NGS’ NG/LNG SNAPSHOT June 16-30, 2024
National News Internatonal News
NATIONAL NEWS
City Gas Distribution & Auto LPG
Tamil Nadu Launches CNG and LNG Buses to Cut Costs and Emissions
In a bid to reduce environmental impact and operational costs, Tamil Nadu has introduced CNG and LNG buses on select routes. This experimental initiative aims to cut expenses by up to 20% and lessen the state’s carbon footprint. About 1.76 crore people use the 20,160 diesel buses daily, making fuel a significant cost factor.
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In an effort to curb the environmental impact and operational costs associated with diesel buses, the Tamil Nadu government on Thursday introduced CNG and LNG buses for select routes, in an experimental initiative.
This transition to alternative fuels is expected to save between 7-20 per cent of total expenses and significantly reduce the carbon footprint of the state transport department. Currently, approximately 1.76 crore people are serviced by 20,160 diesel buses operated by various transport corporations each day, with nearly 27 per cent of their expenses attributed to fuel costs.
Following Chief Minister M K Stalin’s directive to adopt alternate fuels, Transport Minister S S Sivasankar announced that 14 buses using Liquified Natural Gas (LNG) and Compressed Natural Gas (CNG) would be operated by seven transport corporations on a trial basis. The new service was formally launched in transport corporations operating in Chennai, Villupuram, and Kumbakonam during an official function.
In addition, the minister handed out appointment orders on compassionate grounds to 49 legal heirs of transport corporation employees who lost their lives while on duty.
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111 of 383 villages in capital have got piped PNG connections: LG Saxena. The facility will be expanded to 311 Delhi villages by the end of the year, they said, adding that the remaining 72 villages will be connected to the PNG network by March 2025
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Lieutenant governor VK Saxena’s office on Thursday said that 111 of the 383 villages in the Capital have been equipped with piped natural gas (PNG) connections.
Officials said Indraprastha Gas Limited (IGL) has laid 672 km of pipelines in these 111 villages, has received 129,000 applications for gas connections so far, and has installed 77,513 PNG meters.
The facility will be expanded to 311 Delhi villages by the end of the year, they said, adding that the remaining 72 villages will be connected to the PNG network by March 2025.
“PNG connection in Delhi’s villages was envisaged by Delhi LG in June 2023 as part of his plan to transform and develop the hitherto neglected villages with better amenities. Subsequently, he held several rounds of meetings with IGL and other concerned agencies and in six months, PNG pipelines were laid. The first ever PNG connection in northwest Delhi’s Qutabgarh village was inaugurated by the LG in December 2023. This was also the first venture of IGL in Delhi’s rural areas, which was till date confined to the selected urban residential colonies only,” said an official from LG’s office.
During a review meeting, Saxena directed the concerned agencies – MCD, PWD, DDA and NDMC – to provide requisite permissions for laying PNG pipelines and other formalities on priority within 30 days, officials said.
“The LG emphasised that this initiative will also prevent the villagers from the hassle of getting LPG cylinders refilled/replaced and this will result in huge savings in terms of money and energy for the local villagers,” officials said.
The LG had earlier said that Delhi will be the first city in the country where every house will be provided piped gas.
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Natural Gas/ Pipelines/ Company News
Gujarat Gas, GAIL, Petronet LNG shares: 3 cos to benefit if natural gas is included in GST
Jefferies in its latest note said that the Modi government reviving talks to include natural gas under GST should aid companies such as Gujarat Gas Ltd, GAIL (India) Ltd and Petronet LNG Ltd, adding that three out of four key states that could hold sway are under the ruling NDA. Such an inclusion could lower natural gas cost by $0.8-0.9 per mmBtu and aid faster adoption, helping GAIL’s transmission and trading volumes in the medium term, the foreign brokerage said.
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GAIL’s consolidated Ebitda could rise 2 per cent assuming it retains the benefit in the LPG segment, it added In the case of Gujarat Gas Ltd, it’s competitiveness to propane is seen improving 6 per cent, aiding volumes or margin. Gujarat Gas would benefit in Morbi, Jefferies said noting that the 6 per cent VAT on natural gas sold in Morbi, if subsumed under GST, would improve Gujarat Gas’ competitiveness to propane by Rs 2.5 per kg at current prices. If passed on, this would improve volumes; if retained, it would improve margins.
Petronet LNG could also benefit as improved competitiveness of natural gas if GAIL passes on the $0.8-0.9 MMBtu benefit should drive volume growth, aiding PLNG’s LNG volumes. It said such benefits would accrue gradually over the medium term.
“VAT on CNG in Delhi/Mumbai/Gujarat is 0 per cent/3 per cent/5 per cent. We expect CGD players to pass on the benefit to consumers if CNG is subsumed under GST. This should increase the discount to petrol/diesel and marginally aid volume growth,” Jefferies said.
On GAIL, the foreign brokerage said the tariff charged in its transmission business is already under GST. But the VAT on natural gas used as fuel is stranded.
“This VAT (Rs 0.8bn in FY24 calc) could be offset, but the company expects the regulator to cut tariff to pass on the benefit to the consumer. VAT paid on NG purchased from third parties in the trading business is offset against VAT charged on NG sales, resulting in no stranding of taxes paid. In the petrochemical business, no VAT is payable on LNG used as input, as it is treated as GAIL’s own gas given the importing entity is GAIL. So, there is no stranding of taxes,” it said.
Jefferies said, in the LPG business, VAT paid on natural gas as input is stranded today, as the final product is under GST. “Inclusion would benefit GAIL whose consolidated Ebitda can see 2 per cent upgrade, unless the government forces it to pass on the benefit to the OMCs,” it said.
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In first hike in six months, IGL raises CNG price by Re 1
NEW DELHI: IGL on Saturday raised CNG (compressed natural gas) price by Re 1 per kg in Delhi and neighbouring cities as well as in other markets, marking the first hike in six months that could prompt a clamour for fare hikes by auto, goods carriers, taxi and bus operators
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The price of PNG (piped natural gas) supplied to households remained unchanged.
After the latest increase, CNG will cost Rs 75.09 per kg in Delhi, up from Rs 74.09. In Noida, Greater Noida, and Ghaziabad, the new price will be Rs 79.70 per kg from Rs 78.70 per kg.
IGL had last raised CNG price by Re 1 per kg on December 14 last year in all its markets. In March, however, the price was reduced by Rs 2.50 per kg to Rs 24.09.
Company executives said IGL’s input costs have risen due to rising dependence on imported and auctioned domestic gas from the market, which are costlier, to meet rising demand amid inadequate supply of cheaper gas under government price control from ONGC’s fields.
More than a third of CNG supplied by IGL is currently being met with costlier gas sourced from the market. This does not impact PNG prices since it gets first priority over government-controlled cheaper gas from ONGC’s fields.
Other city gas retailers have so far not announced any change in prices.
In Ajmer, Pali, and Rajsamand in Rajasthan, CNG prices have been increased to Rs 82.94 per kg from Rs 81.94 per kg by IGL.
CNG prices have also increased in Rewari, Haryana, as well as Meerut, Muzaffarnagar, and Shamli in Uttar Pradesh — towns serviced by IGL.
New Delhi: IGL on Saturday raised CNG (compressed natural gas) price by Re 1 per kg in Delhi and neighbouring cities as well as in other markets, marking the first hike in six months that could prompt a clamour for fare hikes by auto, goods carriers, taxi and bus operators.
The price of PNG (piped natural gas) supplied to households remained unchanged.
After the latest increase, CNG will cost Rs 75.09 per kg in Delhi, up from Rs 74.09. In Noida, Greater Noida, and Ghaziabad, the new price will be Rs 79.70 per kg from Rs 78.70 per kg.
IGL had last raised CNG price by Re 1 per kg on December 14 last year in all its markets. In March, however, the price was reduced by Rs 2.50 per kg to Rs 24.09.
Company executives said IGL’s input costs have risen due to rising dependence on imported and auctioned domestic gas from the market, which are costlier, to meet rising demand amid inadequate supply of cheaper gas under government price control from ONGC’s fields.
More than a third of CNG supplied by IGL is currently being met with costlier gas sourced from the market. This does not impact PNG prices since it gets first priority over government-controlled cheaper gas from ONGC’s fields.
Other city gas retailers have so far not announced any change in prices.
In Ajmer, Pali, and Rajsamand in Rajasthan, CNG prices have been increased to Rs 82.94 per kg from Rs 81.94 per kg by IGL.
CNG prices have also increased in Rewari, Haryana, as well as Meerut, Muzaffarnagar, and Shamli in Uttar Pradesh — towns serviced by IGL.
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Adani Total gets PNGRB nod
Adani Total Gas Ltd (ATGL) has received approval from the Petroleum and Natural Gas Regulatory Board (PNGRB) to establish a city gas distribution (CGD) network in Jalandhar, Punjab.
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This move aligns with Adani Total?
strategy to expand its gas distribution footprint across India, enhancing access to clean energy and contributing to the country?
sustainable development goals.The PNGRB nod allows ATGL to set up infrastructure for the distribution of compressed natural gas (CNG) for vehicles and piped natural gas (PNG) for residential, commercial, and industrial use. This initiative is expected to improve the accessibility of cleaner fuel alternatives in Jalandhar, reducing dependence on conventional fuels and contributing to environmental conservation.
The CGD project in Jalandhar will involve laying down an extensive network of pipelines to ensure a steady supply of natural gas to various sectors. The infrastructure development will include setting up CNG stations for vehicles, which will promote the use of CNG as a more environmentally friendly fuel compared to petrol and diesel. Additionally, the provision of PNG to households and industries will support the transition to cleaner energy sources, thus reducing carbon emissions.
Adani Total?s expansion into Jalandhar is part of a broader plan to enhance India?s gas infrastructure and promote the use of natural gas as a key energy source. The company aims to establish CGD networks in multiple cities across the country, ensuring a reliable and cost-effective supply of natural gas. This effort is expected to contribute significantly to India?
s goal of increasing the share of natural gas in its energy mix from the current 6% to 15% by 2030.The establishment of the CGD network in Jalandhar will not only provide economic benefits by generating employment opportunities during the construction and operational phases but will also play a crucial role in improving the region’s air quality. With the increasing focus on sustainable development, initiatives like these are vital for achieving long-term environmental goals.
https://www.constructionworld.in/energy-infrastructure/oil-and-gas/adani-total-gets-pngrb-nod/57890
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Gujarat Gas plans capex of 12 bln rupees in FY25, source says
AHMEDABAD – Gujarat Gas Ltd plans capital expenditure of nearly 12 bln rupees in 2024-25 (Apr-Mar), as against 8.12 bln rupees it had spent in 2023-24, a top company official told Informist on condition of anonymity. “We have 36,000 km of piped network currently and the majority of the proposed investment would be in laying steel pipelines across the states of Rajasthan, Punjab, Haryana, Madhya Pradesh and Maharashtra,” the official said.”We also plan to add 330,000 new residential connections in 2024-25.”
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Currently, Gujarat Gas is connected to 2.1 mln households across 27 geographical areas in six states and one Union territory. In 2023-24, the company added 187,000 new households to its network of piped natural gas supply. It also sold 0.71 mscmd of natural gas to households in 2023-24.Other than expanding its pipeline network, Gujarat Gas also hopes to add 200 compressed natural gas stations to its existing 808 pumps operating across India.
The government of Gujarat, which has a controlling stake in the company, had announced in November that going forward, Gujarat Gas would set up compressed natural gas stations primarily on a public-private partnership basis. As per the new scheme, dealers would be granted licences to set up stations and sell compressed natural gas.
The dealer would be fully responsible for getting the requisite permissions and investment, including the land and equipment costs, to set up the station. Further, if a dealer decides to exit within 10 years of setting up a compressed natural gas station, they have to pay a penalty to Gujarat Gas.
As per the scheme, Gujarat Gas would only deliver gas to the dealer stations through its network of steel pipelines. Dealers would be required to spend a total of 5-6 bln rupees to set up these 200 stations. “With dealers spending every penny, this would not just be a big savings for Gujarat Gas, but it also opens up untapped potential for CNG sale across geographies as the dealer would have done his or her due diligence,” the official said. “We received 628 applications and would grant approval to 200 of them. Of these, 75% would be in Gujarat, with the remaining in Maharashtra, Haryana and Punjab,” the official said.
The stations of the company currently sell 500-3,000 kg of compressed natural gas per day, with break even at around 1,000 kg per day. “The CNG business is a cash and carry business. The customer pays you immediately. As for piped natural gas, the payment may come 45-90 days after the consumption of natural gas by commercial, residential or industrial user,” the official said.
“Moreover, you also need to keep an inventory in the form of natural gas in the pipeline. For Gujarat Gas it comes to nearly 4 bln rupees.”The company had attained an average compressed natural gas volume of 2.89 mscmd in 2023-24, 14% higher on year. Its volumes have just crossed 3 mscmd, the official said. Historically, the company’s compressed natural gas sales have grown 11.5% annually. In the last financial year, Gujarat Gas had effectively not added a single compressed natural gas station to its network, compared to 102 it added in 2022-23.
