NGS’ NG/LNG SNAPSHOT – Nov 1–15, 2022
City Gas Distribution & Auto LPG
Union Minister Sh. Nitin Gadkari said bio-CNG and LNG will be manufactured
Union Road, Transport and Highways Minister Sh. Nitin Gadkari has talked about making bio-CNG and LNG from stubble. He has said that we have made Bio-CNG and LNG from stubble, which can run tractors and buses. He said that Indian Oil has made a big project in Panipat. There, 1 lakh litres of ethanol and 150 tonnes of bio-bitumen are being produced daily from stubble. We will use this bitumen for road construction.
On tackling the problem of pollution in Delhi, Gadkari said that it is a bit difficult to find a solution, but it is not impossible. He said that if the Central Government, State Government, Municipal Corporation and farmers make efforts together, then this problem can be solved. He said that we should forget politics and work together to tackle the problem of pollution.
The Union Minister said that roads are being built around Delhi at a cost of Rs 60,000 crore. Due to which Delhi will become traffic free. Along with this, he also talked about bringing electric vehicles and green hydrogen, which can control air as well as noise pollution. He said, ‘I promote it by travelling in a car of green hydrogen. We can reduce fares by 20-30% by shifting people to electric AC buses.
Domestic natural gas distribution begins at Unnikulam in Kozhikode
Indian Oil Adani Gas Private Limited (IOAGPL) has started domestic distribution of natural gas to 52 households in Unnikulam grama panchayat in Kozhikode. Work is in progress to ensure distribution to 81 more houses. The group expects to connect more than 25,000 households in the district to the network by June 2023.
The company also plans to provide natural gas to the Kerala State Industrial Development Corporation’s industrial park at Kinaloor soon. A pipeline network of 21 km consisting of medium pressure and low pressure pipes has been commissioned for the purpose.
In the first phase of the project in Kozhikode district, 23.9 km of steel pipeline that carries gas in 26 bars has been commissioned from CGS at Unnikulam to Kunnamangalam to distribute natural gas in Kozhikode city.
In the second phase, laying of 42 km of pipeline is in progress. Hydro testing and the setting up of isolation valves are in progress along 14 km from Pavangad to Nallalam where the pipeline has already been laid. IOAGPL has already requested the Kozhikode Corporation for plots on lease to set up DRS at six centres in the city so as to begin distribution within the Corporation limits.
Digital interventions in City Gas development
The Ministry of Petroleum and Natural Gas (MoPNG) has set an ambitious target of making gas 15 percent of India’s primary energy basket by 2030 from the current levels of around 7 per cent. To increase gas availability across the country,
Petroleum and Natural Gas Regulatory Board (PNGRB) authorised 228 Geographical Areas (GA’s) for gas distribution covering 53 per cent of India’s area and 70 per cent of India’s population by conducting 11 bidding rounds. Disparate groups of players composed of established oil marketing companies,global players, industrial houses, and companies with private equity funding have won these geographical areas.
However, the City Gas Distribution (CGD) players are facing several headwinds which were not envisaged at the time of bidding. On the commodity front, stressed domestic gas supplies and steep increase in LNG prices has impacted price competitiveness of natural gas. The adoption of new generation fuels such as EV, Hydrogen is on the rise leading to further impact on conversions. The increase in steel prices, laying cost, delays on Right of Way, delay in connectivity to trunk pipelines have resulted in detrimental impact to the project financials. Further there is very little room to hold back investments, as PNGRB is closely monitoring progress on city gas stations, steel pipe length and number of domestic PNG connections.
AG & P to develop city gas projects in India’s Karnataka State
AG&P Pratham, a unit of Singapore’s AG&P, has signed a memorandum of understanding with the government of the Indian state of Karnataka to develop a city gas distribution (CGD) network in 15 districts of the state, the company said on November 3.
Under the MoU, AG&P Pratham will invest 80bn Indian rupees ($970mn) over the next eight years to build CGD networks in districts of Kolar, Mysuru, Mandya, Chamrajnagar, Hassan, Chikkamagaluru, Kodagu, Bagalkot, Koppal, Raichur, Kalaburagi, Vijayapura, Shivamogga, Uttara Kannada and Haveri.
The area being developed by AG&P accounts for more than 55% of the state’s geographical area and 42% of its population. Over the next eight years, AG&P plans to supply gas to 5mn households and several industries and commercial establishments. It also plans to set up about 600 compressed natural gas (CNG) stations and LNG stations to service the transport sector.
To date, AG&P Pratham has launched 60 CNG and LNG stations in the state, while several such stations are at various stages of development.
