NGS’ NG/LNG SNAPSHOT – July 1-15, 2022
City Gas Distribution & Auto LPG
AG&P Pratham plans Rs 9,000-crore city gas push
AG&P Pratham, the India arm of Singapore-based Atlantic Gulf & Pacific (AG&P) City Gas, is planning to invest over ₹9,000 crore in the city gas distribution business in the country, a senior official said.
The investments would be towards expanding city gas distribution (CGD) infrastructure and setting up new compressed natural gas (CNG) stations, among other areas.
From the gas (hub), the LNG is transported through a network of polyethylene lines to various markets including industrial and commercial and domestic customers. As most of its GAs are located near coastal areas, another area the company is looking at is the running of fishing boats on LNG. These boats currently run on kerosene. Datta said his company is in talks with the state governments of Kerala, Karnataka and Gujarat to adopt the idea of CNG-run boats.
The company is currently selling around 0.25 standard cubic metres per day and plans to cross 1 million metric standard cubic metres per day by the fiscal year end, said Datta. AG&P is one of the few international players in the CGD sector in India which is vastly expanding the city gas distribution network in its push to be a gas-based economy.
Another prominent global player in the CGD segment is Total Gas, which has a joint venture with Adani Gas NSE 2.21 %. Leading players in the segment include Mahanagar Gas NSE 1.76 %, Gujarat Gas NSE -2.10 % and Indraprastha Gas NSE -0.39 %. After the completion of 11th city gas distribution (CGD) round last November, 96% of India’s population and 86% of its geographic area would be covered under CGD network. Projected investments in the sector are around ₹1.2 lakh crore.
India launches 500 CNG-fuelled boats in Varanasi
Indian PM Sh. Narendra Modi on July 07 launched 500 CNG-fuelled boats in the eastern Indian city of Varanasi, state-owned Gail said. These boats are being supplied CNG from India’s first floating CNG station built by Gail at Namo Ghat.
The conversion of the boats running on petrol and diesel to run on CNG was carried out under Gail’s corporate social responsibility initiative in association with Varanasi Nagar Nigam (VNN). VNN appointed Varanasi Smart City as coordinator of the project while Mecon has provided engineering and consultancy services for the conversion of the boats to run on CNG.
“Conversion to CNG will not only reduce pollution but the resultant savings on fuel will lead to the better economic condition of boatmen,” Gail stated, adding that work is going on to convert the other boats to clean fuel too.
47 more CNG buses to ply on Patna roads
In order to reduce air pollution, the state transport department has started replacing diesel-run buses with CNG ones in the state capital under the state climate action plan. Altogether 50 mini buses in the city run by private operators will be replaced with cleaner fuel in the first phase.
The Bihar State Road Transport Corporation Limited (BSRTC) has procured 50 CNG buses and started handing over 47 of them to the bus operators in the first lot.
The state government has given 50% subsidy or ₹7.5 lakh on each purchase of the CNG bus (BAVI). From June 10 to July 02, a total of ₹3 crores has been given to the beneficiaries by the district transport office. According to transport officials, there are around 300 city ride diesel buses being operated in Patna on different routes by private players. The aim is to replace all yellow buses with green buses. The 24-seat buses will be equipped with CCTV cameras, speed governor, GPS tracker, fire extinguisher and first-aid kit among other facilities. Shree Prakash, the district transport officer, said 50 diesel buses have been replaced with CNG, but 250 private diesel buses are still on the Patna roads.
In Patna, the BSRTC has been operating 70 standard-size CNG buses by replacing the diesel buses and a few have been retrofitted with the CNG kit. Besides, 25 electric buses are also being operated in the city.
Policy Matters/ Gas Pricing/ Others
Rajasthan to drive clean mobility through CNG Policy 2022 from this month
The Rajasthan Compressed Natural Gas (CNG) policy 2022 is likely to be implemented this month itself with Saturday being the last day for feedback by stakeholders to the draft policy, officials said on Friday, July 08.
The policy is available on public domain and stakeholders can send their responses on the draft policy till Saturday. After going through the feedback, the state government will work towards implementation of the policy, which will help in reducing air pollution in our cities by moving to a cleaner fuel, stated by an official from the pollution control wing of the state transport and road safety department.
The policy aims to control vehicular pollution by promoting CNG as an eco-friendly fuel and highlights special provisions for non-attainment cities or smart cities of Rajasthan. For transition towards CNG and having proper infrastructure, the draft policy had recommended provisions like diesel vehicles older than 10 years can be provided five years of extension on retrofitment of CNG, facilitation from the transport department for new CNG vehicles/conversion of vehicles from alternate fuels to CNG by having dedicated window, issue of registration certificate and approval of CNG RFCs in defined time.
The policy further recommends that city transport corporations be advised or permitted to set up CNG stations on their access land parcels with relaxation of NOCs from the district magistrate. The state will also facilitate City Gas Distribution (CGD) entities in leasing, acquisition and land-use conversion of land. For smooth implementation of the policy, it has also been proposed that a dedicated CNG cell should be established within the department “for effective day-to-day functioning”.