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Mahanagar Gas had a bumper FY24. This year, it may be a bit squeezed
Every year cannot be a bumper one. That, in short, summarises Mahanagar Gas Ltd’s near-term outlook. After a solid year of profitability, the city gas distribution company’s margin is expected to taper this financial year.
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MGL’s Ebitda per standard cubic meter (scm) had scaled up to a multi-year high of about ₹14 in 2023-24, thanks to lower cost of gas procurement despite marginally lower revenue. For the next 2-3 years, however, MGL expects its Ebitda per scm to drop to ₹9-11, the company told analysts at its recent investor meeting.
That said, MGL, which currently has a presence in Maharashtra, expects volume growth of 6-7% as it expands its network coverage.
In keeping with the company’s forecast, Centrum Broking estimates MGL’s FY25 earnings per share to drop 26%, followed by a 2.7% EPS increase in FY26.
“We believe, incrementally MGL’s volume growth to largely determine its earnings growth provided the company is able to maintain its Ebitda/scm,” Centrum’s analysts said in a research note. MGL’s total volume in FY24 stood at 3.6 million standard cubic metres per day.
This financial year, lower sale prices rolled out in March and a drop in the share of administered price mechanism (APM) gas are expected to weigh on MGL’s margin. The company’s management has indicated that APM gas share has fallen to about 70% in the April-June quarter, from 75% earlier.
MGL plans to invest about ₹1,000 crore this financial year in laying pipelines and building other associated infrastructure, including ₹200 crore in its recently acquired gas distribution company Unison Enviro Pvt. Ltd.
UEPL holds licences to distribute natural gas in three districts in Maharashtra, and has already begun supplies in one. UEPL’s current volume is 0.14 million standard cubic metres per day, with growth expected to be about 10%.
MGL also entered into a joint venture with Baidyanath LNG Pvt. Ltd in December to set up liquified natural gas retail outlets. The joint venture will establish six stations in the first phase to supply LNG to heavy-duty vehicles such as trucks.
MGL has also entered into a pact with the Mumbai municipal corporation to set up a 1,000-tonne per day compressed biogas plant to convert solid waste, entailing an investment of ₹500 crore.
Yet, the biggest trigger for MGL would be the inclusion of natural gas under the goods and services tax, allowing consumers to claim credit for input tax paid and possibly lower the cost of gas for them; and increase usage among industrial and commercial consumers.
The MGL stock trades at about 12 times its FY25 estimated earnings, show Bloomberg data. It has gained 20% so far in 2024. But in the near future, margin concerns may weigh on sentiment even as MGL’s valuations aren’t pricey.
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Policy Matters/ Gas Pricing/ Others
PNGRB seeks to regulate LNG terminals
Companies planning to set up new liquefied natural gas (LNG) terminals or expand existing ones will need approval of the downstream regulator, according to a draft regulation by the Petroleum and Natural Gas Regulatory Board (PNGRB), which is seeking to regulate terminals that are expanding rapidly while remaining deeply underutilised
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The draft regulation, open to public consultation, is aimed at all operating and future terminals which will have to register with the regulator.
Any entity wanting to build an LNG terminal will have to intimate PNGRB before taking the final investment decision (FID), according to the draft.
For both new units as well as expansion, the regulator’s approval will hinge on one or more of these criteria such as promoting competition among operators, avoiding infructuous investment, ensuring adequate national gas supply, protecting customer interest and availability of gas evacuation facility from the terminal, according to the draft.
PNGRB can suspend or terminate the registration of a terminal or forfeit its bank guarantee if it’s found involved in unfair trade practice or breaching regulatory obligations, according to the draft.
The proposed regulation requires companies planning new capacity to “have a credible business plan for utilisation of capacity” and “submit the business plan and detailed evacuation plan.”
Companies also need to furnish a bank guarantee equal to 1% of the estimated project cost of the terminal or Rs 25 crore, whichever is less.
PNGRB will approve the “completion schedule” of the LNG terminal and can impose a financial penalty on the operator for not sticking to the completion schedule.
India’s LNG terminal capacity has expanded two-thirds in five years to about 45 million tonnes per annum. Another 20 million tonnes per annum capacity is on the cards.
Average capacity utilisation, however, has remained low due to a combination of low domestic gas demand and inadequate evacuation facilities. Five of the total seven terminals operated at 30% or lower capacity in 2023-24.
Petronet LNG, a listed joint venture of state-run oil companies, is the oldest and largest operator of LNG terminals in India. Its terminal at Dahej in Gujarat operated at 95% capacity last fiscal year. But its other terminal at Kochi operated at just 20%. Kochi terminal has languished for years due to the absence of a pipeline that can evacuate gas from the terminal to demand centres.
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Name
Energy policy continuity likely, but PSUs fear regulatory risks
The new coalition government is expected to ensure policy continuity for the energy and commodity sectors with a focus on energy transition and meeting the goal of net zero by 2070, analysts said.
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However, the lower-than-expected seat share by the Bharatiya Janata Party in Lok Sabha has created fears of regulatory risks to the PSU-dominated oil and gas sector, ICICI Securities said.
Moreover, now that the elections are over, analysts are hopeful of a change in the pricing policies of the state-owned oil marketing companies and see them revising the retail prices of petrol and diesel once again.
“We are fairly sanguine on any material changes to pricing policies of OMCs and even margin trends for the gas companies post the formation of the new government at the Centre,” the brokerage firm said in its latest report.
Analysts at ICICI Securities expect a reduction of `3 per litre in both petrol and diesel prices, with gross refining margins assumed at $5 per barrel as seen in the first quarter of FY25 so far.
Increasing demand for oil, gas, and renewable energy sources is further expected to drive investments in the country, analysts say. “India’s rapid economic growth will be underpinned by a multidimensional energy transition — with strong demand growth for oil, gas and renewables,” said Atul Arya, chief energy strategist at S&P Global Commodity Insights. “With this win, we can expect policy continuity. It will present new investment opportunities for both domestic and international investors,” he said.
The firm noted that the new government will start office with some familiar challenges of keeping energy supply affordable, reliable and clean — all of which underpin the goal for natural gas to have a 15% share of the country’s primary energy mix by 2030. The government first set the target of a 15% share of natural gas back in 2017 when the share of gas was just over 6% but no major change has happened since.
“While the 15% target has remained unchanged, the energy landscape has evolved rapidly during that period, raising questions over whether it is still relevant,” S&P Global Commodity Insights said. Moreover, the previous government’s target of a 20% ethanol blending rate in gasoline by 2025, still remains to reach its destination. Analysts say that market participants have been concerned about a scarcity of first-generation feedstocks, primarily sourced from sugarcane and corn, that could delay this timeline.
The industry now expects the new government to address challenges in utilising second-generation feedstocks such as agricultural and biomass waste to ensure a stronger ethanol production supply chain. While the Modi-led government has tried to increase the domestic oil and gas production since it came to power, the output has remained stagnant with the import dependency only reaching new highs.
What needs to be seen is how the new coalition government navigates through rising geopolitical tensions and demand-supply concerns that have long plagued the global oil market.
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Puri reaffirms 20% ethanol blending target by 2025
New Delhi: Hardeep Singh Puri, who has been reappointed as the Union Minister of Petroleum and Natural Gas in the new government, took charge of his office on Tuesday and reiterated the Modi government’s firm commitment to achieving the target of 20 per cent ethanol blending in fuel by 2025. The minister also highlighted the significant progress made in May, when the country crossed the 15 per cent ethanol blending milestone.
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“The Prime Minister had originally set a target of 20 per cent blending by 2030,” Minister Puri stated. “Based on our current progress and ongoing work, I am confident that we will achieve the 20 per cent blending target by 2025, which was brought forward from 2030,” he added. After assuming his new role, Puri emphasized India’s successful management of the energy trilemma—ensuring energy availability, affordability, and sustainability—during a period when other nations, including developed countries, faced energy rationing, fuel shortages, and soaring prices. He noted that India is possibly the only country where fuel prices have decreased over the past two and a half years.
The minister also pointed out the significant increase in LPG connections from 14 crores in 2014, with only 55 per cent of the population having access, to 32 crores now, attributing this success to the Ujjwala scheme. In terms of exploration and production, Puri announced that oil production from the 98/2 well will soon increase to 45,000 barrels per day, with gas production also set to commence shortly.
He mentioned that ONGC has invited international oil and gas majors with annual revenues above $75 billion to participate in a tender for a technology partnership in the western offshore region.
Integrating green hydrogen into the refining process is another area of focus, with the PNG minister announcing the upcoming installation of green hydrogen plants at refineries in Panipat, Mathura, and Paradeep. He also mentioned the commissioning of the first green hydrogen plant on 27th May 2024, and establishing a green hydrogen station at Kochi for buses serving the Kochi Airport.
Looking ahead to upcoming projects in the refining sector, Puri informed that BPCL is in an advanced stage of setting up greenfield refineries. At the same time, GAIL plans to establish an ethane cracker unit for petrochemicals. He also mentioned the upcoming Bina refinery by BPCL and the Cauvery Basin Refinery by IOCL in Chennai.
Meanwhile, the minister’s statements reflect the government’s continued efforts to enhance India’s energy security, promote sustainable practices, and maintain affordable fuel prices for its citizens.
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LNG Use / LNG Development and Shipping
India looks to export RLNG to BD via pipeline
Two Indian energy companies are eyeing export of re-gasified liquefied natural gas (RLNG) to Bangladesh within next few years after laying two separate pipelines totalling 265 kilometres.
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After importing the gas from international suppliers, Indian state-run GAIL and private company H-Energy will supply RLNG to separate Bangladeshi entities.
India’s H-Energy is set to sign a deal with Bangladesh’s state-owned oil, gas and mineral corporation Petrobangla, while GAIL is finalising a re-gasified LNG sales agreement with private Bangladeshi firm Dipon Gas Company.
Market analysts attribute this move by the Indian companies to sluggish domestic LNG consumption in India over the past several years.
Neighbouring India imported around 23.3 million tonnes (mt) of LNG during the fiscal year of 2023-2024 (April-March), which is a 7.17 per cent decrease compared to the country’s peak LNG import volume of 25.1 mt in FY 2020-21, according to India’s Petroleum Planning and Analysis Cell (PPAC).
India’s GAIL and H-Energy will primarily export a combined total of around 1.6-2.0 million tonnes per annum (MTPA) of re-gasified LNG, which could be expanded through mutual negotiations.
H-Energy, a subsidiary of the Hiranandani Group, intends to supply half of the total, or 0.8-1.0 MTPA, while GAIL will handle the remaining half of 0.8-1.0 MTPA.
The pipelines, prices
H-Energy plans to supply the gas from Digha in West Bengal to Khulna in Bangladesh. This will require constructing a 155 km cross-border pipeline stretching from Kanai Chatta in East Medinipur district to Shrirampur in Khulna.
The pipeline will be divided, with 90 km laid within India and 65 km within Bangladesh.
H-Energy will cover the construction costs, while Petrobangla will be responsible for the wheeling charges.
H-Energy’s selling price will be linked to Brent Crude, ensuring flexibility to fluctuate with international market movements.
GAIL will supply the gas to Jashore district in southwestern Bangladesh. The gas will be delivered through a 110 km cross-border pipeline constructed from the Benapole border.
The pipeline will be divided, with 65 km laid within India and 45 km within Bangladesh.
GAIL will build the Indian segment of the pipeline, while Bangladesh’s Dipon Gas will be responsible for constructing the Bangladeshi stretch.
Dipon Gas and GAIL have not yet finalised the benchmark for setting RLNG prices.
“We are now at the final stage of inking RLNG import deals with India’s H-Energy,” Petrobangla Chairman Zanendra Nath Sarker told The Financial Express recently.
“All relevant issues, including payment methods, pipeline management and pricing, have already been discussed,” he added.
According to the Petrobangla chairman, H-Energy will be able to deliver re-gasified LNG to Bangladesh within two years of finalising the deals. This timeframe encompasses pipeline construction and the signing of purchase and sales agreements.
“We expect to receive RLNG from H-Energy by 2027,” said a senior Petrobangla official involved in the negotiations.
Indian LNG to feed power plants, southern industries
He said re-gasified LNG from H-Energy will mainly be used for a 22-year period to feed the 800MW Rupsha combined-cycle power plant, owned by the state-run North West Power Generation Company.
“The remaining RLNG could be used by industries and other gas-fired power plants in the southern region,” he added.
The Asian Development Bank (ADB) is providing a loan of around $600 million, while the Islamic Development Bank (IsDB) is contributing around $200 million to the Rupsha power plant project, which features two 400MW gas-fired units. The government intends to cover the remaining $150 million.
An insider from GAIL said RLNG supply to Jashore might be expedited if major land acquisition hurdles for pipeline construction can be avoided.
