NGS’ NG/LNG SNAPSHOT – January 2021, VOLUME 2
National News Internatonal News
NATIONAL NEWS
City Gas Distribution & Auto LPG
MNGL to launch mobile CNG refuelling pumps in Maharashtra: Official
Maharashtra Natural Gas Ltd (MNGL) will launch mobile CNG refuelling pumps in Maharashtra, according to a senior official of the company. MNGL is a joint venture of
read more
Bharat Petroleum Corporation Ltd and Gas Authority of India Ltd. The research in underway for the mobile CNG refuelling units, said MNGL Independent Director Rajesh Pande on Wednesday (Jan 13). He added that the company will launch such refuelling pumps in the next 6 months in Maharashtra. On the occasion of the 15th foundation day, company officials and Pune MP Girish Bapat informed about the works undertaken by the firm since its incorporation in 2006. It will be the first-of-its-kind experiment in India. The company is already supplying gas through pipeline to 3.2 lakh houses and major industries in Pune and the Pimpri-Chinchwad region. It will also expand its operation in Nashik, Dhule, Sindhudurg, and other regions, Pande said.
show less
Hubballi: 19,000 houses to be connected to PNG network by May-end
In what is likely to give a much-needed push for sustainable energy solutions, as many as 19,500 households in the twin cities will be connected to the piped natural gas (PNG) network by the end of May.
read more
Transitioning from the traditional liquified petroleum gas (LPG) to the more eco-friendly PNG is in keeping with both the state and central government’s push for the adoption of greener solutions to meet energy requirements. The Indian Oil Adani Gas Private Ltd (IOAG) has thus far connected 7,000 households in Hubballi-Dharwad to the PNG network and has set for itself the target of supplying 37,000 households with natural gas by the end of 2021. Supply of natural gas through the piped network is feasible only to well-planned localities. “It is very difficult to lay pipelines in congested areas. We will soon be supplying natural gas to Vasant Nagar, Badami Nagar, Bengeri, Shirur Park, Dollars Colony, Renuka Nagar in Hubballi, while in Dharwad, the infrastructure is in place in Gandhi Nagar and Shettar Colony,” Vinod added. Pointing to the prevalence of natural gas in European countries, Vinod said that most of metros in India too were switching to the cleaner, safer fuel. Expressing his gratitude to the HDMC, Hubballi-Dharwad Smart City Ltd and the elected representatives for cooperating with IOAG, Vinod added, “I am sure people will love the idea of gas being supplied directly to their kitchens.” The length of the PNG network in Hubballi-Dharwad is now extended to 323km. Natural gas is being sourced from the Dhabol-Bengaluru pipeline, he added.
show less
Indane commercial LPG to have higher efficiency
Customers can save 5-8%, says official. Plans are afoot to promote the recently launched differentiated LPG christened “extra Tej” in a big way across Telangana and
read more
Andhra Pradesh to enable the industrial and commercial users save around 5 to 8 % on fuel, said B. Anand Reddy, General Manager, (LPG), Telangana & Andhra Pradesh State Office of the Indian Oil Corporation Limited. Speaking after inauguration of the new Indane showroom at Ranganayakulagutta bypass road here on Friday, he said all industrial customers will get “extra Tej”, the premium product at no extra cost with assured saving of 5-8 % on fuel. The Indian Oil has also launched another new product named Chhotu, the 5kg (Free Trade LPG) cylinder, recently to effectively cater to the needs of the customers. Telangana LPG Distributors’ Association president Mellacheruvu Venkateshwara Rao, representatives of the Ravichandra Gas Agency and others were present.
show less
Seven CNG stations to become functional in a week
Gail Gas has also received 47,000 bookings for domestic piped natural gas supply in city. Petrol-fired motor vehicles in Mangaluru can go green soon as Gail Gas Ltd.,
read more
a subsidiary of GAIL India Ltd., will be commissioning at least seven Compressed Natural Gas (CNG) stations within a week in different corners of the city. By this financial year-end, the company plans to open at least 15 CNG stations in Dakshina Kannada, according to Gail Gas General Manager Villin Zunke. The company has set a total target of establishing 100 CNG stations across Dakshina Kannada in eight years. Apparatus for seven CNG stations have already been installed at seven petrol pumps being operated by public sector oil marketing companies and they are undergoing testing and validation by the authorities concerned. They are: IOCL Kulur, HPCL Hosabettu, IOCL Haleyangadi, HPCL Mulki, HPCL Kavoor and one each IOCL and HPCL in Adyar. The company would encourage eligible individuals to open new CNG dealership in the district who can provide land for the station. Gail Gas would provide the apparatus while the dealer has to manage day-to-day operation of the station. This became possible with the Kochi-Koottanad-Mangaluru liquefied natural gas (LNG) pipeline being commissioned and later dedicated to the nation by Prime Minister Narendra Modi on January 5. The areas were closer to LNG receiving stations at Mangalore Chemicals and Fertilizers and at Arkula where distribution pipe laying work is in progress. The government has also given a target of providing 3.5 lakh piped natural gas (PNG) connections to households and commercial establishments in Dakshina Kannada district in eight years. The initial concentration would be to cover Mangaluru taluk followed by other taluks, Mr. Zunke said. Agencies empanelled by Gail Gas have already booked 47,000 connections, while 4,300 connections were already given in different parts of the city. As many as 50 out of the 60 wards in Mangaluru City Corporation limits are being covered. LNG would begin flowing to kitchens in households once distribution pipeline work is completed. Consumers will be issued bi-monthly bills with meter readers visiting each meter location. Remote reading of meters is being explored, Mr. Zunke told The Hindu. The Koch-Mangaluru LNG pipeline will, in all, facilitate 21 lakh PNG connections in cities en route, the Prime Minister had announced.
show less
Electric Mobility & Bio- Methane
Tesla takes another step on road to launch in India
Tesla Motors India and Energy Private Limited was incorporated on Jan. 8 with its registered office in the southern city of Bengaluru, a hub for several global technology companies.
read more
Tesla Inc has moved a step closer to its launch in India later this year by registering a company in the country, a regulatory filing showed on Tuesday (Jan 12). Tesla Motors India and Energy Private Limited was incorporated on Jan. 8 with its registered office in the southern city of Bengaluru, a hub for several global technology companies. The filing shows the Indian unit has three directors including David Feinstein, who is currently a senior executive at Tesla, according to his LinkedIn profile. India’s transport minister Nitin Gadkari told a local newspaper in December the U.S. electric carmaker would start with sales and then might look at assembly and manufacturing. Tesla chief executive Elon Musk has tweeted several times in recent years, including as recently as October 2020, about an impending foray into India. The move comes as Indian Prime Minister Narendra Modi is promoting the production and use of electric vehicles to reduce the country’s oil dependence and cut down on pollution. But efforts have been stymied by a lack of investment in manufacturing and infrastructure such as charging stations. To boost investment, India plans to offer $4.6 billion in incentives to companies setting up advanced battery manufacturing facilities, according to a government proposal seen by Reuters.
show less
Green Drive: EESL to set-up 500 more EV charging stations in FY21
New Delhi joint venture EESL plans to install at least 500 more electric vehicle (EV) charging stations in the country during fiscal 2020-21. The joint venture of PSUs under the Ministry
read more
of Power, the Energy Efficiency Services Limited (EESL) has undertaken the project to boost the e-mobility ecosystem in India. In a conversation with IANS, EESL Managing Director Rajat Sud informed that close to 207 charging stations have already been installed across India. “With the supply resumed from the manufacturers and opening up of transport, EESL is striding towards installing at least 500 chargers by the end of the financial year. During the year, EESL has also completed an additional procurement of 1020 chargers.” Besides, EESL intends to set up ‘Carbon Neutral Charging Stations’ by bundling solar rooftop, battery based charging stations and battery swapping stations. Eventually, the company plans to set up 10,000 charging stations over the next two to three years across the country. Presently, the state-run firm has tied up with various private and public companies such as Apollo Hospitals, BSNL, Maha-Metro, BHEL and HPCL, among others, to set up public charging infrastructure. It has also partnered with urban local bodies in cities like Hyderabad, Noida, Ahmedabad, Jaipur and Chennai, and is in discussion with others to create such infrastructure. One of the main capital requirements to set up charging infrastructure is the availability of ‘land’, which as of now is provided free of cost by most municipal bodies or firms for public chargers to EESL. Currently, many automobile companies and other private players, including standalone charging infrastructure developers, are also installing these facilities. Furthermore, EESL plans to ramp up installation of smart meters in the country. According to Sud, installation of smart meters have brought benefits to states and UTs like Uttar Pradesh, Haryana, Delhi and Bihar. “We are actively in discussion with new as well as states where the programme is currently ongoing. However, we are still awaiting a concrete response from these states.” At present, EESL’s Smart Meter National Programme (SMNP) is working to eventually replace 25 crore conventional meters with smart meters across India. This is expected to improve the billing efficiencies of Discoms and reduce their cost incurred on manual meter reading through a web-based monitoring system.
Source: ET Auto
show less
Facelift for IOC pumps to catch ’em young, make room for EV charging
IndianOil, the country’s largest fuel retailer, is giving its outlets a multi-crore-rupees facelift to attract gen-next consumers and make room for new-age alternatives
read more
such as charging or battery swap for EVs (electric vehicle) and natural gas, company executives said. The move is part of company chairman SM Vaidya’s vision of retaining the company’s market leadership through the energy transition by turning traditional petrol pumps into energy plazas with an assortment of cleaner, greener and affordable alternative fuels. “The revamp creates a distinct and attractive identity for consumers, while freeing up space – wherever it is possible – for other offerings. The idea is that each pump will offer more than one (petrol/diesel) mobility solution,” Shyam Bohra, executive director heading the Delhi state office, told TOI.
Source: ET Auto
show less
Karnataka govt eyes green rewards from pricey electric push
The state government will also provide Rs 88 lakh in subsidy — Rs 55 lakh Centre’s share and Rs 33 lakh Karnataka’s — for each electric bus. As a money-saving measure,
read more
the state government has included a clause capping yearly increment on the lease to 1 percent as against standard 10 percent. The state government is pursuing an expensive green plan involving electric buses and autos as part of its long-term efforts to reduce pollution levels. Karnataka has already secured the Centre’s approval to lease 390 e-buses for a long period. Accordingly, the transport department has finalised a plan to run 90 small buses as feeder services to Metro rail. It will lease 300 full-sized e-buses under the Centre’s ‘FAME II’ scheme and provide them to Bangalore Metropolitan Transport Corporation (BMTC). FAME stands for faster adoption and manufacturing of hybrid and electric vehicles. The use of e-buses may cost more in the short run. Under the lease model for the feeder services, a private agency will get a 15-year contract to supply 90 buses with drivers. Conductors will be hired by the state government.
