5,900. Tighten it further to ₹5,900 when the contract goes below ₹5,750. Exit the shorts at ₹5,600.
Price volatility may affect India’s target of increasing natural gas’ energy share
India’s target of increasing natural gas’ (NG) share of energy to 15 per cent by 2030, from 6 per cent in 2017, may be impacted by the price volatility and infrastructure constraints, a report by Fitch Ratings said.
The challenges might affect the goal despite resilient demand from city gas distribution (CGD) networks and rising domestic production.
Natural gas’s share of energy has remained at 6 per cent since 2021, as per the report.
As the sectors switch to cheaper alternative fuels, the NG demand from price sensitive industrial and power sectors may be limited in times of rising NG prices.
The pace of adoption of gas for mobility and household fuel may also slow in times when its price benefit against alternate fuels decreases.
“India’s inadequate gas pipeline infrastructure and potential execution delays in some projects under construction may delay NG demand growth. Underutilised existing LNG import infrastructure may slow new capex in the near to medium term. Still, the operationalisation of new CGD networks, the price advantage of NG against other fuels, and increased adoption of NG to comply with pollution norms would support long-term NG demand from CGDs,” said the report.
On the outlook, Fitch stated that energy growth, aided by India’s GDP growth estimate of 7 per cent a year over the next few financial years and the government’s efforts to increase natural gas and renewables’ share in the energy mix on its path of decarbonisation would support mid-single-digit natural gas demand growth over the medium term.
Prime Minister Narendra Modi committed to an ambitious five-part “Panchamrit” pledge, including reaching 500 GW of non-fossil electricity capacity, to generate half of all energy requirements from renewables, to reduce emissions by 1 billion tons by 2030, at the COP26 summit in Glasgow in late 2021.
India also aims to reduce the emissions intensity of GDP by 45 per cent. Finally, India commits to net-zero emissions by 2070.
Walking the talk, India has gone ahead and banned the use of several single-use plastics starting July 2022.
The adverse impacts of littered single-use plastic items on both terrestrial and aquatic ecosystems, including in marine environments are globally recognized.
Electric Mobility/ Hydrogen/ Bio- Methane
Guyana seeks Indian investment in it’s Hydrocarbon sector
Guyana wants Indian companies to invest in its oil and gas sector as the South American nation aims to expand its nascent energy sector, a senior Indian foreign ministry official said on Jan 10,2023.
Guyana’s President Mohamed Irfaan Ali and Suriname‘s President Sh. Chandrikapersad ‘Chan’ Santokhi, who is visiting India, held discussions on Monday with Indian Prime Minister Narendra Modi at a conference in the central Indian state of Madhya Pradesh.
Guyana is home to one of the largest oil discoveries in the last decade. It currently produces 340,000 barrels per day (bpd) of oil and aims to raise it to 1.64 million bpd by end of the decade, said Sh. Saurabh Kumar, a secretary in the Indian external affairs ministry.
He said Guyana has sought the participation of Indian state-run and private companies in its hydrocarbon sector.
“We are looking for cooperation with Guyana, and Suriname, particularly with Guyana,” Kumar said, adding Ali would meet India’s oil minister Hardeep Singh Puri during his trip to New Delhi.
“In the next 3-4 months, you will see a massive expansion of the Indian investment footprint in Guyana,” Ali said in an interview with broadcaster NDTV, adding that oil and gas will be among the sectors that will witness expansion of investment.
India, the world’s third biggest importer and consumer of oil, is diversifying its crude import sources and in 2021 imported Guyanese Liza crude. (Reporting by Nidhi Verma; Editing by Andrew Heavens, Susan Fenton and Marguerita Choy)
NTPC starts blending green hydrogen with piped natural gas in Surat
National Thermal Power Corporation (NTPC) on Tuesday commissioned its first green hydrogen blending project in Gujarat.
The project, which is a joint effort between NTPC and Gujarat Gas (GGL), has started blending Green Hydrogen into piped natural gas (PNG) in Surat network of NTPC Kawas.
“NTPC and GGL have worked relentlessly towards achieving this milestone in record time after the foundation stone laid by the Hon’ble Prime Minister of India on 30th July 2022. This set-up is geared up to supply H2-NG (natural gas) to households of Kawas township at Aditya Nagar, Surat,” the company said in a statement. The first molecule of green hydrogen from the project was set in motion by Sh. P Ram Prasad, head of project, Kawas in presence of other senior executives of NTPC Kawas and GGL.