High CNG price forces RTC to review its clean fuel strategy
The skyrocketing price of compressed natural gas (CNG) has forced the Kerala State Road Transport Corporation (KSRTC) to course-correct its green fuel strategy. The price of the ‘clean fuel’ increased by nearly ₹30 per kg in the past six months.
Responding to questions on the proposed reform in the Assembly on Tuesday, Transport Minister Sh. Antony Raju said the prospects of adopting CNG buses in a big way did not appear as bright as it was when the government decided to buy 700 such vehicles for the KSRTC-SWIFT, a legally independent company for operating long-distance buses of the KSRTC for 10 years.
Each kg of CNG cost ₹54.62 when the decision was taken in December 2021. However, it has increased to ₹83 at present. Nonetheless, the fuel is 13.7% cheaper than diesel. The scenario has prompted the government to shift focus towards encouraging the use of electric buses, he said, adding that the Centre’s delay in fixing the price for liquefied natural gas (LNG) has also limited the State’s options.
CNG and piped gas prices in Mumbai hiked again
Mahanagar Gas has hiked the retail price of compressed natural gas (CNG) and piped natural gas (PNG) by Rs 4/kg and Rs 3/SCM, respectively, in Mumbai. The revised costs were put into effect from midnight of July 12.
The state-run utility attributed the increase to the rise in input costs and depreciation of rupee.
Owing to the limited domestic gas allocation, Mahanagar Gas had been importing gas from overseas markets. To balance the costs, the retail price of CNG has been hiked by Rs 4/kg to Rs 80 and the domestic PNG price has been increased by Rs 3/SCM to Rs 48.50, in and around Mumbai.
Starting April 1, the Centre hiked the price of domestic and imported natural gas by over 110%. This had canceled out the steep price reduction after the state slashed VAT to 3.5%.
Electric Mobility/ Hydrogen/ Bio- Methane
Harness the power of green hydrogen- NITI Aayog
The government’s focus on the green hydrogen focus economy is praiseworthy and forward looking; it now needs to review the policy, infrastructure and financial challenges.
If India wants to mitigate the climate crisis, meet its international climate commitments, reduce its fuel import bill, strengthen its renewable energy sector and unlock green jobs, the nation must accelerate its efforts to decarbonise the economy. A critical cornerstone of this strategy will be the use of green hydrogen (produced by renewable energy through electrolysis of water) in key energy-intensive sectors such as fertilisers, refining, shipping, iron and steel, and transport. A new report released on Wednesday, June 30, by NITI Aayog, Harnessing Green Hydrogen: Opportunities for Deep Decarbonisation in India, provides a pathway to accelerate the emergence of a green hydrogen economy, which is critical for India to achieve its net-zero ambitions by 2070. According to the report, green hydrogen demand in India is expected to rise fourfold by 2050, and the country has a distinct advantage in becoming one of the most competitive producers of green hydrogen. Crucially, green hydrogen will achieve cost parity with natural gas-based hydrogen by 2030.
To achieve the goals, India will have to bring down the costs and the NITI report suggests that medium-term price targets should be set to guide the industry toward making green hydrogen. There is also the issue of generating enough renewable energy to produce the fuel, investing in hydrogen and securing green financing to ensure the hydrogen economy is financially viable.
Green hydrogen will provide momentum to the country’s journey towards energy independence by 2047 – Sh. Hardeep Puri
Petroleum and Natural Gas Minister Sh. Hardeep Puri stated that Green Hydrogen will provide momentum to country’s journey towards energy independence by 2047. He said India has a huge edge in green hydrogen production, owing to its favorable geographic conditions and presence of abundant natural elements.
While chairing a meeting with stakeholders on Green Hydrogen in New Delhi today, Sh. Puri said, green hydrogen must be pushed as an alternative source of energy as country is spending 12 lakh crore rupees to import energy. He said, India being the large growing economy, is going to be the hub of Green Hydrogen.
India needs $15 billion funding to set up 15 GW hydrogen capacity by 2030: Sh. V K Saraswat
India will need funding of USD 15 billion to set up 15 GW (gigawatt) of green hydrogen capacity by 2030, NITI Aayog Member Sh. V K Saraswat said on Thursday, July 14.
He was speaking at a conference ‘India@2030: A Roadmap for Aatmanirbhar Bharat in Renewable Energy’ organised by CII here, a statement said. “India will require an estimated USD 15 billion in public and private funding to set up 15 GW of green hydrogen by 2030, Sh. V. K Saraswat, Member, NITI, Aayog said pointing out that green hydrogen is the future,” the CII said.
Green hydrogen is the fuel of the future but its price continues to be prohibitive for sectors like fertilizer and refineries which need to use it, said Sh. Saraswat said. In his address, the NITI Aayog member also suggested certain measures to reduce the cost of green hydrogen.
Sh. Saraswat said that “for the price of green energy to come down to USD 1/kg, 80 per cent reduction in cost of electrolyser is needed, electricity cost has to slash to 2 cents per kwh (kilowatt hour), electrolyser plant life must increase to 20 years and electrolyser efficiency must increase by 76%.”