Source: ET Auto
show less
Essar eyes hydrogen economy with GBP 750 million hub in UK
The Essar group is eyeing a pie of the emerging multi-billion-dollar green economy by setting up a ‘hydrogen hub’ in the UK at an investment of GBP 750 million (about a $1 billion)
read more
as the country decarbonises the economy in the post-Brexit era. The group’s UK arm, Essar Oil, has tied up with Progressive Energy, an English company specialising in low-carbon energy projects, for setting up the hub at its Stanlow Refinery at Ellesmere Port in Chester. Seen in the backdrop of the group’s $13-billion sale of its giant refinery in Gujarat to a consortium led by Russian major Rosneft in 2017, the hydrogen move makes it a first mover in an energy segment that is touted as the future of mobility solution. A company statement said the hydrogen hub will help provide Essar Oil with low-carbon hydrogen to decarbonise its energy demand in addition to creating a hydrogen economy across northwest England and northeast Wales. The hub will initially produce 3 terawatt-hours (TWh) of low carbon hydrogen each year, beginning 2025. This will be followed by another facility of 6 TWh to raise the total capacity to over 9 TWh of hydrogen per annum, or energy used for heating across the whole of Liverpool. Natural gas and fuel gases from the refinery will be converted into low-carbon hydrogen, with carbon dioxide safely captured and stored offshore in sub-surface reservoirs in Liverpool Bay. Follow-on capacity growth is planned to reach 80% of the UK government’s new target of 5 GW (gigawatt) of low-carbon hydrogen for power, transport, industry and homes by 2030. The hydrogen production hub will deliver clean energy to industry in the HyNet ‘low-carbon cluster’ as well as to fuel buses, trains and freight transports, to heat our homes, and to generate electricity when the sun is not shining or the wind blowing, the statement said.
show less
Gas/ Pipelines/ Company News
PM dedicates Kochi – Mangaluru Natural Gas Pipeline to the nation
Prime Minister Shri Narendra Modi dedicated Kochi – Mangaluru Natural Gas Pipeline to the Nation through a video conference today.
read more
The event marks an important milestone towards the creation of ‘One Nation One Gas Grid’. Governors and Chief Ministers of Karnataka and Kerala, along with Union Minister for Petroleum and Natural Gas were also present on the occasion. The Prime Minister said since 2014, the Government has brought in various reforms across the Oil and Gas sector covering exploration and production, natural gas, marketing and distribution. He announced that the Government plans to achieve ‘One Nation One Gas Grid’ and to shift to a gas-based economy as this gas has several environmental benefits. He said the Government is taking policy initiatives to increase the share of natural gas in India’s energy basket from 6 Percent to 15 Percent. “Dedication of the Kochi-Mangaluru natural gas pipeline of GAIL is part of our journey to move towards One Nation One Gas Grid. Clean energy is important for a better future. This pipeline will help improve clean energy access” said the Prime Minister .
Source: PIB
show less
GAIL to consider share buyback, dividend on January 15
GAIL (India) Ltd, the nation’s largest gas distribution firm, will on Friday (Jan 15) consider buyback of shares with a view to returning surplus cash to shareholders,
read more
the biggest being the Government of India. In a stock exchange filing, the company said its board will meet on January 15 to consider share buyback as also payment of interim dividend for the fiscal year ending March 2021. It did not give details. The government has asked at least eight state-run companies to consider share buybacks as it scours for ways of raising funds to rein in its fiscal deficit. The firms asked to consider share buybacks include miner Coal India, power utility NTPC, and minerals producer NMDC. A buyback, also known as a share repurchase, is when a company buys its own outstanding shares to reduce the number of shares available in the open market. Companies buy back shares for a number of reasons, such as to increase the value of remaining shares available by reducing the supply or to return surplus cash to shareholders. The government wants public sector undertakings to either meet their targets for capital expenditure or “reward the shareholder in the form of a dividend” or share buyback. The government, which holds 52.1 per cent of GAIL, is likely to participate in the GAIL buyback just as it did in the case of NTPC, Engineers India Ltd, RITES and KIOCL. Finance Minister Nirmala Sitharaman had in her budget for 2020-21 set a target of raising Rs 2.1 lakh crore from privatisations and sale of minority stakes in state-owned companies. The share buyback, as well as the dividend, is counted as part of this target. According to the Department of Investment and Public Asset Management (DIPAM), the government has so far raised Rs 28,298.26 crore from disinvestment proceeds. This includes Rs 14,453.77 crore received as dividend from state-owned firms. The remaining 13,844.49 crore proceeds include Rs 1065.37 crore from selling shares in NTPC share buyback. The government is likely to miss its disinvestment target by a wide margin and the fiscal deficit is not likely to be anywhere near the target of 3.5 per cent of the GDP in 2020-21 (April 2020 to March 2021). While privatisation of firms such as Bharat Petroleum Corporation Ltd (BPCL) and Air India Ltd has been pushed into next fiscal due to COVID-19-related delays, tax collections have been hit hard as restrictions imposed to curb coronavirus dented incomes all around.
show less
Gas-based economy crucial for Atmanirbhar Bharat, says PM Modi
Prime Minister Narendra Modi on Tuesday (Jan 5) said that a gas-based economy is crucial for Atmanirbhar Bharat and work is being done in the direction of “One Nation, One Gas Grid”.
read more
Prime Minister Narendra Modi also inaugurated the Kochi-Mangaluru natural gas pipeline, via video conferencing today. “It is an honour to dedicate the 450-km pipeline to the nation. This is an important day for India, especially for people of Karnataka and Kerala. India is focusing on gas-based economy and lot of work is being done on ‘One Nation, One Gas Grid’. The gas-based economy is also crucial for Atmanirbhar Bharat,” said PM Modi at the inauguration. “It is an important day for India, especially for the people of Karnataka and Kerala. These two states are being connected via a natural gas pipeline. I congratulate everyone as the pipeline is a futuristic step towards a clean energy ecosystem,” he added. Governors and Chief Ministers of Karnataka and Kerala, along with Union Minister for Petroleum and Natural Gas were also present during the event. Kochi-Mangaluru Natural Gas Pipeline will have a positive impact on economic growth, the Prime Minister stated. “It is an example that if we work together, nothing is impossible,” he added. “The Kochi-Mangaluru pipeline is an example that if everyone works together by prioritising development, no goal is unachievable. This pipeline is going to prove very important in accelerating the development of both the states,” said PM Modi. “It is not just a pipeline but it will be a major driver of development in both states,” he added. The Kochi-Mangaluru pipeline will increase the ease of living for millions of people in both states. This pipeline will reduce the expenses of the poor, middle class and entrepreneurs of both the states, the Prime Minister stated. “The Kochi-Mangaluru pipeline will be the medium of gas distribution system in cities. It will become a medium for developing CNG-based transport systems in many cities,” he added. According to the PMO, the 450 km long pipeline has been built by GAIL (India) Ltd. It has a transportation capacity of 12 Million Metric Standard Cubic Metres per day and will carry natural gas from the Liquefied Natural Gas (LNG) Regasification Terminal at Kochi (Kerala) to Mangaluru (Dakshina Kannada district, Karnataka), while passing through Ernakulam, Thrissur, Palakkad, Malappuram, Kozhikode, Kannur and Kasaragod districts. It will also supply Natural Gas to commercial and industrial units across the districts along the pipeline. Consumption of cleaner fuel will help in improving air quality by curbing air pollution.
show less
Helped by KG-D6, India’s production crosses pre-COVID levels
India’s natural gas production crossed pre-Covid levels this week, helped by KG-D6 field of Reliance Industries Ltd and its partner BP Plc starting production.
read more
‘Domestic gas production of India crosses pre-Covid level (77.8 MMSCMD on 01 March 2020) at 81.1 MMSCMD on 27 December 2020,’ the Directorate General of Hydrocarbons (DGH) said in a tweet. DGH, the government custodian of upstream oil and gas production in the country, said production levels are likely to be higher in 2021 calendar year. India had produced 2,331 MMSCM of gas during November. This was 9.1% lower than the same month last year. The fall in output was largely due to lower production by fields operated by the private sector, according to the Oil Ministry’s Petroleum Planning and Analysis Cell (PPAC). While state-owned Oil and Natural Gas Corporation (ONGC) and Oil India Ltd (OIL) continue to produce at almost the same levels as of November, the total gas production has risen because of R-Series fields in the KG-D6 block commencing production, a DGH official said. Reliance-BP had on December 18 announced the start of natural gas production from Asia’s deepest project, when they put onstream the ultra-deepwater R-Cluster, the first of the three deep sea projects the two companies are developing in the eastern offshore block. R-Cluster is producing about 5 MMSCMD and will touch peak production 12.9 MMSCMD sometime next fiscal. Satellites fields in the same KG-D6 block, which are supposed to begin output from the third quarter of the 2021 calendar year, would produce a maximum of 7 MMSCMD. MJ field will start production in the third quarter of 2022 and will have a peak output of 12 MMSCMD. According to PPAC, India imported 12% more gas (in LNG form) at 2,893 MMSCM (96.4 MMSCMD) in November. Fertilizer plants (33%), power generating units (18%), city gas distribution projects (18%) and refineries (13%) are the biggest consumers of gas. In another tweet, DGH said gas makes up for 6.23% of all energy consumed in the country. The government wants the share of natural gas in the energy basket to be raised to 15% by 2030. Achieving that share would mean India’s consumption of gas would have to rise to 500 MMSCMD by 2030 from 150 MMSCMD now, DGH said. The government wants to promote the use of natural gas as it is cheaper, environment friendly and cuts carbon footprint.