AG&P City Gas is developing 12 CGD networks in India under the brand name AG&P Pratham. In its 12 concessions, AG&P is responsible for developing and operating CNG stations for vehicles, PNG to homes, and the distribution of LNG to industrial and commercial customers. City gas projects in India benefit from marketing exclusivity in their designated areas for eight to ten years and construction exclusivity of related infrastructure for 25 years.
Policy Matters/ Gas Pricing/ Others
CNG, PNG to cost more in Mumbai as MGL hikes prices
Mumbai gas distributor, Mahanagar Gas Ltd (MGL), said on Friday, November 4, it is increasing the retail price of compressed natural gas (CNG) by Rs 3.5 per kilogram to Rs 89.50 and of piped natural gas (PNG) by Rs 1.5 per unit to Rs 54 from midnight of November 5, 2022.
This is the second revision since October when the Centre had increased the price of domestically produced gas, supplied with an administered price mechanism (APM), by 40 percent for the second half of the fiscal, which came atop a 110 percent spike in April for the first half.
On shortage in the supply of APM gas, MGL said the supply has been cut by 10 percent, forcing it to source the fuels from outside at a substantially higher cost as the demand for gas has not come down yet.
MGL claimed that even at the revised level CNG is about 42 percent cheaper than petrol in the megapolis, while PNG is cheaper by around 8 percent compared to current LPG.
MGL distributes gas to 1.98 million households and over 4,067 small commercial and 360 industrial establishments in and around Mumbai.
The company also supplies CNG to vehicles in Mumbai, Thane, Mira-Bhayander, Navi Mumbai and beyond. It has 296 CNG filling stations in Mumbai, Greater Mumbai, Thane, Navi Mumbai and Panvel. Natural gas, which is extracted from below the Earth's surface, is converted to CNG for running automobiles and piped to household kitchens for cooking. It is also used to generate electricity and manufacture fertilisers. Prices vary from city to city depending on the incidence of local taxes such as VAT.
Parekh committee may opt for differential gas price plan
The Kirit Parekh committee, which has been asked to suggest a fair price for natural gas supplies to end consumers, is expected to break away from the existing formulaic pricing methodology as it seeks to balance the interests of gas producers and consumers.
Natural gas prices have been going through the roof, sparking dismay at homes that rely on piped cooking gas, pumps dispensing CNG for vehicles and a wide swathe of user industries.The committee, which is expected to submit its report later this month, could take a radical stand by suggesting a differential pricing mechanism — one set for fertiliser and power industries and a completely different one for piped natural gas for homes and CNG for vehicles.
PNG prices in Delhi have risen 52 per cent in just over a year to Rs 53.59 per standard cubic metres (SCM) in October 2022 from Rs 35.11 per standard cubic metres (SCM) in September 2021. CNG prices have shot up 57.9 per cent during this period to Rs 78.61 per kg from Rs 49.76, according to data available in PPAC.
Electric Mobility/ Hydrogen/ Bio- Methane
Building an electric mobility ecosystem in India
Urbanisation is an important force driving the economic growth of India. Six cities make up 15% of India’s economy. We have two Indian cities in the top ten most congested cities across the world – Mumbai ranks fifth and
Bengaluru ranks tenth. Bengaluru has been growing at a significantly faster pace than the other cities over the last three years at double digits. Bengaluru’s population has grown by 70% in the last two decades, while the country’s overall population has grown by about 28%. Transport data company INRIX studied traffic congestion in 200 cities in 38 countries and showed the impact of traffic congestion by looking at how much time and money it wastes. In the US, it found the total cost of lost productivity caused by congestion to be $87 billion. Hence, it is important to enable clean, safe and convenient mobility to sustain India’s economic growth.
IOC targets green hydrogen meeting 10% of requirements by 2030
Indian Oil Corporation (IOC) is targeting to replace at least a tenth of its current fossil-fuel-based hydrogen at its refineries with carbon-free green hydrogen as part of a decarbonization drive. To start with, the nation’s largest oil firm is setting up green hydrogen plants at its Panipat and Mathura refineries, IOC said in its latest annual report.
“The company is venturing into green hydrogen production and is targeting 5 percent of hydrogen produced by it as green hydrogen by 2027-28 and 10 per cent by 2029-30,” it said.
Hydrogen is the cleanest known energy source but it barely exists in a pure form on Earth. It either is bound with oxygen in water or with carbon to form hydrocarbons like fossil fuels.
“At present, the refineries are the major consumption centres for hydrogen, used for desulfurization. The current dominant hydrogen production process is highly carbon-intensive being based on the Steam Methane Reforming process.