Sh. Kapil Maheshwari, President, New Energy, Reliance Industries Limited had recently told PTI that India is already a market of 6-7 million tonnes of green hydrogen.
Ladakh Admin, NHPCL sign MoU to set up two pilot green hydrogen projects
Keeping in line with India’s aim to build green hydrogen plants that will run on electricity produced by green energy sources and help reduce dependence on fossil fuels for mobility, Ladakh Administration on Thursday, July 14, signed an MoU with the National Hydroelectric Power Corporation Limited (NHPC) for the establishment of 2 pilot green hydrogen technologies.
As per official communiqué, CEO, NHPC Renewable Energy Limited, Sh. A K Pathak, and Head of Power Station NBPS and Chutak P S, Sh. Bikram Singh extended sincere congratulations on the major moment and felicitated the officials. Sh. Pathak apprised the officials regarding the background of Green Hydrogen; Production and Working of Hydrogen Technology; Hydrogen Pilot Project, Kargil and Leh; Present Status of Pilot Projects, among others. Lieutenant Governor, UT Ladakh, Sh. Radha Krishna Mathur, urged NHPCL to ensure that the cost of hydrogen fuel is not costlier than other fuels. He further directed NHPCL to develop a blueprint of hydrogen-based energy for Ladakh.
CEC and Chairman, LAHDC, Leh, Sh. Tashi Gyalson while appreciating NHPCL’s cooperation said that with the growing threat of climate change due to the excessive release of carbon emissions, Ladakh is looking for clean energy alternatives to replace traditional fossil fuels.
Therefore, major collective steps should be taken to tackle the devastating effects of climate change, he added. Member of Parliament, UT Ladakh, Jamyang Tsering Namgail extended good wishes and hoped for growth and development.
This initiative is a boost to the Prime Minister’s vision of a ‘carbon neutral’ Ladakh. The MoU will help Ladakh develop a carbon-free economy based on renewable sources and green hydrogen, said the Secretary.
Karnataka signs MoUs with Petronas Hydrogen and Continental Automotive Components for investment worth Rs 32,000 cr
The Karnataka Government has signed two separate MoU with Malaysia-based Petronas Hydrogen and Continental Automotive Components. This will usher in an investment in the state to the tune of Rs 32,000 crore.
The MoUs were signed by Dr. EV Ramana Reddy, Additional Chief Secretary in the Department of Industries and Commerce. CM Sh. Basavaraj Bommai also marked his presence. Petronas Hydrogen and Continental Automotive were represented by CEO Adlan Ahmaad and CEO Prashant Doreswamy respectively. CM Sh. Basavaraj Bommai assured both the companies of lending every kind of support at policy or executive level. Petronas has committed to investing Rs 31,200 crore in establishing a renewable energy plant in Mangaluru. This will provide employment opportunities to 3000 persons.
On the other hand, Continental Automotive will be making an investment of about Rs 1000 crore in an R & D centre for the expansion of Technical Centre India. The TCI will seek to work on automotive software development and mobility technology development, thereby adding about 6000 jobs.
Karnataka has recently made huge strides in renewable energy. The state made headlines at Davos where an MoU was signed with ReNew Power Company for an investment of Rs 50,000 cr. The state has also signed an MoU with ACME Cleantech Solutions for setting up Hydrogen and Ammonia production plants in Mangaluru with an associated solar power unit at an investment of Rs 52,000 crore. The State Government is currently committed to working on a Green Hydrogen policy to further strengthen its position in the renewable energy sector.
In April, the state was not only self sufficient but also among the highest power sellers in the category, data shows. According to data from the energy department, renewable energy accounts for 52% of the state’s power needs, followed by thermal, hydro and nuclear at 34%, 12% and 3% respectively. A new EV park is taking shape outside Bengaluru. The state government is also looking to organise a Global Investor Summit in November this year for the first time since 2016 to attract more investments from abroad to set up RE projects and neutralise COVID-induced sluggishness. Exide, the country’s largest automotive battery maker, in April announced an investment of Rs 6,000 crore in setting up one of the countries largest Giga factories dedicated to advanced cell chemistry technology in Haralur near Bengaluru International Airport.
Murugappa Group sets up EV arm TI Electric Mobility to re-enter EV space with e-3Ws, e-tractors
The Chennai-based Murugappa Group is once again entering the electric vehicle industry, this time with electric three-wheelers, electric tractors and more.
It plans to enter the elebtric vehicle space through a newly-formed entity TI Electric Mobility under the Group company Tube Investments of India (TII), the bi-cycle major. To begin with, the INR 5,600-crore (standalone) TII plans to have a presence in both passenger and goods carrier segments of electric 3-wheelers. The market launch is expected by the end of August or early September 2022.
Ten years ago the Group had entered the electric scooter market under the BSA brand. That business didn’t progress as planned
Natural Gas / Transnational Pipelines/ Others
USA: Ellington farm turns manure into natural gas
After five years of development and production, an Ellington farm will be on the cutting edge of green energy production this fall. Earlier Thursday, July 01, Eyewitness News got a sneak peek at how they will be able to produce massive quantities of natural gas.