Source: PTI/Indian Oil & Gas
show less
Gas pipeline to benefit Karnataka’s coastal districts: CM
The 444-km Kochi-Mangaluru natural gas pipeline, which Prime Minister Narendra Modi commissioned on Tuesday (Jan5), would benefit industrial, commercial entities and households
read more
in Karnataka‘s coastal districts of Dakshina Kannada and Udupi, Chief Minister B.S. Yediyurappa said. “The pipeline will benefit hundreds of households, commercial establishments and industries in Dakshina Kannada and Udupi districts, as natural gas is economic, eco-friendly and a clean fuel for use,” said Yediyurappa in a statement. The Chief Minister participated in the virtual event earlier in the day through video-conferencing from his home-office. Terming the pipeline dedication to the nation historical, he said the natural gas would cater to the growing demand for eco-friendly fuel by power and fertiliser plants across the state, spur industrial growth, and create hundreds of jobs. Though the Kochi-Mangaluru pipeline project was launched in 2009, protests and land acquisition for laying the pipes in Kerala delayed it, escalating its cost from the initial cost of Rs 2,915 crore to Rs 5,750 crore. “The long pipeline supplies gas in liquid form from the Petronet Liquified Natural Gas (LNG) plant at Kochi where the imported LNG is stored and regassified,” Gail official Jyoti Kumar told IANS. The pipeline has been supplying the Mangalore Chemicals and Fertilisers (MCF) at Panambur in the north of Mangaluru since December to produce urea, replacing naptha as feedstock. “The pipeline will soon supply the gas to Mangalore Refinery Petrochemicals Ltd (MRPL) and state-run ONGC’s Mangalore Petrochemicals Ltd (OMPL),” said Kumar. Noting that Karnataka would equally benefit from the inter-state project with uninterrupted supply of eco-friendly and affordable fuel in the form of piped natural gas (PNG) and compressed natural gas (CNG), Kumar said a parallel pipeline from Trissur and Palakkad in north Kerala to Bengaluru via Coimbatore and Krishnagiri in Tamil Nadu would cater to all users in the state.
show less
OPINION: Oil & Gas sector to post robust volume growth in FY22; Expect more tax incentives in budget
Higher crude oil realisations, stable returns from pipelines, healthy demand growth, dominant market position, strong financial flexibility and headroom in key credit metrics
read more
will result in stable credit profile of the players’ in the oil and gas sector. The Covid-19 pandemic and subsequent lockdowns coupled with economic slowdown had severely impacted the demand for petroleum oil products which are now on a firm recovery path. The demand for these products is expected to register robust growth of 8-10% over FY2021 levels. The demand for Aviation Turbine Fuel (ATF) will however, remain a key laggard in view of flight operations and air travel restrictions. Its demand is expected to remain significantly below pre-Covid levels in FY2022. Better days ahead are also expected for refineries and their capacity utilisations will be healthy, though gross refining margins will remain subdued owing to global supply overhang amid demand recovering from the pandemic.
As for the demand for natural gas, the same is expected to expand by ~10% in FY2022 driven by commencement of operations by several fertilizer plants, increase in city gas distribution (CGD) operations as several GAs complete their initil infrastructure building phase and new customers getting connected to the gas grid post the expansion in the trunk pipeline network. More importantly, after years of decline in domestic gas output, production is set to rise significantly owing to commencement of production from the KG basin fields of ONGC and RIL-BP. On the flip side, despite production increases, domestic gas prices as per the modified Rangarajan formula remain extremely low ($1.79/mmbtu for H2 FY2021) and a loss-making proposition for production from even benign geologies. Regarding upstream producers, their margins are estimated to rise significantly in FY2022 over FY2021 due to higher average crude oil prices. The gas utilities sector too will witness healthy margins in the next fiscal owing to regulatory protection or dominant market position of most entities in the sector. Some of the new pipelines though are expected to be sub-optimally utilised in the initial years owing to lack of adequate volumes. The Unified Tariff regime implemented by the PNGRB while revenue neutral for the natural gas pipeline operators reduces the tariff paid by far off consumers. Players are expected to cover the lost ground due to restrictions and lockdowns in FY2021 and go for healthy capex and investments in FY2022. However, debt levels are expected to decline in FY2022 to around Rs. 4.9 lakh crore by FY2022 end from Rs 5.8 lakh crore at FY2021 end. The credit metrics (interest coverage – 7.3x and debt/OPBDITA – 2.0x) too are likely to improve in coming year due to a decline in debt levels and improvement in profitability. Higher crude oil realisations, stable returns from pipelines, healthy demand growth, dominant market position, strong financial flexibility and headroom in key credit metrics will result in stable credit profile of the players’ in the oil and gas sector. Coming to industry’s budget wish list, given the weak outlook for international gas prices, players expect a provision of a floor for domestic gas prices. Additionally, they want 20% ad-valorem cess on crude oil production to be reduced as it curtails realisations and cash accruals of upstream companies in a high crude oil price regime. Also, to promote the use of natural gas as fuel, the incumbents want Liquified Natural Gas imports be exempted from customs duty as crude attracts nil duty while LNG demands 2.5% duty. Further, due to crude oil, natural gas, HSD, MS and ATF being out of the ambit of GST, the oil industry is faced with stranded taxes and burden of compliance with a dual taxation regime. Accordingly, they expect crude oil, natural gas and petroleum products to be brought under GST to enable free flow of credits and avoid stranded taxes.
show less
Policy Matters/ Gas Pricing/Others
India now looks to build strategic gas reserve
After oil, India may now build strategic reserve of natural gas to further strengthen the country’s energy security and shield itself from supply disruptions and
read more
frequent price fluctuations coming from perennial political risks in the prime energy supplying countries in the Middle East and Africa. The reserve will also help the country cope with demand spike and price rise in the event of border skirmishes and war like situations that played out recently with China. Sources privy to the development said a conductive global energy market where oil and gas prices are stable had given fresh push for building strategic gas reserves in the country. An announcement in this regard may be made as early as in the Budget 2021-22. The country had already taken advantage of low oil prices in the first quarter of FY21 (April-June) to fill its existing strategic oil reserve, making big savings. And the government now feels that it’s time for similar infrastructure for gas. Spot LNG prices are currently at around $6 per MMBtu, though a little higher than early last year, still attractively priced to push the initiative on strategic reserve. For building strategic gas reserve, the plan is to inject depleted gas fields with fuel or develop storage in large salt caverns.
The plan for strategic gas reserve emerges from an official study that suggests that consumption of natural gas would grow two-fold by 2030, resulting in large gap between demand and domestic production. This would increase imports of gas and take them closer to levels of oil imports, where the country has to depend on overseas supplies to meet over 85% of its domestic consumption demand. At present, almost half of the domestic consumption of natural gas is met from imports. With the government keen on building a cleaner gas based economy, consumption is set to rise, pushing up imports of LNG. The suggestion for building strategic gas reserve has also come from Niti Aayog that is finalising a national Energy Policy. An earlier draft policy has made a case for a gas storage requirement, if consumers have to be assured of un-interrupted supplies. It is expected that a natural gas reserve would rely more on the private sector to build gas storage capacity. In this regard, depleted oil and gas fields of national oil companies (NoCs) will be offered on competitive basis to interested gas marketeers, both for strategic and commercial storages. A policy in this regard may be formulated by the Oil Ministry. Also, other options like salt caverns and aquifers would be explored to build the strategic gas reserve. Once the storage is identified, bids would be invited to use the storage. Overseas gas producing companies may also be offered stake in such a storage as is being done in the case of strategic oil reserve. The storage facility may be chosen close to the pipeline infrastructure so that the fuel can be easily used in times of need. “The strategic gas reserve would work well for the country as it would ensure uninterrupted fuel supply to key infrastructure projects. However, the cost structure for storage should be such that fuel price for customers is kept low. Close to 25,000 MW of gas based power projects are either under stress or functioning at very low capacity due to shortage of gas,” said a power sector analyst, not willing to be named. The idea of a strategic gas reserve is not new to India. Several heavy energy consuming countries have build storage system to ensure supply security. The US has almost a third of global gas storage while Russia, Ukraine, Canada and Germany together account for another big chunk. China also has gas storage facilities.
show less
Early inclusion of natural gas into GST fold likely
With states coming on board over GST compensation issue, the Centre is gearing up to get their consent over inclusion of petroleum products under the new indirect tax fold.
read more
Sources privy to the development said that based on Petroleum Ministry’s suggestion, the Centre may take up with GST Council the issue of bringing natural gas under the Goods and Services Tax (GST) regime to begin with before entire oil and gas sector is brought under it. Though the dates for next GST Council meeting is yet to be finalised, finmin sources said its due and may take place anytime after the budget presentation. With revenue position already strained due to Covid-19 outbreak, states have been reluctant to consider bringing high revenue generating petroleum products under GST fold. But the dual tax treatment is affecting the sector and hampering government’s plan to develop a gas-based economy in the country. Sources said that with this in mind, a phased approach to inclusion of petroleum products under GST may be adopted with natural gas falling first in the queue. Inclusion of gas would not pose a challenge for the GST Council as it is largely an industrial product where a switchover to the new taxation would not be difficult. The revenue implication for the states is also low in the case of this switchover. The gross GST collections touched a record high of over Rs 1.15 lakh crore in December – the highest since the implementation of the regime. As part of its efforts to build concensus with the states on GST launch, the previous Narendra Modi government had decided to exclude five petroleum products — crude oil, petrol, diesel, ATF and natural gas — from the list of items placed under GST, but included products such as cooking gas, kerosene and naphtha in the new regime. This created a messy situation for the companies, as they were required to comply with both the old and new tax regimes. Moreover, tax credits are not transferable between the two systems. GST levy on natural gas would help state-run oil companies such as ONGC, IOCL, BPCL and HPCL to save tax burden to the tune of Rs 25,000 crore as they would get credit on taxes paid for inputs and services. Tax credits are not transferable between the two different taxation systems. Gas sales, including CNG and piped gas supplies, attract VAT ranging from 5-12 per cent.
https://energy.economictimes.indiatimes.com/news/oil-and-gas/early-inclusion-of-natural-gas-into-gst-fold-likely/80131162
show less
Share of natural gas in energy basket will be more than doubled: PM Modi
Enunciating his energy roadmap, Prime Minister Narendra Modi on Tuesday (Jan 5) said the share of natural gas in India’s energy basket
read more
will be more than doubled, energy sources diversified and the nation will be connected with one gas pipeline grid to help bring affordable fuel to people and industry. Inaugurating a 450-km natural gas pipeline between Kochi in Kerala to Mangaluru in Karnataka, he said India under his government is seeing unprecedented work on highways, railway, metro, air, water, digital and gas connectivity which will aid economic development. The government has an “integrated approach to energy planning. Our energy agenda is all-inclusive,” he said. While on the one hand, the natural gas pipeline network is being doubled to about 32,000 km in 5-6 years, on the other, work on the world’s biggest hybrid renewable plant combining wind and solar power has started in Gujarat. Also, the emphasis is being laid on manufacturing biofuels as well as electric mobility, he said. These measures will help India move away from being highly dependent on polluting coal and liquid fuels for meeting its energy needs. As much as 58% of all energy consumed in the country currently comes from coal while petroleum and other liquids make up for 26% of the energy basket. Share of natural gas is just 6% while that of renewables is less than 2%. Modi said the share of natural gas, which is cleaner and can be transported through pipelines thereby cutting vehicular movements needed for other fuels, is targeted to be raised to 15% by 2030. By the same time, petrol will be doped with as much as 20% of ethanol extracted from sugarcane and other agro products, he said.
