NGS’ NG/LNG SNAPSHOT – Nov 16–30, 2022
City Gas Distribution & Auto LPG
Muktidham crematorium in Pune to switch to CNG fuel
The Pune Cantonment Board (PCB) Tuesday said the Muktidham crematorium near Dhobi Ghat will soon switch to environment-friendly CNG fuel. PCB CEO Sh. Subrat Pal informed media persons that the now non-functional crematorium is expected to be relaunched by mid-January next year.
“This is a unique public-private sector initiative”, Sh. Pal said, adding that the Lions Club of Bibwewadi volunteered to raise funds to the tune of Rs 1 crore for the project and undertake the construction work.
At a press conference held in Pune Tuesday, members of Lions Club of Bibvewadi, including
secretary Sh. Govind Chauhan and spokesperson Sh. Mahendra Oswal, said residents in neighbouring areas like Salisbury Park, Gultekdi, and Market Yard, among others, were facing difficulties owing to the closure of the crematorium. The electric crematorium was not functioning for the last 10 months due to technical glitches, PCB officials said.
“We had to perform the last rites at other crematoriums or wait for hours to use the wooden pyre,” Lions Club members said.
The electric crematorium was set up in 2003 and by 2016 was in need of repairs, the PCB CEO told media persons. However, the board was unable to take up major works owing to financial constraints since 2017.
The crematorium receives at least eight bodies daily, Vijay Chavan, the head of the electricity department at the PCB, said. The number almost doubled during the covid pandemic, he added.
Chavan said the furnace has to be replaced. Thereafter, the PCB will be responsible for its
Government policies to play big role in improving fortunes of shares of city gas distribution companies
Gas/gas distribution companies reported a muted performance over the quarter ended September 2022. Though most of them witnessed robust year-on-year growth in their top line aided by growth in volumes, sequential growth was more or less flat with marginal increases for most players.
However, margins came under severe pressure due to a sharp spike in global gas prices while the increase in realisations lagged.
Experts say that near-term outlook for gas companies look bleak as they cannot go for more price hikes now without it having an effect on volumes.
In the last revision effective April 2022 to September 2022, the price of natural gas from old and regulated fields was doubled to $6.1 per million British thermal unit (mmBtu). Price of gas produced from difficult fields like the KG-D6 block operated by the Reliance Industries-bp combine was hiked from $6.13 earlier to 9.92 per mmBtu for the April-September 2022 period.
“Local gas prices are at a record high and are expected to rise further due to a sharp increase in global gas prices triggered by the Ukraine-Russia conflict,” said Deepak Jasani, head of retail research, HDFC Securities.
With the likelihood of gas prices remaining elevated in the foreseeable future, the government is finalising a plan to make things easier for priority sectors such as city gas distribution (CGD, where companies supply piped natural gas or PNG to homes as an alternative to liquefied natural gas or LNG for cooking purposes), and fertiliser plants that use natural gas as feedstock, etc.
Policy Matters/ Gas Pricing/ Others
Kirit Parikh panel may recommend price caps to help moderate CNG rates
A government-appointed gas price review panel, led by Sh. Kirit Parikh, is likely to recommend price caps for natural gas produced from legacy fields of state-owned firms to help moderate CNG and piped cooking gas rates, while keeping the pricing formula for difficult fields unchanged.
The panel, which was tasked with suggesting a “ fair price to the end-consumer “ while ensuring “ market-oriented, transparent and reliable pricing regime for India’s long-term vision for ensuring a gas-based economy”, may opt to suggest two different pricing regimes, officials said.
For the legacy or old fields of Oil and Natural Gas Corporation (ONGC) and Oil India Ltd (OIL) — where the cost has long been recovered and which are currently governed by a formula that uses rates in gas-surplus nations such as the US, Canada and Russia — the committee is likely to recommend a floor or minimum base price and cap or ceiling rates.
This would ensure that prices do not fall below cost of production, as they did last year, or do not spike to record levels as currently.