They don’t even let the waste go to waste. That’s right, we’re talking about manure. Bahler said this methane digester will be up and running in October, transforming waste from his 3,000 dairy cows into natural gas. Producing quantities that he said could power 800 homes for one year’s time.
Bahler said one of his dairy cows produces about 10 gallons of milk a day, but he said each cow also produces about 15 gallons of manure. Public utility and holding company South Jersey Industries is investing in the project and Bahler said it’ll take the gas the digester generates. Bahler said this is only the beginning for this technology in Connecticut. Taking something you’d scrape off the bottom of your shoe and turning it into a gold mine.
For the first time, the USA is sending more gas to Europe than Russia
For the first time, the U.S. is supplying more natural gas to Europe than RU.S.sia sends by pipelines. Europe is seeking alternatives such as U.S. liquefied natural gas to Russian supplies after Gazprom slashed shipments through Nord Stream,
its biggest pipeline to Europe, and cut off shipments to countries that didn’t comply with new payment terms. Russia met more than a third of the European Union’s gas demand last year.
The increase in U.S. LNG imports comes as the nation ramps up output of the super-chilled fuel after starting exports from the Gulf Coast in 2016, transforming global energy trade. U.S. shipments remain strong even after a fire at the Freeport LNG plant in Texas, which has been shut for prolonged repairs.
After Russia’s war on Ukraine, the EU in March agreed on an additional 15 billion cubic meters of U.S. LNG this year in a bid to displace Russian gas. In an ambitious target, the bloc has sought to replace a third of Russian gas with LNG from various sources this year. Russia ships about 150 billion cubic meters of gas to Europe via pipelines every year, and another 14 billion to 18 billion cubic meters of LNG.
Combined with Russian LNG, which keeps arriving in Europe except for the UK, the country may still be a bigger overall gas supplier to Europe than the U.S.A. In 2021, Russia was the third-biggest supplier of LNG to Europe, after the U.S. and Qatar and ahead of Algeria, according to BP Plc’s annual statistical review of world energy.
Michigan, USA: Consumers Energy announces new investment in natural gas system
JACKSON, Mich. (WNEM) Consumers Energy received approval on Thursday, July 07, on a new natural gas system investment worth $170 million to make more affordable payments for customers.
These investments are part of the Natural Gas Delivery Plan. The plan is a 10-year, $11 billion strategies that includes upgrading transmission infrastructure, changing compression and replacing outdated distribution pipes.
Argentina holds tender for new gas pipeline, key to reversing energy deficit
Argentina will take a key step on Friday, July 08, in the construction of a major new natural gas pipeline for its huge Vaca Muerta shale formation, vital to helping the South American country reverse a deep energy deficit that is costing it billions of dollars.
The government, rattled by a recent shakeup in the economy ministry, will hold the last stage of the tender to select a firm for the construction work for the pipeline’s first phase, with work expected to begin in October and end in 2023.
New Economy Minister Mr. Silvina Batakis, who oversees the energy secretariat, this week gave her backing to the project after her predecessor Martin Guzman abruptly resigned. Domestic gas supply has become a focus with spiking global prices.
The development of the gas pipeline is being led by Energía Argentina, a public company under the orbit of the Secretary of Energy, which reports to the Ministry of Economy. The gas pipeline and related works will allow transport capacity to be increased initially by an estimated 11 million cubic meters of gas per day.
The new pipeline is key because the current system is overwhelmed, limiting the country’s ability to replace LNG imports which have spiked in price due to Russia’s invasion of Ukraine. Vaca Muerta is the world’s second largest reserve of shale gas and the fourth largest oil reserve.
In 2021, Argentina imported 56 LNG cargoes for $1.1 billion, at an average value of $8 per million British thermal units (mmBtu), to meet the gas needs of industries and homes, according to official data. Argentina imports around 20% of the gas it consumes.
This year it has already imported 41 cargoes at an average price of $30 per mmBtu, which could total some $3.7 billion in 2022 and lead to an over $6 billion energy deficit, estimated Daniel Dreizzen, analyst at consultancy Ecolatina. The pipeline could eventually change the scenario.
Greek-Bulgarian natural gas interconnector pipeline completed
Construction of the Interconnector Greece-Bulgaria (IGB) natural gas pipeline, which links the gas systems of the two countries, is completed and slated to start trial operation next month. Despite the IGB pipeline hitting several administrative obstacles during its planning and construction,
it is of great strategic significance for gas market operation in the region and the energy security of Bulgaria.
Prime Minister Kyriakos Mitsotakis, during the inauguration ceremony for the pipeline in the northern town of Komotini, described the IGB gas pipeline as “a decisive energy bridge, important for Greece, Bulgaria, the Balkans and Europe.”
The 182 km IGB gas pipeline, which links the Greek town of Komotini with Stara Zagora in Bulgaria, although small in length by international standards, is considered of great strategic value since it will allow the free flow of gas from Greece to Bulgaria. Some 32 km of the pipeline lie in Greek territory, while the rest are in Bulgaria.