show less
Towards efficient pricing of natural gas
Last month’s regulatory green signal for Indian Gas Exchange (IGX), the first national-level gas trading platform, is welcome reform that would shore up transparent price discovery in natural gas,
read more
the cleanest and most efficient fossil fuel. IGX would provide more efficient price signals for market participants and, hence, facilitate growth and attendant investments in the gas value chain. India aims to boost the share of gas in its overall commercial energy mix, from just over 6% now to 15% by 2030. Recently, Petroleum Minister Dharmendra Pradhan announced $60 billion worth of investment in gas infrastructure by 2024, to step up the gas market nationally. An online platform for imported liquefied natural gas (LNG), IGX would enable buyers and sellers to trade on the spot as well as the forward market, with physical hubs at Dahej and Hazira in Gujarat, and Kakinada in Andhra Pradesh. Currently, about half of domestic gas usage constitutes imported LNG. However, LNG supplies tend to be via long-term contracts, which implies price rigidities and heightened risks that hamper market development. Even short-term LNG contracts tend to be for 6-12 months. Now, IGX would provide day-ahead and weekly gas price contracts, to bring about more efficient price discovery in a fragmented and quite opaque market. Domestically produced gas is price-regulated and benchmarked with those in the mature gas markets abroad. In fact, IGX price signals can well reveal the extent to which domestic gas is mispriced. Efficient prices are surely required to rev up investments both upstream and downstream. It would also incentivise coal gasification. In tandem, we also need to rationalise gas transport tariffs for an efficient national gas market.
https://economictimes.indiatimes.com/blogs/et-editorials/towards-efficient-pricing-of-natural-gas/
show less
Reliance, BP commit to pay for any shortfall in KG-D6 production to buyers
Reliance Industries Ltd and its partner BP Plc of UK have committed to pay in cash for any natural gas volumes they are unable to deliver to customers from the next wave of discoveries
read more
in the eastern offshore KG-D6 block. According to draft gas sales and purchase agreement (GSPA) Reliance and BP have shared along with price discovery bids for incremental gas from the R-Cluster fields in KG-D6 block, the sellers will reimburse buyer money equivalent to gas sourced from alternate source to make up for any volumes they are unable to deliver. The buyer on his part will be obliged to offtake the committed gas volumes or pay for it (take or pay). The volumes not taken but paid for can be taken in subsequent quarters, the GSPA said. These ship or pay and take or pay obligations will be waived in the event of force majeure events such as any act of God like earthquake and floods, fire, epidemic, acts of war, strike and lockouts, delays due to government/ regulatory actions and court orders. Also, “loss, failure, impediment, restriction in output or deliverability of reservoirs in the gas fields” will be a force majeure event, it said. Reliance had a decade back signed up to sell 60 MMSCMD of gas from the first set of gas fields in the KG-D6 block, but the output rapidly declined due to reservoir issues, leaving users such as power plants stranded. The company had not reimbursed buyers for the shortfall, calling it an act beyond its control. The government had, however, levied penalties on it for failure to produce the committed volumes – an act that the company has challenged through an arbitration. The outcome of the arbitration is pending. While those initial fields have ceased to produce, Reliance-BP last month started output from the R-Cluster fields. They in November 2019 sold the first 5 MMSCMD from the R-Cluster field at a rate benchmarked against Brent crude oil, the duo has now invited bids for selling incremental 7.5 MMSCMD of incremental output that is likely to be available from February benchmarked to a gas index, according to a notice inviting offers. Reliance and BP have sought rates equivalent to JKM or Japan/Korea Liquefied Natural Gas Import Price. Bidders have been asked to “quote the variable denoted as ‘V’ in USD per million British thermal units (MMBtu) terms”.
“The gas price (in USD/MMBtu (GCV)) shall be = JKM + V,” the notice said.
GCV stands for gross calorific value.
‘V’ can be a positive, zero or negative number and up to two decimal places, but it cannot be less than (-) 0.30 USD/MMBtu, it said. This means users will have to quote -0.30 or higher value of ‘V’. At the current JKM price, KG-D6 gas would cost USD 6 per MMBtu at the base or cut off price. This is higher than USD 4.2 to 4.4 per MMBtu rate at which the first 5 MMSCMD are sold at Brent crude oil benchmark. Brent crude oil is presently in the range of USD 50 to 51 per barrel. However, the rate discovered will be subject to the cap the government places on gas price. The cap for six months to March 31, 2021, is USD 4.06 per MMBtu. Reliance-BP is investing USD 5 billion in bringing to production three deepwater gas projects in the Block KG-D6 R-Cluster, Satellites Cluster, and MJ — which together are expected to meet about 15 per cent of India’s gas demand by 2023. R-Cluster will have a peak output of 12.9 MMSCMD while satellites, which are supposed to begin output from the third quarter of the 2021 calendar year, would produce a maximum of 7 MMSCMD. MJ field will start production in the third quarter of 2022 and will have a peak output of 12MMSCMD. Reliance has so far made 19 gas discoveries in the KG-D6 block. Of these, D-1 and D-3 — the largest among the lot — were brought into production from April 2009 and MA, the only oilfield in the block was put to production in September 2008.
https://energy.economictimes.indiatimes.com/news/oil-and-gas/reliance-bp-commit-to-pay-for-any-shortfall-in-kg-d6-production-to-buyers/80081349
show less
Nod to independent operators of gas pipelines soon: Petroleum Secy
The government proposes to appoint independent operators of gas pipelines in the country to operationalise the common carrier principle that will allow
read more
all consumers and producers access to fuel transport infrastructure. Petroleum Secretary Tarun Kapoor told IANS that the ministry was taking approvals for segregating the existing gas pipeline infrastructure to identify the portion of infrastructure that will need to support common carriers. “We are getting all the approvals. Certain things have to go to the cabinet within two to three months. We will do it,” Kapoor told IANS in an interaction. As per the plan, a transport system operator (TSO) would be put in place to manage the common carrier part of the gas pipeline infrastructure. The TSO will be entrusted with the task of booking pipeline capacity for transport of gas from producers to the consumers on payment of fee to be decided by the regulator. The identification of a common part of gas pipeline may involve bifurcation of operations of gas utility GAIL India into gas transportation and marketing. The gas transportation arm may then be put under an independent TSO. The current work in the Petroleum Ministry also involves evaluating various ownership models that may be put in place to streamline gas transport operations in the country. Suggestions have also come to involve investors in transportation operations of GAIL, making it independent of the government and PSU oversight. GAIL is the country’s biggest natural gas marketing and trading company and owns more than two-thirds of the country’s over 16,000-km long pipeline network, giving it a stranglehold on the market. Users of natural gas have often complained about not getting access to GAIL’s 11,500-km pipeline network that can support other operations as well. As part of development of a gas-based economy, the government proposes to increase the share of natural gas in the country’s energy basket to 15 per cent by 2030, from the current around 6 per cent. Development and easy access to gas infrastructure would play a key role achieving the target.
show less
LNG Development and Shipping
OPINION: 1,000 LNG stations: A dream too big?
On November 19, 2020, the Union Minister for Petroleum and Natural Gas, Dharmendra Pradhan, laid the foundation for India’s first 50 liquefied natural gas (LNG) fuel stations.
read more
Looking back 20 years ago, Delhi considered the adoption of CNG as a fuel, even in light of concerns related to performance and additional adoption costs. The past shows that policy mandates—including environment compensation charges—had a greater impact on CNG adoption in Delhi/NCR in 2013-2016.
How trucking industry can adopt LNG vehicles
Although large-scale infrastructure planning for the initial 50 LNG fuel stations is moving ahead, the native development of LNG trucks by original equipment manufacturers (OEMs) lags behind and is also competing with Bharat Stage VI (BSVI) and electric vehicles (EVs). Only four LNG-based passenger vehicles were registered in India in 2019 and 2020 [2]. Since LNG-fueled vehicles are expensive (the additional cost is recovered through fuel cost savings), a minimum utilization assurance is needed. This is a key ask by fleet operators who are already taking technology and other associated risks with the adoption of a new vehicle type. In general, since fleet operators look at a payback of four years for a diesel truck to ensure recovery of the additional costs, the utilization assurance should be around 90,000 kilometers (for a 28-ton weight carrying capacity vehicle). What we see in the trucking industry is not supporting this economic hypothesis. Some fleet operators shared that they are only getting 60,000-70,000 kilometers per year for vehicles expected to run more than 90,000 kilometers. Figure below shows that year-over-year sales growth of heavy goods vehicles has been on the decline since 2018. Then the impact from COVID-19 led to extremely low utilization and sales of vehicles in 2020, with agriculture and essential services being the remaining source of demand.
Measures to create sustainable demand
We must take meaningful measures to create sustainable demand and meet the government’s goal of developing 1,000 LNG stations in the next three years.
read more
show less
Providing subsidies to maintain the price differential between diesel and LNG trucks is not a sustainable solution and, in this case, to maintain the existing tax differential between diesel and LNG retail price is a minimum ask by every LNG retail player. However, support from government owned organizations (like oil marketing companies) can take lead for conversion to LNG based trucks and even using LNG-fueled vehicles to deliver LNG to stations may present more viable options.
a) Using LNG heavy duty vehicles by Oil Marketing Companies (OMCs): An initial step could be that government owned OMCs start utilizing LNG vehicles as a part of their fleet for transporting petroleum products. Adopting a model similar to EV adoption by Energy Efficiency Services Limited (EESL) where more than 1,514 e-cars have been deployed or are under deployment for government organizations—may offer some insights for model adoption in the trucking industry. LNG trucks can be either leased or outright purchased to replace the existing diesel vehicles leased by government organizations [3]. Oil marketing companies and other public sector undertakings have trucking requirements that can be mapped to the initial set of planned 50 LNG stations.
b) Use of LNG as a fuel in vehicles transporting LNG: Another area which makes sense is to initiate the use of LNG as a transportation fuel in trucks that transport LNG to CGDs or LNG retail outlets. With more than 50 LNG retail stations planned and multiple CGDs looking at hub and spoke models, the accessibility and availability of fuel for these categories of vehicles should not be a challenge. Exploring these models and more robust policies that promote the adoption of LNG vehicles over diesel will set the wheels of market establishment in motion.
Conclusion
The Government of India is leaving no stone unturned to take measures that increase natural gas consumption in India. Approving all critical regulations towards the use of LNG as a transport fuel, enabling market freedom towards the establishment of LNG retail outlets by any entity, and now setting up 50 LNG stations are all concerted efforts already in place in a relatively short time frame. But we must keep in mind that the success of these initial 50 LNG stations is the foundation for the longer-term plan of 1,000 LNG stations in India. With a current focus on implementing measures to generate demand, we must develop water- tight, economically viable concepts today to achieve the longer-term goal. Ultimately, engagement from all stakeholders, including OEMs, financiers, fleet operators, and end-users, will be required to make this vision a reality.
References:
1. https://www.downtoearth.org.in/coverage/cng-bus-market-16119
2. Source: VahanParivahan database
3. https://www.eeslindia.org/evandevci.html
[This piece was authored by Ankit Gupta, Managing Consultant – India Oil & Gas, and Abhishek Sahoo, Energy Researcher – Oil & Gas, ICF]
show less
Indian Oil seeks LNG cargo for delivery in February
Indian Oil Corp is seeking a liquefied natural gas (LNG) cargo for delivery in February, two industry sources said on Monday (Jan 11).
read more
The refiner is seeking the cargo for delivery on Feb. 13 on a delivered ex-ship (DES) basis in a tender that closes on Jan. 13, they said. IOC last bought a cargo for Feb. 21 delivery at above $13 per MMBtu and did not award another cargo for Feb. 8 delivery, two other sources said.