“On the other hand, green hydrogen i.e. hydrogen produced from electrolysis of water, using renewable energy, has a zero-carbon profile, making it the preferred form of hydrogen in the context of a carbon neutral future,” IOC said.
Natural Gas / Transnational Pipelines/ Others
Natural Gas /Transnational Pipelines/Others
U.S.A : Compressed Natural Gas (CNG) vehicles market share, trends and forecast to 2030
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Qatar : Qatar Energy and Mitsui O.S.K. Lines (MOL) expand partnership with three new LNG carrier deals
State-owned oil and gas company Qatar Energy has signed another long-term charter contract with a subsidiary of Japanese shipping company Mitsui O.S.K. Lines (MOL) for three newbuild liquefied natural gas (LNG) carriers.
The contract includes three LNG carriers to be built at Hudong-Zhonghua Shipbuilding in China. The vessels are scheduled for delivery in 2027.
With the latest deal, MOL and Qatar Energy expand their existing relationship, building on the long-term charter contract signed in April this year.
Qatar Energy is undertaking the North Field Expansion Project to increase its LNG production capacity to 126 million tons per annum by 2027.
Most recently, the company awarded long-term charter contracts to Malaysian energy logistics group MISC Berhad and its consortium partners for five newbuild LNG carriers, in addition to previously awarded seven long-term deals.
Australia : State Gas Limited GAS & MES sign MOU for CNG virtual pipeline infrastructure
State Gas Limited (ASX:GAS) (OTCMKTS:STGSF) has entered into a Memorandum of Understanding with Mine Energy Solutions Pty Ltd (MES) securing access to compressed natural gas (CNG) Virtual Pipeline infrastructure.
As previously announced, State Gas is planning to truck compressed natural gas to the market to commercialise its proven gas resource at Reid's Dome (PL 231), as soon as possible. The transport of compressed gas by truck, creating a ‘virtual pipeline’, is a globally recognised and safe process for the movement of gas. State Gas will be utilising this process to transport the gas to the pipeline infrastructure network approximately 60km away.
The gas, once produced, will be compressed and dehydrated at site to pipeline standard and loaded into new generation high pressure carbon fibre cylinders typically employed in the aerospace industry and which are compatible with hydrogen for transport by truck to the pipeline.
MES is a Queensland based technology developer which has successfully demonstrated the conversion of mobile mining equipment to operate on domestically produced gas, thereby displacing up to 80% of imported diesel in this equipment providing an immediate decarbonisation benefit. As part of the conversion, carbon fibre cylinders are installed on the equipment in a unique configuration allowing the equipment to operate safely and efficiently in all open pit mine site operations. MES and State Gas are collaborating to develop the ”Virtual Pipeline” solution for State Gas. “I am delighted to enter into this alignment with MES” said State Gas Executive Chairman Mr Richard Cottee. “MES is a locally based company finding innovative ways to do things better, just like State Gas”. ”The demand for gas has never been greater and attention is moving to ensuring every possible molecule is used. I see a big future for CNG as a means of capturing gas that is otherwise too far from the market or pipeline infrastructure”, Mr Cottee added. MES Chief Executive Mr Adrian Abbott agreed: “Our Board is committed to assist the resource industry to decarbonise, and collaborating with State Gas will assist some of our clients to achieve their carbon reduction commitments through the use of domestically produced gas”.
Global LNG Development
U.S : Nat gas drops 6% on less cold weather, focus on Freeport LNG
U.S. natural gas futures dropped about 6% on Friday in what has already been an extremely volatile week on forecasts for less cold and heating demand next week than previously expected.
Traders also noted the market remained focused on unproven rumours that the Freeport liquefied natural gas (LNG) export plant in Texas may not return until December. But with gas prices in Europe TRNLTTFMc1 down about 13%, traders noted rumours about Freeport were not necessarily the cause of the latest U.S. price drop since a delayed Freeport startup should cause global gas prices to spike higher.
Front-month gas futures NGc1 fell 36.0 cents, or 5.8%, to settle at $5.879 per million British thermal units (mmBtu). That put the contract down about 8% for the week after gaining about 15% and 13% during the prior two weeks.
Rapid price changes over the past couple of weeks – futures gained or lost more than 5% on eight of the past 10 days – boosted the contract’s 30-day implied volatility index NGATMIV to its highest level since hitting a record in October 2021 for a third day in a row. The market uses implied volatility to estimate likely price changes in the future.