Apart from the pipeline, the project comprises metering stations, a compressor, and an operations centre. The IGB pipeline also has a reverse flow capability, which is vital when balancing market needs, leading to greater flexibility and, eventually, more competitive prices.
Furthermore, the pipeline is expected to help decongest the regional system, mainly on the Greek side, as Bulgaria has been importing growing gas volumes from Greece over the last few months. The pipeline, which will run with an initial capacity of 3.0 billion cubic metres per year (bcma), is expected to upgrade to 5.0 bcma over the next three to four years as demand for gas is expected to grow.
Greece plans to double its storage capacity by the end of 2023 when a new floating LNG terminal is expected to come on stream off the harbour of Alexandroupolis. The IGB Interconnector is expected to carry gas from the TAP pipeline to Bulgaria since TAP brings natural gas from Azerbaijan to Europe via Greece and Italy, but also from the present and future LNG terminals in Greece.
Bulgartransgaz, along with DEPA, has set up the ICGB consortium as the pipeline operator and has already signed a 1.0 bcma contract with Azerbaijan to supply gas through TAP.
This contract is expected to be fully activated by October 1, when the IGB is expected to enter full commercial operation.
ADNOC unveils its first natural gas exclusive station in Abu Dhabi
Abu Dhabi National Oil Company (ADNOC) Distribution has opened its first CNG-only service station in the United Arab Emirates (UAE). The traditional Al Zahia petrol station on Al Falah Street in Abu Dhabi has undergone a comprehensive renovation and now provides natural gas vehicles with quick and easy access to the heart of the capital.
The company has been providing this alternative fuel in its station network for more than 10 years, as the first car was converted to run on natural gas in September 2010. So far, more than 10,000 vehicles have been converted to run on natural gas throughout the region.
The recently inaugurated station is one of 30 sites where CNG is currently available across the UAE, and is part of a strategic move of CNG supply sites to suitable and better equipped locations – giving drivers of natural gas vehicles a wider choice of supplies.
The alternative fuel burns more efficiently than conventional fuels, which helps reduce pollution and carbon emissions. It is also one of the safest and most cost-effective types of automobile fuels available in the market.
Global LNG Development
Kogas, TotalEnergies to consider LNG opportunities
Korea Gas Corp., aka Kogas, is partnering with TotalEnergies under a tentative agreement to develop more liquefied natural gas (LNG) marketing and development opportunities.
Under a memorandum of understanding (MOU), South Korea’s state-run Kogas and the French supermajor could cooperate on improving LNG and low-carbon energy trading to increase price stability for the country. Kogas CEO Chae Hee-bong said the agreement is the latest “valuable fruit” of the long-term cooperation between the firm and its French partner.
South Korea has received more U.S. volumes than any other country since U.S. LNG terminals started shipping out large scale cargoes overseas in 2016. South Korea has received about 1.5 Tcf of U.S. natural gas as of April. That’s about 13.6% of all exported U.S. volumes since 2016.
However, U.S. LNG volumes to South Korea have started to drop since last August. The decline accelerated after Russia’s invasion of Ukraine, which increased European demand for LNG cargoes. About 19 Bcf of U.S. LNG went to South Korea in March compared to 32 Bcf during the same time last year, according to the Energy Information Administration.
Kogas is an equity partner in at least three international LNG terminal projects with TotalEnergies. It has a 5% stake in Australia’s Gladstone LNG, a 6% stake in Yemen LNG operated by TotalEnergies and leads a consortium of Korean businesses with a 5% stake in Oman LNG.
Kogas has also been diversifying its LNG sources with long-term contracts. It signed a 20-year, 2 mmty contract with Qatar Petroleum last summer. TotalEnergies recently backed a major LNG project in Qatar, becoming the first equity stake partner in the massive North Field East (NFE) expansion project.
Kogas is one of the world’s largest buyers of LNG and imports about 90% of all volumes that enter South Korea, according to the U.S. Department of Commerce. It retains a monopoly in the country’s domestic wholesale market and supplies both power generation customers and city gas companies.
Russia takes over the Sakhalin-2 LNG project, squeezing Shell
The Russian president has signed a decree that appears to nationalize the Sakhalin-2 offshore oil and gas production-sharing agreement and related LNG facilities to squeeze out its foreign partners.
Russian President Vladimir Putin has signed a decree that could be interpreted as a backdoor move to nationalize the Sakhalin-2 offshore upstream oil and gas project and related LNG facilities as Moscow seeks to block Shell, and possibly Japan’s Mitsui and Mitsubishi from selling their stakes to other international players.
Sakhalin-2’s current partners will be offered new shares proportional to their old stakes and they would have a month to decide whether to accept the new terms. Even if the former partner agrees however, the government could refuse and sell the foreign-held stakes within a 4-month period to a Russian buyer. The decree justifies the move saying that the Russian state invested in production and transport infrastructure, as well as the LNG plant, and under the terms of the production-sharing agreement (PSA), these facilities become the property of the state, according to Russia’s business daily Kommersant.