Source: Reuters/Indian Oil & Gas
show less
IOC cancels LNG import tender due to higher prices – trade sources
Indian Oil Corp has cancelled its tender to import liquefied natural gas (LNG) for delivery in mid February due to higher prices, two trade sources familiar with the matter said.
read more
One the of sources said offers were made at current spot rate of about $30/MMBtu, which is “unaffordable” to Indian customers.
show less
Natural Gas / Transnational Pipelines/ Others
China’s natural gas output to surpass oil around 2025 -CNPC expert
China‘s natural gas output is expected to surpass crude oil production around 2025, China National Petroleum Corp (CNPC) oil and gas exploration expert Zou Caineng said on Friday (Jan 1).
read more
Domestic natural gas output from CNPC, China’s largest producer, topped 130 billion cubic metres (bcm) in 2020, up 11.6 bcm from the previous year, the company said in a statement on its website. For the first time, natural gas output surpassed CNPC’s domestic crude oil output in terms of oil equivalent, it said. Zou, who is also a member of the Chinese Academy of Sciences, expects China’s natural gas output to increase and oil production to remain stable, he was quoted as saying by CNPC.
show less
UAE’s SNOC announces start of gas production at Mahani field in Sharjah
UAE’s Sharjah National Oil Corporation (SNOC) and partner ENI announced on Sunday the start of gas production at the recently discovered Mahani field in Sharjah,
read more
UAE state news agency WAM reported. SNOC and Italian energy giant Eni announced the discovery of Mahani last year, a new find of natural gas and condensate onshore in Sharjah, and the first in the emirate since the early 1980s. Production would start at the Mahani-1 gas well in the Mahani field in Area-B in Sharjah, WAM reported. “The announcement comes within one year of the discovery of gas in the Mahani field, which represents the first new onshore discovery in Sharjah in 37 years,” it said. Last March, SNOC said the impact of the coronavirus pandemic would delay the startup of production at its Mahani gas exploration project by up to two months.
show less
Oil little changed as investors await OPEC+ decision
Oil prices were little changed on Tuesday (Dec30) after OPEC and allied producers, including Russia, continued deadlocked talks on February output while fuel demand concerns lingered on amid new COVID-19 lockdowns.
read more
Brent crude futures for March rose 8 cents, or 0.2 per cent, to $51.17 a barrel by 0206 GMT, while U.S. West Texas Intermediate crude for February was at $47.74 a barrel, up 12 cents, or 0.3 per cent. Both contracts fell more than 1 per cent on Monday after the Organization of the Petroleum Exporting Countries and its allies, a group known as OPEC+, failed to agree on February’s oil output levels. Saudi Arabia argued against pumping more because of new lockdowns while Russia led calls for higher production, citing recovering demand. OPEC+ will resume talks on Tuesday. “OPEC+ drama is of course steering the latest oil price downgrade, but the heavier hand is likely the still unknown impact of the new strain on economic activity and travel – both factors that warrant a belated mini-price correction after the winter holidays,” said Louise Dickson, oil markets analyst at Rystad Energy. Rising tensions in the Middle East supported oil prices. Iran‘s Revolutionary Guards Corps on Monday seized a South Korean-flagged tanker in Gulf waters and detained its crew amid tensions between Tehran and Seoul over Iranian funds frozen in South Korean banks due to U.S. sanctions.
show less
U.S. says BP pays $24.4 million but challenges natgas manipulation fine in court
The U.S. Federal Energy Regulatory Commission (FERC) alleged BP violated the Natural Gas Act by manipulating the next-day gas market at Houston Ship
read more
Channel from mid-September through Nov. 30, 2008. Oil major BP PLC paid almost $24.4 million to the U.S. Treasury to cover allegations company traders manipulated natural gas markets in 2008, but is still challenging the fine in court, U.S. energy regulators said in a filing. The U.S. Federal Energy Regulatory Commission (FERC) alleged BP violated the Natural Gas Act by manipulating the next-day gas market at Houston Ship Channel from mid-September through Nov. 30, 2008. FERC said in a filing late Tuesday that BP paid the fine on Dec. 28 but noted the company said it intends to seek review in the U.S. Court of Appeals for the Fifth Circuit. “BP maintains that our natural gas traders did not engage in market manipulation,” said a spokesperson for BP, noting “We will appeal this decision to the Fifth Circuit.” The case dates to actions taken by BP traders to take advantage of market dislocations around the time Hurricane Ike smashed into the Houston area in September 2008. FERC’s Office of Enforcement alleged BP traders made uneconomic physical gas sales to suppress the Houston Ship Channel Gas Daily index and boost the value of BP’s financial position.
show less
Global LNG Development
Freezing temperatures push Asian gas prices to record highs
Spot LNG prices in Asia rise to $28/MMBtu; temperatures expected to become milder soon. Freezing temperatures across Asia and Europe are driving liquefied natural gas (LNG)
read more
prices to record highs and pushing up the cost of shipping the fuel globally as buyers grapple with tight inventories and a shortage of tankers. Demand for super-cooled natural gas has surged in recent years as buyers, particularly China and India, move away from dirtier coal-polluting power plants. Prices had remained relatively low until late 2019, when unexpected cold weather and bottlenecked shipments caused prices to surge. Spot Asian LNG prices are up more than 1,000 per cent since touching a record low below $2 per MMBtu in May during lockdowns to stem the spread of the coronavirus. US natural gas prices hit a six-week high on Tuesday, while the cost to ship LNG from the United States to Asia hit an all-time record, in part due to a logjam in the Panama Canal, where vessels transit from the US Gulf to the Pacific.
“This bottleneck for shipping has an immediate impact on the demand for gas. Storage supplies are low and therefore, demandi s high,” said Toby Dunipace, with shipbroker SSY in a report this week. He said Panama Canal congestion had led to waiting times of seven to 10 days or more for LNG vessels. The effects are being felt in US markets as well, where US natural gas prices hit a six-week high on Tuesday (Jan 12). Global LNG trade has set record highs each year since 2015. Global LNG demand jumped about 10 per cent a year from 2017-2019 mostly due to strong growth in China and India. Analysts at Goldman Sachs said there were 10 US cargo loading cancellations for February. Limited LNG tanker availability may keep spot LNG prices elevated in coming months, traders said. Average daily tanker rates on the US Gulf to Japan route rose to $2,53,270 on Tuesday, highest since earnings were first published in 2019, Baltic Exchange data showed. S&P Global Platts’ Japan-Korea-Marker (JKM), a reference point for Asian spot LNG prices, rose to $28.221 per MMBtu on Monday (Jan 11) for a cargo to be delivered in February. At least one Japanese utility paid over $30 per MMBtu for a cargo for late January delivery, traders said. On Tuesday, commodity trader Trafigura bought a 3.2 trillion British thermal unit (TBtu) cargo for delivery in mid-February from Total Gas and Power Asia at $39.30 per MMBtu, data from Platts showed. This is worth nearly $130 million, about 11% more than a cargo for two million barrels of oil, based on current prices, Reuters calculations show. High Asian LNG prices have dragged the whole natural gas complex higher. Dutch gas prices traded at the TTF hub, the European benchmark, rose to near three-year highs on Tuesday as LNG cargoes were re-routed to Asia and as speculative buying increased. On Tuesday, the month-ahead TTF price hit €28.55 per megawatt hour, or about $7.8/MMBtu, highest since the fourth quarter of 2018. “Supply is super tight in the prompt months and inventory levels are quite low in many places,” a Singapore-based LNG trader said. “As the weather gets mild and supply gradually returns, the situation might improve.” If the cold weather abates, prices may be near a peak as demand for heating fuel diminishes, traders and analysts said. Temperatures are expected to rise to above-average in Tokyo, Beijing, Seoul and Shanghai over the next few weeks, weather data from Refinitiv Eikon showed. Supply also appears to be increasing with Shell resuming cargo loadings from its Prelude floating facility in Australia after it was offline for nearly a year, and with increased loadings from Qatar, Russia and the United States, shiptracking data from Eikon showed. Still, supply issues will cause the LNG market to remain vulnerable to cold snaps through the first quarter, Goldman Sachs said.
show less
More repairs needed at Chevron’s Gorgon plant as LNG prices spike
Chevron has found welding faults in critical equipment in the first production train at its $US54 billion ($69.5 billion) Gorgon LNG plant in Western Australia that are similar to those
read more
that caused an extended shutdown last year at unit two. The faults are likely to keep the first train offline for several weeks, a shutdown that has already contributed to an extreme spike in spot LNG prices over this Northern Hemisphere winter.
One of the three production lines at Chevron’s Gorgon LNG plant on WA’s Barrow Island is now offline.
At least one cargo was reported early this week to have changed hands at more than $US20 per million British thermal units, a tenfold surge in prices since sub-$US2 prices were reported in June.
The freezing mid-winter temperatures and a squeeze on supplies have made trader Trafigura reportedly bid for a cargo at $US26.15/MMBTU for delivery to South Korea in early February, another record high, Houston-based Tellurian said on Friday morning. The faults found in train one at Gorgon have also raised expectations that the similar defective welds are likely to be found in the third train at the 15.6 MMTPA plant on Barrow Island when it is shut down for inspection within the next few months. “Repairs to propane heat exchangers on Gorgon LNG Train 1 are under way following the discovery of weld quality issues during inspections,” a Chevron spokesman in Perth said. “Appropriate safety measures are in place, with insights from Train 2 repairs contributing to a more effective inspection and repair program.”
The damaged welds are in propane kettles used in the liquefaction process in the 5.2 MMTPA production trains on Barrow Island. The second train at Gorgon was brought back online in late November following the repairs, after originally being shut down for routine inspection and maintenance work in May. All the propane kettles in the three production trains were made by the same company in South Korea. WA’s Department of Mines, Industry Regulation and Safety signalled it was keeping a close eye on the situation at the plant. “DMIRS is in regular contact with Chevron and remains satisfied with the safety measures in place at its Gorgon LNG plant,” said Steve Emery, director of dangerous goods and petroleum safety. “The department is also satisfied with Chevron’s progress on its ongoing inspection and repair program.” Chevron said it was continuing deliveries of LNG from the rest of the Gorgon plant. “LNG Trains 2 and 3 remain operational and we continue to deliver LNG to customers and gas to the Western Australian domestic market,” the Perth-based spokesman said. “Following completion of repairs on Train 1, Train 3 will undergo a similar process. “We remain aligned with the regulator on maintaining the safety of our workforce and operating facilities.” Credit Suisse energy analyst Saul Kavonic said the surge in LNG prices highlighted the risks of spikes in a market that is seen as oversupplied on average throughout 2021. “Given limited supply flexibility, supply outage risks and large demand swings, when the LNG market risk skews short it can send prices skyrocketing for short periods,” he said.
show less
LNG problems and the road ahead – Pakistan
EDITORIAL: It has become painfully clear that no matter how much the government and the opposition try to present their respective sides of the story about all the problems
read more
with the Liquefied Natural Gas (LNG) sale-purchase mechanism, the debate only gets murkier and rendered much more difficult for people to decide whether they are being fleeced or facilitated. It is really quite remarkable that representatives of the ruling Pakistan Tehreek-e-Insaf (PTI) and its predecessor in office Pakistani Muslim League-Nawaz (PML-N) can use the same datasets to back two very different arguments about which of the two has done more harm to the treasury. Yet the fact is, as often argued in this space, that the previous administration agreed to a very stringent deal that allowed virtually no flexibility to the buyer because it is ‘Take or pay’ and not ‘Take and Pay’ but then, there argument is this is what happens in a ‘sellers market’ which the LNG is. The problem lies in that we have not paid attention to building sufficient storage for LNG so that we can take advantage of seasonal variations in the spot market to bring down our average cost of the product. And now that we are contractually caught in it the best the government can do is to pay urgent attention to augmenting storage and transmission capacity to trim costs wherever and whenever possible.