Dipon Gas will be utilising funds from Saudi Arabia to implement the pipeline project and import RLNG. Initially, the company will sell RLNG to Petrobangla and other interested private consumers, including industries and power plants.
It has future plans to set up a fertiliser factory and a power plant that will utilise GAIL’s RLNG as their primary energy source.
To this end, state-owned Petrobangla signed a memorandum of understanding with H-Energy a few years ago.
In 2018, Petrobangla also signed an agreement with the Indian Oil Corporation (IOCL) for a similar purpose. However, this agreement has not progressed since then.
Four new long-term LNG deals in past year
Apart from natural gas production at domestic gas fields, the country has been importing LNG since April 2018 and re-gasifying it in two privately owned floating storage and re-gasification units (FSRU) at Moheshkhali island in the Bay of Bengal.
Combined, these FSRUs have a regasification capacity of around 1,100 million cubic feet per day (mmcfd). The country has also been a participant in the international LNG spot market since September 2020.
Over the past year, Bangladesh has signed four new long-term LNG sales and purchase agreements (SPAs).
These agreements, which take effect from 2026 onwards, will see the country import an estimated 5.0-6.0 million tonnes per annum (MTPA) of LNG.
Qatargas and OQ Trading International (formerly Oman Trading International) are currently supplying LNG to Bangladesh under long-term contracts.
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GAIL India issues LNG tenders for July, August delivery, sources say
SINGAPORE, June 13 (Reuters) -GAIL (India) GAIL.NS, the country’s biggest gas distributor, has issued two tenders seeking spot liquefied natural gas (LNG) cargoes for delivery in July and August, according to two industry sources on Thursday.
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One is a swap tender offering LNG cargo on a free-on-board (FOB) basis for loading from the Sabine Pass, United States, on August 9. This is in exchange for cargo to be delivered on a delivered ex-ship (DES) basis to the Dhamra terminal in eastern India from August 15-18, said the sources.
The swap tender closes on June 14.
GAIL is also seeking LNG supply for delivery to the Hazira terminal on July 11-15, or to the Dahej terminal on July 9 or 13, one of the sources said, in a tender that closes on June 13.
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Volvo Trucks India embarks on LNG journey with a supply of 20 trucks to Delhivery
Volvo Trucks India delivers 20 LNG-powered trucks to Delhivery, promoting gas-based economy with lower emissions and fuel economy. Volvo Trucks India has taken a significant step in its LNG (liquefied natural gas) journey by delivering its first set of 20 LNG-powered heavy-duty trucks to Delhivery, a third-party logistics service provider.
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These LNG-powered trucks will operate alongside Delhivery’s existing fleet of Volvo diesel-powered trucks. As India continues to promote a gas-based economy, Volvo Trucks has decided to introduce its LNG trucks for select applications after conducting trials in India with LNG.
Volvo’s LNG trucks are equipped with the company’s patented HPDI (high-powered direct injection) technology. Unlike spark ignition engines, HPDI uses compression ignition or diesel cycle, resulting in a 15-20 per cent improvement in fuel economy over other LNG trucks. Additionally, HPDI technology produces lower emissions compared to spark-ignited LNG trucks while maintaining the same torque and efficiency as diesel engines, according to B Dinakar, Executive Vice President of Volvo Trucks, VE Commercial Vehicles Ltd.
Dinakar also noted that Volvo Trucks is actively working on building an ecosystem for LNG transportation while promoting its LNG vehicles. The company is collaborating with various stakeholders, including regulatory authorities, to ensure the availability of LNG filling stations along routes used by LNG trucks.
Volvo Trucks is in discussions with Indian Oil Corporation, Mahanagar Gas in Mumbai, and several other companies, including city gas distribution firms. “Collaboration is the way forward in this space, and Volvo Trucks will continue to work towards building the ecosystem,” Dinakar added.
LNG is measured in kilograms, with one kilogram of LNG providing the same energy as 1.4 liters of diesel. Although LNG prices increased during the recent crisis, LNG is currently about 10 per cent cheaper than diesel. Compared to fossil fuels, LNG produces 20 per cent lesser CO2 emissions. Volvo’s LNG trucks are also BioLNG compatible, which can potentially reduce CO2 emissions by 100 per cent.
“We view India as one of our key growth markets,” said Hanna Ljungqvist, Head of Market India & Indonesia, Volvo Trucks. “With the rapid development of roads and expressways, the value of Volvo trucks in terms of safety, durability, and speed presents a significant growth opportunity across various segments.”
Globally, Volvo Trucks has sold over 7,500 LNG trucks, with Europe accounting for more than one-third of its LNG volumes. While Volvo does not currently offer LNG solutions in North America or Latin America, it continues to explore opportunities in these regions.
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Indian Oil signs mega 10-year LNG supply contract with Total Energies
Total Energies has signed a sales and purchase agreement with Indian Oil Corporation for the delivery to India of up to 800,000 tons per year of LNG for 10 years from 2026.
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In line with its strategy to grow its liquefied natural gas (LNG) business, Total Energies has, earlier this month, announced the signing of two new LNG medium- and long-term contracts in Asia.
The first one is a sales and purchase agreement (SPA) with Indian Oil Corporation (IOCL) for the delivery to India of up to 800,000 tons per year of LNG for ten years from 2026.
The second is an agreement (HoA) with Korea South-East Power for the delivery to South Korea of up to around 500,000 tons per year of LNG for five years from 2027.
These agreements allow Total Energies to secure medium-term outlets for its global LNG supply portfolio. They also strengthen the company’s footprint in Asian markets, where it is particularly committed to supporting its customers with their decarbonization strategies.
“We are delighted to have been selected by IOCL and Korea South-East Power to supply LNG to India and Korea. These contracts enable us to contribute to the energy security and transition of these countries, to which we have an enduring commitment,” said Gregory Joffroy, Senior Vice President, LNG at TotalEnergies.
Total Energies is the world’s third largest LNG player with a global portfolio of 44 Mt/y in 2023 and benefits from its interests in liquefaction plants in all geographies. The company has an integrated position across the LNG value chain, including production, transportation, access to more than 20 Mt/y of regasification capacity in Europe, trading, and LNG bunkering.
TotalEnergies’ goal is to increase the share of natural gas in its sales mix to close to 50% by 2030, to reduce carbon emissions and eliminate methane emissions associated with the gas value chain, and to work with local partners to promote the transition from coal to natural gas.
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Electric Mobility/ Hydrogen/Bio-Methane
L&T bags large offshore order from ONGC for its Hydrocarbon vertical
Subramanian Sarma, Whole-time Director & President (Energy), L&T, said, “This order demonstrates ONGC’s confidence in L&T forged through execution of multiple complex offshore projects and also reinforces L&T’s commitment to contribute towards India’s energy security.”
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Larsen and Toubro (L&T) announced on Thursday, that its Hydrocarbon vertical (L&T Energy) has secured a large order from the Oil & Natural Gas Corporation (ONGC) for Daman Upside Development Project-Wellhead Platforms & Pipelines (DUDP-WP), off India’s west coast.
The scope of work, it added, includes engineering, procurement, construction, installation, and commissioning of four Wellhead Platforms, 140-km Pipeline and associated Topside modifications at Tapti Daman block at a Western offshore location.
Subramanian Sarma, Whole-time Director & President (Energy), L&T, said, “This order demonstrates ONGC’s confidence in L&T forged through execution of multiple complex offshore projects and also reinforces L&T’s commitment to contribute towards India’s energy security.”
According to the company, the value of significant order is between Rs 1000 crore and Rs 2500 crore, large orders are worth Rs 2500 crore- Rs 5000 crore, major orders are in the range of Rs 5000 crore- Rs 7000 crore and mega orders are worth above Rs 7000 crore.
L&T is a multinational company engaged in EPC projects, hi-tech manufacturing and services. It operates in over 50 countries worldwide.
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Renewable energy companies look abroad for green hydrogen plants
Hero Future Energies (HFE), part of Hero Group, is evaluating deployment of green hydrogen plants in the UK and the rest of Europe in association with its partners, said Srivatsan Iyer, global CEO, HFE.
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Renewable energy companies such as Hero Future Energies and Renew are looking to set up green hydrogen plants abroad, while others like Adani New Industries and Avaada Group are in talks with global companies for offtake of the new-age energy.
Hero Future Energies (HFE), part of Hero Group, is evaluating deployment of green hydrogen plants in the UK and the rest of Europe in association with its partners, said Srivatsan Iyer, global CEO, HFE.
HFE has a partnership with Tier 1 electrolyser OEMs such as Ohmium International to develop 1,000MW of green hydrogen production facilities in India, UK and rest of Europe. HFE is also evaluating use cases for green hydrogen, working on projects to be commissioned in the immediate future, and looking at opportunities to scale these up, he said. HFE has established strategic partnerships with players throughout the green hydrogen value chain to operationalise projects, Iyer added.
Anothr renewables player, Adani New Industries (ANIL), is exploring international markets such as Europe, Japan and South Korea for offtake partners of green hydrogen and its derivatives, said a company spokesperson. ANIL is a subsidiary of Adani Enterprises.
Last year, Adani Global, Singapore, a step-down subsidiary of Adani Enterprises, announced a 50:50 joint venture with Kowa Holdings Asia, Singapore for sales and marketing of green ammonia, green hydrogen and its derivatives. The JV will concentrate on marketing of products in Japan, Taiwan and Hawaii, it said.
ANIL is developing large-scale integrated green hydrogen and derivatives plants in Gujarat and is conducting feasibility and construction-readiness studies.
“The company’s focus includes development of downstream products like green ammonia,green methanol, and sustainable aviation fuel, tailored to cater to diverse sectors,” he said. ANIL is aiming to develop projects equivalent to 1 MMTPA (million metric tonne per annum) of green hydrogen and 5.6 MMTPA of green ammonia by 2030.
Another company planning an overseas plant is Renew, founded by Sumant Sinha. It has signed an exploratory framework agreement with Egypt to set up a green hydrogen plant in the Suez Canal Economic Zone. “We will continue making progress on green hydrogen through these and other initiatives,” Sinha had said in a recent interaction with FE.
Renew has also signed MoUs with the governments of Odisha, Maharashtra and Andhra Pradesh to set up green hydrogen plants . It is setting up a 0.5 million tonne plant in Odisha where it has tied up with Japanese power major JERA for 0.1million tonne offtake , industry sources said. It also has a JV with Indian Oil and L&T to jointly set up a green hydrogen business.
Avaada Group, is planning ~4 MTPA capacity of various types of green fuel, such as green ammonia, green methanol, e-methanol and sustainable aviation fuels. It is developing an integrated renewable energy, green hydrogen and green Ammonia plant of 0.5 MTPA capacity, including storage and related port infrastructure, in Odisha.
“ We are in active discussions with various offtakers, in India and globally. We are the producers and not consumers of green fuel. We are also working on various tenders for procurement of green fuels by different offtakers, both in India and globally,” said Vineet Mittal , chairman of Avaada group.
According to Vikram V, vice president, co-group head-corporate ratings at Icra the demand for green hydrogen is driven by policy support from the government, given the objective to reduce carbon emissions and dependence on fossil fuels.
The cost competitiveness of green hydrogen remains weak, with the cost of green hydrogen at $4-5 per kg against the cost of grey hydrogen at about $2 per kg. It is expected to improve going forward, with growing scale in manufacturing, technology improvements and operating efficiency gains, Vikram said.
“While a number of players have announced large plans in green hydrogen, the progress is gradual with pilot projects underway currently.” he said.
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Driving towards green horizons, OMCs unite for hydrogen road map
In a bid to accelerate their energy transition plans and ensure the adoption of green hydrogen in a comprehensive manner, state-owned oil marketing companies (OMCs) are expected to soon submit a joint road map for the sector, officials said.
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The Ministry of Petroleum and Natural Gas Ministry has asked for the detailed plan being submitted before the upcoming national budget, the officials said.
Public-sector undertakings (PSUs) under the ministry target to produce more than 1 million tonnes (mt) of green hydrogen by 2030. However, despite forging private sector partnerships, and issuing tenders, work on no green hydrogen production unit has taken off so far.
“There is a need to bring together different stakeholders and make a plan to raise funds and start capex in a cohesive manner. Given that the OMCs are among the largest companies in India aiming to step into the green hydrogen economy, it would be better if there is a unified approach,” an official said.
Refineries in the country already utilise hydrogen for internal consumption, which has the potential to be converted into green hydrogen. The ministry plans to ensure uptake through city gas distribution (CGD) where it will be blended green hydrogen (GH2) with natural gas.
IOCL plans to mix the green hydrogen produced with grey hydrogen that is produced during naptha or natural gas for captive purposes in secondary processing units. It is also testing hydrogen-enriched natural gas, or HENG, to be carried in natural gas pipelines. In theory, the two can be mixed in any proportion, but typically, HENG in the range of 10 per cent to 20 percent hydrogen by volume represents the most-promising near-term option.