South Korea : Samsung heavy industries bags $446 million order for LNG carrier pair
South Korean shipbuilder Samsung Heavy Industries (SHI) has received an order for the construction of two liquefied natural gas (LNG) carriers.
The company behind the order is an undisclosed shipowner based in Africa, according to a stock exchange filing. The value of the contract is 589.7 billion won ($446 million). The two LNG carriers are slated for delivery by March 2026.
Other details of the contract were not revealed.
With this deal, SHI has managed to fulfil 89% of its annual $8.8 billion target of $8.8 billion. So far, the shipbuilder increased its cumulative order receipts to 41 ships which are worth around $7.8 billion.
Only in June this year, SHI succeeded in signing a $3 billion order worth of orders for 14 LNG carriers. The contracts were inked with undisclosed shipowners from Bermuda and Africa.
Last month, the South Korean company delivered a newbuild liquefied natural gas (LNG) carrier to Greek shipping company Minerva. The vessel Minerva Amorgos is a 174,000 m3 LNG carrier which features WinGD XDF propulsion, Mark III Flex+ containment system and Airliquide subcooler system.
Netherlands : Nordsol, Attero and Titan team up to produce bio-LNG for maritime sector
Nordsol, Attero and Titan have collaborated on the FirstBio2Shipping project for the production of bio-liquefied natural gas (bio-LNG) to support sustainable maritime transport.
To attain decentralised production of the fuel, the partners have reached a final investment decision to build a plant at the facility of waste processor Attero in Wilp, the Netherlands.
With the first delivery of bio-LNG expected in early 2024, the plant will generate about 2,400tpa of bio-LNG or liquefied biomethane.
Attero will be involved in the processing of domestic bio waste into six million normal cubic metres of biogas on a yearly basis.
Using its patented iLNG technology, Nordsol will work with Attero to generate 2,400t of high-purity bio-LNG and 5,000t of liquid bio-CO₂ from the biogas annually.
As the exclusive long-term off-taker, clean fuel supplier Titan will deliver this bio-LNG to customers in the maritime sector.
Compared to conventional maritime fuel, the bio-LNG produced by the companies is anticipated to lower greenhouse gas (GHG) emissions by 92%.
Nordson commercial director Léon van Bossum said: “Nordsol is committed to making bio-LNG mainstream together with various partners.
“In 2021, we built the first Dutch bio-LNG installation to make road transport more sustainable. As a frontrunner, we are proud to also contribute to the decarbonisation of the maritime sector, together with Titan and Attero.
“The FirstBio2Shipping project is intended to start a snowball effect, resulting in more and larger installations that help make shipping more sustainable.”
Qatar : Qatar will expand liquified natural gas storage facility in South Wales
The Gulf state of Qatar is to invest millions of dollars in expanding a liquified natural gas, or LNG, terminal at Milford Haven in South Wales to cope with increasing demand amid the global fuel crisis.
The two most significant global players in the LNG industry are Qatar and the United States, and at the same time as a new $10 billion Golden Pass terminal is being developed in Texas, state energy company QatarEnergy and its US partner ExxonMobil are increasing the capacity of the Welsh facility which was completed in 2009.
It is hoped the Milford Haven expansion will allow for its LNG capacity to increase by around 25 percent, as countries around the world continue to look for alternative energy supply sources amid the ongoing conflict in Ukraine.
The Doha News website reports that even before the conflict began, in 2021 around 17 percent of the United Kingdom’s gas came from Qatar, the world’s biggest LNG exporter, and despite government statements criticising fossil fuel production, that demand has grown in recent years.
The Milford Haven site, known as South Hook, is one of Europe’s largest LNG terminals. It currently has an annual capacity of 15.6 million tons of LNG, and The Daily Telegraph newspaper reports that the aim is to get capacity up to closer to 20 million tons by the middle of 2025.
At the start of the Ukraine conflict, the Guardian newspaper reported that Qatar had existing long-term contracts for most of its exports to be sold to Asian markets, but there was believed to be “some flexibility” about these arrangements.
In addition to its own requirements, Britain has become a so-called gas bridge to Europe, only serving to heighten the importance of the Milford Haven facility.
Germany, which is Europe’s biggest gas market, has no LNG import terminals whatsoever, and although imports to Europe could be stepped up significantly, it is thought that challenges including the lack of infrastructure could take up to a decade to overcome.
Brexit has also placed further obstacles in the way but earlier this week the German government expressed a willingness to cooperate with the UK over energy supplies.