Ideally, although it is important to sort out LNG supply chain bottlenecks to ensure price stability for the consumer, the government should look away from fossil fuels for the long term. The collapse in oil prices and the subsequent buyer’s market, while it suits countries like Pakistan just fine for the time being, is in fact indicative of the coming end of the fossil fuel industry. Oil producers can get together and maintain prices for a while, through OPEC quotas and the like, but such steps will not be able to resist the winds of technological change for too long. As more and more countries decide to go green and turn towards wind and solar energy, demand for its traditional sources will automatically drop. And at a time when price shifts of a few dollars-per-barrel in this or that direction can threaten budget targets of countries that produce oil and gas, it also sounds the death knell for power blocs that have dominated the energy market for more than half a century.
It is in Pakistan’s interests also to graduate to cleaner, renewable forms of energy in its power mix. Some of the world’s more advanced countries are in the process of taking a very sharp turn in this direction and soon enough developing countries will also line up. So now, before increased demand drives up input prices, would be a good time to get into the game. Japan, for example, already seems nicely on track to eliminate gasoline powered vehicles by the mid-2030s in a bid to reach net zero carbon emissions and generate nearly $2 trillion a year in green growth by 2050. It will be closely followed by a number of leading countries in the European Union as the region becomes increasingly obsessive about containing such emissions. So it seems wind and solar energy are about to do to oil and gas industries what the internal combustion engine did to the horse and carriage. Soon enough the competition will diversify and improve and only niche players from the old world will be left. It is important to remember that no change can come overnight and this particular issue will require extremely careful handling for a while to come. The prime minister has ranked energy as the number-one problem faced by his administration at the moment. He must not repeat old mistakes that resulted from focusing on short-term fixes. He must instead look to give the country a long-term and sustainable energy plan that will require diversification on a very large scale.
https://www.brecorder.com/news/40046703/lng-problems-and-the-road-ahead
show less
Croatia: Floating LNG terminal on Krk becomes operational
According the Croatia’s state broadcaster, the capacity of the terminal has been sold out for the next three years. A floating LNG (Liquefied Natural Gas) terminal became operational Friday (Jan 1),
read more
based off the island of Krk, in the Republic of Croatia. The terminal was funded by the European Union, having been awarded a grant of EUR 101.4 million (123,03 USD). According the Croatia’s state broadcaster, the capacity of the terminal has been sold out for the next three years. The terminal, which has the capacity of 2.6 billion cubic meters per year, is of a strategic and geopolitical importance for Croatia and the European Union. It could strengthen the European energy market and increase the security of gas supply to EU countries.
show less
Goldman forecasts ‘perfect storm’ for global gas markets
It sees European balances even tighter on colder weather revisions in North-Western Europe and a deeper-than-expected drop in NW European Liquefied Natural Gas (LNG)
read more
deliveries. Goldman Sachs raised its forecasts for key natural gas price benchmarks on Wednesday (Jan 13), saying falling supplies and colder weather in Asia and Europe made for a “perfect bullish storm”. It sees European balances even tighter on colder weather revisions in North-Western Europe and a deeper-than-expected drop in NW European Liquefied Natural Gas (LNG) deliveries. Goldman lifted its Dutch Title Transfer Facility (TTF) gas price forecasts for the rest of the winter, and calendar years 2021 and 2022, to $8.30 per MMBtu, $6.72/MMBtu and $6.48/MMBtu from $6.65, $5.63 and $6.03 previously. The European benchmark Dutch month-ahead gas contract retreated slightly on Wednesday from an over two-year peak scaled in the previous session. While Goldman expects tightness in coal markets to moderate from the summer, it sees a slower-than-expected return of Colombian coal supplies, implying higher TTF gas prices later. “We also raise our 2021/22 winter, 2022 summer and 2022/23 winter TTF forecasts to $6.60/MMBtu, $6.30/MMBtu and $6.90/MMBtu from $5.95, $5.85 and $6.75 previously,” the bank said. Supply disruptions, shipping delays and strong LNG demand, supported by heavy nuclear maintenance in Japan and a cold start to 2021 in North-Eastern Asia, have significantly tightened the market, Goldman analysts said in a note. The bank also raised its Japan Korea Marker (JKM) forecasts for balance of winter for 2020/21, and calendar years 2021 and 2022, to $14.30/MMBtu, $8.73/MMBtu and $7.85/MMBtu from $12.65, $7.56 and $7.37 previously. Goldman reiterated its expectation for a significant upside to NYMEX gas prices this summer to help correct what it sees as a 2.5 billion cubic feet per day market imbalance through October 2021, and maintained its $3.25/MMBtu 2021 summer U.S. gas price forecast.
(Reporting by Bharat Govind Gautam in Bengaluru; Editing by Alexander Smith)
show less
Natural Gas / LNG Utilization
Argentina: successful trial period for a Scania CNG bus in Córdoba
In September Scania Argentina delivered a bus of the Green Efficiency line to Tamse, the company responsible for urban passenger transport in the city of Córdoba.
read more
After completing 60 days of testing, the 100% natural gas powered vehicle revealed that 40% savings in operating costs had been exceeded. The Green Efficiency units are designed to run exclusively on alternative fuels, such as CNG, LNG and biogas. “The bus is very comfortable, innovative, and has highly positive details for users,” said Marcelo Rodio, Chairman of the Board of Tamse, and added: “In the near future we imagine having an entire CNG fleet, because it is a technology that it is showing us great advantages.” The 280 HP Scania bus carried out the test in Tamse’s lines B and B1, which complete routes of between 170 and 240 kilometers per day respectively. With a range of more than 300 kilometers, the CNG tanks are refueled at the end of each day, which total between 10 and 13:30 hours of service. “It is really satisfactory for us that the client can check, developing his usual operation, how sustainable buses work. These new options represent a great step on the road to more efficient transportation, which also prioritizes the protection of the environment,” said Carlos Naval, Regional Manager of the Central Zone of Scania Argentina.
show less
Landi Renzo supports Egyptian transition to natural gas mobility
Safe&Cec, a company 51% owned by Landi Renzo and leader in the design and production of equipment for the distribution of natural gas and biomethane, has been awarded
read more
a contract for the supply and assembly of over 150 compressors in Egypt for the companies Gastech (Egyptian International Gas Technology) and NGVC (Natural Gas Vehicles Company). The agreement, one of the most important in the sector, is part of the project for the development of natural gas mobility and refueling infrastructure promoted by the Egyptian government. This is also a further step in the contribution that Landi Renzo Group has given and will continue to give to the growth of NGV mobility in Egypt, supported by the country’s significant resources, especially in the Zohr field. “This important contract further consolidates Landi Renzo Group’s leadership position in the Egyptian market. In spite of the Coronavirus pandemic, Safe&Cec is closing with positive results a definitely complicated year, and above all we are starting 2021 with a very significant backlog and higher than historical data, which allows us to have a positive outlook on 2021,” said Cristiano Musi, CEO of Landi Renzo Group and CEO of Safe&Cec. “In addition, we are ready to enter into hydrogen compression supply and are considering a number of strategic options to accelerate growth in the segment. We also continue our growth in the supply of biomethane applications in the U.S., a market expected to grow strongly in the coming years,” he added.
show less
Mexico: natural gas bus trial begins in the municipality of Manzanillo
The governor of the State of Colima José Ignacio Peralta Sánchez launched the new public transport test program in the municipality of Manzanillo,
read more
which is environmentally-friendly since it operates with CNG and will be of benefit to the entire population. In this stage of tests, three DINA buses will be circulating during 15 days, a period that will be used to evaluate the cost benefit and make subsequent decisions regarding its possible implementation. On the tour aboard the bus, the official explained that the entire public transport system in the state is being revolutionized, since the user is becoming the center of public policy. In addition, he highlighted that the new buses have air conditioning and better service. In addition, the governor acknowledged the head of the Ministry of Mobility Rafael Martínez Brun and all his staff for the implementation and execution of this new program, as well as all the transport operators for joining this public policy for the benefit of the population. In his speech, the president of the Manzanillo Single Transportation System Aureliano Hernández Alonso commented that this new model is similar to what they want to offer as operators, with technological services such as air conditioning, Wi-Fi and clean energy, and that in this test period they will verify the profitability and costs of these vehicles.
show less
More than 300 CNG buses will hit the streets of Azerbaijan’s capital in 2021
During the official visit of President Recep Tayyip Erdoğan to Azerbaijan, after the joint press conference held with the President Ilham Aliyev, contracts in various fields were signed.
read more
One of these agreements was made between BMC, one of the largest commercial vehicle manufacturers in Turkey, and Baku Transport Agency (BNA) as a result of the tender made by BNA. Under this agreement, BMC will deliver 320 new CNG buses to Baku this year. BNA delegation visited BMC İzmir Pınarbaşı Facilities immediately after the signing of the contract, where they examined and tested the BMC natural gas buses. BMC buses, awarded with Europe’s “Best Design Award”, are manufactured with advanced technology, offering high safety and comfort for both the driver and passengers. They also provide comfortable transportation in narrow streets with their high maneuverability and an environmentally friendly mobility by using CNG.