Gas from legacy fields is sold to city gas distributors who had to raise rates of CNG and piped cooking gas by over 70 per cent after prices went up from USD 2.90 per million British thermal unit till March to USD 6.10 in April and further to USD 8.57 last month, reflecting a surge in global rates. This rise in rates, which narrowed the gap between CNG and polluting diesel, had prompted the review.
For the gas from difficult fields such as those lying in deepsea or which are in high-pressure, high-temperature zones, the committee is likely to suggest not tinkering with the existing mechanism of paying them higher rates based on a different formula to compensate for the greater risk and cost involved, officials said.
This would ensure that explorers, who are seeing a surge in cost of services due to the spike in global energy rates, are not put at a disadvantage.
This way the concerns over investments in exploration and production (E&P) being hit would also be addressed, they said, adding that market-driven pricing would also encourage new investments and attract global players.
KG-D6 fields of Reliance Industries Ltd and its partner bp plc of UK are governed by the pricing formula for difficult fields. Rates for difficult fields from October 1 is USD 12.46 per mmBtu.
The panel headed by former planning commission member Sh. Kirit S Parikh is in the final stages of finalising its report. It would be submitted to the government in the next few days, the officials said, adding the cap for the legacy fields is likely to be higher than USD 4.75 per mmBtu cost of production and the floor could be set at USD 3.50.
The oil ministry will process the recommendations before moving the Cabinet for approval for changes in the existing gas pricing regime.
Natural gas is a fossil energy source that is formed deep beneath the earth’s surface. It is used to generate electricity, produce fertilisers and petrochemicals, converted into CNG to run automobiles and piped to household kitchens for cooking and heating. It is also used in making glass, steel, cement, bricks, ceramics, tile, paper, food products, and many other commodities as a heat source.
India’s crude import basket at 10-month low but pump prices to remain high
The price of the Indian basket of crude oil has hit a 10-month low of $88.6 a barrel in November, government data showed.
However, officials say this may not translate into an immediate reduction in rates at pumps as state-owned retailers might need time to recoup losses incurred earlier.
Over the past few days, a fresh Covid-19 outbreak in China has compounded fears of economic slowdown intensifying in major economies. As a result Brent crude spot prices fell on November 28 to their lowest since January 4, touching a low of $79.92 a barrel intraday. For India, every $1 per barrel dip in crude oil prices has an impact on its current account of about $1 billion.
However, petroleum ministry officials said oil marketing companies (OMCs) would need time to shore up earnings before retail prices can be reduced. “The government has decided to take a long-term view of the issue because the OMCs had kept prices low earlier this year when global prices had risen. We also have to see whether the current trend line holds”.
OMCs such as Indian Oil Corporation, Bharat Petroleum Corporation, and Hindustan Petroleum Corporation had a difficult September quarter, contending with high international crude and gas prices and low gross refining margins.
Electric Mobility/ Hydrogen/ Bio- Methane
IOC plans to set up EV charging stations at 4,000 locations nationally
Indian Oil Corporation Ltd (IOCL) intends to set up electric vehicle (EV) charging infrastructure at 4,000 locations across India by 2024, said Sh. Manjeet Walia, the company’s Chief Divisional Retail Sales Head, speaking at the business line campus connect lecture series at Panjab University, Chandigarh.
Some 2,500-odd charging stations have already come up, he mentioned, while delivering his lecture on the topic ‘opportunities and challenges with EVs.’
Sh. Walia said that IOCL’s R&D team is also working on aluminium air batteries. This would look at replacing lithium — which is currently being imported — with aluminium which is currently available in abundance here. IOCL is also looking to set up battery swapping stations which would effectively save time associated with charging EV batteries. He also touched upon the company’s work in development of hydrogen cells for a “carbon neutral future of mobility.”
According to Sh. Akshay Sangwan, Director- Development & Commercial (Sonalika / ITL) and Executive Director (Sonalika Industries / ICML), who was also present at the lecture series organised by Panjab University, there is scope for start-ups to tap into the EV space. Pointing to opportunities, Sangwan said OEMs are currently relying on outsourcing knowledge — a segment that the various start-ups can now tap into.