The company further said that NTPC Kawas held awareness workshops for township residents with help of GGL officials after the start of blending operation. Green Hydrogen in Kawas is made by electrolysis of water using power from an already installed 1 MW floating solar project.
The Petroleum and Natural Gas Regulatory Board (PNGRB) has given approval for 5% vol./vol. blending of green hydrogen with PNG to start with. The blending level would be scaled phase wise to reach 20%, NTPC said in a press release.
Green Hydrogen, when blended with natural gas, helps reduce carbon-dioxide emissions while keeping net heating content the same. Only a few countries like the UK, Germany, and Australia have been able to achieve this feat.
“This would bring India at the centre stage of the global hydrogen economy. India would not only reduce its hydrocarbon import bill significantly but can also bring forex ashore by being a green hydrogen and green chemicals exporter to the world,” NTPC said.
Natural Gas / Transnational Pipelines/ Others
Egypt: Wintershall Dea discovers gas in Egypt’s east Damanhour block
Wintershall Dea has found gas in its East Damanhour exploration block in the onshore Nile Delta in Egypt, the company said on January 12.
The licensees, operator Wintershall Dea (40%) and partners Cheiron Energy (40%) and INA (20%), as well as the Egyptian Gas Holding Company (EGAS), will assess the discovery as a possible tie-back development towards the nearby infrastructure at Disouq.
The Disouq gas project is operated by DISOUCO, a joint venture between Wintershall Dea and EGAS.
Wintershall Dea started exploration at East Damanhour in November 2021. The discovery was made as the second exploration well in this licence. The ED-2X well is located around 3 km north of the existing Disouq field.
The well encountered a 43-metre thick gas bearing reservoir with a gas-water contact at 2,627 m. “A thorough and fit for purpose data acquisition program has been carried out in the well and the discovery has been tested at peak production of 15mn ft3/day,” the company said.
Turkey: Türkiye to supply LNG from its terminals to Bulgaria
Türkiye is set to sell natural gas to Bulgaria, Energy and Natural Resources Minister Mr. Fatih Dönmez said Jan 1,2023 adding that the agreement in this regard will be signed between the countries on Jan 2, 2023.
Bulgarian Energy Minister Mr. Rossen Hristov previously said that negotiations are considering using 1 billion cubic metres of capacity from Türkiye’s Liquefied Natural Gas (LNG) terminals. Mr. Hristov, in a statement to reporters on Dec. 23, maintained that they did not have any problems in purchasing LNG, but that they had problems with the area where it will be unloaded.
Saying the Revithoussa LNG Terminal is used in Greece, Mr. Hristov added: “This terminal is very busy. Our agreement for the floating LNG storage and gasification unit (FSRU) in Alexandroupoli begins in 2024. We still need an extra billion cubic metres of capacity.”
He said they were negotiating to reserve a capacity of 1 billion cubic metres per year from the LNG terminals in Türkiye and to transfer the gas from Türkiye’s Petroleum Pipeline Corporation (BOTAŞ) network to their border.
Noting that they can use any terminal in Türkiye, Hristov said the agreements will be signed with different LNG suppliers for supply security. Türkiye currently transfers pipeline gas to Bulgaria and further Europe via TurkStream natural gas pipeline.
With an annual capacity of 31.5 billion cubic metres, the TurkStream was commissioned in early 2020. The pipeline comprises two 930-kilometre (577.88-mile) offshore lines, and two separate onshore lines that are 142 and 70 kilometres long.
The first line with a capacity of 15.75 bcm is designated for supplies to Türkiye’s domestic customers, while the second carries Russian gas further to Europe through Bulgaria.
Global LNG Development
Oman: Oman LNG inks LNG supply deal with Shell
State-owned Oman LNG has signed an agreement with Shell to supply 0.8mn metric tons/year of LNG for ten years starting from 2025, the official Oman News Agency reported on January 10. Shell is already a shareholder in Oman LNG.