Slow rollout
A series of hurdles has plagued green hydrogen plans by OMCs. The largest, IOCL, plans to set up green hydrogen units at all of its refineries as part of a Rs. 2.4 Trillion green transition plan to achieve net zero carbon emission status by 2046.
Back in 2021, IOCL had released bids to set up green hydrogen units at its refineries in Panipat and Mathura refineries. With planned installed capacities of 2,000 million tonnes per annum (mtpa) and 5,000 mtpa, respectively, the units were planned to be set up on a build-own-operate basis. The period of operation was up to 24 years and the new units had a target deadline of 28 months.
After the plans didn’t fructify, the company decided to refocus its efforts on the Panipat refinery, its largest in India with 15 mtpa capacity. In August, last year, global tenders were established to establish a green hydrogen generation plant with 10 KTA (thousands tonnes per annum) capacity, under a 30 month construction deadline. But the tender was cancelled by the company after it led to bidders approaching the Delhi High Court arguing a conflict of interest.
Prospective bidders had alleged a conflict of interest on IOCL’s part in the last tender. This was owing to GH4India Pvt Ltd, IOCL’s own joint venture with infrastructure and engineering major Larsen & Toubro (L&T) and renewable energy company ReNew also bidding for the tender. An industry body of green hydrogen producers, the Independent Green Hydrogen Producers Association had also moved the Delhi High Court in November, 2023.
Subsequently, IOCL reissued the tender in early April, and extended the date for final submission of bids after prospective bidders said they will need more time to meet the specifications of the tender.
In February, BPCL invited bids to set up a green hydrogen refuelling station at Kochi airport in Kerala.
Last year, the Ministry informed the Parliament that HPCL is setting up an electrolysis-based green hydrogen plant with a capacity of 370 mtpa) at its Visakhapatnam Refinery in Andhra Pradesh. While it was set to be opened by September.
> Bharat Petroleum issued a tender to set up a green hydrogen refuelling station at Kochi Airport
> Hindustan Petroleum is constructing a 370 tpa production unit at Visakhapatnam refinery
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What’s the Hydrogen Valley Innovation Hub at IIT Madras?
‘The Rs 100 crore promised by Hyundai is for the hub’s capex requirement. The automaker anyway is researching across the world on hydrogen fuel, and is one of the frontrunners in this area.’
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Earlier this year, IIT Madras tied up with Hyundai Motor India and Guidance Tamil Nadu (state’s investment promotion agency) for establishing the ‘Hydrogen Valley Innovation Hub’ on the campus. It will be set up at a cost of Rs 180 crore (of which Rs 100 crore has been promised by Hyundai).
We talked to Aravind Kumar Chandiran, associate professor, Dept of Chemical Engineering, IIT Madras, on what will be the research focus of the hub?
No, the focus is much wider, beyond automotive, and also beyond hydrogen-based fuel cell electric vehicles. Research is also being carried out on hydrogen internal combustion engines (H2ICE) – for vehicles, and also for other applications such as machinery used in factories etc.
Why H2ICE?
FCEVs require extremely high pure hydrogen – for example, the UK’s National Physical Laboratory found that even 4 ppb (parts per billion) of hydrogen sulphide can destroy the fuel cell. While we have fuel cells, we don’t have enough pure hydrogen.
But for H2ICE, relatively less pure hydrogen works, and because it’s ICE, the current ICE infrastructure works well.
What about green hydrogen?
That’s a big focus area – in fact, this initiative aims to promote a green hydrogen ecosystem in the country. IIT Madras is the nodal agency for establishing the hub and has special focus on localisation of manufacturing, skill development, creation of validation platforms, roadmap and landscape analysis for the hydrogen ecosystem.
Why is Hyundai contributing?
The Rs 100 crore promised by Hyundai is for the hub’s capex requirement. The automaker anyway is researching across the world on hydrogen fuel, and is one of the frontrunners in this area. Globally, it has hydrogen cars, trucks and buses, and its ix35 FCEV was the world’s first mass-produced FCEV car.
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What is IIT Madras doing?
IIT Madras has provided land, building infrastructure, and R&D infrastructure. The institute is also developing a curriculum and body of knowledge for skill development, while operating and maintaining the Hydrogen Valley Innovation Hub.
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The institute is also establishing a centre of excellence that will play the role of a think tank, and conduct annual conferences and workshops, besides publishing research papers.
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INTERNATIONAL NEWS
Natural Gas / Transnational Pipelines/ Others
Canada: Northern B.C. natural gas pipeline to start construction this summer
The pipeline would carry natural gas from Hudson’s Hope in northeast B.C. to proposed Ksi Lisims facility near Gingolx
TC Energy has announced construction will begin on its recently sold Prince Rupert Gas Transmission Pipeline (PRGT) project in August.
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The original project received its environmental permit from B.C.’s regulatory body in 2014 with a plan to carry natural gas from northeast B.C. to a liquefaction facility in Prince Rupert.
The proposed export facility project, majority-owned by the global energy giant Petronas and planned for Lelu Island within the District of Port Edward, was canned in 2017, but TC Energy applied for and received a five-year extension to its pipeline permit in 2019. That permit expires this year unless the project can show the B.C. Environment Assessment Office (EAO) construction has been “substantially started.”
In the interim, the Ksi Lisims LNG project has taken shape. The Nisga’a Nation and Calgary-based Western LNG propose a floating liquefaction facility adjacent to Pearse Island north of Gingolx. In March, the partnership purchased the PRGT pipeline project to feed this plant with natural gas from the Northeast.
In a statement issued last week, TC Energy said it expects the sale of the pipeline to close within the month.
“While TC Energy will not have a role in the construction of PRGT, we continue to celebrate Indigenous co-ownership and the development of a major infrastructure project that can deliver lasting benefits to communities,” the company statement read.
Rebecca Scott, Ksi Lisims LNG spokesperson confirmed the aggressive timeline to start construction is partially based on the EAO requirement for a substantially started status by Nov. 25 of this year.
The other major factor, she said, is to align with timelines for the liquefaction facility because the pipeline will take much longer to build. Ksi Lisims LNG expects to have permits in place for the plant by the end of the year.
Terms of the deal between TC Energy and the Nisga’a-Western LNG partnership have not been released, but TC Energy said its initial proceeds are not expected to be “material” to the company. If the project is completed, however, TC Energy could see more returns on the back end.
Nevertheless, when the transaction was announced in March, TC Energy president Francois Poirier said “enabling LNG development in B.C. is good for Indigenous communities [and] our customers.”
The roughly 900-kilometre proposed pipeline, beginning in Hudson’s Hope in the Northeast was originally conceived to run across northern B.C. eventually exiting from Nisga’a territory on the coast, then turn south underwater to the proposed Petronas LNG facility near Prince Rupert.
Now, instead of turning south, it would turn north running underwater to the proposed Ksi Lisims LNG floating barge facility.
The company is not overly concerned about permitting for the route change, which requires filing applications to the EAO.
“Amendments are fairly common practices as projects with EA Certificates evolve,” Scott said.
While Indigenous co-owned, the project is not without its Indigenous detractors. Both Lax Kw’alaams and Gitanyow, whose lands are also potentially affected, are opposed to the projects as they currently stand wanting new environmental assessments and further consultation.
However, Scott said initial construction activities this summer will not impact other Nations and consultation work is ongoing.
“It is key to understand that the work will be happening on Nisga’a Lands only,” she said. “It’s also very important to know that the work does not impact ongoing engagement with other Nations about potential improvements and benefits.”
Nisga’a Nation president Eva Clayton believes all the concerns will be worked out as the projects progress.
“When we announced that we were buying this project, we knew it represented a historic and meaningful step toward independence and opportunity — not just for the Nisga’a, but for all Indigenous people in Canada,” she said. “Our Nation’s objective is to build a meaningful economy at home so future generations can live fulfilling lives in the Nass Valley.”
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Philippines: The Philippines goes all in for natural gas, a climate pollutant
Sea turtles still scramble from the waters of Batangas Bay, paddling up the sand to bury their eggs. Coral reefs that some marine biologists call the Amazon of the ocean lie just offshore, home to giant clams, nurturing small fish, which in turn are prey for manta rays.
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But above the surface the land is changed. The fishing village of Santa Clara is now surrounded by four power generating stations, all burning natural gas.
The construction isn’t over. Four more power plants that burn natural gas are planned for the coastline. What was a string of fishing villages is now an industrial zone
The Philippines is going all in for electricity made via climate-damaging combustion, with almost two dozen power stations planned and the ambition to become a gas hub for the entire Asia Pacific region.
When natural gas is super-chilled into a liquid, special tanker ships can transport millions of cubic feet of it at a time, and the global trade in liquified natural gas or LNG is growing fast.
It’s one of the world’s largest natural gas power buildouts and will contribute to climate change at a time when alternative, renewable electricity has never been cheaper.
“It’s mindboggling that the Philippines, a climate-vulnerable country, would still pursue dirty fuels which exacerbate climate disasters,” said Gerry Arances, executive director of the Philippine nonprofit Center for Energy, Ecology and Development.
Natural gas causes warming of the atmosphere both when it leaks out, unburned, and when it is burned for heat or electricity. Experts who have studied the country found its future growth could be met entirely with renewables; reliance on natural gas will make power more expensive for Filipinos and there will be other environmental costs.
Wilma Abanil, a grandmother of four, witnessed changes after the first plant opened in 2002. Within two years, the fish catch was falling, she said. It grew worse as more plants opened.
“Before when you worked really hard, you could send your children to school,” Abanil said. “We were happy. We could support our family. These days we have nothing.”
While Philippine fish exports are going up nationally, officials records show the catch from Batangas Province in a slide. Many residents blame the power plants. There is overfishing, too.
“We heard they will build more,” Abanil said. “What will happen to us?”
But Philippine Department of Energy fossil fuels director Rino Abad defended the plans. “We just have to make our best choice which is natural gas,” he said in a Zoom interview, describing it as the least expensive energy source, flexible and very clean. “We cannot increase our energy capacity by RE (renewable energy) alone
He noted the country is not building any new power plants that burn coal, which is dirtier.
Abad disputed the size of the expansion, saying 14 plants are planned. But that appears to include only those in the department’s formal pipeline and not others that are at an earlier stage or more recently announced.
Today, the Philippines accounts for less than 4% of overall natural gas use in Southeast Asia, Abad said. Indonesia and Thailand use several times more.
Philippine environmental guidelines protect the coral reefs, he said, for example limiting the temperature of hot water discharged from power plants.
All the plants surrounding Santa Clara are owned by First Gen, the Philippines’ leading natural gas energy company. First Gen did not reply to requests for comment.
Many energy watchers disagree that in 2024, it’s essential to build new fossil fuel plants for electricity, or that it’s the least expensive. Natural gas plants require a constant supply of fuel that rises and falls in price on international markets, unlike solar, wind and geothermal electricity, which cost very little to run once they are built
Relying on “very expensive, unreliable, imported fuel,” is a mistake, said Sam Reynolds of the Institute for Energy Economics and Financial Analysis, which analyzed the Philippines’ energy plan in several white papers. Electricity made from burning liquefied natural gas is between two and three times as expensive for Filipinos than electricity made from renewables, he found.
And coastal power plants can cause environmental damage in a number of ways. Their hot water discharge can kill corals; changing the coastline alters flows of seawater and sand, which can disrupt delicate ecosystems, and tanker ships risk importing invasive species.
The risk assessment for a San Miguel plant currently under construction next door described corals in the area surrounding the power station as already in a poor state.
President of the Philippine Association of Marine Science, Jayvee Saco and others are concerned that corals further offshore could suffer the same fate. In the worst case, “future generations will only see the beauty of the reef in books or museums,” he said in an interview at his laboratory at Batangas State University. Seagrass will die first, then sea cucumbers, then fish, he said, as a machine flipped vials containing samples behind him.
A study by marine biologists at Ateneo de Manila University found coastal areas under stress from the five power plants that already operate in the area.
A spokeswoman for San Miguel said via email its monitoring shows marine life has not been affected and a “thriving marine ecosystem” remains. The company has created employment and liquified natural gas is “internationally recognized as a transition fuel to cleaner energy,” she said.
But there is no such international recognition. For years, evidence hasaccumulated that natural gas power is not much better for the climate than coal, if at all. That’s because it’s made up mostly of methane. It burns cleaner than coal, as the industry claims, but when it leaks out, unburned, which it does, it is more than 80 times more harmful to the climate than CO2.
The Philippines may have made its decision to invest heavily in natural gas in part on the advice of the U.S. Agency for International Development, which encouraged the expansion, arguing in a 2021 paper that the country could realize “strong economic and environmental benefits” by using LNG to meet its energy needs. The paper came out as U.S. natural gas companies rapidly turned the United States into the world’s largest LNG exporter. U.S. President Joe Biden has recently delayed consideration of new export terminals.