Mrs Sonalika was willing to support such start-ups and also invest in them if the opportunity arises, he said. In fact, while taking up the issues associated with battery EVs and plug-in EVs — that include economic benefits, and environmental and safety concerns — Sh. Sangwan pointed to the retro-fitment feasibility of current vehicles that are in use.
Low power passenger and commercial vehicles are most likely to be the first adopters of EVs, he said. Students were also asked to tap into R&D on the EV segment with Sh. Veer Karan Goyal, research scholar at IIT Bombay and Power Electronics Design Engineer (R&D) at ElectroWaves Electronics, invited them to join him at his in-house production facility at Himachal Pradesh.
Most technology required in the EV sector was being outsourced and there was a need to make them within the country. Self-dependence in the vehicle charging and charger departments was important and this formed the backbone of Goyal’s interactive session.
India’s green hydrogen plan will need an investment of ₹30 trillion by 2030
India is in the process of finalising the roadmap to a “green hydrogen economy” which will require an investment of ₹30 trillion by 2030, said Sh. Vivek Kumar Dewangan, chairman and managing director, REC.
The country’s green hydrogen plans would play a major role in achieving its goal of net zero emissions and becoming a developed nation by 2047.
“India has launched a green hydrogen project. Now, we are in the progress of finalising a roadmap for becoming a green hydrogen economy which would require ₹15 trillion and another ₹15 trillion is required to meet our middle-term goal by 2030. So in all, these initiatives would require an investment of ₹30 trillion by 2030,” Sh. Dewangan said.
Natural Gas / Transnational Pipelines/ Others
Natural Gas /Transnational Pipelines/Others
U.S. : U.S. Pipeline Constraints Could Hinder Mexico LNG Projects
Mexico has big plans to become an LNG export powerhouse, but it might not have the pipelines or available capacity to do so, according to experts.
“Is there enough capacity and pipelines to support these projects? I don’t think so,” said the head of the Gadex consultancy, Eduardo Prud’homme, on Nov 14 at the LDC Gas Forums’ U.S.-Mexico show in San Antonio, TX.
Mexico plans to import gas from the United States for its liquefied natural gas export projects, which means securing upstream capacity. There is also competition for gas from around 10 other LNG export projects planned in the United States.
“There are a lot of moving parts that need to work in cohesion for these Mexico LNG projects to happen,” NGI’s Andrew Baker, senior editor, said during the event. Baker helmed a panel that included Prud’homme and Mexico energy expert Ms. Rosanetty Barrios.
“There is spare capacity in Mexico,” Barrios told the audience. The Comisión Federal de Electricidad (CFE) is “giving the signal it wants to use this spare capacity for LNG export projects.”
She said Mexico could still open up pipeline capacity to private sector companies, but only once the current administration of Andrés Manuel López Obrador is complete. The rules of the energy reform as enshrined in the constitution remain in place. “But if these LNG export projects go ahead, someone has to build new pipelines.”
So far, only the first phase of the 3 million metric tons/year (mmty) Energia Costa Azul (ECA) export project in Baja California, Mexico, is progressing, albeit with some delays. The project is sponsored by Sempra Infrastructure.
Mr. Prud’homme said New Fortress Energy Inc. (NFE) in conjunction with CFE could also see some advances. NFE executives last week said they expect to finish building their first “Fast LNG” unit by March. Operations could begin by mid-year offshore Mexico’s east coast, with several more units to follow. These include two at Altamira and one at the Lakach deepwater natural gas field off Veracruz state in a deal with state oil company Petróleos Mexicanos, aka Pemex.
Barrios, however, highlighted that Pemex has lost $43 billion so far in this administration, and theCFE another $7.59 billion, meaning the state companies may not be depended on for financing big-ticket projects.