show less
Peru: Cusco’s first natural gas station is already in operation
After 16 years of waiting, the Regional Government of Cusco finally opened in the San Jerónimo district the first CNG filling station, which will allow to promote and change
read more
the energy matrix to lower the costs of transportation fuel, as well as to implement the widespread use of this energy in the homes and industries of the Cusco region. “The gas will reach homes and the regional industry, that is our immediate challenge,” said the regional governor, Jean Paul Benavente, during the inauguration. “It was not an easy task because we had stumbles. We had to obtain permits from Osinergmin (Supervisory Agency for Investment in Energy and Mining) and municipal licenses. Now we have to think about all the possibilities that our most important energy resource will offer us,” he added. Benavente recalled that to make this CNG station a reality he signed an inter-institutional cooperation agreement with the Camisea Consortium in 2019 for the installation of three service stations in total, two located in Cusco and the other in Quillabamba, with the aim of generating up to 50% savings in the beneficiaries’ economy. “The era of Camisea natural gas begins in Cusco, with lower CO2 emissions, reduction of noise pollution by 50%, less noise and vibrations,” he said. In addition, the free conversion of more than a 1,000 gasoline vehicles to natural gas technology was agreed in two workshops authorized by the Ministry of Transport and Communications (MTC). “So far, 50 vehicles have benefited, out of the more than 400 registered,” said the regional authority. The Regional Government, the Camisea Consortium, Lima Gas Natural, BIOCOM (EDS San Jerónimo), the Eco Perú Gas conversion workshop (Huancaro) and GM Conversiones (San Jerónimo) participate in this project with investments that exceed 5 million dollars.
show less
On Turtle’s NGV refueling network grew 35% in Europe last year
Despite the difficulties that the Covid-19 pandemic brought to the road transport sector, OnTurtle closed 2020 with a positive balance and continues its international expansion.
read more
In the year of its 25th anniversary, the company specialized in fleet management services gained a strong presence in Europe, with the expansion to Italy and Poland, and has increased the network of natural gas stations by almost 35% compared to 2019. “In addition, taking into account the problems derived from the pandemic, we wanted to demonstrate clear support to professional carriers and drivers for their fundamental work during the most complicated months,” they shared in a statement. In 2020, OnTurtle activated a score of new natural gas supply points, reaching 66 service stations. These openings also took place in new countries, such as Germany, Italy and the Netherlands. Thus, in this sector the company grew by 34.79% compared to 2019. “Last December, the member states of the European Union set the goal of reducing greenhouse gas emissions by 55% in 2030. True to our commitment to cleaner mobility of goods, at OnTurtle we have continued adding new stations with LNG and CNG refueling in Europe,” they added.
show less
World’s largest protein producer is testing CNG trucks in Brazil
JBS brands Friboi and Seara recently started a pilot project involving natural gas trucks manufactured by Scania. The sustainable vehicles’ CO₂ emissions are 15% lower in comparison
read more
with diesel-powered models. In the case of Friboi, the truck makes daily runs between the cities of Andradina, Lins and São Paulo (SP), while the vehicle at Seara runs the route between São Paulo and Duque de Caxias, in the State of Rio de Janeiro. On an annual basis, the Scania trucks provide a reduction of 7.6 tons of greenhouse gases, equivalent to the emissions of four passenger cars, or enough to circle the world once in a family car. The 100% CNG trucks use German technology and each of them comes with eight gas cylinders. They are also the first vehicles of their kind in Brazil. With six decades of history, JBS is currently the largest protein producer in the world and the second largest food company in the world. The company operates in the processing of beef, pork, lamb and chicken, and also operates in the production of convenience foods and value added.
show less
Scania delivers new LNG-powered truck to Molgás Energía in Madrid
Molgás Energía has added a new Scania natural gas powered vehicle to provide transportation service solutions to its customers. This LNG truck has a 340 HP 9-liter engine,
read more
a tank with a capacity of 400 liters, and a maximum torque of 1,600 Nm. Molgas has more than 20 years of experience in the sector and a sustained and continued growth of the activity throughout Europe. Within Molgás Energía’s philosophy of offering comprehensive solutions to its customers, making it as easy as possible for them to adopt natural gas as an economical, clean and sustainable fuel, it has once again opted for Scania by acquiring this new truck for the transport and supply of Air Liquid’s gas, which is one of the most important companies in the world in the production and distribution of gases. With this new vehicle, Molgás is committed to responsible transportation through the use of alternative energies that, in addition to being quieter, also have the ECO label, allowing to operate in urban areas that have access limitations in situations of pollution alerts. The engines of these vehicles are also 100% suitable for the use of biomethane. “Natural gas is a type of fuel that has come to stay as a transportation solution, not only because of the environmental benefits it brings, but also because of the economic profitability that gas refueling entails,” said Molgás Energía.
This new truck has been delivered to Molgás Energía by the official Scania dealer in Madrid.
show less
NGV America releases guidance on filing for Alternative Fuels Tax Credit
After championing the inclusion of an extension of the Alternative Fuels Tax Credit (AFTC) in a combined year-end FY 2021 Omnibus spending and Covid-19 stimulus package in late December,
read more
NGVAmerica released updated guidance on filing for the federal tax credit. The AFTC – a $0.50 fuel credit/payment for the use of natural gas as a transportation fuel – and the Alternative Fuel Vehicle Refueling Property Credit – a 30%/$30,000 investment tax credit for alternative vehicle refueling property – are extended through December 31, 2021. With this credit, America’s transit agencies can continue to invest in cleaner, commercially available and proven natural gas buses without reducing service or increasing fares, school districts can provide exhaust-free rides to school by replacing their dirty legacy fleets, and freight haulers and package delivery companies can afford to replace aging diesel trucks with the cleanest heavy-duty truck on the market, which runs entirely on natural gas. The AFTC was last extended in 2019 for the 2018, 2019, and 2020 calendar years and applies to all classes of natural gas vehicles fueled by geologic and renewable CNG and LNG. Its continuation is important to provide investment certainty for fleets of all shapes and sizes working to reduce their environmental footprint and address clean air and climate change sustainability goals. The Fact Sheet on filing for the AFTC for calendar years 2020 and 2021 can be found here.
show less
LNG as a Marine Fuel/Shipping
LNG shipping rates from U.S. surge to record highs on Asia buying boom
The cost of shipping liquefied natural gas (LNG) from the United States to Asia hit a record high on Tuesday (Jan 12) as appetite for the fuel from buyers
read more
there and delays through the Panama Canal reduced the amount of ships for hire. Freezing temperatures across Asia and Europe have pushed up LNG prices and lifted wider gas prices as buyers grapple with shrinking inventories and the shortage of tankers. Shipping sources said an apparent ban on Australian coal imports into China, which has been reported by Chinese media, had also bolstered demand by Chinese buyers for LNG tankers to carry cargoes to Asia. Average daily tanker rates on the U.S. Gulf to Japan route rose to $253,270 on Tuesday, its highest since earnings were first published in 2019, Baltic Exchange data showed. This compared with $174,000 a day at the end of last year, the Baltic data showed. “The sector continues to establish new all-time highs with no slowdown in activity,” shipbroker Clarksons Platou Securities said on Tuesday. Shipping sources said new build LNG tankers hitting the water were being pulled into service to meet the demand. The United States, a major LNG producer, ships LNG cargoes through the Panama Canal waterway to buyers in Asia. Toby Dunipace, with shipbroker SSY, said Panama Canal congestion had led to waiting times of seven to 10 days or more for LNG vessels. “This bottleneck for shipping has an immediate impact on the demand for gas. Storage supplies are low and therefore, demand is high,” he said in a report this week. “If we see a cold February and March, then the shipping market could see an overall positive (first quarter).” Shipping sources said delays through the Panama Canal had been compounded of late by weather disruptions, higher than expected LNG traffic as well separate tanker shipments of liquefied petroleum gas (LPG), which were also trying to sail through the waterway. LNG tanker rates from the U.S. Gulf to Europe softened this week to $310,691 a day from a high of over $320,000 a day last week, Baltic Exchange data showed. (Reporting by Jonathan Saul in London; editing by Jonathan Oatis)
show less
First LNG-powered ferry to serve the UK will enter service in 2022
The next ship to join Brittany Ferries’ fleet is called Salamanca, will be powered by cleaner LNG and recently took to the water for the first time.
read more
Salamanca’s launch ceremony took place at the CMJL shipyard in Weihai, China, where she is under construction. She is the second of three E-Flexer class ships ordered by Brittany Ferries and will join sister-ship Galicia, when she enters service in the spring of 2022. The third ship, Santoña, will also run on LNG and will follow in 2023. Both Salamanca and Santoña will serve the company’s long-distance routes connecting the UK with Spain. Salamanca is equipped with two Wartsila 12V46DF engines generating 13,740 kW each (18,500 horsepower per engine). Thanks to energy recovery, electricity production on board comes with low CO2 emissions. Alternators installed on shaft lines produce energy even at very low speeds, which means the ship’s electrical generators are only needed when the ship is alongside. Like her sister, Salamanca will weigh-in at over 42,000 gross tons. That means she will be one of the largest ships ever to serve the company, and at 215 meters long she will be joint-longest. She will carry 1,015 passengers, with over 2.7km of lane-space to house passenger and freight vehicles. She will of course be French-flagged and crewed by dedicated French seafarers. The facilities for storing LNG will be supplied by Repsol in Spain. Under the terms of the agreement, the fuel company will build two quayside LNG bunkering terminals in the ports of Santander and Bilbao, including a 1,000 m3 storage tank to ensure uninterrupted supply for Salamanca and Santoña. Fleet renewal is one of the pillars of Brittany Ferries’ five-year recovery plan. The investment in new ships was made well before the pandemic began, but a trio of cleaner, more efficient and comfortable vessels will help secure the company’s future ensuring the continuity of passenger and freight services. Each E-Flexer vessel promises a significant reduction in air quality and greenhouse gas emissions. They are also smoother, quieter and benefit from less vibration with better sea handling, to the benefit of passengers.
show less
First U.S. offshore LNG articulated tug and barge ready for operations
Q-LNG Transport (“Q-LNG”) and Shell Trading (US) Company (“Shell”) today announced that the first offshore liquified natural gas (“LNG”) bunkering articulated tug and barge (“ATB”) in the
read more
United States, the Q-LNG 4000 is now ready for operations. Designed to provide ship-to-ship transfers of LNG to vessels utilizing LNG and ship-to-shore transfers to small scale marine distribution infrastructure, the ATB is an integral part of the LNG infrastructure along the southeast U.S. coast. This critical milestone in the development of marine LNG infrastructure is an important step in the safe, reliable transportation and delivery of LNG in North America. “Shell has an ambition to be a net-zero emissions energy business by 2050 or sooner, in step with society, and we are working hard to deliver the kind of solutions our customers need now to help them decarbonize,” said Karrie Trauth, General Manager for Shipping and Maritime, Americas. “LNG is an important part of the solution today, and I’m proud that this vessel will effectively double the number of LNG bunker vessels in the U.S. and making it possible for us to continue to help others accelerate their own transition.” The barge complements Shell’s existing global network of 6 LNG bunker vessels to meet the growing global demand for cleaner maritime fuels. Shane Guidry, CEO of Q-LNG commented, “I’m pleased to have taken delivery and to begin our long term service contract with Shell Trading. All of my companies, including Q-LNG, are focused on, and will continue to do our part to design, build and operate vessels that will assist with the quest to decarbonize. We look forward to delivering extremely safe and reliable service, as we have done for Shell all of my career. I absolutely want to thank all of those with Shell who were very helpful throughout the build process and to especially thank everyone on my team, whom all remained focused and committed, with boots on the ground 24/7 to get this vessel across the finish line.” Compared to heavy fuel oil, LNG reduces greenhouse gas emissions by up to 21% for 2-stroke engines and up to 15% for 4-stroke medium speed engines as well as significantly reducing pollution from nitrogen oxides and particulate matter compared to conventional marine fuels. This fuel type also meets IMO 2020 sulphur regulations.