The Russian government will not be a founder, nor will it participate in the new company, Russia’s TASS news agency reported. But under the decree, only a Russian legal entity can buy shares in the new company, the Moscow Arbitration Court will adjudicate all disputes, and the government will control any sale or transfer of shares.
Russia’s Kommersant reported that the head of Tokyo Gas, Takashi Uchida, had said in April that Japan’s withdrawal from the Sakhalin-2 project would lead to supply disruptions in cities, and it would be difficult to quickly find an alternative to Russian LNG.
In early May, ExxonMobil’s decision to declare force majeure and exit its operatorship in Russia’s other Yeltsin-era Far East megaproject, the Sakhalin-1 PSA, also rattled Japanese partners—Japan Petroleum Exploration Company (JAPEX) and Sakhalin Oil and Gas Development Company (SODECO)—both of which prefer to remain in the deal with Russia’s Rosneft and India’s ONGC Videsh.
Germany to open new LNG ports by early 2023 in bid to cut dependence on Russia
Germany will begin the operation of two temporary terminals for the import of liquefied natural gas (LNG) by early 2023, Economy Minister Mr. Robert Habeck said in an interview published by the Welt am Sonntag newspaper
on July 02. In all, the German government has leased four floating LNG terminals in its aggressive effort to reduce the country’s dependence on natural gas imported from Russia.
Mr. Klaus Mueller, the head of Germany’s Network Agency, which oversees energy supplies, said on July 2 that he fears Russia could cut off gas supplies to Germany entirely.
The same day, Jens Kerstan, Hamburg’s senator for the environment, was also quoted by Welt am Sonntag as saying rationing of hot water for residences in the city could be imposed if Russia reduces gas supplies. Mr. Kerstan said a temporary LNG terminal planned for Hamburg would not be operational until mid-2023 at the earliest.
Russia reduced gas supplies to Germany, Italy, Austria, the Czech Republic, and Slovakia last month, citing technical issues with the Nord Stream-1 pipeline. At the time, Habeck said there were no technical issues and that Germany was “in a trade dispute” with Russian President Vladimir Putin.
In June, the European Union as a whole imported more LNG from the United States than pipeline gas from Russia for the first time ever. Nonetheless, the executive director of the International Energy Agency, Fatih Birol, wrote on Twitter that “the drop in Russian supplies calls for efforts to reduce EU demand to prepare for a tough winter.”
Shell joins Qatar’s LNG expansion mega-project
QatarEnergy on Tuesday signed a deal with Shell SHEL.L for the Gulf state’s North Field East expansion, the world’s largest liquefied natural gas (LNG) project, following agreements with TotalEnergies TOTF.PA, Exxon XOMN.N, ConocoPhillips COP.N and Eni ENI.MI.
Shell will take a 6.25% stake in the North Field East expansion project, QatarEnergy CEO Saad al-Kaabi told a news conference. TotalEnergies and Exxon will also hold 6.25% stakes. Qatar is partnering with international companies in the first and largest phase of the nearly $30 billion expansion which will boost Qatar’s position as the world’s top LNG exporter.
Oil majors have been bidding for four trains or liquefaction and purification facilities that comprise the North Field East project. In all, the expansion plan includes six LNG trains that will ramp up Qatar’s liquefaction capacity to 126 million tonnes per annum (mtpa) from 77 by 2027.
The fifth and sixth trains are part of a second phase, North Field South. The North Field is part of the world’s largest gas field which Qatar shares with Iran, which calls its share South Pars. Shell CEO Mr. Ben Van Beurden was in Doha for the signing and met with Qatar’s Emir on Tuesday July 06. Beurden said during the news conference that Shell was still studying Russia’s decree on Sakhalin-2.
Russian President Mr. Vladimir Putin last week signed a decree that seizes full control of the Sakhalin-2 gas and oil project in Russia’s Far East, a move that could force out Shell as well as Japanese companies Mitsui & Co 8031.T and Mitsubishi Corp 8058.T. Beurden told reporters it was too early to discuss specific plans to compensate for any loss from Sakhalin but that it was important to note that with 64 million tonnes of production, Shell had multiple opportunities to manage portfolio changes.
China Gas, US firm sign 20-year LNG deal
China Gas Holdings Limited announced on Tuesday, July 06, that its subsidiary China Gas Hongda Energy Trading Co. LTD has signed a 20-year liquefied natural gas (LNG) agreement with Rio Grande LNG LLC, owned by NextDecade Corporation from the United States.
According to the deal, NextDecade will provide one million tons of LNG per year to China Gas starting in 2027, while the “purchase price is indexed to the benchmark price of Henry Hub.”
NextDecade Chairman and CEO Matt Schatzman described China Gas as “a leading natural gas distributor” in the People’s Republic, while China Gas Chairman, Managing Director and President Liu Ming Hui said that the agreement will ensure that the company meets “the increasing demand for high quality, stable and clean energy from our customers.”