There are other LNG export projects planned, too. President López Obrador said in September an LNG terminal could potentially be built in the port of Coatzacoalcos in southern Veracruz to export supply to Europe.
Europe : Eastward gas flows on Yamal-Europe pipeline, Russian flows Via Ukraine rise
Eastbound gas flows rose on November 15 morning on the Yamal-Europe pipeline to Poland from Germany as did Russian supplies to Europe via Ukraine, pipeline operator data showed.
Exit flows at the Mallnow metering point on the German border stood at 5,598,525 kilowatt hours(kWh) per hour between 0800 CET and 0900 CET, up from around 4,670,000 kWh/h seen the previous day.
Nominations for Russian gas into Slovakia from Ukraine via the Velke Kapusany border point rose to 41.2 million cubic metres (mcm), up from at 36.8 mcm the previous day, Ukrainian transmission system data showed.
Russian gas producer Gazprom said it will ship 42.4 million cubic metres (mcm) of gas to Europe via Ukraine on Tuesday, similar to levels over recent days.
Gas flows via the Nord Stream 1 pipeline, which crosses the Baltic Sea from Russia to Germany, remained at zero.
The pipeline was shut on Aug. 31 for what was supposed to be three days of maintenance but has not reopened, with Moscow blaming the situation on Western sanctions and technical issues.
Russia said it was unable to restart the pipeline but since then the pipeline has also been damaged by suspected sabotage. https://www.naturalgasworld.com/eastward-gas-supplies-on-yamal-europe-pipe-russian-deliveries-through-ukraine-rise-102089
Global LNG Development
TES targets German LNG launch within 12 months
LNG developer Tree Energy Solutions (TES) has signed a contract with ECOnnect Energy to secure infrastructure to connect its planned floating storage regasification unit (FSRU) with an onshore terminal in the German port of Wilhelmshaven, the company said on November 15, estimating that the project will be ready to receive gas within 12 months.
TES’ terminal is one of five LNG import projects that Germany is looking to develop over the coming years to replace Russian gas. ECOnnects IQay solution” will substitute a conventional jetty, fast-tracking deployment while minimising construction costs and environmental impacts,” TES said.
“The IQuay solution allows for incredibly fast installation and natural gas import into Wilhelmshaven, while also enabling a future hydrogen hub,” said Morten Christophersen, CEO at ECOnnect. "We are proud that our flexible import solution is consistent with TES’s vision to address Germany’s immediate energy demand and also its long-term carbon-neutral energy import strategy.”
The terminal is expected to be up and running in autumn 2023, TES said.
China : China builds largest LNG bunker vessel by converting gas carrier
China completed the first conversion project of an LNG gas carrier into an LNG bunker vessel.
The Hai Yang Shi You 301 (16,250 dwt) became, according to Chinese media reports, the largest LNG bunkering vessel and the first in China to support the broader international ocean-going ship market.
Guangzhou Shipbuilding International (GSI), a division of China State Shipbuilding Corporation(CSSC), undertook the conversion which lasted approximately 80 days. A former gas carrier, built in 2015 and according to Chinese media, was operating transporting LNG in China’s coastal regions. The ship had the capacity to transport 30,000 cubic meters of LNG.
The vessel, which is 605 feet long, was delivered to the shipyard at the beginning of August 2022, to begin the conversion. According to CNOOC Energy Technology & Services which will be operating the Hai Yang Shi You 301, the renovation project included adding cryogenic units, gas combustion devices, front bunkering stations, reliquefaction systems, and other equipment for LNG bunkering operations. They also altered the mooring equipment and added anti-collision capabilities necessary to operate as a bunkering vessel.
The vessel now has the capability to conduct ship-to-ship transfers with a fueling capacity of 1,650 cubic meters of LNG per hour. The Hai Yang Shi You 301 will be operated by CNOOC from a base in the Nansha district of Guangzhou. CNOOC reports it will be fueling large, ocean-going containerships, ore carriers, crude tankers, and Ro-Ros.