Twenty years ago, in this same part of the Philippines, communist insurgents took up arms against an earlier generation of power plants that had displaced them. The New People’s Army launched a pre-dawn assault on soldiers guarding a nationally-owned power plant in Batangas. Several were killed on both sides in the gunfight.
There are echoes of that conflict today: Some protestors against the LNG buildout say they’ve been threatened. Aaron Pedrosa, a lawyer for the Philippine Movement for Climate Justice, said in an interview in Manila that soldiers often round them up, then offer money to keep quiet.
If they refuse? “Some have been abducted,” he said. “You can be charged with anti-terrorism laws. Some leaders have been killed because they were, ‘resisting arrest.’”
The Philippine Army didn’t respond to requests for a comment.
Back in Santa Clara, Joseph Vargas, president of a fishing association and husband of Abanil, says most communities have seen no benefit from the power plants built so far, even though Philippine law requires financial support for livelihoods in affected areas. Residents in four villages visited by The Associated Press agreed. He too has experienced pressure against protesters. He said soldiers wouldn’t allow them to fish, as a punishment.
“We were harassed until we stopped,” he recalled, “and they said if we continue, something bad will happen to us.”
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US: US natural gas posts 12% weekly gains as power demand kicks in
Quantum Commodity Intelligence – US natural gas prices consolidated solid weekly gains Friday amid increasing power generation demand, declining output and healthy LNG exports.
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Benchmark Henry Hub Jun24 futures trading on NYMEX were trading up nearly 3% on the day at $2.90/mmBtu early afternoon Eastern Time, extending weekly gains to over 12%.
Apart from very brief spikes in January and May, the Jul24 contract is trading at over six-month highs.
Latest data from the Energy Information Administration and LSEG put average gas demand at 98 billion cubic feet day (Bcf/day) in early June, so far little changed from May averages, but with summer temperatures forecast to ramp up demand for air conditioning is likely to soar.
At the same time production continues to decline with the latest EIA report flagging a 0.6% (0.7 Bcf/d) decline in the latest reporting week, with shale output around 9% lower this year as major firms including EQT and Chesapeake trim production, primarily from the Haynesville and Marcellus gas basins
The EIA also reported that natural gas deliveries to LNG terminals increased by 0.2 Bcf/d to 13.2 Bcf/d in the latest reporting week as Freeport exports moved towards full capacity after several months of shortfalls.
Twenty-six LNG vessels left the US in the same week (8 from Sabine Pass; 5 from; 4 from Corpus Christi, 3 each from Calcasieu Pass and Cameron; 2 from Cove Point and 1 from Elba Island) with a combined LNG-carrying capacity of 94 Bcf in the week 30 May to 5 Jun.
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Nigeria: TotalEnergies launches Ubeta gas field for LNG liquefaction plant
TotalEnergies, operator of OML 58 onshore license in Nigeria with a 40 per cent interest, together with the Nigerian National Petroleum Corporation Ltd (NNPCL) 60 per cent have taken the Final Investment Decision (FID) for the development of the Ubeta gas field.
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The field located about 80 km northwest of Port Harcourt in Rivers state, the OML 58 license contains two fields currently in production, the Obagi oil field and the Ibewa gas and condensate field.
The company said that the OML58 gas production is processed in the Obite treatment center and supplied to both the Nigerian domestic gas market and to Nigeria LNG (NLNG) plant.
The company stated that production start-up is expected in 2027, with a plateau of 300 million cubic feet per day (about 70,000 barrels of oil equivalent per day including condensates), adding that Gas from Ubeta will be supplied to NLNG, a liquefaction plant located in Bonny Island with an on-going capacity expansion from 22 to 30 Mtpa, in which TotalEnergies holds a 15 per cent interest.
Ubeta is a low-emission and low-cost development, leveraging on OML58 existing gas processing facilities. The carbon intensity of the project will be further reduced through a 5 MW solar plant currently under construction at the Obite site and the electrification of the drilling rig.
https://blueprint.ng/totalenergies-launches-ubeta-gas-field-for-lng-liquefaction-plant/
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Iran: Iran surpasses Qatar in gas extraction from shared offshore field
The field holds approximately eight percent of the world’s natural gas reserves and around 18 billion barrels of condensate.
Iran has exceeded Qatar in gas extraction from the vast South Pars field by 100 million cubic metres (mcm), according to Iran’s oil minister.
“We set an unprecedented record in gas production, and Iran has been ranked first among the Gas Exporting Countries Forum (GECF) members in terms of gas production increase,” Javad Oji said in a press conference on Saturday, as reported by Tehran Times.
“In the South Pars joint field, we extract 75 to 100 million cubic metres of gas more than the Qatari side,” he added, saying that Iran’s gas production growth was at five percent.
Located in the Persian Gulf, the world’s biggest natural gas reserve is shared between Iran, which calls its portion South Pars, and Qatar, who refers to it as the North Dome.
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The major offshore field spans 9,700 square kilometres, with 3,700 square kilometres falling within Iran’s territorial waters. The remaining 6,000 square kilometres, the North Dome, lie within Qatar’s territorial waters.
The minister went on to detail that the oil ministry has inked contracts worth $20bn with major corporations aimed at enhancing the recovery rate of wells in the South Pars gas field.
The field holds approximately eight percent of the world’s natural gas reserves and around 18 billion barrels of condensate, divided into 24 phases.
Qatar, along with international firms, have used the field and transformed it into the world’s largest exporter of liquefied natural gas. The giant gas field holds approximately all of Qatar’s gas production and about 60 percent of its export revenues.
Iranian diplomat holds talks with Qatar’s PM and Hamas leader in Doha
Recent estimates indicate that the Iranian section of the field contains 14 trillion cubic metres of in-situ gas, representing 50 percent of Iran’s total reserves.
Oji also noted significant progress in Iran’s oil industry under the 13th government administration, revealing that 150 projects worth $34bn have been launched in the first three years.
Among these projects is the development of South Pars gas field phase 11, which had previously been dormant.
“The country managed to acquire good revenues by implementing these kinds of projects in the oil, gas, refining, and petrochemical sectors,” he explained.
Regarding international collaborations, Oji expressed optimism about expanding ties with Russia, highlighting the signing of $5bn worth of oil contracts with Russian companies.
He affirmed that current oil production of 250,000 barrels per day originates from these agreements.
Oji maintained that in defiance of crippling U.S. sanctions, the late President Ebrahim Raisi’s administration had taken decisive steps within the oil industry.
“I should announce that any government that comes to power in the U.S. cannot prevent the export and production of Iranian oil,” he said.
https://dohanews.co/iran-surpasses-qatar-in-gas-extraction-from-shared-offshore-field/
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Natural Gas / LNG Utilization
Morocco : Morocco Plans to Build Floating LNG Terminal in Nador Port
Nador, Thursday, June 6, 2024: Morocco has announced plans to build the country’s first floating liquefied natural gas (LNG) terminal at Nador Port, part of its efforts to enhance energy security and reduce reliance on gas imports from neighboring countries.
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Tender for the Floating Terminal:
Abdelghfour El Hajoui, Director of the Oil and Gas Sector at the Ministry of Energy Transition and Sustainable Development, revealed the ministry’s intention to issue a tender this summer for the construction of the floating terminal. Financial closure for the project is expected in 2025, with construction and commercial operations commencing in 2026.
Nador Port: A Strategic Location:
Nador Port was chosen as the site for the floating terminal for several compelling reasons, including:
Proximity to Spain: Spain is currently one of Morocco’s main LNG suppliers, with Morocco relying on its terminals to regasify gas purchased from international markets.
Existence of the Morocco-Spain Gas Pipeline: The gas pipeline passes through Nador, making it an ideal location for storing and regasifying gas.
Reducing Gas Transportation Costs and Time:
Morocco aims to reduce the cost and time of transporting LNG from Spain to the kingdom through the establishment of this terminal. Gas will be transported directly from international suppliers to the Nador terminal, rather than being shipped to Spanish terminals and then via the Maghreb-Europe Gas Pipeline.
A Step Towards Energy Independence:
The construction of the Nador terminal is part of Morocco’s broader strategy to strengthen its energy security and reduce its reliance on energy imports. The ministry intends to build two more LNG regasification terminals on the Atlantic coast, in Mohammedia and Dakhla, in the coming years.
Multiple Benefits:
The establishment of these terminals will bring several advantages to Morocco, including:
Reduced gas transportation costs: The terminals will significantly lower gas transportation costs.
Shorter gas transportation time: This will contribute to improving the efficiency of Morocco’s energy supply.
Enhanced energy security: Reduced reliance on imports will minimize the risk of energy supply disruptions.
Support for economic growth: These terminals will attract foreign investment and create new job opportunities.
A Significant Step Towards a Sustainable Energy Future:
The construction of the first floating LNG storage and regasification terminal at Nador Port is a significant step towards a more sustainable energy future for Morocco. These terminals will help reduce greenhouse gas emissions and strengthen the country’s energy security.
https://fesnews.media/282232/2024/06/06/
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France: GTT readies to start selling new gas containment system
The world’s dominant gas containment system provider for the LNG shipping industry is ready to start selling a new kit. France’s GTT has got all the necessary approvals for its NEXT1 LNG cargo containment system, officially sealed at this week’s Posidonia event in Athens, and the technology is now ready for commercial deployment.
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GTT NEXT1 technology aims to offer a thermal level of performance equivalent to that of its Mark III Flex+ technology while using two metallic barriers. The use of prefabricated reinforced polyurethane foam panels to support the two membranes provides what GTT believes is the best compromise between thermal and mechanical performance. The secondary barrier is made of Invar, and the design of the first barrier is based on the existing corrugated stainless steel concept, similar to that of the Mark technologies.
Philippe Berterottière, chairman and CEO of GTT, stated: “We are proud to present this cutting-edge solution, which combines the best of our proven technologies with new advancements, ensuring optimal performance and improved reliability for the transportation of liquefied natural gas.”
https://splash247.com/gtt-readies-to-start-selling-new-gas-containment-system/
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New modern technology LNG vessels have exceeded expectations
When UPM took seven new vessels fuelled with natural liquid gas into operation, the expectations were high. Now, a good year in, we check how it is going. Do the actual emission reductions live up to the forecasts?
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As an important step on UPM’s continuous journey towards a future beyond fossils, seven new vessels entered the fleet for maritime operations in Europe in 2022. The vessels are equipped with dual fuel engines, meaning that they can run on liquified natural gas (LNG) and traditional marine gas oil. When fuelled with LNG, the vessels were expected to emit 25 per cent less CO2. So far, they have lived up to the expectations and even exceeded them.
“After a year of operations with all seven vessels, the experience has been great,” says Lauri Rikala, Director, Global Break Bulk Shipping, UPM Logistics.
Four of the vessels are Lift-On/Lift-Off (LoLo) vessels made by Wijnne Barends for transporting, timber, pulp and other forest products raw materials. The three remaining, built by Bore, are RoLo vessels for flexible handling and transporting of UPM’s paper and plywood products. “Both vessel types perform how they were designed to perform,” Rikala notes. “Their cargo capacity is as expected or slightly better than we had anticipated, and fuel consumption is in line with our expectation.”
He is particularly pleased with the vessels’ cutting-edge technology which makes it possible to monitor emissions, reduce fuel consumption as well as to ensure a versatile use of vessels for various cargo purposes.
“One might think that the vessels carry only the cargo they are designed for, but these vessels were designed to fit to purpose flexibly. For example, Bore Wind has carried full cargo of UPM’s paper products from Rauma to Rostock and sailed from there to Flushing in the Netherlands to carry a full cargo of pulp back to Rauma,” Rikala describes. “Another example is Bore Way who carried out our paper and plywood products to Amsterdam, Santander and Ferrol and on its way to France carried our external customer’s steel. With the ability to maximise the cargo loads, we can reduce considerably both the CO2 emissions and costs.”
Reducing all types of emissions
The first LNG-fuelled vessel started operating for UPM in the second quarter of 2022 and the rest were taken into use gradually during the following half year. Statistics comparing the emissions from UPM’s time charter fleet in European short sea trade in 2020 with 2023 show that the LNG vessels have reduced greenhouse gas emissions per transported tonne by over 26 per cent every quarter.
Hanna Eklund, Senior Manager, Safety, Security and Sustainability, UPM Logistics, highlights that the calculations show the so-called well-to-wheel emissions, meaning the total amount of greenhouse gas emissions from the fuel sourcing phase (the “well”) to the emissions generated during its operation (the “wheel” phase).
“Some have raised concerns about the methane slip, so it is important to note that when we say that the emission reductions are above 26 per cent, that is after the methane slip has been taken into account,” Eklund explains, adding that all seven vessels are still not operating at full capacity, so their emission performance might improve.
Not only do LNG ships reduce the amount of CO2 emissions released into the atmosphere. LNG also emits much less nitrogen gas (NOx), sulfur dioxide (SO2) and particles compared to traditional diesel, resulting in an over 95% reduction in sulfur and particles emissions.