Malaysia retains position as world’s 5th largest LNG exporter in 2021
Malaysia exported 24.9 million tonnes per annum (MTPA) of liquefied natural gas (LNG) in 2021, retaining its previous year’s position as the fifth largest LNG exporter after Australia, Qatar, the United States and Russia, the Malaysian Gas Association (MGA) declared.
Citing the 13th annual World LNG Report 2022 released by the International Gas Union (IGU) on Wednesday, July 06, MGA said last year’s export of 24.9 MTPA was a slight increase from 23.9 MTPA in 2020. This constitutes about 6.7% of the total LNG traded globally, it said in a statement on Thursday, July 07.
It said Asia Pacific remained the largest LNG exporter region with 131.2 million tonnes LNG being exported last year. Meanwhile, MGA said Malaysia continued to be a technology leader in floating liquefied natural gas (FLNG) production, which saw Petroliam Nasional Bhd’s (Petronas) Floating Liquefied Natural Gas Satu (PFLNG1) with a capacity of 1.2 MTPA and Petronas Floating Liquefied Natural Gas Dua (PFLNG2) with a capacity of 1.5 MTPA, came online in 2021.
At the end of April 2022, there were only four operational FLNG units globally, the final investment decision (FID) for the third Petronas FLNG is expected to be made by end-2023.
AG&P to commission PH’s first LNG terminal this year
The Atlantic, Gulf & Pacific (AG&P) International Holdings is looking to commission the country’s first liquefied natural gas (LNG) terminal in Batangas City this year, a top-ranking official said.
AG&P Group chairman and chief Joseph Sigelman said that the Philippines LNG (PHLNG) import terminal will be able to store LNG and dispatch it to power plants, opening “a new era of clean, efficient fuel” for the country.
The five million tonnes per annum LNG facility, which is a project between AG&P and local unit Linseed Field Power Corporation, will serve the requirements of the 1,200-megawatt (MW) Ilijan natural gas power plant of San Miguel Corporation with the expectation that the Malampaya gas-to-power project will be depleted by 2027. AG&P invested 14.6 billion in the PHLNG import terminal which is scheduled to open by mid-year.
The engineering, procurement, and construction (EPC) contract for the LNG facility was awarded by the Department of Energy (DOE) in April 2021, while the permit for construction was granted in September.
Apart from the Ilijan plant, PHLNG is also expected to service other SMC Global Power Holdings’ (SMCGP) plants like the 850-MW mid-merit plant expansion set for operations this year. SMCGP subsidiary South Premiere Power Corporation serves as Ilijan’s independent power producer administrator.
Snam buys BW LNG’s FSRU to boost Italy’s energy security
Snam and BW LNG have signed an agreement for the acquisition by Snam Group of 100% of the share capital of FSRU I Limited, which upon closing will own the floating storage and regasification unit (FSRU) ‘BW Singapore’ as its sole asset.
BW Singapore, built in 2015, has a maximum storage capacity of about 170,000 cubic metres of LNG (liquefied natural gas) and a nominal continuous regasification capacity of about 5 billion cubic metres per year. The unit has been deployed from the outset as an FSRU but can also operate as a carrier for the transport of LNG.
The FSRU, which is currently bound by a charter agreement with a third party until November 2023, is expected to be installed in the upper Adriatic Sea, close to the coast of Ravenna. Operations are scheduled to commence in the third quarter of 2024, following the completion of the authorisation and regulatory process and the finalisation of the works required for mooring and connection to the gas transport network.
The acquisition will be financed by Snam from its own resources for an amount of approximately 400 million US dollars, which will be paid in two tranches. The FSRU will be made available to Snam at the closing date of the deal, which is expected by the end of 2023. In the coming months, Snam will also begin activities to contract LNG regasification capacity which will gradually become available from the start-up of BW Singapore in Italy.
Marathon seeks more time to build LNG import project in Alaska
Marathon Petroleum Corp’s Trans-Foreland Pipeline Co unit wants more time to convert the Kenai liquefied natural gas (LNG) export plant in Alaska into an import terminal, U.S. energy regulators said on Monday, July 11.
A Federal Energy Regulatory Commission (FERC) notice said that Trans-Foreland last week sought an extension until December 2025 to complete the facility.
FERC approved Trans-Foreland’s request to build the plant in December 2020 and gave the company until December 2022 to place it into service. Trans-Foreland has said the facility would import up to four tanker loads of LNG per year and use its boil-off gas management system to deliver imported gas to the adjacent Kenai Refinery.
The Kenai LNG export plant entered service in 1969. It has not exported LNG since 2015.
The plant was the only big LNG export facility in North America until Cheniere Energy Inc’s Sabine Pass export terminal in Louisiana entered service in February 2016. Nearly all of the LNG from Kenai went to Japan. (Reporting by Scott DiSavino; Editing by Josie Kao)
Global trade in LNG grew by 4.5% in 2021
An average of 49.0 billion cubic feet per day (Bcf/d) of liquefied natural gas (LNG) was traded globally during 2021, an increase of 2.2 Bcf/d (4.5%) from 2020, according to The LNG Industry GIIGNL Annual Report 2022 by the International Group of Liquefied Natural Gas Importers (GIIGNL).