Previously, Avenir had reported that its 20,000 cbm LNG bunker vessels were the largest by capacity. The newbuilds were built in China for the company with the first vessel introduced in 2021. They surpassed the Gas Agility, operated by TOTAL in Northern Europe, which claimed the title of the largest LNG bunker vessel with a capacity of 18,600cbm.
DNV’s Alternative Fuel Insights database reports that there are currently 40 bunker vessels in operation to service the fleet of primarily LNG-fuel dual vessels emerging using alternatives. They expect in the next three years that the fleet will increase by 50 percent with 20 additional bunker vessels on order. They also report that another 17 are believed to be under discussion.
While gas carriers are in demand for the LNG export market, conversion of some of the vessels might also provide a quicker solution to expanding the LNG bunker fleet to meet the growing demand as more ocean-going carriers build vessels designed to operate on LNG. DNV reports that LNG-fueled vessels are expected to more than double from the current 323 in service to over 800 by 2025.
Germany completes construction of its first floating LNG terminal
Liquefied natural gas facility will be central to securing energy supplies this winter, says minister
Germany has completed construction of its first floating terminal to receive liquefied natural gas(LNG), which its economy minister said would be vital to securing energy supplies to the country over the winter months.
Mr. Robert Habeck described the first of five planned floating terminals at the North Sea port of Wilhelmshaven as “a central building block for the security of our energy supplies this coming winter”, as Germany races to find alternatives to Russian pipeline gas, on which it had relied for years until supplies were halted during the invasion of Ukraine.
A pier at Wilhelmshaven has been expanded to provide a mooring place for a floating storage and regasification unit (FSRU), the central component for transporting LNG via sea and transferring it to land. Before the end of this year, the first FSRU is due to be in operation to regasify LNG, arriving on special tankers from around the world. The first FSRU, the Esperanza, is expected to arrive with a full load in about a month and to be unloaded.
Olaf Lies, the economy minister of the northern state of Lower Saxony, in which Wilhelmshaven is located, said as more LNG tankers arrived the Esperanza would be moored accordingly, in order to process their supplies.
Mr. Habeck said the building of the mooring site had happened at “enormous speed” and called it proof that Germany was able to “quickly and with a high degree of decisiveness progress infrastructure projects”, crediting the cooperation between central government and the state of Lower Saxony, which he said had “pulled together”.
The government is working on introducing a total of five swimming LNG terminals to German ports, each with a capacity of at least 5bn m3 per year.
The terminal at Wilhelmshaven, and another at Brunsbüttel, are expected to be operational early next year.
The third and fourth FSRUs are to be opened at the ports of Stade and Lubmin, and are expected to be operational by the end of 2023. The fifth will be in Wilhelmshaven and is due to be up and running by the fourth quarter of next year.
In addition, a private special ship is planned for Lubmin with an annual capacity of 4.5bn m3 a year, to be ready from the end of 2022, according to the economics ministry.
A spokesperson said an annual total of 25bn m3 would be provided by state-run FSRUs, and together with the privately run FSRU would cover about a third of Germany’s gas needs, based on 2021 levels.
In addition to LNG, Germany has gas storage facilities around the country that are full. They are capable of covering about 28% of the country’s entire gas requirements.
The government and the Federal Network Agency responsible for power hopes existing supplies, the LNG, together with savings that industry and private homes are making, will be sufficient to get Europe’s largest economy through the winter.
Seapeak orders LNG newbuilds from Samsung Heavy Industries
Seapeak LLC has entered into shipbuilding contracts for the construction of five, 174 000 m3 M-type, electronically controlled, gas admission (MEGA) propulsion LNG carrier newbuildings.
The LNG carriers will be constructed by Samsung Heavy Industries Co., Ltd for a total fully built-up cost of approximately US$1.1 billion and are scheduled for delivery in 2027.
Upon their deliveries, the five LNG carriers will each operate under a fixed-rate time-charter contract with an international energy major for a firm period of 10 years, each of which can be extended at the option of the charterer.