“This has an important positive impact on the air quality of harbour areas,” Eklund notes.
Lower logistics emissions benefit customers
In addition to reducing emissions in its own operations, UPM is committed to reducing emissions from the most significant sources in its value chain by 30 per cent by 2030, against 2018 levels. And when UPM cuts transport emissions, the customers’ total carbon footprint is reduced as well.
“The introduction of new LNG vessels is an essential part of UPM’s Logistics’ contribution to UPM Sourcing’s -30 by 30 programme,” Rikala tells.
UPM Logistics’ sustainability work does not end with the LNG vessels’ current 26 per cent emission reductions but will continue at many arenas. “We are now looking into alternative fuels for our new LNG ships. Perhaps e-LNG or Bio-LNG will be available on an industrial scale in the near future,” speculates Rikala, who closely follows the development of different types of low-emission fuels.
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US: Verbio and BayWa AG to promote bio-LNG
Verbio and BayWa AG have joined forces to promote bio-LNG as a climate-friendly and cost-efficient diesel alternative and to contribute to the decarbonisation of heavy-duty transport.
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The companies will grow the filling station network for bio-CNG and bio-LNG to 23 stations nationwide.
Freight forwarders in Bavaria, Baden-Württemberg, Lower Saxony, Hesse, and Saxony can now also refuel with bio-LNG from Verbio at 11 BayWa stations.
Freight forwarders can pay at all Verbio LNG filling stations throughout Germany with the fuel cards of DKV, UTA, Eurowag, Verbio, BayWa, IDS, RMC, Romac Fuels, Tankpool24 and Hoyer. The petrol stations are open around the clock every day.
https://www.lngindustry.com/small-scale-lng/11062024/verbio-and-baywa-ag-to-promote-bio-lng/
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Peru: Grupo HAM, Limagas open first LNG station in Peru
The new company seeks to become a Latin American leader in gas and plans to open between 10 and 15 refueling stations by December 2025. Grupo HAM and Limagas have created a new joint-venture called EVA (Energía de Valor Ambiental), with the aim of promoting the adoption of liquefied natural gas (LNG) and compressed natural gas (CNG) in Peru.
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Both companies joined forces to support the transition of road transport as well as passenger cars, light vehicles and trucks. As a result, 10 to 15 refueling stations are expected to be opened by December 2025.
Recently, its first LNG refueling station was inaugurated next to the city of Mala, on the Pan-American Highway South, a road system that links almost all the countries of the continent.
The EVA Mala LNG station is characterized by its new concept, called Benito, which includes installation and start-up in less than 24 hours, reducing construction time. The gas station has an 80m3 tank that integrates two dispensers, allowing LNG refueling for heavy vehicles and all types of trucks.
With the creation of EVA, Grupo HAM and Limagas seek to develop an important growth strategy and take advantage of the possibilities offered by the country to promote the use of natural gas vehicles to become a leader in the Latin American energy sector.
https://www.mobilityplaza.org/news/38027
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Global LNG Development
US: Alaska LNG Secures Preliminary Gas Supply Agreement
Alaska Gasline Development Corp. (AGDC) has signed a preliminary agreement to source gas from Pantheon Resources PLC for Alaska LNG, a federally authorized project to export up to 20 million metric tons of liquefied natural gas (LNG) per year.
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The so-called gas sales precedent agreement (GSPA) contains main terms that would be contained in a future binding GSA between AGDC and London-based Pantheon, including the supply of up to 500 million cubic feet per day (MMcfpd) to the liquefaction project for an extendable 20 years.
The GSPA also set the maximum base price for the feed gas at $1 per million British thermal unit in 2024 dollars, AGDC and Pantheon said in a joint statement. The GSPA was signed between AGDC subsidiary 8 Star Alaska LLC and Pantheon subsidiary Great Bear Pantheon LLC.
In Alaska, Pantheon plans to develop two field discoveries, Ahpun and Kodiak, which sit onshore state land in the North Slope. Kodiak has been independently certified to contain 5.4 trillion cubic feet of gas and 1.2 billion barrels of marketable liquids, in the best-estimate scenario for contingent recoverable resources, according to a Pantheon statement April 9. Pantheon is still working on a resource estimate for Ahpun.
The signing of a GSA in the future is conditional on Pantheon reaching affirmative final investment decisions (FID) on these upstream projects, as well as AGDC making an FID for Alaska LNG. AGDC plans to reach an FID mid-2025. Pantheon also needs permits and regulatory approvals to deliver gas for Alaska LNG.
Alaska LNG, which received export authorization from the Energy Department last year, is pursuing a phased development to make it attractive to investors. The GSPA is part of phase one.
“Phase 1 of Alaska LNG does not involve construction of an LNG plant, and as a result has a materially lower capex requirement and construction timeframe, allowing gas transportation as early as 2029”, the joint statement said.
AGDC president Frank Richards commented, “This agreement solidifies the commercial foundation needed for the Phase 1 portion of Alaska LNG and provides enough pipeline-ready natural gas, at beneficial consumer rates, to resolve Southcentral Alaska’s looming energy shortage as soon as 2029”.
“Phasing Alaska LNG by leading with the construction of the pipeline will make Alaska LNG’s export components more attractive to LNG developers and investors, and this agreement will help unlock the project’s substantial economic, environmental, and energy security benefits for international markets as well as for Alaska”, Richards added.
AGDC is in talks with potential partners for the construction of the 807-mile pipeline from the North Slope to Southcentral Alaska. Alaska LNG is planned to deliver up to 3.3 billion cubic feet of gas per day from the North Slope to overseas markets, according to AGDC.
“AGDC is continuing advanced discussions with an established North American pipeline developer and Alaska utilities to complete the commercial structure that will make a natural gas pipeline from the North Slope to Southcentral Alaska possible and further enhance the prospects for the overall Alaska LNG export project”, AGDC spokesperson Tim Fitzpatrick told Rigzone.
Gas Price Adjustment
To lessen the upstream cost burden on Pantheon, the GSPA allows the base price of the gas that Pantheon would supply Alaska LNG to be reduced if state authorities lower financing repayment costs “and/or enable other commercial opportunities”, the joint statement said.
“Furthermore, securing financing for Phase 1 of Alaska LNG could potentially increase commercial alignment for the complete project and thus potentially provide additional demand for Pantheon’s associated natural gas above the initial 500 mmcfd plateau”, the statement added.
“The GSPA potentially opens up additional funding pathways for the Alaska LNG Project and the Ahpun field development activities. This may relieve Pantheon of the need for equity dilution following FID, in line with the Company’s guidance to secure the path of least value dilution for existing shareholders”.
Court Battle
While the GSPA marked a milestone, a suit has been filed by environmental watchdogs, taking issue with the route of the pipeline.
The Center for Biological Diversity and Sierra Club on May 30 sued federal fisheries authorities alleging that their biological opinions had failed to fully examine the harms posed by Alaska LNG to wildlife species.
The petition for review filed before the United States Court of Appeals for the Ninth Circuit seeks to throw out the opinions of the Fish and Wildlife Service (FWS) and the National Marine Fisheries Service (NOAA Fisheries). The opinions issued by the fisheries authorities “violate the Endangered Species Act by not fully examining and mitigating the project’s harms to polar bears, Cook Inlet beluga whales and North Pacific right whales”, the plaintiffs said in a joint statement.
“The pipeline would connect drilling operations on the North Slope to an export terminal on Cook Inlet and bring tanker ships through the habitat of endangered Cook Inlet beluga whales and North Pacific right whales”, the Center for Biological Diversity and Sierra Club said in their statement. “The Federal Energy Regulatory Commission estimates the project would increase large vessel traffic in the inlet by up to nearly 75 percent.
“Cook Inlet beluga whales are critically endangered. The population has declined more than 75 percent since 1970, and scientists believe their recovery is hindered by noise pollution and the cumulative harm of multiple, human-caused stressors.
“The eastern North Pacific right whale population ranges from the Bering Sea to Baja California and is down to only about 30 individuals. With few reproducing females, the population is at extreme risk of imminent extinction”.
Named as defendants are the FWS; Interior Secretary Deb Haaland, whose department oversees the FWS; NOAA Fisheries; and Commerce Secretary Gina Raimondo, whose department oversees NOAA Fisheries.
AGDC rejected the suit’s claims. “Alaska LNG has withstood intensive environmental scrutiny by two successive administrations because of its obvious and abundant benefits, which include reducing global emissions by up to 2.3 billion tons, strengthening allied energy security, and finally ending longstanding air quality problems plaguing Interior Alaska villages and communities”, Fitzpatrick said in a statement to Rigzone.
The Interior Department and the FWS declined to comment. NOAA Fisheries said it could not comment on litigations.
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Qater: QatarEnergy inks major LNG supply deal with Taiwan’s CPC
China National Petroleum Corporation, ConocoPhillips, Eni, ExxonMobil, Shell, Sinopec and TotalEnergies are other partners in the NFE.. QatarEnergy has signed a deal with CPC Corporation Taiwan (CPC), encompassing a long-term supply of liquefied natural gas (LNG) to CPC and a strategic partnership in the North Field East (NFE) LNG expansion project.
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Under the terms of the agreement, QatarEnergy will deliver an impressive four million tonnes per year (tpy) of LNG from the NFE project to CPC, extending over a period of 27 years.
In a parallel agreement, QatarEnergy has agreed to transfer a five percent interest in one of the NFE project’s trains, boasting a capacity of eight million tonnes per year, to Taiwan’s state-owned oil and gas company.
This strategic move positions CPC as a key partner in the NFE project, facilitating their involvement in its development and expansion.
This transfer of interest will essentially not affect the stakes of any other shareholders involved in the project.
China National Petroleum Corporation, ConocoPhillips, Eni, ExxonMobil, Shell, Sinopec and TotalEnergies are other partners in the NFE.
North Field Expansion project
Qatar has the world’s third-biggest proven natural gas reserves and is on its way to dominate global productions of LNG through its NFE project.
Under the first phase of the project, the biggest of its kind globally, Qatar is raising its LNG production from 77 million tonnes to 110 million tonnes by 2025, representing a 43 percent increase.
The second part of the project – the biggest of its kind – will ramp up Qatar’s LNG production to 126 million tonnes by 2027.
QatarEnergy began looking into potential partners in 2019, with production expected to start before the end of 2025.
Discovered in 1971, the North Field covers an area of 9,700 square kilometres, of which 6,000 square kilometres are in Qatar’s territorial waters.
The production then kickstarted in 1989, during the time in which oil was the primary source for Qatar’s wealth.
https://dohanews.co/qatarenergy-inks-major-lng-supply-deal-with-taiwans-cpc/
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US: Pantheon signs preliminary gas supply deal for Alaska LNG project
The agreement sets the stage for a 20-year supply of up to 500 million cubic feet per day (mcf/d) from Pantheon’s fields. N Great Bear Pantheon, a subsidiary of Pantheon Resources, has signed a gas sales precedent agreement (GSPA) with 8 Star Alaska, a subsidiary of AGDC.
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This agreement outlines the commercial terms for a future binding contract for Pantheon to supply natural gas to the Alaska liquified natural gas (LNG) project.
The project, which is currently under development, aims to deliver gas within Alaska and export up to 20 million tonnes per annum of LNG.
AGDC’s Alaska LNG project is a federally authorised initiative that aims to provide natural gas to Alaska’s regions facing an energy crisis.
It is considering a phased approach, starting with the development of a pipeline from the North Slope to south-central Alaska.
This initial phase does not include an LNG plant, significantly reducing capital expenditure and construction time, with gas transportation possible by 2029.
AGDC plans to commence front end engineering and design before a final investment decision around mid-2025.
The agreement between Pantheon and AGDC sets the stage for a 20-year supply of up to 500mcf/d from Pantheon’s Kodiak and Ahpun fields at a base price capped at $1 per million British thermal units.
The terms also include minimum daily volumes for the take-or-pay obligation. The potential for a lower gas price exists if both parties collaborate to reduce project financing costs.
The initial term of the GSPA extends to 30 June 2025 or until the definitive gas sales agreement is executed, with provisions for automatic annual renewals.
This agreement could lead to additional funding opportunities for both the Alaska LNG project and Pantheon’s field development activities.
AGDC president Frank Richards commented: “This agreement solidifies the commercial foundation needed for the Phase 1 portion of Alaska LNG and provides enough pipeline-ready natural gas, at beneficial consumer rates, to resolve south-central Alaska’s looming energy shortage as soon as 2029.”
Pantheon executive chairman David Hobbs said: “We are building a mutually beneficial long-term relationship with Alaska LNG and with the state, which seeks to supply much needed gas required for south-central Alaska’s energy needs, while at the same time realising the value from our total aggregate contingent resources exceeding 1.5 billion barrels of ANS blend and six trillion ft³ of natural gas.”
https://www.offshore-technology.com/news/pantheon-alaska-lng-project-deal/?cf-view
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Nigeria: NNPC, Golar LNG sign agreement on Floating LNG project
In furtherance of its commitment to monetise Nigeria’s vast natural gas resources, the NNPC Limited has executed a Project Development Agreement (PDA) with Golar LNG for the deployment of a Floating Liquefied Natural Gas (LNG) offshore Niger Delta, Nigeria.