Unseasonably mild weather recently has shielded the continent from the full impact of reduced fuel supplies, but there has been much discussion about contingency plans for possible power problems
in the new year, and there are longer-term challenges as supplies from Russia remain shrouded in Uncertainty. “I think everyone’s now thinking about what’s going to happen next year,” Graham Freedman, principal analyst for European gas at global consultancy Wood Mackenzie, told the Telegraph “It’s a question of will there be enough to meet demand and fill up storage.”
Technological Development for Cleaner and Greener Environment Hydrogen & Bio-Methane
Netherlands : Ignitis to import biomethane into Lithuania
SG dujos will be the first company in the country to use the biomethane to replace natural gas. Biomethane is a sustainable alternative to fossil fuels, which meets the natural gas standard completely because it has an equivalent chemical formula (CH4). According to Saulius Bilys, Head of Strategic Development at SG Dujos, with the launch of biomethane imports, vehicle fleets that use natural gas (methane) can already fully replace them with zero emissions fuel.
Ignitis is hoping that in 2023 it will also be able to offer biogas produced in Lithuania itself.
“We will import biomethane from the Netherlands” said Haroldas Nausėda, Head of B2B Clients and Expansion at Ignitis. “Even though biomethane can be purchased globally, according to the highest standards, the importing and exporting parties must be connected via a common gas network. This means that the biomethane molecule entering the gas network must be able to travel to Lithuania and the customer’s gas consumption points. In this case, we ensure uninterrupted supply chain between the Netherlands and Lithuania. The gas will travel through the pipelines of the Netherlands, Germany, Poland and Lithuania – this requires managing quite complex processes.”
The leading country in Europe in biogas and biomethane production is currently Germany. According to International Energy Agency data, in 2010–2018 Germany had the largest share of installed biogas production capacities, and biogas is produced using biomethane.
Both Ignitis and SG Dujos have received ISCC certification (International Sustainability and Carbon Certification) while developing biomethane trading practices, which is necessary to conduct biomethane trading.
Oregon : NW Natural scraps plans for blended hydrogen and natural gas project
Oregon’s first green hydrogen production project has been shelved after public pushback over potential environmental and health impacts.
NW Natural, the state’s largest natural gas provider, had proposed to the Oregon Public Utilities Commission in August a plan to create green hydrogen to blend into its natural gas. The company would have pumped the blended gas to 2,500 customers in west Eugene by early 2024.
It pitched the project as an experimental way to reduce its greenhouse gas emissions and to hone production of green hydrogen, which is made when electricity powered from renewable sources is run through water to separate oxygen and hydrogen. The hydrogen is trapped and blended into the natural gas, which is primarily methane, a potent greenhouse gas.
Environmental and social justice groups pushed back, saying the project had little emissions- reduction benefit. They also said NW Natural hadn’t undertaken an analysis of health and safety risks to customers who would burn the fuel in their homes, that the $10 million price tag was too costly and the company’s current customers across the state would be left holding the bill.
Among the six groups that intervened in the approvals process are the NAACP of Eugene-Springfield, Oregon Physicians for Social Responsibility and the Sierra Club.
NW Natural withdrew its proposal on Nov. 1. In the filing to withdraw, NW Natural explained why it chose to scrap the proposal altogether rather than just suspend the approvals process for a few months while it solicited more community input.
“NW Natural is seeking to convey that it is willing to engage in stakeholder outreach without a predefined time limit that would have been included as part of a motion to suspend the procedural schedule, and that it is willing to consider changes to the project in light of such outreach,” NW Natural attorney Ryan Sigurdson wrote. The company had held two meetings with community members prior to August. The company could still file an application for the same project or a revised version of the project in the future, according to the filing.
Critics of the project were particularly concerned with where the blended natural gas would end up.
About 66 percent of the residents in one west Eugene neighbourhood that would be receiving it are considered low-income, and its home to a larger share of people of colour compared to the rest of Eugene, according to the coalition of environmental and social justice groups. Residents are already in an area that deals with high levels of air pollution from nearby factories and with higher rates of childhood asthma compared with the rest of the city, according to an analysis from the Eugene- based nonprofit Beyond Toxics.
When hydrogen is used in a fuel cell, such as for a car, it gives off no emissions, but when it is combusted for heat or for cooking, it generates nitrogen oxide, which can cause respiratory issues, according to the Centers for Disease Control and Prevention.
“Eugene residents will not be forced to be guinea pigs for experimental and dangerous technology that perpetrates fossil fuel infrastructure, environmental injustices and more air toxics,” Lisa Arkin, executive director of Beyond Toxics, said in a statement.
“This project was absolutely unacceptable, and its withdrawal is a testament to the power of community opposition.”