Seapeak expects to finance the initial new building construction instalment payments by way of an equity contribution from investment funds managed by its sponsor, Stonepeak. In due course, Seapeak expects to secure long-term debt funding to finance the remaining construction costs.
Technological Development for Cleaner and Greener Environment Hydrogen & Bio-Methane
Fast EV charging using natural gas offered by entrepreneur Mr. Stevan Bratic
Serial entrepreneur Mr. Stevan Bratic, owner of Bratic Enterprises, has developed an electric vehicle charging system that uses natural gas, instead of electricity, to recharge EVs.
These EV “PODS” can be permanently mounted, or mobile depending on the commercial customers’ needs. They also can be used as a profit centre by allowing commercial clients, such as shopping malls and restaurants, to allow their clients to charge EVs for a fee while they shop or dine. The rapid charging feature can get an EV to 80 percent charge in just 15 minutes.
Low-cost financing and leasing also are provided by Bratic.
Saudi : Red Sea Global signs deal for sustainable electric mobility network
Saudi sustainable tourism development company Red Sea Global has signed a deal with Electromin and Energy International Corporation to deliver a carbon-neutral, electric mobility network to its Red Sea development.
Electromin will assist in the supply of an electric bus fleet in collaboration with the Chinese company Yutong and the European manufacturer and supplier of electric vehicles, EURABUS.
The fleet of zero-emission electric buses, which will be used initially to transport employees around the site, marks the company’s first smart sustainable integrated transport network.
“This deal is the first step on the road to a fully integrated mobility network spanning land, sea and air, which will enable safe movement of visitors, residents, and goods,” said Andreas T. Flourou, RSG’s executive director of mobility operations.
To conveniently service regular routes for employees, the fleet will consist of two types of vehicles: a smaller vehicle with a range of around 250 km and a larger bus with a range of roughly 350km when fully charged.
Emission-free transport at RSG corresponds with its larger ambition to power the entire destination with solar energy, thus reducing carbon emissions by about 500K tons per year.
Commenting on the deal, RSG’s group CEO Mr. John Pagano said: “Our mission has always been to set the standard for regenerative tourism. Carbon-neutral operations across the Red Sea are a key part of achieving this.”
RSG’s moves toward sustainable mobility across its development aligns with the Kingdom’s Vision 2030 goals towards reducing carbon emissions and driving sustainability to address the impact of climate change.
In addition, RSG said it will establish a new resort, Faena The Red Sea, in its tourist destination, with operations starting in 2024.
Furthermore, RSG’s mandate has expanded to oversee upwards of a dozen projects stretching the length of the Red Sea coast of Saudi Arabia, with the potential to expand beyond the Kingdom in the future.
Earlier this month, Saudi Arabia’s Crown Prince Mohammed bin Salman launched the first Saudi EV brand Ceer. Ceer is set to directly contribute $8 billion to Saudi Arabia’s GDP by 2034.
Part of the Saudi Public Investment Fund’s strategy is to diversify Saudi Arabia’s gross domestic product increases by investing in promising growth industries — Ceer will attract over $150 million of foreign direct investment, and create up to 30,000 direct and indirect jobs.
Speaking at the Saudi Green Initiative, which took place on the sidelines of the UN Climate Change Conference last week, PIF’s Governor, Yasir Al-Rumayyan said that the Kingdom plans to build 328,000 EVs per year, with investments in the electronic vehicles sector.
He added that the Kingdom has a target to generate 50 percent of its energy from renewable sources by 2030, and PIF is responsible for developing 70 percent of this renewable energy.
Elaborating on the expansion of EV plans in Saudi Arabia, Cadillac, a division of the US automobile manufacturer General Motors Corp., is also planning to launch its first EV in the Kingdom during the first half of 2023, said Mr. Kristian Aquilina, MD of Cadillac Middle East and international operations.
“We are talking to some government authorities, and their target of electrifying 30 percent of Riyadh’s transportation by 2030 is driving a lot of momentum,” Mr. Aquilina said last September.