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The signing ceremony, which took place on Monday, June 10, 2024, was attended from the NNPC Limited side by the Chief Financial Officer, Umar Ajiya; Executive Vice President, Gas Power & New Energy, Olalekan Ogunleye; and Executive Vice President, Upstream, Mrs. Oritsemeyiwa Eyesan, while the Golar LNG team was led by Karl Fredrik Staubo (CEO).
The PDA is another major milestone achievement towards ensuring gas commercialisation through deployment of an FLNG Facility in Nigeria, which is in line with Mr. President Bola Ahmed Tinubu’s resolve to rapidly commercialise Nigeria’s gas assets for the economic prosperity of the nation.
The agreement aims to monetise vast proven gas reserves from shallow water resources offshore Nigeria. The PDA also outlines the monetisation plan that will utilise approximately 400-500mmscf/d and produce LNG, LPG and Condensate.
The Partners, NNPC Limited and Golar LNG have both expressed their commitment to achieve Final Investment Decision (FID) before end of Q4, 2024 and first gas by 2027.
Golar LNG Limited is a renowned independent owner and operator of LNG infrastructure, including carriers, floating storage and regasification units (FSRUs), and floating liquefaction (FLNG) vessels.
https://www.environewsnigeria.com/nnpc-progresses-floating-lng-project-with-golar-lng/
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Peru: Lipiandes inaugurates the first service station for LNG trucks in Peru and consolidates its international green energy corridor
Lima, Peru. – Lipiandes today took the international leap in the construction of the first cleaner energy corridor for heavy cargo transportation in the Andean Region, with the inauguration of its first service station in Peru for trucks powered by liquefied natural gas (LNG). Located in Mala, at the southern access to Lima, and built with the technology of the leading Spanish company in this field, HAM Cryogenic, the station is the first of three that the company hopes to open in 2024 in Peru. The second will be located in Nasca, and the third, 48 kilometers from Arequipa.
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“With this opening we are making steady progress in our strategy of strengthening our core business, through energy solutions based on gas in its different formats and with the consolidation of our international presence as leaders in the energy sector in Latin America. Today we meet a new milestone by concretizing our announced “green corridor” that will cross Chile and Peru,” said Angel Mafucci, general manager of Lipiandes.
In this way, the Lipiandes group of companies (the new name of Empresas Lipigas SA), which brings together subsidiaries and brands such as Lipigas and Evol, in Chile; Gas País, in Colombia and Limagas and Limagas Natural, in Peru, continues with the expansion of the corridor that will link Lima with Puerto Montt and that in Chile already has stations in Linares, Maule Region; Tabolango, Valparaíso Region; and Paine, Metropolitan Region. In the case of Peru, the company expects that, between now and the end of the year, more than 120 trucks will be supplied by this network, which is the first in the central-southern area of that country and will be open to the public. Likewise, the company is working to open new facilities of this type north of the Peruvian capital.
“As an LNG producer, Peru has privileged conditions for the development of the international corridor of liquefied natural gas stations for heavy-duty trucks that the company is building. It is a very competitive alternative in terms of costs and allows us to reduce the impact of trucks on the environment. That is why we hope that this network will expand quickly and every day more trucks will be supplied with this fuel,” says Pablo Saenz Laguna, general manager of Limagas Natural, a subsidiary of Lipiandes, which leads the project in the neighboring country.
According to industry figures, LNG makes it possible to reduce particulate matter emissions by 90%, reduce CO2 emissions by between 20% and 30%, and reduce noise pollution by 50%, among other advantages.
This milestone is part of a larger Lipiandes strategy that seeks to “green” its main business, gas, and offer renewable products by 2030. To achieve this, in Chile it has implemented different initiatives, such as the construction of the first plant for production of renewable liquefied natural gas (LNG-R) through the treatment of organic waste. Located in the Ñuble Region, the facility will be able to process between 7,500 and 16,500 m3 of biogas daily. This LNG-R (or Biogas) produced in Chile will serve in the near future to supply the trucks that use the service stations of the green corridor, which will reduce more than 19,000 tons of CO2 per year, when compared to the emissions of diesel trucks, and reduce particulate matter emissions by 96%. The above would be equivalent to taking more than 6,000 cars off the road or planting more than 38,000 trees. The company projects that the plant will be operational by the end of 2024 to market LNG-R during the first half of 2025.
Likewise, the company has the first agreements to offer renewable liquefied gas (Bio LPG) in cylinders by 2028, a milestone that will allow democratizing access to renewable energies in Chile.
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Russia: Russian LNG scheme one-third complete despite US sanctions
Project will use about 45 billion cubic metres of Gazprom production capacity shut in after Russian pipeline gas exports to Europe were halted in 2022. Construction of the Baltic LNG project is progressing despite US actions to prevent it and other Russian liquefied natural gas export schemes, according to national gas giant Gazprom.
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The statement came after Gazprom executive chairman Alexei Miller visited the construction site near the port of Ust-Luga at the end of last week, almost concurrently with the announcement of a new round of US sanctions targeting new Russian LNG projects.
Baltic LNG, consisting of two trains with a capacity of 13.1 million tonnes per annum of LNG, is part of the large wet gas handling complex to be built in Ust-Luga.
The complex includes a facility for removing ethane from the incoming hydrocarbon mix for its further use in polymer production.
In the statement, Gazprom said that the construction of the LNG plant is more than 32% complete.
According to a Russian government decision published at the end of January this year, the country’s National Welfare Fund will provide the project with about 900 million roubles ($10 billion) in loans to be split evenly between the LNG plant and ethane processing facility.
The government said total investments required for the scheme are estimated at over 4.9 trillion roubles.
About 2.88 trillion roubles are being provided by Russian banks at a preferential interest rate and another 1.2 trillion roubles by the project’s partners, Gazprom and Russian privately held gas player Rusgazdobycha.
Gazprom added that site engineering work and construction of access roads has been completed. About 15,000 people and more than 1500 units of equipment are mobilised for the construction work near Ust-Luga, according to the company.
Orders have been placed for major equipment, including the entire line of long-lead equipment, the company added. First deliveries are planned for the third quarter of 2024, Gazprom said.
Baltic LNG is managed by Ruskhimalliance, a joint venture of Gazprom and Rusgazdobycha.
Gazprom is responsible for shipping ethane-rich gas to Ust-Luga that Gazprom extracts from the deep and high-pressure Achimov and Valanzhin formations in West Siberia, and also gas to be produced at the cluster of Tambey fields in the northeast of the Yamal Peninsula in West Siberia.
Earlier in June, the Russian government rubber-stamped a plan to strip of Germany’s Wintershall Dea and Austria’s OMV from their shareholdings in three ventures in West Siberia that produce wet gas from these formations.
Since 2021, Gazprom has been assigning parts of the trunk network to carry a separate stream of wet gas from West Siberia and the Tambey fields via the existing trunkline system to Baltic LNG.
The company has been conducting upgrades to gas-pumping compressors and laying new pipelines along the 2000-kilometre-plus route to Ust-Luga.
According to the government resolution, the first LNG train at Baltic LNG is now slated to start operations in the period spanning 2026 and 2027, with the second train to follow in the same period in 2027 and 2028.
German industrial gases specialist Linde left Baltic LNG in 2022 to comply with international sanctions, to be replaced by a number of Gazprom-related and privately held subcontractors.
These are Gazprom Avtomatizatsiya, GSP-2, GSP-4, GSP-6 GSP-7, SSK Region, GSP-Service, Gazstroyprom and others, according to Russian tender announcements. They are being managed by construction player Velesstroy, which holds an engineering, procurement and construction contract with Ruskhimalliance.
Last week, the US continued to expand sanctions against new Russian LNG projects, with the US Department of the Treasury sanctioning Rusgazdobycha after imposing restrictions for companies dealing with Ruskhimalliance.
Echoing a similar decision by the UK in May last year, the US State Department added Ruskhimalliance executive director Kirill Seleznev to the list of sanctioned Russian nationals.
In December last year, the US placed three Russian Baltic LNG suppliers — Northern Technologies, Kazan Compressor Machinery Plant and Gazprom Linde Engineering — on its sanctions list.
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Singapore: Blue hydr Shell signs agreement to acquire Pavilion Energy
Shell Eastern Trading Pte. Ltd., a subsidiary of Shell plc, has reached an agreement with Carne Investments Pte. Ltd., an indirect wholly-owned subsidiary of Temasek, to acquire 100% of the shares in Pavilion Energy Pte. Ltd. Pavilion Energy includes a global liquefied natural gas, or LNG, trading business with a contracted supply volume comprising about 6.5 million tonnes per annum. Headquartered in Singapore, Pavilion Energy’s global energy business encompasses LNG trading, shipping, natural gas supply and marketing activities in Asia and Europe.
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The acquisition will be absorbed within Shell’s cash capital expenditure guidance, which remains unchanged. The deal is in excess of the internal rate of return hurdle rate for Shell’s Integrated Gas business, delivering on its 15-25% growth ambition for purchased volumes, relative to 2022, as outlined during the 2023 Capital Markets Day. Integration of portfolios will commence after completion of the deal, which is expected by Q1 2025, subject to regulatory approvals and fulfilment of other conditions precedent. “The acquisition of Pavilion Energy will strengthen Shell’s leadership position in LNG, bringing material volumes and additional flexibility into our global portfolio,” said Zoe Yujnovich, Shell’s Integrated Gas and Upstream Director. “We will acquire Pavilion’s portfolio of LNG offtake and supply contracts, which includes additional access to strategic gas markets in Asia and Europe. By integrating these into Shell’s global LNG portfolio, Shell is strongly positioned to deliver value from this transaction while helping to meet the energy security needs of our customers.”
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LNG as a Marine Fuel/Shipping
Japan: Mitsubishi splashes Toyofuji Shipping’s LNG-powered RoRo ship
Mitsubishi Shipbuilding, a subsidiary of Mitsubishi Heavy Industries (MHI), has held a christening and launch ceremony for the first of two new liquefied natural gas (LNG)-powered roll-on/roll-off (RoRo) ships under construction for Japanese Toyofuji Shipping.
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The ceremony was held at the Enoura Plant of MHI’s Shimonoseki Shipyard & Machinery Works in Yamaguchi Prefecture on June 7, 2024.
The vessel Trans Harmony Green is approximately 195 meters long, has a breadth of 30.6 meters, and has a gross tonnage of approximately 49,500.
The ship can simultaneously transport about 3,000 passenger cars. Its main engine and main generator engine are dual-fuel engines, each accommodating LNG or diesel fuel.
According to MHU, these engines could enable a greater than 25% reduction in CO2 emissions compared to ships with the same hull and powered by fuel oil.
They could also cut SOx (sulfur oxide) emissions to near zero, thereby helping to reduce the vessel’s environmental footprint.
The ship’s handover is scheduled for late January 2025 following completion of outfitting work and sea trials.
Trans Harmony Green will serve as a RoRo vessel on shipping routes in Asia.
Mitsubishi Shipbuilding, as part of MHI Group’s strategic initiatives for energy transition, works toward realizing a carbon-neutral world by building LNG-powered ships enabling the maritime industry to achieve a low-carbon footprint.
A few months ago, Mitsubishi launched salvage tug built for Nippon Salvage. The vessel, named Koyo Maru, is scheduled for handover this month.
Meanwhile, the Japanese shipbuilder also christened and launched a RoRo ship for Fujitrans Corporation.
https://www.offshore-energy.biz/mitsubishi-splashes-toyofuji-shippings-lng-powered-roro-ship/
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Canada: Why the Haisla First Nation are so enthusiastic about LNG
Sometime next year, it’s expected that the LNG Canada complex in Kitimat will begin shipping its first shipments of liquefied natural gas to Asia. Crystal Smith, chief of the Haisla First Nation, spoke of the project as a game-changing investment that has brought prosperity to her people.
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And in the coming weeks, her people are expected to sanction their own LNG project – Cedar LNG – a project that was made possible by the LNG Canada project.
“It has been absolutely amazing to see the impact for not only Haisla but for the region,” Smith said Thursday at the Indigenous Partnership Success Showcase.
The LNG Canada project, which is 90 per cent complete, represents a $40 billion investment, which includes the $18 billion LNG plant in Kitimat, the Coastal GasLink pipeline and upstream natural gas assets in northeastern B.C.
Outside of B.C., there’s little recognition of just how significant the LNG Canada project is for Canada, said Barry Penner, a former B.C. Liberal attorney general and current chairman of the Energy Futures Initiative.
“It’s clear that there isn’t enough recognition of how strategic and important this is for, not just our province but our country as a whole,” Penner said.
The LNG Canada project was proposed more than a decade ago, and was embraced by the Haisla, who welcomed the project and the economic opportunities it would bring.