New LNG export capacity, primarily in the United States, and rising global demand for natural gas drove continued growth in global LNG trade last year.
Global LNG export capacity has increased by 29%, or 14.0 Bcf/d, over the past five years (2017–21). The growth was led primarily by capacity additions of 9.6 Bcf/d in the United States, 2.2 Bcf/d in Australia, and 1.7 Bcf/d in Russia. Last year, LNG exports increased the most from the United States, a 2.9 Bcf/d increase compared with 2020. Australia increased its LNG exports by 0.1 Bcf/d, remaining the world’s largest LNG exporter for the second consecutive year. In North Africa, LNG exports from Egypt increased by 0.7 Bcf/d and from Algeria by 0.2 Bcf/d, the second- and third-largest year-on-year volumetric increases among all LNG-exporting countries.
Among LNG-importing regions in 2021, only Asia and Latin America increased annual imports: Asia by 2.4 Bcf/d and Latin America by 0.6 Bcf/d. In four of the past five years, China increased its imports of LNG more than any other country. In 2021, China’s LNG imports grew by 1.4 Bcf/d, accounting for 57% of the increase in Asia’s LNG imports. Japan’s LNG imports, essentially flat from 2020 to 2021, declined by 11% (1.2 Bcf/d) between 2017 and 2021 as a result of nuclear units coming back online. India reduced LNG imports by 0.3 Bcf/d in 2021 primarily because of record-high LNG spot prices in Asia.
Europe’s LNG imports were 8% (0.9 Bcf/d) lower during 2021 than 2020 because larger volumes of flexible LNG supplies, primarily from the United States, were shipped to Asia and Brazil. Lower LNG imports in Europe contributed to record-low natural gas storage inventories during 2021, even as prices reached record highs. The United Kingdom and Italy reduced LNG imports more than other European countries between 2020 and 2021, by 0.3 Bcf/d each.
In Latin America, Brazil had the most growth in LNG imports between 2020 and 2021. Brazil’s LNG imports increased by 0.6 Bcf/d, averaging 0.9 Bcf/d during 2021, as it experienced its worst drought in more than 90 years. The drought limited hydroelectric power generation and led to increased natura gas-fired electricity generation.
Technological Development for Cleaner and Greener Environment Hydrogen & Bio-Methane
CMA CGM looks to set up biomethane production in France
French liner CMA CGM and fellow energy group Engie are advancing their cooperation in renewable gas fuels for shipping with plans to launch biomethane production in France in 2026.
The companies have announced a €150m ($156m) investment scheme to establish a facility at the port of Le Havre fueled by dry biomass from local wood-waste sources, along with solid recovered fuel, to produce 11,000 tonnes of biomethane annually. An investment decision is expected at the end of the year. The project, dubbed Slamander, is the first step towards the companies’ shared goal of producing up to 200,000 tonnes of renewable gas annually by 2028 for CMA CGM ships and the wider shipping industry.
CMA CGM has been putting money into dual-fuel engine technology, which currently runs on liquified natural gas (LNG) but is also capable of using bioLNG as well as synthetic methane. The Marseille-headquartered firm currently has a fleet of 30 e-methane-ready ships in operation and plans to have more than doubled that by the end of 2026.
The Marseille-headquartered carrier has also looked to further expand its energy mix by ordering its first ships that will run on methanol, a fuel heavily promoted by its Danish rival, Maersk.
Viva Energy Australia in track to to open its first hydrogen service station
Viva Energy has made significant advancements in the development of its hydrogen refuelling station. The company is looking to serve Australia’s most prominent commercial transport fleets with the new facility set to be operational by late 2023 in Geelong.
The firm has placed orders for a 2.5MW electrolyser for green hydrogen production and a fast-fuelling hydrogen dispensing system capable of servicing multiple vehicles at once. The equipment is expected to be delivered by the third quarter of next year as a first of its kind for the Australian market.
The electrolyser will use renewable electricity to split water molecules into hydrogen and oxygen while the recycled water will be supplied from Barwon Water’s Northern Water Plant. Nel Hydrogen US, a subsidiary of Norwegian Nel ASA, will provide the containerised electrolyser jointly with local partner ENGV.
The company is also partnering with Air Liquide to provide a “fast fill” refuelling package tailored to attend to at least 10 trucks or buses consecutively. The system will be capable of dispensing 300 kg. Of hydrogen in just two hours, which will let Viva Energy’s alternative fuel customers have a similar experience to refuelling with traditional fuel.
Viva will be able to generate and deliver more than 1,000 kg of green hydrogen daily, which can power a fleet of at least 15 hydrogen fuel cell heavy vehicles. The first site is expected to kick off the project to build new hydrogen stations reaching from Geelong and Melbourne to Sydney and Brisbane.
Viva Energy announced its plans to build a hydrogen mobility network across Australia back in March of this year. The company is seeking to set up several service stations that can offer customers the alternative fuel while also providing electric vehicle recharging. This will help in bringing together zero emission technologies to support Australia’s energy transition.