https://maritime-executive.com/corporate/first-u-s-offshore-lng-articulated-tug-and-barge-ready-for-operations
show less
Port of Algeciras in Spain will have first LNG bunkering vessel with EU’s support
The European Commission has signed a grant agreement with Enagás and the Port Authority of Algeciras Bay, giving the green light for co-financing the building of the first vessel to be fully dedicated to
read more
LNG bunkering at the Spanish Port of Algeciras. This project is boosted by the Enagás start-up that specializes in small-scale LNG supply infrastructure, Scale Gas, and the Port Authority of Algeciras Bay (APBA). The initiative, coordinated by Enagás, is framed within the LNGhive2 strategy, led by the Spanish Ports Authority, and the European Union program that contributes to the implementation of the Trans-European Transport Network, Connecting Europe Facility (CEF 2019 call for proposals), which will provide funding for 20% of its execution, approximately 11 million euros. The aim is to support the development of the market for LNG as a sustainable marine fuel, in line with the EU Directive 2014/94/EU on Alternative Fuels Infrastructure. The project consists of the construction of a bunkering barge with capacity to store 12,500 m3 of LNG, which will entry into service in 2023. Once in operation, the vessel will be loaded with LNG at the Enagás terminal in Huelva and will then either supply it directly to end consumers or transfer it to smaller barges for subsequent supply of smaller vessels berthed in the port of Algeciras. In 2012, the Port of Algeciras provided the first LNG bunkering service in Spain using a tanker truck, a service known as truck-to-ship (TtS) LNG bunkering. In 2020, seven TtS LNG bunkering operations were performed in Algeciras, a 300% more LNG has been supplied to ships than in all of 2019. Once operational, this new vessel will allow ship-to-ship (StS) LNG bunkering at the Port of Algeciras. In addition to promoting more sustainable maritime transport and improving air quality in the Bay of Algeciras, this project will be a further step towards consolidating Spain and the Port of Algeciras, which is the busiest port in Spain, as the European leader in LNG bunkering in the Strait of Gibraltar. The European Union supports the key role that LNG has to play in bringing about energy transition in the maritime sector. With the funds resulting from the CEF call for proposals, which has already provided funding for seven projects in Spain, it will be possible to achieve the climate goals set by the European Green Deal, giving priority to short sea shipping projects using alternative fuels, as well as the installation of energy bunkering systems on land in order to allow ports to reduce emissions from berthed vessels. Up to November 2020, LNG bunkering operations in Spain increased fourfold compared to the same period the previous year. According to DNV/GL, the provider of certification services, there are 175 LNG-powered ships in service in the world. This new vessel will join the 20 bunkering barges already supplying LNG around the world and will strengthen the role of Spain and its ports in the field of LNG bunkering. There were six ports in Spain supplying LNG to ships in 2019, a number that has now grown to 11 in 2020. These advances have been made possible by the developments and investment of more than 300 million euros made or committed by the partners in the CORE LNGas hive and LNGhive2, public-private initiatives, for which a total of close to 62 million euros has been co-financed by the European Commission. These initiatives involve 49 partners, 21 of which are public institutions, including 13 port authorities, and 28 are private or industrial entities.
show less
Spain: world’s first LNG-powered fast ferry will be ready in March
Baleària plans to incorporate an internationally innovative ship in March 2021: the world’s first fast ferry for passengers and cargo powered by natural gas engines.
read more
In the coming weeks, the Eleanor Roosevelt will carry out sea trials at the Armón shipyards in Gijón, where she is being built. The armament of the ship’s hull is practically completed and tests have been carried out on the access ramp for vehicles and cargo. “The works are progressing and in a few months one of the most innovative and sustainable vessels in the world will be in operation. Its addition into the fleet will be a milestone in Baleària’s history, but also in international maritime transport,” said Guillermo Alomar, Baleària’s Fleet Director. “The innovations that she incorporates will greatly reduce movement, vibrations and noise,” he added. With an investment of 90 million euros, the Eleanor Roosevelt will also be the longest fast ferry in the world (123 meters). It will have capacity for 1,200 passengers and a warehouse for 500 linear meters of trucks and 250 cars, or alternatively 450 cars. The vessel will have a service speed of 35 knots (with a maximum speed greater than 40 knots). Moreover, she has measurement equipment to monitor the actual fuel consumption, calculate the efficiency of the engines and adjust the navigation to increase comfort according to the state of the sea. In addition to being the world’s first ferry of its kind with dual fuel LNG engines, she will also be innovative thanks to the smart ship technological improvements that she incorporates, which will guarantee a better experience for customers on board. The Eleanor Roosevelt will be the flagship of Baleària’s natural gas fleet strategy, which in 2021 will reach nine ships (it currently sails with six LNG ferries and is converting one more). The shipping company has invested 380 million euros to adopt LNG, a fuel that represents a considerable reduction in emissions (with an immediate improvement in air quality and the greenhouse effect) and noise pollution.
show less
Technological Development for Cleaner and Greener Environment Hydrogen & Bio-Methane
Total & Clean Energy to build biogas plants and fund filling stations
Clean Energy Fuels Corp. and its largest shareholder, Total S.E., announced a memorandum of understanding to create a 50/50 joint venture to develop carbon-negative renewable
read more
natural gas production facilities in the United States, as well as credit support to build additional downstream fueling infrastructure. Total will provide $50 million and Clean Energy $30 million for the proposed joint venture and Total will be providing credit support of $65 million to support Clean Energy development in the biomethane value chain, including $45 million for contracted fueling infrastructure. The companies have already partnered to expand the use of renewable natural gas in the heavy-duty truck market with its Zero Now program, which allows fleets to purchase natural gas trucks for the same price as diesel trucks. The demand for biomethane has rapidly accelerated through the Zero Now program with trucking companies such as Kenan Advantage, KeHE Distributors, Estes Express Lines, Tradelink Transport, among many others, taking advantage of the economic savings while powering their new fleets with this clean fuel. The California Air Resources Board gives these carbon-negative renewable natural gas projects a carbon intensity (CI) Score (gCO2e/MJ) of -250 (or lower) compared to 97 for diesel and 46 for electric batteries. “We are very fortunate to have a partner in Total that is so supportive on a number of levels,” said Andrew J. Littlefair, CEO and president of Clean Energy. “Both our companies have recognized the enormous opportunity that a carbon-negative fuel can play in our ambitious efforts to combat climate change. This new agreement will allow Clean Energy to increase the flow of low-CI renewable natural gas as the demand expands, as well as the capital to build new fueling stations for additional contracted fleets.” Clean Energy also announced plans that it will work with BP Products North America Inc, a subsidiary of BP p.l.c. to develop, own and operate new renewable natural gas facilities at dairies and other agriculture facilities that will produce one of the cleanest fuels in the world. Clean Energy’s goal is to meet the rapidly growing demand by customers for carbon-negative renewable natural gas and to deliver its Redeem™ fuel to its entire fueling infrastructure by 2025, which it is well on its way to achieving.
show less
Air Liquide builds six biogas stations for UK leading supermarket chain
One of the leading retailers in the United Kingdom, ASDA, will commission more than 300 new natural gas trucks in 2021 to reduce the environmental footprint of its transport activities.
read more
To support this fleet, Air Liquide will install and operate six biomethane stations at ASDA’s sites. These facilities, which will be operational by the first quarter of 2021, will refuel both ASDA trucks and those of some partners. The new infrastructure will boost Air Liquide’s network to 20 filling stations in the UK. These stations are dedicated to refilling fleets of trucks and buses. At the end of 2019, Air Liquide acquired Gas Bus Alliance, which added seven biomethane stations for buses to its network in the country. Air Liquide will also install its tenth biomethane production plant in the UK by the summer of 2021, near Nottingham, with a production capacity of 90 GWh. Today, Air Liquide’s biomethane production capacity in the UK amounts to 650 GWh per year, which is enough to supply 1,000 trucks. “We are very pleased to support our customers who choose renewable fuels to reduce their emissions. Thanks to a wealth of expertise and experience along the entire biomethane value chain, Air Liquide is strengthening its unique position in the United Kingdom and contributes to the construction of a low-carbon society and to the fight against climate change,” said Emilie Mouren-Renouard, Member of the Air Liquide Executive Committee.
show less
New technology could improve H2 transport & expand service stations
With clean hydrogen gaining recognition worldwide as the carbon-free fuel capable of making a significant contribution to addressing climate change,
read more
Southern California Gas Co. (SoCalGas) will field test a new technology that can simultaneously separate and compress hydrogen from a blend of hydrogen and natural gas. At scale, the technology would allow hydrogen to be easily and affordably transported via the natural gas pipeline system, then extracted and compressed at fueling stations that provide hydrogen for fuel cell vehicles. Created by Netherlands-based HyET Hydrogen, the technology is designed to provide pure highly-compressed hydrogen wherever a natural gas distribution system exists. The project is scheduled to begin in March at SoCalGas’ Engineering Analysis Center in Pico Rivera, California and slated to be complete by the third quarter of 2021. SoCalGas also recently announced a program to study blending hydrogen into its natural gas pipelines. If approved by regulators, the program would be the first step toward establishing a statewide standard for injecting hydrogen into the natural gas grid. “This innovative technology could be a game-changer, allowing hydrogen to be distributed to wherever it is needed using the natural gas grid,” said Neil Navin, vice president of clean energy innovations at SoCalGas. “As demand increases for zero-emissions vehicles such as fuel cell cars, California will need thousands more hydrogen fueling stations—and this technology may help make that possible.”
The new technology, called Electrochemical Hydrogen Purification and Compression (EHPC), works by applying an electrical current across a hydrogen-selective membrane to allow only hydrogen to permeate it while blocking the natural gas components. Continuously applying the electrical current builds up and pressurizes the hydrogen. To test the technology, SoCalGas will blend hydrogen, in concentrations from 3 to 15%, with methane, the primary component of natural gas. That blend of gases will then be injected through a simulated natural gas pipeline testing system into the EHPC system to continuously extract and compress the hydrogen at a rate of 10 kg per day. SoCalGas’ testing will provide performance data that will enable fine-tuning and optimization of the EHPC system to accelerate scaling up the technology. Within the next two years, the EHPC technology is expected to be scaled to produce 100 kg of hydrogen a day or more from a single EHPC system, enough to fill 20 fuel cell vehicles.
show less