“We were tired of managing poverty,” Smith said. “Our leadership was just tired of not having solutions. We saw the solutions coming through economic development.”
As a result of the investment and jobs pouring into Kitimat as a reult of the project, the Haisla have been able to build a new apartment complex, a new health centre and invested $5 million into a new language and culture centre to help preserve the Haisla language, Smith said. Her people are enjoying high employment rates, thanks to the LNG Canada project.
“We’re seeing a very low unemployment rate,” Smith said. “If they’re not working on the project, they are actually in school.”
“I think what is the most inspiring aspect of all of this, is the project’s been able to help facilitate reconciliation between our community and neighbouring indigenous communities. We’re seeing other communities benefit from the project, in terms of contract and employment opportunities as well.”
Senior governments have not been quite as enthusiastic about the LNG industry as the Haisla, and are in fact sometimes viewed as putting up roadblocks to the industry.
“I would really like to see LNG not be a dirty word from politicians,” said Hope Regimbald, stakeholder relations lead for LNG Canada.
“We have done… some really incredible world-class, precedent-setting, positive work. We are deeply proud of it. We’re deeply proud of the legacy that it’s going to have in our community. And I’d love the government – all areas of government — to join us in that acknowledgement and the celebration.”
With LNG Canada having blazed a path, other LNG projects could follow, notably the Haisla’s own Cedar LNG project.
When the Haisla negotiated an agreement with LNG Canada, that agreement included giving the Haisla access to natural gas from the Coastal GasLink pipeline to supply their own LNG project, which will be located on Haisla land.
The Haisla’s industry partner on the $4.6 billion Cedar LNG project is Pembina Pipleine Corp. (TSX:PPL,NYSE:PBA).
Cedar LNG has an environmental certificate and long-term offtake agreements signed, and in April issued a notice to proceed to Samsung Heavy Industries and Black and Veatch on engineering, procurement and construction contracts.
All that’s left now is for the Haisla and Pembina Pipelines to make a final investment decision.
“We’re looking to do an FID sometime soon,” Smith said. “It will be the largest indigenous owned project to FID.”
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Singapore: PSA Marine receives delivery of LNG dual fuel harbour tug
The 50-tonne bollard pull harbour tug was built at PaxOcean Shipyard and uses Wartisila design and technology.
Singapore-based harbour and terminal towage operator PSA Marine, a wholly-owned subsidiary of PSA International, has received delivery of its first liquefied natural gas (LNG) dual fuelled harbour tug PSA Aspen, it said in a LinkedIn update.
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The 28-metre long, 50-tonne bollard pull harbour tug was built at the PaxOcean Shipyard and uses design and technology provided by Wartsila.
It operates on two Wartsila 20DF dual-fuel engines running primarily on LNG fuel supported by a LNGPac fuel storage and supply system.
PSA Marine received a grant of up to SGD$2 million ($1.48 million) from the Maritime and Port Authority of Singapore (MPA) under the LNG Bunkering (Pilot Programme) to build the vessel.
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China: Hudong-Zhonghua: 14,000 cbm LNG bunkering ship wraps up gas trials
The 14,000 cubic meter (cbm) LNG bunkering vessel custom-built by Chinese shipbuilder Hudong-Zhonghua, a subsidiary of China State Shipbuilding Corporation (CSSC), for compatriot Anhui Changjiang LNG, an operator of the Wuhu LNG Terminal in Anhui Province, has completed gas trials.
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The LNG bunkering vessel was ordered in 2022 as part of the Gasification of the Yangtze River strategy, aiming to switch ships sailing the river by burning heavy oil and diesel to use LNG and thus cut emissions.
Hudong-Zhonghua held a launching ceremony for the vessel in January 2024. With gas trials completed and the ship docked at the Changxing No. 0 base wharf, the shipbuilder marks another milestone in LNG ship design and construction.
Classified by the China Classification Society (CCS), the ship has a total length of 130 meters, a molded width of 23.60 meters, and a molded depth of 15 meters.
It features a B-type containment system independently designed by Hudong-Zhonghua as well as the capability to provide both LNG refueling and transportation services from river to sea.
In addition, the ship carries a dozen types of equipment that are first applied on board, including the first domestic LD compressor, cryogenic pump, and deep-cold device, with a localization rate of more than 80%, the shipbuilder highlighted.
The delivery of the LNG bunkering vessel is scheduled for August this year.
https://www.offshore-energy.biz/hudong-zhonghua-14000-cbm-lng-bunkering-ship-wraps-up-gas-trials/
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France: CMA CGM takes delivery of new LNG-powered feeder vessel
French shipping giant CMA CGM has taken delivery of the fourth ship in a series of 10 new 2,000-teu containerships powered by LNG from South Korea’s HD Hyundai Mipo. The firm announced on Wednesday in a social media post the naming and delivery ceremony for CMA CGM Tivoli.
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Also, the LNG-powered vessel departed the yard in Ulsan on June 15, according to CMA CGM.
CMA CGM took delivery of the the first vessel in this batch, CMA CGM Mermaid, in February.
Back in November 2021, CMA CGM ordered these 10 LNG-powered feeders for about $627 million or some $62.7 million per vessel.
CMA CGM said the new generation of containerships were designed in close collaboration with France’s Chantiers de l’Atlantique, while the Danish engineering firm Odense Marine Technique (OMT) further converted the concept into an industrial prototype.
Moreover, French LNG giant GTT worked closely on the project for the design and conception of the gas chain and storage tank with total capacity of 1,053 cbm. LNG powers a 12-megawatt MAN dual-fuel engine.
Delivered progressively between February 2024 and January 2025, the 10 new vessels will transport goods over short distances, mainly in Northern Europe and the Mediterranean.
Between April and July, six of the series will join the Intra-Northern-Europe line to serve the Baltic and Scandinavian ports from the hubs of Hamburg and Bremerhaven.
In addition, four other ships will join the Intra-Mediterranean line between the end of September and the end of November, according to CMA CGM.
Capable of carrying 45’ containers which can be loaded on trailers, these ships offer a “more energy-efficient alternative to road transport in Europe and the Mediterranean region,” it said.
These new containerships will join the CMA CGM fleet of around 620 vessels, including more than 30 already powered by LNG.
https://lngprime.com/europe/cma-cgm-takes-delivery-of-new-lng-powered-feeder-vessel/115095/
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Jordan: EGAS eyes securing at least 17 LNG shipments over the next three months
EGAS is looking to receive the shipments via floating terminals in Jordan and Ain Sokhna. State gas firm EGAS is seeking at least 17 LNG shipments in a tender, to be delivered over the next three months — its largest in years — Bloomberg reports, citing traders it says have knowledge of the matter.
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The details: In the tender, which closes on 26 June, EGAS is looking to acquire seven shipments of LNG cargoes in July, six more in August, and four more in September, Reuters reports, citing unnamed trade sources.
But potential bidders look hesitant: Egypt is also seeking deferred payments of up to six months for the shipments, which could “narrow the list of bidders and increase premiums” amid high demand for the fuel in Asia, the trade sources said. Although Egypt has made a point of paying back its arrears to foreign oil companies after it floated the EGP in March, some traders told the newswire that they are concerned given the nation’s “credit risk and difficult economic situation.”
And we may have to pay a premium: We could be looking at a USD 1-2 premium per mmBtu on the Dutch TTF hub gas price — one of the main benchmarks for European gas prices — to secure all shipments, Reuters cited its sources as telling it. On top of this, “any longer-term payment terms would warrant an additional premium,” one source told the newswire.
There’s heavy competition for imports from the Atlantic: Demand from Asia, particularly from Japan, is especially high for Atlantic LNG volumes — which are expected to be the main source of Egypt’s supply of the fuel while the Bab Al Mandab strait remains inactive.
Remember: A fall in domestic production has pushed the country from being a net exporter to a net importer of LNG in recent months. The government has been ramping up imports in efforts to address a supply gap that has translated into extended power cuts and most recently had the government slashing gas supplies to fertilizer companies to cut supplies to feed power plants instead.
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Technological Development for Cleaner and Greener Environment Hydrogen & Bio-Methane
Tender for H2-ready power plants in Germany to be held in early 2025
Germany’s federal network regulator (BNetzA) has indicated tenders for 10 GW of hydrogen-ready gas power plants will be held early next year. Terms of the auctions still need fine-tuning and parliamentary
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approval before the regulator can invite bids, with BNetzA’s vice president Barbie Haller stressing “power plant operators [need to] know what to prepare for.”
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Mitsubishi Shipbuilding nets orders for methanol-fueled RoRo cargo ships
Japan’s Mitsubishi Shipbuilding, a part of Mitsubishi Heavy Industries (MHI) Group, has received orders from compatriots Toyofuji Shipping (Aichi Prefecture) and Fukuju Shipping (Shizuoka Prefecture) for methanol-fueled roll-on/roll-off (RoRo) cargo ships.
The two ships will be built at the Enoura Plant of MHI’s Shimonoseki Shipyard & Machinery Works in Yamaguchi Prefecture, with scheduled completion and delivery by the end of fiscal 2027.
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They will be approximately 169.9 meters in overall length and 30.2 meters in breadth, with 15,750 gross tonnage and loading capacity for around 2,300 passenger vehicles. The main engine is a dual-fuel engine that can use both methanol and heavy fuel oil.
Describing the ships’ characteristics, MHI said that the windscreen at the bow and the vertical stem are used to reduce propulsion resistance, while fuel efficiency is improved by employing MHI’s proprietary “energy-saving system technology combining high-efficiency propellers and high-performance rudders with reduced resistance.”
MHI noted that Mitsubishi Shipbuilding will continue to work with its business partners to provide solutions for a range of societal issues by building ferries and RoRo vessels with “excellent” fuel efficiency and environmental performance that contribute to stable navigation for customers.
To remind, in June 2024, Mitsubishi Shipbuilding held a christening and launch ceremony for the first of two new liquefied natural gas (LNG)-powered RoRo ships under construction for Toyofuji Shipping.
The vessel, named Trans Harmony Green, is approximately 195 meters long, has a breadth of 30.6 meters and a gross tonnage of approximately 49,500. Its handover is scheduled for late January 2025 following the completion of outfitting work and sea trials. It will serve as a RoRo vessel on shipping routes in Asia.
https://www.offshore-energy.biz/mitsubishi-nets-orders-for-methanol-fueled-roro-cargo-ships/
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Wärtsilä launches world’s first large-scale 100% hydrogen-ready engine power plant
Technology group Wärtsilä haslaunched the world’s first large-scale 100% hydrogen-ready engine power plant, to enable the net-zero power systems of tomorrow.
The IEA World Energy Outlook 2023 shows that hydrogen is an essential component of our future power systems. According to the report, the pathway to reach net zero emissions by 2050 requires 17 Mt of hydrogen to be consumed in power generation in 2030, reaching 51 Mt by 2050.
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The deployment of renewables worldwide is set to double by the end of this decade creating the right conditions for excess clean electricity to be used for production of hydrogen-based, carbon neutral fuels, and for enabling 100% renewable power systems.
Scaling up renewables alone, however, is not enough to reach global net zero targets. Flexible power generation solutions, like engine power plants, are needed to balance fluctuating renewable energy sources. It is crucial that these solutions are futureproof and ready to run on sustainable fuels to fully decarbonise the energy sector.
Wärtsilä is addressing this need through its new hydrogen-ready engine power plant, which can be converted to run on 100% hydrogen. The new engine power plant is a significant step beyond existing technology, which can run on natural gas and 25 vol% hydrogen blends.
Anders Lindberg, President, Wärtsilä Energy, said: “We will not meet global climate goals or fully decarbonise our power systems without flexible, zero-carbon power generation, which can quickly ramp up and down to support intermittent wind and solar.
“We must be realistic that natural gas will play a part in our power systems for years to come. Our fuel flexible engines can use natural gas today to provide flexibility and balancing, enabling renewable power to thrive. They can then be converted to run on hydrogen when it becomes readily available: future-proofing the journey to net zero.
“This is a major milestone for us as a company, and the energy transition more generally, as our hydrogen-ready engines will enable the 100% renewable power systems of tomorrow.”
The Wärtsilä 31 engine platform, which the hydrogen-ready power plant is based on, is the most efficient in the world. It synchronises with the grid within 30 seconds from start command, ensures energy security through fuel flexibility and offers unparalleled load following capabilities and high part load efficiency. It has completed more than 1 million running hours, with over 1,000 MW installed capacity globally.
Wärtsilä’s 100% hydrogen-ready engine power plant concept based on the Wärtsilä 31 engine platform has been certified by TÜV SÜD, demonstrating a commitment to quality and safety. TÜV SÜD’s H2-Readiness certification consists of three stages with three corresponding certificates. Wärtsilä has now achieved the first stage with a Concept Certificate for the conceptual design of its engine power plant. The 100% hydrogen-ready engine is expected to be available for orders in 2025, and available for delivery from 2026.
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