“We are delighted to sign this term-sheet agreement with Shell, who has been our partner in the industry for many years,”Mr. Hamed Al Nu’amani, CEO of Oman LNG, said. “This agreement leverages the opportunities to place Oman LNG in a very competitive market, with strong partners allowing us to grow our market access.”
The Shell deal was announced just days after Oman LNG signed binding term sheet agreements to deliver a total of 2.35mn mt/year of LNG to three Japanese companies.
Oman LNG is 51% owned by the government of Oman, 30% by Shell, 5.4% by Total, 5% by Kogas, and Japanese and Omani firms own other stakes of under 3%.
UK: UK’S $1.15 BLN funding for Mozambique LNG project
The British government’s funding of up to $1.15 billion for a liquefied natural gas (LNG) project in Mozambique is lawful, a London court ruled on Friday, dismissing an appeal by Friends of the Earth.
The environmental campaign group had asked London’s Court of Appeal to rule the British government wrongly decided funding the project, led by French energy company TotalEnergies , was incompatible with the Paris Agreement on climate change.
UK Export Finance (UKEF) has committed to provide direct loans and guarantees to banks to support the design, build and operation of the $20 billion project.
Friends of the Earth’s legal action over the decision failed in a lower court and was dismissed by the Court of Appeal in a written ruling on Jan 13.
Japan: Inpex to accelerate expansion of LNG production & sales
Inpex Corp, Japan’s biggest oil and natural gas explorer, aims to accelerate its expansion of production and sales of liquefied natural gas (LNG) on the premise that the LNG market will remain tight in the mid-term, its CEO said on Jan 12.
“Global LNG market is expected to remain tight in the mid-term due to the structural change of the global natural gas market, especially LNG, since the Russian invasion of Ukraine,” Inpex CEO Takayuki Ueda told Reuters in an interview.
The global gas supply chains have changed, with European countries seeking to import more LNG to replace Russia’s pipeline gas and the United States boosting export of the super-chilled fuel, while Russia is looking at providing more gas to India and China, possibly through pipelines, he said.
Brazil: Brazil’s Blueshift to deploy LNG terminal in Rio de Janeiro state
Brazilian firm Blueshift Gás & Energia will deploy a liquefied natural gas storage and transfer terminal in Rio de Janeiro state’s Sepetiba bay, according to a source familiar with the matter.
Named Tagoahy with an extension of 76,500m2, it will be of the offshore type, where a floating storage unit (FSU) ship with a storage capacity of approximately 125,000m3 will remain anchored, the source told BNamericas on condition of anonymity.
It will be deployed near Martins island, the access channel to Itaguaí port, and demand an investment of 52mn reais (US$10.2mn).
Tagoahy will be used for reception, storage and transfer of LNG as part of the distribution system in Rio de Janeiro and other states in the south, southeast and northeast regions.
The imported gas will be received through an LNG carrier vessel (LNGC) with capacity of between 70,000m3 and 135,000m3, which will transship the gas in liquid phase to the FSU via the ship-to-ship modality. The stored LNG will then be transferred to small carrier vessels for transportation to other states.
The LNG can also be moved to ISO containers with capacity of 45m3 that will then be transported for unloading at Sepetiba port.
Technological Development for Cleaner and Greener Environment Hydrogen & Bio-Methane
USA: Northwest Iowa project pipes cow manure natural gas to Sioux Center
Cow manure from local dairy farms will be run through digesters to generate natural gas that will run through a pipeline to the northwest Iowa town of Sioux Center.
Mr. Aaron Maassen owns one of the three dairy farms involved in the project. He says it will not only expand the town’s capacity for natural gas, it will also capture methane emissions from livestock waste. “Capturing value out of it that would have been lost as a greenhouse gas,” Maassen says. “So, it allows us to capture that without changing the value of the resource that we have for our own operation, and add value to just our local community.”
Maassen says the greenhouse gas emissions eliminated will be equivalent to around 8,800 cars. Sioux Center utilities assistant manager Adam Fedders says the community needs more natural gas capacity. “For a growing community, like Sioux Center, taking advantage of opportunities to receive additional capacity and other locations is something that’s advantageous,” Fedders says, “and then to find an opportunity right in your backyard is even greater.”
The farm digesters are expected to bring in around 350 MMBTUs a day, or around a third of the natural gas typically used in Sioux Center on a summer day. Construction on the pipeline is expected to begin as early as April.